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 Percival 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 between the parties

I. Facts of the case

1. On 5 July 2014, 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 agreement (hereinafter: agreement) valid as from 5 July 2014 until June 2017.

2. According to the agreement, the club undertook to pay the player a monthly salary of USD 3,000.

3. Furthermore, the agreement includes, inter alia, bonuses payable by the club to the player as follows:

- USD 10,000 in case the club qualifies for the Champions League;

- USD 5,000 in case the club qualifies for the preliminary rounds of the Europa League;

- USD 8,000 in case the club qualifies for the group stage of the Europa League.

4. On 1 August 2014, the parties signed an employment contract (hereinafter: contract) valid as of 1 August 2014 until 30 June 2017.

5. According to the contract, the club undertook to pay the player a monthly basic salary of 5,000 payable on the 20th day of each month.

6. On 12 January 2016, with subsequent amendments on 3 March 2016 and 25 March 2016, the player lodged a claim with FIFA against the club for breach of contract without just cause and requested to be awarded payment of the following monies:

- USD 24,000 corresponding to salaries as of July 2015 until February 2016 on the basis of the agreement;

- 40,000 corresponding to salaries as of July 2015 until February 2016 on the basis of the contract;

- USD 10,000 corresponding to bonuses on the basis of the agreement;

- USD 5,000 corresponding to bonuses on the basis of the agreement;

- USD 48,000 as compensation corresponding to the residual value of the agreement;

- 80,000 as compensation corresponding to the residual value of the contract.

In addition, the player requested 5% interest p.a. as of the due dates.

7. In his arguments, the player held that the club deregistered him in “summer 2015”, thus showed no interest in continuing the employment relationship and prevented him from playing. He argued that he played his last match on 24 April 2015.

8. The player further pointed out that his work permit expired on 22 August 2015 and that the club failed to renew it.

9. In this context, the player explained that “due to the lack of knowledge as to my rights, at that point, I did not take actions against the club up to January 2016”, when he put the club in default and requested the following amounts :

- 30,000 corresponding to salaries as from July 2015 until December 2015;

- USD 18,000 corresponding to salaries as from July 2015 until December 2015;

- USD 10,000 corresponding to the Champions League qualification bonus.

10. Furthermore, the player argued that the club failed to pay his salaries for eight consecutive months, i.e. as from July 2015 until February 2016. In this context, the player stated that he considered the employment relation terminated.

11. In addition, the player alleged that he did not receive the bonus payments defined in the agreement relating to the qualification for the preliminary rounds of the Europa League and the Champions League.

12. After expiry of the time limit to file its answer to the claim, the club requested an extension of said time limit. In reply, the club was informed by FIFA that no extension of the time limit could be granted, since such request was not received before the time limit had expired (cf. art. 16 par. 12 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber - edition 2015).

13. On 1 May 2016, the player signed an employment contract with the club from country E, Club F, valid as from 1 May 2016 until 28 June 2016, including a total salary of 9,000.

14. On 1 July 2016, the player signed an employment contract with the club from country G, Club H, valid as of 1 July 2016 until 30 June 2017, including a monthly salary of 1,000.

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 January 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 January 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 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. 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 (TMS).

5. In this respect, the members of the Chamber acknowledged that, on 5 July 2014, the Claimant and the Respondent had concluded an employment agreement valid as from 5 July 2014 until June 2017, on the basis of which the Claimant was entitled to receive a monthly salary of USD 3,000.

6. Furthermore, the DRC acknowledged that, on 1 August 2014, the Claimant and the Respondent signed an employment contract valid as from 1 August 2014 until 30 June 2017, in accordance with which the Respondent undertook to pay a monthly salary of 5,000 to the Claimant.

7. In continuation, the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that the Respondent had terminated the agreement and the contract without just cause, since it deregistered him, did not renew his work permit and failed to pay his remuneration as of July 2015. Consequently, the Claimant asked to be awarded his outstanding receivables as well as payment of compensation for breach of contract.

8. Subsequently, the DRC observed that the Respondent, for its part, failed to present its response to the claim of the Claimant within the relevant time-limit. In this respect, the members of the DRC noted that, after expiry of the time limit, the Respondent had requested an extension of the time limit to file its answer to the claim, which request was rejected, since it was received after the expiry of the time limit set to reply, in accordance with art. 16 par. 12 of the Procedural Rules.

9. Furthermore, as a consequence of the aforementioned consideration, the Chamber concurred that in accordance with art. 9 par. 3 of the Procedural Rules it shall take a decision upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

10. Having said that, the members of the Chamber highlighted that the underlying issue in this dispute is to determine as to whether the Respondent, as claimed by the Claimant, is liable for the termination of the agreement and the contract without just cause and, in the affirmative, to determine the consequences thereof.

11. In this regard, the members of the Chamber turned their attention to the Claimant’s argumentation that the Respondent had de-registered him in “summer 2015” and prevented him from playing. In this context, the Claimant further held having played his last match for the Respondent on 24 April 2015.

12. In addition, the Chamber took into account that according to the TMS, the 2014-15 sporting season in country D ended on 31 May 2015 and that the 2015-16 season started on 26 July 2015.

13. Furthermore, the DRC took note of the player’s allegation that the Respondent failed to renew his work permit, which expired on 22 August 2015, as well as that the Respondent had ceased payment of his remuneration as of July 2015.

14. In this regard, the DRC deemed it important to highlight that by deregistering a player, a club is effectively barring, in an absolute manner, the potential access of a player to competition.

15. Therefore, the Chamber established that the deregistration of a player could basically constitute a breach of contract since it de facto prevents a player from being eligible to play for and render his services to his club.

16. The Chamber further noted that the uncontested de-registration of the Claimant by the Respondent in the summer of 2015 coincides with the period of time as of which the Respondent ceased the payment of the Claimant’s contractual remuneration.

17. On account of the above, and bearing in mind that the Claimant’s allegations remained unanswered by the Respondent, the Chamber established that the Respondent terminated the agreement and the contract without just cause at the end of the 2014-15 season by de-registering the player prior to the start of the new season.

18. In light of the above and in view of the Claimant’s request to be awarded remuneration as of July 2015, i.e. after the termination without just cause by the Respondent, the Chamber concluded that no remuneration was outstanding on the basis of the agreement and the contract for the period of time up to and at the moment when they were terminated.

19. Having established the above, the DRC turned its attention to the consequences of the termination of the agreement and the contract by the Respondent without just cause.

20. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

21. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. 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 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.

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

23. 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 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 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.

24. Having said that, the members of the Chamber turned their attention to the remuneration and other benefits due to the Claimant under the existing contracts and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contracts and the new contract, if any, in the calculation of the amount of compensation.

25. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the agreement and the contract as from the termination without just cause by the Respondent until the original date of expiry, i.e. 30 June 2017. In this regard, considering the Claimant’s requests, the Chamber took into account that as of July 2015 until 30 June 2017, the amounts of USD 72,000 and 120,000 were due to the Claimant in terms of monthly salaries.

26. Therefore, the Chamber concluded that the Claimant would have received remuneration in the amounts of USD 72,000 and 120,000 had the agreement and the contract been executed until their ordinary expiry date. Consequently, the Chamber concluded that the amounts of USD 72,000 and 120,000 serve as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

27. 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 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.

28. In this regard, the members of the Chamber noted that, on 1 May 2016, the Claimant signed an employment contract with the club from country E, Club F, valid as of 1 May 2016 until 28 June 2016, including a total salary of 9,000, approximately corresponding to USD 1,100.

29. Furthermore, the DRC noted that, on 1 July 2016, the Claimant signed an employment contract with the club from country G, Club H, valid as of 1 July 2016 until 28 June 2017, including a total salary of 10,000, approximately corresponding to USD 10,200, as from August 2016 until the end of June 2017.

30. On account of the above and the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damage, the Chamber decided that the Respondent must pay the amounts of USD 60,700 and 120,000 to the Claimant as compensation for breach of contract.

31. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amounts of USD 60,700 and 120,000 as of the date of the amended claim, i.e. 25 March 2016, until the date of effective payment.

32. As regards the Claimant’s claim relating to bonuses in connection with the Europa League and Champions League qualification, the members of the Chamber stressed that the payment and the amount of such bonuses are linked to matches that were to be played after the termination of the agreement, and, therefore, were fully hypothetical. Consequently, the Chamber decided to reject such claim.

33. The members of the Chamber concluded their deliberations on the present matter 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, compensation for breach of contract in the amounts of USD 60,700 and 120,000 plus 5% interest p.a. as from 25 March 2016 until the date of effective payment.

3. In the event that the aforementioned sums and interest are not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

4. Any further claim lodged by the Claimant is rejected.

5. 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

Encl: CAS directives