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 29 March 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 29 March 2018,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Roy Vermeer (The Netherlands), member

Alexandra Gómez (Uruguay), member

Wouter Lambrecht (Belgium), member

Joel Talavera (Paraguay), 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. According to the player of Country B, Player A (hereinafter: the Claimant), on 4 January 2017, the club of Country D, Club C (hereinafter: the Respondent) sent him an “offer letter” (hereinafter: the offer letter), by means of which it allegedly offered him to conclude a contract with the following conditions:

- Duration: 4 January 2017 until 15 November 2017;

- 180,000 in the currency of Country D as monthly salary;

- 180,000 in the currency of Country D as sign-on fee;

- 5,000 in the currency of Country D for accommodation.

2. Moreover, the offer included the following statement:

“This offer is for Player A […] This offer will become the basis for signing the contract papers if you pass the medical test that will be done in the hospital of your choice….”.

3. In addition, the Claimant stated that, “on or about 12 January 2017”, he concluded an employment contract with the Respondent, covering the period from 4 January 2017 until 15 November 2017. According to the Claimant, on the same date, a press conference was held to announce his arrival as the Respondent’s new player.

4. On 20 April 2017, the Claimant lodged a claim against the Respondent before FIFA and requested the following amounts:

- 550,000 in the currency of Country D as outstanding salaries plus 5% interest p.a. as from each due date. Said amount is broken down as follows:

 180,000 in the currency of Country D as sign-on fee, “due on 4 January 2017”;

 180,000 in the currency of Country D as outstanding salary for January 2017, “due on 5 January 2017”;

 180,000 in the currency of Country D as outstanding salary for February 2017, “due on 5 February 2017”;

 10,000 in the currency of Country D as accommodation expenses for January 2017 and February 2017.

 1,620,000 in the currency of Country D as compensation for breach of contract, corresponding to its residual value (March 2017 to November 2017) plus 5% interest p.a. as from the contract’s termination date.

5. Furthermore, the Claimant requested the imposition of sporting sanctions against the Respondent.

6. In support of his claim, the Claimant explained that the Respondent never provided him with a copy of the employment contract. However, he explained that as from 12 January 2017 he started rendering his services to the Respondent.

7. In continuation, the Claimant explained that on 12 February 2017 the Respondent informed him that he “could no longer join trainings of the [Respondent]”.

8. Subsequently, the Claimant held that the Respondent did not request his ITC and that he “has [not] been giving any chance to play in any matches” since 12 January 2017. According to the Claimant, the Respondent denied his “access to competitions and, as such, violated one of his fundamental rights as a football player”.

9. Considering the above-mentioned circumstances, the Claimant stated that the Respondent was no longer interested in his services.

10. Equally, the Claimant stated that the Respondent failed to pay him his salaries and accommodation allowances for January 2017 and February 2017 and the sign-on fee.

11. Bearing in mind the abovementioned facts, the Claimant stated that the Respondent clearly breached the employment contract and that, consequently, he had just cause to unilaterally terminate it. Therefore, the Claimant explained that he sent a letter to the Respondent on 13 February 2017 in which he granted a deadline to the Respondent until 20 February 2017 “to settle this dispute amicably”.

12. Finally, the Claimant pointed out that in different replies to said letter the Respondent offered to pay him two or four monthly salaries as settlement for the termination of the contract. According to the Claimant, this demonstrates that the Respondent admitted the existence of the contract.

13. In its reply to the claim lodged by the Claimant, the Respondent requested the complete rejection of the Claimant’s claim. In particular, the Respondent argued that it has not signed an employment contract with the Claimant and that he was not part of the Respondent’s team during the 2017 season.

14. In continuation, the Respondent argued that the offer letter “is not an employment contract in any way”. In this regard, the Respondent explained that said letter “was issued to [the Claimant] inviting him to come and have his professional skills and competency tested before entering in the process of signing an employment contract with [the Respondent]”. However, the Respondent explained that the Claimant “lacked the skill of a professional football player” to qualify as a Respondent’s player. According to the Respondent, the Claimant “has duly received the report on the assessment of his skill as football professional”.

15. Furthermore, the Respondent explained that all the employment contracts with its players are constantly checked by the Football Association of Country D and that it always hands copies of the contracts to all its players and to the Football Association of Country D. In this respect, the Respondent argued that if a signed employment contract exists, the Claimant has to submit it.

16. In his replica, the Claimant reiterated that the Respondent failed to provide him with a copy of the employment contract.

17. In reference to the contents of the offer letter, the Claimant considered that said document contains all the “essentialia negotii” of a contract. Therefore, the Claimant stated that said document “is a legally binding contract because it satisfied all the elements of a contract…” and cannot be considered as “an invitation for the [Claimant] to go to Country D to have his competency tested”, as argued by the Respondent in its reply to the claim.

18. Moreover, the Claimant pointed out that the only condition that the offer letter had was to pass the medical tests. According to the Claimant, he met the requirement and the Respondent did not contest it.

19. Subsequently, the Claimant explained that even if there was no written contract whatsoever, there was a de facto employment relationship between the parties. In this respect, the Claimant pointed out that he “went to Country D and performed his obligations as an employee for nearly a month before being dismissed by the [Respondent]”.

20. Finally, the Claimant stated that the Respondent failed to comply with its obligation of registering him with the Football Association of Country D.

21. The Respondent submitted its duplica, reiterating its arguments and confirming its positions concerning the Claimant’s claim.

22. In addition, the Respondent argued that the Claimant acknowledged that there was no employment contract and that he was trying to claim that the offer letter was a contract. According to the Respondent, this “is not in good faith”.

23. Regarding the answers to the letter sent by the Claimant on 13 February 2017 (cf. point 12 above), the Respondent explained that “it was only part of correspondence between the [Respondent] and [the Claimant] over other topics”.

24. Furthermore, the Respondent explained that the Claimant practiced with the Respondent less than 30 days and, therefore, is not entitled to receive any payment according to the law of Country D.

25. In relation to the press conference (cf. 3 point above), the Respondent explained that it uses such conferences to “generally welcome all football players to come practice” with the Respondent.

26. Finally, and upon FIFA’s request, the Claimant informed that he did not conclude any employment contract with another club after the termination of the contract.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) 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 20 April 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 and 2018 editions 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 from Country B and a club from 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 (editions 2016 and 2018), and considering that the present matter was submitted to FIFA on 20 April 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 according to the Claimant, on 4 January 2017, the Respondent sent him an “offer letter” by means of which it allegedly offered him to conclude a contract with the following conditions:

- Duration: 4 January 2017 until 15 November 2017;

- 180,000 in the currency of Country D as monthly salary;

- 180,000 in the currency of Country D as sign-on fee;

- 5,000 in the currency of Country D for accommodation.

6. Along with the above, the Chamber took note that the Claimant held that “on or about 12 January 2017”, he concluded an employment contract the Respondent, covering the period from 4 January 2017 until 15 November 2017.

7. Subsequently, the DRC noticed that the Claimant sent a correspondence labelled “termination letter” to the Respondent on 13 February 2017.

8. The members of the Chamber considered important to note, however, that, in said letter the Claimant also gave the Respondent a prior warning as he stated that he will resume the contract with the Respondent if the latter “confirm [its] intention to honour the contract” and to register him for the 2017 season. The DRC also observed that in said letter the Claimant granted a deadline to the Respondent until 20 February 2017 “to settle this dispute amicably”.

9. Moreover, the DRC took note that, on 20 April 2017, the Claimant lodged a claim against the Respondent before FIFA and requested 550,000 in the currency of Country D as outstanding remuneration and 1,620,000 in the currency of Country D as compensation for breach of contract.

10. Further, the Chamber took note that the Claimant explained that as from 12 January 2017 he started rendering his services to the Respondent. However, the DRC noticed that the Claimant argued that the Respondent never provided him with a copy of the employment contract.

11. Notwithstanding with the above, the members of the Chamber observed that the Claimant considered that the offer letter contains all the “essentialia negotii” of a contract and therefore, can be considered “a legally binding contract because it satisfied all the elements of a contract…”.

12. Moreover, the DRC acknowledged that the Claimant argued that the Respondent was no longer interested in his serviced as it did not request his ITC and also failed to pay him his salaries and accommodation allowances for January 2017 and February 2017 as well as the sign-on fee.

13. In continuation, the Dispute Resolution Chamber took note that the Respondent on its part requested the complete rejection of the Claimant’s claim. In particular, the Chamber observed that the Respondent argued that it has not signed an employment contract with the Claimant and that the offer letter cannot be considered an employment contract. According to the Respondent, the Claimant was not part of the team during the 2017 season.

14. In this regard, and after having carefully examined the parties’ positions, the Chamber wished to highlight 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 and the remuneration.

15. This being established, and after a careful study of the offer letter presented by the Claimant, the Chamber concluded that all such essential elements are included in the pertinent document, in particular, the fact that the said document establishes that the Claimant is entitled to receive remuneration, including a monthly salary, in exchange for his services to the Respondent as a player.

16. Consequently, the members of the DRC decided that the offer letter (hereinafter: the contract) contains all essentialia negotii of an employment contract and therefore the Claimant and the Respondent were in a valid and legally binding employment relationship as from 4 January 2017.

17. Furthermore, the DRC considered relevant to recall its jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of (administrative) formalities, such as, but not limited to, the registration procedure in connection with the international transfer of a player, which are of the sole responsibility of a club and on which a player has no influence. The DRC also pointed out that it is the responsibility of the engaging club to ensure that the player is properly registered with his new club in order to be able to provide it with his services. Since the club is supposedly interested in acquiring the rights of the player and in benefiting from his services, it is also expected from it that it acts accordingly in view of obtaining the player’s ITC and his subsequent registration. As regards the case at stake, the DRC stressed that, according to the information submitted to the file, no ITC was requested by the Respondent.

18. Subsequently, the Chamber noted that the Respondent did not present any evidence that the sign-on fee as well as the Claimant’s salary and accommodation allowance for January 2017 were paid. In this respect, the members of the Chamber also stressed that the Claimant was entitled to a sign on fee of 180,000 in the currency of Country D, to a monthly salary of 180,000 in the currency of Country D and to receive a monthly amount of 5,000 in the currency of Country D for accommodation.

19. On account of the aforementioned considerations, and in accordance with the general legal principle of pacta sunt servanda, the DRC decided that the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of 365,000 in the currency of Country D.

20. In addition, and with regard to the Claimant's request for interest, the members of the Chamber decided to award the Claimant interest on the above-mentioned amount as follows:

a) 5% p.a. over the amount of 180,000 in the currency of Country D as from 5 January 2017 until the date of effective payment;

b) 5% p.a. over the amount of 185,000 in the currency of Country D as from 1 February 2017 until the date of effective payment.

21. Having established the above and, considering the conflicting position of the parties, the Chamber went on to analyse if the contract had been terminated by the Respondent with or without just cause.

22. In this regard, the Chamber established that the Respondent obviously had no longer been interested in the Claimant’s services by sustaining that no valid employment contract existed between the parties, by not requesting the relevant ITC although this being the responsibility of the Respondent and by failing to remit the Claimant’s salaries. Such conduct constitutes, in the Chamber’s view, a clear breach of contract. Accordingly, the Chamber concurred that the Claimant had just cause to unilaterally terminate the employment contract on 20 February 2017 and that, consequently, the Claimant is entitled to receive from the Respondent an amount of money as compensation.

23. 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.

24. 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 employment contract at the basis of the matter at stake.

25. 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.

26. Having recalled the aforementioned, and in order to establish the amount of compensation to be paid by the Respondent, 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 remaining value of it corresponds to 1,805,000 in the currency of Country D consisting of the salaries from February 2017 to November 2017 (1,800,000 in the currency of Country D), as well as 5,000 in the currency of Country D corresponding to the Claimant’s accommodation allowance for February 2017. Consequently, the DRC concluded that the amount of 1,805,000 in the currency of Country D serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

27. Subsequently, the members of the Chamber verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

28. In this regard, the Chamber noted that, according to the Claimant, he did not enter into any professional football relationship with a new club after the termination of the contract with the Respondent.

29. The Chamber therefore concluded that the Claimant is entitled to receive from the Respondent compensation for breach of contract in the amount of 1,805,000 in the currency of Country D which is considered by the members as a fair and justified amount.

30. In addition, taking into account the constant practice of the DRC 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. 20 April 2017, until the date of effective payment.

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

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of 365,000 in the currency of Country D.

3. Within the same deadline, the Respondent has to pay to the Claimant interest as follows:

- 5% p.a. over the amount of 180,000 in the currency of Country D as from 5 January 2017 until the date of effective payment;

- 5% p.a. over the amount of 185,000 in the currency of Country D as from 1 February 2017 until the date of effective payment.

4. 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 1,805,000 in the currency of Country D plus 5% interest p.a. on said amount as from 20 April 2017 until the date of effective payment.

5. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2., 3. and 4. are 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.

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

7. 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