Social insurance cover for underage development contract players

What is it all about?

In both cases, a junior player who was injured during a football match and had concluded a so-called “development contract” with a professional club within the meaning of the DFB regulations brought an action against the refusal of the statutory accident insurance to recognise an insured event.

In this respect, the decisions concern a key question of practical relevance in professional youth football: when is a youth player not just a club member, but an employee within the meaning of social law – with the result that injuries are considered accidents at work?

Assessment of a development contract – interpretation of the overall circumstances

The principle of interpreting the overall circumstances also applies to the assessment of the question of whether a sponsorship agreement constitutes “employment” pursuant to Section 7 (1) SGB IV, which results in statutory insurance cover pursuant to Section 2 (1) No. 1 SGB VII, so that the legal structure of a sponsorship agreement is an essential, but not conclusive criterion for the classification to be made.

• Typical characteristics of an employment relationship

  In the subsidy agreements examined by the courts, the following points were found to be particularly indicative of the existence of an employment relationship:

  • the concrete integration into the professional structures of an NLZ
  • the fact that the youth player is bound by instructions (e.g. wearing club clothing)
  • the actual duties and expectations (e.g. binding requirements for participation in events, training courses, training sessions and matches)
  • holiday entitlements
  • regulations on incapacity for work

• Association member or employment relationship?

  Furthermore, the courts correctly distinguish between

  • the typical duties of every club member in amateur and popular sports (such as assisting with the preparation and cleaning of sports grounds, selling tickets or the classic “ball boy”) and
  • the duties of a professionally sponsored junior player in an NLZ geared towards high performance, which is characterised by hierarchical structures in which the underage junior players are organisationally integrated and professional performance requirements are placed on them.

• Compensation for expenses or pay?

  In addition to being bound by instructions, the question of appropriate consideration is also an important indicator for categorisation as an employment relationship. In the case of remunerated junior players, the question therefore arises: Is it merely compensation for expenses – or remuneration for work?

  In addition to the amount of remuneration or its designation in the contract, the courts also take into account the other economic conditions, including the club’s own interest in promoting professional youth players:

  • Licensing requirements of the German Football League: obligation to operate an NLZ
  • sporting and economic added value of long-term talent
  • FIFA protection mechanisms (keyword: contract stability)

• Age limit – no blanket exclusion

  The courts also convincingly state that the requirements under association law (e.g. licence to play only from the age of 16) are in any case not decisive for the existence of an employment relationship. For example, Section 5 (1) of the German Youth Employment Protection Act (JArbSchG) contains a fundamental ban on child labour, which, according to Section 2 (2) and (3) JArbSchG, also applies to young people aged 15 and over who are still subject to compulsory full-time schooling. As regulations on compulsory full-time schooling are a matter for the federal states, scenarios would also be conceivable in which a young player loses their status as an employee if they move to the youth academy of another federal state. However, it is important to note that, in the opinion of the LSG Hessen, a possible violation of the Youth Labour Protection Act does not result in a loss of social security protection. However, this question could be raised again before the Federal Social Court.

Conclusion and outlook

The rulings of the state social courts make it clear that sponsorship agreements in the area of youth development are generally not subject to any special treatment under social insurance law. In addition to the structure of the contract itself, its practical implementation and relevant association regulations are also decisive.
The following applies: the more a minor player is integrated into the professional structures of a youth development centre, the more binding the performance requirements are and the more clearly the club has an economic interest in the player’s sporting development, the more likely this is to indicate the existence of an employment relationship.

With 58 youth development centres nationwide, the decisions affect a considerable number of young players – and potentially also other sports with professional youth development structures. The Hessian State Social Court has authorised an appeal to the Federal Social Court due to the fundamental importance of the case – so a supreme court clarification remains exciting. Should the decision of the Hesse State Social Court become legally binding, youth academies and clubs will have to systematically review their development contracts with youth players under social security law and – where the actual structure indicates an employment relationship – treat them consistently as employment relationships.