F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2018-2019) – fifa.com – atto non ufficiale – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland23 October 2018

Decision of the Single Judge

of the

Players’ Status Committee

passed in Zurich, Switzerland, on 23 October 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 8 November 2017, the coach of Country B, Coach A (hereinafter: Claimant), and the club of Country D, Club C (hereinafter: Respondent), concluded an employment contract valid as from 1 January 2018 until 31 December 2020 (hereinafter: contract).

2. Clause 3 of the contract stipulates the following:

- “Total amount for duration of contract per year USD 300,000”;

- “The first party [the Respondent] shall pay an advance contract payment of an amount of USD 60,000 after signing the contract (at the beginning of each season)”;

- “The first party [the Respondent] shall pay a monthly salary after deduction of (USD 20,000)”;

- [the Respondent] “Provide air tickets business for the coach, and his family round trip twice a year.”

3. In addition, clause 5 of the contract stipulates that:

- “A. If [the Respondent] desires to terminate the contract, [the Respondent] shall pay to [the Claimant] an amount of Two month salary in the first year and second year.

- B. If [the Claimant] desires to terminate the contract before its fixed term, [the Respondent] must be informed before one month and [the Claimant] shall pay to [the Respondent] an amount of (USD 100,000) in the first year and (USD 50,000) in the second year.

- ...”

4. On 29 March 2018, the Respondent informed the Claimant in writing that the contract was terminated with immediate effect.

5. On 4 April 2018, the Claimant sent a notice to the Respondent asking the Respondent to pay the total amount of USD 108,666.45.

6. Subsequently, on 3 May 2018, the Claimant lodged a claim before FIFA against the Respondent for breach of contract without just cause requesting to be awarded the total amount of USD 108,666.45 made up as follows:

 USD 198,666.45, consisting of

- Remuneration corresponding to his salaries of November 2017 (USD 19,166.66 for 23 days) and as from December 2017 until February 2018 (USD 25,000 each) and March 2018 (USD 23,333.33 for 28 days);

- Compensation in the amount of USD 50,000 corresponding to the amount under clause 5.A. of the contract, allegedly two monthly salaries of USD 25,000 each;

- USD 31,166.46 corresponding to the alleged average amount of three round trip business flight tickets Country B– Country D for his family;

 Minus the total amount of USD 90,000 already paid by the Respondent.

7. According to the Claimant, based on a yearly remuneration of USD 300,000 he was entitled to a salary of USD 25,000 per month. Furthermore, the Claimant stated that since the beginning of the contract, he had received the total amount of USD 90,000 from the Respondent, allegedly corresponding to the advance payment of USD 60,000, USD 20,000 in January 2018 and USD 10,000 in February 2018.

8. According to the Claimant, the day following the termination of the contract, the Respondent proposed to pay him the amount of USD 50,000, which he refused, considering that this was only the amount of compensation agreed in clause 5.A. of the contract. In this regard, the Claimant presented a non-signed “clearance agreement” dated 30 March 2018 and made out on the Respondent’s letterhead.

9. In its reply to the claim, the Respondent pointed out that the starting date of the contract was 1 January 2018.

10. In addition, the Respondent argued having remitted to the Claimant the advance payment of USD 60,000 on 12 November 2017, which according to the Respondent corresponds to three monthly salaries, as well as USD 30,000 on 27 February 2018 corresponding to his salary as from 1 January until 15 February 2018.

11. Finally, the Respondent stressed that it terminated the contract due to the deterioration of the team’s performance and results.

12. After the closure of the investigation in this matter, the Claimant presented a non-solicited replica and added a request to be awarded 10% of legal fees as well as the advance of the procedural costs paid by him.

13. The Claimant informed FIFA that he has remained unemployed since the termination of the contract by 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 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 3 May 2018. Consequently, the Single Judge concluded that the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution (hereinafter: 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 which concerns an employment-related dispute of an international dimension between a coach of Country B and a club of Country D.

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 3 May 2018. In view of the foregoing, the Single Judge concluded that the 2018 edition of the Regulations on the Status and Transfer of Players (hereinafter: Regulations) is applicable to the case at hand as to the substance.

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. Furthermore, in this context, the Single Judge observed that the Claimant had presented an unsolicited replica containing an additional request asking, inter alia, to be awarded 10% of legal fees after the closure of the investigation of the present matter. As a result, in application of art. 9 par. 4 of the Procedural Rules, the Single Judge decided not to take into account said replica and additional request of the Claimant.

5. In continuation, the Single Judge acknowledged that, on 8 November 2017, the Claimant and the Respondent concluded an employment contract valid as from 1 January 2018 until 31 December 2020, by means of which the parties agreed upon the payment by the Respondent to the Claimant of a total amount of USD 300,000 per year, consisting of a payment of USD 60,000 at the beginning of each season and a monthly salary “after deduction” of USD 20,000.

6. Subsequently, the Single Judge noted that the Claimant argued that the Respondent unilaterally terminated the employment contract. Therefore, the Claimant deemed to be entitled to receive, inter alia, compensation for breach of contract from the Respondent.

7. In this respect, the Single Judge took due note that the Respondent informed the Claimant in writing on 29 March 2018 that it had decided to terminate the contract.

8. In addition, the Single Judge took into account that according to the Respondent, it terminated the contract due to the deterioration of the team’s performance and results.

9. Having established the above, the Single Judge concluded that the underlying issue in the present matter was to determine as to whether the contract had been terminated by the Respondent with or without just cause and to determine the consequences, if any, thereof.

10. 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.

11. 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 desired or expected sporting results cannot, as a general rule, constitute per se a reason to terminate a contractual relationship with just cause.

12. In view of the above, the Single Judge came to the conclusion that the reason put forward by the Respondent in its reply to the claim as to why it prematurely terminated the contract does not justify such termination. In other words, the Single Judge decided that the Respondent had no just cause to unilaterally terminate the employment relationship between the parties on 29 March 2018 and that, therefore, the Respondent is to be held liable for the early termination of the employment contract without just cause.

13. In continuation, prior to establishing the consequences of the termination of the contract without just cause by the Respondent, the Single Judge held that he had to address the issue of any unpaid remuneration at the moment the contract was terminated by the Respondent.

14. In this respect, the Single Judge underlined that the Claimant considered that he was entitled to receive a monthly salary of USD 25,000 and that, in his claim, he had inter alia requested the payment of his monthly salaries as of November 2017.

15. With the aforementioned considerations in mind, the Single Judge stressed that the contract clearly stated that it entered into force on 1 January 2018 and that, according to the contractual terms agreed in clause 3, the Claimant was entitled to receive from the Respondent the total amount of USD 300,000 per year, consisting of (i) an advance payment of USD 60,000 payable at the beginning of each season and (ii) twelve monthly salaries of USD 20,000 each.

16. Along these lines, the Single Judge established that, according to clause 3 of the employment contract, the Claimant was entitled to receive the total amount of USD 120,000 up until 29 March 2018, date of termination of the contract, including the lump sum payment of USD 60,000.

17. In addition, the Single Judge took note of the payment receipts presented by the Respondent, in accordance with which, as confirmed by the Claimant, since the beginning of the employment relationship, the Respondent has paid the total amount of USD 90,000 to the Claimant, corresponding to the lump sum payment of USD 60,000 as well as part of his monthly salaries in the amount of USD 30,000.

18. Considering all of the above, the Single Judge decided that the Respondent must fulfil its obligations as per the contract until its termination in accordance with the general legal principle of “pacta sunt servanda” and, thus, is liable to pay to the Claimant outstanding remuneration in the amount of USD 30,000.

19. In continuation, the Single Judge turned his attention to the compensation payable to the Claimant by the Respondent as a result of the latter’s termination of the contract without just cause.

20. In this respect, the Single Judge took due note of the content of clause 5.A. of the contract, according to which “If [the Respondent] desires to terminate the contract, [the Respondent] shall pay to [the Claimant] an amount of Two month salary in the first year and second year.” The Single Judge further took note that clause 5.B. of the contract deals with the amount of compensation payable by the Claimant in the event of an early termination of the contract by the latter. Consequently, the Single Judge considered that the relevant clause deals with the financial consequences of an early termination of the contract by either of the parties.

21. In addition, the Single Judge underlined that the Claimant requested the amount of USD 50,000 as compensation for breach of contract relying on clause 5.A. of the contract, and that, according to him, after having terminated the contract, the Respondent proposed to pay him the amount of USD 50,000. The Single Judge further took into account that the Respondent had not contested such allegation of the Claimant and that said amount of USD 50,000 would correspond to 2 monthly payments of USD 25,000 on the basis of a yearly contractual amount of USD 300,000.

22. As a result, on account of the previous consideration and that the amount provided by the provision in question appears to be proportionate, the Single Judge determined that the amount of compensation due to the Claimant by the Respondent had to be assessed in accordance with the relevant clause, which had been contractually agreed upon by and between the parties. Furthermore, for these reasons, the Single Judge deemed that remuneration under any potential new employment signed by the Claimant, by means of which the Claimant would have been enabled to mitigate damages, is irrelevant in the case at hand.

23. Taking into account the previous considerations, the Single Judge established that the Respondent has to pay to the Claimant the total amount of USD 50,000 as compensation for breach of contract.

24. Equally, referring to art. 12 par. 3 of the Procedural Rules, as regards the Claimant’s claim pertaining to air tickets, the Single Judge took into account that the Claimant had not presented any evidence of travel costs he actually incurred.

25. However, on the basis of the information provided by FIFA Travel and referring to the relevant terms of the employment contract, the Single Judge decided that the Respondent must pay to the Claimant the amount of CHF 8,580 for 1 air ticket in business class (Country D – Country B) relating to his travel back home following the termination of the contract.

26. The Single Judge concluded his deliberations in the present matter by establishing that any further claim of the Claimant is rejected.

27. 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 of the Procedural Rules further states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings.

28. 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 have 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 is up to CHF 150,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 15,000.

29. In conclusion, in view of the circumstances of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF

13,000. Consequently, the Single Judge of the Players’ Status Committee decided that the amount of CHF 3,000 has to be paid by the Claimant and the amount of CHF 10,000 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 outstanding remuneration in the amount of USD 30,000, within 30 days as from the date of notification of the present decision.

3. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of USD 50,000 and the amount of CHF 8,580 in regard of an air ticket, within 30 days as from the date of notification of the present decision.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

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

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

7. The final costs of the proceedings in the amount of CHF 13,000 are to be paid, within 30 days of notification of the present decision as follows:

7.1 The amount of CHF 10,000 by the Respondent to FIFA to the following bank account with reference to case no. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH 27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

7.2 The amount of CHF 3,000 by the Claimant to FIFA. Given that the Claimant has already paid the amount of CHF 3,000 as advance of costs at the start of the present proceedings, the Claimant does not have to pay any additional amount.

*****

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