Cricketers vs IRD legal clang under DRS
Sri Lanka’s Limited Over cricket captain Charith Asalanka and Test skipper Dhananjaya de Silva have filed a petition before the Court of Appeal, seeking an interim order against the recent decision of the Inland Revenue Department (IRD) to classify national cricketers as employees of Sri Lanka Cricket (SLC) rather than as independent service providers.
The IRD in a letter dated October 14, 2024 has asked SLC to classify cricketers as employees for the purpose of the Inland Revenue Act, which the SLC Executive Committee decided to implement the direction on January 17, 2025.
The petitioners, who represent a group of national cricketers, including prominent players such as Wanindu Hasaranga, Angelo Mathews, Maheesh Theekshana, Pathum Nissanka, and Kusal Mendis, argue that the IRD’s decision is both arbitrary and unreasonable, challenging a long-standing arrangement between SLC and its players.
The matter was taken up before the Acting President of the Court of Appeal, Justice M.T.M. Lafar, and Justice K.P. Fernando. The cricketers filed the petition seeking an order to quash the IRD’s decision and requested an interim order to suspend the implementation of this decision. The cricketers assert that the decision was made without their knowledge or consent, and without affording them an opportunity to make representations on the matter.
In support of the petition, a letter signed by 38 national cricketers was submitted to the Court, outlining their grievance and expressing solidarity with the petitioners’ call for legal action. The petitioners highlighted that for over 15 years, Sri Lanka’s cricketers have been treated as independent contractors, not employees of SLC. They further emphasised that the historical relationship between the cricketers and SLC has always been based on the understanding that cricketers are independent service providers, as reflected in their contracts, which have been renewed annually.
Legal counsel for the petitioners argued that the classification of cricketers as employees by the IRD undermines the nature of their professional relationship with SLC, which has always been structured on a contract basis with terms that involve significant uncertainty regarding tenure, contract renewal, and financial arrangements. They also pointed out that cricketers are paid a “fee” rather than a salary, and the contracts allow the use of players’ image rights, which are critical for global broadcasting and cricket-related events.
The petitioners further highlighted the uncertainty surrounding contract negotiations, particularly as they coincide with the time of contract renewal. The abrupt decision by the IRD has created confusion and instability, particularly given that contracts with SLC are typically short-term and renegotiated every 12 months.
Additionally, it was argued that while the cricketers have no issue with paying taxes, they maintain that their status as independent service providers should remain unchanged. The petitioners’ legal counsel also pointed out that the Auditor General has previously recognised cricketers as independent service providers, a position that had been consistent for over a decade.
The legal team also emphasised that the change in classification is not only disruptive for players but also impacts those who are attached to entities such as the police and military. Importantly, the cricketers clarified that they are not seeking statutory entitlements such as the Employees’ Provident Fund (EPF), Employees’ Trust Fund (ETF), or gratuity. Instead, they are focused solely on preserving their status as independent contractors.
During the hearing, SLC’s legal representatives expressed their agreement with the petitioners’ position, confirming that they also view national cricketers as independent service providers and not employees. SLC’s counsel indicated their willingness to abide by any decision the Court makes on the matter.
Representing the petitioners were counsel Nishan Sydney Premathiratne, Shenali Dias, and Sidath Gajanayaka, under the instructions of Gamindu Karunasena. President’s Counsel Kuvera de Zoyza, with Pasindu Bandara and Sajana de Zoyza, appeared on behalf of Sri Lanka Cricket. Deputy Solicitor General Manohara Jayasinghe represented the Inland Revenue Department.
The Court has scheduled the next hearing for March 28, 2025, where the petitioners will continue presenting their submissions, followed by a reply from the respondents. The case has sparked considerable interest, as the outcome could have far-reaching implications for the classification and treatment of professional athletes in Sri Lanka.