F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2020-2021) – fifa.com – atto non ufficiale – Decision26 January 2021

Decision of the

Single Judge of the Players' Status Committee

passed on 26 January 2021,

regarding an employment-related dispute concerning the coach Rafael Edgar Dudamel Ochoa

BY:

Johan van Gaalen (South Africa), Single Judge of the PSC

CLAIMANT:

Rafael Edgar Dudamel Ochoa, Venezuela

Represented by Mr Eduardo Carlezzo

RESPONDENT:

Clube Atlético Mineiro, Brazil

Represented by Mr Breno Costa Ramos Tannuri

I. FACTS OF THE CASE

1. On 23 December 2019, the Venezuelan coach, Rafael Edgar Dudamel Ochoa, (hereinafter: the Claimant or coach), and the Brazilian club, Clube Atlético Mineiro, (hereinafter: the Respondent or club) concluded an employment contract valid as from 1 January 2020 until 31 December 2021 (hereinafter: the contract).

2. According to clause 1.3 of the contract, the Respondent committed itself to pay to the coach the following remuneration: (i) monthly salary of BRL [Brazilian Real] 300,000; (ii) monthly housing allowances of BRL 18,000; and (iii) monthly image rights of BRL 160,000.

3. By means of clause 1.6 of the contract, the parties established that in the event of early termination of the contract, the parties agreed that the breaching party should pay compensation in the amount of BRL 2,760,000. However, the parties further stipulated that the amount of compensation could not exceed the total amount of monthly salaries due to the coach as of the date of termination until 31 December 2021.

4. As per the coach, on 27 February 2020, “only 2 months after the beginning of the contractual relation between the parties and after only 10 matches as the club´s head coach”, the Respondent allegedly “decided to fire the Claimant from its position, unilaterally breaching the employment contract”. The coach also sustained that the decision to terminate his contract was “announced in the club´s official Twitter, as well as in several media vehicles”.

5. According to the coach, during a press conference in April 2020, the Respondent allegedly stated that, “the dismissal was due to the coach's technical incompetence”.

6. As regards to his remuneration, the coach pointed out that “until the moment of the early termination the Respondent had not made any payment to the Claimant. After that, two payments were made in favor of the Claimant, the first amounting to R$ 310,882.81 on 1 March 2020 and the second amounting to R$ 250,000 on 23 March 2020”.

7. The coach further maintained having tried to settle the matter amicably.

8. On 5 August 2020, the Claimant lodged a claim against the Respondent in front of FIFA for outstanding remuneration and compensation for breach of contract, claiming the following:

a) “Accept the present claim and determine the Respondent to pay the pending monthly amounts due to the Claimant amounting to R$ 395,117.19 (...), regarding the pending amounts corresponding to the months of January and February 2020, plus 5% interest per year from the date in which each of the payments should have been made;

b) Determine the Respondent to pay an indemnity for the unilateral breach of contract, as provided for in clause 1.6. of the employment contract, amounting to R$ 2,760,000 (...), plus 5% interest per year as of the date in which the amount became due, that is, as of 27 February 2020, when the employment contract was early terminated;

c) Condemn the Respondent to bear with eventual costs of the present procedure”.

9. With regard to the claimed outstanding amounts, the Claimant stated the following: “from the total amount due of R$ 956,000 (R$ 478,000 x 2 months – January and February 2020), the Respondent paid only R$ 310,882.81 on 1 March 2020 and R$ 250,000 on 23 March 2020. For this reason, the amount of R$ 395,117.19 is still pending”.

10. As to the compensation for breach of contract, the Claimant referred to clause 1.6. of the contract, requesting payment of BRL 2,760,000.

11. In its reply to the claim, the Respondent confirmed that on 27 February 2020, it unilaterally terminated the coach’s employment contract.

12. According to the club, it offered the coach various proposals for settling the dispute amicably and in good faith. However, the coach rejected all proposal offered by the club and consequently lodged his complaint at FIFA so as to claim the entire amount due under clause 1.6 of the contract.

13. The club maintained that, after the unilateral termination of the contract, the following amounts “along with applicable taxes” were paid to the coach:

• BRL 310,882.81 on 1 March 2020;

• BRL 80,000 on 23 March 2020;

• BRL 250,000 on 23 March 2020;

• BRL 20,000 on 3 July 2020; and

• BRL 30,000 on 8 July 2020.

14. The Respondent added that, along with the above-mentioned payments, it incurred an amount of BRL 69,489.71 which was paid to the government as taxes (FGTS). Therefore, the amounts of BRL 130,000 and BRL 69,489.71 have to be deducted from the compensation payable to the coach.

15. Moreover, the club pointed out that the amounts established in the contract are gross. As consequence, the compensation payable to the coach is to be considered as gross too.

16. Furthermore, the Respondent stated that “it is well established practice of the FIFA PSC that claims of image rights payments are not admissible before the FIFA PSC.”

17. In its conclusion, the Respondent requested the following:

“FIRST – To confirm that the statement of claim lodged by the Coach contains excessive amounts of claim;

SECOND – To consider the non-compliance of Coach’s efforts to mitigate the damages as a deducting factor while calculating the compensation due to the Coach, which shall not be higher than gross R$ 1,600,510; AND

THIRD – To confirm that the Coach shall exclusively afford and in full with the payment of all costs regarding the case at hand (cf. Art. 18, par. 1 of the FIFA Procedural Rules).”

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 stake. In this respect, the Single Judge took note that the present matter was submitted to FIFA on 8 August 2020 and decided on 26 January 2021. Thus, the 2021 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.

2. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players is 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 January 2021 edition of the Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the claim was lodged in front of FIFA on 8 August 2020. In view of the foregoing, the Single Judge concluded that the June 2020 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.

3. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 1 and par. 2 of the Procedural Rules in connection with art. 23 par. 1 and par. 4 as well as art. 22 lit. c) of the Regulations, he was competent to deal with the present matter since it concerned an employment–related dispute with an international dimension.

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 arguments and the documentation submitted by the parties. The Single Judge emphasised, however, 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. In this respect, the Single Judge acknowledged that, on 23 December 2019, the Claimant and the Respondent concluded an employment contract valid as from 1 January 2020 until 31 December 2021, pursuant to which the Respondent undertook to pay to the Claimant a total monthly remuneration of BRL 478,000.

6. In continuation, he Single Judge remarked that, in his claim to FIFA, the Claimant had accused the Respondent of having terminated their contractual relationship without just cause on 27 February 2020.

7. The Single Judge also noted that, as such, the Claimant deemed inter alia being entitled to claim from the Respondent the payment of outstanding remuneration in the amount of BRL 395,117.19, together with 5% interest p.a., and of compensation for breach of contract in the sum of BRL 2,760,000, together with 5% interest p.a. as from 27 February 2020. In this respect, the Single Judge noted that the coach referred to clause 1.6 of the employment contract and held that a liquidated damages clause was agreed between the parties in case of termination without just cause.

8. In addition, the Single Judge noted that, for its part, the Respondent confirmed that on 27 February 2020 it had unilaterally terminated the coach’s employment contract and that it argued that: “the statement of claim lodged by the Coach contains excessive amounts of claim”.

9. In continuation, the Single Judge also took note of the Respondent’s arguments as to the possible application of the principle of mitigation of damages in case an amount for breach of contract would be grant to the Claimant. Based on such a reduction, the Respondent requested that at maximum, an amount of BRL 1,600,510 could be awarded to Claimant.

10. Moreover, the Single Judge pointed out that the Respondent relied on untranslated documents of alleged payments, which it had submitted during the course of the proceedings, in order to prove that it had performed part of its financial obligations towards the Claimant. In this regard, the Respondent maintained that after the unilateral termination of the contract, the following amounts were paid to the coach:

• BRL 310,882.81 on 1 March 2020;

• BRL 80,000 on 23 March 2020;

• BRL 250,000 on 23 March 2020;

• BRL 20,000 on 3 July 2020; and

• BRL 30,000 on 8 July 2020.

11. In this context, the Single Judge recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. In this respect, the Single Judge concurred in the conclusion that the Respondent did not provide sufficient evidence corroborating the allegations on the basis of which it paid an additional amount of BRL 130,000 to the coach.

12. On account of the above, the Single Judge referred to the established jurisprudence and emphasised that, as a general rule, only a breach or misconduct which is of a certain severity justifies the termination of a contract without notice. 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. Hence, if there are more lenient measures which can be taken in order for an employer to ensure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

13. In addition, the Single Judge also recalled that, still in accordance to the longstanding jurisprudence, sporting results or, as in the present matter, “the coach's technical incompetence” cannot be retained as a valid reason to justify an early termination of an employment contract and in this respect, wished to underscore that, according to the principle of contractual stability, the unilateral termination of a contract must be considered as an absolute last resort.

14. In view of all the aforementioned, the Single Judge was of the firm opinion that the club did not have just cause to prematurely terminate the employment contract with the coach.

15. Nevertheless, before entering the analysis of the consequences of the unjust termination of contract on the part of the club, the Single Judge deemed it appropriate to first assess whether any outstanding remuneration was still due by the club to the coach.

16. In this regard, the Single Judge underlined that the coach is also entitled to his outstanding remuneration. In particular, the Single Judge observed that, on the date of termination of the contract, the club had an outstanding debt towards the coach in the amount of BRL 395,117.19, corresponding to the outstanding salaries of January and February 2020. Moreover, the Single Judge took note of the fact the coach argued that part of his salaries of January and February 2020 remained outstanding, however, he did not indicate exactly which amount pertains to each month. Therefore, and considering that the outstanding amount of BRL 395,117.19 is inferior of his monthly salary (i.e. BRL 478,000), the Single Judge considered as outstanding only the month of February 2020.

17. In view of the above, and in accordance with the principle of pacta sunt servanda, the Single Judge established that the club has to pay to the coach the total amount of BRL 395,117.19 as outstanding remuneration.

18. In addition, taking into account the Claimant’s request as well as the well-established jurisprudence, the Single Judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount as of 1 March 2020 until the date of effective payment.

19. 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.

20. 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.

21. In this sense, the Single Judge recalled the arguments of the parties as to the relevant provisions of the contract and observed that clause 1.6 of the contract provides for a compensation clause in the event of breach of contract, which established that the breaching party should pay compensation in the amount of BRL 2,760,000. However, the parties further stipulated that the amount of compensation could not exceed the total amount of monthly salaries due to the coach as of the date of termination until 31 December 2021.

22. On account of the above, the Single Judge observed that the aforementioned clause was reciprocal and, in view of the general principle of proportionality and of the principle of equal treatment, established that said clause can be taken into consideration in the determination of the amount of compensation.

23. In view of the above, the Single Judge concluded that the amount of BRL 2,760,000 is to be paid by the club to the coach as compensation for breach of contract.

24. Equally, taking into account the Claimant’s request for interest, the Single Judge, in accordance with the well-established jurisprudence, decided that the club has to pay to the coach interest of 5% p.a. on the amount of BRL 2,760,000 as from the date on which the claim was lodged, i.e. 5 August 2020, until the date of effective payment.

25. Finally, and as to the payable costs, the Single Judge of the Players' Status Committee referred to the Covid-19 Football Regulatory Issues – FAQ, published on 11 June 2020 which establish that, given the current circumstances, for any claim lodged between 10 June 2020 and 31 December 2020 (both inclusive), there will be no requirement to pay an advance of costs and no procedural costs shall be ordered.

26. The Single Judge concluded his deliberations in the present matter by establishing that Claimant’s claim is partially accepted and by rejecting any further request made by the parties.

III. DECISION OF THE SINGLE JUDGE OF THE PSC

1. The claim of the Claimant, Rafael Edgar Dudamel Ochoa, is partially accepted.

2. The Respondent, Clube Atlético Mineiro, has to pay to the Claimant, the following amounts:

- BRL 395,117.19 gross as outstanding remuneration plus 5% interest p.a. as from 1 March 2020 until the date of effective payment;

- BRL 2,760,000 gross as compensation for breach of contract without just cause plus 5% interest p.a. as from 5 August 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

4. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amounts.

5. The Respondent shall provide evidence of payment of the due amounts in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amounts due, plus interest as established above are not paid by the Respondent within 30 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

7. This decision is rendered without costs.

For the Single Judge of the PSC:

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:

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