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 19 January 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 19 January 2017,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Wouter Lambrecht (Belgium), 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 31 December 2013, 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 (hereinafter: the contract) valid as from 1 January 2014 until 31 December 2017.

2. According to art. IV., par. 8 of the contract, the Claimant was entitled to a monthly salary of 2,150,000 to be paid “until the 10th day of the month following the current month”.

3. Pursuant to art. VI, par. 14 of the contract, “[the Claimant] is entitled to cancel the present contract with termination with cause in case [the Respondent] does not fulfil its obligation defined in [art.] IV. Termination with cause may be exercised by the [the Claimant] only after he demanded contractual performance from [the Respondent] in writing, with a time limit of at least 30 days and the deadline passed without effect”.

4. According to art. VII, par. 25 of the contract, “as regards issues no regulated by the present contract, the relevant provisions of Act XXII of 1992 on the Labour Code, Act I of 2004 on Sports, stipulations of the statutes of the Football Federation of country D and that of international football associations (FIFA,UEFA) shall prevail”.

5. Also on 31 December 2013, the parties entered into an “Individual Bonus Agreement” (hereinafter: the bonus agreement) pursuant to which the Respondent committed to pay the Claimant, inter alia:

- EUR 10,000 by 20 January 2014, EUR 10,000 by 20 January 2015, EUR 10,000 by 20 January 2016 and EUR 10,000 by 20 January 2017;

- 150,000 per month as rent allowance;

- all the payments under the bonus agreement were to be made “until the 20th day of the month following the current month”.

6. On 15 December 2015, the Claimant wrote a letter to the Respondent (hereinafter: the default notice), stating that “the [Respondent] did not comply with contractual obligations towards the Claimant as of the beginning of 2015” and - pursuant to par. 14 of the contract - put the Respondent in default of payment of the following amounts, granting thirty days in order to remedy the default:

i) 8,845,000 as outstanding salaries from April to August 2015;

ii) 300,000 as rent allowances from July to August 2015;

iii) EUR 10,000 plus interest as of 21 January 2015, “as the annual bonus”;

iv) EUR 50,000 plus interest as of 1 December 2012, as reimbursement of the cost of medical treatments occurred in 2012;

v) EUR 3,900 plus interest as of 25 May 2015, as reimbursement of the cost of treatments occurred in 2015 “so far”.

7. On 31 December 2015, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract, requesting the following:

a) 15,295,000 plus 5% interest for unpaid salaries for the period between April and December 2015;

b) 900,000 plus 5% interest for unpaid rent allowance for the period between July and December 2015;

c) EUR 10,000 plus 5% interest as of 21 January 2015, for the annual bonus “according to the paragraph 13 of the Individual Bonus Agreement”;

d) 53,750,000 and EUR 20,000, plus 5% interest as of the date of the decision, for compensation for breach of contract, broken down as follows:

- 53,750,000 corresponding to twenty-five monthly salaries for the period between December 2015 and December 2017;

- EUR 20,000 corresponding to two annual bonuses for the year 2016 and the year 2017, in the amount of EUR 10,000 each.

8. In his claim, the Claimant explained that he suffered an injury on 18 April 2015 during the warming up of a match with the Respondent and, on the same day, was taken to the clinic by the Respondent’s doctor in order to undergo some exams. The Claimant reported that the result of such exams was that “he was diagnosed with popliteal artery entrapment syndrome” and he had therefore to undergo surgery with subsequent medical treatments for rehabilitation. In particular, the Claimant emphasised that the surgery was performed “under the supervision of the Respondent’s medical doctor”, that the following treatments were followed “as prescribed by the Respondent’s medical doctor” and that the Respondent allowed him to go to country B for the medical treatments and the rehabilitation.

9. According to the Claimant, the Respondent did not reply to his default notice and refused “to pay any contractual obligation towards the [Claimant] as of April 2015”.

10. On 5 January 2016, the Claimant received a letter from the Respondent, dated 17 December 2015, by which the latter replied to the Claimant’s default notice, stating, inter alia, that:

- the Claimant was unable to work and, according to the law of country D, until the date of return to work he was not entitled to his salary but only to a “sickness benefit”, which is “a state responsibility” only;

- no agreement had been reached between the Respondent and Claimant regarding the payment of the costs for the Claimant’s medical treatments and that the Respondent was not obliged to pay such costs;

- the Respondent was “ready to negotiate with [the Claimant] and its aim is to settle the dispute in an amicable way”.

11. On 23 January 2016, the Claimant sent a letter to the Respondent whereby, inter alia, he replied to the Respondent’s letter dated 17 December 2015 pointing out that, notwithstanding his default notice, the Respondent did not pay the requested amounts and, therefore, he was terminating the contract.

12. In its reply to the claim, the Respondent firstly underlined that it was undisputed that the Claimant “was not able to perform his duties due to his illness” as of 19 April 2015 and considered that country D’s law was applicable to the contract. According to the Respondent, pursuant to country D’s law, “it can be established with certainty that until the [Claimant] is deemed incapable for work he is entitled to sickness benefit only but not to wage”.

13. In continuation, the Respondent argued that the payment of such “sickness benefit” was a “state responsibility” and alleged that the player received it. Consequently, the Respondent held that it was not its obligation to pay the “sickness benefit” and considered that, in accordance with country D’s law, it did not pay the salaries to the Claimant as of 19 April 2015. In this regard, the Respondent explained that the Claimant chose to register under the “Act E” which provides for a daily “sickness benefit” of 1,750 for every 1,000,000 earned by the Claimant as monthly gross amount. Thus, as it allegedly acted lawfully, the Respondent denied any breach of contract and argued that “in the absence of breach of contract, the [Respondent] shall not be subject to pay compensation for the [Claimant]”.

14. Furthermore, the Respondent acknowledged that the Claimant was entitled to the amounts claimed for rent allowance (900,000) and bonus (EUR 10,000). In particular, the Respondent pointed out that “the [Claimant] always received the amounts due to him, in accordance with the individual bonus agreement – as requested by him – in cash from the [Respondent’s] treasury”. Nonetheless, the Respondent alleged that the Claimant failed to withdraw the aforementioned amounts from the Respondent “for some reason which is incomprehensible to the [Respondent]”.

15. Finally, the Respondent considered that the Claimant waited until 23 January 2016 for terminating the contract, just to claim the bonus of EUR 10,000 “which was due to him until 20 January 2016, in accordance with the individual bonus agreement”. In the Respondent’s opinion, the Claimant was not entitled to claim for such bonus because of his “misuse of exercise of rights”.

16. In his replica, the Claimant rejected Respondent’s arguments and insisted on the fact that the Respondent did not fulfil its contractual obligations. In particular, the Claimant considered that country D’s law was not applicable and, in any case, its interpretation by the Respondent was false and misleading. In this context, the Claimant stressed that, in case the allegations of the Respondent were true, he would only be entitled to the 0,01% of his salary.

17. In addition, the Claimant stressed that the Respondent disregarded the fact that he “got injured while preparing for the official match according to the [Respondent’s] instruction” and that, at the moment the claim was lodged, the Respondent was in default of nine monthly salaries.

18. Despite having been invited by FIFA to do so, the Respondent did not submit its final comments.

19. Upon request of FIFA, the Claimant informed that he did not sign a new employment contract with any other club as from December 2015 until 5 December 2016.

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 31 December 2015. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; 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 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 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. 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 31 December 2015, the 2015 edition of said regulations (hereinafter: 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. 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.

5. First, the Chamber noted that the parties entered into an employment contract valid as from 1 January 2014 until 31 December 2017, which entitled the Claimant to a monthly salary of 2,150,000. In addition, the Chamber noted that, according to the bonus agreement concluded by the parties, the Respondent committed to pay the claimant a bonus of EUR 10,000 on the 20th January of each contractual year and 150,000 each month as rent allowance.

6. Furthermore, the DRC acknowledged that the Claimant put the Respondent in default of his outstanding remuneration on 15 December 2015 and, after having lodged his claim in front of FIFA, on 23 January 2016 he informed the Respondent of the termination of the contract.

7. In this context, the DRC noted that the Claimant alleged that the Respondent breached the contract as it failed to pay him the outstanding salaries for the months as of April until December 2015, for the total amount 15,295,000, as well as the agreed bonus of EUR 10,000 on 20 January 2015 and the rent allowance from July to December 2015, in the amount of 900,000.

8. Furthermore, the Chamber took note that the Claimant explained that he suffered an injury during the warming up of a match with the Respondent on 18 April 2015, after which he followed a rehabilitation program agreed with the Respondent. Moreover, the Claimant stated that the Respondent did not pay him any remuneration since the date of the injury.

9. The DRC also took note that conversely the Respondent acknowledged that the Claimant got injured and it however argued that, as the Claimant became unable to perform his duties as of 19 April 2015, he was entitled only to a “sickness benefit” payable by the State of country D, in accordance with country D’s law. Moreover, the Chamber noted that the Respondent acknowledged that the Claimant was entitled to the requested bonus and to the rent allowance.

10. In this context, the Chamber first wished to point out that, in accordance with the well-established jurisprudence of this Chamber, an injury or health condition of a player cannot be considered a valid reason to cease the payment of a player’s remuneration. In this regard, the Chamber highlighted that it is the club’s responsibility to secure the continuation of payment of remuneration in such cases, possibly by means of adequate insurance. Furthermore, the Chamber took into account that it was undisputed that the Respondent had ceased the payment of the player’s remuneration as early as 19 April 2015.

11. In casu, the DRC pointed out that the Respondent should have properly insured the player for any injury and/or incapacity in order to cover any such risks. In this regard, the members of the Chamber, referring to the principle of the burden of proof explicitly stipulated in art. 12 par. 3 of the Procedural Rules, stressed that the documentary evidence submitted by the Respondent was not convincing in this respect. In particular, the members of the Chamber underlined that the Respondent did not prove at the Chamber’s satisfaction that the Claimant was entitled let alone that he actually received any kind of “sickness benefit”.

12. On account of the aforementioned considerations, the members of the Chamber concurred that the Respondent failed to pay the Claimant’s salary as of 19 April 2015 until December 2015 without any valid reason and, therefore, it was in breach of its contractual obligations towards the Claimant for a significant period of time.

13. In view of the above, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract and considered that such termination occurred when the Claimant lodged his claim in front of FIFA, i.e. 31 December 2015, as on this date the Claimant requested, inter alia, compensation for breach of contract.

14. As a consequence thereof, the members of the Chamber concurred that the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

15. 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, first of all, in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent is liable to pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination, i.e.:

a) 15,295,000, corresponding to the Claimant’s salary as from April until November 2015;

b) EUR 10,000, corresponding to the bonus due on 20 January 2015;

c) 900,000 corresponding to the rent allowance as from April until December 2015.

16. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the members of the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the above-mentioned amounts as follows:

a) 5% p.a. as of 21 January 2015 on the amount of EUR 10,000;

b) 5% p.a. as of 11 May 2015 on the amount of 245,000;

c) 5% p.a. as of 11 June 2015 on the amount of 2,150,000;

d) 5% p.a. as of 11 July 2015 on the amount of 2,150,000;

e) 5% p.a. as of 11 August 2015 on the amount of 2,150,000;

f) 5% p.a. as of 21 August 2015 on the amount of 150,000;

g) 5% p.a. as of 11 September 2015 on the amount of 2,150,000;

h) 5% p.a. as of 21 September 2015 on the amount of 150,000;

i) 5% p.a. as of 11 October 2015 on the amount of 2,150,000;

j) 5% p.a. as of 21 October 2015 on the amount of 150,000;

k) 5% p.a. as of 11 November 2015 on the amount of 2,150,000;

l) 5% p.a. as of 21 November 2015 on the amount of 150,000;

m) 5% p.a. as of 11 December 2015 on the amount of 2,150,000;

n) 5% p.a. as of 21 December 2015 on the amount of 150,000;

o) 5% p.a. as of 21 January 2016 on the amount of 150,000.

17. In continuation, the Chamber decided that, in accordance with art. 17 par. 1 of the Regulations, the Respondent is liable to pay compensation for breach of contract to the Claimant.

18. In view 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.

19. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent contract and the bonus agreement contain 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 such compensation clause was neither included in the contract, nor in the bonus agreement, at the basis of the matter at stake.

20. As a consequence, the members of the Chamber determined that the prejudice suffered by the Claimant in the present matter had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. In this regard, the DRC emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter, as well as the Chamber’s specific knowledge of the world of football and its experience gained throughout the years.

21. Along these lines, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the contract and of the bonus agreement until 31 December 2017 and concluded that, had the contract been executed until its expiry date, the Claimant would have received a total remuneration of 53,750,000 and EUR 20,000 respectively, comprised of:

- 53,750,000 corresponding to monthly salaries as of December;

- EUR 20,000 corresponding to the bonuses due on 20 January 2016 and 20 January 2017.

22. In continuation, the Chamber verified as to whether the Claimant had signed an employment contract with another Respondent during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. In this regard, the Chamber noted that, according to the Claimant´s declaration, he had not been able to sign an employment contract with another club during the relevant period of time.

23. Consequently, on account of all of the above-mentioned considerations, the Chamber decided that the Respondent must pay the amounts of 53,750,000 and EUR 20,000 as compensation for breach of contract to the Claimant, which are to be considered a reasonable and justified compensation for the breach of contract in the matter at hand.

24. 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 amounts as of 19 January 2017 until the date of effective payment, as explicitly requested by the Claimant.

25. 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 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 amounts of 16,195,000 and EUR 10,000, plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 21 January 2015 on the amount of EUR 10,000;

b. 5% p.a. as of 11 May 2015 on the amount of 245,000;

c. 5% p.a. as of 11 June 2015 on the amount of 2,150,000;

d. 5% p.a. as of 11 July 2015 on the amount of 2,150,000;

e. 5% p.a. as of 11 August 2015 on the amount of 2,150,000;

f. 5% p.a. as of 21 August 2015 on the amount of 150,000;

g. 5% p.a. as of 11 September 2015 on the amount of 2,150,000;

h. 5% p.a. as of 21 September 2015 on the amount of 150,000;

i. 5% p.a. as of 11 October 2015 on the amount of 2,150,000;

j. 5% p.a. as of 21 October 2015 on the amount of 150,000;

k. 5% p.a. as of 11 November 2015 on the amount of 2,150,000;

l. 5% p.a. as of 21 November 2015 on the amount of 150,000;

m. 5% p.a. as of 11 December 2015 on the amount of 2,150,000;

n. 5% p.a. as of 21 December 2015 on the amount of 150,000;

o. 5% p.a. as of 21 January 2016 on the amount of 150,000.

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 amounts of 53,750,000 and EUR 20,000, plus 5% interest p.a. as from 19 January 2017 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned 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 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