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 3 November 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 3 November 2016,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Alejandro Marón (Argentina), member

Mario Gallavotti (Italy), member

Carlos Puche (Colombia), member

Eirik Monsen (Norway), 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 6 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 valid from 7 August 2015 until 30 June 2017.

2. In accordance with the employment contract, the Claimant was inter alia entitled to receive the following remuneration and amenities:

a. EUR 8,000 per month between 21 June 2015 and 30 June 2016;

b. EUR 9,000 per month between 1 July 2016 and 30 June 2017;

c. Remuneration is due on the 25th day of the following month;

d. EUR 5,000 when the Respondent receives the International Transfer Certificate;

e. EUR 10,000 on 31 January 2016;

f. EUR 5,000 on 10 July 2016;

g. EUR 10,000 if the team plays in Europa League qualification (hereinafter: Europa League Qualification bonus);

h. provision of “housing for a family, standard furniture, no payment of utilities”;

i. EUR 400 for each point in the “league of country D” regular season;

j. EUR 500 for each point in the “league of country D” play-off season;

k. EUR 300 for each point in the “league of country D play-out”.

3. On 24 May 2016, the Claimant put the Respondent in default of the amount of EUR 33,750 pertaining to:

a. EUR 23,750 as allegedly unpaid salaries and rent of January, February and March 2016; the Claimant acknowledges having been paid EUR 1,000 on 23 May 2016;

b. EUR 10,000 as allegedly unpaid Europa League Qualification bonus.

4. On 26 May 2016, the Respondent paid the Claimant the amount of EUR 15,146.

5. On 27 May 2016, the Claimant put the Respondent in default of the amount of EUR 26,500 pertaining to:

a. EUR 16,500 as allegedly unpaid salaries and rent of March and April 2016;

b. EUR 10,000 as allegedly unpaid Europa League Qualification bonus.

6. On 6 June 2016, the Claimant notified the Respondent of the termination of the employment relationship on the basis that the Respondent had not reimbursed the amounts it had been put in default of. The Claimant requests to be paid a total of EUR 156,750. In particular, he requested to be paid outstanding remuneration in the total of EUR 27,750:

a. EUR 16,000 as salaries of March and April 2016 (2x EUR 8,000);

b. EUR 10,000 as Europa League Qualification bonus;

c. EUR 1,750 as match bonuses.

The Claimant further requested to be paid compensation for breach in the total amount of EUR 129,000.

7. On 9 June 2016, the Respondent replied to the Claimant’s termination letter stating that the Respondent had issued payment orders which meant the Claimant had received the payments of January and February 2016 as well as the bonus due on 31 January 2016. The Respondent did not contest the “player’s right to cash“ the Europa League Qualification bonus but explained that at the time the Claimant had put the Respondent in default, the Executive Committee of the Football Federation of country D had not yet ratified the final results of the domestic championship and the payment had therefore not fallen due. The Respondent continued by stating that the Claimant had no just cause to termination the contract because the Respondent was in a difficult financial situation which was communicated to the players, and that it had offered the players alternate ways of receiving payments. It added that the delays in payment were not an expression of the Respondent’s intention to terminate the contract. The Respondent further stated that it did not consider the contract to be terminated indicating that the squad will meet on 14 June 2016 to begin training and the Claimant is invited. In this regard, it asked the Claimant to confirm a flight reservation made on 9 June 2016 for a flight on 13 June 2016.

8. On 14 June 2016, the Claimant lodged a claim against the Respondent requesting to be paid outstanding remuneration and compensation for breach in the total amount of EUR 157,624 as follows, plus an unspecified 5% p.a. as interest on each amount:

a. Outstanding remuneration:

i. EUR 26,874 comprised of the following:

1. EUR 72 as the outstanding bonus;

2. EUR 302 as part of the monthly salary of February 2016;

3. EUR 16,000 as the salaries of March and April 2016;

4. EUR 500 as the rent of March and April 2016;

5. EUR 10,000 for the Europa League Qualification bonus.

b. Compensation for breach:

i. EUR 130,750 relating to the residual value of the employment contract between May 2016 and June 2017, including a EUR 1,750 performance bonus for May 2016.

9. In particular, the Claimant argues that he was regularly paid late by the Respondent. In this regard, the Claimant asserted that the Respondent had failed to pay the entirety of the bonus due on 31 January 2015 before 4 May 2016. In addition, he states that his salaries of January and part of February 2016 were only paid to him on 26 May 2016.

10. He considers that it is clear that all payments of remuneration and bonuses were paid when they were three months overdue and that the Respondent’s repeated violations of the contract gave him just cause to terminate the contract. Consequently, he claims to be entitled to compensation for breach of contract of EUR 130,750 amounting to the residual value of the employment contract, i.e. EUR 8,000 each for May and June 2016, EUR 9,000 x 12 months between July 2016 and 30 June 2017, EUR 1,750 as performance bonus for May 2016, and EUR 5,000 due as contractual bonus.

11. In its reply to the claim, the Respondent requested an extension of the deadline set by FIFA, however, it never reverted to FIFA.

12. In response to FIFA’s pertinent request, the Claimant informed FIFA that he had signed a new contract on 8 July 2016 with the Club E from country F, valid from 8 July 2016 until 31 May 2018. The contract provides that the Claimant is entitled to EUR 3,448 as monthly salary.

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II. Considerations of the Dispute Resolution Chamber

1. First, the Dispute Resolution Chamber (hereinafter also referred to as the Chamber or the DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 14 June 2016. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (2015 edition; hereinafter: the Procedural Rules) are applicable to the matter at hand (cf. article 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 (2016 edition), 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 (2016 edition), and considering that the present claim was lodged on 14 June 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 Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the members of the Chamber started by acknowledging all the aforementioned facts as well as the arguments and documentation submitted by the parties. The Chamber, however, 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 (hereinafter: TMS).

5. In this regard, the Chamber recalled that on 6 August 2015 the parties had signed an employment contract valid from 7 August 2015 until 30 June 2017. In accordance with the employment contract, the Respondent was inter alia obliged to pay EUR 8,000 per month for the duration of the 2015/16 sporting season and EUR 10,000 on 31 January 2016. Furthermore, the Chamber noted that if the team plays in the Europa League Qualification matches, the Claimant would be owed EUR 10,000.

6. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause on 6 June 2016, after having put the Respondent in default twice previously, since the Respondent allegedly failed to pay the Claimant’s remuneration. In this respect, the Claimant asserts that after putting the Respondent in default on multiple occasions, the Respondent had made certain payments but had failed to fully cure the default. Consequently, the Claimant deems at the time of termination, unpaid portions of monthly salaries and the instalment due on 31 January 2016, as well as two entire monthly salaries and a contractual bonus had remained unpaid. Therefore, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract plus 5% interest p.a. from an unspecified date on each amount.

7. Furthermore, the members of the Chamber noted that the Respondent, for its part, had requested an extension of the deadline set by FIFA to reply to the claim but had failed to present any other response to the claim, in spite of having been invited to do so. Consequently, the Chamber deemed that the Respondent had renounced to its right of defence and, thus, had accepted the allegations of the Claimant.

8. As a consequence of the aforementioned consideration, the members of the Chamber concurred that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents on file, in other words, upon the statements and documents presented by the Claimant.

9. The Dispute Resolution Chamber then took into consideration that according to the Claimant, the Respondent had failed to pay his remuneration in the total amount of EUR 26,874, pertaining to the unpaid portion of the instalment due on 31 January 2016, in the amount of EUR 72, the unpaid portion of the monthly salary of February 2016, in the amount of EUR 302, as well as salaries and rent due for March and April 2016 in the amount of EUR 16,500. In addition, the Claimant asserted being owed the Europa League Qualification bonus in the amount of EUR 10,000 and 5% interest p.a. on the entire outstanding amount from an unspecified date.

10. In light of the above, the Chamber proceeded to analyse whether the Claimant indeed had just cause to terminate the contract. In this regard, the Chamber noted that at the time of termination, i.e. 6 June 2016, at least the amount of EUR 16,374 had remained outstanding, comprised of the amount due on 30 January 2016, the unpaid portion of the salary of February 2016 as well as his salaries for the months of March and April 2016. Moreover, the Chamber underlined that the Claimant had put the Respondent in default twice, without receiving the entirety of his salaries.

11. Consequently, the members of the Chamber were of the unanimous opinion that the Respondent had breached the employment contract and that thus, the termination of said employment contract by the Claimant was with just cause. As such, the Chamber went on to deal with the consequences of the early termination of the employment contract with just cause by the Claimant.

12. The members of the Chamber therefore recalled that in accordance with the general legal principle of pacta sunt servanda, the Respondent must fulfil its obligations as per the employment contract concluded with the Claimant.

13. In this regard, and in particular with regard to the Claimant’s claim for unpaid rent, the Chamber noted that in the absence of any monetary value in the contractual condition relating to the provision of an apartment, and in the absence of any documentary evidence submitted in this regard (cf. art. 12 par. 3 of the Procedural Rules), it had to reject the Claimant’s claim relating to said fringe benefits.

14. Furthermore, the members of the Chamber took due note that the Claimant had previously put the Respondent in default of the monthly salaries of January, February and March 2016, in addition to the Europa League Qualification bonus. In this regard, the DRC noted that the Respondent reacted to said default notice by paying the Claimant EUR 15,146, i.e. approximately two monthly salaries. Consequently, the Chamber noted that the Claimant, once again, put the Respondent in default of the monthly salaries of March and April 2016, the European Qualification bonus and match bonuses. The members of the Chamber noted that the Respondent had failed to make any further payment.

15. In continuation, and in particular with regard to the Europa League Qualification bonus, the DRC noted from the documentation on file that the Respondent had acknowledged owing the Claimant said bonus, but deemed that it had not fallen due at the time of the termination of the employment contract. Therefore, in light of the information contained on the Transfer Matching System which indicates that the 2015/16 sporting season in country D began on 1 July 2015 and finished on 30 June 2016, the DRC unanimously agreed that the Europa League Qualification bonus fell due on 1 July 2016.

16. Therefore, in accordance with the aforementioned general legal principle of pacta sunt servanda, the Respondent must fulfil its obligations as per the employment contract concluded with the Claimant and consequently is to be held liable to pay the outstanding amount of EUR 16,374.

17. 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 a termination. In this regard, the members of the Chamber determined that the Respondent was not only to pay the amount of EUR 16,374 as outstanding remuneration to the Claimant, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.

18. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the Respondent in the case at stake. In doing so, the members of the Chamber 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.

19. In application of the relevant provision, the Chamber held that it first 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. In this regard, the Chamber established that no such compensation clause establishing any amount was included in the employment contract at the basis of the matter at stake.

20. 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.

21. In application of the relevant provision, and in order to evaluate the compensation to be paid by the Respondent, the members of the Chamber took into account the remuneration due to the Claimant in accordance with the employment contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber pointed out that at the time of the termination of the contract, the remaining value of the contract from its early termination by the Claimant until its regular expiry amounted to EUR 139,000. This sum comprises the monthly salaries of May and June 2016 in the total amount of EUR 16,000 as well as the twelve monthly salaries due for the 2016/17 season totalling EUR 108,000. In addition, the relevant sum comprises the instalment of EUR 5,000 due to the Claimant on 10 July 2016. Finally, as established above, the Chamber recalled that the Europa League Qualification bonus of EUR 10,000 fell due on 1 July 2016 and is also to be included in the residual value of the employment contract as from its early termination. Consequently, the Chamber concluded that EUR 139,000 shall serve as the basis for the final determination of the amount of compensation for breach of contract.

22. 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.

23. Indeed, on 8 July 2016, the Claimant found employment with the club from country F, Club E. In accordance with the pertinent employment contract, which has been made available by the Claimant and is valid until 31 May 2018, the Claimant was entitled to receive a monthly salary of EUR 3,448. Consequently, the Chamber established that the value of the new employment contract concluded between the Claimant and Club E for the period running from July 2016 until and including June 2017 amounted to EUR 41,376.

24. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of EUR 97,624 to the Claimant, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

25. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at a rate of 5% p.a. on the amount of EUR 97,624 from the date the claim was lodged, i.e. 14 June 2016

26. In conclusion, for all the above reasons, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay to the Claimant the amount of EUR 16,374 as outstanding remuneration and EUR 97,624 as compensation for breach of contract.

27. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

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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 16,374 plus 5% interest p.a. as from 14 June 2016 until the date of effective payment.

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 97,624 plus 5% interest p.a. on said amount as from 14 June 2016 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the aforementioned 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