EFL salary caps for League One and League Two scrapped following PFA challenge

alary caps in League One and League Two have been scrapped following a ruling by an independent arbitration panel.

Clubs in those leagues voted to bring in financial controls, in the form of salary caps, ahead of the start of this season.

The salary caps were set at £2.5million for those in League One and £1.5m for League Two, with the English Football League (EFL) believing they would curb the issue of rising wages and make clubs more sustainable.

Following their introduction, however, the caps were met with a backlash by the Professional Footballers’ Association (PFA).

The PFA said in August 2020: “The EFL has a legal obligation to consult with the PFA and the Professional Football Negotiating and Consultative Committee [PFNCC] over any potential changes to a player’s conditions. 

“This consultation has not happened, and as such, we are gravely concerned any cap brought in will be unlawful and unenforceable, which will ultimately be detrimental to everyone involved.”

An independent arbitration panel duly looked at the case after a claim was put forward by the PFA that the EFL was in breach of regulations by introducing the cap.

On Monday, the panel ruled that the EFL was in breach of the PFNCC’s constitution by introducing salary caps.

The PFA said they welcome the fact that “the salary cap rules are automatically withdrawn and hopes to open constructive dialogue to agree reasonable and proportionate cost control measures for the future”.

PFA Chief Executive, Gordon Taylor OBE said: “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.

“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 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.

At the time of the adoption of the Salary Cap Rules, the EFL included a provision to ensure that any decision such as this would have the effect of reinstating the Salary Cost Management Protocol rules that were in operation during season 2019/20, which links player related expenditure to turnover.