What Is the Status of the “Rangers” Players Today?

Last week Mr Green and his company Sevco 5088 Ltd bought the assets and business of Rangers Football Club. This included the “Player Contracts” – the contracts of employment of those employees of Rangers Football Club PLC (in Administration) (hereafter referred to as “Rangers PLC”) who are professional football players registered with the SFA.

There are two questions.

1                     What is the employment status of the players?

2                     What is the football status of the players?

As I have written before, I think Mr Green is wrong in what he says about the players. (On a side note, I feel that “Mr Green is wrong” is becoming the most-used phrase on this blog since “Carthago delenda est”!)

Employment Status

The TUPE regulations exist to protect employees, not employers. It is, in 99.99% of cases the employee who stands to lose out on a transfer of undertaking. The instances where the employer loses out are so rare that the law sees no need to protect them.

Once players agree to be employed by Sevco 5088 Ltd, trading as “The Rangers Football Club” and which I will refer to from hereon as “Sevco”, then their Rangers PLC contracts will continue on the same terms. Interestingly this of course means that the players who negotiated the right to leave on payment of a reduced transfer fee in return for a temporary wage cut, are effectively, as a result of the actions of the administrators, worth less than they would have been, with the result, one assumes, that the offer of £5.5 million by Sevco is also less than it would have been if the players retained full value. Perhaps not the best job by the administrators in the interests of the creditors there…

If a player objects to the transfer of his employment to Sevco, he cannot be forced, by law, to be employed by that company. Instead his contract would be at an end, and he would have no claim on Sevco, nor would it have any claim on him, on the basis that there never was a contract between them.

One of the complications could be the apparent lack of information and consultation between Duff & Phelps and Sevco on one hand, and the players, and other employees, on the other. Employees have a reasonable time, in all the circumstances, to decide of they wish to object to the transfer over. The less preparatory work done by the ”new” employer, the longer the employee has to reach that decision.

From a purely economic point of view, any player who has the choice of staying as a Rangers FC player under Sevco, or leaving as a free agent by objecting to being transferred, should undoubtedly choose the latter option, if there is a reasonable prospect of another club wanting to sign him. Put as simply as possible, the money which does not need to be paid as a transfer fee works its way into the player’s bank account by way of increased signing on fees and salary. Equally, any professional adviser to such a player would probably be in breach of duty to his client should he advise him to stay put.

That is not to say that it would be guaranteed that any player will make more money, but, especially with the news of the increased SKY TV deal with the English Premier League from season 2013-2014 onwards, the managers of EPL and prospective EPL teams will already feel the money which they won’t have for a year burning a hole in their pockets. The EPL gravy train is still running, and players, in what is a short professional career, are entitled to get on it if they can.

The employment position is very clear. The players have it in their control to be an employee of Sevco or not.

Football Status

This is a more difficult question, at least in the eyes of the SFA who asked FIFA for guidance. However, I think, in terms of the Rules applicable to Scottish football, and following the ruling in the Bosman case, this issue should also be clear cut, and in favour of the players too.

The relevant SPL Rules regarding registration are shown at the bottom of this piece.

The confusion comes about, I think, because of the phrasing of the Rules. They refer to a player having to be registered before being eligible to play for a “Club”. As I wrote early this morning, there are unfortunate complications which come from the reliance on the term “Club” in the Rules of the SPL and SFA. The players are not employed by the “Club” which is not a legal entity, but they play for the Club and not necessarily for the employer who pays them. An employment contract, standing what the rules say, might read that, as part of a player’s duties to Melchester Rovers PLC, he will play football for Melchester Rovers FC.

Termination of Registration is the issue here. The argument seems to be, and one assumes this is Mr Green’s position, that Sevco has acquired the players’ contracts and the rights of Rangers PLC under those contracts. In addition Sevco, he would argue, control the players’ registrations, even where the player objects to the transfer of his employment.

The problem with that stance by Sevco is that the issue of retention of control of registrations on the expiry of a contract was found some years ago to be unenforceable in EU Law. The famous Bosman case dealt wt that, and opened floodgates of wealth for players to move as free agents.

You can read an excellent Fact Sheet on the Bosman case, written by Dr Geoff Pearson, of the Football Industry Group at the University of Liverpool, here.

As Dr Pearson states:-

The Bosman case arose because of a Belgium player called Jean-Marc Bosman. Bosman’s contract with … RFC Liege had run out and he wanted to be transferred to … Dunkerque. Liege, however, refused to let Bosman leave without the payment of a transfer fee which Dunkerque were unwilling to pay. Bosman claimed that as a European Union citizen, he possessed the right to “freedom of movement” within the European Union if he wished to find work (then Article 48 of the Treaty of Rome – now Art. 39 of the EU Treaty). The transfer system prevented him exercising his right to freedom of movement and Bosman argued that the system should be changed so that players who were out of contract with their club could move to another club without the paying of a transfer fee.”

The case was heard at the European Court of Justice, and the court found in favour of Bosman and against RFC Liege, the Belgium Football Association and UEFA. The court decided, inter alia, that:-

“Transfer fees for out-of-contract players were illegal where a player was moving between one E.U. nation and another. From now on only players still serving contracts with their teams could have transfer fees paid for them.

The principles of Bosman have been extended since the case was decided back in 1995. Put simply, a football “club” cannot retain a player’s registration so as to prevent him signing for a new club if his contract has ended.

The position here is therefore clear, I suggest. If a player agrees to join Sevco, then his registration remains with the club, Rangers FC, on the basis that there is continuity on the club. The contract transfers over from Rangers PLC, the former employer, to Sevco, the new employer.

If the player chooses not to transfer across however, their contract with Rangers PLC is at an end. They have no contract with Sevco, nor ever had one. Therefore whilst they remain registered to “Rangers FC” until they take steps to have that registration cancelled, their can be no rights available to Sevco either to benefit from the player not transferring over, or to have any control over the registration.

As long as the player follows the procedures laid down in Rules D6.1, D6.4 or D6.9, depending on that attitude of Sevco, they will be able to have their registration terminated, and they will be a free agent, available to sign for any club elsewhere, with no compensation payable either to Rangers PLC or to Sevco.

Of course Sevco could decide to try to hold tan objecting player’s registration and to refuse to release it with a view to deriving a transfer fee. However, as this was outlawed by the ECJ 17 years ago, I think they would be on difficult ground, and indeed could open themselves, and the League and SFA if they refused to release the player’s registration, up to litigation for loss of the opportunity to sign elsewhere. Such a claim could be very substantial.

Therefore, unless Mr Green and Sevco have advisers who are smarter than I am (which I accept is entirely possible if not indeed certain) or he is a gambler, any player who does not want to join Sevco can leave for nothing.

Coming back to the role of the player’s agent, right now it is not clear (a) if Rangers will play football this coming season and (b) if so which division it will be in. In those circumstances, as Sevco is unlikely to be able to pay a full squad of players if not playing at all, or in the third division, the prospect of a new deal elsewhere becomes the “bird in the hand option”.

Sevco faces losing a number of its top players for nothing in the next very short while. I am not saying that that will happen, but any agent will be making sure his client understands the possible financial implications of deciding to stay on at Ibrox, should there be any credible interest at all elsewhere. If players do elect to stay, this will be trumpeted as a vote of confidence in Mr Green, and as exhibiting loyalty to Rangers, even if the reason is that no one else was interested. That however probably counts as “legitimate” PR!

The next few days will be very interesting. Who will sign on for the Sevco experience, and who will leave for their own financial well being and security?

 

Posted by Paul McConville

———————————————

Rules Regarding Player Registration

D1.1 Subject to these Rules, to be eligible to Play for a Club a Player must first be Registered either as a Professional Player or as an Amateur Player.

D1.2 An application for a Player to be Registered or to change Status must be made, in the case of Professional Registration, by submitting to the Secretary a fully completed and executed Contract of Service for the Player concerned and, in the case of Amateur Registration or change of Status, by submitting to the Secretary a fully completed written application in the form specified from time to time by the Board and must, in all cases, if issued to the Player concerned, be accompanied by a copy of the Player’s Player Passport. In the case of Amateur Registration or change of Status the form used must be fully completed with all required details and signed by the Player and Club concerned prior to submission to the Secretary. The Board may determine in the case of Amateur Registration to accept as an application for Amateur Registration a fully completed copy of the form or forms then in use by the SFA for the registration of amateur players submitted to the SFA.

D1.3 The Secretary shall, subject to these Rules, Register:-

D1.3.1 Players as either a Professional Player of a Club or as an Amateur Player of a Club; and

D1.3.2 any change in the Status of Registered Players.

D1.4 Every Relevant Player (as defined in the Rules of the SFL) shall be deemed to be automatically Registered, with appropriate Status, immediately upon his Club becoming a member of the League.

D1.5 Subject that a Player shall become registered as a Relevant Player, in accordance with the rules of the SFL, on the relegation of his club to the SFL, the Registration of every Player of a Club shall automatically cease upon his Club ceasing to be a member of the League

D6.1 The Registration of a Professional Player shall terminate on receipt by the Secretary of a written request to that effect, countersigned by the Player concerned, from the Club to which he is Registered.

D6.2 The Registration of an Amateur Player shall terminate on the receipt by the Secretary of a written request to that effect from the Club to which he is Registered.

D6.3 The Registration of a Professional Player shall terminate on the expiry of the term, without renewal, extension or replacement, duly notified to the Secretary, of his Contract of Service.

D6.4 Subject to the terms of this Rule D6.4, where the employment of a Professional Player by the Club to which he is Registered has been terminated in accordance with his Contract of Service the Player may, by giving fourteen clear days written notice to the Secretary, copied to the Club to which he is Registered, terminate his Registration. The Club to which he is Registered may, within fourteen days of receipt of the copy of such notice, notify the Secretary in writing and copied to the Player, that the Club concerned objects to the termination of the Registration of the Player. The only valid reasons for such objection are that the Player’s employment under his Contract of Service shall not have terminated or that termination of the employment by the Player shall not have been in accordance with the terms of the Player’s Contract of Service. In the event of the club validly objecting in accordance with this Rule D6.4 the Board shall determine whether, when and on what terms and conditions, if any, the Registration of the player shall terminate.

D6.9 The Board may terminate the Registration of a Player where, after consulting with the Club and Player concerned, the Board is satisfied that the Player’s association as a Player with the Club concerned has permanently terminated and there are no continuing claims between the Club and Player concerned.

D6.10 The Registration of a Player shall continue unless or until terminated in accordance with these Rules.

 

 

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18 Comments

Filed under Charles Green, Football, Rangers, TUPE

18 responses to “What Is the Status of the “Rangers” Players Today?

  1. Munch was a Gers Fan

    Perhaps Lord Glennie had some foresight….If (most) players choose not to transfer to the Newco, then a transfer ban would be crippling – irrespective of the league that “THE” is playing in. Referring to your early post, the SFA panel could solve most of the problems with one (swift) decision.

    Terminate the membership of Rangers.

    No further disciplinary actions but “THE” will have no stars on it’s badge. Let’s start again.

    • Tyke Bhoy

      As I have posted on RTC I would expect most of the journeymen (non first team squad) to agree to the TUPE transfer as there is no record of employye NI payments from them for the last 12 months. From memory the Administrators courtesy of no early redundancies (apart from Wylde and Celik) still had around 70 playing staff on the books. Even if the whole first team squad walks away that’s still enough players even if they are under 17s etc. to play.

      Paul, would refusal to TUPE not just leave the players still contracted to RFC(IA) until the Liquidation event. This would delay their “free agent” status. Also from postings on RTC the registration transfers to the SFA who may or may not decide to charge a transfer fee to cover admin costs and pay any surplus to the Liquidators. So they may not be as “free” as suggested by “free agent”

  2. TheBlackKnight TBK

    Paul, I have long been an admirer of your work, BUT REALLY!

    Imagine my excitement to find a new blog post, by you, on RFC(alive or dead) player registrations.

    Now imagine my disappointment.
    I have just wasted 10minutes of my valuable time on a Sunday morning reading about possible maybes.

    Has no one told you, Rangers don’t do proper player registrations

    😉

  3. gorbalstam

    Who’s het next pay day? Green?

  4. SouthernExile

    The big unknown is whether this deal has reached completion. Mr Green by his words and actions suggests it has; Mr Clarke in his Thursday statement said it was “imminent”.

    In a normal business transaction, the parties would have announced that they had exchanged on Thursday subject to satisfaction of CPs which would include completion of consultation with employees on TUPE. The normally accepted minimum period for consultation is 30 days.

    Right now we dont know what’s going on. Is normal TUPE process going to be followed? Who has liability for picking up employment costs from Friday morning?

    More widely, what are the terms of the deal which are described in the CVA Proposal as being “confidential”? Is D&P under an obligation to report them to the court? Are there any CPs which might not be satisfied and lead to the deal collapsing?

    All very mysterious……

  5. degough

    At last, a topic I have some expertise in. The mind of a football player.
    I can tell you all now that there are 2 things a professional football player has on his mind. The order of them is determined by the age of the player.

    1. What can I do to play at a higher standard?
    2. Will I earn enough money to be able to support my family.

    If the player can get a better contract playing at a higher level he will want to leave.
    If he is a young player he will accept earning less to play at a higher standard. He will eventually earn a better contract if he improves as a player and the best way to improve is to play at the highest standard you are capable of.
    If he is an older player he will want to maximize earnings before the consideration of playing at a higher standard. He is probably as good as he is going to get.

    So for the Rangers players to decide what to do they will need to know the following;
    1 What league will Rangers be playing in?
    2 What offers from other clubs are on the table?
    3 What is the standard of the other club making an offer?
    3 How much money will I get from Rangers as opposed to from another club?

    The agents will be telling the players “Say and sign nothing. I am working 24 hours a day from now till the end of August to get us the best possible deal!”

  6. Alick

    This does also link back to Paul’s earlier post today on whether Green was in fact attempting to argue that the football club owned by Sevco is a wholly new club as a ruse to avoid the sporting penalties due to Rangers (the football club as distinct from any company that might own it). Green can only argue he has any rights to the players’ registrations (although, as Paul says, the implication of Bosman is that rights to the registrations are worthless if players don’t accept the transfer of employment) by accepting that the football club he’s bought is the same Rangers that are subject to a whole range of sporting penalties.

  7. Pensionerbhoy

    Mr. Green gives the impression of being a major shareholder in Greggs with the amount of cakes he seems to ‘own’ and ‘eat’. One feels he is on route to suffer from a very severe case of indigestion. But then, perhaps he will have acquired more than enough money to afford an excess of cures.

    Hail Hail

  8. Old Auditor

    Can someone tell me exactly what undertaking RFC(IA) has been able to transfer to “The Rangers” that would would mean TUPE applies?

  9. duggie73

    Paul,
    For Sevco to be, or own a football club does it not require an SFA licence?

    This is dependent on the previous owners (in effect one would assume D&P) guaranteeing that sufficient due dilligence has been performed on the new owners to allow them to be signed off as “fit and proper”.

    Could it be safely assumed that in the current situation such would not be accepted unless it explicitly excluded the possibility that shareholders of the new club had invested in Ticketus at the time of the Whyte take-over, as such would to some extent implicate the shareholders in the discredited Whyte regime?

    And until such a guarantee is forthcoming, no players would be allowed to transfer to Sevco’s ownership?

  10. tiltic

    The only problem I have with this article is the myth that players have a short professional career ,justifying their ludicrous pay. Yes they may have to retire from professional football in their thirties ,unless I am mistaken they are not then render paralysed. Like many people in our society have been forced to , they could easily retrain for a second career ( dare I say get a real job).This obviously does not include those who continue to get obscene
    salaries to manage .

    • Vince

      tiltic, I nearly voted against you, just to make it 7-1, but that was against another club, way back in ’57 anyway, so I just made it 8 likes.
      HH
      Vince.

  11. AJ

    Glasgow Rangers company plc, company number: SC004276 INCORPORATED Glasgow Rangers 1872 on the 27/05/1899.
    On June 14, 2012 the company (Glasgow Rangers company plc, company number: SC004276) cease to exist ALL IT’S
    HONORS AND HISTORY IS THEREFORE DISCONTINUED

  12. Jim

    Could D&P’s suggestion that they will be in place for another 6-8 weeks an attempt to force the players to TUPE across to NewCo? Players that agree to move go on to the books of Sevco, while players that don’t stay with the Old Rangers. Or at least stay until such point when it finally falls into liquidation, which could be after the end of the transfer window. And if they want to move any earlier then a transfer is payable to Old Rangers (IA), which under the terms of the purchase agreement is handed over directly to Sevco anyway.

    Of course if enough players refuse to TUPE over then D&P could be screwed over by having to pay a couple of months of very expensive wages. Unless that’s in one of the double super secret clauses and gets paid by Sevco. And I don’t know if TUPE requires that the handover of business happen in one transaction. It could be that an attempt to stop employers circumventing the rules by piecemeal transfer could leave a loophole that traps the Rangers players.

  13. Robert

    On Thursday June 14, 2012 the CVA was formally rejected and the way forward, as HMRC were not going to agree to a CVA, was liquidation.

    However, the question is what steps require to be formally taken to move Rangers PLC Company No. SC004276 formally from administration and into liquidation.

  14. Grab the grass

    Paul, Interesting two posts below.

    My understanding of this is that the “club” – Rangers FC – and the owner/operator – Rangers FC PLC – are seen as different entities. The key question which I haven’t seen anywhere is who exactly, and I mean exactly, are the players actually contracted with – the club or the PLC??

    If it is the club then I don’t think that the TUPE regs apply as all that has happened is that the club, which would have needed to be a limited company wholly owned by the PLC, has had its shareholding transferred. This is how a lot of the English clubs are set-up where a PLC is the parent, but the football club is still Ltd and which actually holds the contracts and registrations. I can’t recall a TUPE debate in any of the administrations south of the border which implies it is set up differently. If there is anyone out there who has actually seen or has a copy of the actual player contract and can say which party is the contract holder, then it would be great benefit to the debate.

    On the club versus owner issue it would appear it is just as well that the SPL inserted the clauses it did otherwise a change of owner of a club would not be subject to the requirement for the transfer to be approved by the SPL. As stated in the post or a reply, how the existing party (Rangers PLC(IA)) still have the power to vote on this is ludicrous as they no longer have a club and should be disbarred.

    I suspect that commercial considerations will rule and that newco rangers will be club 12 and a way will be found for them, with some acceptence of sporting sanctions being applied for one season (probably loss of points), though may include settlement of “football debts” to play in the SPL. How the rest of the footballing nation takes this will be interesting.

    Keep up the good work.

  15. Jrc

    Is the non payment of NI and PAYE by the employer not arguably a breach of contact by rangers in any case ?

  16. Pingback: Can Someone Offer Training on TUPE to Sevco, McCoist and Green? | Random Thoughts Re Scots Law by Paul McConville

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