Commerce Commission decides rugby union authorisation no longer required
Published01 Apr 2011
The Commerce Commission has revoked an authorisation granted to the New Zealand Rugby Union (NZRU), relating to salary cap arrangements and player movement regulations, as it is no longer required.
The Commerce Commission has revoked an authorisation granted to the New Zealand Rugby Union (NZRU), relating to salary cap arrangements and player movement regulations, as it is no longer required. The original authorisation was requested by the NZRU and applied to players in the Air New Zealand Cup (now the ITM Cup).
The NZRU advised the Commission that as a result of changes to the players' employment arrangements, it believed the authorisation was no longer relevant. The Commission agreed.
The authorisation was required because the NZRU had the ability to hire players as independent contractors, which could have resulted in behaviour that might breach the Commerce Act. However, following changes made by the NZRU to their employment arrangements in December 2009, all players participating in the ITM Cup must now be employees and cannot be engaged as independent contractors. As the Commerce Act does not apply to arrangements with employees, the authorisation is no longer necessary.
The Commission asked for submissions from interested parties on the possible revocation and received only one, from the NZRU, supporting the Commission's preliminary view that the authorisation was no longer required.
In Decision 580, issued on 2 June 2006, the Commission gave a conditional authorisation allowing the NZRU to enter into or give effect to salary cap arrangements and player movement regulations. The authorisation applied to the NZRU, Provincial Unions and any players playing for a Provincial Union in the Premier Division of the domestic rugby competition (formerly the Air New Zealand Cup and now the ITM Cup).
Section 65 of the Commerce Act allows the Commission to vary, revoke or grant a new authorisation if there have been material changes in the circumstances since it was authorised.
As a consequence of employment changes by the NZRU, the Commission considers that the exemption in the Act relating to employment arrangements (i.e., section 44(1) (f)) applies and, therefore, the restrictive trade practice provisions of the Act no longer have any application.
