F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2016-2017) – fifa.com – atto non ufficiale – Decision 28 February 2017

Decision of the Single Judge of the Players’ Status Committee

passed in Zurich, Country K, on 28 February 2017,

by

Mr Geoff Thompson (England),

Single Judge of the Players’ Status Committee,

on the claim presented by the coach

Coach A, Country B

as “Claimant”

against the club

Club C, Country D

as “Respondent”

regarding an employment-related contractual dispute

arisen between the parties.

I. Facts

1. On 1 July 2013, the Coach of Country B, Coach A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent) entered into a “Professional Football Trainer Contract” (hereinafter: the employment contract) valid from 1 July 2013 until 30 June 2015, according to which the Respondent hired the Claimant as “Assistant coach”. In this respect, the employment contract stipulated in clause 5 that the Claimant was entitled to receive from the Respondent for the season 2013/2014 the amount of EUR 72,000 on 30 July 2013 as well as EUR 288,000 payable in ten monthly instalments of EUR 28,800 on the “10th of every month” from July 2013 until April 2014. In addition, clause 5 of the employment contract stipulated that the Claimant was entitled to receive from the Respondent for the season 2014/2015 the amount of EUR 72,000 on 30 July 2014 as well as EUR 288,000 payable in ten monthly instalments of EUR 28,800 on the “10th of every month” from July 2014 until April 2015.

2. In addition, the employment contract stipulated, inter alia, that “in case of late payment of salary and/or bonus, later than 60 days of the agreed date, by the Club [i.e. the Respondent] to the assistant coach [i.e. the Claimant] this last [i.e. the Claimant] has the right to terminate with immediate effect and without preliminary notice (warning) the contract of employment with the Club. In this case, the Club will have to indemnify the assistant coach with an amount corresponding to all remuneration of the current contract due until 30 June 2015 (arrear of wages until the day of the termination of the contract + all remuneration from the day of termination of the contract to the 30 June 2015 as indemnity)”.

3. Moreover, clause 10 of the employment contract entitled “Special provisions” provided the following:

“At the end of season 2013/2014, in case of termination of the contract by the Trainer [i.e. the head coach of the coaching staff, Coach E (hereinafter: the head coach)] for personal/private (family) reason during execution of the contract, no indemnity of any kind is due to the Club [i.e. the Respondent] except if and only if:

The Trainer becomes coach of one of the Top 5 clubs within a association of the UEFA Confederation during the year from the date of the anticipated termination so that an indemnity of 1.000.000,00 € (i.e. one million EUR) is due to the Club;

OR The Trainer becomes coach of any other club during the year from the date of the anticipated termination so that an indemnity of 750.000,00 € (i.e. seven hundred and fifty thousand EUR) is due to the Club.

Moreover, in case above-mentioned, all contracts with the technical staff (i.e. with Employee F, Employee G and Employee H) will be automatically terminated without compensation except the reimbursement of the advance of the remuneration pro rata temporis of all months no worked at the date of termination.

If the club terminate the contract at the end of the season 2013/2014 an indemnity of 1.000.000 Euros will be paid by the club to the head coach.

With regard to the assistants coach if the termination of the contract with any of the by the club, the club will pays three monthly salaries - and if the contract with any of the, termination by the decision of the coach [i.e. the Claimant] the club do not pay any compensation… This clause is valid only until the end of the season 2013/2014”.

4. On 23 October 2014, the Claimant lodged a claim in front of FIFA against the Respondent, arguing that the latter had breached the contract without just cause. In this regard, the Claimant explained that the Respondent allegedly repeatedly delayed the monthly salary payments and that the “the club [i.e. the Respondent], until present date, did not pay the instalment referring to the month of April 2014, which should have been paid until the 10th of the April 2014”. Subsequently, the Claimant referred to the relevant provisions in the employment contract and claimed having been “entitled to the right of terminate the Agreement [i.e. the employment contract] with immediate effect, and without preliminary notice or prior warning, as well as the Claimant has the right to be indemnified under the terms of such Agreement”. Equally, the Claimant pointed out that the Respondent did not issue the relevant flight tickets for the Claimant’s return to Country D as contractually agreed and that the Respondent allegedly “hired another professional head coach and a new technical staff - Coach J, born in Country K – who is training the football first team Club since June 2014”. In view of the foregoing, the Claimant terminated the employment contract by means of an email dated 7 October 2014.

5. Consequently, the Claimant requested from the Respondent the amount of EUR 28,800 as outstanding salaries, plus interest at a rate of 5% per year as from 10 April 2014 until date of effective payment as well as the amount of EUR 360,000 as compensation for breach of contract, plus 5% interest per year as from 10 June 2014 until date of effective payment.

6. In its reply to the claim, the Respondent argued that, on 5 May 2014, the head coach orally terminated his employment contract invoking personal reasons. Subsequently, the Respondent referred to the content of clause 10 of the employment contract, in accordance with which all employment contracts with the technical staff would be terminated automatically in case the head coach terminates his contract “at the end of season 2013/2014”.

7. Therefore, the Respondent claimed that the head coach terminated the employment contract and, hence, the Claimant’s request should be rejected.

8. In his replica, the Claimant reiterated his position. Furthermore, the Claimant argued that the Respondent never informed the Claimant regarding such automatic termination of the employment contract. Equally, the Claimant informed FIFA having concluded a new employment agreement with the Club of Country L, Club M on 8 January 2015, in accordance with which the Claimant was entitled to receive monthly salaries in the amount of EUR 9,000 and acknowledged that the compensation should be mitigated accordingly.

9. Consequently, the Claimant requested from the Respondent the amount of EUR 28,800 as outstanding salaries, plus interest at a rate of 5% per year as from 10 April 2014 until date of effective payment as well as the amount of EUR 324,000 as compensation for breach of contract, plus 5% interest per year as from 10 June 2014 until date of effective payment.

10. In its last position in the matter at hand, the Respondent requested that all claims should be dismissed.

***

II. Considerations of the Single Judge of the Players´ Status Committee

1. First of all, the Single Judge of the Players’ Status Committee (hereinafter also referred to as: the Single Judge) analysed whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 23 October 2014. Consequently, the Single Judge concluded that the 2014 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution (hereinafter: the Procedural Rules) is applicable to the matter in hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the Single Judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that in accordance with art. 23 par. 1 and 4 in combination with art. 22 lit. c) of the 2014, 2015 and 2016 editions of the Regulations on the Status and Transfer of Players, he would be, in principle, competent to deal with employment-related disputes between a club or an association and a coach of an international dimension.

3. In continuation, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, he recalled that the claim was submitted to FIFA on 23 October 2014 and concluded that the 2014 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance (cf. art. 26 par. 1 and 2 of the Regulations).

4. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started his analysis by acknowledging the facts of the case and the arguments of the parties as well as the documents contained in the file. However, the Single Judge emphasised that in the following considerations he will only refer to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. In doing so and to begin with, the Single Judge acknowledged that, on 1 July 2013, the Claimant and the Respondent had concluded an employment contract valid from the date of its signature until 30 June 2015. The terms of the employment contract provided that the Claimant was entitled to receive from the Respondent for the season 2013/2014 the amount of EUR 72,000 on 30 July 2013 as well as EUR 288,000 payable in ten monthly instalments of EUR 28,800 on the “10th of every month” from July 2013 until April 2014 and for the season 2014/2015 the amount of EUR 72,000 on 30 July 2014 as well as EUR 288,000 payable in ten monthly instalments of EUR 28,800 on the “10th of every month” from July 2014 until April 2015.

6. In continuation, the Single Judge observed that, on the one hand, the Claimant had argued that the Respondent had hired a new coaching staff as from June 2014 and therefore, he had had just cause to terminate the employment contract, by means of an email on 7 October 2014. Consequently, the coach requested from the Respondent the amount of EUR 28,800 as outstanding salaries, plus interest at a rate of 5% per year as from 10 April 2014 until date of effective payment as well as the amount of EUR 360,000 as compensation for breach of contract, plus 5% interest per year as from 10 June 2014 until date of effective payment.

7. On the other hand, the Single Judge remarked that, for its part, the Respondent did not contest having replaced the coaching staff in June 2014. In this respect, the Respondent referred to clause 10 of the contract which stipulated that in case the head coach of the club terminates his contract at the end of the 2013/2014 season the employment contract will be automatically terminated. In this regard, the Respondent alleged that said head coach resigned for personal reasons on 5 May 2014 and, therefore, the employment contract was terminated automatically.

8. In light of the above, the Single Judge deemed that he had to address the question which party had terminated the contract and whether such termination occurred with or without just cause.

9. In continuation, the Single Judge also underlined that, subsequently, if it were found that the contract was breached by one of the parties without just cause, it would be necessary to determine the consequences for the party that caused the unjust breach of the relevant contract.

10. In view of the above, the Single Judge went on to analyse the content of the relevant clause 10 of the employment contract which established an automatic termination of the respective employment contracts in case of the resignation of the head coach for the entire coaching staff.

11. At this stage, the Single Judge deemed appropriate to emphasise that the employment contract was concluded by the Claimant and the Respondent not involving any third party. Equally, the Single Judge highlighted the personal nature of employment contracts being that the employee, by its nature, has to fulfil his obligations in persona and those, without the consent of all the parties of such contract, cannot be substituted by the services of another person. On account of the above, in particular considering the personal nature of an employment contract, the Single Judge deemed that such an automatic termination clause based on the personal decision of a third party cannot be considered valid to terminate an employment contract with just cause.

12. Consequently, taking into account that the Respondent did not contest having replaced the Claimant by means of installing a new technical staff in June 2014, the Single Judge considered that the Respondent prematurely terminated the employment contract without just cause.

13. Having established that the Respondent is to be held liable for the premature termination of the employment contract as of June 2014, the Single Judge went on to consider the financial consequences following the Respondent’s unjustified termination of the employment contract.

14. In doing so, the Single Judge first held that the Respondent must fulfill its obligations as per the employment contract in accordance with the general legal principle of pacta sunt servanda, which in essence means that contract must be respected. Accordingly, the Single Judge remarked that it remained uncontested that the Respondent failed to pay the monthly salary for April 2014 amounting to EUR 28,800. Consequently, considering the Claimant’s relevant request the Single Judge decided that the Respondent is liable to pay to the Claimant the of EUR 28,800 as well as 5% interest per year as of the relevant due date.

15. Having established the above, the Single Judge referred once again to clause 10 of the employment contract and took note that such provision did contain a clause regarding compensation to be awarded in case of breach of contract by the parties, but insisted that the calculations stipulated therein are not balanced and disproportional, reason for which the Single Judge did not apply such clause of the employment contract.

16. As a consequence of the above, the Single Judge concluded that the amount of compensation due to the Claimant had to be assessed in accordance with other criteria a taking into consideration the residual value of the contract according to the longstanding jurisprudence of the Players’ Status Committee.

17. Bearing in mind the above, and taking into account that the contract was valid until 30 June 2015, the Single Judge of the Players’ Status Committee decided that the Claimant was entitled to the remaining value of his salary as compensation for the unilateral termination of the contract without just cause. Consequently, the Single Judge concluded that the amount of EUR 360,000, corresponding to the salaries

from June 2014 until 30 June 2015, serves as the basis for the final determination of the amount of compensation for breach of contract.

18. In continuation, the Single Judge verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the Players’ Status Committee, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the coach’s general obligation to mitigate his damages.

19. The Single Judge noted that, according to the Claimant, he concluded an employment contract on 8 January 2015 with the Club of Country L, Club M, in accordance with which he was entitled to receive a monthly salary of EUR 9,000. Consequently, the Single Judge concurred that the amount received from 8 January until 30 June 2015 under the new employment contract shall be taken into consideration in the calculation of the amount of compensation for breach of contract in the case at stake, i.e. EUR 54,000.

20. Consequently, on account of all the above-mentioned considerations and the specificities of the case at hand, the Single Judge decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 306,000 as compensation for breach of contract in the case at hand.

21. Therefore, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Single Judge decided that the Respondent must pay the amount of EUR 306,000 as compensation for breach of contract as well as 5% interest per year on the said amount from the date of the claim, i.e. 23 October 2014 until the date of effective payment.

22. Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which, in the proceedings

before the Players’ Status Committee, including its Single Judge, costs in the maximum amount of CHF 25,000 are levied. The costs are to be borne in consideration of the parties’ degree of success in the proceedings (cf. art. 18 par. 1 of the Procedural Rules).

23. In respect of the above, and taking into account that the Claimant’s claim was partially accepted as well as considering that the Respondent was the party at fault, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA.

24. Furthermore and according to Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute. Consequently and taking into account that the total amount at dispute in the present matter is over CHF 200,001 the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

25. In conclusion, and considering the particularities of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000 has to be paid by the Respondent.

***

III. Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, Coach A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, Coach A, within 30 days as from the date of notification of this decision, the total amount of EUR 28,800 as outstanding salaries, plus interest at a rate of 5% per year on the said amount as from 11 April 2014 until the date of effective payment.

3. The Respondent, Club C, has to pay to the Claimant, Coach A, within 30 days as from the date of notification of this decision, the total amount of EUR 306,000 as compensation, plus interest at a rate of 5% per year on the said amount as from 23 October 2014 until the date of effective payment.

4. If the aforementioned sums, plus interest, are not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

5. Any further claims lodged by the Claimant, Coach A, are rejected.

6. The final costs of the proceedings in the amount of CHF 20,000 are to be paid by the Respondent, Club C, within 30 days as from the date of notification of the present decision as follows:

6.1. The amount of CHF 15,000 has to be paid to FIFA to the following bank account with reference to case nr. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

6.2. The amount of CHF 5,000 has to be paid directly to the Claimant, Coach A.

7. The Claimant, Coach A, is directed to inform the Respondent, Club C, immediately and directly of the account number to which the remittances under points 2., 3. and 6.2. above are to be made and to notify the Players’ Status Committee of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Country K

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Single Judge of the

Players’ Status Committee:

Omar Ongaro

Football Regulatory Director