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 remain
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.
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In October 2012, the Court of Appeal confirmed that a Service Provision Change ("SPC") TUPE transfer can only occur where the client who receives the service, before and after the change, remains the same (Hunter v McCarrick  EWCA Civ 1399).