Rugby Australia could face a financial catastrophe if Israel Folau is successful in his legal action against the union.

Folau has launched his legal action against Rugby Australia and club side the Waratahs after his playing contract was terminated over controversial social media posts.

Legal representatives for Folau have filed an application to the Australian Fair Work Commission and are seeking a declaration that his employment was unlawfully terminated because of his religion.

Folau’s £2.15million, four-year deal was cut short after an independent panel backed RA’s position that the comments he made on April 10 warranted his sacking rather than a fine or suspension.

Folau is seeking $10 million in damages on the back of his dismissal, a sum which could potentially derail the union which has only just found its way back to profit.

Rugby Australia filed a $5.2 million surplus in 2018, having record a $3.7 million loss in 2017. However, even without the Folau saga, Chairman Cameron Clyne had already predicted more financial losses in 2019.

A fall off in attendances, the poor form of the Wallabies and a declining market in terms of broadcast and sponsorship deals have all hurt the Wallabies bottom line in recent years.

The 30-year-old devout Christian said on his Instagram account that “hell awaits” for “drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists, idolaters”.

Folau, who also played rugby league for the Melbourne Storm and Brisbane Broncos before switching codes, said: “I will forever be grateful and proud to have played the sport I love for our nation.

“Ours is an amazing country built on important principles, including freedom of religion. A nation made up of so many different faiths and cultural backgrounds will never be truly rich unless this freedom applies to all of us.

“The messages of support we have received over these difficult few weeks have made me realise there are many Australians who feel their fundamental rights are being steadily eroded.

“No Australian of any faith should be fired for practising their religion.”

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