F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2020-2021) – fifa.com – atto non ufficiale – Decision11 August 2020
Decision of the
Single Judge of the Players' Status Committee
on 11 August 2020,
regarding an employment-related dispute concerning the coach Ivan Leko
BY:
Roy Vermeer (Netherlands), Single Judge of the PSC
CLAIMANT / COUNTER-RESPONDENT:
Ivan Leko, Croatia
Represented by Mr. Walter van Steenbrugge
RESPONDENT / COUNTER-CLAIMANT:
Al Ain FC, United Arab Emirates
Represented by Mr. Nezar Ahmed
I. FACTS
1. On 1 June 2019, the coach and the club signed an employment contract (hereinafter: contract), valid
as from 1 July 2019 until 30 June 2021.
2. According to the contract, for the 2019/2020 season, the coach was entitled to the total amount of
EUR 1,740,000 net as follows:
Down payment with an amount of EUR 600,000 net payable on 20 July 2019,
An amount of EUR 1,140,000 net divided in 12 instalments, each instalment with an
amount of EUR 95,000 net to be paid at the end of each calendar month starting from 31
July 2019 until 30 June 2020.
3. For the 2020/2021 season, the coach was entitled to the total amount of EUR 1,640,000 net as
follows:
Down payment with an amount of EUR 500,000 net payable on 20 July 2020,
An amount of EUR 1,140,000 net divided in 12 monthly instalments, each instalment with
an amount of EUR 95,000 net to be paid at the end of each calendar month starting from
31 July 2020 until 30 June 2021.
4. Pursuant to art. 13 (2) of the contract, the parties agreed upon the following:
“If this contract terminated for reasons not provided in the Club’s Regulation without a “just cause”,
then the party who making the termination must pay a due compensation calculation an amount
of 1,000,000 EUR net”.
5. On 9 September 2019, the parties signed a document entitled “Contract Addendum” (hereinafter:
addendum).
6. In accordance with art. 1 of the addendum, the club committed itself to the following:
“The First Party [the club] shall pay the Second Party [the player] (54%) of the total income taxes
after deductions actually paid by the Second Party covering the remuneration that the Second Party
received from the First Party during the first year of his contract only, provided such tax
reimbursement shall not exceed the amount of EUR 470.000 payable in 12 equal monthly
instalments, each amounts to EUR 39,167. The first instalment shall be paid on 30/06/2020. These
instalments shall be paid by checks”.
7. In accordance with art. 2 of the addendum, the coach committed itself to the following:
“A- The Second Party shall submit to the First Party no later than 02/01/2021 proof of payment of
the (54%) of the due income taxes on the incomes which the Second Party receives from the First
Party during the first year of his employment contract, as well as a copy of his optimal tax return
for the tax year 2019 and 2020.
B- The Second Party shall pay from the personal money thereof the (46%) of the due income taxes
on the incomes that the Second Party receives from the First Party during the first year of the
employment contract (i.e. from 01/07/2019 until 30/0602020) and to submit to the First Party the
relevant proof of payment, or if the Second Party own contribution was less than 46& of the due
taxes, the Second Party shall reimburse the First Party the difference between the 46% of the due
income taxes and the actual amount paid by the Second Party.
C- In the event of the premature termination of the employment contract concluded between the
Parties on 01/06/2019
C-A If the termination by the Second Party, the Second Party shall return to the First Party all the
tax reimbursements that the Second Party received from the First Party under the provisions of the
Addendum herein,
C-B In the event of the premature termination from the First Party, the Second Party shall not return
the tax reimbursements to the First Party, also it shall be settled by the First Party”.
8. On 22 December 2019, the coach informed the club in writing of the following:
“Yesterday, 21 December, Al Ain Football Club decided to terminate my contract, I also refer to
the e-mail I sent in that regard to the club immediately after the termination of the contract.
I understood that the club proposes to pay me two months’ salary to compensate for the
termination of my contract.
Article 13.2.a of my contract stipulates, after all, that I’m entitled to a termination fee of
1,000,000 EUR net in the event the club ends my contract “without just cause”, which is the
case here.
Besides that, article 2, C of the addendum to my contract of 9 September 2019 states that in
the event of a premature termination of my contract by the club the Club will continue to settle
the due income taxes on the incomes that I receive from the club during the first year of my
contract, provided that such tax reimbursement shall not exceed the amount of 470,000 EUR.
Considering the above, I ask the club, following the termination of my contract by the club, to
pay me an amount of 1,470,000 EUR, reduced by the amount the club already paid under the
addendum to my contract for the agreed tax reimbursement”.
9. On 31 December 2019, the coach put the club in default, requesting the following:
“Art. 13.2.a. stipulates that my client is entitled to a termination compensation of 1.000.000
EUR, net.
Besides that, art. 2C of the addendum (September 9th of 2019) states that in the event of a
premature termination of the contract by the Club, Al Ain will continue to settle the due income
taxes on the incomes that my client received from the Club during the first year of the contract,
provided that such tax reimbursement shall not exceed the amount of 470 000 EUR.
Also the salary of December 2019 has not been paid yet.
1 000 000 EUR
470 000 EUR (having reached the maximum limit due to the Belgian tax authorities)
95 000 EUR
PM (pro memoria) bonuses
Total: 1 565 000 EUR + PM
This amount has to be paid before the 5th of January 2020 by payment directly on the account
of my client”.
10. On 2 January 2020, the club informed the coach in writing , inter alia, of the following:
As per Art. 4 of the Employment Contract (the “Contract”), Mr. Leko is entitled to a
remuneration in the amount of EUR 1,740,000 for season 2019/2020 (i.e. EUR 4,767.00 per
day). Mr. Leko’s employment with the Club began in 1 July 2019 and ended on 21 December
2019. This means that he only worked 174 days for the Club and thus Mr. Leko is only entitled
to a remuneration in the amount of EUR 829,632.00 (i.e. 174 days x EUR 4767.00). However,
to date the Club has paid Mr. Leko EUR 1,075,000.00. This implies that the club has overpaid
to Mr. Leko EUR 245,368. As such, Me Leko is obligated to reimburse the Club for such
overpayment of EUR 245,368 or such amount needs to be taking into account in the
determination of the settlement amount.
In conformity with Articles 1 and 1 of the Addendum, dated 9 September 2019 (the
“Addendum”), the Club undertook to reimburse Mr. Leko (54%) of the total income taxes
after deductions actually paid by Mr. Leko covering the remuneration that he receives from
the Club during the first year of the Contract upon the submission of i) proof of payment of
the due income taxes on the incomes he receives from the Club during the first year of the
Contract, and ii) a copy of your tax return for the tax year 2019 and 2020.
In this connection, as has been explained at para. 1 above, given that Mr. Leko only worked
174 days for the Club before his employment came to an end and thus he is only entitled to
incomes from the Club in the amount of EUR 829,632.00, according to Art. 1 of the
Addendum, the Club is obligated to reimburse Mr. Leko (54%) of the total income taxes after
deductions actually paid by him covering only the amount of EUR 829,632.00 and according
to Art. 2 of the same, such contribution towards his income taxes can only be paid to him
upon the submission of i) proof of payment of the due income taxes on said amount, and ii)
a copy of his tax return for the tax year 2019 and 2020, duly certified and stamped by all the
competent authorities including the UAE Embassy in Belgium.
Against and in consideration of the above background, the Club would like to offer Mr. Leko
a settlement sum to the amount of EUR 300’000.00 for the termination of the contractual
relationship between him and the Club and hence to mutually rescind the Contract and the
Addendum returning the Parties to their respective positions before the Contract’s and
Addendum’s effective date”.
11. On 2 January 2020, the club informed the coach in writing , inter alia, of the following:
“First, our client cannot agree with the statement that Al Ain overpaid him so far as a
consideration for the services he provided under his contract with Al Ain.
Therefore, our client is as a consideration for the services he provided under his contract with
Al Ain entitled to an amount of 600.000 EUR for the start of the first season, as well as to an
amount of 475.000 EUR for the services he provided in the months July until November 2019
(5 x 95.000 EUR), as well as to an amount of 64.354,83 EUR for the services he provided in
the month of December 2019, being 21 days (21 x (95.000 EUR / 31)).
Until now, our client did not receive any payment for the services he provided in December
2019.
As so, our client was not overpaid, but underpaid for the services he provided under his
agreement with Al Ain and kindly asks Al Ain to pay him the sum due for the services he
delivered in the month December 2019.
Taking into account the amounts our client already received from Al Ain and still needs to
receive from Al Ain, (including the fee for the services he provided in December of 61.290
EUR and the termination fee of 1.000.000 EUR), our client is convinced that the amount due
by Al Ain with respect to the income taxes of our client will actually equal to an even exceed
the maximum compensation of 470.000 EUR Al Ain undertook to pay in thi s respect.
Our client paid already an amount of 500 000 EUR to the Belgian Tax Authorities.
In summary, our client asks Al Ain to pay him no later than January 10, 2020, an amount of
EUR 1.534.354,84 EUR, following the termination of his contract by Al Ain without a just
cause (…)”.
12. On 10 January 2020, the club informed the coach of the following:
“According to article 4 of Mr. Leko contract, the total amount due to Mr. Leko for the first year
is (1,740,000), (i.e. 4,767.00 per day).
Until 21/12/2019, Mr. Leko only worked 174 days for the Club, thus Mr. Leko is only entitled to
a remuneration in the amount of 829,632.00 (i.e. 174 days x 4767.00), while he has received
(1,075,000).
(245,368) difference between Mr. Leko due remuneration and what he already received –
(64,354) Dec 2019 compensation = 181,014 which Mr. Leko owes the Club until 21/12/2019”.
13. On 12 January 2020, the coach sent an email to the club, requesting the amount of EUR
1,524,354.84 to be paid by 14 January 2020.
14. On 30 January 2020, the club sent an email to the coach, again holding that the coach owes it the
amount of EUR 181,014.
15. On 10 March 2020, the coach lodged a claim against the club before FIFA for outstanding
remuneration and compensation for breach of contract.
16. In his claim, the coach stated that on 21 December 2019, the club unilaterally terminated the
employment contract because of some “disappointing sporting results”.
17. Thus, the coach concluded that the club had terminated the contract without just cause.
18. According to the coach, following the contract termination, the club offered compensation in the
amount of EUR 190,000, which he rejected.
19. In this regard, the coach referred to art. 13 (2) of the contract, and held that the compensation for
termination without just cause amounts to EUR 1,000,000.
20. In addition, the coach argued that he had not been paid his salary for December 2020 which,
according to him, amounted to EUR 64,345.84 (i.e. 95,000 / 31 x 21).
21. Moreover, the coach referred to the addendum signed on 9 September 2019, and held that the club
“took to bear 54% of the income taxes due by [the coach] on the income received in the first year
of the contract with a maximum compensation of EUR 470,000. This tax payment was also payable
in monthly arrears of EUR 39,167”.
22. Furthermore, the coach referred to art. 1 of the Addendum and maintained that, contrary to what
the club argued in its letter of 2 January 2020, the club’s obligation to pay him EUR 470,000 was
not “subject to his prior presentation of the proof of payment of these income taxes”, but rather
“after the payment thereof, in particular, no later than 2 January 2021”.
23. In this context, the coach stated that the parties had expressly agreed that the club would pay the
coach a monthly instalment of EUR 39,167 (i.e. 470,000 / 12), in order to allow him “to pay the
balance of his income taxes due by [the club]”.
24. According to the coach, the club had not paid him any amount whatsoever as stipulated in the
addendum. Thus, the coach concluded that he is entitled to the maximum amount of EUR 470,000
“in order to allow him, as expressly agreed, to settle the balance of his income taxes payable by [the
club] under the addendum”.
25. In continuation, the coach made reference to the club’s settlement offer of EUR 300,000, dated 2
January 2020, and argued that it had to reject this offer as well, since the amount offered was “not
even close to the amount [the coach] is entitled to”.
26. As such, the coach explained that, on 12 January 2020, he put the club in default one last time.
However, not only did the club not pay him the requested amount of EUR 1,534,354.83 but it stated
that the coach owed the club the amount of EUR 181,014, since it overpaid him.
27. With regard to the club’s calculation, the coach argued that the club had wrongly taken into account
the amount of EUR 600,000, which was due at the start of the employment relationship, holding
that “this amount cannot be taken into account as remuneration for the service [the coach] provided
during the months July – December” 2019.
28. In summary, the coach requested that Al Ain shall be instructed to pay him the amount of EUR
1,534,354.84 EUR, as a result of the early termination for convenience of his employment contract
by Al Ain, calculated as follows:
December 2019 fee (21 days) EUR 64,354.84
Tax payment: EUR 470,000
Termination fee: EUR 1,000,000
Bonuses: PM
TOTAL EUR 1,534,354.84, plus 5% interest p.a.
29. In reply to the claim of the coach, the club lodged a counterclaim.
30. According to the club, the coach requested at the beginning of the season 2019/2020 the
termination of the contract or an amendment of the financial terms of the contract taking into
account “that under Croatian income tax law, he is obligated to pay income taxes exceeding 50% of
his income received from the Respondent”. This request allegedly prompted the signature of the
Addendum.
31. According to the club, in application of the Addendum, the club had to pay to the coach 54% of the
total income taxes after deductions actually paid by the coach “covering the remuneration he receives
from the Respondent during the first year of the contract only, provided that such reimbursement
shall not exceed EUR 470,000”. The club added that in order to qualify for such reimbursement, the
coach had to submit to the coach, no later than 2 January 2021 proof of payment of the 54% of the
due income taxes on the income that the coach received from the club during the first year of then
contract “as well as a copy of his optimized tax return for the tax year 2019 and 2020.”
32. The club held that on 21 December 2019, the parties decided to mutually terminate the contract
“provided they reach and agree on a termination agreement that is fair and just for both parties”.
33. According to the club, the parties met on several occasions without reaching an agreement, and on
9 and 11 January the coach returned his car and accommodation to the club. The club added that
on 12 January 2020, the coach informed the club that he was leaving the country the following day.
The club considered that the coach had unilaterally terminated the contract on that day.
34. The club contested the allegation of the coach that it had terminated the contract on 21 December
2019, and held that the coach did not provide any evidence of said termination. The club added that
it made no sense that the club would have terminated the contract for bad results when the club
maintained a second position in the league.
35. The club held that in a meeting on 21 December 2019, the parties simply agreed on the idea of a
mutual termination but that the conditions of said termination had to be decided by the parties
mutually. The club underlined that by leaving the country on 13 January 2020, the coach had himself
unilaterally terminated the contract.
36. On the tax issues, the club held that the coach failed to produce any evidence of the payment of the
income tax in Croatia, making it impossible for the club to reimburse him since it cannot assess exactly
the amount to be reimbursed.
37. The club held that it overpaid the coach as the coach stayed with the club from 1 July 2019 until 21
December 2019 (if the PSC was to consider that the contract had been terminated on that date), he
worked 174 days, as such he was only entitled to EUR 829,632 as remuneration for that time frame
(174 x EUR 4,767 [his remuneration per day as calculated by the club]), but received EUR 1,075,000.
The club therefore deemed to have overpaid EUR 245,368 to the coach. The club deemed that should
the PSC determine that the contract had been terminated at the fault of the club, said amount should
be deducted from any compensation due to the coach, or that in any case, that amount be paid to
the club by the coach.
38. In summary, the club requested the Single Judge to reject the coach’s claim. Alternatively, should the
Single determine that the club did terminate the contract without just cause, quod non, the club
deemed that the coach is only entitled to an amount not exceeding EUR 754,632 (Note: EUR
1,000,000 – EUR 245,368).
39. As to its counter-claim, the club requested that the coach be ordered to pay compensation a total
amount of EUR 1,135,901 plus 5% interest p.a., i.e, EUR 1,000,000 as compensation for breach of
contract in accordance with art. 13 (2) of the contract, plus EUR 135,901 as surplus amount which
was overpaid to the coach. In this regard, the club calculated the amounts due to the coach as from
1 July 2019 until 13 January 2020, which amounted to EUR 939,000 (197 days x EUR 4,767) and
reiterated that it had paid the coach a total of EUR 1,075,000.
40. In reply to the counterclaim of the club, the coach contested the allegation of the club that he
terminated the contract by leaving the country.
41. The coach held that on 19 December 2019, the club lost a match and that in the four previous
matches, the club obtained one win and three draws making them 3rd place of the Arabian Gulf
League. The coach held that it was the club who unilaterally terminated the contract on 21 December
2019 and provided an article dated 21 December 2019 from the alleged website of the club as
evidence that the club terminated the contract, article which is entitled: “Al Ain terminates Croatia’s
Ivan Leko contract amicably, Al Darmajki: Al Ain assigns the new head coach in a week”, and which
reads, inter alia, as follows: “the Board of director of Al Ain has officially announced relieving the Croatian head coach of Al Ain along with the assistant coaching team of their duties as of today 21
December 2019”.
42. From that same website, the coach provided an article according to which on 4 January 2020 a new
coach had been appointed.
43. The coach held that he did not leave the country right away following the alleged termination of the
contract by the club on 21 December 2019, as he was hoping the club would pay him the
compensation for the termination of the contract, and only left in January when it became clear that
the club would not.
44. As to the tax issue, the coach argued that he “did prepay the income taxes on the income received
in 2019 (tax year 2020)”. In this regard, the coach provided a document which appears to be a
translation but no original version of that document.
45. On the allegation that he was overpaid, the coach held that the club took into account in its
calculation the down payment of EUR 600,000 due on 20 July 2019, and counted it as salary while
the contract also provided for a monthly salary for the coach.
46. The coach added that in accordance with the addendum, in application of art. 2C, since the
termination was due to the club, “the club would continue to settle the agreed instalments payable
by the club in view of the income taxes due by the coach”.
47. The coach argued that he had the obligation to provide proof of payment of the income taxes by 2
January 2021. Since that date is still to come, the coach considered from the prepayment he already
did, that it would obviously be higher than the amount provided by the addendum. The coach held
that should it not be higher, he would proceed to the reimbursement of the difference to the club.
48. In its last comments to the coach’s claim, the club held that the contract had not been terminated
by the club on 19 December 2019 and that the evidence of the coach in this respect was not
sufficient. The club considered that its letter of 2 January 2020 was clear evidence that up to that
date it did not consider the contract as terminated.
49. On the news articles from the club’s website, the club considered that it did not corroborate the
termination of the contract by the club, as the article provided that the termination was “amicable”
and that article dated 21 December 2019 followed the mutual discussions between the parties on
19 December 2019.
50. As to the allegations that the coach had been replaced, the club argued that since the parties had
been negotiating in view of mutually terminating the contract as of September 2019, the club
deemed that “the decision to hire a new coach, was taken to minimize potential risks keeping in
mind that pursuant to the provisions of the contract of the new coach”. The club confirmed that it
hired the new coach as from 6 January 2020.
51. On the tax issue, the club held that it was induced into signing the addendum under fraud. It deemed
that according to Belgium tax law, as a non-resident (living less than 6 months per year in Belgium),
the only income on which the coach could be taxed on, would be income earned in Belgium. The
club held that when signing the contract and addendum, the coach was already a UAE resident. The
club argued that to avoid paying taxes in Belgium, the coach would only have needed to send his
employment contract which stated that he was resident in the UAE.
52. The club also held that the addendum was not valid also because the club did not receive anything
in exchange for all the advantages provided by the club in the addendum to the coach.
53. On the proof of payments to the Belgium tax office, the club argued that the coach only provided a
translation but no original and that as such, the documents should not be admissible.
54. Finally and should the PSC consider that the contract was terminated on 13 January 2020, then the
coach worked for 197 days and should only have received EUR 939,099 (i.e. 197 days x EUR 4,767)
but actually received EUR 1,075,000. The club therefore considered that EUR 135,901 were overpaid
to the coach in that scenario.
55. The club underlined that the contract does not provide for a sign-on fee of EUR 600,000 and the rest
as salaries, the club deemed that the contract only provided for a full net amount of EUR 1,740,000
and a breakdown of payments.
56. The club reiterated its counterclaim.
57. The coach informed FIFA that he remained unemployed since the termination of the contract.
II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PLAYERS’ STATUS
COMMITTEE
1. First of all, the Single Judge of the Players’ Status Committee (hereinafter: 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 10 March 2020 and decided on 11 August 2020.
Consequently, the June 2020 edition of the Rules Governing the Procedures of the Players’ Status
Committee and the Dispute Resolution Chamber (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. 2 and par. 3 of the Procedural Rules and
confirmed that in accordance with art. 23 par. 1 and par. 4 in conjunction with art. 22 lit. c) of the
Regulations on the Status and Transfer of Players (edition August 2020) he is competent to deal with
the present matter, which concerns an employment-related dispute with an international dimension.
3. Furthermore, the Single Judge analysed 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 par. 2 of the
Regulations on the Status and Transfer of Players (edition August 2020), and considering that the
present claim was lodged on 10 March 2020, the March 2020 edition of the Regulations on the
Status and Transfer of Players (hereinafter: Regulations) is applicable to the matter at hand as to the
substance.
4. The competence of the Single Judge and the applicable regulations having been established, the
Single Judge entered into the substance of the matter. In this respect, the Single Judge started by
acknowledging all the above-mentioned facts as well as the arguments and the documentation on
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. The parties concluded an employment contract valid as from 1 July 2019 until 30 June 2021, as well
an addendum to the contract.
6. According to the contract, the coach was entitled to a total remuneration of EUR 1,740,000 net for
the season 2019/2020 (one down payment of EUR 600,000 due on 20 July 2019 plus 12 x EUR
95,000) and of EUR 1,140,000 net for the season 2019/2020 (12 x EUR 95,000).
7. The object of the addendum was to clarify how and to which extent the income tax due over the
remuneration shall be paid. Specifically, the addendum stipulates as follows (art. 1 and 2):
Art. 1
“The First Party [the club] shall pay the Second Party [the player] (54%) of the total income taxes
after deductions actually paid by the Second Party covering the remuneration that the Second Party
received from the First Party during the first year of his contract only, provided such tax
reimbursement shall not exceed the amount of EUR 470.000 payable in 12 equal monthly
instalments, each amounts to EUR 39,167. The first instalment shall be paid on 30/06/2020. These
instalments shall be paid by checks”.
Art. 2
“A- The Second Party shall submit to the First Party no later than 02/01/2021 proof of payment of
the (54%) of the due income taxes on the incomes which the Second Party receives from the First
Party during the first year of his employment contract, as well as a copy of his optimal tax return for
the tax year 2019 and 2020.
B- The Second Party shall pay from the personal money thereof the (46%) of the due income taxes
on the incomes that the Second Party receives from the First Party during the first year of the
employment contract (i.e. from 01/07/2019 until 30/0602020) and to submit to the First Party the
relevant proof of payment, or if the Second Party own contribution was less than 46% of the due taxes, the Second Party shall reimburse the First Party the difference between the 46% of the due
income taxes and the actual amount paid by the Second Party.
C- In the event of the premature termination of the employment contract concluded between the
Parties on 01/06/2019
C-A If the termination by the Second Party, the Second Party shall return to the First Party all the tax
reimbursements that the Second Party received from the First Party under the provisions of the
Addendum herein,
C-B In the event of the premature termination from the First Party, the Second Party shall not return
the tax reimbursements to the First Party, also it shall be settled by the First Party”.
8. The Single Judge then noted that the parties disagree as to whom proceeded to the termination of
the contract and when such termination occurred.
9. Indeed, the coach argues that he was informed of the unilateral termination by the club during a
meeting on 21 December 2019 due to some disappointing sporting results. According to him, his
replacement and dismissal were announced on the Respondent’s website. The coach, furthermore,
alleged that his salary for the month of December 2019 remained unpaid. The coach also referred to
the exchange of letters and emails mentioned above in par. I. 8. To 14., where it transpires that the
parties were discussing the amounts due to the coach as outstanding remuneration, compensation
and taxes. In particular, the coach held that it could not accept the club’s last offer to pay him
compensation amounting to EUR 300,000 as this amount was far less to what he was, in his opinion,
entitled to under the contract.
10. The coach is of the opinion that he is entitled to outstanding remuneration for the month of
December 2019 as well as EUR 1,000,000 as compensation for breach of contract in accordance
with art. 13 (2) of the employment contract. Equally, According to the coach, the club had not paid
him any amount whatsoever as stipulated in the addendum. Thus, the coach concluded that he is
entitled to the maximum amount of EUR 470,000 “in order to allow him, as expressly agreed, to
settle the balance of his income taxes payable by [the club] under the addendum”. The Claimant also
requested 5% interest p.a. on these amounts.
11. The club, for its part, denied having terminated the contract on 21 December 2019, and held that
the said meeting’s purpose was merely to discuss the terms of a mutual termination. The club deemed
that it was the coach who terminated the contract on 13 January 2020 when he returned the car
and the apartment provided by the club.
12. The club further explained that, in its view, it had overpaid the coach. Taking into account the date
of 13 January 2020 as the date of termination, the club calculated that the amounts due to the coach
as from 1 July 2019 until the termination amounted to EUR 939,099 (197 days x EUR 4,767) and
that it had paid the coach a total of EUR 1,075,000. Thus, the club deemed that it overpaid the coach
by EUR 135,901.
13. Furthermore and since the club deems that the coach terminated the contract by leaving the country,
it claims compensation in the amount of EUR 1,000,000, also referring to art. 13 (2) of the contract.
14. With respect to the tax issue, the club deems that the coach did not produce any evidence of the
payment of the income tax the income he received from the Club during the first year of the Contract,
nor did the coach provide a copy of his tax return for the tax year 2019 and 2020. Thus, the club
held that the conditions for a reimbursement in the maximum amount of EUR 470,000 are not met.
15. Finally and should the Single Judge rule that the club terminated the contract on 21 December 2019,
quod non, the club claimed that the coach should be entitled to the maximum amount of EUR
754,632 (EUR 1,000,000 – EUR 245,368; cf. par. I. 37. And 38. above).
16. Having recalled the main facts surrounding the present matter as well as the parties’ respective
positions, the Single Judge determined that it must assess the two following issues:
i. Who terminated the contract between the parties and when, and was the termination with
or without just cause, and;
ii. Is the coach entitled to the reimbursement of the income tax as provided for in the
addendum.
17. As to the first issue, the Single Judge, after having thoroughly analysed the parties’ arguments and
evidence produced in this context, first acknowledged that there is no concrete evidence on file of
the contents of the meeting which the parties held on 21 December 2019. Notwithstanding, the
coach provided as evidence an excerpt from the club’s website which clearly states that on 21
December 2019, the coach was relieved from his duties and replaced by the U-21 coach.
Furthermore, there is also evidence on file that the club hired a new coach on 6 January 2020.
18. In view of the above, the Single Judge established that the contract was terminated by the club on
21 December 2019.
19. Furthermore and referring once again to the excerpt from the club’s website, the Single Judge could
verify that the reason for the coach’s dismissal was the team’s bad results.
20. In this regard, the Single Judge referred to its constant jurisprudence, according to which the absence
of sporting results of a team cannot, as a general rule, constitute a valid reason for a club or an
association to terminate a coach’s employment contract since the assessment of performance by a
coach is a subjective perception which cannot be measured on an objective scale and therefore has
to be considered as inadmissible grounds for a termination of the employment relationship.
21. In view of all the aforementioned, the Single Judge came to the conclusion that the coach’s dismissal
by the club had occurred without just cause. Therefore, the Single Judge held that, in accordance
with his constant practice, the club had breached its contractual obligations towards the coach and
should, as a consequence, compensate the latter accordingly.
22. Having established the above-mentioned, the Single Judge went on to assess the potential financial
consequences of the breach of the contractual relationship by the club. In doing so, the Single Judge
first of all took note that the coach was inter alia requesting the payment of the remuneration
stipulated in the contract for the 21 days of December 2020.
23. In this regard, the Single Judge also reiterated that the club deemed having overpaid the coach by
EUR 245,368, in light of the fact that the coach was allegedly entitled to EUR a total of EUR 829,458
for 174 days worked at the club (EUR 4,767 x 174 days).
24. The Single Judge duly acknowledged that the club provided evidence of having paid the coach a total
amount of EUR 1,075,000; this being said, the club’s calculation does not take into account the
down payment of EUR 600,000 which was due in July 2020. Taking into account the contractual
stipulations, the coach was, in fact, entitled to EUR 600,000 payable on 20 July 2019, and to a
monthly salary of EUR 95,000 per month due at the end of each calendar month. Thus, the Single
Judge determined that the coach should, according to the contract, have received a total amount of
EUR 1,075,000 (EUR 600,000 + (EUR 95,000 x 5)) between July and November 2019, which is exactly
what the coach received.
25. In light of the foregoing considerations, the Single Judge concurred with the coach’s claim that he
had not received any amounts in excess from the club and that the salary of December 2019
remained unpaid. In this regard, the Single Judge noted that since the month of December 2019 has
been fully worked, the coach is entitled to the full salary of EUR 95,000, plus 5% interest as from 1
January 2020 as claimed.
26. Having established the aforementioned, the Single Judge turned his attention to the compensation
payable to the coach by the club following the termination without just cause of contract by the
latter.
27. In this respect, the Single Judge held that it first of all had to clarify whether the pertinent
employment contract contained any clause, by means of which the parties had beforehand agreed
upon a compensation payable by the contractual parties in the event of breach of contract.
28. Indeed, art. 13 (2) of the contract constitutes a compensation clause and stipulates the following:
“If this contract terminated for reasons not provided in the Club’s Regulation without a “just cause”,
then the party who making the termination must pay a due compensation calculation an amount of
1,000,000 EUR net”.
29. The Single Judge thus concluded that such clause, which is reciprocal, and which both parties have
relied upon in their respective claims, must be applied to the case at hand.
30. In light of the above, the Single Judge held that, in addition to the outstanding remuneration owed
to the coach as established above, the club must pay the coach the amount of EUR 1,000,000 plus
5% interest p.a. as from 10 March 2020, i.e. as from the date of the claim.
31. With respect to the second issue to be tackled in the present matter, this is, the coach’s request for
the reimbursement of income tax in the amount of EUR 470,000, the Single Judge paid close
attention to what the parties had agreed upon under the addendum.
32. In this regard, the Single Judge duly noted that, in accordance with art. 2A of the addendum, the
coach should submit two types of documents in order for the club to proceed to the relevant
reimbursement, that is, on the one hand, proof of payment of the 54% of the due income tax on
the income received from the club, and, on the other hand, a copy of his optimal tax returns for the
tax years 2019 and 2020.
33. The Single Judge observed, though, that the coach did not adduce evidence that he had indeed
provided the club with those documents. Furthermore, the coach did produce a document to FIFA in
this connection, however this document consisted in a translation into English but the documents in
their original version were not provided. In accordance with art. 9 par. 3 of the Procedural Rules,
evidence must be submitted in the original language and, if applicable, translated into one of the
official FIFA language. The consequence of not providing the original version of a document will
result in said document not being taken into account.
34. In light of the above, the Single Judge held that the coach did not sufficiently substantiate his claim
that he had paid the relevant taxes nor that it had provided the club his optimal tax returns.
35. Consequently, the Single Judge decide to reject the coach’s claim with respect to the reimbursement
of income tax in the amount of EUR 470,000.
36. Notwithstanding the above, the Single Judge determined that the amounts awarded to the coach as
outstanding remuneration and compensation for breach of contract are awarded net of taxes.
37. In conclusion of all the above, the Single Judge decided that the coach’s claim is partially accepted
and that the club’s counter-claim is rejected.
38. Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 18 par.
1 ii. of the Procedural Rules, according to which in the proceedings before the Players’ Status
Committee, including the Single Judge, costs in the maximum amount of the advance of costs shall
be levied for any claims lodged prior to 10 June 2020 but decided thereafter. The Single Judge noted
that the Claimant paid CHF 10,000 as advance of costs in the present matter.
39. In conclusion, the amount CHF 10,000 has to be paid by the club 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/Counter-Respondent, Ivan Leko, is partially accepted.
2. The Respondent/Counter-Claimant, Al Ain FC, has to pay to the Claimant within 30 days as from
the notification of this decision, the following amount:
- EUR 95,000 net as outstanding remuneration plus 5% interest p.a. as from 1 January 2020
until the date of effective payment;
- EUR 1,000,000 net as compensation for breach of the contract plus 5 % interest as from 10
March 2020 until the date of effective payment.
3. Any further claims of the Claimant/Counter-Respondent are rejected.
4. The counterclaim of the Respondent/Counter-Claimant is rejected.
5. In the event that the amount due, plus interest as established above is not paid by the
Respondent/Counter-Claimant in accordance with point 2. Within the stated time limits, the
present matter shall be submitted, upon request to the FIFA Disciplinary Committee for
consideration and a formal decision.
6. The Claimant/Counter-Respondent is directed to inform the Respondent/Counter-Claimant
immediately and directly of the account number to which the remittances are to be made and to
notify the single judge of the Players’ Status Committee of every payment received.
7. The final costs of the proceedings in the amount of CHF 10,000 are to be paid by the
Respondent/Counter-Claimant to FIFA (cf. note relating to the payment of the procedural costs
below).
For the Players' Status Committee:
Emilio García Silvero
Chief Legal & Compliance Officer
NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the
Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.
NOTE RELATED TO THE PUBLICATION:
FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party
within five days of the notification of the motivated decision, to publish an anonymised or a redacted
version (cf. article 20 of the Procedural Rules).
CONTACT INFORMATION:
Fédération Internationale de Football Association
FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | psdfifa@fifa.org | T: +41 (0)43 222 7777