Transfer of Clubs.

Matter: Roses United FC.

The National Soccer League (NSL) was informed by SAFPU about a possible sale of a club in the National First Division (“NFD”) and furthermore that there are various disputes outstanding with the club, therefore the Executive Council of the NSL must not approve any sale prior all disputes have been dealt with and SAFPU have confirmed same. Despite demands to the club and requests to the NSL, the NSL approved the sale of the club. It resulted in various players’ claims not being resolved and the new owner contracted further players to an existing struggling club.

The “old” players, the player who were contracted by the Seller of the club, were called in and told they do not have any job anymore, the club has been sold and that their contract has as a result been terminated. This constituted the grossest breach of a player’s fundamental rights and was totally against the principle of contract stability. SAFPU then referred various disputes to the National Dispute Resolution Chamber (NDRC) and citing the Seller, the Purchaser and the NSL as parties to the dispute. A dispute then arose between the Seller and the Purchaser of the club in respect of payment of the purchase price and the conditions attached to such payments. Due to the various disputes referred by SAFPU to the DRC, the parties were compelled to involve SAFPU in the re-transfer of the club from the Purchaser to the Seller.

With the intervention and assistance of SAFPU, the situation was mediated and all players with outstanding moneys were settled. Not only has SAFPU recovered monies for players, it ensured that players were declared free agents in order to sign for any other club outside the window period and lastly, SAFPU ensured that a club was not liquidated which would have had a major effect on players’ contracts and work/playing opportunities for players in the NFD. The NSL has realized the importance to involve the representative union (SAFPU in this instance) in all matters of possible transfer of club and/or shares in clubs, in order to avoid the unpleasant situation.

We believe the NSL furthermore also understands the importance of financial fair play and compliance, as it will be more fully discussed below. This was not only a great victory for SAFPU and its players/members, but also for football in South Africa. Financial Fair Play (PROPOSAL FROM SAFPU), this involves financial control and guarantees that clubs are indeed sustainable. This is very important in order to avoid the situation of the Roses sale deal, as stipulated above. It is further more important to avoid that a club contract 50 odd players, fully knowing that it cannot pay all the players. Specifically if the club’s grant in the NFD is only R380 000.00 per month. This will result in lesser disputes at the DRC.

Why can’t players become shareholders in clubs? This is an important aspect to investigate and have some research done. This will result in more moneys invested in the NSLs, by people who understand football and do have a passion about it and further will give players the opportunity to invest their moneys in something they understand. The NSL, when applying financial fair play, should apply the following principles:

  1. Not allow any club to renew its membership (be a member of the NSL), if any players’ moneys are outstanding.
  2. All clubs must be obliged to submit Financial Statements.
  3. Requirement for clubs to breakeven – breakeven rule.
  4. Clubs relegated – parachute payment in order to avoid unlawful and unfair retrenchments.
  5. Any sale or transfer of club ownership – SAFPU at all times be engaged (LRA & CBA).

The following potential sanctions should be considered if a club is in breach of any of the financial fair play principles:

  1. Fine – payable towards players’ education.
  2. Deduction of points.
  3. A restriction on number of players a club may register in breach of breakeven rule and/or financial difficulty in not paying players.
  4. Dock monthly grants (ring-fence) until all claims of players have been settled.
  5. Incentive to all clubs – no disputes / claims from players (clubs fully complying with contracts) during a 12 month period, incentive payment to the club.
  6. Moneys owed to players are regarded as overdue until proven by club that it is not overdue.
  7. Players’ salaries guaranteed, even if club is insolvent. (Guaranteed by NSL by way of grant)

Injuries during the scope of employment (SAFPU recommendations)

  1. All Clubs’ Players is insured by the NSL and the NSL is fully liable for payment of such insurance premiums.
  2. If a Player is injured, the Club should report such an injury to the NSL and the Insurance Company/underwriters. However this is not consistent. The result is that players are not reimbursed for medical expenses occurred and in certain instances, the injury is of such a nature, the player is not able to continue playing competitive football.
  3. In such instance, the club strictly (however incorrectly) apply the principle of no work no pay principle and eventually terminate the player’s contract due to incapacity.
  4. SAFPU does have presently 2 matters in which the players have been injured during training and/or matches, that they are not able to continue their playing careers. Despite a classic example of a possible disability claim, the club and/or NSL refused to entertain such claims (we are following on)
  5. Therefore it is submitted that if a Player’s claim is repudiated by the Insurance Company/underwriters utilised by the NSL due to the club not submitting the requested documentation and/or claim in time, the Club should be fully liable for all costs occurred by the Player due to the injury and loss of income as a result of the injury, which includes but are not limited to match bonuses, salary or any incentives for playing players at the time at the club (this should be so because the responsibility to report an injury and claim on behalf of the player, lies solely with the club).
  6. The fact that the NSL is the party paying the premiums and contracting to the insurance underwriters, should also make the NSL liable for any negligence of any claim not submitted to the insurance underwriters.
  7. The club and the NSL, jointly and severally, should be fully liable for all medical costs and remuneration of the Player till the Player is rehabilitated or declared being permanently disabled (not being able to play football anymore in the future).
  8. The club should be liable for such payment even if the Player’s contract with the club terminates due to the expiry of the agreement during his period of incapacity, unless the Player terminates his professional football career to take up other employment.