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, 23 January 2018

Decision of the Single Judge

of the

Players’ Status Committee

passed in Zurich, Switzerland, on 23 January 2018,

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

between the parties

I. Facts of the case

1. On 1 January 2017, the Coach of Country B, Coach A (hereinafter: the coach or the Claimant), and the Club of Country D, Club C (hereinafter: the club or the Respondent), signed an employment contract (hereinafter: the contract) valid as of the date of signature until 31 December 2017, for the position of assistant coach of the Respondent’s first team.

2. Pursuant to article 7.1 of the contract, the Respondent was to pay the Claimant a total salary of EUR 66,666 net. The monthly salary was to be paid on the 10th of the following month.

3. As per art. 8 of the contract, the Respondent shall provide the Claimant and his family with a total of two business class round trip flight tickets between the coach’s hometown and City E per season.

4. Article 10.3 and 10.4 of the contract respectively provides that “The contract may be cancelled by reaching agreement between [the parties] through negotiation” and “If the contract is terminated by [the Respondent] without a just cause, [the Respondent] shall pay [the Claimant] full amount of the remaining salary under this contract as compensation”.

5. Art. 12 of the contract states that “This contract shall not contain any contents against Law of Country D. Any dispute will be resolved by consultation on a maximum terms of 15 days. If it cannot be resolved both sides has the right to send it to the Football Association F or FIFA to adjudicate.”

6. On 19 March 2017, the Respondent informs the Claimant that, considering that “the team failed to achieve the desired results”, it decided that:

“1. [The Claimant] no longer serve as Assistant Coach of [the Respondent’s] team. Daily training and all the competitions will be organised by the Coaching team of Country D.

2. The club will initiate the contract cancellation procedures with [the coach] and will terminate the working contracts signed by both parties through friendly negotiation with [the Claimant] and [his] lawyer as soon as possible.

3. The club will continue to pay the accommodation for [the Claimant] in City E until March 31, 2017.”

7. On 28 March 2017, the Claimant underlines the unilateral termination of the contract by the Respondent and, based on art. 10.4 of the contract, urges the Respondent to “pay the remaining amount of EUR 55,555 […] within 15 days”. The Claimant further reminds the Respondent that all amounts of the contract are in euros and net of any taxes, as well as accompanied by a tax certificate. The Claimant also reserves the right to “increase the value of the claim” in view of additional benefits set forth in art. 8 of the contract.

8. On 19 May 2017, the Claimant lodges a complaint against the Respondent before FIFA, claiming that the Respondent unilaterally terminated the contractual relationship with him on 19 March 2017 based on the lack of sporting performance of the Respondent’s first team under his services, which, according to the Claimant, does not constitute a just cause.

9. The Claimant further adds that the Respondent solely paid his salary for January and February 2017.

10. Therefore, referring to art. 10.4 of the contract, the Claimant requests payment of compensation from the Respondent in the amount of EUR 55,555 (i.e. EUR 5,555.50 x 10 months), plus 5% interest as of 19 March 2017, corresponding to “the full amount of his remaining salary under the employment contract”.

The Claimant also requests that the Respondent bears the full costs of the present proceedings.

11. In its reply, provided after the expiry of the deadline set by the FIFA administration, the Respondent first of all underscores that it acted in an attempt to negotiate a settlement, as stipulated in art. 10.3 of the contract, which is in line with art. 5 of the Law of Country D on labour-dispute mediation and arbitration.

12. The Respondent further states that Labour Law of Country D is applicable to the coach, referring to art. 12 of the contract in line with art. 3 of the Regulations on the Management of Employment of Foreigners in Country D.

13. In this context, the Respondent holds that, on 19 March 2017, it initiated the appropriate procedure in order to terminate the contract by mutual agreement and that the coach, in refusing the possibility to pursue negotiations, decided to unilaterally terminate the contract without just cause.

14. As a result, on 7 July 2017, the Respondent lodges a counterclaim against the Claimant before FIFA, requesting to be paid a compensation equivalent to three monthly salary in the total amount of EUR 16,666.50.

15. Alternatively, in the event the Claimant’s claim is accepted, the Respondent deems that such compensation should be limited to three monthly salaries, as mandatorily provided for by art. 47 of the Labour Contract Law of Country D.

16. Regardless of the decision, the Respondent also requests that the Claimant pays the amount of CHF 10,000 as legal fees and bears all procedural costs.

17. In his replica, the Claimant mainly maintains that only FIFA Regulations apply to the matter at stake and that, in fact, art. 12 does establish FIFA’s competence.

18. Moreover, the Claimant insists that the letter dated 19 March 2017 from the Respondent is a termination notice and that such decision to terminate the contract was not mutual, but unilaterally decided by the Respondent.

19. In view of the aforementioned, the Claimant reiterates his claim and rejects the Respondent’s counter-claim and additional requests.

20. In its duplica, the Respondent mainly upholds its arguments as well as its counter-claim.

21. Upon FIFA’s request, the Claimant has confirmed that he signed an employment contract with the Club of Country G, Club H, valid as of 19 June 2017 until 30 June 2019 in exchange of a monthly salary in the amount of 14,000 (approx. EUR 1,900), except for June 2017 which amounts to 5,600 (approx. EUR 750). The Claimant also adds that, in accordance with art. 10.4 of the contract, there is no mitigation possible.

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 19 May 2017. Consequently, the Single Judge concluded that the 2017 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 at 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 2018 edition of the Regulations on the Status and Transfer of Players, he is competent to deal with the matter at stake.

3. Furthermore, 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 referred, on the one hand, to art. 26 par. 1 and 2 of the 2018 edition of the Regulations on the Status and Transfer of Players, and on the other hand, to the fact that the present claim was lodged with FIFA on 19 May 2017. In view of the foregoing, the Single Judge concluded that the 2016 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. The competence of the Single Judge and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started by acknowledging the above-mentioned facts as well as the documentation 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 which he considered pertinent for the assessment of the matter at hand.

5. Before entering into the substance of the matter, the Single Judge addressed the issue of the admissibility of the Respondent’s reply and counter-claim. In particular, the Single Judge recalled that i) the Respondent filed its reply and counterclaim after the deadline granted by the FIFA Administration to do so without any valid reason and ii) it never paid the advance of costs related to its counter-claim.

6. With the above in mind, the Single Judge deemed it important to refer to art. 17 par. 1 and 3 of the Procedural Rules, according to which an advance of costs (cf. art. 18 of the Procedural Rules) is payable for proceedings before the Players’ Status Committee and the Single Judge by the claimant or counter-claimant respectively, at the moment the claim or counter-claim is lodged. Moreover, art. 17 par. 5 of the Procedural Rules states that if a party fails to pay the advance of costs when submitting a claim or counterclaim, the FIFA administration shall allow the party concerned ten days to pay the relevant advance and advise that failure to do so will result in the claim or counter-claim not being heard.

7. In casu, the Single Judge observed that the Respondent lodged a counter-claim however failed to proceed with the payment of the relevant advance of costs in this regard, even after having been invited by the FIFA administration to do so on 21 August 2017.

8. Therefore, and referring to art. 17 of the Procedural Rules, the Single Judge decided that the Respondent’s counter-claim cannot be heard and could therefore not be admitted to the file.

9. Subsequently, the Single Judge recalled that the Respondent, in spite of having been invited to do so, had failed to present its response to the claim of the Claimant within the relevant time limit set by FIFA, i.e. 26 June 2017. In fact, the reply of the Respondent was only received on 11 July 2017. As a result, bearing in mind the Single Judge’s constant jurisprudence in this regard and in application of art. 9 par. 3 of the Procedural Rules, the Chamber decided not to take into account the reply of the Respondent and established that, in accordance with the aforementioned provision, it shall take a decision on the basis of those documents on file that were provided prior to the deadline set by FIFA, in casu, on the statements and documents presented by the Claimant in his original claim.

10. Having concluded the above, the Single Judge acknowledged that, on 1 January 2017, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 31 December 2017, by means of which the parties agreed upon the payment by the Respondent to the Claimant of a total salary amounting to 66,666.

11. Subsequently, the Single Judge took note that, on the one hand, the Claimant argued that the Respondent unilaterally terminated the employment relationship with him, based on poor sporting results of the Respondent’s team under his supervision. Therefore, the Claimant claimed to be entitled to receive, inter alia, compensation for breach of contract from the Respondent.

12. In this respect, the Single Judge noted that the Respondent sent a letter to the Claimant dated 19 March 2017, by means of which the Respondent informed the Claimant that “the team failed to achieve the desired results […]. [The Claimant] no longer serve as Assistant Coach of the [Respondent’s] team. […]”.

13. Having established the above, the Single Judge concluded that the issue to address in the present matter is whether the contract had been terminated by the Respondent with or without just cause.

14. In this context, the Single Judge was eager to emphasise that, according to the well-established jurisprudence of the Players’ Status Committee, only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely.

15. Along those lines, the Single Judge underlined that reasons such as mismanagement of the team or poor results are of a highly subjective nature and could thus not be seen as valid grounds to terminate a contract. Furthermore, the Single Judge was eager to recall the well-established jurisprudence of the Players’ Status Committee, according to which the absence of sporting results cannot, as a general rule, constitute per se a reason to terminate a contractual relationship with just cause.

16. In view of the above, the Single Judge came to the conclusion that the reason put forward by the Respondent in its letter dated 19 March 2017 as to why it prematurely terminated the contract does not justify such termination. In other words, the Single Judge decided that the Respondent did not have a just cause to unilaterally terminate the employment relationship between the parties on 19 March 2017 and, therefore, the Respondent is to be held liable for the early termination of the employment contract without just cause.

17. The Single Judge continued his deliberations by examining the consequences of such unilateral termination without just cause by the Respondent.

18. First and foremost, the Single Judge decided that, taking into consideration the longstanding jurisprudence of the Players’ Status Committee, the Claimant was entitled to receive compensation for the Respondent’s breach in the contractual relationship with the Claimant. In this respect, the Single Judge noted that according to clause 10.4 of the contract “If the contract is terminated by [the Respondent] without a just cause, [the Respondent] shall pay [the Claimant] full amount of the remaining salary under this contract as compensation”.

19. Notwithstanding the above, the Single Judge wished to stress that said compensation clause lacks the necessary requirements in order to be considered as valid, in accordance with the well-established jurisprudence of the Players’ Status Committee. In particular, in the Single Judge’s opinion, the mentioned clause is unilateral and violates the principle of the equal repartition of rights between the parties as it does not provide for the same consequences in favour of the club in case the coach would be the party terminating the contract without just cause. As such, the Single Judge decided not to apply the relevant clause and instead calculate the compensation due to the coach by the club in accordance with the Players’ Status Committee well-established principles.

20. In so doing, the Single Judge first turned his attention to the remuneration and other benefits due to the Claimant under the existing contract. The Single Judge pointed out that the contract signed between the Claimant and the Respondent was to run for another ten months, i.e. until December 2017, after the termination of the contract occurred on 19 March 2017. Furthermore, the Single Judge understood that for this relevant period, the Claimant was entitled to receive a total salary of EUR 55,555. Consequently, the Single Judge concluded that the amount of EUR 55,555 served as the basis for the final determination of the amount of compensation for breach of contract.

21. In continuation, the Single Judge remarked that the Claimant had found new employment, for which he earned a monthly fixed-remuneration in the amount of 14,000, equivalent to EUR 1,900, except for June 2017 for which it amounted to 5,600, equivalent to EUR 750, for a total amount of EUR 12,150.

22. Consequently, in accordance with the constant practice of the Players’ Status Committee and the general obligation of the Claimant to mitigate his damages, the remuneration as indicated in the new employment contract shall be taken into account, on a pro rata basis, in the calculation of the amount of compensation for breach of contract.

23. In view of all of the above, the Single Judge decided that the Respondent had to pay the amount of EUR 43,405 to the Claimant, which was considered by the Single Judge to be a reasonable and justified amount as compensation for breach of contract.

24. 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 19 May 2017 on the aforementioned amount of EUR 43,405.

25. Finally, 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.

26. 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.

27. 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.

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, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 43,405, plus 5% interest p.a. on the said amount as from 19 May 2017 until the date of effective payment.

3. If the aforementioned amount, plus interest as established above, is 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.

4. Any further claims lodged by the Claimant are rejected.

5. The counterclaim of the Respondent is inadmissible.

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

6.1 The amount of CHF 2,000 by the Claimant to FIFA. Given that the Claimant has already paid the amount of CHF 2,000 as advance of costs at the start of the present proceedings, no additional amount is requested as costs of the proceedings.

6.2 The amount of CHF 8,000 by the Respondent to FIFA.

6.3 The abovementioned amounts as foreseen in points 6.1 and 6.2 have 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

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance under point 2. is 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

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