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 8 January 2016, the Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract), valid from the date of signature until 31 May 2018.

2. Pursuant to art. 3 of the contract, the Claimant was entitled to receive the following remuneration:

 2015-16 season: EUR 90,000 payable as follows:

- EUR 18,000 on 30 January 2016;

- EUR 18,000 on 29 February 2016;

- EUR 18,000 on 30 April 2016;

- EUR 18,000 on 30 May 2016;

 2016-17 season: EUR 180,000 payable as follows:

- EUR 18,000 on 30 August 2016;

- EUR 18,000 on 30 September 2016;

- EUR 18,000 on 30 October 2016;

- EUR 18,000 on 30 November 2016;

- EUR 18,000 on 30 December2016;

- EUR 18,000 on 30 January 2017;

- EUR 18,000 on 27 February 2017;

- EUR 18,000 on 30 March 2017;

- EUR 18,000 on 30 April 2017;

- EUR 18,000 on 30 May 2017;

 2017-18 season: EUR 180,000.

3. Furthermore, the contract provides that “[i]f the [Respondent] doesn’t make the payments (Salaries) for two months, according to fifa rules the [Claimant] has right to cancel his contract”.

4. On 20 September 2016, the Claimant put the Respondent in default of paying him the amount of EUR 49,000, corresponding to part of his salary for April 2016, as well as his salaries for May and August 2016, within seven days.

5. On 28 September 2016, the Claimant terminated the contract with the Respondent.

6. On 5 October 2016, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract, requesting the following:

- EUR 49,000, plus interest as of each due date, as outstanding remuneration corresponding to part of his salary for April 2016, as well as his full salaries for May and August 2016;

- EUR 342,000, plus interest as from 28 September 2016, as compensation corresponding to the residual value of the contract;

- EUR 108,000, plus interest as from 28 September 2016, as “indemnity […] in accordance with article 337c/3 of Swiss Code of Obligations”;

- to order the Respondent to bear the legal and procedural costs.

7. In his claim, the Claimant insists that the Respondent failed to pay him more than two monthly salaries and that therefore, in accordance with the contract, he had just cause to terminate the latter.

8. In spite of having been invited to do so, the Respondent did not reply to the Claimant’s claim.

9. According to the information contained in the Transfer Matching System, on 120 January 2017, the Claimant and the Club of Country B, Club E, concluded an employment contract valid as of the date of signature until 15 June 2018 and according to which he is entitled to receive a total remuneration of 253,306.45.

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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 5 October 2016. Consequently, the 2016 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: 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 (edition 2017), 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. 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 2017), and considering that the present claim was lodged on 5 October 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. The members of the Chamber started by acknowledging the facts of the case, as well as the documentation contained in the file. However, the Chamber emphasised that in the following considerations it will refer only to facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Chamber acknowledged that the parties had signed an employment contract, valid as of 8 January 2016 until 31 May 2018 and that the Claimant had unilaterally terminated said contract with the Respondent on 28 September 2016, i.e. before the ordinary expiry of the employment contract, after having put the Respondent in default on 20 September 2016.

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. In particular, the Claimant alleges that the club failed to pay part of his salary for April 2016 as well as his full salaries for May and August 2016.

7. Subsequently, the DRC observed that the Respondent, for its part, failed to present its response to the claim of the Claimant, 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 DRC held 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. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute was to determine whether the contract had been terminated by the Claimant on 28 September 2016 with or without just cause.

10. On account of the aforementioned, and, in particular, taking into account that the Respondent did not reply and thus, did not contest that the claimed salaries had remained unpaid, the DRC established that the Respondent, without any valid reason, failed to remit to the Claimant, until 28 September 2016, a significant part of his salary for April 2016 as well as his salaries for May and August 2016. Consequently, and considering that the Respondent had repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 28 September 2016 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

11. Having established that the Respondent 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 that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

12. At this stage, the DRC made reference to its previous considerations and recalled that at the time of the termination, i.e. on 28 September 2016, part of the salary for April 2016 as well as the salaries for May and August 2016 were outstanding.

13. Consequently, in accordance with the principle of pacta sunt servanda, the DRC decided that the Respondent is liable to pay the Claimant the amount of EUR 49,000 as outstanding remuneration.

14. In addition, and taking into consideration the Claimant’s claim, the DRC decided that the Respondent had to pay default interest at a rate of 5% as follows:

a. 5% p.a. as of 1 May 2016 on the amount of EUR 13,000;

b. 5% p.a. as of 31 May 2016 on the amount of EUR 18,000;

c. 5% p.a. as of 31 August 2016 on the amount of EUR 18,000.

15. In continuation, the Chamber focused its attention on 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 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.

16. 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 established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

17. 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.

18. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until 31 May 2018, taking into account that the Claimant’s remuneration until August 2016 is included in the calculation of the outstanding remuneration. Consequently, the Chamber concluded that the amount of EUR 342,000, i.e. remuneration as from September 2016 until 31 May 2018, serves as the basis for the determination of the amount of compensation for breach of contract.

19. 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.

20. The Chamber noted that according to the documentation in its possession, the Claimant concluded a new employment contract valid until June 2018, according to which he is entitled to receive a total remuneration of 253,306.45 which corresponds to approximately an amount of EUR 35,000.

21. In view of all of the above, and taking into consideration the respective duration of the original and of the new contract, the DRC decided that the Respondent must pay the amount of EUR 307,000 to the Claimant, which is considered by the DRC to be a reasonable and justified amount as compensation for breach of contract.

22. In addition, taking into account the Claimant’s request as well as its longstanding and well-established jurisprudence, 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. 5 October 2016, until the date of effective payment.

23. Subsequently, the DRC analysed the Claimant’s request as “indemnity […] in accordance with article 337c/3 of Swiss Code of Obligations” in the amount of EUR 108,000. In this regard, the Chamber deemed it appropriate to point out that no corroborating evidence had been submitted that demonstrated the damage suffered or its quantity and therefore decided to reject the claim in this respect.

24. In continuation, the Chamber focused its attention on the further consequences of the breach of contract in question and, in this respect, addressed the question of sporting sanctions in accordance with art. 17 par. 4 of the Regulations. The cited provision stipulates inter alia that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on a club found to be in breach of contract during the protected period.

25. Subsequently, the members of the Chamber referred to item 7 of the “Definitions” section of the Regulations, which stipulates, inter alia, that the protected period shall last “for three entire seasons or three years, whichever comes first, following the entry into force of a contract, where such contract is concluded prior to the 28th birthday of the professional, or two entire seasons or two years, whichever comes first, following the entry into force of a contract, where such contract is concluded after the 28th birthday of the professional”. In this respect, the Chamber took note that the breach of the employment contract by the Respondent had occurred on 28 September 2016, i.e. 9 months following the entry into force of the contract at the basis of the dispute. Therefore, the Chamber concluded that, irrespective of the Claimant’s age, such breach of contract by the Respondent had occurred within the protected period.

26. As a result, by virtue of art. 17 par. 4 of the Regulations and considering that the Claimant terminated the contract with the Respondent with just cause and, consequently, the Respondent was to be held liable for the early termination of the employment contract, the Chamber decided that the Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision. In this regard, the Chamber emphasised that apart from the Respondent having clearly acted in breach of the contract within the protected period in the present matter, the Respondent had also on several occasions in the recent past been held liable by the Chamber for the early termination of the employment contracts with the players Player F (case. ref. nr. XX-XXXXX; decided on 28 January 2016), Player G (case ref. nr. YY-YYYYY; decided on 28 January 2016), Player H (case ref. nr. ZZ-ZZZZZ; decided on 28 January 2016) and Player J (case ref. nr. WW-WWWWW; decided on 18 August 2016).

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 49,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 1 May 2016 on the amount of EUR 13,000;

b. 5% p.a. as of 31 May 2016 on the amount of EUR 18,000;

c. 5% p.a. as of 31 August 2016 on the amount of EUR 18,000.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract amounting to EUR 307,000 plus 5% interest p.a. on said amount as from 5 October 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 points 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.

7. The Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision.

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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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives