SUBMISSIONS OF THE RUGBY LEAGUE PLAYERS’ ASSOCIATION (RLPA) IN RELATION TO NRL GUIDELINE No 3 of 2010 – TOTAL REMUNERATION DECLARATIONS

Introduction

On 13 August 2010, the Chief Executive Officer of National Rugby League Limited (NRL) issued NRL Guideline No 3 of 2010 (the Guideline), expressed to be effective immediately.  The Guideline provides that a Player, his Agent and the Chief Executive Officer of his Club must sign a Total Remuneration Declaration (TRD) in the form attached to the Guideline when entering into an NRL Playing Contract (Contract) and that that TRD must, as a precondition to registration, accompany the Contract and NRL Player Registration Application when lodged with the Salary Cap Auditor pursuant to Rule 41 of the NRL Playing Contract and Remuneration Rules (PCR Rules).

The TRD is a Statutory Declaration, in which the three persons identified in the paragraph above would declare that:

(a)    the Contract contains all of the terms relating to the payment of remuneration by, or on behalf of, the Club to, or for the benefit of, the Player; and

(b)   Schedule 2 to the Contract contains complete details of every current Third Party Agreement entered into by, on behalf of or with respect to the Player and every proposed such Third Party Agreement.

Contrary to clause 7.1 of the 2007 Unregistered Agreement between the NRL and the RLPA (Agreement), the NRL issued the Guideline without prior notice to the RLPA of its intention to do so and therefore did not afford the RLPA a reasonable opportunity to review the final draft and to make submissions to it, as the RLPA was entitled to do under clause 7.2 of the Agreement.  After correspondence from the RLPA in that regard, the Chief Executive of the NRL, in a letter dated 18 August 2010, allowed the RLPA a period of seven days to make submissions regarding the Guideline.

Obviously, the provision of an opportunity to address proposed changes to rules that are incorporated in Contracts after a decision to make those changes has been made and announced is grossly inadequate.  Players should be entitled to participate in the decision-making process before a decision is made rather than addressing submissions to a body that has already made its decision.  The RLPA reserves all rights arising from the failure of the NRL to comply with its obligations under the Agreement.  Subject to that reservation of rights, its submissions are as follows.

Submissions

The RLPA understands that the Guideline has been motivated by the events that transpired this year in relation to the Melbourne Storm Club.  The Chief Executive of the NRL has been quoted in the media as saying that the TRD “seeks to protect Players and Agents from any innuendo around their knowledge of salary cap cheating”.  He has also said that, if Players or Agents were not prepared to sign a TRD “then there’s an inference that you’ve got something to hide”.

The RLPA submits that the relevant questions on a consideration of the Guideline are as follows:

1.  Is the change that the NRL has proposed to the PCR Rules necessary or beneficial?

2.  Is the TRD the most effective way for the NRL to achieve its stated objective?

Is the change necessary or beneficial?

The RLPA’s primary submission is that there is not a compelling reason to require Players to execute a TRD as prescribed under the Guideline. 

1.1       Rule 28(3) of the PCR Rules already provides that every Contract “must contain all of the terms as to the payment of Remuneration to, or for the benefit of, the Player that have been agreed between the Player and the Club” and, in Schedule 2 to every Contract, “every then current Third Party Agreement entered into between the Player and a Third Party.”

1.2       A Player’s failure to comply with Rule 28(3) may lead to the Salary Cap Auditor exercising his discretion not to register his Contract and also exposes him to the range of severe penalties that the NRL is entitled to impose under the NRL Rules for breach of the PCR Rules, including:

·         a fine of up to $50,000;

·         the suspension or cancellation of his registration;

·         the cancellation of the registration of his Contract;

·         the cancellation of his personal result, including forfeiture of any medals, points and/or prizes awarded by or directly controlled by the NRL; and

·         a requirement to pay compensation.

In circumstances where the presently available sanctions include loss by the Player of his livelihood and/or a fine of up to $50,000, it is difficult to sensibly suggest that the imposition of the obligation to submit a Statutory Declaration serves any useful purpose.

1.3       The CEO of the NRL himself said on 17 August 2010 that “whether this is a change of any substance is debatable”.  If that comment was intended to suggest that the changes introduced by the Guideline are of no substance, then it is clearly correct and that only serves to reinforce the conclusion that the purpose of the rule changes is to generate a perception amongst members of the public that further meaningful measures have been introduced.

1.4       While the events at the Melbourne Storm are said to have created the imperative for this new procedure, after a lengthy investigation conducted by forensic experts from Deloitte, the Melbourne Storm Players were all cleared of any wrongdoing.  Although the RLPA recognises that public perceptions of the Game are of critical importance to its members, no reasonable basis exists for imposing on Players the further obligations contemplated by the introduction of the Guideline.

Is the TRD the most effective way for the NRL to achieve its stated objectives?

The RLPA submits that, even if it were to accept (which it does not) that some change to the PCR Rules is required to ensure Players and Agents are, in the words of the Chief of the NRL, “more accountable in terms of the contract payments that are submitted”, there is a fairer and more reliable way of achieving that objective.

2.1       The primary attraction to the NRL in adopting the TRD procedure, as opposed to any other, appears to be that any failure by a Player, Agent or Club to make a truthful statutory declaration will result in criminal liability. In other words, the focus has been on the penalty for non-compliance and not necessarily on the method that would ensure the greatest transparency, in particular, the greatest transparency to the Player himself.

2.2              The following three facts are highly relevant when considering the wisdom of requiring Players to make a Statutory Declaration in respect of the contents of their Contracts:

2.2.1    Most Players do not negotiate their own Contracts.

2.2.2    Most Players are highly reliant on professional advice to achieve a proper understanding of the effect of the terms of their Contracts.

2.2.3    Players do not lodge their own Contracts for registration – that is the responsibility of their Clubs.  As a consequence, there is, to use the language more usually reserved for the world of drug testing, a “break in the chain of custody” and therefore the potential for a Contract is respect of which the Player has executed a TRD not to be the same Contract that ultimately finds its way to the Salary Cap Auditor for registration.  Given the events surrounding the Melbourne Storm and those alleged to have been responsible, this is a matter of considerable concern to Players.

2.3       In the RLPA’s opinion, the fairer and more reliable way to ensure absolute accountability around the Contract registration process is for the Salary Cap Auditor to provide the desired transparency at the outset by:

2.3.1    Sending a formal notification to the Player (and his Agent and his Club), at the time when his Contract is registered, confirming both the amounts recorded by the NRL against his name in respect of  Remuneration and the Third Party Agreements into which the Player has entered.

2.3.2    Requiring the Player to notify him within 14 days if he disputes the confirmed details.

2.4       The procedure proposed by the RLPA would achieve the NRL’s aims of greater accountability and of eliminating the possibility for Players to claim that they were not aware of the payment terms of their Contracts.  Moreover, the Player would not only know what he has signed but he would also know what the NRL has received.  From the beginning of the Contract, there would be absolute clarity and certainty on both sides.  Far from “hiding something”, the RLPA is seeking to have the relevant details made as obvious as possible.

2.5       In addition, the RLPA’s proposal would avoid a number of practical difficulties that may arise through the operation of the Guideline, including:

2.5.1    The necessity for the Player to obtain legal advice before signing the TRD, in circumstances where he may in the past have relied on the advice of his Agent, thereby adding to the cost of the transaction for the Player.

2.5.2    The necessity of arranging for a Justice of the Peace or a Solicitor, or a number of them, to witness the signatures of the Player, Club CEO and Agent respectively, when witnesses with those qualifications are not required in respect of the execution of the current Contract.

24 August 2010