[Legal Spotlight] (6) Can a Coach Be Dismissed for Poor Results Alone?…The Legal Issues Left by Hong Myung-bo's Resignation

"A coaching contract has a strong mandate-contract character"
Insufficient grounds or procedure for termination may lead to damages liability

As Hong Myung-bo, head coach of the national soccer team, voluntarily resigned taking responsibility for the elimination in the round of 32 of the World Cup, attention is also focusing on the legal issues involved in terminating a professional sports coaching contract. The legal community explains that while replacing a coach due to poor results is common in the sports world, depending on the contract terms it can lead to a large penalty or a damages lawsuit.

Attorney Shin Yong-hoon of Daeryun LLC explained that for a coaching contract, the actual nature of the contract is more important than its title. The point is that a court comprehensively considers whether the employer exercises direction and supervision, the independence of task performance, the exercise of personnel authority, and the method of salary payment to determine whether it is an employment contract or a mandate contract under civil law.

Because professional sports coaches are guaranteed considerable autonomy in matters such as player selection and match operation, there are not a few cases in which they are recognized as being under a mandate contract or a contract equivalent to it, rather than as ordinary workers. However, depending on the contract terms and actual work form, the possibility of being recognized as a worker under the Labor Standards Act cannot be ruled out.

If a coach is recognized as a worker under the Labor Standards Act, terminating the contract for poor results alone is not easy. This is because the Labor Standards Act restricts dismissal without just cause.

On the other hand, if it is a mandate contract, the legal principles differ. Civil law in principle allows the contracting parties to terminate the contract at any time, but it provides that if one terminates at a time unfavorable to the other party without an 'unavoidable reason,' one must compensate for the loss.

Attorney Shin explained, "Even considering the win rate and squad management comprehensively, it is hard to view an 'unavoidable reason' as immediately established by poor results alone." In this case, the point is that the club or association may bear damages liability based on the amount equivalent to the coach's remaining salary.

In fact, a court recently issued a judgment to a similar effect. In a lawsuit brought by a professional basketball coach who was unilaterally dismissed last year against the club, the bench judged that the club had failed to sufficiently prove the grounds and procedure for termination stipulated in the contract. The club refused to pay the remaining salary citing poor results and the like, but the court ruled that the club must pay the coach about 300 million won in remaining salary plus delay interest.

Attorney Shin said, "In the sports field, results are the most important factor deciding a coach's fate, but legally the contract is the primary standard," adding, "If the grounds and procedure for termination stipulated in the contract are not met, terminating the contract for poor results alone can lead to damages liability."

He added, "A coaching appointment contract needs to be concluded from a risk-management perspective that considers various situations such as poor results or a failure of squad management, beyond simply setting the salary."

Reporter Jeong Ye-jin yejin0311@inews24.com

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[Legal Spotlight] (6) Can a Coach Be Dismissed for Poor Results Alone?…The Legal Issues Left by Hong Myung-bo's Resignation (Go to Article)