The recent controversy surrounding the Regulations, Terms & Conditions for NESC – 2018 (“Regulations”) issued by the ESports Federation of India (ESFI) for the selection of players for the Asian Games highlighted the unequal bargaining power existing with the sportspersons and the sports federations/ league owners and the dominant position of the latter.
The issues with the Regulations are apparent on the face of the contract and have been discussed in detail elsewhere. What is visible from the Regulations is that ESFI has only taken on the role and responsibility of holding trials for the event (and the marketing and publicity surrounding it), leaving the players on their own on matters relating to expenses, losses, injury etc. ESFI even retained the right to unilaterally change the conditions contained in the Regulations at any time without any notice.
Interestingly, the players, in practical terms, did not even have the right to withdraw from the event due to an illness or injury, as the withdrawal would lead to the player being liable for compensating the ESFI for all costs, damages and expenses. This contrasts with the non-liability of ESFI itself as is highlighted in clause xxv and xxviii of the General Terms and Conditions in the Regulations.
Whilst the furore surrounding the Regulations led to the ESFI acknowledging the problems and announcing its intentions to update the Regulations and indeed updating the Regulations on August 21, which clarifies and brings in a better balance in respect of the rights of the players, the issue highlights a wider problem at hand: the power imbalance that exists between sportspersons and the administrators.
The Scenario Abroad
The conflict between the sportspersons on one side and the authorities on the other side is neither a recent phenomenon nor an issue which is limited to the Indian context.
In the foreign context, due to the labour conditions, the club owners and administrators held the power in respect of deciding a player’s career. This power is generally derived from the pyramid structure in which sports federation generally functions.
At the top of the pyramid is the international sports federation followed by the national sports federation, regional sports federation and then at the grassroot level is the clubs. A player is generally prohibited from participating in competitions without the permission of international or national federations.
This conflict eventually led to attempts to strengthen the bargaining position of the sportspersons via the formation of unions and associations. Attempts to unionise footballers started around 1898 in the United Kingdom and was strengthened in the 1960s, while in the United States, unions were formed in the 1960s. It could strongly be argued that, presently, the power balance has swung firmly in favour of the sportspersons.
Further, collective bargaining agreements have become the norm for sportspersons in professional sports. It can be understood as “the technique by which dispute as to conditions of employment is resolved amicably by agreement rather than coercion”.
In the sporting context, these agreements are negotiated between the sportspersons’ union and the sports administrators (which usually include league owners/organisers). Such agreements generally contain agreed terms on the number of games, minimum and maximum salary, division of revenue, pension and other benefits, conditions governing sportsperson’s mobility, disciplinary rules etc.
These agreements can then be incorporated into the constitution and rules of the leagues. Thus, rather than simply being an agreement governing incomes, collective bargaining agreements come to shape the way in which a league operates.
The negotiations and the failure between the parties to agree on the terms of these agreements have seen multiple lock-outs. Recent examples include the dispute between the Australian Cricketers’ Association and Cricket Australia regarding the revenue sharing model. Commentators noted that it was only due to the cricketers’ unity that they were able to push through with their demands.
The sporting framework is quite complicated and includes interaction at several levels: between
- event organisers and
- the legislature.
However, amidst the complexity, it is important to understand the relationship of players with these organisations to ascertain the kind of benefits they would be entitled to. It often becomes difficult to determine with certainty whether a sportsperson is an employee or an independent contractor. This contrast often becomes important from a labour law point of view as employees are afforded better protection of the law.
Indian courts have generally applied several tests to determine if a person is an employee or not. While the direction and control test are a few ways devised to ascertain whether an employment relationship exists, there are various other factors that are also determinative of an employment relationship. An individual need to satisfy the ‘mutuality of obligation’ test.
There are other tests determining as to whether the person is employed as part of the businesses (organisation test), if he is economically dependent upon the business (economic reality test), or whether he uses his own tools. Thus, what becomes evident is that no single sweeping determination can be made due to the complexity of the questions involved.
Would an amateur athlete, who is dependent on government support for training facilities etc. be considered an employee?
Would a professional athlete who only appears for a few months for a league be considered an employee or an independent contractor?
Since the uncertainty of the status of the workers was evident, an alternative solution to the situation can be to form unions which might provide them the opportunity to collectivise themselves and have a better bargaining power.
The right to form unions and associations is provided within Article 19(1)(c) of the Indian Constitution.
This is not an unlimited right, and as such, this right is only enforceable against the State. The Trade Unions Act, 1926 (“Act”) is the statutory mechanism which governs the field and provides a definition of trade unions. Section 2(h) of the Act defines trade unions as “any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business”.
In the case of Tirumala Tirupati Devasthanam v. Commissioner of Labour, the Supreme Court has held that any group of employees can form associations. Therefore, the only barrier that is likely to arise in recognition of sports associations is the recognition of sportsperson as employees.
Regardless, there are also certain general problems associated with the process of unionisation. Through judicial interpretation it has been established that the right to form unions does not contain the right to engage in collective bargaining or attain its objectives and does not preclude the employer from not recognising the union/association. Thus, the federations and/or the league owners can simply refuse to recognise the union, leaving the union without much recourse as there is an absence of any statutory framework for recognition of union as a bargaining agent.
Trade unions are also bound to the legislative provisions in case of an industrial dispute (assuming a particular sport is deemed to be an industry), which includes notice period prior to striking, mandatory conciliation proceedings etc.
This makes union action less effective in cases where time is of essence. Unionisation also requires funding in respect of the activities of the union, which may not be present in less popular sports.
An individual sportsperson, who holds superior bargaining power, may feel that her power to negotiate is reduced due to collective bargaining. Further, it is also fraught with public relation concerns as unionisation is seen as more adversarial and politicised, which can be a concern for sportspersons who wish to not be seen directly associated with such activities.
Furthermore, within a sport itself, sportspersons could form multiple unions which would lead to fragmentation in the unity amongst the sportspersons and eroding their bargaining power. Most importantly, the sportspersons must have the capacity and capability of creating a union, which requires knowledge and effort on their part.
It may be noted at this time that there have been attempts in the past by sportspersons in India to collectivise themselves. In 1989, there was an attempt by the Indian cricketers.However, no concrete developments in this regard took place, perhaps with the players concerned about BCCI’s reaction to such acts. Interestingly, whilst footballers in India do have an association: the Football Players Association of India, which is affiliated with FIFPro, it was not recognised by the AIFF. In 2017, when the Association raised concerns over financial stability and employment concerns, AIFF simply responded by stating that it didn’t recognise the Association as its structure was not correct.
Perhaps in recognition of the power imbalance and concerns regarding the process becoming adversarial, the recent judicial and legislative developments have focused more on the constitution of a sportspersons’ association within the structure of the sporting authorities.
In this model, the sportspersons’ representatives are allowed a seat on the table in the committees of the sporting bodies via legislative or judicial actions. For instance, the Justice Lodha Committee in its report noted the reluctance “on the part of the BCCI to initiate such a move, ostensibly due to the apprehension of unionisation”. It also noted the importance of giving players a voice within the BCCI to address their concerns.
The solution that the Justice Lodha Committee recommended was as discussed above: a Players’ Association, consisting of former players. This Association would be responsible for nominating members to the Governing Council and Apex Council of the BCCI. The Committee also recommended that the financial needs of the Association be borne by the BCCI. In the Code for Cricket Players’ Association, as contained in Annexure B of the Committee Report, the mandate of the Association is clearly spelled out.
The Association is to “negotiate with the Board of Control for Cricket in India…securing best commercial and other terms to Players, and welfare measures and benefits, for both current and former players.” However, the Committee expressly clarifies that the Association will not be or act as a trade union.
A similar vein of thought appeared to be incorporated in the erstwhile National Sports Development Bill, 2013. The Bill proposed the constitution of an Athletes Commission, which would be responsible for, among other things, nominating members to the executive bodies of the National Olympic Committee and sports federations, so as to involve the sportspersons in the decision-making processes.
The Athletes Commission was to advice the National Olympic Committee and sports federations on the needs of the athletes relating to development, training and competition schedules, athletes’ grievances, selection and technical criteria, logistical and administration support, and athlete support beyond competitive sports career.
It was recommended that total strength of the athletes in the executive body not be less than twenty five percent exclusive of those who are elected by the general body. Further, representation of women in such bodies was also sought to be guaranteed. The author is unaware whether similar provisions exist in the 2017 Code, which is presently contained in a sealed envelope with the Delhi High Court, or the intended revision of the 2017 Bill, as proposed by the Government recently.
This model too has its own set of problems.
The voting mechanism could simply lead to the players’ representatives being outvoted. There would also be concerns regarding the influence that the authorities would be able to exert on such bodies as they would control the funding. The working of the structure proposed by the Lodha Committee and the 2013 Bill also hinges on the knowledge and participation of the athletes in such proceedings, which is by no means guaranteed.
A major concern that exists is that the sportspersons (and the ex-sportspersons) would merely become placeholders (or may not even attend majority of the meetings). Another concern is also of the conflict of interest arising as sportspersons may have their own ventures in the sport.
However, perhaps given the issues surrounding the legislative protection towards ‘trade unions’ formed by sportspersons and the concerns regarding the adversarial litigation and posturing that usually occurs in such a process, this mechanism would appear to be in favour at the present moment.
One-sided clauses, as contained in the Regulations, are often present in sportspersons’ contracts in the Indian scenario, at least during the initial drafts.
Depending upon the bargaining power of a sportsperson, such clauses and contracts are then negotiated. Sportspersons who are household names can often negotiate better terms for themselves as they hold superior bargaining power and can afford to hire lawyers and agents to protect their interests.
The problem arises for upcoming players, who generally do not have the same bargaining power, and are faced with such clauses and contracts. Mostly such sportspersons have to accept the terms and conditions laid out in front of them. This is because they necessarily need to avail the opportunities that are offered in order to advance their career and/or are often unaware of the consequences of such wide clauses. There is also a lack of awareness about issues which can impact a sportsperson and her livelihood, such as intellectual property rights etc.
It is hardly a wonder that modern sport has given rise to ‘super-agents’, who negotiate and handle the legalese surrounding such negotiations. However, unlike the Regulations, the contracts are not available in the public domain and are not subject to such levels of public scrutiny.
Within e-sports globally, recent trends have seen attempts abroad to unionise the players. This has also led to certain organisers taking upon themselves to give the players an initial push towards forming associations. This extends to providing players with an initial budget to form the associations and giving them a seat at the table to present and discuss their concerns.
The problem for e-sports players in India is that even if recommendations of the Lodha Committee and/or provisions similar to the 2013 Bill are enacted, they are unlikely to benefit from the same.
This is because the ESFI has not yet been recognised by the Ministry of Youth Affairs and Sports, and thus, is likely to be outside of the ambit any such provisions.
Thus, the players may not find themselves with any voice within the functioning of ESFI. Further, while the players could form an association themselves, it is doubtful it would be an effective mechanism due to the reasons stated above. Also, given the nature of e-sports, there may be question marks over the fact whether the e-sports players themselves are in a position to unionise themselves at the present stage. Interestingly, the International E-sports Federation, of which ESFI is a member, does have the concept of an Athletes’ Commission.
A solution to the problem of power-imbalance would appear to be greater transparency in decision making on the part of ESFI. It is indeed commendable that the ESFI has, taking into account the views of the stakeholders, updated the Regulations, which provides clarity on various aspects such as the expenses etc. to be incurred. Further, the federation also appears to be updating their website to better reflect the rules and regulations of ESFI.
Whilst such actions would involve public scrutiny, it would also allow ESFI to gain greater legitimacy in its objectives. It does not appear that ESFI is the only organisation with interest in e-sports in India and would perhaps need the players’ support in the fulfilment of its objectives. On part of the players, lessons should be learnt from the outrage that followed the Regulations becoming public. It would become essential to be vigilant and raise their voices about similar issues that crop up in the future.
[This article was updated on September 8, 2018, in light of the fact that ESFI had issued revised Regulations on its Facebook page on August 21, 2018.]
[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the Bridge.]
https://cybersport.com/post/indian-asian-games-terrible-esports-contract, https://thebastion.co.in/politics-and/sports/esports-is-here-to-stay-where-do-indias-pro-gamers-go-from-here/, http://www.espn.in/esports/story/_/id/23736148/three-lawyers-weigh-esports-federation-india-player-contract
Karol Leather Karamchari Sangathan v. Liberty Footwear Company, (1989) 4 SCC 448
 1995 Supp (3) SCC 653
 It may be noted that certain states do have legislation governing the recognition of unions by the employers.