Israel Folau sues Rugby Australia for millions after being sacked
Israel Folau’s looming court action against Rugby Australia won’t send the game broke but could still result in key programs being cut. SEE FOLAU’S COURT DOCUMENTS
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Rugby Australia won’t go broke after all if it loses its legal battle with Israel Folau because it has already taken out a $10 million insurance policy to cover any damages claims, The Daily Telegraph can reveal.
However, the sport’s governing body could still be faced with the bleak prospect of having to cut funding to important grassroots and professional programs because the $10 million only covers employment practices liability.
The Daily Telegraph understands the policy does not include legal fees and the $5 million in salary the former Wallaby is also seeking as part of his application to the Fair Work Commission.
Folau’s hefty salary is included in Rugby Australia’s budgets for the next four years but an early payout would leave a giant hole in the administration’s already tight finances for other programs.
Backed by a top barrister and a commercial law form, Folau is suing Rugby Australia and NSW Rugby for unlawful termination of his contract, saying he was fired for his religious beliefs.
He is seeking $5 million in salary, under the Fair Work Act, plus damages.
He has not specified the amount of compensation he’s after but his lawyers said the figure “will be substantial”, which translates to millions given Folau’s superstar status in the game.
The $10 million liability cover means Rugby Australia won’t go bust even if it loses the case, but it will take a massive hit.
The knock-on effect of having to fork out a $5 million lump sum payment and pay legal costs will have catastrophic implications for everyone else in the game, from professionals to grassroot participants.
For now, Rugby Australia remains confident it will win the case, arguing that Folau was sacked for breaching his employment contract, not for his religious beliefs.
The independent panel that heard his case agreed, finding the 30-year-old guilty of a high-level breach of the code of conduct, so recommended his contract be ripped up.
As such, no decisions have yet been made on which programs will face funding cuts, but if Folau wins, someone else will lose in the hip pocket.
Rugby Australia made a $5.2 million profit last year after generating revenues of $120 million, but is forecasting a loss this year because of the World Cup, making any decisions about funding cuts even more gut wrenching.
Rugby Australia pumped $9 million into community rugby last year, to cover the costs of various programs for schoolchildren, women, indigenous players, referees and coaches in all states and territories in Australia, involving 271,000 participants.
But Rugby Australia is adamant that it will never shut down its popular grassroots programs, so any cuts will have to be spread across the game, so could also impact on national and state teams that Folau used to be part of.
Rugby Australia spent $9.2 million on high performance and national teams last year as well as $16.8 million on player payments.
The team costs for the Wallabies was $9.7 million while the national sevens teams, including the champion women’s side that won the Olympic gold medal in Rio de Janeiro, were given $5.7 million.
DETAILS OF ISRAEL FOLAU’S CLAIM AGAINST RUGBY AUSTRALIA
As expected, Folau is challenging his termination under Section 723 of the Fair Work Act, with the backing of prominent Melbourne QC Stuart Wood and the Macpherson Kelley commercial law firm.
Folau is claiming that he was unlawfully fired because of his religious beliefs and believes he is not only standing up for his Christian beliefs but also the rights of all Australians.
“The messages of support we have received over these difficult few weeks have made me realise there are many Australians who feel their fundamental rights are being steadily eroded,” Folau said yesterday.
“No Australian of any faith should be fired for practising their religion.”
In the documents that were filed with the Fair Work Commission yesterday, Folau is seeking $5 million in lost salary, plus damages that are still to be decided but will be in the millions. If he is successful the size of the payout could potentially send Rugby Australia broke.
“The termination has cost Mr Folau the best years of his rugby career, participation at the Rugby World Cup, the chance to become the greatest Wallaby tryscorer (a decades-old record he was likely to break), and the associated exposure and opportunities,” Folau’s application said.
“As well as around $5 million in lost salary, Mr Folau will claim in respect of the loss of these opportunities (renewal of contract, sponsorships, etc). The damages will be particularised in due course, but will be substantial. In addition, Mr Folau will seek civil penalties.”
Rugby Australia and Rugby NSW are sticking to their argument that Folau was fired because he breached his employment contract by posting anti-gay comments on his social media accounts despite being repeatedly warned not to.
“This is an issue of an employee and his obligations to his employers within the contract that he signed,” Rugby Australia and Rugby NSW said in a joint statement. “He was bound by a code of conduct for all professional players in Australia that spells out clear guidelines and obligations regarding player behaviour, including respectful use of social media.”
Folau’s lawyers indicated they have other options at their disposal, setting the scene for a long stoush rugby officials said they had desperately hoped to avoid. “It is important to make clear that Rugby Australia and NSW Rugby did not choose to be in a position where they are forced to divert significant resources to defend the ongoing legal action taken by Israel, but his action leaves the game with no choice,” they said.
SUBSCRIBER EXCLUSIVE: Read Jamie Pandaram’s fascinating series on the stunning breakdwon between Israel Folau and Rugby Australia.
Originally published as Israel Folau sues Rugby Australia for millions after being sacked
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