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 9 February 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 February 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Eirik Monsen (Norway), member

Joaquim Evangelista (Portugal), member

Taku Nomiya (Japan), member

Todd Durbin (USA), 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 2 August 2015, the Player of Country B, Player A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent) signed an employment contract (hereinafter: the contract) valid as from 26 July 2015 until “the end of football season matches in 2016-2017”.

2. According to art. 7 of the contract, the Claimant was a entitled to the following:

“ 7-1) amount of contract for football season 2015-2016 will be 245/000 USD net and plus 1/529/100/000 will be added.

7-2) amount of contract for football season 2016-2017 will be 310/000 USD net and plus 1/961/700/000 will be added.

7-3) 40% of the amount of contract after passing medical test and receive of player (ITC), will be paid to him.

7-4) 30% of amount of contract will be paid till the first of January.

7-5) 20% amount of contract as agreed will be paid until 1/Apr/2016.

7-6) 10% amount of contract as agreed will be paid until 15/May/2016”.

3. In accordance with art. 7, par. 7-7) of the contract, “in relation to amounts in the contract which the player empower completely to the manager director of the club to withdraw from his saving accounts of the player and pay it to the tax office as a tax of the player. This prosecution is executable till the last of prosecution and the player has not any right to claim against it and the player can not to claim to any other official authorities”.

4. Pursuant to art. 6, par. 6-10) of the contract, “if the club qualify to the League of Continent F championship in football season 2016-2017, amount of 5/000 USD will be paid to the player”.

5. Art. 6, par. 6-7) of the contract provides that “the contract will be annulled by the player if the club could not pay him the amounts after 45 days of the dates included in the contract and the club should pay the player the whole amount of the contract”.

6. On 8 June 2016, the Claimant wrote a letter to the Respondent, by means of which he referred to the aforementioned art. 6, par. 6-7) and terminated the contract. Moreover, within the same letter, the Claimant requested within ten days the payment of “USD 424.512,00 increased by taxes”, corresponding to the remuneration allegedly unpaid for the season 2015-2016 (USD 114,512) plus the remuneration provided by the contract for the season 2016-2017 (USD 310,000).

7. By means of letter dated 13 June 2016, the Respondent replied to the player asserting that the Claimant’s termination was “not valid” because the Claimant did not put the Respondent in default in writing beforehand. In addition, the Respondent argued that the clause invoked by the Claimant was not valid as it was “contrary to FIFA’s jurisprudence” according to which “more than three months of delay represents a just cause of termination of the contract”. Furthermore, the club held that the “application of such clause is erroneous since the time-limit therein indicated of 45 days is not elapsed”.

8. Furthermore, in the above-mentioned letter, the Respondent acknowledged having paid entirely the first instalment of season 2015/2016 and only partially the second and third, while for the last one (having 15 May 2016 as due date) it emphasized that “the time limit of 45 days is not elapsed yet”.

9. Nevertheless, the Respondent informed the player to be “ready to pay cash in City E (Country D) the remaining amount due for the Employment Agreement as agreed and as processed during last season” and invited the Claimant to come to the Respondent’s office to collect “the remaining amount due for the sporting season 2015/2016, i.e. of USD 109,512”. Finally, the Respondent stressed that the contract was still valid and requested the Claimant to immediately “come back to Country D in order to participate to the training sessions for the sporting season 2017/2018”.

10. On 23 June 2016, the Claimant replied to the Respondent, insisting on the validity of his termination, and requested the payment of USD 167,149.08 for the season 2015/2016 (USD 109,512.00 for salaries plus USD 5,000 “to play (qualification) in the League of Continent F”, plus USD 62,637 for taxes corresponding to 1,529,100,000) and of USD 377,245.06 for the season 2016/2017 (USD 310,000 for salaries plus USD 67,245.06 for taxes corresponding to 1,961,700,000).

11. On the same date, the Respondent replied to the Claimant, insisting on his previous arguments, and added that it had already fulfilled its obligation in relation to the payment of taxes for season 2015/2016 and reiterated that it was ready to pay him “USD 109,512 (plus bonus, if any) […] only cash in City E since Country D is still experiencing embargo problems and transfer money abroad the country is not possible for the Club”.

12. Moreover, the Respondent stressed that the Claimant did not join for the start of the training sessions for season 2016/2017 and requested him to join the squad in City E by 26 June 2016.

13. The Claimant replied to such request on 24 June 2016, asking for evidence from the Respondent that the latter paid taxes for the Claimant for season 2015/2016 and insisting on his previous requests.

14. On the same date, the Respondent answered confirming his precedent position and sending to the Claimant a final request to join the team for trainings by 26 June 2016.

15. On 7 July 2016, the Claimant lodged a claim in front of FIFA, requesting the amount of USD 544,394, plus interest at 5 % p.a. as from 1 January 2016, broken down as follows:

a) USD 109,512 as salaries for season 2015/2016;

b) USD 5,000 as bonus “to play (qualification) in the League of Continent F” for the season 2015/2016;

c) USD 62,537, corresponding to 1,529,100,000, as taxes for the season 2015/2016;

d) USD 310,000 as remuneration for the season 2016/2017;

e) USD 67,245.06, corresponding to 1,961,700,000, as taxes for the season 2016/2017;

plus payment of legal expenses in favour of the Claimant.

16. In his claim, the Claimant stated that, according to the contract, he was supposed to receive, during season 2015/2016, a salary of USD 245,000,as follows:

- USD 98,000 “on the day of completion of medical examination” (i.e. 40%);

- USD 73,500 not later than 1 January 2016;

- USD 49,000 not later than 1 April 2016;

- USD 24,500 not later than 15 May 2016.

17. Nonetheless, according to the Claimant, he received only USD 135,488, as follows:

- USD 50,000 on 12 August 2015;

- USD 10,875 on 18 November 2015;

- USD 20,000 on 26 September 2015;

- USD 54,613 on 20 February 2016.

18. On account of the above, the Claimant emphasized that he terminated the contract pursuant to art. 6 par. 7 of the contract and he was entitled to “the whole amount of the contract”.

19. Moreover, the Claimant added that the club did not pay his taxes for season 2015/2016 and he submitted a document from the City E tax administration office dated 24 April 2016, which reads as follows: “Regarding the letter from Company/Employer, Club C […] dated 01 March 2016, for the purpose of confirming the tax status of Player A […] for the purpose of the extension of the residence permit: We kindly ask you to resolve the request for income/tax obligation according to the stated dates, and to notify the tax administration from 21 March 2016 to the last payment date”.

20. Furthermore, the Claimant argued that the Respondent, through its letter dated 13 June 2016, acknowledged its debt for season 2015/2016.

21. On 19 September 2016, the FIFA Administration informed the parties of the closure of investigation-phase and that no further submissions from the parties would be admitted.

22. On 23 November 2016, the Respondent replied stressing that it allegedly only received “the accompanying letters without the attachments therein indicated” and requested to FIFA to send it the claim again with all the relevant attachments.

23. On 5 December 2016, the FIFA Administration replied to the Respondent’s request providing it with the proof of delivery of the claim and its annexes via courier to the Respondent on 23 August 2016 and with the positive fax transmission report of the FIFA’s correspondence by which the investigation-phase was closed on 19 September 2016.

24. Upon request of FIFA, the Claimant informed that, after the termination of the contract, he signed an employment contract with the Club of Country G, Club H on 30 July 2016, valid for one year. According to the new contract, the Claimant is entitled to an overall remuneration of EUR 50,000 “net”, payable as follows:

- EUR 40,000 in ten monthly salaries of EUR 4,000 each, payable on the 10th of the following month;

- EUR 10,000 on January 2017.

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 7 July 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 of Country B and a Club of 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 7 July 2016, the 2016 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 of all, the Chamber noted that the parties entered into an employment contract valid as from 26 July 2015 until the end of season 2016/2017, which entitled the Claimant to a salary of USD 245,000 for season 2015/2016 and of USD 310,000 for season 2016/2017.

6. Furthermore, the DRC took note that the Claimant terminated the contract on 8 June 2016 without having previously put in default the Respondent in writing and, in his claim, he argued that he had just cause to terminate the contract pursuant to art. 6 par.7 of the contract.

7. In particular, the Claimant emphasised that the Respondent paid him only USD 135,488 out of the salary of USD 245,000 provided for season 2015/2016 he was entitled to the outstanding salary, compensation for breach of contract, as well as a bonus for season 2015/2016 and taxes for seasons 2015/2016 and 2016/2017.

8. Subsequently, the Dispute Resolution Chamber took note that the Respondent affirmed that it did not receive the attachments of the letters sent by the FIFA’s Administration and requested FIFA to send it the claim again with all the relevant attachments. In this regard, the Chamber pointed out that the FIFA’s Administration replied to the Respondent’s request providing the latter with proof of the delivery of the claim and its annexes via courier to the Respondent on 23 August 2016. On account of the above, the Chamber concluded that the claim and its annexes had been received by the Respondent. The members of the Chamber were comforted with their conclusion considering that the Respondent did not reiterate its request.

9. In continuation, the Dispute Resolution Chamber observed that the reply of the Respondent was received after the notification of the closure of the investigation of the matter at hand. As a result, in line with art. 9 par. 4 of the Procedural Rules as well as the Chamber’s constant jurisprudence in this regard, the Dispute Resolution Chamber decided not to take into account the reply of the Respondent and established that, in accordance with art. 9 par. 3 of the Procedural Rules, it shall take a decision upon the basis of those documents on file that were provided prior to the closure of the investigation-phase, in casu, upon the statements and documents presented by the Claimant.

10. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute was to determine whether the contract had been unilaterally terminated with or without just cause by the Claimant on 8 June 2016.

11. In view of the above, the DRC first of all took into consideration the content of art. 14 of the Regulations, which provides that “a contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause”.

12. In continuation, the Chamber stressed that the definition of just cause and whether just cause exists shall be established in accordance with the merits of each particular case.

13. On account of the above, the Chamber determined that, at the time when the Claimant terminated the contract, the Respondent had failed to pay more than 40% of the due salaries without a valid reason and, thus, in accordance with its longstanding jurisprudence, the Chamber considered that the amount of the unpaid salaries was substantial.

14. In view of the above, the Chamber consequently decided that the Claimant had just cause to unilaterally terminate the employment contract on 8 June 2016. The members of the Chamber were comforted with their conclusion considering art. 6, par. 6-7) of the contract.

15. 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.

16. 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 salaries which were outstanding under the contract at the moment of the termination, amounting to USD 109,512.

17. 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 on the above-mentioned amount as follows:

a) 5% p.a. as of 2 January 2016 on the amount of USD 36,012;

b) 5% p.a. as of 2 April 2016 on the amount of USD 49,000;

c) 5% p.a. as of 16 May 2016 on the amount of USD 24,500.

18. Furthermore, as to the amounts requested by the Claimant for taxes, the members of the Chamber recalled that, in accordance with art. 7, par. 7-7) of the contract, “in relation to amounts in in the contract which the player empower completely to the manager director of the club to withdraw from his saving accounts of the player and pay it to the tax office as a tax of the player. This prosecution is executable till the last of prosecution and the player has not any right to claim against it and the player can not to claim to any other official authorities”.

19. In this respect, the DRC wished to emphasise that, pursuant to said article of the contract, it was the Respondent’s obligation to pay the taxes directly to the authorities, being expressly excluded any claim of the Claimant in this regard. What is more, the evidence submitted by the Claimant did not prove, pursuant to art. 12 par. 3 of the Procedural Rules, that the Claimant incurred any expenses incurred in relation to the payment of taxes. On account of the above, the members of the Chamber consequently rejected this part of the claim.

20. 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.

21. 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.

22. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent contracts 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. The members of the Chamber recalled that according to art. 6, par. 6-7) of the contract, “the contract will be annulled by the player if the club could not pay him the amounts after 45 days of the dates included in the contract and the club should pay the player the whole amount of the contract”.

23. The members of the Chamber agreed that this clause is not reciprocal as it does not grant the same rights to both parties, and that, therefore, in accordance with the longstanding jurisprudence of the DRC in this regard, said clause cannot be taken into consideration in the determination of the amount of compensation.

24. 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.

25. In order to estimate the amount of compensation due to the Claimant in the present case, the members of the Chamber first turned their attention to the remuneration and other benefits due to the Claimant under the existing contract 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 contract and the new contract, if any, in the calculation of the amount of compensation.

26. Along these lines, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the contract and concluded that, had the contract been executed until its expiry date, the Claimant would have received a total remuneration of USD 310,000.

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 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.

28. In this regard, it was duly noted that, on 30 July 2016, the Claimant signed an employment contract with the Club of Country G, Club H, valid for one year, in accordance with which he was entitled to a remuneration of EUR 50,000.

29. 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 USD 255,000 as compensation for breach of contract to the Claimant.

30. In addition, taking into account the Claimant’s request, 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. 7 July 2016, until the date of effective payment.

31. As to the bonus requested by the Claimant, taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had not fully substantiated his claim with pertinent documentary evidence in accordance with art. 12 par. 3 of the Procedural Rules. That is, there is no supporting documentation relating to the Claimant’s claim pertaining to outstanding bonuses. Consequently, the DRC decided to reject this part of the Claimant’s claim.

32. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

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 USD 109,512 plus 5% interest p.a. as follows:

a. 5% p.a. as of 2 January 2016 on the amount of USD 36,012;

b. 5% p.a. as of 2 April 2016 on the amount of USD 49,000;

c. 5% p.a. as of 16 May 2016 on the amount of USD 24,500.

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 USD 255,000 plus 5% interest p.a. as from 7 July 2016 until the date of effective payment.

4. In the event that the amounts plus interest 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 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:

Omar Ongaro

Football Regulatory Director