Rugby Australia bungled its contract negotiations with Israel Folau by failing to insert social media restraints, according to a Sydney media report.

The Daily Telegraph says that Folau, who inked a $4m four year deal last year, refused to have the additional clauses retrospectively inserted into the contract.

If this is so, it will place added pressure on RA's Kiwi CEO Raelene Castle, whose tenure has turned into a giant headache because of Folau's inflammatory social media posts.

Today looms as D-Day for the much-maligned Wallabies star - he has until this afternoon to lodge notice that he will fight the termination of his RA contract.

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RA believe they are still on safe ground, because they will argue the Wallaby star breached the standard player code of conduct by vilifying others because of their sexuality.

The Telegraph labelled the contract situation as a "bungle" which could leave RA facing action under workplace anti-discrimination requirements.

Folau's latest social media outburst quoted Bible scripture saying hell awaited people such as gays and atheists.

Folau's defence will be based around him being punished for expressing his religion's beliefs. The report says the lack of social media clauses are central to his defence.

But he would appear to still be facing a major battle.

The NSW Anti-Discrimination Act 1977 (Section 49ZT) states: "It is unlawful for a person, by a public act, to incite hatred towards, serious contempt for, or severe ridicule of, a person or group of persons on the ground of the homosexuality of the person or members of the group".

A spokeswoman for The Workplace Employment Lawyers said RA can argue that Folau breached his contract by going against legally correct direction RA gave him.

"'Free speech' in the workplace is qualified by employee's obligations under their contract. In this case, it appears that Folau was told about RA's policies and its expectations in relation to his conduct," she said.

"Given the history, and as Folau is a public figure, RA is likely to have grounds for taking disciplinary action which may include termination of his contract."

She added: "The NSW Anti-Discrimination Act protects against a 'public act' which amounts to vilification.

"We are not aware of any case law considering vilification in the context of argued religious expression in the workplace.

"However, recent cases show that vilification via social media is being considered by the courts."