A proposed salary cap from the English Football League (EFL) on League One and League Two clubs has been withdrawn following a decision from an independent arbitration panel.
The caps were originally voted through by clubs in the third and fourth tier of English Football in August, however, the Professional Footballers' Association (PFA) challenged the decision.
The arbitration panel has upheld the claim by the PFA that the EFL was in breach of the constitution of the Professional Football Negotiating and Consultative Committee (PFNCC) by introducing ‘Squad Salary Caps’, which would have seen League One clubs be capped at £2.5 million per club and £1.5 million per club in League Two.
It was argued by the PFA that that the PFNCC’s remit to consider matters relating to the employment of, and any associated rules and regulations to professional players employed by EFL Clubs, was not properly considered as part of the process to introduce the new rules and as a result served a notice of claim to that effect.
Both the EFL and the PFA agreed to take the matter to arbitration and after hearing submissions from both parties, an independent panel concluded that the EFL was in breach of its agreement as a member of the PFNCC.
The EFL will now discuss the matter of financial controls and implications linked to this outcome at a series of meetings with its Member Clubs later this week.
"We were disappointed that the EFL decided to introduce salary cap proposals, which were voted through without the proper consideration or consultation with the PFNCC," said PFA chief executive Gordon Taylor.
"As a result, in August 2020, the PFA served a notice of arbitration on the EFL stating the introduction of the new rules were in breach of obligations under the constitution of the PFNCC. We are pleased the panel upheld the PFA's claim."
The EFL's decision to implement salary caps was viewed as an essential addition to ensuring that football clubs lived within their means, particularly following the onset of the coronavirus pandemic, which has weighed financially heavy on teams in the lower tiers of English football.
Author: Jake Wilkin