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Understanding your contract in eSports and gaming

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Relationship status: It’s complicated

There is a common misconception that probationary periods allow an employer to dismiss an employee for any reason (or for no reason at all) prior to the confirmation of their employment. This is not necessarily the case and, in fact, there is no statutory basis that entitles an employer and an employee to a probationary period.

Being offered, or offering a person, a new opportunity in the gaming or eSports industry can be incredibly exciting.  

Everyone is looking to the road ahead and enthusiastically imagining a long and fruitful relationship. Gamers are understandably keen to get the work or training underway but, in that excitement, can forget to write down what their arrangement will be or worse, rush to sign a document that they don’t fully understand.

After some time, confusion may arise about the conditions of the arrangement – what was the original deal? How much was the gamer to get paid and for what? How many hours of training and competitive gaming were agreed to? And who is responsible for what?

Whilst it may not seem glamourous, understanding contracts and their importance can go a long way to maintain a functioning working relationship that is free from drama. Contracts enable gamers, gaming organisations, sponsors and other parties to clearly understand their rights and responsibilities. In simple terms, contracts articulate the type of relationship you will have with the other party and what you will owe to each other as a result of that relationship.

In this blog, we briefly touch on three main type of relationships and contracts that are common in gaming and eSports.

Employment

An employment contract creates an employment relationship. This will mean that the gaming organisation or company employs the gamer and will have certain responsibilities towards that individual. Some of those responsibilities include:

  • Paying the minimum wage that the employee is entitled to receive in accordance with workplace laws;
  • Making superannuation contributions;
  • Creating and maintaining a safe working environment;
  • Workers compensation;
  • Setting expectations on how work is to be performed; and
  • Performance management.

In return an employee in an employment relationship is responsible for:

  • Performing work as reasonably directed by the employer;
  • Acting in the employer’s best interests and not causing damage to the employer; and
  • Working safely.

An employment contract sets out these matters and specifies how the employment can be terminated, and what will happen when it is. An employee must be given notice of the termination of their employment and treated fairly in the process.

Independent contracting

Many gamers enter into independent contracting agreements with gaming organisations and sponsors where they are contractors providing a service to or on behalf of an organisation, rather than working as an employee.

In contracting relationships, the contractor is running their own business and is performing the services according to their own skills and expertise.

A contracting agreement will generally set out that the contractor will get paid for the completion of certain services, a task or a project – say, a fee for competing in a particular competition. At the end of that competition, the relationship comes to an end because the services have been fully rendered and the contractor has been paid.

In a contracting agreement, the parties maintain an “arm’s length” from each other, meaning that the organisation has less control over how the gamer does what they do – they just need to get it done.

Where the organisation attempts to exert more control over the gamer in an independent contracting relationship, the relationship may actually be one of employment. This is known as “sham contracting” and can have serious consequences for an organisation.

Sponsorship

Sponsorship is another form of relationship that commonly arises in the gaming and eSports industries. In a sponsorship arrangement, a sponsor provides a form of consideration (perhaps money and/or products) to a gamer in exchange for certain forms of promotion from that gamer.

In sponsorship arrangements, it is essential that the parties clearly articulate what is expected. Gamers should understand the extent and limitations of the promotion they are expected to provide and how this might affect any other sponsorship relationships they might have. We have heard some horror stories of sponsors insisting gamers promote brands or products in inappropriate ways that the gamers never considered to be part of their original arrangement.

Contracts give you piece of mind

Articulating the type of relationship that you are entering into from the outset, and understanding fully what is required of you and what you can expect from the other party, is essential to a functioning, fruitful relationship. Good, clear contracts can help you achieve this and give you piece of mind.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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