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, 29 August 2017

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 29 August 2017,

by

Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the coach

Player A, from country A

as “Claimant”

against the club

Club B, from country B

as “Respondent”

regarding a employment-related

contractual dispute between the parties.

I. Facts of the case

1. On 20 July 2016, the coach A, from country A (hereinafter: the Claimant) and the Club B, from country B (hereinafter: the Respondent) concluded an employment contract (hereinafter: the contract), valid from 1 August 2016 until 31 May 2017, by means of which the Claimant was inter alia entitled to receive from the Respondent, as salary, the total amount of USD 1,000,000 as follows: an advance payment of USD 200,000 by no later than 15 August 2016; USD 150,000 on 30 November 2016; USD 150,000 on 30 March 2017 and USD 50,000 “at the end of each calendar month within the contract life” (i.e. for 10 months).

2. In accordance with the contract, the Claimant “shall hire four assistants to help him and occupy the following positions: Assistant coach – two physical coach – Coach for under 21 team. The above mentioned assistants shall be entitled to receive financial entitlements at the total amount of (..) USD 500,000 within the validity of their contract with the first party [i.e. the Respondent] to be distributed between them upon arrival to country B with coordination with the second party [i.e. the Claimant]”.

3. As per art. 3.1. of the contract “The coach shall undertake the following: To provide and set the training program and development plan for the senior team and achieve the goals of the first party set the participate in all matches and training sessions and related activities”.

4. In case of a premature termination of contract by the Respondent, the Claimant was entitled to receive from the latter “as compensation an amount equal (50%) of the total amount of remaining salaries to the end of the contract” (cf. art. 5.1. of the contract).

5. In case of a premature termination of contract by the Claimant, the Respondent was entitled to receive from the latter, as compensation, an amount “equal (50%) of the total amount of remaining salaries to the end of the contract” (cf. art. 5.2. of the contract).

6. Art. 5.3. of the contract specified that the Respondent “may terminate the contract and the club shall not compensate the coach in the event the coach breach the contract or Club’s rule, country B regulation, country B PLC regulation, FIFA regulation or any other rules related to the sports.”

7. By means of a correspondence dated 19 December 2016, the Claimant lodged a claim with FIFA against the Respondent for breach of contract and requested from the latter the payment of USD 82,750 as outstanding remuneration and of USD 331,452 as compensation for breach of contract. In addition, the Claimant requested from the Respondent the payment of 6% interest p.a. on the total sum of USD 414,202 as of 23 October 2016.

8. In this respect, the Claimant accused the Respondent of having terminated their contractual relationship without just cause on 22 October 2016. The Claimant also alleged that the Respondent would have dismissed him as well as his entire staff after a match lost by the club on 22 October 2016 against the Club X, from country B. In this context, the Claimant provided FIFA with three termination letters, dated 22 October 2016, allegedly addressed by the Respondent to three members of his staff. According to the Claimant, the Respondent would have hired a new head coach on the same day.

9. In continuation, the Claimant explained that by 22 October 2016, the Respondent had only paid him USD 254,347 out of USD 337,097 due. The Claimant calculated the amount of USD 337,097 as follows: USD 200,000 due on 15 August 2016 and twice the sum of USD 50,000 corresponding to his August and September 2016 monthly salary plus USD 37,097 for 23 days in October 2016.

10. As a result, the Claimant deemed being entitled to receive from the Respondent, the outstanding sum of USD 82,750 (i.e. USD 337,097 – USD 254,347).

11. Equally, the Claimant deemed being entitled to receive from the Respondent, as compensation for having unilaterally terminated the contract without just cause, the sum of USD 331,452, corresponding to 50% of the remaining value of the contract in accordance with clause 5.1. of the contract (cf. point I.4 above). The Claimant calculated the relevant amount as follows: USD 12,903 for 8 days in October 2016 plus 7 times USD 50,000 plus USD 150,000 due on 30 November 2016 plus USD 150,000 due on 30 March 2017, divided by 2.

12. In its response on 17 April 2017, the Respondent rejected the Claimant’s claim in its entirety.

13. In this respect, the Respondent alleged having terminated the contract with just cause in accordance with its art. 5.3. (cf. point I.6 above) as the Claimant had failed to comply with his contractual obligations by losing “all of the first eight matches between the country B League and the Cup (..) resulting on the Club ranking last in the country B League and eliminated from the Cup”. As to that, the Respondent quotes art. 3.1. of the contract when mentioning the contractual obligations of the coach (cf. point I.3 above).

14. According to the Respondent, after the team’s “defeat” on 22 October 2016 “and given the teams deplorable performance during the country BLeague and the Cup” it had had “no other option than to terminate the Employment Contract by means of the termination letter dated 24 October 2016. The Respondent was forced to terminate the Employment Contract with just cause as a result of the Coach A’s failure to achieve the first party goals”. From the Respondent’s point of view the Claimant had failed “to comply with his obligations to achieve the Club’s goal as provided for in Clause 3 of the Employment Contract” and had therefore breached the contract “in the sense of clause 5.3. (..) entitling the Club to terminate the Employment Contract with immediate effect without having the Coach the right to receive compensation”.

15. In view of the above, the Respondent considered that no compensation whatsoever was to be awarded to the Claimant.

16. Nevertheless and in the “unlikely event” that FIFA would consider the termination of the contract as having occurred without just cause, the Respondent clarified that, if at all, the Claimant could only claim the payment of USD 181,451 as compensation, corresponding to 50% of USD 362,903.

17. Pursuant to the Respondent, when calculating the amount payable to the Claimant as compensation under art. 5.1. of the contract, only the remaining salaries of the latter were to be taken into account and not the advance payments.

18. Hence, the Respondent calculated the compensation due to the Claimant as follows: USD 12,903, corresponding to the “remaining monthly salary of October (from 24 October to 31 October 2014)”, plus USD 350,000, corresponding to the “remaining seven monthly payments, as from 1 November 2016 to 31 May 2017”, divided by 2.

19. In continuation, the Respondent acknowledged owing the Claimant the outstanding amount of USD 82,749, arguing that the latter had so far received USD 50,000 on 31 August 2016, USD 100,000 on 31 August 2016, USD 54,348 on 20 September 2016 and USD 50,000 on 29 September 2016. As to that, the Respondent provided evidence related to the alleged payment of 4 cheques to the Claimant for the following amounts: 184,000 on 4 September 2016, 368,000 on 4 September 2016, 200,000 on 21 September 2016 and 200,000 on 20 September 2016.

20. Hence, the Respondent calculated the outstanding remuneration payable to the Claimant as follows: USD 37,097, corresponding to his monthly salary for 23 days in October 2016 plus USD 45,652, corresponding to the “remaining amount of the first Advance payment”. As further alleged by the Respondent, it had been “willing to pay said amount to the Coach since the date of termination” but the Claimant had refused to receive the sum in question seeking “in bad faith to receive compensation when he is not entitled to”.

21. Asked about his labour situation between 22 October 2016 and 31 May 2017, the Claimant informed FIFA on 31 July 2017 that he had not been able to conclude any employment contract during the relevant period of time.

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 referred to art. 21 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (editions 2015 and 2017). Consequently, and since the present matter was submitted to FIFA on 19 December 2016, the Single Judge concluded that the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (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 3 in combination with art. 22 lit. c) of the 2016 edition of the Regulations on the Status and Transfer of Players, he shall adjudicate on an employment-related dispute between a club or an association and a coach that has an international dimension.

3. As a consequence, the Single Judge is the competent body to decide on the present litigation involving a coach from country A and Club B, from country B regarding an alleged breach of an employment contract.

4. 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 referred, on the one hand, to art. 26 par. 1 and 2 of the 2015 and 2016 editions 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 December 2016. 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).

5. 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. The Single Judge, however, 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.

6. In this respect and first of all, the Single Judge acknowledged that, on 20 July 2016, the Claimant and the Respondent had concluded an employment contract valid from 1 August 2016 until 31 May 2017, by means of which the Claimant was inter alia entitled to receive from the Respondent the total amount of USD 1,000,000 as follows: an advance payment of USD 200,000 by no later than 15 August 2016; USD 150,000 on 30 November 2016; USD 150,000 on 30 March 2017 and USD 50,000 “at the end of each calendar month within the contract life”.

7. In continuation, the Single Judge observed that as stated in clause 5.1. of the contract, in case of a premature termination of contract by the Respondent, the latter had to pay to the Claimant “as compensation an amount equal (50%) of the total amount of remaining salaries to the end of the contract”.

8. Equally, the Single Judge further remarked that clause 5.2. of the contract specified that in case of a premature termination of contract by the Claimant, the latter had to pay to the Respondent, as compensation, an amount “equal (50%) of the total amount of remaining salaries to the end of the contract”.

9. Additionally, the Single Judge noticed that, in accordance with clause 5.3. of the contract, the Respondent “may terminate the contract and the club shall not compensate the coach in the event the coach breach the contract or Club’s rule, country B regulation, country B PLC regulation, FIFA regulation or any other rules related to the sports.”

10. Subsequently, the Single Judge took note that in his claim to FIFA, the Claimant had accused the Respondent of having terminated the contract without just cause on 22 October 2016 and had therefore claimed to be entitled to receive, as compensation for breach of contract, 50% of his remaining salary under the contract in accordance with its clause 5.1.. In addition, the Single Judge took into account that the Claimant had also accused the Respondent of having failed to pay him the sum of USD 82,750 arguing that he had only received USD 254,347 out of USD 337,097 that were due until the termination of contract.

11. In continuation, the Single Judge observed that, for its part, the Respondent had contested the claim of the Claimant alleging that the contract had been terminated with just cause in accordance with its clause 5.3., as the Claimant would have failed to comply with his contractual obligations by losing “all of the first eight matches between the country B League and the Cup (..) resulting on the Club ranking last in the country B League and eliminated from the Cup”. At the same time, the Single Judge also observed that the Respondent had admitted having failed to pay to the Claimant outstanding remuneration in the amount of USD 82,749.

12. In light of all the above, the Single Judge observed that it was undisputed by the parties that the contract had been unilaterally terminated by the Respondent on 24 October 2016, based on a termination letter issued by the Respondent and provided by the latter as evidence. Thus, the Single Judge deemed that the first question to be addressed in the present matter was whether the contract had been terminated by the Respondent with or without just cause on 24 October 2016.

13. To this end, the Single Judge recalled that, in its submissions to FIFA, the Respondent had explained having had just cause to terminate the contract on the basis of clause 5.3. of the contract in view of the bad results achieved by the team under the guidance of the Claimant. In this respect, the Single Judge deemed it appropriate to analyse the content of such clause invoked by the Respondent as the basis for the termination of the contract with the Claimant. After doing so, the Single Judge was convinced that such clause of the contract could not be applied, as it is non-objective and arbitrary, to the benefit of the Respondent only, contrary to the principle of contractual stability and to the ultima ratio nature of termination, as it allows the Respondent to put an end to the contract with the Claimant at any time for any possible breach of contract and of several Regulations, without any further concrete specifications. In addition, taking into account the argumentation of the Respondent regarding the insufficient sportive performance of the team under the Claimant’s guidance, the Single Judge was eager to emphasize that, in accordance with his well-established jurisprudence, the absence of sporting results cannot, as a general rule, constitute per se a reason to terminate a contractual relationship with just cause.

14. In view of the aforementioned, the Single Judge decided that the termination of contract by the Respondent had occurred without just cause.

15. After having established the aforementioned, the Single Judge went on analysing the consequences of the breach of contract without just cause committed by the Respondent.

16. 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 requested from the Respondent the payment of the amount of USD 82,750 and that the Respondent had acknowledged having failed to pay to the latter the sum of USD 82,749.

17. In view of the aforementioned, considering the request of the Claimant, the content of the contract with regard to the latter’s monthly remuneration, the fact that the Respondent acknowledges having failed to pay to the Claimant the requested remuneration as well as the legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, the Single Judge resolved that the Respondent, in order to fulfil its obligations established in the contract, has to pay to the Claimant the outstanding amount of USD 82,750.

18. Additionally and with regard to the Claimant’s request for interest, the Single Judge pointed out that no provision related to the payment of a specific amount of interest in case of late payment by the Respondent had been contractually agreed between the parties. As a result and in accordance with his well-established jurisprudence, the Single Judge decided that the Respondent has to pay to the Claimant 5% interest p.a. on the amount of USD 82,750 as from 19 December 2016, i.e. the date of the claim, until the date of effective payment.

19. Having established the aforementioned and turning his attention to the compensation payable to the Claimant by the Respondent following the termination without just cause of the contract by the latter, the Single Judge reverted to clause 5.1. of the contract (cf. point I.4 above), on which the Claimant bases his request for compensation, and without entering the question of the matter of the justice and applicability of this clause, he deemed that the amount of compensation due to the Claimant shall be assessed in accordance with said provision, as the Claimant limits his request to it.

20. Considering the aforementioned as well as taking into account the request of the Claimant and the content of clause 5.1. of the contract, the Single Judge decided that the amount of USD 331,452, corresponding to 50% of the remaining remuneration of the Claimant under the contract, should be paid by the Respondent to the Claimant as compensation for having breached their contractual relationship without just cause.

21. Equally and with regard to the Claimant’s request for interest, considering the lack of a contractual agreement between the parties in this respect and in accordance with his well-established jurisprudence, the Single Judge decided that the Respondent has to pay to the Claimant 5% interest p.a. on the amount of USD 331,452 as from 19 December 2016 until the date of effective payment

22. In view of all the aforementioned, the Single Judge concluded that the claim of the Claimant is partially accepted – considering the starting date of the interest rate requested – and that the Respondent has to make to the Claimant the followings payments: outstanding remuneration in the amount of USD 82,750, plus 5% interest p.a. on said amount as from 19 December 2016 until the date of effective payment as well as compensation for breach of contract in the amount of USD 331,452, plus 5% interest p.a. on said amount as from 19 December 2016 until the date of effective payment.

23. 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 and the 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 and are normally to be paid by the unsuccessful party.

24. In this respect, the Single Judge reiterated that the claim of the Claimant is almost entirely accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Respondent has to bear the costs of the current proceedings in front of FIFA.

25. 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 above CHF 200,001, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

26. In conclusion and in view of the numerous submissions that had to be analysed in the present matter as well as considering that a number of factual complexities had to be addressed but taking into account that the present decision was taken by the Single Judge and not by the Players’ Status in corpore, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000.

27. Consequently, the amount of CHF 20,000 has to be paid by the Respondent 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 B, has to pay to the Claimant, Club B, within 30 days as from the date of notification of the present decision, outstanding remuneration in the amount of USD 82,750, plus 5% interest p.a. on said amount as from 19 December 2016 until the date of effective payment.

3. The Respondent, Club B, has to pay to the Claimant, Coach A, within 30 days as from the date of notification of the present decision, compensation for breach of contract in the amount of USD 331,452, plus 5% interest p.a. on said amount as from 19 December 2016 until the date of effective 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. Any other 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 B, within 30 days as from the date of notification of this 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.:

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 B, 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

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