The Esports athlete: work, services and teams

When a player legally becomes an athlete, and how labor relations, services and teams are organized once a sports body recognizes the discipline.

Brazil focus: this text is written mainly for readers in Brazil and the Brazilian Esports market. It refers to Brazilian law, institutions and practice.

Note: the text itself places this article in early 2018 (it announces a follow-up for March 2018). Laws, figures and the legal status mentioned are those of that time.

These players are known as athletes, in their institutional and professional regularity, once an administrative body of this area is recognized by the Ministry of Sport in the country where they compete. This is apart from recognition by other ministries, such as the Ministry of Culture in some countries, or when, at the same time, Electronic Sport and its regulation are also recognized. Where there is no such recognition, or no such recognized body to administer this sport in the country's national sports system, players are usually known by other names such as "cyber-athlete" or even "gamers". These terms fall out of use when the category is professionalized and regulated, so that it fits the rights and duties that the class of athletes legally requires. With the recognition of the Brazilian Confederation of Electronic Sports by Brazil's Ministry of Sport (National Secretariat of High-Performance Sport), and with it officially inside the National Sports System, we will treat the player here only as an "Athlete".

Also from this article on, we will write the term "Electronic Sport" in English as simply "Esports or esports", as defined by the Associated Press in its Associated Press Style Book since May 2017, and we will no longer write both "Esports" and "e-Sports".

Regardless of this, these are the athletes who carry out their work for organizations with a sporting/commercial character, which are generally legally constituted companies. In Brazil, the legal and tax models most used are: Limited Civil Society (S/C Ltda.), Individual Limited Liability Company (EIRELI), Individual Microentrepreneur (MEI), Individual Entrepreneur and LTDA (EI), Micro Company (ME) and Small Business (EPP), split here between company classification and types of taxation. Alongside these we have Sports Clubs (such as Flamengo, Corinthians, Grêmio or, outside Brazil, Real Madrid and Barcelona, among others), constituted as Non-Profit Entities. Beyond these, there are the game developer companies themselves and/or sponsoring companies, which can set up electronic sports teams on their own and also invest in teams that belong to their own championship calendar.

On Traditional Sports Clubs (the traditional tax and Legal model) and Club-Companies, and the aspects of the Brazilian Constitution regarding Sport, the Zico Law 8672/93, the Pelé Law 9615/98, Law 9981/2000, Provisional Measure 2011-9 of 26/06/11, Law 10671/03, Law 12395/11 and Articles 1039 and 1092 of the Civil Code, plus the issues involving majority shareholders, quota holders, minor partners and sponsors, North American-style Leagues and investment in athlete development, we will write in a next article to be published in early March 2018.

What we can say in advance in this article on the subject of the previous paragraph is that there is no relationship of success or improvement for Sports Clubs that became Club-Companies, nor the same relationship for teams that were already created in the Club-Company model. What gives success to each of them, regardless of the model, is qualified management in all areas and only that. But the Club-Company model is very uncharacterized by regulation that would make it understood literally and completely. What was presented in Law left many gaps in understanding and application, and to this day there is no consensus on the model to follow. However, as already said, we will address the subject in another article.

In 2013 Brazil took a significant leap in its Esports scene thanks to the growth of the online game "League of Legends". The routine of these professional athletes (players) is very heavy. The latest time to get up is 11 a.m. After the first meal of the day, the working day is up to 12 hours watching matches, studying opponents and fighting. This is, as already covered in the article written earlier under the title "Esports as Regular Sports, its progress and its regulation and official recognition in Brazil and in the World", and in English under the title "Why Esports are Regular Sports and other Issues", both available on LinkedIn and on the websites of CBDEL, PAMESCO and WESCO, a sport practiced under the strict application of physical, mental and psychological methods and resources that fit perfectly into high-performance sport.

Although the modality is not yet recognized as a sport in Brazil, we repeat here that the Brazilian Confederation of Electronic Sports already has the recognition and certification of the Ministry of Sport (especially through SNEAR; read the articles "CBDEL is Certified and approved by Brazil's Ministry of Sport" and "Legal view of the Certification and Recognition of CBDEL" on LinkedIn and related websites to understand what this means and its impact on the electronic sports scene in Brazil). The advance of professionalization is undeniable. So the big question arises about the recognition of the formal employment record (the "signed work card") for the athletes (players) involved in this complex structure.

Although Esports is a recent sport, our Brazilian legislation has not faced the subject. It is in fact waiting for parliamentary results, with proposals of 4 bills made especially for Electronic Sport: Federal Bill 3450/2015 (Chamber of Deputies), Federal Bill 7747/2017 (attached to PL 3450/2015), State Bill 1512/2016 (São Paulo) and Federal Senate Bill 838/2017. Three of them, all except PL 7747/2017, were drafted and formatted by the president of CBDEL, Mr. Daniel Cossi, and standardized and presented by the respective Federal Deputy, State Deputy and Senator. Other State Bills of the same content and aim have already been presented in other states.

Returning to the main subject, in current market practice the contract agreed between the parties is a service provision contract, a civil sponsorship contract or an employment contract. Of these, the least favorable to the athlete, and, taking into account the guiding principle of Labor Law, which is the PRIMACY OF REALITY, we solemnly believe it is the civil sponsorship contract, a type of contract that suits a relationship with the "team". That is because in the contractual relationship there is subordination to the employer, performed habitually through a daily training routine of at least 8 hours, in exchange for salary, and which can only be performed by that specific contracted athlete (player). In labor matters what happens in practice matters more than what the documents show. According to Plá Rodriguez, "it means that in case of disagreement between what happens in practice and what appears in documents and agreements, preference must be given to the former, that is, to what happens on the ground of facts".

In a service provision contract, the rights and duties of the contractor and the contracted party are set out and agreed by mutual consent, formalized by signatures, registration of the contract at a notary's office and other Legal steps that may be needed, known to any lawyer. It must, without fail, be the guarantee for the service taker that, if all the conditions once agreed in the contract are met, the result of the services provided will meet the expected expectations. It must also, without fail, guarantee that the contracted party (athlete) is not involved in and does not take part in possible lawsuits dealing with the contractor (team), such as the contractor's failure to comply with what was agreed, and so on.

Another point is that every service contract must state the period for which these agreements apply, the start and end of the services provided, or set an indefinite term unless both parties agree to terminate it.

It is important to note that, whether by task or continuous services, we cannot enter service provision contracts that create an employment bond and thereby establish an employment relationship with the contractor, as that would be contrary to the CLT (Consolidation of Labor Laws).

Under an employment contract (having the "work card signed"), all rights, duties and other guarantees for both parties come from agreements with class bodies, from our Constitution and from the Consolidation of Labor Laws (CLT). Here we have labor law, whereas in the previous case (Service Provision Contract) we have civil law (Civil Code).

However, as we said, there is what jurists usually call the PRINCIPLE OF THE PRIMACY OF REALITY. This means that if you meet all the requirements of an employee (CLT), in fact the type of contract signed between the athlete and the team will matter little, since you will have all the guarantees provided by Law. See below some characteristics side by side:

According to the labor law reform made in 2017, there are more ways to negotiate between employees and employers, from the perspective that what is negotiated prevails over what is legislated. These possible agreements will have Legal value on matters such as overtime, dismissals, hour banks, vacations and work breaks, among other points. These reforms came at a time when the Labor Law must adapt to our technological, market and social reality, since today we have tools such as WhatsApp and WeChat, as well as home office and more horizontal work. Here an important point comes in: Gaming Houses, the spaces used by athletes where they both train and live their regular daily lives, are in greater use and must indeed be considered in the context of the Labor Law. In horizontal work there is a thin line separating hours of work, training and leisure carried out in the same place, with the same tools for work, training and leisure. Above all, the new Labor Law greatly benefits the relationship between electronic sports teams and athletes in that the formal agreement between the parties now prevails and each situation is better understood. The chance of Bad Faith Litigation is now lower, as is the punishment of whoever brought it, when proven.

In every contract, regardless of its type, the correct statement of the end activity must be observed, which is taking part in high-performance championships that require a lot of skill and training. This alone shows that, beyond physical wear, these players suffer excessively from mental wear, because the game demands great concentration and reasoning together with emotional control. They are required to meet several goals.

Article 3 of the CLT says that an employee is any natural person who provides services of a non-occasional nature to an employer, under the employer's dependence and in exchange for salary. The distinguished author Sérgio Pinto Martins says in his well-known work (MARTINS, Sergio Pinto. Direito do trabalho. 17th ed. São Paulo: Atlas, 2003):

"The Employment Contract, in truth, is already a legal labor relationship, even when there is no provision of services, because it creates rights and obligations. If an agreement is needed for the employment relationship to exist, even a verbal or tacit one, even if not express, there is an interaction between the contract and the relationship and one cannot exist without the other. The relationship is the effect of the contract and not the cause."

The employment contract is distinguished from various other contracts of a civil nature because it necessarily involves a natural person as the employee. According to the prevailing theory, the employment contract has a contractual nature, and so the contract exists once the employee provides services, followed by remuneration from the employer, even with a tacit agreement.

It should be noted that one of the requirements of the contract is to perform the work in "Training Centers" assisted by coaches, psychologists, nutritionists and other professionals. It is essential to record that electronic sports athletes are subject to punishments or other penalties if they breach any clause of the agreed contract. It follows that the athlete has no AUTONOMY and is in clear subordination to the contracting company.

Once all the requirements listed in article 3 of the CLT are met, all rights must be recognized: signed work card, salary, social security contributions, vacations plus the constitutional one-third, the 13th salary, and the severance guarantee fund (FGTS).

In addition, with the recognition of Esports as a sport, the Pelé Law (Law 9,615/98), under article 28, provides that the activity of the professional athlete is characterized by the special sports employment contract. Hence the importance of the work CBDEL has been doing for years with the competent bodies in Brazil so that recognition happens definitively. The bills, mostly drafted by the president of CBDEL, at Federal level (Senate and Chamber of Deputies) and State level (Legislative Assemblies), meet these needs. As we said, the Certification of CBDEL by the Ministry of Sport, in particular by the National Secretariat of High-Performance Sport, is already a sign that this path is being taken.

However, even where items provided for in the Pelé Law already appear in the employment contracts of some electronic sports players with their teams, we still cannot count on the defense of electronic sports athletes under the guarantees and other specifications that come from this Law. Electronic sports athletes are not officially recognized as athletes under our Legislation, and therefore cannot enjoy anything the Pelé Law provides.

A topic of major importance in Esports is also the participation of minors (between 16 and 18 years old) in teams and other competitions described as professional. In addition there is the distinction between educational, amateur and professional electronic sport, in any sports category of the Brazilian National Sports System.

Both the CLT and the Constitution rule on the work of minors. The Fan Statute, the Pelé Law and the Child and Adolescent Statute must also be considered. Under the CLT and the Constitution, any type of work is prohibited for minors under 16 years of age, except as an apprentice (Apprenticeship Contract).

Between 16 and 18 years of age, only administrative or technical work is allowed, as long as it is not done in places considered unhealthy. In these cases there are many nuances of change, such as the workload (working hours), where extensions are prohibited, and there are also working-hour adjustments based on what the minor has completed in schooling (yes, only if the minor has completed secondary school may the working day be eight hours, and even then these hours include theoretical learning; otherwise the limit is six hours), a guaranteed minimum wage per hour, matching work vacation with school vacation (if they are still studying), among many other particularities.

A non-professional athlete in training, over fourteen years old, may receive financial aid from the sports practice entity that trains them (done only and exclusively by Clubs Certified as Athlete Trainers, duly approved both by CBDEL and, for example, by the Brazilian Confederation of Clubs, thereby even obtaining Federal Lottery subsidies and various other private investments, and also the Sports Incentive Law itself, which is not specific to athlete trainers but runs through amateur sport). This takes the form of a learning scholarship freely agreed through a formal contract, without creating an employment bond between the parties. We will address Athlete-Training Clubs in the article we will publish on Club-Companies and the related subjects already mentioned in the paragraph at the start of this article.

It is very important to understand that we must have youth categories in Esports, but the age barrier (only over 14) is still an important point to observe. Youth development is crucial to form new talents and discover professionals who will make a difference in the very near future. Training centers of CBDEL and of the affiliated Federations and LNEE will receive children from nine years of age under special conditions and only in educational and inclusive electronic sport.

Nevertheless, and with certainty, it follows that under either the CLT or the Pelé Law the basic requirements that fulfill the labor rights of athletes are evident.

Countries such as South Korea, the United States, Finland and Russia already recognize and grant to the Esports athlete all the rights that were already offered and applied to athletes of other modalities. Although we are not dealing in this article with all the aspects around an athlete, there are points such as ARENA RIGHTS and IMAGE RIGHTS that must also be negotiated.

An extraordinary fact is the inclusion of Japan as a country that recognizes the modality as professional. There was a huge obstacle to this recognition because of a Law in force in the country since the 1980s that prevented professional game championships, as a way to stop the action of organized crime that used games to move money illegally. With the progress of Esports in mind, and with an eye on the 2024 Olympics, the Japanese government sought through the legislature to change a law that had stood for decades. With the change in the Law, championships with high prizes can now be officially established. With this advance, the issuing of professional licenses to the best players in the tournament was legally recognized.

In addition, in the first week of February this year the Esports scene in Japan announced JeSU (Japan Esports Union), which regulates game competitions in the country. This body is already in contact with WESCO (World Esports Consortium) to discuss and carry out joint activities regarding the standardization of international electronic sport, its application through resolutions of the International Esports Tribunal, and the International Esports Dispute Resolution Chamber, among other applications. Through JeSU, companies can nominate competitors to earn a "professional player" license and compete professionally in the country. The new organization, which brings together the Japan e-Sports Association, the eSports Promotion Organization and the Japan eSports Federation, will be in charge of promoting the growth of esports in Japan. It is chaired by presidents and CEOs of Konami, Capcom and other companies. JeSU will issue professional licenses to competitive players in Japan, which is expected to boost the development of the industry in the country.

Following the movement toward professionalization of the modality, Riot Games in 2017 made it mandatory to formalize the signed work card for all athletes on the teams that take part in its North American and European competitions. CBDEL in Brazil will propose stages and an adaptation period for teams that wish to fit sports club models, among other proposals, but nothing will shake the Esports scene in any current area.

In the American continent, doing this role and standardizing Electronic Sport Laws, Electronic Sport Sports Justice Courts, Health and Development Departments, Anti-doping and Arbitration Commissions, Family, Education and Athletes, among many other aspects, we have PAMESCO, the Pan-American Confederation of Electronic Sports, whose members are fully committed to making the electronic sports scene, its practice and its professionalization homogeneous. The current members of PAMESCO are: USA (AMCOES and University and School Leagues), BRAZIL (CBDEL and National Esports League), MEXICO (FEMES and its National Esports League), PERU (APDEV), COLOMBIA (ACDEV), ARGENTINA (DEVA and ADEEMA), ECUADOR (Master GAME) and CHILE (ACHDEV). PAMESCO is currently in contact and discussions with UNESCO, USAN (United South American Nations) and the OAS (Organization of American States).

At the global level we have WESCO, the World Esports Consortium, with the participation of 29 countries and their electronic sports administration bodies, as well as companies from various sectors that interact in some way with Esports, including some developers. PAMESCO is also part of WESCO and under its seal, and WESCO also works for the development and standardization of electronic sport in its various areas, departments and systems. WESCO is currently at the start of contact with the IOC (International Olympic Committee), the IPC (International Paralympic Committee) and the UN (United Nations), among other regional bodies.

Given the whole world scenario, we can no longer speak of a civil contract or informality in the provision of services. With the advance of the modality in Brazil, teams that do not sign their athletes' work cards may bear the sanctions provided in the Labor Law when taken to court.