The FA’s new work permit system & proposal for new “home grown” rules

Published 16 April 2015 | Authored by: Carol Couse, Tiran Gunawardena

The Football Association (“TheFA”) Chairman, Greg Dyke, recently announced two important developments during an update on the England Commission (aimed at improving the English senior team)1 that could have a significant impact for both young English players and non-EU players looking to play at the highest echelons of the game in the UK.

Firstly, following months of FA led discussions, Mr Dyke announced that the Home Office have approved a fundamental reform of the work permit system that will come into effect from 1 May 2015, in time for next season.2 Mr Dyke states that this change was implemented with a view of ensuring that only the best non-EU foreign players will be granted permission to play in England with less “bog standard” foreign players taking spots of local young players who would otherwise receive playing opportunities.3 Secondly, Mr Dyke announced proposals to change the home grown rules by changing the definition of a ‘home grown’ player in an attempt to improve the flow of young English players from academies to the highest level.4

Both these announcements can be seen as an attempt to maximise the number of domestic or home grown players being given first team opportunities at clubs competing in English leagues. Mr Dyke stated that his “fear for the future of English football is the Premier League ends up being owned by foreigners, managed by foreigners and played by foreigners5 and that these proposals are aimed at encouraging the development of more home grown players in the Premier League such as Tottenham Hotspur’s 21 year old Harry Kane, arguably the standout player of the 2014/15 season.

This article will touch on the proposed changes to the home grown rule but will focus more on the new work permit application process and the potential issues and complications it could raise. Undoubtedly, these new work permit regulations will make it much more difficult for non-EU footballers, without experience at the highest level to ply their trade in the UK going forward.

(A) The Work Permit Rules for Non-EU Players

(i) The Current Rules and Perceived Flaws

Under the current work permit rules, in order for a non-EU player to secure a work permit, the following 2 requirements had to be satisfied:6

  1. The player must have participated in at least 75% of his home country’s senior competitive international matches where he was available for selection during the two years preceding the date of application; and
  2. The player’s National Association must be at or above 70th place in the official FIFA World Rankings when averaged over the 2 years preceding the date of application.7

In the event that a non-EU player failed to automatically meet the above requirements, the acquiring club has an option to request a hearing in front of an independent review panel.8 The panel normally comprises of 6 members, including one representative from each of the Football Association, the Professional Footballers’ Association and the relevant League (Premier League or Football League, depending which the appellant Club is a member of), as well as 3 independent football experts selected from a list of ex-professional players and managers with a good knowledge of both domestic and international football.9

This panel could grant the work permit if they vote by majority that they are satisfied that:

  • The player was of “the highest calibre”; and
  • The player is able to contribute significantly to the development of the game at the top level in England.

In practice, what qualified as “the highest calibre” was incredibly subjective and was largely dependent on the views of the individual panel members chosen. Due to the extremely imprecise nature of judging a player’s footballing talent and future potential, there was a great deal of unpredictability and inconsistency in the system. Moreover, the panel’s reasons for their decision did not have to be disclosed10 to the public or even to the acquiring club, which meant that there was a distinct lack of transparency in the system.

For a detailed analysis of the cases submitted to this “highest calibre” test from 2009 to 2014, please refer to Jake Cohen’s article, ‘Delayed Entry: the FA’s “highest calibre” standard for non-EU footballers.11 As the analysis in this article illustrates, a large percentage of players were ultimately granted a work permit by the review panel. That said, on the statistics alone, the perceived success rate of the players who were deemed to be of ‘the highest calibre’ is not particularly impressive. This led to a questioning of the efficacy of the subjective and rather opaque process.

(ii) The confirmed changes to the work permit rules

As outlined in Jake Cohen’s article,12 given the entrenched rules protecting freedom of movement for citizens within the EU, if The FA wanted to promote home grown players and the national game, it had little choice but to turn its attention on tightening restrictions on work permits for non-EU footballers.13

Accordingly, following a 6-month consultation process, The FA announced that the Home Office has confirmed that a new work permit application process will come into force on 1 May 2015. The new rules set out a single application process with two alternative routes:

  1. An Automatic Governing Body Endorsement – based on the number of international team appearances, similar, in principle, to the current process; and
  2. An ‘Exceptions Panel’ process – overseen and implemented by an independent expert legal panel, applying largely objective criteria.

a) Automatic Governing Body Endorsement (“GBE”)

To be eligible for automatic GBE, a non-EEA (European Economic Area) player must have participated in a minimum percentage of senior competitive international matches for his national team in the 2 years preceding the date of his application. The required percentages are determined by that country’s FIFA world ranking as follows:14

  • FIFA Ranking 1-10: 30% and above
  • FIFA Ranking 11-20: 45% and above
  • FIFA Ranking 21-30: 60% and above
  • FIFA Ranking 31-50: 75% and above

This tiered system appears to be a fairer criteria than the previous blanket rule of 75% because it takes into account that it would be harder for a player to play consistently for a high ranking national team (e.g. Brazil) than it would be for a lower ranked team (e.g. Australia).

Moreover, in order to maximise the chances of approval for international elite young talent, for players under 21, the test period is reduced from 2 years to 1 year. Again, this reflects the inherent difficulty young players face in breaking into their national team.

b) Exceptions Panel

The authors understand that, for players that do not pass the automatic GBE, the ‘Exceptions Panel’ provides an alternative route of evaluation, which acknowledges that there are factors other than international appearances that can indicate whether a player is of an exceptional standard. The Panel (consisting of 3 members including a Chair with a legal background and experience in football) would be responsible for applying a set of objective criteria to try and ensure that only the most talented non-EU players ply their trade in England.

The authors understand that these criteria will include a points based system that analyses the transfer fee and wages offered to the player (compared to a median figured calculated by the Premier League) as well as the player’s previous club playing record.

Further, the authors understand that there will be a degree of leniency for players who are a ‘near miss’ and also for those players who may not meet the required criteria yet, but may be expected to do so in the near future. This would indicate that preference will be given for younger promising players rather than players who have already reached their peak. For players who are obtained on free transfers, we understand that a ‘proxy’ transfer value will be assigned to the player for the purposes of the analysis based on available information on the player.

Lastly, the authors understand that there will be a set of checks and balances put in place to prevent a manipulation of the rules (e.g. a front-ended contract which reduces in value after the first year in order to present the player as being more valuable than he actually is).

It is quite possible that all of these criteria may have historically been taken into account by Panels under the “highest calibre” test. However, due to the lack of transparency in the system, whether and how it was applied was impossible to determine. Accordingly, this new process of listing these factors, obliging an ‘Exceptions Panel’ to take them into account and attributing fixed weighting to these factors will undoubtedly be a fairer, more consistent and transparent method. Moreover, the authors understand that the basis of the decisions made will be published which will greatly address the issues of transparency and consistency that plague the current rules.

(iii) Observations and potential issues under the new work permit rules

It is clear that a more objective and transparent system was required for the work permit application process and this new application process appears to be just that.

For the truly elite international talents, the automatic GBE should provide for a straight-forward application process. For those that do not qualify under this rule, there appears to be a reasonable number of objective, measurable criteria that an ‘Exceptions Panel’ must take into account to determine whether a player is suitable to be granted a work permit. However, it does appear that this objective test was designed to be harder to satisfy than the “highest calibre” test with the intended result being that less non-EU players may play in England than was the case previously. As Mr Dyke stated during his announcement,15 this is exactly The FA’s intention as:

… if you applied the new system retrospectively across the last five years we estimate that 33% of the players who gained entry under the old system would not have been granted a work visa under the new system. That means that over five years there would have been 42 fewer non-European players playing in the Premier and Football Leagues across that time as a result of the change.

Effectively Mr Dyke argues the case for quality over quantity.

However, whilst the methodology of the new work permit application process appears to be sound, questions still need to be asked about whether this will help or hinder the game in England.

Critics of Mr Dyke’s proposal have questioned whether this is truly the best solution for the problem. Whilst it is understandable that The FA wants to promote home grown players and see more home grown stars in the league, it is questionable whether tightening restrictions on non-EU players will actually help in achieving this. Given the expensive prices being paid for English talent in the transfer market, one has to wonder whether the “bog standard” non-EU players Mr Dyke wants to see less of will simply be replaced by “bog standard” English or EU players – who The FA are powerless to prevent from playing in England due to EU protections on freedom of movement under Article 45, Treaty on the Functioning of the European Union.16 Clearly, Mr Dyke attempts to address this issue with his home grown player initiative. Developing the best talent however, is likely to also depend upon the resources invested in grassroots football, something that commentators assert are lacking at all but the elite clubs.17 In this regard however, we note that the Premier League has recently announced that at least £1bn of their new £5bn domestic TV deal will be invested in (amongst other things) grassroots facilities.18

Harry Kane was repeatedly mentioned by Mr Dyke as the paradigm of the benefits of promoting home grown players. As Mr Dyke stateshow many other Harry Kanes are there in the youth teams of Premier League clubs?19 However, one has to ask whether Harry Kane and others such as Danny Welbeck and Raheem Sterling are performing to the level they are because of their exceptional ability, rather than simply because they have had the opportunity of additional playing time.

In light of the proposed amendments to the home grown rules (more on this below), unless there are sufficiently talented English youth players coming through the system, we could feasibly see a decline in quality of the Premier League product. Given the recent announcement of the record breaking TV rights deals being negotiated by the Premier League,20 it will be interesting to see the reaction of clubs and the Premier League if the quality of the product - which is currently justifying eye watering TV rights figures - does decline. Further, as these work permit rules are stricter than those of other big leagues in Europe,21 it is arguable that English clubs risk losing out on talented non-EU players to rival European leagues. If the Premier League loses talent to rival leagues this may potentially weaken the value of the Premier League brand.

We may also see a heavy premium being paid by clubs to secure the best English talent (and there is arguably a premium being paid already22), thereby distorting the transfer market even further. This is even more of an issue in an era of Financial Fair Play, when clubs cannot necessarily afford to build their squads and bolster their English/home grown talent base through a highly inflated transfer market.23 In addition, when combined with the proposed home grown rule changes below, there may even be instances of clubs buying English players to include in a squad merely to satisfy a quota, rather than with any real intention to play them regularly. The examples of Scott Sinclair and Jack Rodwell at Manchester City and Josh McEachran at Chelsea - who were/are all highly touted young English players –are cited by commentators as players who did not get many playing opportunities once they moved to clubs in the higher echelons of the league.

Additionally, as detailed in Mr Cohen’s article,24 it should be noted that English clubs often utilise the loan system to avoid the negative impact of the work permit rules. They do this by acquiring non-EU players who do not satisfy the work permit requirements and loaning them out immediately to other clubs in Europe in countries with more lenient work permit laws (e.g. the Netherlands) until they either develop to a level where they can satisfy the ‘Exceptions Panel’ tests or they are sold. As noted in Mr Cohen’s article,25 Chelsea established their partnership with Dutch side, Vitesse Arnhem, for this very reason and these new rules may simply encourage more of this behaviour by the bigger Premier League clubs who can afford to have ‘partner clubs’ around Europe.

In summary, the intention of the changes to the work permit system may be admirable, but it will be interesting to see whether the new process ultimately assists in achieving the stated goal of improving the success of the national team.

 

The Proposed Changes on the home grown players rule

In conjunction with the changes to the work permit laws, Mr. Dyke claims there is an urgent need to remedy the ‘blockage’ and improve the flow of young English players from academies and the Elite Player Performance Programme (EPPP) into first team squads.26 On this point he notes that only 22% of the players who started matches for Chelsea, Manchester City, Arsenal and Manchester United (the current top 4 in the league table) this season were eligible to play for England. Moreover, this season only 23 English players appeared in the Champions League group stage compared with 78 Spanish players, 55 Germans and 51 Brazilians.27

Accordingly, in order to remedy this, The FA has announced proposals to amend the home grown rules as follows:28

  • A change in the definition of home grown player to any player, irrespective of their nationality, who has been registered with any club affiliated to The FA or Football Association of Wales for a period of 3 years prior to the player’s 18th birthday (as opposed to the current rule which requires them to be registered for 3 years before their 21st birthday).
  • A reduction in the maximum number of non-home grown players permitted in a club’s first team squad of 25 from 17 down to 13, phased over four years from 2016. As a result, at least 12 players in a squad of 25 would have to be home grown.
  • The introduction of a requirement that at least 2 home grown players are also ‘club trained players’ (defined as any player, irrespective of nationality, that has been registered for 3 years at their current club prior to their 18th birthday, rather than their 21st birthday which is the case under the current rules).

FIFA have rules protecting the transfer of minors29 that essentially prohibit players from registering with overseas clubs until age 18, unless they have moved countries for reasons unrelated to football.30 Whilst there is an exception permitting EU players to move within the EU or the EEA aged 16-18, under the proposed rules above, even if these players were to move to England at 16 they would not satisfy the requirement of 3 years of training in England before their 18th birthday. Accordingly, The FA hopes that these proposed changes will result in the vast majority of home grown players being English.

Arsenal manager Arsene Wenger has spoken out in criticism of the proposed amendments to the rules stating that “… we are in a top level competition and you earn your right through the quality of your performance, rather than your place of birth.31 Wenger believes that the real problem that needs remedying is the historic poor performances by English youth (U16-U2132) teams and that the proposed rules will only result in a promotion of mediocrity in the Premier League and “sometimes what looks a good solution is not necessarily the right one”.33 Conversely, five former England managers have written to The FA throwing their support behind the proposed changes and current Premier League managers such as Alan Pardew, Sam Allardyce and Roberto Martinez have all publicly endorsed them as being beneficial to the national game.34

These proposals will be put forward to a vote by the Premier League and a two-thirds majority will be required for them to come into effect.35 It remains to be seen what the Premier League’s clubs decide and given the heavy investment into youth facilities made by some of the more successful clubs, it is likely that they will regard the idea of even more restrictive regulations– particularly ones that will make it harder for them to recruit the best talent from overseas - as a hindrance rather than a benefit. Accordingly, Mr Dyke may find it difficult to win over their approval.36 Whilst The FA could force through the proposed changes against the wishes of the Premier League clubs, so far Dyke has preferred to adopt a collaborative and consultative approach, rather than a confrontational one.

 

Conclusion

Mr. Dyke and The FA are essentially arguing that too many sub-standard foreign players in the Premier League are indirectly obstructing the development of young English players and Mr Dyke believes that “as the body responsible for all of English football, it’s The FA’s duty to create as many opportunities as possible for young home grown talent to compete at the highest level”.37

The changes announced in relation to the work permit rules (which have been approved) and the home grown rule (still subject to approval by the Premier League) have been made with these concerns in mind.

Whilst it is indisputable that the new work permit system is more objective and transparent than the current version, it is also quite clear that it will be harder for many non-EU players to obtain a work permit than it was in the past. This will likely provide more opportunities to young English players than in the past, but whether this will achieve Mr Dyke’s overall objective of improving the health of the national game in the long run remains to be seen.

 

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About the Author

Carol Couse

Carol Couse

Carol is a consultant in the sports team at Mills & Reeve LLP and has over thirteen years of experience in sports law, both in-house and in private practice.

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Tiran Gunawardena

Tiran Gunawardena

Tiran Gunawardena is an Associate (Australian Qualified) in the sports law team at Mills & Reeve LLP.

Tiran specialises in international and domestic sports arbitration, with significant experience with proceedings before the Court of Arbitration for Sport (CAS) and regulatory matters in sport. He is dual qualified as an Australian solicitor and chartered accountant, and holds a Master in International Sports Law from ISDE (Madrid). Tiran is also an England Boxing and British Gymnastics Disciplinary Panel member. Prior to working at Mills & Reeve, Tiran spent almost 4 years working in the Corporate Tax and M&A team at PwC Sydney.

Tiran was selected by Who’s Who Legal as a leading sports lawyer in the UK in 2018.

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