F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2017-2018) – fifa.com – atto non ufficiale – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland, 5 June 2018

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 5 June 2018,

by

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 a contractual dispute arisen between the parties

I. Facts of the case

1. On 31 May 2016, the coach of Country B, Coach A (hereinafter: the Claimant) and the club of Country D, Club C (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract) valid as from 1 July 2016 until 30 June 2017.

2. Article 10 letter a) of the contract stipulates that the Claimant was to be remunerated with a “gross monthly base salary” amounting to 39,505 in the currency of Country D.

3. Furthermore, article 10.1 of the contract establishes, inter alia, the following:

“10.1 The employee benefits from the following increments / bonuses:

a) An installation allowance in the amount of EUR 40,000 (forty thousand) net, payable in two equal instalments as follow:

- EUR 20,000 (twenty thousand) net in June 2016 only after the [Respondent] has received from the Professional Football League of Country D the first instalment of the TV rights;

- EUR 20,000 (twenty thousand) net in February 2017 only after the [Respondent] has received from the Professional Football League of Country D the second instalment of the TV rights;

[…]

d) The parties agree that the [Claimant] will receive at the end of the 2016/2017 season a bonus in the amount of EUR 15,000 (fifteen thousand) net only if at the end of the 2016/2017 season [the Respondent] ranks in the 9-10 position in the final ranking of the First league ratified by the Football Federation of Country D/Professional Football League of Country D. The payment will be made once the Football Federation of Country D/Professional Football League of Country D has ratified the results of the 2016/2017 season of the National Football Championship of the First league and after [the Respondent] has received the first instalment of the TV rights due for the 2017/2018 season”.

4. According to article 15 let. c) of the contract, the Respondent is entitled to terminate the contract unilaterally “while making all the payments due to the employee until the date on which the [Respondent] decided to unilaterally terminate the contract, which will represent the agreement of both parties”.

5. Moreover, article 16 of the contract reads as follow:

“The disputes arising from the conclusion, performance, amendment, termination and interpretation of the terms of this individual employment contract will be settled in the following order:

a) amicably;

b) by turning to the Football Federation of Country D committees;

c) by the courts having jurisdiction over the subject matter or the territory, under the law”.

6. The contract does not contain any clause relating to compensation for breach of contract.

7. On 4 November 2016, the Claimant lodged a claim before FIFA against the Respondent requesting the following:

 270,090 in the currency of Country D net as compensation, amount that according to the Claimant corresponds to the contract’s residual value, i.e. salaries from October 2016 until July 2017 (9*30,010). In order to calculate said amount, the Claimant explained that he was entitled to receive a gross monthly salary of 39,505 in the currency of Country D, amount that according to him is equivalent to a net monthly salary of 30,010 in the currency of Country D;

 The “set-up premium according to Art. 10.1 letter a” of the contract, amounting to EUR 20,000;

 The outstanding payment of the bonus provided in article 10.1 let. d) of the contract equivalent to EUR 4,500, “calculated as follows: Euro 15,000 : 40 stages x 12 stages played = Euro 4,500”. Specifically, the Claimant held that at the moment of the contract’s termination the team was ranked in the 9th position, “with 12 cumulative points”;

 The payment of “legal interest”;

 The procedural cost and legal expenses in an amount to be established by FIFA.

8. In his claim, the Claimant argued that he complied with all his obligations during the course of the contract. Moreover, the Claimant pointed out that he took over the Respondent’s team “with 4 points, and saving it from relegation and subsequently qualifying in Continental League”.

9. Notwithstanding the above, the Claimant stated that the Respondent terminated the contract by means of a letter dated 6 October 2016. In said letter, the Respondent terminated the contract, invoking its clause 15 let. c).

10. As a consequence of the foregoing, the Claimant argued that he is entitled to receive compensation as the Respondent had terminated the contract without just cause, based on a clause that “is affective by absolute nullity, being abusive and impermissible clause by the FIFA and Continental Confederation Regulations”.

11. In its response to the claim lodged by the Claimant, the Respondent rejected the competence of FIFA and held that the Claimant’s claim should be declared inadmissible. Furthermore, the Respondent argued that the Claimant should “pay the expenses made by the [Respondent] during the course of these proceedings”.

12. In supports of its allegations, the Respondent argued that FIFA’s Players’ Status Committee lacks jurisdiction to decide the present case. In particular, the Respondent held that the claim should have been filed before the National Dispute Resolution Chamber of the Football Federation of Country D (hereinafter: the NDRC of the Football Federation of Country D)

13. In this regard, the Respondent referenced several provisions at a domestic level. In particular, the Respondent mentioned Article 26.2 of the Regulations on the Status and Transfer of Football Player of the Football Federation of Country D which establishes that “the National Dispute Resolution Chamber (NDRC) shall have jurisdiction to settle matters regarding: f) the conclusion, interpretation, and enforcement of contracts concluded between clubs that participate in competitions hosted by the Football Federation of Country D and the Professional Football League of Country D and their employed coaches”.

14. This being established, the Respondent argued that there is an “express choice of jurisdiction included in article 16” of the contract which, according to the Respondent, establishes that if a dispute arising from the contract cannot be settled amicably, “the parties expressly agree to grant jurisdiction to the domestic jurisdictional bodies – the Football Federation of Country D committees”.

15. Moreover, the Respondent stated that “by expressly choosing the national Football Federation of Country D jurisdiction, the parties gave the National Dispute Resolution Chamber of the Football Federation of Country D the jurisdiction to settle the case”.

16. Subsequently, the Respondent argued that the NDRC of the Football Federation of Country D is “an arbitration body that complies with the FIFA requirements on composition, independence and fair proceedings”.

17. In particular, the Respondent argued that the NDRC of the Football Federation of Country D is composed of five members with an equal representation of players and clubs, as it is comprised of two players’ representatives, two clubs’ representatives, and one chairman elected by consensus of the abovementioned player and club appointed representatives. According to the Respondent, the NDRC of the Football Federation of Country D “tries cases in panels of at least three members” and “the panel must always consist of an equal number of representative of players and club”.

18. In addition, the Respondent stated that the members of the NDRC of the Football Federation of Country D “are independent from those that appointed them” and “cannot participate in the settlement of a case if they have a personal and/or direct/indirect interest in the case or any other reason that might affect their impartiality”. In addition, the Respondent held that the parties can “recuse a member of the NDRC if they are any doubts regarding their independence or impartiality”.

19. Furthermore, the Respondent argued that the NDRC of the Football Federation of Country D implements its decisions by simple majority and that said decisions are “subject to appeal before the Appeal Committee”. In this regard, the Respondent pointed out that the “decisions of the Football Federation of Country D Appeal Committee are final and enforceable at domestic level from the date of delivery and are subject to appeal only before the Court of Arbitration for Sport no later than 21 days from notification”.

20. Moreover, and in the case that FIFA decides that the NDRC of the Football Federation of Country D does not fulfill FIFA’s requirements, the Respondent argued that “even in that case, the FIFA Player’s Status Committee still does not have jurisdiction”.

21. In this respect, the Respondent referred once again to article 16 of the contract and argued that according to said provision if a disputes arising from the contract “cannot be settled amicably or in a domestic arbitration proceeding, the ordinary courts of law with subject matter and territorial jurisdiction shall be competent to settle the case”.

22. Despite being invited to do so, the Respondent failed to submit any comments in relation to the substance of the matter.

23. By means of an unsolicited letter dated 31 March 2017 and received after the closure of the investigation phase, the Respondent submitted alleged proofs of payment made by it to the Claimant during the contractual relation between the parties.

24. In addition, and by means of unsolicited correspondences dated 1 June 2018 and 4 June 2018 and received after the closure of the investigation phase, the Respondent reiterated its previous allegations and emphasized that FIFA was not competent to hear the present dispute.

25. Upon request of the FIFA administration, the Claimant informed that he remained unemployed until 30 June 2017, i.e. the ordinary expiry of his contract with the Respondent.

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 4 November 2016. Consequently, the Single Judge concluded that the 2015 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 2015, 2017 and 2018 editions of the Procedural Rules).

2. Subsequently, the Single Judge referred to article 3 par. 1 and 2 of the Procedural Rules and confirmed that in accordance with article 23 par. 1 and 4 in combination with article 22 lit. c) of the Regulations on the Status and Transfer of Players (edition 2018), he would be, in principle, competent to deal with employment-related disputes between a club and a coach of an international dimension.

3. However, Single Judge acknowledged that the Respondent, with reference to the second part of article 22 lit. c) of the Regulations, deemed that the NDRC of the Football Federation of Country D was competent to deal with the present case and not FIFA.

4. More specifically, the Single Judge took note that the Respondent argued that the NDRC of the Football Federation of Country D complied with the requirements of FIFA in terms of constitution, independency and fair proceedings, and that there is an “express choice of jurisdiction included in article 16” of the contract which, according to the Respondent, establishes that if a dispute arising from the contract cannot be settled amicably, “the parties expressly agree to grant jurisdiction to the domestic jurisdictional bodies – the Football Federation of Country D committees”. Moreover, the Single Judge observed that the Respondent stated that “by expressly choosing the national Football Federation of Country D jurisdiction, the parties gave the National Dispute Resolution Chamber of the Football Federation of Country D the jurisdiction to settle the case”.

5. In this regard, the Single Judge referred to article 22 c) of the Regulations, according to which he is competent to deal with a matter such as the one at hand unless an independent arbitration tribunal, guaranteeing fair proceedings exists at national level.

6. In relation to the above, the Single Judge also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the Players’ Status Committee can settle an employment-related dispute between a club and a coach of an international dimension, is that the jurisdiction of the relevant arbitration tribunal derives from a clear reference in the employment contract.

7. Therefore, while analysing whether he was competent to hear the present matter, the Single Judge considered that he should, first and foremost, analyse whether the employment contract at the basis of the present dispute actually contained a clear jurisdiction clause.

8. Having said this, the Single Judge turned his attention to art. 16 of the employment contract, on the basis of which the Respondent contested FIFA’s jurisdiction. Said article stipulates that:

“The disputes arising from the conclusion, performance, amendment, termination and interpretation of the terms of this individual employment contract will be settled in the following order:

a) amicably;

b) by turning to the Football Federation of Country D committees;

c) by the courts having jurisdiction over the subject matter or the territory, under the law”.

9. In this respect, and regardless of the fact that the relevant employment contract contains a reference to dispute resolution at national level, the Single Judge pointed out that the relevant article was drafted in a rather vague manner in the sense that it merely refers to “Football Federation of Country D committees” and to “courts having jurisdiction over the subject matter or the territory, under the law” and not to a specific deciding body in the sense of art. 22 lit. c) of the aforementioned Regulations, or to any similar arbitration body.

10. In view of the foregoing, the Chamber held that art. 16 of the employment contract cannot be considered as a clear and exclusive jurisdiction clause in favour of the NDRC of Country D or any other national body in Country D.

11. On account of all the above-mentioned considerations, the Single Judge established that the Respondent’s objection towards the competence of FIFA to deal with the present matter has to be rejected, and that he is competent, on the basis of art. 22 lit. c) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

12. The competence having been established, the Single Judge decided thereafter to analyse which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions 2016 and 2018), and considering that the present matter was submitted to FIFA on 4 November 2016, the 2016 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

13. His competence and the applicable regulations having been established and entering into the substance of the matter, the Single Judge continued 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 refer only to the facts, arguments and documentary evidence that he considered pertinent for the assessment of the matter at hand.

14. In doing so and to begin with, the Single Judge acknowledged that on 31 May 2016, the Claimant and the Respondent, concluded an employment contract valid as from 1 July 2016 until 30 June 2017. In accordance with article 10 letter a) of the contract the Claimant was to be remunerated with a “gross monthly base salary” amounting to 39,505 in the currency of Country D.

15. In addition, the Single Judge took note that article 10.1 of the contract establishes, inter alia, the following:

“10.1 The employee benefits from the following increments / bonuses:

a) An installation allowance in the amount of EUR 40,000 (forty thousand) net, payable in two equal instalments as follow:

- EUR 20,000 (twenty thousand) net in June 2016 only after the [Respondent] has received from the Professional Football League of Country D the first instalment of the TV rights;

- EUR 20,000 (twenty thousand) net in February 2017 only after the [Respondent] has received from the Professional Football League of Country D the second instalment of the TV rights;

[…]

d) The parties agree that the [Claimant] will receive at the end of the 2016/2017 season a bonus in the amount of EUR 15,000 (fifteen thousand) net only if at the end of the 2016/2017 season [the Respondent] ranks in the 9-10 position in the final ranking of the First league ratified by the Football Federation of Country D/Professional Football League of Country D…”.

16. Furthermore, the Single Judge observed that according to article 15 let. c) of the contract, the Respondent is entitled to terminate the contract unilaterally “while making all the payments due to the employee until the date on which the [Respondent] decided to unilaterally terminate the contract, which will represent the agreement of both parties”.

17. Moreover, the Single Judge took note that the Respondent, by means of a letter dated 6 October 2016, terminated the contract invoking its clause 15 let. c).

18. The Single Judge further observed that, on 4 November 2016, the Claimant lodged a claim against the Respondent and requested the following:

 270,090 in the currency of Country D net as compensation for breach of contract, amount that according to the Claimant corresponds to the contract’s residual value, i.e. salaries from October 2016 until July 2017;

 The “set-up premium according to Art. 10.1 letter a” of the contract, amounting to EUR 20,000;

 The outstanding payment of the bonus provided in article 10.1 let. d) of the contract equivalent to EUR 4,500, “calculated as follows: Euro 15,000 : 40 stages x 12 stages played = Euro 4,500”;

 The payment of “legal interest”;

 The procedural cost and legal expenses.

19. In this respect, the Single Judge observed that in support of his claim, the Claimant argued that the Respondent terminated the contract without just cause invoking its clause 15 let. c), clause that according to the Claimant “is affective by absolute nullity, being abusive and impermissible clause by the FIFA and Continental Confederation Regulations”.

20. On the other hand, the Single Judge remarked that the Respondent, despite being invited to do so, failed to submit any comments in relation to the substance of the matter.

21. Equally, the Single Judge noted that the Respondent, after the notification of the closure of the investigation of the matter at hand, submitted unsolicited correspondences dated 31 March 2017, 1 June 2018 and 4 June 2018. As a result, in line with art. 9 par. 4 of the Procedural Rules as well as his constant jurisprudence in this regard, the Single Judge decided not to take into account the above-mentioned letters of the Respondent and established that, in accordance with art. 9 par. 3 of the Procedural Rules, he shall take a decision upon the basis of those documents on file that were provided prior to the closure of the investigation-phase.

22. Having established the above, the Single Judge highlighted that the underlying issue in this dispute was to determine whether the employment contract had been terminated by the Respondent with or without just cause and, subsequently, to determine the potential consequences thereof.

23. In this regard, the Single Judge focussed his attention on the above-mentioned clause 15 let. c) of the contract and considered that such clause appears to be unilateral and to the benefit of the Respondent only. Therefore, and in the light of such potestative character of the pertinent contractual clause, the Single Judge decided that clause 15 let. c) of the contract does not constitute a clause that can be validly invoked nor a legal basis to unilaterally terminate the contract.

24. As a consequence, the Single Judge decided that the Respondent terminated the contract prematurely and without just cause on 6 October 2016 and, therefore, that the Respondent is to be held liable for such early termination of the employment contract without just cause.

25. The Single Judge continued his deliberations by analysing the consequences of the breach of contract without just cause committed by the Respondent.

26. But before doing so, the Single Judge first went on to assess whether any outstanding remuneration was still due by the Respondent to the Claimant at the moment the contract was terminated without just cause by the Respondent. In this regard, the Single Judge underlined that the Claimant had inter alia requested from the Respondent the payment of the bonus provided in article 10.1 let. d) of the contract in an amount equivalent to EUR 4,500.

27. In this respect, the Single Judge observed that the wording of said article is clear and requires the Respondent to rank in 9 or the 10 position in the final ranking of the first League of Country D. However, the Single Judge noted that the Claimant acknowledged that at the date of termination, i.e. 6 October 2016, the Respondent only played the first 12 games of the first League of Country D. Therefore, the Single Judge decided that the Claimant is not entitled to receive any amount related to the bonus established in article 10.1 let. d) of the contract.

28. Turning his attention to the compensation payable for the unilateral termination without just cause by the Respondent, and taking into account the legal principle of contractual freedom, the Single Judge held that, as a general rule, if an employment contract contains a specific provision establishing an amount of compensation to be paid in case of early termination, such provision should prevail over any other way to determine compensation for a unilateral early termination.

29. In this regard, the Single Judge remarked that the parties did not establish a specific provision in the contract fixing an amount of compensation in case of its premature termination.

30. Bearing in mind the above, and his constant jurisprudence in this regard, the Single Judge decided that the Claimant is entitled to the remaining value of his salaries as compensation for the unilateral termination without just cause of the contract by the Respondent.

31. With regard to its calculation, the Single Judge noted that the Claimant claimed an amount of 270,090 in the currency of Country D as compensation equivalent to the residual value of the contract, i.e. net salaries from October 2016 until June 2017.

32. In addition, the Single Judge observed that the Claimant requested, without any further specification, EUR 20,000 corresponding to the “set-up premium according article to 10.1 letter a” of the contract. In this regard, the Single Judge concluded that the Claimant was referring to the second instalment of EUR 20,000 payable in February 2017. Therefore, the Single Judge decided that the amount of EUR 20,000 should be considered in the present matter as compensation considering that it was due in February 2017 and that the termination of the contract occurred on 6 October 2016.

33. As a consequence of the above, the Single Judge concluded that the amounts of 270,090 in the currency of Country D and EUR 20,000 serves as the basis for the final determination of the amount of compensation for breach of contract.

34. Subsequently, the Single Judge pointed out that an injured party has an obligation to mitigate the loss he or it might have suffered as a result of the non-fulfilment and/or breach of a contract. In this respect, the Single Judge verified whether the Claimant had signed an employment contract with another club or association 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.

35. In this respect, the Single Judge underlined that the Claimant informed FIFA that he did not sign any other employment contact after the date of the termination of the employment relationship with the Respondent, i.e. 6 October 2016, until the end of its validity, i.e. 30 June 2017.

36. Consequently, on account of all the above-mentioned considerations and the specificities of the case at hand, the Single Judge decided that the claim of the Claimant is partially accepted and that the Respondent had to pay the amounts of 270,090 in the currency of Country D and EUR 20,000 to the Claimant, which was considered by the Single Judge to be a reasonable and justified amount as compensation for breach of contract.

37. In addition, as per the Claimant’s claim for interest and in accordance with his longstanding jurisprudence, the Single Judge granted the Claimant interest at the rate of 5% p.a. as of 4 November 2016 on the aforementioned amounts of 270,090 in the currency of Country D and EUR 20,000.

38. In continuation, 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 proceedings before the Players’ Status Committee, including its Single Judge, costs in the maximum amount of CHF 25,000 are levied. The relevant provision further states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings.

39. In respect of the above and taking into account that the claim of the Claimant has been partially accepted, the Single Judge concluded that both parties had to bear the costs of the current proceedings before FIFA. 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. On that basis, the Single Judge held that the amount to be taken into consideration in the present proceedings was between CHF 50,000 and CHF 100,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 10,000.

40. As a conclusion, in view of the circumstances of the present matter, the Single Judge determined the costs of the current proceedings amounting to CHF 10,000. Consequently, the Single Judge of the Players’ Status Committee decided that the amount of CHF 2,000 has to be paid by the Claimant and the amount of CHF 8,000 by the Respondent in order to cover the costs of the present proceedings.

41. Lastly, the Single Judge rejected any claim for legal expenses and procedural compensation in accordance with art. 18 par. 4 of the Procedural Rules and the respective longstanding jurisprudence in this regard.

42. The Single Judge concluded his deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

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

1. The claim of the Claimant, Coach A, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of 270,090 in the currency of Country D and in the amount of EUR 20,000, as well as interest of 5% p.a. on the aforementioned amounts as of 4 November 2016 until the effective date of payment.

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

5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances in accordance with the above-mentioned number 2. are to be made and to notify the Single Judge of the Players’ Status Committee of every payment received.

6. Any further claim lodged by the Claimant is rejected.

7. The final costs of the proceedings in the amount of CHF 10,000 are to be paid, within 30 days as from the date of notification of this decision, as follows:

7.1 The amount of CHF 8,000 has to be paid by the Respondent 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

7.2 The amount of CHF 2,000 has to be paid by the Claimant. Taking into account that the latter has already paid the amount of CHF 2,000 as advance of costs at the beginning of the present procedure, the Claimant is exempted to pay said amount to FIFA.

*****

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:

Coach A, Country B / Club C, Country D 14

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne - Switzerland

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

Encl. CAS directives