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’Gers footballers play away under TUPE

Employment Law & HR
BG Purple

As any follower of Scottish football will tell you, things are not looking too rosy for Glasgow side Rangers FC. Earlier this year the club was staring into the abyss of financial ruin following their dispute with the tax man over a questionable employee benefits scheme.

No sooner had it been announced that Rangers would go into liquidation than an unlikely knight in shining armour, Charles Green, galloped north from Sheffield United to save the day and take over the club.  

It looked as though Rangers’ woes were soon to be over when the new consortium announced it would set up a new company – the unimaginatively-named Sevco Scotland Ltd – and transfer the former club’s assets free from debt liability. Chief amongst those assets was the glittering line-up of top-class players that had already weathered months of uncertainty and 75% pay cuts. Alas, no-one thought to read the small print!  

TUPE Regulations 
That small print takes the form of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or “TUPE” to its friends. Under this legislation an employee’s terms and conditions are protected when their employer transfers the business to another entity. However, TUPE also permits an employee to object to this transfer and walk away from the contract without liability if he doesn’t like the cut of his new employer’s jib. 

And that’s the position that Rangers currently find themselves in. A host of top players have announced that they are leaving the club to seek pastures new and claim that they are free to do so since they have objected to the TUPE transfer. Unsurprisingly, the new Rangers is livid that their top talent is merrily bolting out the stable door and claim that the move is a breach of contract. 

The right to object 
So who is right? Well, it is unquestionably the case that the players have the right to object to the transfer, but the key question that’s getting Scottish football all hot and bothered is when did these objections take place? From the various reports swirling around Ibrox stadium, it seems that the rebellious players only began to voice concerns 7-10 days after the transfer was a done deal. Was that too late? Certainly that’s the peg on which Charles Green is determinedly hanging his hat. 

However, that hat could prove to be hanging on a shoogly nail. It appears that the players were kept in the dark during much of the high-level wrangling; there was significant uncertainty over the identity of their new employer and, indeed, the circumstances in which the players would be plying their trade in the future. 

This uncertainty lends weight to the players’ decision to wait before deciding to object to the transfer and makes it more likely that the objections were valid. Given that it is now confirmed that the new Rangers will start life on the nursery slopes of the third division, it appears that the players’ apprehensions were well-founded. 

What’s next? 
So, what’s next in this dispute? Well, for all Rangers’ harrumphing at the moral indignity of the players’ objections and their threats to sue for breach of contract, they have not actually taken legal action against the players or their new clubs. The next stage of this saga is likely to be determined by the Scottish Football Association and/or FIFA, the sport’s global governing body. 

The SFA has so far declined to issue the mutinous players with international transfer certificates (which they need to allow them to move to their new clubs) on the basis that its rules prevent the issue of ITCs where there is a contractual dispute between the player and the club. Rangers are urging the SFA to convene a panel to determine the dispute, although it is unlikely that any such body would be able to validly over-rule TUPE legal protections. In the meantime the players can ask FIFA to grant temporary registrations that will allow them to move while the dispute is heard. 

All of this serves as a blunt reminder to businesses who may be thinking of selling up or merging- don’t forget your employees are an important asset and always read the small print!

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