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 21 September 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 21 September 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

John Bramhall (England), member

Johan van Gaalen (South Africa), member

Mohamed Al Saikhan (Saudi Arabia), member

Pavel Pivovarov (Russia), 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 25 January 2016, 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 1 February 2016 until 30 June 2018.

2. On the same date, 25 January 2016, the Claimant and the Respondent signed a document called “Remuneration Agreement” (hereinafter: the agreement). According to the agreement, the Claimant was entitled to receive from the Respondent his monthly remuneration as follows:

 EUR 10,000 from 01.02.2016 until 30.06.2017.

 EUR 12,000 from 01.07.2017 until 30.06.2018.

3. According to article 5 par. 2 of the contract, the Respondent has the right to “grade the [Claimant] to another club team (grading shall be decided by the Board of Directors)”.

4. In addition, in its article 6 the contract stipulates that the Claimant is obliged to “conduct oneself according to the highest principle of honesty, ethics and spirit of fair play and abstain from any behaviour and conduct which could damage the good reputation of the [Respondent]”.

5. Likewise, article 10 par. 4 of the contract reads: ”The contract may end by early termination according to §40 of the Sport’s Act. Notice period is 1 month”.

6. Moreover, article 10 par. 5 lit. b stipulates that the Respondent is authorized to unilaterally withdraw from the contract “If the [Claimant] has breached his obligations and has been warned by the [Respondent] in writing upon particularly serious form or repeatedly (at least twice)”.

7. On 4 January 2017, the Claimant lodged a claim before FIFA against the Respondent and requested:

 To order the Respondent to pay the Claimant the amount of EUR 224,000 net plus 5% interest p.a. as compensation;

 EUR 20,000 plus 5% interest p.a. for moral damages;

 To pay the entire costs of the proceedings and reimburse the Claimant for all the costs incurred by him.

8. In support of his claim, the Claimant explained that since February 2016 he has been providing his services to the Respondent in accordance with the terms of the contract. In this respect, he explained that he was participating regularly in all the training sessions and was fielded in most of the matches of the Respondent´s “A” team. However, the Claimant explained that, as of August 2016, the Respondent decided to relegate him to the Respondent´s “B” team without any justification. According to the Claimant, this decision was related to the hiring of a new coach by the Respondent. In this respect, the Claimant stated that before this relegation he never received any complaints or warnings regarding his performance.

9. Furthermore, the Claimant explained that the Respondent unilaterally terminated the contract by means of a letter issued by the Respondent´s president, dated 20 September 2016, and delivered to him on 22 September 2016. According to this document, the Respondent “unilateral withdraw from the [Claimant’s] contract on performance of sport activities of the professional football player, to the date 19.10.2016”.

10. According to the Claimant, in said letter the Respondent argued that the grounds for the termination were the “purported attack and dangerous and threatening behavior of the [Claimant] against two of his teammates in the B team during the match of 18 September 2016”.

11. Within this context, the Claimant argued that his intentions were to respect the contract and its obligations. Therefore, his representative sent an email to the Respondent on 27 September 2016 requesting to be included once again in the training and selection of the Respondent´s first squad.

12. Subsequently, the Claimant pointed out that the Respondent did not revoke or amend in any way the termination letter, also failing to reply or contact the Claimant in any other way regarding the future of their employment relationship and the Respondent´s unilateral termination. Consequently, he left Country D and returned to Country B after 19 October 2016, when the termination was effective. The Claimant stressed that, surprisingly, on 27 October 2016 he received via email a letter from the club with a “Notice No. 1 of Breach of Duty” stating that he was in breach of his obligations because he had failed to attend the training sessions of 25, 26 and 27 October 2016.

13. On 31 October 2016 the Claimant’s representative replied and stated that the club had terminated the employment relation unilaterally and without just cause, effective as of 19 October 2016. In said letter, the Claimant’s representative also sent a default notice to the Respondent, granting a ten-day deadline to pay EUR 234,000 (EUR 224,000 as compensation for the early termination and EUR 10,000 as outstanding salary for October 2016).

14. Furthermore, the Claimant explained that he received a new letter from the Respondent dated 11 November 2016 where the latter repeated its “unfounded allegations”. In reply to this, the Claimant’s representative sent an email dated 24 November 2016 where he confirmed that the employment relation was terminated unilaterally and without just cause by the Respondent, effective as of 19 October 2016.

15. With those considerations in mind, the Claimant stressed that the Respondent failed to observe the contract’s provisions and clearly terminated the contract unilaterally and without just cause. In particular, he explained that he did not breach any obligations of the contract as he respected his trainers, his assistants, the club officials and his teammates. According to the Claimant, in the alleged incident of 18 September 2016, he never tried to physically or verbally attack his teammates and he only had one minor verbal exchange with one of his teammates “caused by the pressure and anxiety of the match”.

16. Additionally, the Claimant argued that the Respondent did not warn him at any other time prior to the Respondent´s letter dated 20 September 2016. Consequently, the Claimant stated that the Respondent had failed to comply with the wording of article 10 par. 5 lit. b of the contract.

17. Moreover, the Claimant stated that the fact that he was relegated to the Respondent’s “B” team also constitutes a clear breach of the contract by the Respondent. According to the Claimant, the Respondent never demonstrated any intention to reinstate him to the first team, even after the email sent by the Claimant to the Respondent on 27 September 2016.

18. This being established, the Claimant referred to article 17 of the Regulations on the Status and Transfer of Players. In particular, he stated that the compensation amount should be the residual value of the contract after its termination, i.e. EUR 224,000 (EUR 80,000 for the November 2016 – June 2017 period and EUR 144,000 for the July 2017 – June 2018 period).

19. Finally, the Claimant requested the amount of EUR 20,000 as compensation for the moral damages caused by the Respondent for “its recidivist and immoral behavior”.

20. In its reply to the claim lodged by the Claimant, the Respondent held that the Claimant’s claim should be rejected. In particular, the Respondent argued that on September 2016 the Claimant was informed, in accordance with article 5 par. 2 of the contract, that he “will be temporary graded to the team B of Club C , to improve the quality of his match performance by taking participation on the training sessions and matches and then he will join the A team”.

21. In this context, the Respondent indicated that the Claimant accepted its decision. However, on 18 September 2016, during a “B” team match, the Claimant “attacked by exalted heavy verbal modo et forma the players Player E and Player F and further continue in such dangerous and threatening behavior when he verbal threated by physical attack the Player E and consequently tried to attack physically the same player”. Under said circumstances, and taking into consideration that “such extreme dangerous behavior should have fatal consequences at future”, on 20 September 2016 the Claimant was informed of the decision of the Respondent’s board regarding the “unilateral withdraw from the [Claimant’s] contract”, with effect as from 19 October 2016, in accordance with article 10 par. 4 of the contract.

22. In continuation, the Respondent referred to the email sent by the Claimant’s representative on 27 September 2016. In this respect, the Respondent explained that indeed according to article 10 of the contract, the Claimant should be warned at least twice in order to unilaterally withdraw from the contract. However, the Respondent repeated that such “extreme dangerous behavior should have fatal consequences at future and that was the reason for the decision”.

23. Furthermore, the Respondent referred to article 5 par. 2 of the contract, according to which the Respondent was authorized to grade the Claimant to its “B” team. In this regard, the Respondent stressed, that in the past it also graded other players to “improve his football quality and then return back to A Team”.

24. Subsequently, the Respondent pointed out that after the email sent by the Claimant’s representative on 27 September 2016, the Claimant returned to train with the Respondent, however, only for a short time. According to the Respondent, on 24 October 2016, the Claimant notified the Respondent that his lawyer informed him that the contract had been terminated and that, consequently, he was returning to Country B. According to the Respondent, the Claimant left Country D without the Respondent’s permission.

25. In this context, the Respondent explained that on 27 October 2016 it sent “Notice No. 1 of Breach of Duty” for failing to attend the “A” team’s training sessions on 25, 26 and 27 October 2016. Moreover, the Respondent referred to its above-mentioned letter dated 11 November 2016 as well as to a “Notice No. 2 of Breach of Duty” sent to the Claimant on 14 December 2016 in which the Respondent requested “the [Claimant] to return back to Country D, to join the [Respondent] to discuss details about the future”.

26. Finally, the Respondent pointed out that it had paid the Claimant’s salary during all 2016, despite the fact that the Claimant was no longer participating in the training sessions. In this regard, the Respondent argued that the Claimant “still accepted the reward according to the contract which, according to him finished at September 2016!”.

27. The Claimant submitted his replica, reiterating his arguments and confirming his position with regards to his statement of claim. In particular, the Claimant stressed that his relegation to the “B” team demonstrated the Respondent’s intention to “downgrade his position and, ultimately, terminate their employment relationship”.

28. In addition, the Claimant argued that, in its reply, the Respondent had admitted that it had failed to comply with the conditions established in article 10 par. 5 lit. b of the contract with respect to the unilateral termination of the contract.

29. Moreover, and in relation to the argument that he left Country D without the Respondent’s permission, the Claimant pointed out that it constitutes bad faith from the Respondent to “request the [Claimant] render his services under the contract and put him on notice for non-appearance after the date of termination took effect (19 October 2016)”.

30. Finally, the Claimant confirmed the payments made by the Respondent; however, arguing that such correspond to outstanding salaries and compensation for the early termination. As a result, the Claimant amended his claim and requested the Respondent to pay EUR 204,000 plus 5% interest p.a. (EUR 60,000 for the January 2017- June 2017 period and EUR 144,000 for the July 2017 – June 2018 period) as compensation for breach of contract and EUR 20,000 plus 5% interest p.a. as compensation for moral damages.

31. The Respondent submitted its duplica, reiterating its arguments and confirming its positions with regards to the claim.

32. Finally, and upon FIFA’s request, the Claimant informed that he entered into another employment contract with the club of Country B “Club G”, valid as from 12 January 2017 until 30 June 2017. This contract provides a monthly salary of EUR 600 and 6 installments of EUR 2,633 each. Additionally, the Claimant informed that he signed another employment contract with the club of Country B “Club H”, valid as from 1 July 2017 until 30 June 2019. According to this document, during the overlapping period the Claimant is entitled to receive a monthly remuneration of EUR 700, seven installments of EUR 2,539 each, one installment of EUR 5,078, one installment of EUR 4,339 and one instalment of EUR 1,800.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analyzed whether it was competent to deal with the case at hand. In this respect, he took note that the present matter was submitted to FIFA on 4 January 2017. Consequently, 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 2017 edition of the Procedural Rules).

2. Subsequently, the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2016), it 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 2016), and considering that the present matter was submitted to FIFA on 4 January 2017, the 2016 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the members of the Chamber entered into the substance of the matter, while emphasizing that, although having acknowledged all the above-mentioned facts, 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. Firstly, the DRC acknowledged that, on 25 January 2016, the Claimant and the Respondent signed an employment valid as from 1 February 2016 until 30 June 2018.

6. Furthermore, the Chamber took note that according to article 10 par. 4 ,”the contract may end by early termination according to §40 of the Sport’s Act. Notice period is 1 month”.

7. Moreover, the members of the Chamber observed that article 10 par. 5 lit. b stipulates that the Respondent is authorized to unilaterally withdraw from the contract “If the [Claimant] has breached his obligations and has been warned by the [Respondent] in writing upon particularly serious form or repeatedly (at least twice)”.

8. The DRC further observed that, on 4 January 2017, the Claimant lodged a claim against the Respondent before FIFA requesting the payment of EUR 224,000 plus 5% p.a. as compensation for breach of contract, as well as EUR 20,000 for moral damages.

9. Subsequently, the Chamber noticed that in his claim the Claimant held that the Respondent terminated the contract unilaterally and without just cause by means of a letter dated 20 September 2016 issued by the Respondent´s president after an alleged incident with his teammates during a match with the “B” team on 18 September 2016. In particular, the Claimant stressed that he did not breach any obligations of the contract as he respected his trainers, his assistants, the club officials and his teammates. Furthermore, the Claimant stated that the Respondent failed to observe the contract’s provisions as the Respondent did not warn him at any time prior to the Respondent´s letter dated 20 September 2016.

10. In continuation, the Dispute Resolution Chamber took note that the Respondent on its part argued that it unilaterally terminated the player’s contract as of 19 October 2016 after an alleged physical and verbal aggression to his teammates during a “B” team match played on 18 September 2016. According to the Respondent, it did not warn the Claimant as such “extreme dangerous behavior should have fatal consequences at future”. In addition, the DRC also observed that the Respondent argued that the Claimant left Country D without the Respondent’s authorization.

11. Within this context, and after having carefully examined the parties’ positions, the Chamber acknowledged that first it had to examine whether the reasons put forward by the Respondent could justify the termination of the contract in the present matter.

12. In this regard, referring to art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof, the DRC took into account that the Respondent failed to present conclusive evidence in support of the allegation that the Claimant attacked physically and verbally his teammates during a “B” team match played on 18 September 2016.

13. Moreover, and regardless of the aforementioned consideration, the Chamber was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, the Chamber considered that there would have been more lenient measures to be taken (e.g., among others, a suspension or a fine), in order to sanction the alleged misconduct, which is at the basis of the termination of the employment contract by the Respondent. A premature termination of an employment contract can always only be an ultima ratio.

14. Notwithstanding with the above, the DRC also pointed out that the termination by the Respondent, by means of its letter dated 20 September 2016, and which according to the Respondent was based on art. 10 par. 4, also does not comply with the wording under article 10 par. 5 lit b of the contract, according to which the Respondent would have to warn the Claimant in writing before terminating the contract.

15. Furthermore, and in relation with the Respondent’s argumentation that Claimant left Country D without the Respondent’s authorization, the DRC established that this argumentation cannot be considered as valid as the Respondent requested the Claimant to render his services after the date of termination took effect (19 October 2016).

16. In view of the above considerations, the Chamber decided that there was no just cause for the Respondent to unilaterally terminate the employment relationship between the Claimant and the Respondent and that, therefore, the Respondent had breached the employment contract without just cause. Consequently, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract without just cause.

17. 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 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. The Chamber held that it first of all had to clarify as to 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 employment 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. Having recalled the aforementioned, and in order to establish the amount of 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 as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber observed that at the time of the termination of the employment contract, the contract would run for another 20 months. Consequently, the Chamber established that the remaining value of the contract as from its early termination by the Claimant until the regular expiry of the contract would be EUR 224,000 for the period between 1 November 2016 and 30 June 2018 (EUR 80,000 for the November 2016 – June 2017 period and EUR 144,000 for the July 2017 – June 2018 period). However, the Chamber took into account that the Claimant acknowledged receipt of payments made by the Respondent after the date of the contract’s termination and that he amended his claim and reduced the amount claimed to EUR 204,000.

21. 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.

22. In this regard, the DRC observed that the Claimant confirmed that he entered into another employment contract with the club of Country B “Club G”, valid as from 12 January 2017 until 30 June 2017. This contract provides a monthly salary of EUR 600 and 6 installments of EUR 2,633 each. Additionally, the DRC took note that the Claimant informed that he signed another employment contract with the club of Country B “Club H”, valid as from 1 July 2017 until 30 June 2019. According to this document, during the overlapping period the Claimant is entitled to receive a monthly remuneration of EUR 700, seven installments of EUR 2,539 each, one installment of EUR 5,078, one installment of EUR 4,339 and one instalment of EUR 1,800. Therefore, in accordance with the constant practice of the Dispute Resolution Chamber and the general obligation of the Claimant to mitigate his damages, such remunerations under the new employment contracts shall be taken into account in the calculation of the amount of compensation for breach of contract.

23. 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 149,000 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a reasonable and justified amount as compensation.

24. 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. 4 January 2017, until the date of effective payment.

25. Furthermore, as regards the claimed legal expenses, the DRC referred to art. 18 par. 4 of the Procedural Rules as well as to its long-standing 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 DRC decided to reject the Claimant’s request relating to legal expenses.

26. Lastly, the DRC analysed the request of the Claimant corresponding to compensation for moral damages in the amount of EUR 20,000. In this regard, the Chamber deemed it appropriate to point out that the request for said compensation presented by the Claimant had no legal or regulatory basis and pointed out that no corroborating evidence had been submitted that demonstrated or quantified the damage suffered. Therefore, the Chamber decided to reject the Claimant’s request relating to moral damages.

27. The DRC 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, 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 149,000 plus 5% interest p.a. on said amount as from 4 January 2017 until the date of effective payment.

3. In the event that the aforementioned sum plus interest is not paid 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 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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives