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Jeremy Lewis with more on Rangers, TUPE and now the FIFA Regulations


Following the sale of the assets of Rangers FC to a new company (New Rangers), the number of players refusing to continue with the New Rangers has now reportedly moved into double figures.  In several cases transfers have been arranged.  The departing players claim they are free agents.  New Rangers claim the players are acting in breach of contract, and that it is entitled to compensation. In the meantime international clearance for the transfers of five of the players has been put on hold.

Right to object

Media coverage of this dispute has to some extent focussed on whether the players were entitled to object to transferring to New Rangers.   Indeed a central theme of New Rangers’ argument has been that it was not until 7 to 10 days after the transfer was completed that players began to state that they were not willing to continue with New Rangers.  By that stage, say New Rangers, the players’ employment had already transferred as an automatic consequence of the Transfer of Employment (Protection of Employment) Regulations 2006 (“TUPE”).  The objections came too late.

One retort has been to claim that there was an absence of information and consultation prior to the transfer.   Whether that would be sufficient to permit a post-transfer objection is doubtful, though it derives some support from the decision in New ISG Limited v Vernon [2008] ICR 319.  (For a more detailed discussion see Jeremy Lewis ed, “Transfer of Undertakings”, Sweet & Maxwell, Looseleaf, at para A3.10.2).

Reg 4(9) TUPE

In the New ISG case it was important to establish an objection to a transfer so as to be released from post-termination restrictive covenants. But in the case of Rangers there would seem to be a more straightforward response.   Under regulation 4(9) TUPE, where a transfer involves or would involve a substantial change in working conditions to the material detriment of a person whose contract is or would be transferred, the employee may treat the contract as having been terminated, and they are to be treated as having been dismissed.  There need be no breach of contract, and it is sufficient that a person in the employee’s position could reasonably regard the change as disadvantageous.  That has been emphasised in a couple of cases involving relocation following a transfer: Tapere v South London and Maudsley NHS Trust [2009] IRLR 972 (EAT); Abellio London Limited v Musse and another [2012] IRLR 360 (EAT). 

Those advising the departing players will no doubt have had reg 4(9) TUPE well in mind.  Certainly when interviewed in late June 2012, two of the players seeking to leave (Steven Naismith and Steven Whittaker) hit precisely the notes that would be expected if a reg 4(9) argument was to be run.  They talked of the uncertainty they faced following the transfer and their wish to compete at the highest level.  They mentioned the likely (three year) ban from European football (resulting from the transfer of Rangers assets to a new company) and likely loss of Newco’s Scottish Premier League place (now confirmed).  This is fertile territory for any reg 4(9) claim. 

Constructive dismissal

Typically a reg 4(9) TUPE claim will be combined in the alternative with a claim of constructive dismissal, which has the advantage that there can then be a claim for loss of notice pay.  For that constructive dismissal there is the additional requirement to establish a repudiatory breach of contract, such as a breach of the implied trust and confidence term.  It may be that talk of being kept in the dark about the transfer and lack of contact from those on high at Rangers/New Rangers. 

FIFA’s regulatory system

How does all this fit with the regulatory system for international transfers?  FIFA regulations provide that a contract between a professional and a club can be terminated “where there is just cause”.  As such there is no difficulty in reconciling the rules with the rights conferred by reg 4(9) TUPE, which are in turn derived from Article 4(2) of Directive 2001/23.  

However the Scottish FA has refused to issue an International Transfer Certificate (ITC) for the transfers of five of the departing Rangers players.  It had no choice but to refuse.  FIFA rules (Annexe 3 rule 6 of the Regulations on the Status and Transfer of Players) prevent it from issuing an ITC if a contractual dispute has arisen between the former club (Rangers) and the professional.   The Regulations also stipulate that players registered at one association (in this case the Scottish FA) may only be registered at a new association when the latter has received an International Transfer Certificate (ITC) from (in this case) the SFA.

Whilst FIFA rules do not prevent the players seeking relief in the ordinary courts (eg seeking a declaration at a speedy trial) the more likely and cost effective step is for the issue to be raised with FIFA (by the players or the prospective new club).  In that event the Players’ Status Committee has 60 days to determine the matter, with a right of appeal to the Court of Arbitration for Sport.  That might be viewed as a significant pressure point if the players cannot play in the meantime. But the more likely course, if there is to be a delay, is for FIFA to grant a temporary registration whilst the matter is adjudicated.

TUPE information and consultation

The Players’ Status Committee is therefore likely to be the immediate venue for the next round of this dispute.  But it may not be the only venue.  In the light of reg 4(9) TUPE, the players’ entitlement to leave does not rest only on whether the players were kept in the dark about the situation leading up to the transfer to New Rangers.  But if those allegations are made out, the remedy lies in a claim in the employment tribunal for up to 13 weeks’ pay per affected employee for failure to comply with TUPE information and consultation provisions.

New Rangers may be facing a spell out of Europe.  But the influence of Europe, via the TUPE regulations, is set to loom large in this dispute.
Related link:  Profile of Jeremy Lewis
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