Could TUPE save Larkham transfer?
Rugby enthusiasts in Edinburgh will be breathing a sigh of relief that, whatever their views on the way in which the highly public argument has taken place between the SRU and Bob Carruthers, there has finally been agreement so that professional rugby will continue in Edinburgh next year.
The relationship was already strained when Edinburgh pulled off the great coup of signing Australia and ACT Brumbies fly-half Stephen Larkham, who was to start a 2-year contract with Edinburgh Rugby in November after the Rugby World Cup in France. But it has now become clear that with the SRU taking Edinburgh back into its own fold and setting up its own team, while all existing players will continue with the new Edinburgh team it appears Stephen Larkham will not be joining them.
Larkham’s agent has stated that Stephen Larkham has incurred various costs in preparing for his move to Edinburgh, looking at properties here. When his signing was announced, he also stated that Edinburgh’s offer was not the most financially rewarding and whilst his talent goes without saying, the fact that he might now be available will not necessarily mean the clubs who were interested before will again be knocking at his door as they may have made alternative signing arrangements – financially, therefore, he is likely to lose out.
But surely the law protects him in such circumstances? Where there is any change in the business (and a professional sports team is a “business”) the rule, to protect employees, is that all contracts of employment pass across so that no-one can be made redundant or dismissed simply because there has been a change of ownership. The rules were tightened up on the so-called TUPE transfers last year with the passing of the Transfer of Undertakings (Protection of Employment) Regulations 2006. In addition to employees knowing that their jobs will be safe if their employer’s business is sold, there are now even more stringent consulting requirements.
The purchaser of the business is now required to ensure that all employees of the transferring business are advised how their employment might be affected going forward and has to provide relevant information – the seller will then usually pass this on to the employees, but both purchaser and seller do need to co-operate to ensure that all relevant information is passed across.
For the players at Edinburgh Rugby, therefore, they could be confident that no matter what happened their contracts of employment would remain in place so that if the SRU did consider any of them surplus to requirements, this would be a redundancy and they would not be left sitting high and dry in the old Edinburgh Rugby which would continue as an entity but without the right to play professional rugby in Scotland – a complete shell.
But the same doesn’t apply to Stephen Larkham. The rules, under the Regulations, protect employees – but they do not protect prospective employees, or indeed anyone who has simply been offered a position. If your start date is the day after the sale the business occurs, you have no protection whatsoever and have no claim against the purchaser, in Stephen Larkham’s case, the SRU.
Under employment law, however, Stephen Larkham’s only remedy (or anyone who finds himself in a similar position where their employer-to-be suddenly sells their business) is left with no claim other than against the person who offered him the job in the first place ie Edinburgh Rugby – but what exactly can he claim? While the terms of his contract are not known, possible claims might include loss of earnings, recovery of costs incurred etc – but wouldn’t he have preferred to be playing professional rugby in Edinburgh with the new Edinburgh team?
So does he have a claim against the SRU? Under employment legislation, no; under general contract law he might, but this would require to be based upon a claim that the SRU had induced Edinburgh Rugby to breach their contract with him. But has there actually been a breach? And has the SRU actually been involved? On a strict analysis, the answer is probably no to both questions; and while we might never know what has gone on behind the scenes, the likely case is that the SRU can hold up its hands and say any matter is between Stephen Larkham and Edinburgh Rugby.
So, just remember, employees have protection under the TUPE Regulations; employees-to-be do not.
FOR FURTHER INFORMATION PLEASE CONTACT: charlotte johns