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 (DRC) judge

passed in Zurich, Switzerland, on 17 May 2018,

by Philippe Diallo (France), DRC judge,

on the claim presented by the player,

Player A, from country A

as Claimant

against the club,

Club B, from country B

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 5 July 2016, Player A, from country A (hereinafter: Claimant or player) and the Club B, from country B (hereinafter: Respondent or club) concluded an employment contract valid as from 1 August 2016 until 31 May 2018 (hereinafter: contract).

2. According to article 5 of the contract, the player was entitled to receive from the club the following remuneration:

 From 1 August 2016 to 31 May 2017:“27,20,000”, payable in a monthly “2,72,000 equivalent to USD 4,000”;

 From 1 August 2017 to 31 May 2018:“30,60,000”, payable in a monthly “3,06,000 equivalent to USD 4,500”;

 A “rent allowance up to 35,000 per month and the player will have to find an accommodation for himself at his own cost” throughout the duration of the contract;

 Performance bonuses during the length of the contract: “5,000 per goal scored, 3,500 per assists and 2,500 per game won in the League or Federation Cup (if the player starts).”

3. Article 15 xii of the contract provides that “the Club B [i.e. the club] will have an option to terminate this agreement [i.e. the contract] with prior written notice of one (1) month to the player if the club is not participating in the League in the season 2017-18.”

4. The 2016-17 season in country B ended on 31 May 2017 and the 2017-18 season started on 1 June 2017.

5. By correspondence dated 21 September 2017, the club terminated the contract explaining that “due to severe financial constraints, [the club] will be unable to participate in the 2017/2018 edition of the League”, and hence it had to terminate the contract. In such correspondence, the club also acknowledged having a debt in the amount of 15,35,000 towards the player at the date of 31 May 2017 and that such amount would be paid as soon as funds would be available.

6. On 21 September 2017, the club issued a statement certifying, inter alia, that the player fulfilled his obligations towards the club and is released with immediate effect. The club further stated “the club mutually terminates the contract on 1st June 2017”.

7. By correspondence dated 4 October 2017 addressed to the club, the player highlighted that the club terminated the contract without just cause and asked that it pay him USD 67,904.41 for outstanding remuneration and compensation.

8. On 6 November 2017, the player lodged a claim against the club before FIFA maintaining that the club terminated the contract without just cause and asking that the club be ordered to pay to him the amount of USD 67,904.41 corresponding to:

 Outstanding remuneration for the 2016/2017 season in the total of 15,57,500 or USD 22,904.41 corresponding to (i) 5 monthly salaries of 2,72,000 or USD 4,000 each, (ii) 5 rent allowances of 35,000 each and (iii) game bonuses of 22,500;

 USD 45,000 as compensation for breach of contract corresponding to 10 monthly salaries of USD 4,500 each for to the 2017/2018 season.

9. The player further asked to be awarded interest of 5% interest p.a. “for every payment starting from the date of debt maturity until the date of payment.”

10. The player informed FIFA that he had not signed any new employment contract following the termination of his contract with the club and underlined that, as from April 2018, he has been playing for Club X, as an amateur in the country X.

11. In spite of having been invited to do so, the club has not replied to the claim.

II. Considerations of the DRC judge

1. First of all, 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 6 November 2017. Consequently, the 2017 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

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 par. 2 in conjunction 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 and a club.

3. 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 (edition 2018), and considering that the present claim was lodged on 6 November 2017, the 2016 edition of the Regulations on the Status and Transfer of Players (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. 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. In particular, the DRC judge recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

5. First of all, the DRC judge acknowledged that, on 5 July 2016, the Claimant and the Respondent had concluded an employment contract valid as from 1 August 2016 until 31 May 2018.

6. The DRC judge further observed that the Claimant lodged a claim in front of FIFA against the Respondent seeking payment of the total amount of USD 67,904.41, which includes both outstanding remuneration and compensation for breach of contract, asserting that the Respondent had terminated the employment contract without just cause by means of its correspondence dated 21 September 2017. Furthermore, the DRC judge noted that in its letter of termination, the Respondent acknowledged that it owed the amount of 15,35,000 to the Claimant for the period of time running up to 31 May 2017.

7. Subsequently, the DRC judge took into account 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 DRC judge considered that, in this way, the Respondent renounced its right to defence and accepted the allegations of the Claimant.

8. Furthermore, as a consequence of the aforementioned consideration, the DRC judge concluded that in accordance with art. 9 par. 3 of the Procedural Rules he shall take a decision upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

9. In order to be able to establish, first and foremost, as to whether, as claimed by the Claimant, the Respondent terminated the employment contract without just cause, the DRC judge turned his attention to art. 15 xii of the employment contract, which appears to have been invoked by the Respondent when terminating the contract.

10. As stated above, according to art. 15 xii of the employment contract “the Club B [i.e. the club] will have an option to terminate this agreement [i.e. the contract] with prior written notice of one (1) month to the player if the club is not participating in the League in the season 2017-18.”

11. In this respect, the DRC judge held that he could not accept said article as being valid, as it provides for a unilateral termination right without any compensation to the benefit of the club only. Indeed, said article does not appear to grant the same right of termination to the player in the event of the fulfilment of the relevant condition. Therefore, the DRC judge underlined that the Respondent could not legitimately terminate the contractual relationship with the Claimant by making use of art. 15 xii of the employment contract. In addition to the unilateral character of art. 15 xii, the DRC judge took into account that the Respondent notified its decision to terminate the contract on the basis of such ground on 21 September 2017, whereas the 2017-18 season had already started on 1 June 2017.

12. Consequently, the DRC judge decided that the Respondent terminated the contract without just cause.

13. Bearing in mind the previous considerations, the DRC judge went on to deal with the consequences of the early termination of the employment contract without just cause by the Respondent.

14. First of all, the DRC judge highlighted that the Respondent must fulfil its obligations as per the employment contract until its termination in accordance with the general legal principle of “pacta sunt servanda”. Consequently, and bearing in mind that the Claimant claimed outstanding remuneration relating to the 2016-17 season only, the DRC judge decided that the Respondent is liable to pay to the Claimant the amount of 15,35,000 or USD 22,573, consisting of five monthly salaries of USD 4,000 each as well as five rent allowances of 35,000 each.

15. However, the DRC judge considered that the request of the Claimant pertaining to game bonuses agreed in the employment contract had to be dismissed as the Claimant did not present sufficient evidence demonstrating that these game bonuses had in fact fallen due.

16. Furthermore, taking into consideration the Claimant’s petition for payment of interest and the fact that the Claimant had not specified the months included in the amount of outstanding remuneration, whereas the amount is related to the 2016-17 season, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amounts of 15,35,000 or USD 22,573 as of the day on which the 2016-17 season had ended until the date of effective payment.

17. Having established the above, the DRC judge turned his attention to the question of the consequences of the termination of the employment contract by the Respondent without just cause.

18. Taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive from the Respondent compensation for breach of contract.

19. 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.

20. In application of the relevant provision, the DRC judge held that he 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.

21. 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 for 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 the contract would run for another season, i.e. until 31 May 2018, in which a total of USD 45,000 as salaries was 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 45,000 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

22. 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, which circumstance appears to be in line with the information available in the TMS, and was therefore not able to mitigate his damages.

23. In view of all of the above, the DRC judge decided that the Respondent must pay the amount of USD 45,000 to the Claimant as compensation for breach of contract without just cause.

24. Furthermore, taking into consideration the Claimant’s petition as well as the constant jurisprudence of the Dispute Resolution Chamber in this regard, the DRC judge decided that the Respondent is liable to pay to the Claimant interest at the rate of 5% p.a. on the amount of compensation as from the date on which the claim was lodged, i.e. 6 November 2017, until the date of effective payment.

25. The DRC judge concluded his deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

III. Decision of the DRC judge

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

2. The Respondent, Club B, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of 15,35,000 or USD 22,573 plus 5% interest p.a. as from 31 May 2017 until the date of effective payment.

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 45,000 plus 5% interest p.a. as from 6 November 2017 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 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 DRC judge 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