The salary caps that were in place in EFL League One and League Two have been withdrawn after a claim from the PFA was upheld by an independent arbitration panel.
The PFA claimed that by introducing salary caps for the 2020/21 season, the EFL was in breach of the constitution of the Professional Football Negotiating and Consultative Committee (PFNCC).
EFL Salary Caps Withdrawn in League One and League Two
Reason for Withdrawl
It was argued by the EFL that the introduction of salary caps in League One and League Two would help to alleviate the problems surrounding sustainability in the lower reaches of the Football League.
Caps had to cover costs including wages, taxes, bonuses, image rights, agents’ fees and other fees paid to players either directly or indirectly.
Clubs from League One and League Two voted in favour of their introduction prior to the start of the 2020/21 season, meaning that League One sides would have a £2.5 million cap and League Two clubs would have a £1.5 million cap.
However, the PFA described their introduction as “unlawful and unenforceable”, and the group’s chief executive, Gordon Taylor, has since 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 previous wage management system will now come back into force, known as the Salary Cost Management Protocol (SCMP).
This means that clubs in League Two can spend up to 50% of their turnover on player-related expenditure, excluding those aged under 21.
This rises up to 60% for League One clubs or 75% in the season following relegation from the Championship.