At this time of year, sports pages are normally rife with transfer
speculation before the new domestic seasons begin across the UK.
This summer is different however, due to increased interest in
Glasgow Rangers and the effect of “TUPE transfers” of
players to the Rangers Newco.
The financial difficulties of Rangers Football Club plc
(“Rangers”), including the substantial claims made by
HMRC, have been well publicised. Earlier this month the consortium
headed by Charles Green claimed to have transferred the business
and assets of Rangers into a new company, Sevco 5088 Ltd
(“Sevco”). If the Transfer of Undertakings (Protection
of Employment) Regulations 2006 (“TUPE”) applied to
this transaction, this would mean in broad terms that each employee
working as part of the Rangers business would be transferred across
to the employment of Sevco.
So far eight members of Rangers’ senior squad, unsettled by
the uncertainty of which league their club will be playing in next
season, have exercised their rights under Regulation 4 of TUPE.
This part of TUPE essentially allows an employee to
“opt-out” of the transfer to the new employer. The
effect of such an objection is that the employee’s employment
with his current employer terminates by operation of law with
effect from the transfer date. The wording of TUPE points towards
the objection needing to be made before the transfer takes place,
but a High Court case in 2007 held that objections made after the
date of the transfer can be valid in certain circumstances. Mr
Green has labelled these opt-outs “opportunism” and is
threatening to seek damages against the eight footballers for
breach of contract, but at the moment the grounds of such a claim
It is relatively rare for employment law to play a big role in
professional football – the common complaint from fans being
that contracts appear not to be worth the paper they are written
on. Nevertheless, Rangers fans will be finding themselves with a
newfound interest in this particular legal issue.