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

arisen between the parties

I. Facts of the case

1. On 10 July 2015, 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 (hereinafter: the contract) valid as from 11 July 2015 until 31 May 2016.

2. According to art. 10 of the contract:

a. “10.1 a) the gross salary for the contract period between 11.07.2015-31.05.2016 is 38.393 XX/month, equivalent of 6.500 euro netto” […];

b. “10.2 […] II. the Club will pay rent in the amount of 1.350 XX/month, for renting an apartment or house, based on the renting contract” [...];

c. “IV. The Club will pay a 300 euro bonus for every draw, 600 euro for win […] the Player must play in the first line-up for minimum 45 minutes” […];

d. “V. The player will receive an instalment-bonus of 22.500 netto until 1th February 2016” […];

e. “VI. Bonuses will be paid in Currency X, at the exchange-rate of the day of payment” […];

f. “10.4 The salary shall be paid on the 15th of the month following the month worked”.

3. Pursuant to art. 17.1 of the contract, “this agreement may be terminated pursuant to the applicable sports regulations and the labour law”.

4. In accordance with art. 18 of the contract:

a. “18.1 Any disputes related to non-compliance, total or partial, of any obligation under this Agreement, as agreed by the parties, shall be settled amicably. Should the parties fail to reach such an agreement, they have the right to refer the dispute to the competent judicial entities within Football Federation of Country D, pursuant to the provisions in the Statute and Regulations of the Football Federation of Country D/League of Country D, or to refer the dispute for settlement before the common law courts”[…];

b. “19.3 The Labour Law applies to the employment agreements entered into by sports clubs and players, with the derogations provided for in the regulations issued by the football ruling entities”.

5. According to art. 19 of the contract:

a. “19.1 the football regulations applicable to this agreement are the statutes, the regulations and decisions of FIFA, UEFA, Football Federation of Country D or League of Country D, as applicable” […];

b. “19.4 this agreement shall be governed by Law no. 69/2000, as modified and amended and, as the case may be, the applicable Law of Country D and the Labour Law of Country D”.

6. On 22 December 2015, the Claimant sent a letter to the Respondent (hereinafter: the default notice) through which he put the Respondent in default for the payment of the following amounts, setting a deadline until 30 December 2015 in order to remedy the default:

a. EUR 13,000 for outstanding salaries, corresponding to the salaries of October and November 2015;

b. EUR 1,550 for match bonuses pursuant to art. 10.2.IV of the contract;

c. 4,050 for accommodation allowances as per art. 10.2.II of the contract, corresponding to the months from October to December 2015.

7. On 4 January 2016, the Claimant sent a letter to the Respondent, by means of which he informed the Respondent that he received no payment or reply to his default notice and therefore terminated the contract with immediate effect for breach of contract by the Respondent (hereinafter: the termination letter). In continuation, the Claimant also requested again the payment of the outstanding amounts detailed in the default notice, “plus compensation for the unjustified breach of contract committed by Club C during the Protected Period, amounting to the residual value of the Contract, increased with the default interest at the rate of 5% per annum”.

8. Also on 4 January 2016, the Claimant lodged a claim against the Respondent before FIFA for breach of contract, requesting the payment of the following:

a) EUR 21,050 and 4,050 for outstanding amounts, broken down as follows:

i) EUR 19,500 for outstanding salaries, corresponding to the months from October until December 2015;

ii) EUR 1,550 for the following match bonuses:

“ - EUR 800 for the game with Club E played in September 2015 for the Cup F (as promised by the [Respondent]);

- EUR 300 (i.e. 50% of EUR 600) for the game with Club G played on 28 November 2015;

- EUR 150 (i.e. 50% of EUR 300) for the game with Club H played on 1 December 2015; and

- EUR 300 for the game with Club J on 11 December 2015.”;

iii) 4,050 for accommodation allowances, corresponding to the months from October until December 2015;

“plus interest of 5% p.a. as follows:

a. on 1,350 as from 16 October 2015 until the date of effective;

b. on EUR 800 as from 16 October 2015 until the date of effective;

c. on EUR 6,500 as from 16 November 2015 until the date of effective payment;

d. on 1,350 as from 16 November 2015 until the date of effective payment;

e. on EUR 6,500 as from 16 December 2015 until the date of effective payment;

f. on 1,350 as from 16 December 2015 until the date of effective payment;

g. on EUR 300 as from 16 December 2015 until the date of effective payment;

h. on EUR 150 as from 4 January 2016 until the date of effective payment; and

i. on EUR 300 as from 4 January 2016 until the date of effective payment”;

b) EUR 32,500 plus 22,500 as compensation for breach of contract, corresponding to the remaining value of the contract, whereby:

- EUR 32,500 for the remaining salaries;

- 22,500 “as a down payment due by 1 February 2016 (Clause 10.2.V of the Contract)”;

c) sporting sanctions on the Respondent.

9. In his claim, the Claimant explained that the Respondent breached the contract by neither paying the due amounts nor replying to his default notice and termination letter. In addition, the Claimant emphasized that he terminated the contract with just cause as the unpaid salaries (i.e. the monthly salaries of October and November 2015) “are substantial” and also due to the fact that “the club’s lack of interest in the future performance of the contract and its persistent non-compliance of the financial terms of the contract severely endangered the position and existence of the [Claimant] and caused him to lose the trust and confidence he had in the future performance of the contract by the [Respondent]”.

10. On 7 January 2016, the Respondent sent a letter to the Claimant by means of which it agreed on the termination of the contract, but with effect from 1 January 2016 (hereinafter: the Respondent’s letter). Moreover, within the same letter, the Respondent acknowledged “the amounts that the player requests as debt of the club towards him”, with the following exceptions:

1. For the game with Club E, played in September 2015 in the Cup F the amount is 565 euro, according to decision of Board of Directors;

2. For the game with Club H, played on 1st of December 2015, there is no bonus awarded because the player didn’t play at least 45 minutes […]”.

Furthermore, the Respondent stated within said letter to “agree to pay the whole amount left for the player until 20th January 2016”.

11. On 7 January 2016, the Claimant amended his claim, modifying his requests as follows:

a) EUR 20,815 and 4,050 for outstanding amounts, broken down as follows:

i) EUR 19,500 for outstanding salaries, corresponding to the months from October until December 2015;

ii) EUR 1,315 for the following match bonuses:

“ - EUR 565 for the game with Club E played in September 2015 for the Cup F;

- EUR 300 (i.e. 50% of EUR 600) for the game with Club G played on 28 November 2015;

- EUR 150 (i.e. 50% of EUR 300) for the game with Club H played on 1 December 2015; and

- EUR 300 for the game with Club J on 11 December 2015.”;

iii) 4,050 for accommodation allowances, corresponding to the months from October until December 2015;

“plus interest of 5% p.a. as follows:

a. on 1,350 as from 16 October 2015 until the date of effective;

b. on EUR 565 as from 16 October 2015 until the date of effective;

c. on EUR 6,500 as from 16 November 2015 until the date of effective payment;

d. on 1,350 as from 16 November 2015 until the date of effective payment;

e. on EUR 6,500 as from 16 December 2015 until the date of effective payment;

f. on 1,350 as from 16 December 2015 until the date of effective payment;

g. on EUR 300 as from 16 December 2015 until the date of effective payment;

h. on EUR 150 as from 4 January 2016 until the date of effective payment; and

i. on EUR 300 as from 4 January 2016 until the date of effective payment”;

b) EUR 32,500 plus 22,500 as compensation for breach of contract, corresponding to the remaining value of the contract, whereby:

- EUR 32,500 correspond to the remaining salaries;

- 22,500 “as a down payment due by 1 February 2016 (Clause 10.2.V of the Contract)”;

c) sporting sanctions on the Respondent.

In addition, the Claimant stressed that, in view of the Respondent’s letter of 7 January 2016, the latter did not dispute the termination of the contract and acknowledged “a debt of three monthly salaries, from October to December 2015” and also “a debt of EUR 565 as a match bonus for the game played against Club E for the Cup F in September 2015”.

12. In its reply, the Respondent requested the dismissal of the Claimant’s claim and, on a preliminary basis, contested FIFA’s jurisdiction due to the fact that the parties allegedly “selected the Labour Law of Country D to be the applicable law applying to the contract”, according to which “in Country D the labor jurisdiction belongs exclusively to the competent courts of law”.

13. As to the merits, the Respondent emphasized that the default notice and the termination letter were sent by the Claimant when ”all the player and the board of the club were in vacation” and the Respondent was allegedly informed of the Claimant’s intention only on 4 January 2016.

14. Moreover, the Respondent considered that, according to Law of Country D, the termination by the Claimant should be qualified as “resignation” which, pursuant to Labour Code of Country D, is a personal act which cannot be expressed through representatives and produces effect only after a twenty days notice. In view of the above, as in the case at stake such “resignation” was not personally communicated, the Respondent held that the same was null and void.

15. Finally, the Respondent argued to be “still in a very big financial difficulty” and asked for “understanding and the continuation of the contract”.

16. In his replica, the Claimant insisted on his initial requests and, firstly, considered that FIFA’s jurisdiction must be assessed “on the basis of the lex arbitri, i.e. the FIFA Regulations on the Status and Transfer of Players”, so that there was no room for application for Law of Country D. In particular, the Claimant underlined that the Respondent failed to provide evidence of the veracity of the invoked law.

17. Moreover, the Claimant maintained that the jurisdiction clause contained in the contract - i.e. art. 18.1 - did not refer to the exclusive and mandatory competence of judicial bodies different from those of FIFA. In view of the above, the Claimant held that such clause could not be construed as a waiver to FIFA’s jurisdiction.

18. In addition, the Claimant stressed that the contract was terminated with just cause in accordance with art. 17.1 and art. 19.1 of the contract and that the Respondent did not contest the Claimant’s right to terminate the contract “pursuant to the applicable sport regulations”, but only under the Law of Country D.

19. In continuation, the Claimant maintained that the Respondent did not prove that the Respondent’s board was on holiday when he sent the default notice and the termination letter and insisted on the fact that the Respondent “did not bother to reply to the [Claimant’s] default notice”.

20. Furthermore, the Claimant emphasized that the Respondent did not contest the amounts requested by the Claimant. In addition, as to the outstanding salaries, the Claimant held that the Respondent acknowledged its debt towards him in the Respondent’s letter and also in a further letter, dated 9 May 2016, whereby the Respondent asked the Claimant to accept a new deadline for the payment of “the sum of 91,800 XX player’s due” which, according to the Claimant, corresponds to EUR 20,815, i.e. the claimed amount for salaries and match bonuses.

21. Despite having been invited to do so, the Respondent did not submit any comments to the Claimant’s replica.

22. On 10 August 2016, the Claimant informed FIFA that he received all the claimed outstanding amounts from the Respondent and amended his initial requests as follows:

a) EUR 32,500 and 22,500 as compensation for breach of contract, plus interest of 5% p.a. on each amount as from 4 January 2016 until the date of effective payment;

b) sporting sanctions on the Respondent.

23. Upon request of FIFA, the Claimant also informed that, on 14 January 2016, he concluded an employment contract with the Club of Country B Club K valid from the date of signature until 31 May 2016, according to which he was entitled to a monthly salary of 7,950.

II. Considerations of the Dispute Resolution Chamber

1. First of all, 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 4 January 2016. Consequently, the edition 2015 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 (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 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2016), the Dispute Resolution Chamber would, in principle, be competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Player of Country B and a Club of Country D.

3. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of art. 18 and 19 of the contract, stating that, according to Law of Country D, employment-related disputes fall within the exclusive jurisdiction of the Courts of Law of Country D.

4. On the other hand, the Chamber noted that the Claimant insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the Respondent.

5. With the aforementioned considerations in mind, and prior entering into the analysis of its competence, the Chamber wished to recall that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, without prejudice to the right of any player or club to seek redress before a civil court for employment-related disputes, it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement.

6. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that a deciding body other than the DRC is competent to settle an employment-related dispute between a club and a player of an international dimension, is that the jurisdiction of the relevant derives from a clear reference in the employment contract.

7. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute contained a clear and exclusive jurisdiction clause in favour of the Labour Courts of Country D.

8. In this respect, the Chamber first of all referred to art. 19 of the contract, according to which “the football regulations applicable to this agreement are the statutes, the regulations and decisions of FIFA, UEFA, Football Federation of Country D or League of Country D, as applicable” […]; this agreement shall be governed by Law no. 69/2000, as modified and amended and, as the case may be, the applicable Law of Country D and the Labour Law of Country D”. The Chamber concluded that such clause is a not a clause of choice of forum, but rather a choice of law. Furthermore, the said clause, while referring to the Law of Country D, also specifically refers to the “statutes, the regulations and decisions of FIFA”.

9. Consequently, the DRC affirmed that art. 19 of the contract does not provide for the exclusive jurisdiction of the Courts of Country D in case of dispute between the parties to the contract.

10. Furthermore, the Chamber recalled that art. 18 par. 1 of the employment contract stipulates that: “Any disputes related to non-compliance, total or partial, of any obligation under this Agreement, as agreed by the parties, shall be settled amicably. Should the parties fail to reach such an agreement, they have the right to refer the dispute to the competent judicial entities within Football Federation of Country D, pursuant to the provisions in the Statute and Regulations of the Football Federation of Country D/League of Country D, or to refer the dispute for settlement before the common law courts”.

11. In view of the aforementioned clause, the members of the DRC were eager to emphasize that art. 18 par. 1 of the employment contract is in clear contradiction with the allegation by the Respondent that the Courts of Country D would have exclusive jurisdiction to deal with this matter. Therefore, the members of the Chamber considered that the Respondent could not prove that the Courts of Country D would be exclusively competent in case of dispute between the parties to the contract.

12. In view of the above, the Chamber established that the Respondent’s objection to the competence of FIFA to deal with the present matter had to be rejected and that the DRC is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

13. In continuation, 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 (edition 2016), and considering that the present claim was lodged on 4 January 2016, the 2015 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

14. 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.

However, the Chamber 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.

15. First of all, the Chamber noted that the parties entered into an employment contract valid as from 11 July 2015 until 31 May 2016, which entitled the Claimant to a salary of EUR 6,500 per month.

16. Furthermore, the DRC acknowledged that it was undisputed that the Claimant put the Respondent in default for the payment of outstanding remuneration on 22 December 2015 and thereafter terminated the contract on 4 January 2016.

17. The Chamber further noted that the Claimant, on the same date of the termination of the contract, lodged his claim against the Respondent, arguing that he had just cause to terminate the contract as the Respondent did not pay him the salary due for the months of October and November 2015 plus other amounts for match bonuses and accommodation allowances.

18. In continuation, the DRC noted that the Respondent, on 7 January 2016, agreed on the termination of the contract and committed to pay the outstanding remuneration, which, as confirmed by the Claimant on 10 August 2016, he eventually did.

19. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute was to determine whether the contract had been unilaterally terminated with or without just cause by the Claimant on 4 January 2016 and the consequences thereof.

20. In view of the above, the DRC first of all took into consideration the content of art. 14 of the Regulations, which provides that “a contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause”.

21. The Chamber stressed that the definition of just cause and whether just cause exists shall be established in accordance with the merits of each particular case.

22. In this context, the members of the DRC recalled that the parties to the contract did not dispute the fact that the Respondent, at the date of termination, failed to pay to the Claimant two monthly salaries, plus other amounts for match bonuses and accommodation allowances. What is more, the Chamber recalled that the Respondent eventually paid the outstanding amounts, thereby acknowledging the debt it had towards the Claimant at the moment of the termination.

23. In view of the above, the Chamber deemed that it could be established that, at the date of termination, the Respondent had failed to pay the due salary for October and November 2015, plus match bonuses and accommodation allowances, without any valid reason. Thus, it is clear that the Respondent was in breach of its contractual obligations towards the Claimant. In this respect, the Chamber wished to point out that the Respondent did not deny having received the player’s default notice but rather only argued, without any proof, that he was informed about it only on 4 January 2016 as “all the player and the board of the club were in vacation”.

24. As such, the Chamber established that the Claimant terminated the contract with just cause.

25. In view of the foregoing, the DRC concluded that, in accordance with art. 17 par. 1 of the Regulations and its long-standing jurisprudence, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant on 4 January 2017 and, consequently, must pay an amount of compensation to the Claimant.

26. On account of the above, the Chamber considered that 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.

27. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent contract contains 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 contract at the basis of the matter at stake.

28. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until 31 May 2016 and concluded that the Claimant would have received a total remuneration of EUR 32,500 and 22,500, had the contract been executed until its expiry date.

29. 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.

30. Indeed, the Claimant found employment with the Club of Country B, Club K, with which he signed a contract valid from 14 January 2016 until 31 May 2016, with a total salary of 35,775, which equals approximately to EUR 18,200.

31. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the Respondent must pay the Claimant the amounts of EUR 14,300 and 22,500, which are to be considered a reasonable and justified compensation for the breach of contract in the matter at hand.

32. In addition and with regard to the Claimant's request for interest, the Chamber decided that the Claimant is entitled to 5% interest p.a. on said amount as of 4 January 2016 until the date of effective payment.

33. The members of the Chamber concluded their deliberations by rejecting any further claim of the Claimant.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, 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 amounts of EUR 14,300 and 22,500, plus 5% interest p.a. as from 4 January 2016 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned number 3. are not paid by the Respondent within the stated time limit, 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 remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to article 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