Kevin Keegan v Newcastle United Football Club Ltd - Essay Example

? CASE of Kevin Keegan v Newcastle United Football Club Ltd Premier League Manager's Arbitration Tribunal 20 October 2009 2009 WL 5641054 Philip Havers QC (Chairman) Lord Pannick QC Kenneth Merrett 1 October 2009 Introduction In this case, Keegan v Newcastle United Football Co Ltd, the claimant is Kevin Keegan (former football manager) and the respondent is the Newcastle United Football Co Ltd. The legal issue concerns constructive dismissal of the manager and the fundamental terms of employment contract, a breach of which entitled him to succeed on constructive dismissal claim. The Arbitration Tribunal declared that Kevin Keegan was constructively dismissed by the Newcastle United Football Club Ltd and therefore Newcastle United Football Club Ltd must pay him for damages amounting to ?2million in addition to interest which will be assessed if the parties do not agree. In the United Kingdom, Constructive dismissal is covered under the Employment Rights Act 1996 (Prichard, 2005, p. 15) Facts Mr Keegan was appointed the Manager of the Club (for the second time) under a written Contract signed and dated 16 January 2008. The then Chairman of the Club, Chris Mort, had approached him about the position a few days earlier, and asked him to meet Mike Ashley (the owner) before deciding whether to take up the appointment. Therefore, a meeting was arranged to take place on 16 January 2008 in London; in attendance were Mr Keegan, Mike Ashley, Mr Mort and Tony Jimenez. After lengthy negotiations and discussions, the Contract was signed between Mr Keegan and the Newcastle United Football Club, and Mr Keegan was appointed the Manager of the Club at an initial salary of ?3million per annum. The primary case for Mr Keegan is under the contract’s terms. Before the signing of the contract, they had agreed that he was to have the final say, and this is the basis on which he signed the contract on. Also, he asserts that at this meeting, Messrs Ashley, Jimenez, and Mort has expressly assured him that he would have the final say. However, the Newcastle Club argues that nothing was expressly said at the meeting regarding whether Mr Keegan will have the final say. In the case, the Club argues that Mr Keegan was told that there was a possibility that Dennis Wise (who was the then Manager of Leeds), would be appointed to this post. As such, the Club argue that under this structure, Tony Jimenez and the Director of Football would be responsible for recruitment of players and they would have the final say, not Mr Keegan. There are several events that culminated to the resignation of Mr Keegan on 4 September 2008. On 30 August 2008, almost at the end of the transfer window Mr Keegan was telephoned by Mr Wise and was told that he had a great player for the Club to sign, namely Ignacio Gonzalez, and therefore he should look him up. Mr Keegan tried to do a background search about the player and could not even locate him on the internet and so was not satisfied that he will make a good player. Notwithstanding the fact that Mr Keegan had made it clear to Mr Wise, Mr Jimenez and to Mr Ashley that he strongly objected to the signing of Mr Gonzalez, the Club went ahead with the deal and the transfer was concluded on 31 August 2008. The Club defended its move as being motivated by commercial interests of the Club. The Club described these commercial interests as: the signing of the player on loan would be seen as a “favour” to two South American agents who were influential and would look Club favourably in the future. Whereas it is clear that Mr Keegan had concerns concerning the nature of this deal, his primary objection to it was that it breached the term of his contract by which he, as the Manager, would have the final say. Mr Keegan stated that despite several attempts by both sides to find a way forward, there seemed to be no headway and he thus concluded that he had no option but to leave the Club. Legally, Mr Keegan argued, the Club had breached fundamental Contract’s terms and he was therefore entitled to resign (Havers, Pannick, and Merrett, 2009, Para 1-8). Judgement Judges Philip Havers, Kenneth Merrett, and Lord Pannick declared that Kevin Keegan was constructively dismissed by Newcastle United Football Club Ltd and therefore the Club must pay him damages amounting to ?2million in addition to interest which is to be assessed if parties concerned do not agree. They argued that Joe Kinnear (Mr Keegan’s successor) had asked to have the final say and the Club gave him while the model and the structure remained the same and Mr Wise was still the Director of Football at the club without any change in his contract’s terms. Besides, none of the witnesses for the Club was able to identify the scenarios that had been relied upon, particularly the scenario from which it would have been implicit that Mr Keegan should not have the final say. Moreover, the judges were of the view that they could not believe that Mr Keegan would have accepted the Manager’s job if it had been implicit that he would not have the final say; so, they “unhesitatingly” accept his evidence. The judges finally observed that the Club’s own witnesses seemed not to be clear regarding what was the position as to who would have the final say. So, they argued that they had real difficulty in understanding what the real position of the club is concerning the issue of who should have the final say. Additionally, the judges observed that the Club repeatedly stated that Mr Keegan was not entitled to the final say, but in a letter to Mr Keegan from Mr Llambias dated 4 September 2008 setting out the Club’s proposals for attempting to advice against the resignation of Mr Keegan. In the letter, Mr Llambias stated that the Club will continue to be in the position that no player will be bought for the first team without his (Mr Keegan’s) approval, save for commercial deals which will always remain the Board’s sole discretion. Since there was no clarity on the part of the Club on whether the manager should have the final say, the judges turned to consider the duties that are usually associated with the position of a Premier League Football Team position. The judges concurred that these duties included controlling the players coming into and out of the Club subject to the financial restraints set by the Board. Since there was no contrary to this evidence, the judges, accordingly, concluded that the Premier League Manager’s position included having the final say regarding the transfers into the Club. Therefore, the judges ruled that they were satisfied that Mr Keegan left the Club because the Club had breached the terms of Contract by imposing on him a player whom he did not want, namely Gonzalez. The actions of the Club amounted to a breach of contract because they were against the contract’s provision that entitled and required Mr Keegan to have the final say. They thus accepted Mr Keegan’s evidence as his resignation was timely. According to the judges, Mr Keegan was justified in leaving the Club because of the following reasons: the law provides that if one of the parties to a contract fundamentally breaches that contract that breach may amount to the contract’s repudiation thus entitling the other party to leave or resign. This is what is referred to as constructive dismissal. Therefore, the judges were not hesitant to point out that the Club had breached the contract as evidences and the description of manager’s position show that he should have the final say. Also, the court did not accept the Club’s argument that Mr Keegan either waived the breach of contract by the club or affirmed it through confirmation on 1 and 2 September that he had tendered in his resignation and did not release a press statement on 3 September regarding the same. Based on the issues considered by the judges, they decided that it should be published that Mr Keegan was constructively dismissed in order to restore his reputation. They also decided that he should be awarded damages. They assessed his damages for constructive dismissal by the club as amounting to ?2m subject to the determination whether there should be any added interest (Havers, Pannick, and Merrett, 2009, para 9- 53). Commentary This case concerns one of the most contentious and controversial issues of today. The nature and terms of employment have evolved over the years and are presenting serious challenge in the work environment. This is particularly so especially in the football management where performance of the club has been of paramount interest. Therefore, the possibility of constructive dismissal has immensely increased as both parties seek to meet their end of the bargain, sometimes with total disregard of the other party. In the United Kingdom laws, constructive dismissal is when an employee is forced to resign from his or her position against his or her will because of dissatisfaction with the employer’s conduct (McGregor, 2010, p. 17). The vital but a really difficult legal issue that arose in this case is in regard to the duties of an employee, in this case a football manager. What appears apparent in this case is the fact that the duties of a football manager within the Newcastle Football Club Ltd structure have not been explicitly described. Whereas some duties are obvious, other duties have not been stated and may often present legal challenges in an event of conflicting “perception” by either party on what duties they should perform in a given situation. Particularly, the issue of who should have the final say in the club is not definite thereby either party may perceive to have the final say and act according to that perception. The difficulty of this legal issue was evident when the judges acknowledged it and resorted to the definition of the term “Manager” in an attempt to determine if a person holding this position has a final say or not. The Club had also relied on the definition as set out in paragraph 1 of Section A of the Rules of the Premier League. Even though the definition does not explicitly state whether the manager should have a final say, the judges argued that the managers’ roles can as well be interpreted to amount to having the final say. That notwithstanding, this is a difficult legal issue that has to be addressed in order to ensure that such cases in the future are handled with certainty. This case presents a perfect case of constructive dismissal. Based on the facts of the case and the arguments presented by the judges who sat on the arbitration tribunal, it is evidently clear that this case amounts to constructive dismissal. This is evidenced by the fact that Mr Keegan resigned against his will because of his employer’s behavior. The case has proved three major aspects that are considered in determining constructive dismissal: employee felt forced to leave because of the breach of employment contract; the employee did not do anything to suggest that he had accepted the breach; and the employer committed a proved breach of contract (McGregor, 2011, p. 29). There are a number of lessons that can be learned from this case. The first lesson learned is that whereas the Employment Rights Act 1996 is considerably comprehensive it may sometimes fail to adequately address all the legal issues relating to employment. Therefore, it is important that further amendments be made to include emerging trends and issues in employment. Secondly, the aspect of constructive dismissal is explicit under law but it is imperative that all the issues surrounding it be considered when making submissions. Lastly, the duties of football manager emerged as the most difficult legal issue in this case because it is not clearly stated whether they have final say or not. Therefore, it is important that the Rules of the Premier League be amended to clearly state whether football managers have the final say. Bibliography Brennan, Blair, W., Jacob, R., & Langstaff, B. F. J. (2008). Bullen & Leake & Jacob's Precedents of Pleadings. London, Sweet & Maxwell. Havers, P, Pannick, L and Merrett, K, 2009, In the Premier League Manager’s Arbitration Tribunal between Kevin Keegan v Newcastle United Football Club Ltd, available: http://videos.icnetwork.co.uk/nejournal/kevinkeegan.pdf (Accessed: 7 May, 2012) McGregor, H, 2010, McGregor on Damages, Sweet & Maxwell McGregor, H, 2011, McGregor on Damages, Sweet & Maxwell. Prichard, G, 2005, Constructive Dismissal, XPL Publishing. Read More