Transferring a football club and its players falls within the Labour Relations Act
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Professional football players and coaches in the Premier Soccer League (PSL) or GladAfrica Championship (GAC) have reason to cry foul if their clubs are sold and they are sidelined because the new owners cannot afford their salaries.
They are employees, and unless they gave their prior consent to being left behind or having their salaries cut, the new club owners could find themselves on the wrong side of the law — specifically section 197 of the Labour Relations Act (LRA).
What’s more, the fact that a sale may have the approval of the National Soccer League (NSL) does not make a transaction any more lawful if players, coaches or other employees have been unilaterally excluded.
PSL status is a coveted asset and the sale of football club statuses, as they are known, has become common in SA. The most recent reported transaction was the sale in July 2020 of Bidvest Wits FC, the oldest PSL club in SA, to GAC side Tshakhuma Tsha Madzivhandila.
Considering the financial predicament of professional football, this will probably not be the last time a PSL club is up for sale. It is important, then, for both existing and prospective owners to understand their legal obligations as employers.
There are two key issues to keep in mind. One is that football clubs are employers and football players, coaches and others are employees. The second is whether the sale of a club is a “transfer” under section 197 of the LRA. The test is simple: if the club will remain the same, except for being in the hands of another employer and a potential name change, and will continue to operate, then it is a transfer.
This means that, unless otherwise agreed, the new employer automatically takes the place of the old employer, including the employment contracts of players, coaches and other employees.
Legally binding
Furthermore, the new employer is required to employ the transferred employees on terms and conditions that are no less favourable on the whole than the terms and conditions on which they were employed by the old employer before the date of transfer.
It is also a requirement that the old and new employer consult and enter into an agreement with the affected employees and/or their trade union about the consequences of the sale.
These are legally binding requirements that have already been tested in the sport of football.
The 2015 NSL ...
They are employees, and unless they gave their prior consent to being left behind or having their salaries cut, the new club owners could find themselves on the wrong side of the law — specifically section 197 of the Labour Relations Act (LRA).
What’s more, the fact that a sale may have the approval of the National Soccer League (NSL) does not make a transaction any more lawful if players, coaches or other employees have been unilaterally excluded.
PSL status is a coveted asset and the sale of football club statuses, as they are known, has become common in SA. The most recent reported transaction was the sale in July 2020 of Bidvest Wits FC, the oldest PSL club in SA, to GAC side Tshakhuma Tsha Madzivhandila.
Considering the financial predicament of professional football, this will probably not be the last time a PSL club is up for sale. It is important, then, for both existing and prospective owners to understand their legal obligations as employers.
There are two key issues to keep in mind. One is that football clubs are employers and football players, coaches and others are employees. The second is whether the sale of a club is a “transfer” under section 197 of the LRA. The test is simple: if the club will remain the same, except for being in the hands of another employer and a potential name change, and will continue to operate, then it is a transfer.
This means that, unless otherwise agreed, the new employer automatically takes the place of the old employer, including the employment contracts of players, coaches and other employees.
Legally binding
Furthermore, the new employer is required to employ the transferred employees on terms and conditions that are no less favourable on the whole than the terms and conditions on which they were employed by the old employer before the date of transfer.
It is also a requirement that the old and new employer consult and enter into an agreement with the affected employees and/or their trade union about the consequences of the sale.
These are legally binding requirements that have already been tested in the sport of football.
The 2015 NSL ...
