F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision 17 May 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 17 May 2018,

in the following composition:

Geoff Thompson (England), Chairman

John Bramhall (England), member

Stijn Boeykens (Belgium), member

Philippe Diallo (France), member

Jérôme Perlemuter (France), 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 13 December 2016, the Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), signed a pre-contract, which was meant to lead to the signing of a “player contract” with, inter alia, the following conditions:

a. duration as from 3 January 2017 until 2 January 2018;

b. option of 1 year extension;

c. salary of USD 5,000;

d. fringe benefits relating to flight tickets, accommodation and a car.

2. According to the pre-contract, the details of the “player contract” will be signed and the above conditions are “subject to medical test result”.

3. On 25 September 2017, the Claimant lodged a claim against the Respondent in front of FIFA, requesting to be awarded compensation for breach of contract in the amount of USD 40,600 including USD 15,000 for “specificity of sport”, plus 5% interest p.a. on the amount of USD 25,600 as from 16 January 2017 and on the amount of USD 15,000 as from the date of the decision until the date of effective payment.

4. The Claimant further asked to be awarded legal fees in the amount of “20% on the value of the conviction”.

5. More specifically, the Claimant claimed that, after signing the pre-contract, he joined the Respondent on 4 January 2017. According to the Claimant, after having allegedly passed the medical tests successfully, he started training with the Respondent until 16 January 2017, when the latter informed him that it was not going to sign the employment contract.

6. The Claimant further explained that the Respondent declared having changed its intention due to a recent experience it had with another Player of Country B, Player E, with whom it had signed an analogous pre-contract which had not been respected by the player and had ultimately led to a claim lodged before FIFA, which culminated in a settlement.

7. According to the Claimant, the Respondent’s decision not to sign the employment contract with him was a punishment for Player E’s behaviour.

8. The Claimant held that the pre-contract, which was drafted by the Respondent and made out on the Respondent’s letterhead, in fact was a valid and binding employment contract as it contains all the essential elements.

9. Moreover, the Claimant pointed out that he was able to partially mitigate the damages from the breach of the pre-contract by the Respondent, which he quantified in USD 60,000 on the basis of a monthly salary of USD 5,000, by signing an employment contract with the Club of Country F, Club G, valid as from 1 February 2017 until 31 May 2017 for a monthly salary of 544,000 and two contracts with the Club of Country B, Club H. More in particular, the first of these two contracts ran as from 20 June until 18 September 2017 for a monthly salary of 1,000 and the second ran as from 3 August 2017 until 15 May 2018 for a monthly salary of 937.

10. The Claimant added that, given that the breach of the pre-contract had occurred during the protected period, he was entitled to an additional compensation for “specificity of sport”.

11. Despite having been invited by FIFA to provide its comments on the present matter, the Respondent did not reply to the Claimant’s claim.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 25 September 2017. Consequently, the DRC concluded that the 2017 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is 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 2018), 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 2018), and considering that the present claim was lodged on 25 September 2017, the 2016 edition of the Regulations on the Status and Transfer of Players (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 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. Having said that, the members of the Chamber acknowledged that, on 13 December 2016, the Claimant and the Respondent concluded a pre-contract which was meant to lead, “subject to medical test result”, to the signing of a “player contract”. It was further noted that said pre-contract, apart from bearing the signature of the parties, indicated: (i) the duration of the employment relationship; (ii) the salary provided for the Claimant’s services and (iii) further fringe benefits.

6. The Dispute Resolution Chamber further acknowledged that, according to the Claimant, the Respondent had unilaterally terminated the contract after he had successfully passed the medical tests and started training with the Respondent until 16 January 2017, when the Respondent informed him that it was not going to sign the final employment contract. The Claimant considered that such decision was the result of a recent experience the Respondent had with another Player of Country B with whom it had signed an analogous pre-contract which had not been respected by the latter and had ultimately led to the opening of a proceeding before FIFA.

7. Furthermore, the Chamber took note that the Respondent, for its part, failed to present its response to the claim of the Claimant, despite having been invited to do so. In this way, so the Chamber deemed, the Respondent renounced its right to defence and, thus, accepted the allegations of the Claimant.

8. Moreover, and as a consequence of the aforementioned consideration, the Chamber established that in accordance with art. 9 par. 3 of the Procedural Rules it shall take a decision upon the basis of the documents already on file.

9. Having said that, the Chamber highlighted that, in order to be able to establish as to whether, as claimed by Claimant, a breach of contract had been committed by the Respondent, it should first of all determine as to whether with the signature of the pre-contract a legally binding employment contract had been concluded by and between the Claimant and the Respondent.

10. In relation to the above, the Chamber wished to underline that in order for an employment contract to be considered as valid and binding, apart from the signature of both the employer and the employee, it should contain the essentialia negotii of an employment contract, such as the parties to the contract, their role, the duration of the employment relationship, the remuneration. After careful study of the pre-contract presented by the Claimant, the Chamber concluded that all such essential elements were included in the pertinent document, in particular, the fact that the pre-contract established that the Claimant, a player, had to render his services towards the Respondent, a club, which in turn had to remunerate the Claimant for his services during a specified period of time.

11. Bearing in mind that according to the pre-contract the conditions were subject to the result of the medical test, the members wished to point out that in accordance with art. 18 par. 4 of the Regulations “the validity of a contract may not be made subject to a positive medical examination and/or the granting of a work permit”. In this context, the members of the Chamber stated that the contents of art. 18 par. 4 of the Regulations are of mandatory nature and cannot be contractually amended or circumvented.

12. On account of the aforementioned, the members of the Chamber concluded that, by signing the pre-contract, a valid and legally binding employment contract had been entered into by and between the Claimant and the Respondent on 13 December 2016 with a duration as from 3 January 2017 until 2 January 2018 (hereinafter: the employment contract).

13. Having established the foregoing, the Chamber continued its analysis and turned its attention to the question of the alleged breach of contract without just cause by the Respondent.

14. In this respect, first and foremost, the DRC took into account that it remained undisputed that the Claimant had joined the Respondent on 4 January 2017 and trained with it until 16 January 2017. Moreover, the Chamber took note of the further documentation presented by the Claimant, in particular, a copy of his flight ticket to Country D with arrival date of 4 January 2017, which was allegedly provided by the Respondent. Consequently, the Chamber concluded that the execution of the employment contract had started in January 2017.

15. In continuation, the Chamber observed that it remained undisputed that, on 16 January 2017, the Respondent informed the Claimant that it would not sign the “player contract” which is referred to in the employment contract (previously referred to as “pre-contract”). The members of the Chamber considered that with such decision, which was apparently based on a presumption that the “pre-contract” did not constitute a final and binding employment contract, the Respondent made it clear to the Claimant that it no longer wished to make use of his services. Given the described circumstances, the Chamber agreed that the Respondent’s action is to be considered a breach of contract without just cause. Consequently, the Chamber decided that the Respondent is to be held liable for the early termination of the employment relationship with the Claimant without just cause.

16. In continuation and having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract.

17. In this context, the Chamber outlined that in accordance with said provision 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.

18. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a 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 contract at the basis of the matter at stake.

19. 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.

20. 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 as from its termination and concluded that the Claimant would have received USD 60,000 as remuneration had the employment contract been executed until its regular expiry date, i.e. 12 monthly salaries of USD 5,000 each. In this context, the Chamber pointed out that the Claimant’s statement that the contractual USD 5,000 were payable on a monthly basis has remained uncontested.

21. In continuation, the Chamber assessed as to whether the Claimant has 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 DRC, such remuneration under a new employment contract(s) 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.

22. The Chamber recalled that the Claimant had entered into an employment agreement with the Club of Country F, Club G, valid as from 1 February 2017 until 31 May 2017, in accordance with which he was entitled to receive a monthly remuneration of 544,000. Furthermore, the Chamber recalled that, subsequently, the Claimant signed two contracts with the Club of Country B, Club H. In this respect, the DRC pointed out that the first of these two contracts ran as from 20 June until 18 September 2017 for a monthly salary of 1,000 and the second ran as from 3 August 2017 until 15 May 2018 for a monthly salary of 937.

23. In addition, in respect of the Claimant’s request to be awarded compensation in relation to “specificity of sport” the Chamber concurred that the Claimant did not prove to the satisfaction of the DRC having suffered any further damage and that, consequently, such request must be rejected.

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 USD 26,150 to the Claimant as compensation for breach of contract.

25. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, 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. 25 September 2017, until the date of effective payment.

26. Furthermore, as regards the claimed legal fees, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to its longstanding and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the Chamber decided to reject the Claimant’s request relating to legal expenses.

27. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is 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, compensation for breach of contract in the amount of USD 26,150, plus 5% interest p.a. as from 25 September 2017 until the date of effective payment.

3. In the event that the above-mentioned amount plus interest due to the Claimant is not paid by the 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.

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

5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to 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 (CAS)

Avenue de Beaumont 2

CH-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