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 18 August 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 18 August 2016,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Joaquim Evangelista (Portugal), member

Johan van Gaalen (South Africa), member

Todd Durbin (USA), member

Zola Majavu (South Africa), 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 21 July 2015, the player from country B, Player A (hereinafter: player or Claimant), and the club from country D, Club C (hereinafter: club or Respondent), signed an employment contract (hereinafter: contract) valid as from 28 July 2015 until 31 May 2017.

2. According to art. 2 of the contract, the club undertook to pay the player the following amounts for the sporting season 2015/2016:

 EUR 50,000 in cash upon signature and EUR 6,000 on 30 August 2015;

 EUR 120,000, payable via 10 equal monthly instalments of EUR 12,000 each at the end of the month, as from August 2015 until May 2016.

3. Furthermore, for the sporting season 2016/2017 the player is entitled to a remuneration of EUR 144,000, payable as follows:

 EUR 24,000 on 10 August 2016;

 EUR 120,000, payable via 10 equal monthly instalments of EUR 12,000 each at the end of the month, as from August 2016 until May 2017.

4. According to art. 7 of the contract, accommodation amounting to EUR 350 monthly shall be paid by the club until the end of the contract.

5. According to art. 5 of the contract, “the club is obliged to pay the player all the amounts (i.e. salary, benefits, bonuses monthly and other monetary obligations) as mentioned in this contract on 30th of each month at the latest. If the salary of the player is paid after a due period of 45 days after the 30th of the month after which the salary was due, the player has the sole and irrevocable right to unilaterally terminate the contract without any further formal notice or administrative actions, therefore, without consequences of any kind. The club shall remain obliged to comply with all its financial duties towards the player, thus the full and irrevocable right on all the open amounts till the end of the contractual period (31-5-2017).”

6. On 20 January 2016, the player put the club in default of payment of EUR 36,000 plus interest granting the club five days to pay, specifying that in the absence of payment, he would terminate the contract.

7. On 28 January 2016, the player sent a notice of termination of contract to the club.

8. In said letter, the player inter alia specified that given the club’s absence of reaction to his warning, the parties’ employment relationship could not continue due to the club’s fault and he had just cause to terminate the contract with immediate effect.

9. On 29 January 2016, the player gave the club a deadline of 10 days to pay him EUR 36,000, specifying that in the absence of payment, he would lodge a claim against the club before FIFA.

10. On 12 February 2016, the player lodged a claim against the club before FIFA, inter alia asserting that the club repeatedly failed to comply with its financial obligations.

11. In particular, the player highlighted that although he put the club in default of payment of three salaries, the club did not proceed with any payment.

12. Therefore, the player holds that he terminated the contract with just cause and is entitled to receive the following amounts:

 EUR 36,000 as outstanding remuneration in relation to the months of October, November and December 2015, plus 5% interest on each instalment as from its relevant due date;

 EUR 204,000 as compensation for breach of contract plus 5% interest on said amount, calculated as from the date of termination, i.e. 28 January 2016;

 EUR 5,250 as compensation based on the contractual accommodation-related allowance, i.e. EUR 350 x 15 monthly instalments.

13. Based on art. 337 c/3 of the Swiss Code of obligations as well as the specificity of sport, the player asked to be awarded additional compensation consisting of six monthly salaries, i.e. EUR 72,000.

14. The player further claims that the costs of proceedings and his legal expenses shall be paid by the club.

15. In spite of having been invited to present its position on the player’s claim, no response was received from the club.

16. Upon request, the player indicated that he had not signed an employment contract with another club following the termination of his employment contract until its ordinary date of expiry.

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 12 February 2016. 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 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. 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 (edition 2016), and considering that the present claim was lodged on 12 February 2016, 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 available on file.

5. 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.

6. Having said that, the Chamber acknowledged that the parties had signed an employment contract valid as from 21 July 2015 until 31 May 2017 in accordance with which the Claimant was entitled to receive, for the period of time as from August 2015 until May 2016, EUR 176,000 via the payment of an amount of EUR 56,000 in two instalments as well as EUR 120,000 via ten equal monthly payments of EUR 12,000 each.

7. The DRC further acknowledged that for the period of time as from August 2016 until May 2017, the club undertook to pay the player the total amount of EUR 144,000. In addition, the Claimant was entitled to a monthly accommodation of EUR 350.

8. In continuation, the members of the Chamber took into account that, on 20 January 2016, the Claimant put the Respondent in default of payment of the amount of EUR 36,000 and that, on 28 January 2016, having reportedly received no payment or reaction from the Respondent to his default notice, the Claimant notified the club of the termination of the contract on the basis of the alleged outstanding remuneration for the months of October, November and December 2015.

9. Consequently, the Claimant held that he had just cause to terminate the contract on 28 January 2016 and claimed that, as a result, the Respondent is liable to pay compensation for breach of contract in addition to the outstanding remuneration.

10. On the other hand, the DRC noted that although the Respondent was invited to present its position on the Claimant’s claim, no answer was received from the Respondent to the Claimant’s statement of claim.

11. In view of the aforementioned, the Chamber deemed that the Respondent had renounced its right to defence and, thus, had accepted the allegations of the Claimant.

12. Furthermore, as a consequence of the aforementioned consideration, the DRC decided that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

13. Having so found, the members of the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the Claimant had just cause to terminate the employment contract on 28 January 2016 and to decide on the consequences thereof.

14. Against such background, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the Claimant’s arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

15. By doing so, the Chamber took into account the Claimant’s allegation that the Respondent had failed to pay his monthly remuneration for the months of October, November and December 2015 in the total amount of EUR 36,000, which was the motive for the Claimant to terminate the contract on 28 January 2016 after having previously put the Respondent in default.

16. Bearing in mind the considerations under numbers II./8. to II./10. above as well as art. 2 of the contract, the Chamber established that when the Claimant terminated the contract on 28 January 2016, the Respondent had not paid to the Claimant his salary for October, November and December 2015 in the total amount of EUR 36,000, all payments of which had fallen due and remained unpaid by the Respondent after having been put in default by the Claimant.

17. On account 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 contract on 28 January 2016 and that, as a result, the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

18. Prior to dealing with the consequences of the early termination of the employment contract with just cause by the Claimant, the members of the Chamber considered that the Respondent must fulfil its contractual obligations in accordance with the general legal principle of “pacta sunt servanda” and pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination of the contract.

19. Accordingly, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 36,000, corresponding to his contractual salaries relating to October, November and December 2015, each in the amount of EUR 12,000.

20. In addition, taking into consideration the Claimant’s claim and the provision of art. 5 of the contract which states that remuneration fell due on the 30th day of the month, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on each of the aforementioned outstanding monthly instalments as of the day following the day on which the respective instalments fell due.

21. In continuation, having established that the Respondent is to be held liable for the termination of the contract with just cause by the Claimant, the Chamber decided that, in accordance with art. 17 par. 1 of the Regulations, the Respondent is liable to pay compensation to the Claimant.

22. Consequently, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake.

23. In doing so, the members of the Chamber firstly 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 player 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.

24. In application of the relevant provision, the Chamber held that it first of all 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.

25. Upon careful examination of the employment contract concluded between the Claimant and the Respondent, the members of the Chamber took note that article 5 provides that “the club is obliged to pay the player all the amounts (i.e. salary, benefits, bonuses monthly and other monetary obligations) as mentioned in this contract on 30th of each month at the latest. If the salary of the player is paid after a due period of 45 days after the 30th of the month after which the salary was due, the player has the sole and irrevocable right to unilaterally terminate the contract without any further formal notice or administrative actions, therefore, without consequences of any kind. The club shall remain obliged to comply with all its financial duties towards the player, thus the full and irrevocable right on all the open amounts till the end of the contractual period (31-5-2017).”

26. The Chamber duly analysed the contents of said clause and acknowledged that it provides for the amount of compensation payable in the event of the termination of the employment contract with just cause by the Claimant.

27. In this respect, the Chamber acknowledged that said contractual clause did not include a precise and specific amount of compensation, however, it clearly provided for a determinable amount of compensation payable by the Respondent in the event of breach of the contract with just cause by the Claimant, which amount corresponds to the remaining value of the employment contract, which was not considered disproportionate by the Chamber.

28. On account of the above, the parties having contractually agreed on the compensation payable in the event of breach of contract and such compensation not being deemed disproportionate, the Dispute Resolution Chamber concluded that the provision contained in art. 5 of the pertinent employment contract has to be considered as valid and fully effective, i.e. the amount of compensation provided for in said article shall be awarded to the Claimant.

29. Furthermore, for these reasons, the Chamber concurred that any remuneration that the Claimant might have earned under a new employment is irrelevant in the case at hand.

30. In this regard, and according to the employment contract provided by the Claimant to FIFA, the Chamber established that the remaining value of the relevant employment contract amounts to EUR 209,250 relating to the Claimant’s financial entitlements under said contract as from January 2016 until May 2017.

31. Taking into account all of the above, the Chamber decided that the Respondent has to pay to the Claimant the total amount of EUR 209,250 as compensation for breach of contract.

32. In addition, taking into account the Claimant’s request as well as the jurisprudence of the DRC, 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. 12 February 2016, until the date of effective payment.

33. As regards the Claimant’s request related to costs of the proceedings and the reimbursement by the Respondent of his legal expenses, the Chamber referred to art. 18 paras 2 and 4 of the Procedural Rules as well as to its long-standing jurisprudence in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the Chamber decided to reject the Claimant’s request relating to procedural costs and legal expenses.

34. The Chamber concluded its deliberations in the present matter by rejecting any further claim lodged by 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 amount of EUR 36,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 31 October 2015 on the amount of EUR 12,000;

b. 5% p.a. as of 1 December 2015 on the amount of EUR 12,000;

c. 5% p.a. as of 31 December 2015 on the amount of EUR 12,000.

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 EUR 209,250 plus 5% interest p.a. as from 12 February 2016 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.

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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:

Marco Villiger

Deputy Secretary General

Encl. CAS directives