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 19 January 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 19 January 2017,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Wouter Lambrecht (Belgium), member

on the matter between the club,

Club A, Country B

as First Claimant / Respondent

and the player,

Player C, Country D

as Second Claimant / Respondent

and the club,

Club F, Country B

as Second Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 4 August 2015, the Player of Country D, Player C (hereinafter: the player or Second Claimant / Respondent) and the Club of Country B, Club A (hereinafter: First Claimant / Respondent), signed a contract valid as from an unspecified date until 31 May 2017 (hereinafter: the contract).

2. According to the contract, for the 2015/2016 season, the player was entitled to receive the following amounts:

 a signing fee of EUR 50,000, due upon the signature of the contract;

 an instalment of EUR 30,000, due on 25 December 2015;

 10 monthly payments of EUR 22,000 in the period between September 2015 and June 2016, due on the 30th day of the respective month and in February 2016 on the 28th day of said month.

Furthermore, for the 2016/2017 season, the player was entitled to receive the following amounts:

 a signing fee of EUR 50,000, due on 25 October 2016;

 an instalment of EUR 30,000, due on 25 December 2016;

 10 monthly payments of EUR 22,000 in the period between September 2015 and June 2016, due on the 30th day of the respective month and in February 2017 on the 28th day of said month.

3. Article i) of the ‘Special provisions’ of the contract stipulates the following: ‘In case the contract is terminated by the player with just cause before the expiration date, the Player will be entitled to claim the outstanding amounts and the salary for the remaining duration of contract as compensation, however, in case the Player signs another contract with a third club after the termination of the contract, the player shall only claim the difference between the two employment contracts. (This compensation, the difference between the annual salaries of two lower salary than his contract with Club A. There are no other compensation rights’.

4. On 4 January 2016, the player put the club in default for the total outstanding amount of EUR 118,000, however to no avail.

5. On 11 January 2016, Club A paid the amount of EUR 66,000 to the player, but also imposed a fine in the total amount of EUR 78,000 on him, because he allegedly missed several training sessions in the period between 6 January and 10 January 2016.

6. On 15 January 2016, the player unilaterally terminated the contract.

7. Furthermore, on 19 January 2016, the player signed a contract with the Club of Country B, Club F, valid for the period between 19 January 2016 and 31 May 2016. According to said contract, the player was entitled to receive the total amount of EUR 110,000, payable in 5 monthly instalments of EUR 22,000 each. After the expiry of the contract with Club F, the player holds to have remained unemployed.

8. On 20 January 2016, Club A lodged a claim against both the player and Club F in front of FIFA, requesting the DRC:

(a) to condemn the player to pay compensation in the amount of EUR 480,000 for the unilateral termination of the employment contract without just cause, specified as follows:

- EUR 132,000 as residual value of the contract in the 2015/2016 season, consisting of 6 payments of EUR 22,000 each;

- EUR 48,000 as ‘the left over amount from the penalty’;

- EUR 300,000 as residual value of the contract in the 2016/2017 season (cf. point 2. above).

(b) and/or to award a compensation ‘that the panel sees fit’;

(c) to find Club F jointly and severally liable for the payment as mentioned under point (a);

(d) to impose sanctions on the player and Club F.

9. In particular, Club A held that the player ‘hasn’t attained the half time training camp program of the football team’ in Antalya. Club A further stated that the player was also absent without valid reason from the club’s training sessions on 6, 7, 8, 9, 10 and 15 January 2016, as well as that he did not attend the match Club A - Club F on 16 January 2016. As a result thereof, Club A held that the player breached his contractual obligations.

10. In this respect, Club A argues that, apart from the fines on 11 January 2016, it imposed an additional fine of EUR 22,000 on the player for missing the training on 15 January 2016. Therefore, Club A holds that fines in the total amount of EUR 100,000 were imposed on the player, specified as follows:

- for the missed training on 6 January 2016, a fine of EUR 11,000;

- for the missed training on 7 January 2016, a fine of EUR 11,000;

- for the missed training on 8 January 2016, a fine of EUR 12,000;

- for the missed training on 9 January 2016, a fine of EUR 22,000;

- for the missed training on 10 January 2016, a fine of EUR 22,000;

- for the missed training on 15 January 2016, a fine of EUR 22,000.

11. Furthermore, Club A argues that on 4 January 2016, it was put in default by the player for the total amount of EUR 118,000, as well as that on 11 January 2016, it paid the amount of EUR 66,000 to the player. As a result, Club A holds that ‘the full amount of 66.000€ debt was paid off’.

12. In addition, Club A states that on 13 January 2016, the player, the player’s manager, the club’s president and his son had a meeting in City G. According to Club A, during said meeting the player expressed the following: ‘He is not happy in Club A, he does not like City H. He is in disagreement with his ex-wife about their child together, he is not able to bring his child to Country B, and from here on even if played in Club A he would not be beneficial to anyone’. Club A further argues that said circumstances are no valid reason for the player to terminate a contract and to sign a new contract with another club.

13. On 29 January 2016, the player lodged a separate claim against Club A, requesting outstanding and compensation for breach of contract.

14. In this respect, the player explains that Club A only paid him the signing fee of EUR 50,000, and therefore, failed to pay him the instalment of EUR 30,000, due on 25 December 2015, as well as the monthly salaries in the amount of EUR 22,000 each related to the period between September and December 2015.

15. As a result of the non-payment of the salaries, on 4 January 2016, the player holds to have put Club A in default for the total amount of EUR 118,000. Further, the player points out that on 11 January 2016, Club A paid him part of the requested amount, i.e. EUR 66,000. After not having received the total requested amount of EUR 118,000, the player argues that on 15 January 2016, he terminated the contract, due to the outstanding amounts.

16. Based on the foregoing circumstances, the player lodged a claim before FIFA and requested the DRC to establish that Club A had to pay him:

(a) the amount of EUR 52,000 as outstanding remuneration (corresponding to the outstanding salary on the date of termination of the contract, i.e. EUR 118,000 -/- EUR 66,000), plus ‘the applicable interest’;

(b) the amount of EUR 22,000 as compensation for breach of contract, calculated as follows: EUR 132,000 as residual value of the contract with Club A -/- EUR 110,000 as value of his new contract with Club F.

In addition, the player asked for legal expenses to be borne by Club A.

17. In reply to the claim of Club A, the player denied the Club A’s allegations that he was absent without a valid reason from the training sessions between 6 January and 10 January 2016. The player stated that he had permission from Club A to return only on 11 January 2016 to City J, like some other players of team. Furthermore, the player stated that he only on 18 January 2016, via his lawyer, received the notary records Club A refers to.

18. With respect to the imposed fines, the player argued that these fines cannot be upheld and that they are invalid, since they are ‘exorbitant’ and he had no right to defend his case. Further, the player stated that his absence was not unjustified, and that Club A only imposed these fines in order to set them off against the outstanding amounts.

19. As a result of the foregoing, the player requested for the rejection of Club A’s claim, even if the termination would for whatever reason be considered as made without just cause, since Club A’s claim is groundless. In addition, the player explains that the compensation for breach of contract cannot exceed the difference between the contract with Club A and the contract with Club F.

20. Despite being invited to do so, Club A failed to submit its reply to the player’s claim.

21. After being informed about the claim against the player, Club F submitted its comments, requesting for the rejection of all claims of Club A.

22. In this context, Club F stated that ‘it is easy to understand that the Claimant is trying to use monetary fines to diminish its debts towards the Player […]’ and further argues that the player was not aware of the fact that these fines were imposed on him and that he was not given the possibility of defence. In addition, Club F holds that ‘this kind of fines and sanctions lead to an unjustified disadvantage of the player’s financial rights’.

23. Further, Club F argues that the fines were disproportionate, that there is no evidence ‘that proves reality of the alleged improper act’ and that ‘the Claimant could not substantiate its assertions’.

24. Finally, according to Club F, it was not a party of the contract between Club A and the player. Moreover, Club F states that upon the signing of its contract with the player, it checked all the documents provided by him and concluded that the player, due to the non-payment of salaries, validly terminated his contract with Club A. In conclusion, Club F states that it cannot be held responsible ‘from any act because of this’.

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 20 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 and par. 2 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 D and a Club of Country B, with the involvement of another Club of Country B.

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 20 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.

5. In doing so, the DRC acknowledged that on 4 August 2015, Club A and the player signed an employment contract valid until 31 May 2017, in accordance with which the player was entitled to receive in the 2015/2016 and 2016/2017 season, the amount of EUR 300,000 per season.

6. In continuation, the Chamber also took note that it remained uncontested by both the player and Club A that their contractual relationship was terminated by the player on 15 January 2016.

7. In this regard, the Chamber took note that Club A argued that the player had unilaterally terminated the contractual relationship without just cause, as well as that the player missed several training sessions, for which circumstance fines in the total amount of EUR 100,000 were imposed on the player, and that it ‘set off its debt towards the player’ by making a payment of EUR 66,000 on 11 January 2016. Moreover, Club A explained that the player left, because ‘he was not happy in City H’ and that he made an ‘unjust transfer’ to ‘Club F’. Based on the aforementioned circumstances, Club A maintained that the player had terminated the contract without just cause and therefore claims compensation to be paid by the player.

8. Furthermore, the members of the Chamber took due note of the separate claim of the player, as well as the argumentation contained therein, by means of which the player explained that the breach of the contract occurred due to the fault of Club A, since as from September 2015, it failed to pay a lump sum payment in the amount of EUR 30,000, as well as his monthly salaries in the amount of EUR 22,000 each. In this respect, the members of the Chamber noted that the player further argued that he put Club A in default, warning the latter that he reserved his rights to terminate the contract, if Club A would not pay him the outstanding amounts. Since Club A did not pay him the full requested amount, the player considered that it breached its contractual obligations and that consequently, he terminated the contract with just cause.

9. With the aforementioned considerations in mind, in particular, the opposite position of the parties, the Chamber deemed that the underlying issue in this dispute, was to determine whether the employment contract had been unilaterally terminated on 15 January 2016 with or without just cause by the player, and subsequently, to determine the consequences of said early termination of the contractual relationship by the player.

10. With the abovementioned in mind, the Chamber first pointed that it remained uncontested that at the end of December 2015, salaries in the total amount of EUR 118,000 remained outstanding, consisting of the salaries for the period between September and December 2015, and the instalment of EUR 30,000 due on 25 December 2015.

11. What is more, the Chamber duly noted that the club confirmed that only on 11 January 2016, after being put in default on 4 January 2016 by the player for the total amount of EUR 118,000, it paid him an amount of EUR 66,000, leaving a total outstanding amount of only EUR 52,000. However, the club deemed that fines totalling EUR 100,000, which were imposed on the player by the club for alleged missed trainings, are to be deducted from the outstanding amount of EUR 52,000. Consequently, the club requested that it was owed the amount of EUR 48,000 by the player, and further requested for compensation for breach of contract to be paid by the player.

12. On the other hand, the members of the Chamber noted that the player rejected that the fines were to be deducted from his receivables, pointing out that on 18 January 2016 only, via his lawyer, he was informed for the first time about these fines, which is after the termination of the contract. Further, the player argued that he had permission to join the training sessions of the club as from 11 January 2016 only. Moreover, according to the player, these fines are disproportionate and were only imposed on him in order to set-off the debts the club had towards him.

13. With regard to the player’s alleged absence, the Chamber observed that the club did not submit sufficient evidence which could prove – at the Chamber’s satisfaction – that the player was indeed absent without valid reason as from 6 January 2016, which circumstance is moreover explicitly contested by the player. In addition, the Chamber noted that the club could not prove that the letters it alleges to have sent to the player, requesting him to come back, were duly notified and received by the player, who claims to have received these letters via his lawyer on 18 January 2016 only.

14. What is more, the Chamber concurred that the fines imposed on the player by the club for his alleged absence shall in any case be disregarded. In this respect, the Chamber noted that the player does not appear to have had the possibility to defend himself. Moreover, there is no proof on file that the imposition of said fines was duly notified to the player. As a result, the Chamber concluded that the aforementioned circumstances constitute a violation of the player’s right to a due process. Thus, said fines should be disregarded. In any case, the fines imposed by the club on the player, in the total amount of EUR 100,000 represent almost five monthly salaries, which is clearly to be considered disproportionate and excessive.

15. Furthermore, and irrespective of the foregoing consideration, the Chamber wished to point out that the imposition of a fine, or any other available financial sanction in general, shall not be used by clubs as a means to set off outstanding financial obligations towards players.

16. In view of the above, the DRC first of all took into consideration the content of article 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”.

17. 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.

18. Consequently, the Chamber determined that the club did not have a valid reason to set off its debt towards the player, thus, the amount of EUR 52,000 remained outstanding at the date of termination.

19. Moreover, the DRC took note that - after it had been put in default by the player on 4 January 2016 – the club paid an amount of EUR 66,000.

20. In view of the above, the members of the DRC highlighted that, at the moment the player terminated the contract, i.e. 15 January 2016, the amount of EUR 52,000, corresponding to almost two and a half monthly salaries, remained outstanding and that Club A had seriously neglected its contractual obligations. As a result, the members of the Chamber were of the unanimous opinion that the player could in good faith believe that, in spite of the payment received on 11 January 2016, the club would have persisted on the noncompliance with the financial terms of the contract.

21. In light of the aforementioned, the DRC came to the unanimous conclusion that, considering the situation of the player at the time of the termination, the outstanding salaries in the amount of EUR 52,000, as well as the objective circumstances at the time of the termination did provide the player with a just cause to prematurely terminate the employment contract.

22. Having established that the club is to be held liable for the early termination of the employment contract, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided to reject the club’s claim and established that the player is entitled to receive from the club an amount of money as compensation for breach of contract, in addition to any outstanding payments on the basis of the relevant employment contract.

23. Along those lines, the Chamber firstly referred to the player’s request regarding the outstanding salaries at the time of the unilateral termination of the contract. In this respect, the members of the Chamber concurred that the club must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”.

24. Consequently, the Chamber decided that the club is liable to pay to the player the remuneration that was outstanding at the time of the termination, i.e. the amount of EUR 52,000, which is the remaining part of the amount of EUR 118,000, which was outstanding at the end of December 2015.

25. Moreover, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of outstanding remuneration, i.e. EUR 52,000 as of 29 January 2016 until the date of effective payment.

26. 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 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.

27. 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. In this regard, the Chamber noted that the clause in article i) of the ‘Special provisions’ of the contract stipulates the consequences of a unilateral termination of the contract with just cause by the player.

28. 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.

29. As a consequence of the above, the members of the Chamber determined that the amount of compensation payable by the club to the player had to be assessed in application of the 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.

30. Bearing in mind the foregoing, as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until the end of the 2015/2016 season. Consequently the Chamber concluded that, in line with the player’s request, the amount of EUR 132,000 (i.e. the salary payments with due dates between January 2016 until June 2016) serves as the basis for the determination of the amount of compensation for breach of contract.

31. In continuation, the Chamber verified as to whether the player 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.

32. In this context, the Chamber noted that the player had signed on 19 January 2016, an employment contract with the Club of Country B, Club F, valid as from 19 January 2016 until 31 May 2016, by means of which he would receive the total amount of EUR 110,000.

33. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay – as per the player’s request - the amount of EUR 22,000 to the player, which was considered reasonable and proportionate as compensation for breach of contract in the case at hand.

34. Furthermore, the members of the Chamber decided to reject any further claim lodged by the player.

35. The Chamber concluded its deliberations in the present matter by rejecting the claim lodged by the club, as it has been established that the player had just cause to terminate the employment contract.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of First Claimant / Respondent, Club A, is rejected.

2. The claim of Second Claimant / Respondent, Player C, is partially accepted.

3. The First Claimant / Respondent has to pay to the Second Claimant / Respondent, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 52,000, plus 5% interest p.a. as of 29 January 2016 until the date of effective payment.

4. In the event that the amount due to the Second Claimant / Respondent in accordance with the above-mentioned number 3. is not paid by the First Claimant / Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. The First Claimant / Respondent has to pay to the Second Claimant / Respondent, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 22,000.

6. In the event that the amount due to the Second Claimant / Respondent in accordance with the above-mentioned number 5. is not paid by the First Claimant / Respondent within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

7. Any further claim lodged by the Second Claimant / Respondent is rejected.

8. The Second Claimant / Respondent is directed to inform the First Claimant / 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.

*****

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