The Israel Folau dispute is set to become a test case for religious freedom in Australia with ramifications that will potentially go way beyond the confines of rugby. Rugby Australia chief-executive Raelene Castle announced Folau’s $4m contract had been terminated after an independent panel found he committed a high-level breach of the code of conduct for posting religiously inspired, anti-gay, comments on social media.

Folau has three days to appeal the decision, but there was strong speculation he will by-pass an appeal and take the matter straight to the Supreme Court. He confirmed he was “exploring his options” but there is not much point in Folau appealing. Even if a new three-person panel was appointed to hear an appeal, it is highly unlikely Folau would escape without any sanction at all.

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And given Folau believes he has done nothing wrong, it would be hard to see him accept a suspension or a fine. For Folau it seems the issue is not just about saving a multi-million contract, but a crusade for the right to express his religious beliefs without discrimination. Folau believes he has a “duty to share God’s word.”

Folau, 30, has steadfastly rejected overtures to end the dispute, which re-ignited on 10 April when he posted that Hell awaited homosexuals and an array of other sinners if they did not repent.

Folau could have saved his career by taking down his offensive posts, but did not do so; he reportedly knocked back an offer of $1m to settle the matter before the code of conduct hearing, but rejected it out of hand. He has dismissed mediation as a possible solution.

All of this leads to the conclusion that the matter was always heading to a court of law where it will almost certainly become a test case – a legal action whose purpose is to set a precedent. There has certainly been nothing like the Folau dispute in the history of Australian sport, perhaps even workplace relations in general, where contract law is pitted against freedom of religion.

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Unlike the US, Australia has no constitutional or statutory bill of rights that protects religious freedom. Section 116 of the Australian Constitution precludes the federal parliament from making laws that prohibit the free exercise of any religion, but does not stop the states from making such laws. But the Federal Fair Work Act prohibits discrimination on the ground of religious belief or activity in employment contexts as do laws in all states except NSW and South Australia.

Rugby Australia terminates Folau's contract – as it happened Read more

RA stated Folau was entitled to his religious beliefs, but had to express them more “respectfully”. If ever laws required clarification, it is those relating to religious freedom in Australia.

While Folau fights for the right to religious freedom, what about the state of the game he is leaving behind?

RA is not flush with funds. There is a report that RA has already spent more than $350,000 in attempting to sack Folau. Could it afford a protracted and costly legal battle it is not guaranteed to win? Going from a code of conduct hearing to a court-room would be a whole new ballgame.

Folau’s controversial social media comments have divided the community and the game. Some of Folau’s former teammates at the Wallabies and the NSW Waratahs have publicly criticised his comments, but many are Pacific Islanders who share his religious beliefs and may feel resentment at the way he has been treated.

The Waratahs’ season has been adversely affected by Folau’s absence. They have won only one of four games since he was suspended and will struggle to make the playoffs. And, of course, rugby is now without the services of one of its best players in a World Cup year.

There will be a lot of soul-searching about how rugby arrived at this point. Is there anything RA could have done to prevent it? Were there missteps along the way in handling the issue? When Folau posted his first anti-gay comment a year ago, RA simply could have stated that Folau’s views were his own and did not reflect those of the organisation and left it at that.

Did Rugby Australia pursue Folau over the matter to uphold its policy of inclusion or was there commercial pressure from sponsors? Or a combination of both? Or was this matter always going to end up in court no matter what RA did or did not do?

If Folau takes legal action and is successful, it be a victory for religious freedom across Australia, particularly in workplaces, and if he fails, he will become Australia’s first sporting religious martyr.