F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2016-2017) – fifa.com – atto non ufficiale – Decision 15 December 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 December 2016,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

John Bramhall (England), member

Mario Gallavotti (Italy), member

on the claim presented by the player,

Player A, country B,

as Claimant

against the club,

Club C, country D

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 15 January 2015, the player from country B, Player A (hereinafter: the Claimant), and the club from country D, Club C (hereinafter: the Respondent), signed an employment contract valid from 15 January 2015 until 14 January 2018.

2. The employment contract inter alia provides for the following remuneration to be paid to the Claimant:

a. USD 7,500 per month for the first year;

b. USD 100,000 payable during 2015 “paid player in the first year the amount of 100,000 one hundred thousand USD dollars received as provider contract and the remaining 10% distributed on a monthly salary for a year”;

c. USD 110,000 payable during 2016 “paid player in the second year the amount of 110,000 one hundred and ten thousand US dollars received as provider contract and the remaining 15% distributed on a monthly salary for a year”;

d. USD 150,000 payable during 2017 “paid player in the third year the amount of 150,000 one hundred and fifty thousand US dollar received as presenter hold 15% and the rest distributed in monthly salaries for a year”;

e. a bonus of USD 8,000 if the Claimant scores eight goals in the season; another USD 4,000 if the Claimant “making of his passing game eight goals”; USD 300 “as per the coach technical report after each match”.

3. On an unspecified date, the Claimant, the Respondent and the club from country B Club E signed a loan agreement for the temporary transfer of the player from 27 January 2015 valid until 30 June 2015 (hereinafter: the first loan agreement).

4. The first loan agreement provides in its article 1 that “the formula of the loan will be onerous, without further charges, except of the monthly salaries of the [Claimant]”. It further provides in its article 2 that “Club E will be obliged to carry out all the expenses relative to the monthly salaries of the [Claimant], as it will be agreed in the individual employment contract between the parties”. It provides in its article 4 that “the [Claimant] will have the right to receive remuneration from the contractual relationship that he will have with Club E”. Furthermore, the first loan agreement provides “the [Claimant] sets free any obligation [Respondent], for all the expenses relative to the monthly salaries, sporting insurance, neither medical care, for the whole duration of this agreement”.

5. On 30 August 2015, the Claimant, the Respondent and the club from country B Club F signed a loan agreement for the temporary transfer of the Claimant valid until 31 December 2015 (hereinafter: the second loan agreement).

6. The second loan agreement provides in its article 2.5 that “Club F will be obliged to carry out all the expenses relative to the monthly salaries of the [Claimant], as it will be agreed in the individual employment contract between this parties”. It provides in its article 4.2 that “the [Claimant] sets free of any obligation [Respondent], for all the expenses relative to the monthly salaries, sporting insurance, neither medical care, for the whole duration of this agreement”.

7. On 11 November 2015, the Claimant put the Respondent in default of the salaries of June, July and August 2015 for a total of USD 22,500. In said default notice, the Claimant indicates that he was on loan with Club E until 30 May 2015. Furthermore, the Claimant reminded the Respondent that his then loan agreement with Club F would come to an end on 31 December 2015 and that he had no intention of extending it, he therefore requested the Respondent to initiate procedures for him to receive his visa to enter country D.

8. On 25 April 2016, the Claimant put the Respondent in default of the total amount of USD 241,125. The Claimant further states that the Respondent had failed to register the Claimant and reintegrate him with the team. The amounts claimed are broken down as follows:

a. USD 100,000 due at the start of the employment relationship;

b. USD 110,000 due at the start of the second year of the employment relationship;

c. USD 4,125 as three monthly salaries of 2016.

9. On 30 May 2016, the Claimant notified the Respondent of the unilateral termination of the employment contract on the basis that the Respondent had not replied to the previous default notices.

10. On 2 December 2015, and subsequently modified on 8 August 2016, the Claimant lodged a claim against the Respondent requesting the payment of a total of “USD 445,500” plus 5% interest p.a. from the relevant due dates, broken down as follows:

a. Outstanding remuneration of USD 233,541:

i. USD 100,000 due at the beginning of the employment relationship;

ii. USD 8,333 as salary for July 2015 calculated as being USD 7,500 plus USD 833 “as the proportional part of 10% per year of the amount of USD 100,000 as specified in [point I.2.b above]”;

iii. USD 8,333 as salary for August 2015 calculated as being USD 7,500 plus USD 833 “as the proportional part of 10% per year of the amount of USD 100,000 as specified in [point I.2.b above]”;

iv. USD 110,000 due on 15 January 2016;

v. USD 6,875 as five monthly salaries of January 2016 until May 2016 calculated as being USD 1,375 per month.

b. Compensation for breach of USD 211,625 corresponding to the residual value of the contract including contractual bonuses.

11. The Claimant asserts that in light of the outstanding remuneration and the Respondent’s refusal to register and reintegrate him with the team or to provide him with the necessary documents for his arrival in country D, he had just cause to terminate the employment contract and is entitled to compensation for the breach of the Respondent.

12. In spite of having been invited to do so, the Respondent did not reply to the claim of the Claimant.

13. In response to FIFA’s pertinent request, the Claimant stated that he had not signed an employment contract until 13 July 2016, when he signed with the club from country B Club G valid until 31 May 2018. The contract provides that the Claimant is entitled to ten monthly instalments of 88,000 between 1 August 2016 and 31 May 2017. The contract provides that “the second year of the contract the club and the [Claimant] have the right to review the contract financially based on the introduction of a season ago”.

II. Considerations of the Dispute Resolution Chamber

1. First, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 2 December 2015. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: the Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (2016 edition) the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from country B and a club from country D.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (2016 edition), and considering that the present claim was lodged on 2 December 2015, the 2015 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the aforementioned facts as well as the arguments and the documentation submitted by the parties. The Chamber, however, emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand. In particular, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

5. In continuation, the Chamber recalled that the parties had signed an employment contract valid from 15 January 2015 until 14 January 2018. In this regard, and considering the claim of the Claimant, the Chamber paid particular attention to the content of the clauses relating to salary provisions, notably the provisions for 2015 and 2016 which respectively provide “paid player in the first year the amount of 100,000 one hundred thousand US dollars received as provider contract and the remaining 10% distributed on a monthly salary for a year” and “paid player in the second year the amount of 110,000 one hundred and ten thousand US dollars received as provider contract and the remaining 15% distributed on a monthly salary for a year”. The members of the Chamber unanimously considered that the content of said provisions is vague and must therefore be subject to a degree of interpretation. In this regard, the DRC first considered the content of the clause pertaining to salaries due for 2017, i.e. “paid player in the third year the amount of 150,000 one hundred and fifty thousand US dollars received as presenter hold 15% and the rest distributed in monthly salaries for a year”. Subsequently, the DRC considered the information to be found on the Transfer Matching System, which confirmed that the salary for the period running from 1 January 2015 until 31 December 2015 totals USD 100,000, that the salary for the period running from 1 January 2016 until 31 December 2016 totals USD 110,000 and that the salary for the period running from 1 January 2017 until 31 December 2017 totals USD 150,000. Therefore, the DRC considered that the salary provision for 2017 as well as the information contained on TMS pertinently give a clearer indication of the intention of the parties.

6. Consequently, from the content of the employment contract, the information contained on TMS, in line with the aforementioned art. 6 par. 3 of Annexe 3 of the Regulations and in particular the salary provisions for 2017, the members of the Chamber concluded that the employment contract inter alia provides for the total payment of USD 100,000 for 2015, with USD 10,000 payable at the beginning of 2015, and a monthly USD 7,500 payable thereafter. In continuation, it was noted that the contract provides for the total payment of USD 110,000 for 2016, with USD 16,500 payable at the beginning of 2016, and a monthly USD 7,792 payable thereafter. Finally the Chamber noted that the contract provides for the total payment of USD 150,000 for the 2017 season, with USD 22,500 payable at the beginning of 2017, and a monthly USD 10,625 payable thereafter.

7. Subsequently, the DRC noted that the Claimant had lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause on 30 May 2016 on the basis that, in spite of having put the Respondent in default of outstanding remuneration on two previous occasions, the Respondent had allegedly failed to pay the Claimant salaries due for the months of July and August 2015, the amount due at the beginning of 2016, in addition to salaries due between January 2016 and May 2016. Consequently, the Claimant requests to be awarded outstanding remuneration as well as the payment of compensation for breach of the employment contract.

8. Furthermore, the members of the Chamber noted that the Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. Consequently, the Chamber deemed that the Respondent had renounced its right of defence and, thus, had accepted the allegations of the Claimant.

9. As a consequence of the aforementioned consideration, the members of the Chamber concurred that in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken on the basis of the documents on file, in other words, upon the statements and documents presented by the Claimant.

10. In continuation, the members of the Chamber recalled that the Claimant inter alia requested to be paid USD 100,000 as an instalment due at the beginning of the employment relationship. In this regard, the DRC took into particular account the considerations to be found in points II./5 and II./6 above, and concluded that in light of the salary provisions provided for in the contract, the relevant payment was not due, and therefore decided to reject the Claimant’s claim in this regard.

11. On account of the aforementioned, and in particular in light of the considerations to be found under points II./6 and II./9 above, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant, until 30 May 2016, i.e. the date on which the Claimant terminated the employment contract, the total amount of USD 70,460 as salaries due for the months of July and August 2015 totalling USD 15,000, the instalment due at the beginning of 2016 in the amount of USD 16,500, in addition to salaries due between January 2016 and May 2016 totalling USD 38,960. Furthermore, the Chamber recalled that the Claimant asserted that the Respondent had failed to register the Claimant upon his return from loan, and in line with the considerations to be found in point II./9 above, concluded that this assertion had remained undisputed. In consideration of the above, and considering that the Respondent had repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 30 May 2016 and that, as a result the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant.

12. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of USD 70,460 as of the day following the day on which the relevant instalments fell due.

13. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the Chamber focused its attention on the consequences of such a termination. In this regard, the members of the Chamber determined that the Respondent was not only to pay the amount of USD 70,460 plus interest as outstanding remuneration to the Claimant, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.

11. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the Respondent in the case at stake. In doing so, the members of the Chamber first recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

12. In application of the relevant provision, the Chamber held that it first had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

13. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable.

14. Bearing the foregoing in mind, as well as the claim of the Claimant, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 14 January 2018. Consequently, the Chamber concluded that the amount of USD 204,544 (i.e. remuneration from June 2016 until December 2017) serves as the basis for the determination of the amount of compensation due for breach of contract.

15. In continuation, the Chamber verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

16. Indeed, on 13 July 2016 the Claimant found employment with the club from country B Club G. In accordance with the pertinent employment contract valid until 31 May 2018, which has been made available by the Claimant, the Claimant was entitled to receive a monthly salary of 88,000. Consequently, the Chamber established that the value of the new employment contract concluded between the Claimant and Club G for the period running from August 2016 until December 2017 amounted to approximately USD 11,544.

17. Consequently, on account of all of the aforementioned considerations and the specificities of the matter at hand, the Chamber decided that the Respondent must pay the amount of USD 193,000 to the Claimant, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

18. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of USD 193,000 as of 2 December 2015, i.e. the date on which the claim was lodged.

19. In conclusion, for all the above reasons, the members of the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay to the Claimant the amount of USD 70,460 as outstanding remuneration and USD 193,000 as compensation for breach of contract in addition to the relevant interest.

20. The members of the Chamber concluded their deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 70,460 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 1 August 2015 on the amount of USD 7,500;

b. 5% p.a. as of 1 September 2015 on the amount of USD 7,500;

c. 5% p.a. as of 16 January 2016 on the amount of USD 16,500;

d. 5% p.a. as of 1 February 2016 on the amount of USD 7,792;

e. 5% p.a. as of 1 March 2016 on the amount of USD 7,792;

f. 5% p.a. as of 1 April 2016 on the amount of USD 7,792;

g. 5% p.a. as of 1 May 2016 on the amount of USD 7,792;

h. 5% p.a. as of 1 June 2016 on the amount of USD 7,792.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of USD 193,000 plus 5% interest p.a. as from 2 December 2015 until the date of effective payment.

4. In the event that the amounts and interest due to the Claimant in accordance with the aforementioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, 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 are to be made and to notify the Dispute Resolution Chamber of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Marco Villiger

Deputy Secretary General

Encl. CAS directives