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 6 June 2018

Decision of the

Dispute Resolution Chamber (DRC) judge

passed in Zurich, Switzerland, on 6 June 2018,

by Jon Newman (United States of America),

DRC judge,

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 1 August 2017, the player from Country B, Player A (hereinafter: the Claimant), and the club from Country D, Club C (hereinafter: the Respondent), signed an employment contract (hereinafter: the contract), valid as from the date of the signature until 31 July 2018.

2. Art. 5 of the contract established “[the Respondent] accepted [the Claimant] and agreed to pay an amount of (USD 70,000) for season 2017-2018 and is distributed as follows, (USD 25,000) at the arrival the international player card and passing medical examination, (USD 15,000) at the end of the season, (USD 30,000) as a monthly salary of (USD 3,000 over 10 months at the beginning of every month).”.

3. Moreover, the contract does not contain a clause regarding the financial consequences in case of breach of contract by any of the parties.

4. Allegedly, on 23 October 2017, the Claimant put the Respondent in default of payment. Furthermore, by means of a letter dated 13 November 2017, which was received by the Football Federation of Country D on 20 November 2017, the Claimant sent a default notice to the Respondent, requesting the Football Federation of Country D to notify the letter to the Respondent since he could not reach the Respondent. In this respect, the Claimant put the Respondent in default of payment, requesting to be paid the total amount of USD 34,000, amount that corresponds to salaries of August 2017, September 2017 and October 2017, as well, as for the outstanding amount of USD 25,000 corresponding to payment due “at the arrival” of the International Transfer Certificate (ITC).

5. On 4 December 2017, the Claimant put the Respondent in default of payment via the Football Federation of Country D and requested the total amount of USD 37,000, amount corresponding to the outstanding salaries of August 2017, September 2017, October 2017 and November 2017, as well the amount of USD 25,000 corresponding to the payment due “at the arrival” of the ITC, giving the Respondent a deadline of 10 days in order to remedy the breach.

6. On 15 December 2017, the Claimant unilaterally terminated the contract in writing, stressing that he had just cause since the Respondent failed to pay him the amounts previously requested.

7. On 15 December 2017, the Claimant lodged a claim against the Respondent before FIFA, requesting the total amount of USD 70,000, amount which was broken down by the Claimant as follows:

- USD 25,000 corresponding to the amount due “at the arrival” of the ITC;

- USD 15,000 corresponding to salaries for the months of August 2017 to December 2017, in the amount of USD 3,000 each; and

- USD 30,000 as compensation for breach of contract.

8. According to the Claimant, the Respondent did not fulfil its payment obligations towards him since the beginning of the employment relationship, as it was agreed in the contract.

9. Moreover, the Claimant referred to his default letters and deemed having just cause to terminate the contract “after [the Respondent] did not respect the terms of the contract”.

10. On its reply, the Respondent stated “[the Respondent] suffered from missing [the claimant] caused a decline in league order to third place which is not qualifying for finals. Consequently, [the Respondent] had financial losses concerning broadcasting, matches tickets and sponsors.”.

11. Furthermore, the Respondent held having contacted the legal representative of the Claimant to solve the matter amicably.

12. The Claimant on its part, informed that “no amicable agreement was found with [the Respondent]”.

13. After being requested by FIFA, the Claimant informed that he did not signed any employment contract(s) after the termination of the contract.

II. Considerations of the DRC judge

1. First of all, the Dispute Resolution Chamber judge (hereinafter: the DRC Judge) analysed whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 15 December 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) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules editions 2017 and 2018).

2. Subsequently, the DRC judge referred to art. 3 par. 2 and par. 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and 2 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2018) he 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 an club from Country D.

3. In particular, and in accordance with art. 24 par. 2 lit. i) of the Regulations on the Status and Transfer of Players, the DRC judge confirmed that he may adjudicate in the present dispute which value does not exceed CHF 100,000.

4. Furthermore, the DRC judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (editions 2016 and 2018), and considering that the present claim was lodged on 15 December 2017, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

5. The competence of the DRC judge and the applicable regulations having been established, the DRC judge entered into the substance of the matter. In this respect, the DRC judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the DRC judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

6. First of all, the DRC judge acknowledged that, on 1 August 2017, the Claimant and the Respondent concluded an employment contract valid as from the date of the signature until 31 July 2018.

7. In this regard, the DRC judge recalled art. 5 of the contract, which established: “[the Respondent] accepted [the Claimant] and agreed to pay an amount of (USD 70,000) for season 2017-2018 and is distributed as follows, (USD 25,000) at the arrival the international player card and passing medical examination, (USD 15,000) at the end of the season, (USD 30,000) as a monthly salary of (USD 3,000 over 10 months at the beginning of every month).”

8. In continuation, the DRC judged noted that the Claimant lodged a claim against the Respondent, maintaining that he had terminated the contract with just cause on 15 December 2017, after having previously having put the Respondent in default, since the Respondent allegedly failed to paid him USD 34,000, corresponding to outstanding salaries of August 2017, September 2017, October 2017 and November 2017, plus the outstanding amount corresponding to the payment due at the date of arrival of the ITC. Consequently, the Claimant requested to be awarded with his outstanding dues, as well as with the payment of compensation for breach of the employment contract.

9. Subsequently, the DRC judge took into consideration that on its reply, the Respondent argued did not contest the allegations of the Claimant and sustained that after the Claimant left, it had suffered financial losses and that their intention was to solve the matter amicably.

10. In this regard, the DRC judge duly observed that the Claimant informed that no settlement has been reached between the parties.

11. Along this line, the DRC judge concluded that the underlying issue in the present matter is to determine if the employment contract had been unilaterally terminated by the Claimant with or without just cause and which party was responsible for the early termination of the contractual relationship in question and the consequences thereof.

12. At this stage, the DRC Judge recalled that the Claimant held that he did not receive any payment from the Respondent since the beginning of the contract. On that basis, the DRC judge confirmed that in accordance with the contract, the Respondent was obliged to pay to the Claimant at the time the contract was terminated by the Claimant, i.e. on 15 December 2017, USD 37,000, amount corresponding to 4 salaries for the months of August 2017 until November 2017, plus the corresponding amount of USD 25,000, which was payable on the date of the arrival of the ITC.

13. On account of the aforementioned, the DRC judge established that the Respondent, without any valid reason, failed to remit to the Claimant, until 15 December 2017, date on which the Claimant terminated the contract, the total amount of USD 37,000. 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 DRC judge was of the opinion that the foregoing situation legitimately caused the Claimant’s confidence in the Respondent respecting its future duties under the contract to be lost and that the Claimant had just cause to unilaterally terminate the employment contract on 15 December 2017 2012 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.

14. 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.

15. First of all, the DRC judge concurred that the Respondent must fulfil its obligations as per employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the DRC judge decided that the Respondent is liable to pay to the Claimant the remuneration that was outstanding at the time of the termination i.e. USD 37,000, consisting of the monthly salaries of August to November 2017, USD 3,000 each, plus the payment due at the date of the arrival of the ITC, USD 25,000.

16. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the DRC judge focussed its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive an amount of money from the Respondent as compensation for the termination of the contract with just cause in addition to any outstanding payments on the basis of the relevant employment contract.

17. In this context, the DRC judge 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 DRC judge 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 DRC judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

19. Subsequently, and in order to evaluate the compensation to be paid by the Respondent, the DRC judge 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 DRC judge pointed out that at the time of the termination of the employment contract on 15 December 2017, the contract would run until 31 July 2018 in which a total of USD 33,000 as salaries was still to be paid. Consequently, taking into account the financial terms of the contract, the DRC judge concluded that the remaining value of the contract as from its early termination by the Respondent until the regular expiry of the contract amounts to USD 33,000 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

20. In continuation, the DRC judge remarked that following the early termination of the employment contract at the basis of the present dispute, the Claimant did not sign a new professional contract during the relevant period of time and was therefore not able to mitigate his damages.

21. In view of all of the above, the DRC judge decided that the Respondent must pay the amount of USD 33,000 to the Claimant as compensation for breach of contract without just cause, which is considered by the DRC judge to be a reasonable and justified amount as compensation.

22. As a result, the DRC judge decided that the Respondent is liable to pay to the Claimant the amount of USD 33,000 as compensation for breach of contract.

III. Decision of the DRC judge

1. The claim of the Claimant, Player A, is 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 USD 37,000.

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 in the amount of USD 33,000.

4. In the event that the amounts 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, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

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.

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Note relating to the motivated decision (legal remedy):

According to article 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 DRC judge:

Omar Ongaro

Football Regulatory Director

Encl: CAS directives