Saturday 22 July 2017

Overseas player policy places IRFU in legal minefield

Players unhappy with the new IRFU limits could well have the law on their side, writes Niall Collins

During Christmas week, the IRFU announced changes to the way it will manage the contracts of non-Irish eligible (NIE) players from 2013. Currently, the provinces can sign six foreign players, one of whom must be capable of being Irish-qualified in the future.

Now, the IRFU wants to impose a limit of one NIE player in each position across the provinces of Leinster, Munster and Ulster. For example, if Munster has an Australian tighthead, then Leinster and Ulster must have an Irish one.

Further, for any position involving an NIE contracted player, a province will not be permitted to renew that player's contract, or bring a new NIE player into that position. All future provincial injury replacement players must be eligible for selection for Ireland and all future provincial NIE player contracts will be position-specific. More specific detail will undoubtedly emerge from the IRFU on the practical operation of the changes.

The drivers behind imposing restrictions on the employment of foreign sportspersons would appear many and varied. Bosses of the North American Soccer League sought to mandate that team rosters contain a minimum number of US players as a means of reducing the financial pressure which teams endured following the arrival of superstars such as Pele to the New York Cosmos.

Closer to home, in 2005, the England and Wales Cricket Board announced a strategy designed to promote the development of English players in county cricket, with national team interests in mind.

The IRFU's policy change appears designed to provide young Irish players with more opportunities and to ensure that the national team has at least two suitably experienced players in each position. However, the changes raise real, but not novel, questions of EU free movement law and employment and equality law.

Direct and indirect discrimination -- based on the nationality of workers of EU member states, as regards their employment, remuneration and other conditions of work -- are prohibited under Article 45 of the Treaty on the Functioning of the European Union.

A directly discriminatory restriction is one which relies on nationality as the basis for disadvantageous treatment. This can only be justified under specific derogations based on considerations of public policy, public security and public health.

An indirectly discriminatory restriction is one which has the effect of discriminating on the grounds of nationality, as opposed to having the object of so doing. Such measures can only be justified under derogation or where there are objective considerations independent of nationality, which are proportionate to the legitimate aim pursued by the rule and are reasonable and necessary. This is evident from EU cases such as Walrave & Koch, Donà v Mantero and Bosman. The issue of discrimination on the grounds of nationality was front and centre in the debate surrounding the legality of FIFA's so-called 6+5 rule, which received a negative assessment from the EU Commission and which was subsequently abandoned, and UEFA's home-grown player rule, which was given the green light by the Commission.

More recent EU decisions in Kolpak and Simutenkov effectively extend the scope of Article 45 to non-EU nationals, through the existence of international association agreements between the EU and non-EU countries.

The Kolpak case concerned the EU/Slovakia association agreement (prior to Slovakia's accession to the EU), whilst Simutenkov concerned the EU/Russia association agreement.

In Kolpak, the German Handball Federation sought to limit the number of non-German players in the league. Kolpak, a Slovakian, had a valid residence permit and employment contract. However, his player's licence was marked with the letter 'A' indicating his non-EU status. As teams were restricted to two 'A' licence players, Kolpak sought to challenge the restrictions under EU law and won. Indeed, the term 'Kolpak player' has now entered the vernacular of professional cricket and rugby in particular to describe those non-EU sportspersons positioned to avail of the extended scope of protection.

The Cotonou Agreement, between the EU and the nations forming the Africa, Caribbean, Pacific Group (including South Africa, Samoa, Tonga and Fiji) is another such EU association agreement.

However, it is important to note that the Kolpak and Simutenkov cases concern the rights enjoyed by non-EU nationals who are already lawfully employed within the relevant national labour market.

Other EU cases, such as the recent Zambrano case, in which it was decided that an EU member state may not refuse the non-EU parents of a dependent child who is a citizen of, and resident in, an EU member state the right to live and work in that member state, should also be added to the mix. A number of foreign rugby superstars currently plying their trade on this island have Irish, and therefore, EU-citizen children. Leinster's Isa Nacewa, for example, whose contract expires this summer, falls into this category.

Rules limiting the employment of foreign players may also infringe the EU Treaty competition rules and there are a number of existing and planned EU Directives and Regulations which deal with the rights of non-EU nationals.

Separately, the proposed changes may be exposed to a challenge under the Irish Employment Equality Acts 1998-2011 (the Acts),

which implement EU Directives prohibiting discrimination in the workplace. The Acts prohibit less favourable treatment on nine specific grounds, including the race ground, which covers persons of different race, colour, nationality or ethnic or national origins.

Direct discrimination cannot be justified under the Acts and in that respect, seems to attract strict liability. Accordingly, where a province which might otherwise renew an NIE contracted player explains, perhaps with regret, that it cannot renew that player's contract because that position must be filled by an Irish player, this might expose the province to a discrimination claim under the Acts. Such a claim would be brought before the Equality Tribunal, which is empowered to make an order for re-instatement or re-engagement, with or without an order for compensation of up to two years' remuneration. The fact that the province was merely adhering to the governing body's diktat would not appear to offer a lawful defence in this regard.

Accordingly, the autonomy of governing bodies to self-regulate must always be subject to over-riding principles of EU and equality law. The changes proposed by the IRFU have given rise to much debate and the IRFU is no doubt fully cognisant that the issue could proceed into the legal area. However, does the appetite exist at provincial, player or other level to challenge the changes? A challenge which would undoubtedly lead to one epic ruckus.

Niall Collins is an EU & competition lawyer and Ronnie Neville, who also contributed to this article, is an employment lawyer and both are members of the Sports Law Unit at leading Irish law firm Mason Hayes & Curran

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