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 June 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 June 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Mario Gallavotti (Italy), member

Guillermo S. Guale (Ecuador), member

Johan van Gaalen (South Africa), member

Joaquim Evangelista (Portugal), 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 arisen between the parties

I. Facts of the case

1. On 6 September 2016, the Player of Country B, Player A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent) signed an employment contract valid “until the end of the Professional League of Country D in 2016/17 equal to 1395/1396 to Calendar of Country D”.

2. The contract provides for the total payment of USD 180,000, as follows:

a. USD 15,000 in cash on the day of signing of the contract.

b. USD 15,000 in cash on 10 September 2016 with the added condition that “if this payment is not done, the [Claimant] is not allowed to attend training and official games without any consequences”.

c. USD 30,000 “will be paid in cash before the 9th game in league 2016-17 season”.

d. USD 60,000 “before the second half of the season starts and the rest will be paid as monthly salary in second half of the season”.

3. The contract contains extra provisions, as follows:

a. if the Claimant has not received at least 65% of his total salary from the Respondent ten days “before ending the mid season of the League of Country D (…) the [Claimant] is with immediate effect free from every contract with the [Respondent] and leave the [Respondent] to another club as a free player (sic.)”.

b. “if any the is a maximum delay of the [Claimant] salary for more than 10 days, the [Claimant] is with immediate effect free”.

c. “the [Claimant] is allowed to break his contract unilaterally in Midseason by informing the [Respondent] at least 10 days before the end of midseason transfer window. In this case the [Respondent] has to pay him only USD 90,000 until midseason (sic)”.

4. The contract equally provides that “the [Claimant] shall be entitled to terminate this contract by 7 days (Five days) notice in writing by Fax and Email to the [Respondent] if the [Respondent] (sic)” is found “guilty of serious or persistent breach of the terms and conditions of this contract (sic)”.

5. The contract provides that the parties agree that “any dispute between the [Respondent] and the [Claimant] shall be referred to FIFA”.

6. On 27 December 2016, the Claimant put the Respondent in default of a total of USD 105,000, setting a time limit of ten days to the Respondent for it to cure said default.

7. On 8 January 2017, the Claimant lodged a claim against the Respondent in front of FIFA, requesting to be paid outstanding remuneration and compensation for breach as follows:

a. Outstanding remuneration of USD 105,000:

i. USD 15,000 due on 10 September 2016, plus 5% interest p.a. from 11 September 2016.

ii. USD 30,000 allegedly due on 20 October 2016, plus 5% interest p.a. from 21 October 2016.

iii. USD 60,000 allegedly due on 23 December 2016, plus 5% interest p.a. from 24 December 2016.

b. Compensation of USD 60,000 corresponding to the Claimant’s salaries due for the entire second half of the season, plus 5% interest p.a. from the date of claim.

8. The Claimant asserts that the lodging of the claim in front of FIFA is to be considered as the unilateral termination of the contract with just cause.

9. The Claimant claims that until the moment the claim was lodged, the Respondent owed him a total of USD 120,000 but only paid him USD 15,000 upon signing the contract.

10. The Claimant claims to have played in nine matches until he lodged his claim. Furthermore, he states that his absence as from the 15th match day of the Championship of Country D on 23 December 2016, can not be held against him in light of the contract which provides that should the payment due on 10 September 2016 not be paid, he would be entitled not to train or play in official games.

11. The Claimant considers that USD 30,000 was due to be paid after the ninth game of the league, i.e. 20 October 2016 at the latest. The Claimant further considers that the “second half of the season starts” on 23 December 2016.

12. The Claimant indicates that the clause indicating that if the Claimant has not received 65% of his salaries by “midseason” he will be a free player, has no legal effect, is potestative and is only in favour of the Respondent. He therefore considers that it can not be applied in the present matter.

13. He further considers that no mitigation to any amount of compensation awarded may be applied, notably since the fault of terminating the contract lies entirely with the Respondent, the breach of contract is noted by the reception by FIFA of the claim and that the residual value of the contract does not take into account any advantages or bonuses provided for in the contract.

14. In spite of having been invited to do so, the Respondent has failed to reply to the claim within the deadline set by the FIFA administration.

15. Upon FIFA’s pertinent request, the Claimant indicated that he had signed an employment contract with the Club of Country E, Club F, on 30 January 2017, but indicated the contract was never executed and he was never registered.

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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 8 January 2017. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2017; hereinafter: 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 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 an Player of Country B and a Club of 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 8 January 2017, the 2016 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 above-mentioned 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 (hereinafter: TMS).

5. The members of the Chamber started by acknowledging that the parties had signed an employment contract valid “until the end of the Professional League of Country D in 2016/2017” which provided for the payment of a total of USD 180,000 with USD 15,000 payable upon the signing of the contract as well as USD 15,000 payable on 10 September 2016. In addition, the Chamber noted that before the ninth league game the Claimant is entitled to the payment of USD 30,000. In this regard, the Chamber noted from the documentation on file that said amount fell due on 20 October 2016, since the ninth league game was played on 21 October 2016. In continuation, the members of the Chamber noted that USD 60,000 was to be paid to the Claimant before the “second half of the season starts and the rest will be paid as monthly salary in second half of the season”, and therefore considered that a further USD 60,000 had to be paid as a monthly salary from the beginning of the second half of the season until the end of the validity of the employment contract.

6. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause on the basis of outstanding remuneration by lodging the present claim in front of FIFA on 8 January 2017. The Chamber noted that the Claimant asserts having not been paid USD 15,000 on 10 September 2016, nor was he paid USD 30,000 due before the ninth league game as well as USD 60,000 due at the beginning of the second half of the season.

7. The DRC 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 to its right of defence, and thus, had accepted the allegations of the Claimant.

8. 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 already on file, in other words, on the statements and documents presented by the Claimant.

9. Bearing in mind the foregoing, the Chamber went on to analyse the arguments and the documentation provided by the Claimant. In this respect, the DRC noted that, in spite of the fact that the contract stipulated rather unclear payment dates, it should be established that the amounts of USD 15,000 (cf. point I.2.b) due on 10 September 2016, and USD 30,000 (cf. point I.2.c) due before 21 October 2016 had fallen due and their non-payment remained undisputable by the Respondent.

10. On this basis, the Chamber deemed that at the time the Claimant had terminated the employment contract, i.e. 8 January 2017, he was owed USD 60,000 and had only been paid USD 15,000. The Chamber therefore noted that at the time of termination, 75% of the amounts having fallen due to the Claimant had remained unpaid, and that this amount also corresponds to 25% of the total value of the contract.

11. On account of the aforementioned, in particular in view of the considerations under point II./7. and II./8. above, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant, until 8 January 2017, date on which the Claimant de facto terminated the contract, the total amount of USD 45,000. Consequently, 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 8 January 2017 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact 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 a rate of 5% p.a. on the amount of USD 15,000 and USD 30,000 as of the days following the days on which each instalment fell due, i.e. 11 September 2016 and 21 October 2016 respectively.

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 termination. In this regard, the members of the Chamber determined that the Respondent was not only to pay the amount of USD 45,000 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.

14. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the Respondent in the matter at hand. 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 of 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.

15. 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 previously agreed on an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber noted that the contract inter alia provides that Claimant is “allowed to break his contract unilaterally in Midseason by informing the club at least 10 days before the end of midseason transfer window. In this case the club has to pay him only USD 90,000 until midseason”.

16. The Chamber duly analysed the content of said clause and acknowledged that the aforementioned clause does not apply to the current case as the reason for termination for the Claimant was a breach by the Respondent and not the alleged right to terminate the contract until mid-season, as stipulated by said clause.

17. 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 members of 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation relating to contractual breach has to be assessed by the Chamber on a case-by-case basis, taking into account all specific circumstances of the relevant matter.

18. Bearing the foregoing in mind as well as the claim of the Claimant, the members of the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until the end of the 2016/2017 season. Consequently, the Chamber concluded that the amount of USD 120,000 (i.e. USD 60,000 due “before the second half of the season starts” and USD 60,000 to be paid “as monthly salary in second half of the season”) serves as the basis of for the determination of the amount of compensation due for breach of contract.

19. 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.

20. Indeed, on 30 January 2017, the Claimant signed an employment contract with the Club of Country E, Club F, which would have entitled the player to EUR 1,800 per month until 30 June 2017. In this regard, the Chamber noted that the Claimant asserted that said contract was never executed and he was never registered. The members of the Chamber acknowledged that from the information contained on TMS, the assertions of the Claimant were correct, and consequently deemed that the Claimant was unable to mitigate his damages.

21. Consequently, on account of all the aforementioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of USD 120,000 to the Claimant which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

22. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 8 January 2017, until the date of effective payment.

23. In conclusion, for all the above reasons, the Chamber decided to partially accept the Claimant´s claim and that the Respondent must pay to the Claimant the amount of EUR 45,000 as outstanding remuneration and EUR 120,000 as compensation for breach of contract, plus the relevant interest.

24. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

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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 45,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 11 September 2016 on the amount of USD 15,000;

b. 5% p.a. as of 21 October 2016 on the amount of USD 30,000.

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 120,000 plus 5% interest p.a. as from 8 January 2017 until the date of effective payment.

4. In the event that the amounts plus 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.

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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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives