In which I politely suggest that Mr Green has got his interpretation of the TUPE regulations wrong, and that he could find his newco left with the players he does not want, whilst the ones he does want leave for nothing.
When a business changes hands, the rights of employees are protected by the Transfer of Undertakings (protection of Employment) Regulations 2006 or TUPE for short.
These regulations are designed to protect the rights of employees when a business is transferred. There is no doubt that what is now proposed by Mr Charles Green, namely a transfer of Rangers assets to his “newco” would amount to a relevant transfer. Therefore, in law, the employment contracts of all of the employees transfer over to the new employer, and the contracts cannot be terminated by the new employer without this constituting an unfair dismissal and breach of contract.
However, in Rangers’ situation, the most relevant issues arise from the perspective of the employee who might be considering leaving.
“TUPE is very clear and all employees will be transferred under the rules and regulations. Of course, if the players choose not to transfer they will then be in breach of contract but we want all of the staff and players to get behind what we are trying to do.
“I always think if you are going to get news, good or bad, it is better if you get it earlier rather than later. If it is good news, you can party for longer and if it’s bad it gives you time to recover. That’s what we’ve got here.”
I am reluctant to disagree with Mr Green, who is advised by very experienced and expensive lawyers, but here I think he is wrong, as far as the statement in bold is concerned.
Whilst the worker automatically becomes an employee of the new company, he is not forced to do so. The employee has the right to object to this. If the employee objects to the transfer, then his employment does not continue with the new employer. It is treated as a resignation, and therefore the employee has no right to compensation from the new employer for redundancy or dismissal.
However, the new employer has no right of action for damages against the employee for terminating the contract. It is illegal and unenforceable to purport to contract out of these rights.
ACCORDINGLY, ANY RANGERS PLAYER WHO DOES NOT WISH TO JOIN A NEWCO CAN “OBJECT” AND WILL NO LONGER BE AN EMPLOYEE OF RANGERS (neither oldco nor newco).
Regulation 4 of the TUPE Regulations states, inter alia:-
(1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee.
(7) Paragraphs (1) and (2) shall not operate to transfer the contract of employment and the rights, powers, duties and liabilities under or in connection with it of an employee who informs the transferor or the transferee that he objects to becoming employed by the transferee.
(8) Subject to paragraphs (9) and (11), where an employee so objects, the relevant transfer shall operate so as to terminate his contract of employment with the transferor but he shall not be treated, for any purpose, as having been dismissed by the transferor.
If a player walks out on a contract with his existing team, then in contract law his employer could seek damages from him, and sporting sanctions would likely be applied to the player, whether by way of suspension or a fine.
However, if a contract terminates under the circumstances above, the player would be a free agent. He would never have been an employee of newco, and therefore, despite Mr Green’s suggestion to the contrary, newco would have no rights to seek to pursue the player for breach of contract.
The only thing the player would need to do would be to send the SPL written notice that the contract was terminated and 14 days later the registration of the player is terminated.
Under Mr Green’s plan, the SPL share passes from oldco to newco. Accordingly oldco would not be a football club capable of seeking compensation for the player leaving for any new team. As the player would never have had a contract with the newco, then that entity also could not seek compensation from any team signing the player.
Effectively therefore “Rangers” could lose the entire playing staff, or at least those who would be of interest as free agents, for nothing.
Duff & Phelps, representing the employer, need to consult with and inform the employees about what is happening. This should have included the above information. Now, if one is a member of the office staff, for example, or a groundsman, or even a youth team player, continuity of employment is a good thing. If not, and one is a highly paid and marketable player, of whom there are still a number at Ibrox, then why not take the chance to leave as a free agent, and cash in? After all, a football career is short, and can be ended by an injury at any time. How can Mr Green guarantee the players will be paid at their contract levels, without European football and possibly in Division 3?
Will international players want to remain, where the chances of being selected for their national sides will reduce if not disappear, should they be relegated to Division 3?
If some top players leave for nothing, or make it clear they would object to a transfer to newco, would Mr Green try to reduce even further his offer?
What discussions has Mr Green had with the valuable players? Their agents would not be doing their jobs if they did not try to obtain compensation for their clients for giving up the right, effectively, to get an early “Bosman”.
TUPE rules protect the employee by limiting the ways in which the new employer can vary the contract. TUPE rules do not prevent the employee negotiating a better deal, or a new contract with the new boss!
Mr Green could find the players he wants to keep looking for improved contracts to stay at Ibrox. After all, if a player is sold by his club, the buyer has to pay a transfer fee. If the player is a free agent, then the money which would have made up the transfer fee can go to the player in wages or a signing on fee.
There may well be Rangers players loyal enough to the team to put Rangers before their personal financial interests. However, having already agreed temporary wage reductions, who could blame any of them who think of their own financial futures now?
Posted by Paul McConville