Last week, Rangers needed some good news after the shock caused by the change in football reconstruction plans. Luckily they got some!
RANGERS have made a successful start to their bid to win compensation for the players who walked out on the club last summer.
The club is chasing Allan McGregor, Kyle Lafferty, Jamie Ness, Stevie Naismith, Steven Whittaker and Sone Aluko for breaching their contracts. Compensation is also being sought from their clubs – Besiktas, Sion, Stoke City, Everton, Norwich City and Hull City.
A meeting took place on Monday at Hampden to discuss jurisdiction on the case and Rangers prevailed.
Chief Executive Charles Green told RangersTV: “From our side it went as well as we could have expected. From the other side I’m sure they will be disappointed. Clearly they wanted they commission to throw it out and rule that the SFA had no jurisdiction because the whole process of the first meeting was about jurisdiction.
“What we stated at the meeting was that newco wants to continue where oldco was. We have this slight anomaly where for a period newco were not members of the SFA from June 14 until being granted membership on August 3.
“It was those technical issues which caused some consternation but I was very encouraged with the meeting. It is still my position that these players breached their contracts and we are going to pursue them. With newco taking over from oldco – and BDO were at the meeting and withdrew from the process – is a fundamental part of it.
“Both parties were asked to go away and discuss various issues. We have been given until January 21 by the chair of the commission to come back to him. In the absence that the parties can’t agree or cannot come up with a view, he will make a judgement.
“Hopefully, though the lawyers, we can come up with an agreement on these issues and at that point then the commission can start taking the thing forward. We are quite a way off from the position we want to achieve in terms of gaining compensation.
“What these players and their clubs need to realise is that when we go to the next level this is going to be a number of days – not just an afternoon at Hampden. These players won’t be training or playing, they will sit in Hampden waiting to give evidence or to make statements.
“We are not going to let this drop as I have said since June.”
Some might find it odd that, on one hand, newco Rangers can successfully seek the protection of the SFA in relation to players whose position is that they were never employed by them, whilst at the same time newco Rangers can say that the SPL has no jurisdiction over it in connection with allegations of rule breaking which form the grounds of the Independent Commission under Lord Nimmo Smith.
Let’s look at this apparent discrepancy.
The football authorities provide a system for resolving disputes amongst their members, including disputes about player registrations. This is one area where an “appeal” lies to the Court of Arbitration for Sport.
I will use the terms newco, oldco and club in this note to refer to the three parties.
The argument regarding the players is simple (although resolution might not be).
Mr Green argues as follows:
- Various players were contracted to oldco to play for the club.
- Newco bought all of the assets of oldco, including the club and all of the players’ registrations.
- By operation of TUPE the rights and obligations of the players under their playing contracts with oldco automatically passed over to newco unless any player rejected the TUPE transfer BEFORE it took effect.
- Therefore any players who purported to leave the club after the purchase by newco have breached their valid contracts with newco and newco is entitled to damages from the players for breach of contract, and from the players’ new clubs for being party to said breach.
Therefore newco has a perfectly valid right to seek damages in the footballing process because, frankly, no one else can.
Oldco cannot pursue a claim for damages in respect of players who, allegedly, breached a contract with newco.
The club has no legal personality so it cannot do so either. I suspect, though stand to be corrected, that the players’ contracts with oldco specified that their employer was Rangers FC PLC, and that any new contracts signed by players since the asset purchase will be with Sevco Scotland Ltd under that name or the subsequent name changes.
I also imagine that the present players remain employed not by RIFC PLC, the newly floated “holding” company, but by the company owned by RIFC PLC.
If the ruling on jurisdiction had been that newco could not pursue the claim because they were not members of the SF at the applicable time, then this would have been an injustice, and would have barred their rights, in a football sense.
If such a decision had been made, then newco would have been perfectly entitled to pursue the matter through the civil courts, on the basis that there was no other forum for doing so. This would not have fallen foul of football’s prohibition against taking court actions. What other choice would newco have had?
Dealing briefly with the merits of the case, the biggest issue I see relates to the identity of newco. To be valid a TUPE transfer requires that the transferring employee knows to whom his contract is being passed over. Slavery has been abolished. Employees can refuse to work for a new employer if they do not want to, and have no obligation to give any reason for refusing to transfer.
That is one reason why it is common in some company purchases for the new owner, prior to the takeover, to discuss matters with key employees to ensure that they are happy to move, and indeed in some cases to have new contracts ready to go on takeover day.
The issue here is that all of the publicity pre-takeover, especially from Duff & Phelps, was to the effect that Sevco 5088 Ltd was buying the assets. As it turned out, after the takeover, the assets had been bought by Sevco Scotland Ltd.
Those are separate legal entities. It would not, in my submission, have been enough to tell players that the new owner was going to be a consortium headed by Mr Green – they needed to know to whom they were being transferred.
It all depends therefore on when the Sevco veil was pulled aside to reveal not Sevco 5088 Ltd but Sevco Scotland Ltd. When, as part of that process, were the players made aware of the relevant details to allow them to exercise their legal rights in an informed manner?
Now the Rangers argument regarding the Nimmo Smith Commission runs differently. It is as follows:
- Oldco is alleged to have broken the rules when it owned the club.
- Newco has never been a member of the SPL.
- Newco did not become a member of the SFA until after the alleged wrongdoing and rule-breaking had been committed.
- Newco have no connection with oldco, apart from having purchased assets from it.
- Newco did not take over any oldco liabilities, with the exception of the “footballing debt” which it agreed to pay as a condition of being allowed to play in the SFL.
- Therefore newco have nothing to do with the disciplinary charges and therefore the SPL and its Independent Commission can take no action against it.
The response by Lord Nimmo Smith’s Commission was an ingenious, yet practical and fair one.
- It was accepted that newco legally was not connected to the case.
- However, under the rules of football, the wrongdoing was committed, allegedly, by or for the benefit of the club.
- The club is now owned by newco.
- Any penalty which is imposed in the event of a guilty verdict could be imposed on “the club”.
- As the owner of the club, newco clearly have an interest in the proceedings and therefore are subject to the Commission’s jurisdiction, not directly, but because of the asset it owns.
This makes logical sense. Otherwise a club owner could ride rough-shod over the rules and then, in a contrived or sham transaction, pass ownership to another entity and then claim that the club could not be punished as there was a new owner! (There is no suggestion that this was the arrangement between oldco and newco by the way.)
It is entirely legitimate to argue what seem, at first, to be mutually inconsistent propositions. When you look at them, they are not, in fact, inconsistent.
However, as part of the ever continuing PR battle, one might suggest that Rangers ought to be explaining themselves why they can pray in aid the same SFA against which they seem implacably opposed.
On the other hand, as Rangers fans generally seem willing to follow Mr Green’s every word religiously, and as some of Rangers’ opponents have the default position of everything he says being automatically bad (and for all that my critics suggest, that is NOT my default position), maybe there is no need for the Traynor-led Ibrox PR machine to make any explanation.
Should the SFA find against Rangers, one can already read the condemnation of the biased and Rangers-hating football authorities, entirely in the pockets of the team from the East End of Glasgow.
Posted by Paul McConville