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Louis van Gaal's red reign is over as Manchester United
Football Club have dismissed the manager from his position. Van
Gaal leaves after completing two years of a three-year contract. It
appears that Manchester United have based their decision on Van
Gaal's capability to perform in the role. The scores on the
doors are as follows:
Manchester United achieved their
lowest goals total for 26 years with only 49 Premier League goals
this season, only one more than Blackburn achieved in 2012 when
they were relegated;
they conceded 35 goals this season,
which was the joint-lowest tally in the league with Tottenham;
and
the team made the most backward
passes in the league, 3,222 to be precise.
Though Van Gaal led the team to victory with an FA Cup win last
weekend, it appears that the disappointing results preceding this
success warrant the decision to end his contract.
If a fixed-term contract does not allow for early termination,
an employer can only end the contract early if the employee has
committed a repudiatory breach of contract. In the absence of such
a breach, if the contract does not include notice provisions and an
employer terminates it early, the employee can claim damages for
loss of earnings for the remainder of the term without the need to
mitigate his or her loss. It is therefore advisable for an employer
to include, in a fixed-term contract, the right to terminate the
agreement early such as, in this case, for poor performance.
Van Gaal is rumoured to be on a guaranteed basic salary of
£3.3 million a year. The termination provisions in his
contract provide for two-thirds of his salary (including image
rights and a loyalty payment) to be paid until June 2017 unless he
finds alternative employment, and around £5 million if the
club dismisses him at the end of this season. Generally, parties
involved in settlement discussions agree to have a continuing duty
of confidentiality relating to the negotiations and the agreement
they reach. However, due to the high profile nature of this matter,
it may be difficult to keep the details of this agreement
confidential.
There is speculation that Jose Mourinho will succeed Van Gaal as
manager at Manchester United. Ryan Giggs, assistant manager at the
club, has previously suggested that he will sever ties with
Manchester United if they do not offer him the managerial position.
It is reported that Mourinho is likely to bring Rui Faria with him
as assistant manager, which may mean an effective demotion for
Giggs if he decides to stay at the club.
In the recent case of Gibbs v. Leeds United Football
Club [2016], Gibbs was an assistant manager who declined the
managerial post when the manager he worked with was dismissed. He
continued in his role whilst negotiating a consensual departure.
However, Leeds United Football Club excluded him from many of his
usual responsibilities and he was denied contact with the first
team. He resigned as a result. The High Court held that the fact he
was prepared to leave if suitable terms were agreed did not bar him
from bringing a constructive dismissal claim. Whilst the facts
differ slightly, this decision highlights that Giggs is free to
negotiate a termination package with the club without hampering a
future claim for constructive dismissal should he resign in
response to an effective demotion following Mourinho's
appointment. To succeed with a claim for constructive dismissal,
Giggs would have to show that he was entitled to resign by virtue
of Manchester United's conduct, namely a repudiatory breach of
contract.
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