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 24 November 2016

Decision of the

Dispute Resolution Chamber (DRC) judge

passed in Zurich, Switzerland, on 24 November 2016,

by Philippe Diallo (France), DRC judge,

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 21 August 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 (hereinafter: the contract) and an appendix (hereinafter: the appendix), valid as from the date of signature until 31 July 2018.

2. According to the appendix, the Respondent undertook to pay the Claimant inter alia USD 1,500 as monthly salary and to provide the Claimant with an accommodation.

3. On 1 August 2016, the Claimant sent a correspondence to the Respondent, requesting the payment of his salaries of April, May, June and July 2016 within 10 days.

4. On 17 August 2016, the Claimant terminated the contract in writing with immediate effect, claiming that the Respondent did not pay his outstanding salaries following his default notice and asserting that the Respondent allegedly tried to force him to sign a termination agreement according to which he would waive his salaries.

5. On 22 August 2016, the Claimant lodged a claim in front of FIFA against the Respondent, requesting to be awarded the total amount of USD 42,000 corresponding to four months’ wages for the season 2015/2016 and the residual value of his contract. The Claimant also requested that sporting sanctions be imposed on the Respondent.

6. In his argumentation, the Claimant maintained that the Respondent failed to pay his salaries as from April to July 2016 and tried to convince him to terminate the contract. In support of his assertion, the Claimant submitted a picture of a termination agreement dated 27 July 2016, bearing the Respondent’s stamp, stating that the contract is terminated by mutual agreement and that the parties have “no financial debts to each other”.

7. In its reply to the Claimant’s claim, the Respondent claimed that the copy of the contract sent by the Claimant is allegedly “not correct” as there had not been any transfer agreement between the Respondent and the former club of the Claimant, Club E, from country B. According to the Respondent, it was informed by the Claimant that he had participated in official matches in country B before, but the International Transfer Certificate (hereinafter: the ITC) was rejected by the Football Federation of country B, allegedly because the Claimant had not been registered within the Football Federation of country B.

8. According to the Transfer Matching System (hereinafter: TMS), the relevant transfer instruction was cancelled by the Football Federation of country B, due to the lack of registration of the Claimant with the Football Federation of country B.

9. The Claimant has remained unemployed since he left the Respondent.

II. Considerations of the DRC judge

1. First of all, the Dispute Resolution Chamber judge (hereinafter: the DRC judge or the judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the present matter was submitted to FIFA on 22 August 2016. Consequently, the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the DRC judge referred to art. 3 par. 2 and par. 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in conjunction with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2016) he 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, the value of which does not exceed CHF 100,000.

3. Furthermore, the DRC judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged on 22 August 2016, 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 DRC judge and the applicable regulations having been established, the DRC judge entered into the substance of the matter. In this respect, the DRC judge started by acknowledging all the aforementioned facts as well as the arguments and the documentation submitted by the parties. The DRC judge however emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand. In particular, the DRC judge 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 this respect, the DRC judge took note that the Claimant and the Respondent concluded an employment contract and an appendix valid as of the date of signature until 31 July 2018, by means of which the Respondent undertook to pay the Claimant a monthly salary of USD 1,500. The DRC judge further took note that, on 17 August 2016, the Claimant terminated the employment contract after having put the Respondent in default of payment of his salary as from April 2016 onwards.

6. Subsequently, the DRC judge noted that according to the Respondent, as opposed to the Claimant, no legally binding employment contract had come into effect between the Claimant and the Respondent, as the ITC had been rejected by the Football Federation of country B in the TMS and that, consequently, there was no transfer agreement between the Claimant’s former club and the Respondent and the copy of the employment contract submitted by the Claimant was thus allegedly “not correct”.

7. Consequently, the DRC judge, first and foremost, focused his attention on the question as to whether a legally binding employment contract had been concluded by and between the Claimant and the Respondent.

8. In this regard, bearing in mind art. 18 par. 4 of the Regulations, the DRC judge considered relevant to recall the Dispute Resolution Chamber’s jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of (administrative) formalities, such as, but not limited to, the registration procedure in connection with the international transfer of a player, which are of the sole responsibility of a club and are to be carried out with due diligence and on which a player has no influence. In this context and for the sake of argument given that in the present matter the Respondent did apply to its Association to register the player, the DRC judge recalled that according to Annexe 3 of the Regulations, an ITC request depends on the new club’s application to the new association to register a professional. Accordingly, the club is actually in the position to prevent the occurrence of the condition precedent of receipt of an ITC by wilfully choosing not to proceed with the application for an ITC request. By analogy, the same applies to the finalisation of documents or procedures related to the transfer of a player, e.g. the signature of a transfer agreement or the payment of transfer compensation.

9. As regards the case at stake, the Respondent asserted that there had not been any transfer agreement between the Respondent and the former club of the Claimant, Club E, since the ITC was rejected by the Football Federation of country B, as the Claimant had not been registered within the Football Federation of country B. On account of the aforementioned jurisprudence of the DRC, the DRC judge concluded that the circumstances surrounding the application of an ITC for the Claimant do not affect the validity of the employment contract concluded by and between the Claimant and the Respondent.

10. On account of the foregoing considerations, the DRC judge decided to reject the Respondent’s arguments in this regard. In addition, the DRC judge decided that by having signed the contract and the appendix, a valid and legally binding employment contract had been entered into by and between the Claimant and the Respondent on 21 August 2015.

11. Having established that a valid and legally binding employment contract had been in force between the Claimant and the Respondent as from 21 August 2015, the judge went on to analyse as to whether such contract had been terminated by the Claimant with or without just cause on 17 August 2016 and to determine the consequences thereof.

12. In this respect, the DRC judge recalled that according to the Claimant, the Respondent failed to pay his salaries as of April until July 2016, as a result of which he had put the Respondent in default of payment on 1 August 2016. The DRC judge also took into account that, the Claimant’s default notice having remained without reaction by the Respondent, on 17 August 2016, the Claimant notified the Respondent of the termination of the contract with immediate effect. Moreover, the DRC judge took note that the Respondent, for its part, did not submit any comment relating to the Claimant’s allegation that his salaries as of April 2016 until July 2016 had remained unpaid.

13. Consequently, the DRC judge established that at the time when the Claimant terminated the employment contract, i.e. 17 August 2016, the Claimant’s remuneration as of April 2016 until July 2016 had undisputedly remained outstanding. Consequently, the DRC judge concluded that the Claimant had just cause to unilaterally terminate the contract on 17 August 2016 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.

14. 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 DRC judge focused his attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding amounts on the basis of the relevant employment contract.

15. First, reverting to the Claimant’s claim for outstanding remuneration, the DRC judge made reference to his previous considerations and recalled that at the time of the termination, i.e. on 17 August 2015, four monthly salaries, i.e. April 2016 until and including July 2016, had remained outstanding. The DRC judge recalled that in accordance with the appendix, the Respondent was obliged to pay to the Claimant a monthly salary of USD 1,500.

16. On account of the aforementioned considerations, the DRC judge decided that in accordance with the general legal principle of pacta sunt servanda the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of USD 6,000.

17. In continuation, the DRC judge turned his attention to the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the judge 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.

18. In application of the relevant provision, the DRC judge held that he first had to clarify as to whether the pertinent employment 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 judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

19. Bearing in mind the foregoing, the judge proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as of August 2016 until 31 July 2018 and concluded that the Claimant would have received in total USD 36,000 as remuneration had the contract been executed until its expiry date.

20. In continuation, the DRC judge 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 able 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.

21. The DRC judge noted that the Claimant had not been able to sign an employment contract with another club during the relevant period of time. Consequently, the DRC judge decided that the Respondent must pay the amount of USD 36,000 to the Claimant as compensation for breach of contract.

22. On account of the above, the DRC judge decided to accept the Claimant’s claim and that the Respondent must pay the total amount of USD 42,000 to the Claimant, i.e. USD 6,000 relating to outstanding remuneration and USD 36,000 as compensation for breach of contract.

III. Considerations of the DRC judge

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

2. The Respondent, Club C, has to pay to the Claimant outstanding remuneration in the amount of USD 6,000 within 30 days as from the date of notification of this decision.

3. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of USD 36,000 within 30 days as from the date of notification of this decision.

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, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. 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 DRC judge 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 DRC judge:

Marco Villiger

Deputy Secretary General

Encl: CAS directives