F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2020-2021) – fifa.com – atto non ufficiale – Decision 28 July 2020

Decision of the

Single Judge of the Players' Status Committee

passed on 28 July 2020,

regarding an employment-related dispute concerning the coach Hendrik Willem ten Cate

BY:

Stefano La Porta (Italy), Single Judge of the PSC

CLAIMANT:

Hendrik Willem ten Cat, Netherlands

Represented by Mr H.J.A. Knijff

RESPONDENT:

Al-Ittihad Club, Saudi Arabia

Represented by Dr. Jan Kleiner and Mr. Luca Tarzia

I. FACTS OF THE CASE

1. On 4 November 2019, the Dutch coach, Hendrik Willem ten Cate, (hereinafter: the Claimant or coach), and the Saudi club, Al-Ittihad, (hereinafter: the Respondent or club) concluded an employment contract valid as from the date of signature until 30 May 2020 (hereinafter: the contract).

2. Pursuant to art. 3 of the contract, the Respondent undertook to pay the Claimant the following amounts:

- EUR 200,000 “to be paid within sign this contract”;

- EUR 200,000 by 6 December 2019;

- Seven monthly instalments of EUR 247,571 to be paid at the end of each month.

3. By means of art. 9 of the contract, the parties agreed upon the following: “Breach of the contract without just cause: If the [club] decides to cancel the contract for whatever reason the [club] has to pay to the [coach] three salaries. If the [coach] decides to break this Employment Contract before the end of the remaining period of the contract, he shall pay to the [club] three salaries.”

4. On 11 February 2020, the club drafted a termination agreement, by means of which it offered the coach the following: “The [club] will make payment of an amount of [495.142 Euro] in two instalment, the first instalment on the signing day of this termination agreement [247.571 Euro] and the other instalment agreement [247.571 Euro] to be paid on 1 July 2020”. Said termination agreement was never signed by the coach.

5. On 25 February 2020, the coach informed the club in writing of, inter alia, the following:

“By decision of Al-Ittihad this employment agreement has been terminated with effect of 11 February 2020.

Al-Ittihad is still due to Mr. Ten Cate his salary from 1 January 2020 until 11 February 2020, amounting to EUR 338,347.

In accordance with article 9 of the abovementioned employment contract Al-Ittihad is obliged to pay to Mr ten Cate an amount of EUR 742,713, equal to three months’ salary.

I have taken due note of the termination agreement drafted by Al-Ittihad. I would like to point out that Mr Ten Cate cannot accept the view that the employment contract has been terminated in mutual agreement. It was the decision of the club to dismiss Mr Ten Cate as Head Coach and to terminate the employment agreement with immediate effect of 11 February 2020.

Al-Ittihad is due to Mr ten Cate the total amount of EUR 1,081,060 (EUR 338,347 plus EUR 742,713).

I would like to request you to transfer the total amount of EUR 1,081,060 to the bank account of Mr Ten cate, as know by you, within seven days after the date of this letter.

If Al-Ittihad would fail meeting their financial obligations towards Mr Ten Cate within the abovementioned period of seven days, Mr ten cate will claim as from that date an interest of 5% and in that case Mr Ten Cate has instructed me to file a petition with the FIFA Players’ Status Committee. Needless to say that Mr Ten Cate would prefer to finalise this matter without FIFA intervention.”

6. On 26 February 2020, the club informed the coach in writing of the following:

“First of all, we would like to thank Mr. Hendrik Willem ten Cate for his services. However, the content of your letter has surprised us. As your client surely knows, there have been discussions on a possible way forward, but ultimately the parties agreed not to continue their cooperation. Therefore, we think that your statement regarding an unilateral termination of the employment contract is incorrect. We of course remain open to further discuss this matter and we are sure that a mutual agreement can be found very quickly.”

7. On 2 March 2020, the coach replied to the club in writing by stating the following:

“I duly received your letter sent by email dated 26 February. I have discussed the content of it with Mr Ten Cate. Mr Ten cate don’t share your view about the termination of his employment contract. It was the initiative of the Club to terminate the contract. This has also been communicated to the staff and the players. Nevertheless, Mr Ten Cate is willing to suspend for a period of ten day filing the documents with FIFA in order to find an amicable solution. It is highly important for Mr ten Cate that the salary which is overdue (1/1/2020 until 11/12/2020) will be paid within five days from now.

Besides that, I may invite you to offer a settlement for the remaining contractual period. It is essential for Mr ten cate that part of the settlement will be a one off payment on a very short term. I am sure that we will find a solution within a couple of days.”

8. Finally, on 9 March 2020, the coach informed the club in writing of the following:

“Unfortunately I did not receive any reply on my email to you dated 2 March. You leave Mr Ten Cate no other way to file a petition with FIFA Players’ Status Committee. Ultimately this week I will send to FIFA the necessary documents with the request to deal with it as soon as possible.

Needless to say that Mr Ten Cate would like to settle this dispute on an amicable bases but it takes two to tango.”

9. On 23 March 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) EUR 338,347 “as non-paid salary over the period 1 January 2020 until 11 February 2020”;

b) EUR 742,713 as compensation “in accordance with article 9 of the employment contract”;

c) Interest at the rate of 5% p.a. “over the total outstanding amount as from the date of filing of this petition until the date of full payment”;

d) EUR 25,000 corresponding to legal costs;

e) That the club pay the procedural costs.

10. The Claimant highlighted that “by decision of [the club] the employment contract with [the coach] has been unilaterally terminated with effect of 11 February 2020” and that notwithstanding the reminders sent to the club, it still owed him the amount of EUR 1,081,060.

11. In its reply to the claim, the Respondent sustained that due to the lack of sporting results, the coach started losing support from the players and that at the beginning of February 2020, the parties decided to terminate the employment contract by mutual consent. The club officially and publicly communicated said agreement.

12. The club highlighted that said official communication was never opposed or objected by the coach. According to the club, the parties negotiated the terms of the termination and agreed on the amount to be paid to the coach, i.e. EUR 492,142, payable in two instalments.

13. Furthermore, the Respondent held that the amount agreed in the termination agreement would be in full and final settlement of any pending payments. In this regard, art. 1.3 of the termination agreement reads as follows: “The Parties acknowledge that this Agreement, upon the fulfilment of its terms, is considered a final and complete settlement of all financial claims between the Parties arising out of the Contract, and the Second party is not entitled to require the First Party or any other party or other person to pay any other amounts other that those specified in this Agreement.”

14. The Respondent further held that by the end of February 2020, after having contacted a lawyer, the coach started alleging the unilateral termination of the contract by the Respondent.

15. The Respondent maintained that the coach failed to prove such allegation since no documents, such as a termination letter, communications, WhatsApp messages or witness statements have been provided as evidences by him. For this reason already, the claim has no merit and must be dismissed.

16. Moreover, the Respondent contested the coach’s assertion that the club breached the contract since there was no unilateral termination by the club.

17. The Respondent further maintained that should it really have unilaterally terminated the contract, the coach would not have participated in any negotiations on the terms of the termination agreement but would have relied on the financial consequences established in section two of art. 9 of the contract and would have also immediately reacted when the Respondent publicly announced the mutual termination.

18. In this respect, the Respondent added that the coach, by participating in negotiations for the conclusion of a termination agreement, corroborated that he agreed and accepted that the contract was mutually terminated or, for the very least, he created the legitimate expectation for the Respondent that the mutual termination was agreed.

19. Finally, the Respondent stated that in the unlikely event that FIFA should consider to grant the Claimant an amount for breach of contract, then the principle of mitigation of damages must apply, and consequently the claimed amounts would in any event have to be reduced. Based on such a reduction, the club believes that at maximum, an amount of EUR 495,142 could be awarded to the Claimant, amount which corresponds to the one agreed between the parties in the termination agreement.

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

1. “The Claim of the Coach Hendrik Willem ten Cate shall be rejected;

Subsidiarly to Prayer 1 and only in case FIFA grants compensation to Claimant based on a presumed breach or unilateral termination of contract

2. The maximum amount to be paid by Al Ittihad to Coach Hendrik Willem ten Cate shall be of EUR 495,142;

3. In any event, all costs of these proceedings shall be charged to Coach Hendrik Willem ten Cate.”

21. On 9 July 2020, the coach informed FIFA that during the period as of 11 February until 30 May 2020 he was unemployed.

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 23 March 2020 and decided on 28 July 2020. Thus, the June 2020 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 June 2020 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 23 March 2020. In view of the foregoing, the Single Judge concluded that the March 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 1 July 2019, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 30 May 2020, pursuant to which the Respondent undertook to pay to the Claimant a monthly salary of EUR 247,571.

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 11 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 EUR 338,347, together with 5% interest p.a. as from 23 March 2020, and of compensation for breach of contract in the sum of EUR 742,713, together with 5% interest p.a. as from 23 March 2020. In this respect, the Single Judge noted that the coach referred to art. 9 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, had rejected the claim of the Claimant arguing that due to the lack of sporting results, in the course of February 2020, the parties decided to terminate the employment contract by mutual agreement.

9. Moreover, 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 EUR 495,142 could be awarded to Claimant, amount which corresponds to the one agreed between the parties in the termination agreement.

10. After having thoroughly analysed the submissions of the parties as well as the documentation at his disposal, the Single Judge deemed that the pivotal issue in this dispute, considering the diverging position of the parties, was to determine as to whether the contract had been terminated without just cause by the Respondent on 11 February 2020, as claimed by the Claimant and, if so, to decide on the consequences thereof.

11. In this regard, the Single Judge recalled that the Respondent considered not having unilaterally terminated the contract as the parties mutually terminated it, at the beginning of February 2020, due to the lack of sporting results.

12. 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.

13. In this respect, the Single Judge considered that the Respondent did not present a written termination agreement duly signed by the Claimant and the Respondent and therefore it failed to prove so.

14. Moreover, the Single Judge acknowledged that he had to examine whether the reason put forward by the Respondent could justify the termination of the contract in the present matter.

15. In doing so, 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.

16. In addition, the Single Judge also recalled that, still in accordance to the longstanding jurisprudence, sporting results cannot be retained as a valid reason to justify an early termination of an employment contract.

17. 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.

18. 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.

19. 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 EUR 341,477, corresponding to the outstanding salaries as of 1 January 2020 until 11 February 2020. However, the Single Judge took note of the fact that the Claimant had limited his request to EUR 338,347 plus an interest of 5% per year as from 23 March 2020.

20. 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 EUR 338,347 as outstanding remuneration.

21. 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 23 March 2020 until the date of effective payment.

22. 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.

23. 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.

24. In this sense, the Single Judge recalled the arguments of the parties as to the relevant provisions of the contract and observed that art. 9 of the contract provides for a compensation clause in the event of breach of contract, which was drafted as follow:

- “Breach of the contract without just cause: If the [club] decides to cancel the contract for whatever reason the [club] has to pay to the [coach] three salaries. If the [coach] decides to break this Employment Contract before the end of the remaining period of the contract, he shall pay to the [club] three salaries.”

25. 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. Consequently, the he Single Judge concluded that the amount of EUR 742,713, corresponding to three monthly salaries as provided for in art. 9 of the contract, serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

26. Equally, the Single Judge verified as to whether the coach had signed a new employment contract after having been dismissed by the club on 11 February 2020 by means of which he would have been enabled to reduce his loss of income. According to the constant practice, such remuneration under a new employment contract would be taken into account in the calculation of the amount of compensation for breach of contract in connection with the coach’s general obligation to mitigate his damages.

27. The Single Judge recalled that, after the termination of the contract, the coach was not able to mitigate his damages, as he remained unemployed.

28. In view of the above, the Single Judge concluded that the amount of EUR 742,713 is to be paid by the club to the coach as compensation for breach of contract.

29. 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 EUR 742,713 as from the date on which the claim was lodged, i.e. 23 March 2020, until the date of effective payment.

30. 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, including 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.

31. In this respect, the Single Judge reiterated that the claim of the coach is accepted and that the club is at fault. Therefore, the Single Judge decided that the club has to bear the costs of the current proceedings in front of FIFA.

32. The Single Judge further observed the temporary amendments outlined in art. 18 par. 2 lit. ii) of the Procedural Rules, which entered in force in 10 June 2020, according to which the maximum amount of procedural costs levied for any claim lodged prior to 10 June 2020, which was yet to be decided at the time of such temporary amendment, shall be equivalent to any advance of costs paid.

33. Accordingly, the Single Judge observed that the Claimant paid the amount of CHF 5,000 as advance of costs, and therefore decided that the maximum amount of costs of the proceedings corresponds to CHF 5,000.

34. Consequently, the Single Judge determined that the Respondent shall pay the amount of CHF 5,000 in order to cover the costs of the present proceedings.

35. Subsequently, the Single Judge reverted to art. 17 par. 5 in combination with art. 18 of the Procedural Rules, and observed that the advance of costs paid by a party shall be duly considered in the decision regarding costs. Therefore, given that the Respondent is responsible to pay the amount of CHF 5,000, the Single Judge decided that the amount paid by the Claimant as advance of costs, i.e. CHF 5,000, shall be reimbursed to the latter by FIFA.

36. The Single Judge concluded his deliberations in the present matter by establishing that Claimant’s claim is accepted.

III. DECISION OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE

1. The claim of the Claimant, Hendrik Willem ten Cate, is accepted.

2. The Respondent, Al-Ittihad Club, has to pay to the Claimant the following amount:

- EUR 338,347 as outstanding remuneration plus 5% interest p.a. as from 23 March 2020 until the date of effective payment.

- EUR 742,713 as compensation for breach of contract without just cause plus 5% interest p.a. as from 23 March 2020 until the date of effective payment.

3. 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.

4. 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).

5. 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 following consequences shall arise:

1.

In the event that the payable amounts as per in this decision are not paid within the granted deadline, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

6. The final costs of the proceedings in the amount of CHF 5,000 are to be paid by the Respondent to FIFA (cf. note relating to the payment of the procedural costs below).

For the Dispute Resolution Chamber:

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