Town manager's compensation wrangle

JOE Royle is today waiting to find out whether he will have to pay back any of the £423,000 damages award after he was sacked by Manchester City.Urging three judges to overturn the award, David Pannick QC told the Court of Appeal yesterday that the severance pay clauses in Royle's contract with the club should be read so as to make "commercial good sense" in the context of the "realities of playing football".

JOE Royle is today waiting to find out whether he will have to pay back any of the £423,000 damages award after he was sacked by Manchester City.

Urging three judges to overturn the award, David Pannick QC told the Court of Appeal yesterday that the severance pay clauses in Royle's contract with the club should be read so as to make "commercial good sense" in the context of the "realities of playing football".

Mr Pannick said the reality was that Manchester City were relegated from the Premier League when they ended in the bottom three in May 2001 and that, therefore, at the date of his sacking on May 21, Royle was not entitled to a full severance pay-out.

He added that Royle's argument that the club was not actually sent down to the First Division until sometime later, when the three relegated clubs handed over their Premiership company shares to the three promoted teams, "plainly conflicts with the ordinary use of language".


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Ipswich Town manager Royle, 55, was at the hearing in London to hear Mr Pannick argue that the share transfer was "an arbitrary event" on a date "not treated by the football community as having any significance".

Royle had sued the club when he received only a fraction of the pay-off he was due after being sacked.

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City lost to Ipswich on May 7, 2001, making it mathematically impossible to stay in the Premier League. They lost 2-1 to Chelsea on May 19 and finished third from bottom.

His compensation for breach of contract was awarded at the High Court in Liverpool last July.

A part of his contract stated he would receive an amount equal to his annual salary if City were in the Premiership when he left, or six months salary if they were in the First Division.

City bosses refused to pay him the cash on the basis that the club was relegated as soon as its last match was played.

In the High Court, Judge Michael Kershaw QC ruled in favour of Mr Royle and awarded £422,899 damages, plus costs.

The judge had heard that City – now back in the Premiership – sacked Royle because they believed he was incompetent.

Mr Pannick told Lord Justice Sedley, Lady Justice Smith and Lord Justice Gage that attempts to settle the dispute and avoid an appeal had failed.

The short point to be decided was whether, for the purposes of the contract, City were "in" the Premier League or "in" the First Division when Royle was sacked two days after the end of the Premier League season with the club in one of the bottom three places.

Jonathan Harvie QC, for Royle, who became City's manager in 1998, said the contract under which he had been dismissed had been entered into in June 2000 after he had succeeded in getting the club into the Premier League.

It was most unlikely that anyone, at the time the contract was signed, contemplated his dismissal.

The unambiguous explanation of what the contract meant was to be found in the Premier League Rules, which stated that a relegated club ceased to be a member of the League only when it transferred its share to a promoted club.

The judges reserved judgment to a later date.

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