Following silence on the auction of Royal AM, who have been expelled from the PSL, a sports lawyer opens up on how these factors affects monies owed to players, among other things.
Royal AM have officially been expelled from participating in the PSL 2024/25 season after the League’s executive committee made the recommendations to the Board of Governors to terminate their membership with the NSL.
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Since SARS reportedly turned down a bid from Durban businessman Chockalingam 'Ray' Moodley at the eleventh hour, after the bid was believed to be close to going through, there have not been any updates on whether Royal AM, even after their membership was canceled, will still be auctioned by the revenue service.
They are reportedly owed R40 million by club owner Shauwn Mkhize.
Writing exclusively to KickOff.com, Lesedi Mphahlele, Attorney and Director at Fairbridges Wertheim Becker Attorneys, explained how the cancelation of membership affects liabilities and financial obligations that Royal AM has to employees, including players.
"This expulsion does not negate other legal liabilities and performance obligations Royal AM owes to
other parties, including the players," shared Mphahlele.
"These obligations remain effective, unless decided otherwise. As to whether the club will be put up for auction again, it is not known at this juncture. However, should the club be put up for auction and same is successful, whilst the club will not be eligible to participate in the 2024/25 football season, provisions of section 197 of the Labour Relations Act (LRA) will be invoked in so far as the players and their employment contracts are concerned."
Thwihli Thwahla players, most of whom have began joining other teams after acquiring free agent status through the PSL's Dispute Resolution Chamber, are still owed salaries since the saga began.
Meanwhile, Samir Nurkovic is still awaiting just under R10 million, which has has risen higher with interests counting, after he won his case at FIFA of an alleged unlawful termination of his contract in 2022.
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in terms of section 197(6), the new employer is automatically substituted in the place of the old
employer in respect of all contracts of employment in existence at the time of the transfer, including
all other related liabilities within the confines of an employer and employee relationship.
"Effectively, damages owed to former players like Samir Nurkovic will remain claimable, but from the new owners of Royal AM, unless agreed otherwise during the transfer process," Mphahlele explained.
