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 7 June 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 7 June 2018,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (the Netherlands), member

Jon Newman (USA), member

Wouter Lambrecht (Belgium), member

Pavel Pivovarov (Russia), member

on the claim presented by the player,

Player A, Country B

as Claimant / Counter-Respondent

against the club,

Club C, Country D

as Respondent / Counter-Claimant

with the club,

Club E, Country F

as Intervening Party

regarding an employment-related dispute arisen between the parties

I. Facts of the case

1. On 25 January 2017, the club of Country D, Club C (hereinafter: Respondent/Counter-Claimant or club) and the player of Country B, Player A (hereinafter: Claimant/Counter-Respondent or player) signed an employment contract (hereinafter: contract) valid as from 28 January 2017 until 28 July 2017.

2. According to article 2 of the contract, the player was entitled to receive from the club, inter alia, a total remuneration of “USD 80,000” payable as follows:

- USD 41,000 as signing-on fee payable upon a successful medical exam of the player and receipt of the international transfer certificate;

- USD 40,000 in 6 monthly instalments of USD 6,500 each, the first of which was due on 28 January 2017 and the remaining 5 were payable on the last day of the corresponding month.

3. Article 6 of the contract establishes that “[the player] is liable for taxes stemming from the performance of this contract.”

4. According to article 8 of the contract, “the [club] shall have the right to terminate this contract if the [player] breaches any provision of this contract subjecting him to compensate the [club] the value of the contract plus USD 25,000.”

5. Additionally, article 13 of the contract states that, “If the [player] misses a training session without a valid reason, an amount of USD 500 shall be deducted from his monthly instalments and such fine shall be doubled in the event of repeated breaches. In the event he [the player] misses training for seven consecutive days without valid reason, [the club] shall have the right to terminate the contract with just cause.”

6. In its article 14, the contract establishes that “the club undertakes to secure the player with decent accommodation and shall pay for his food and transportation to and from the stadium.”

7. On 11 February 2017, the player and the club signed an amendment to the contract, according to which they, inter alia, “mutually agreed to postpone the payment of the signing on fee of USD 41,000 and all of the monthly salaries until the club’s head coach and the medical doctor submit relevant reports certifying that the player is technically, physically and medically qualified to play professional football for the first team of the club.”

8. On 14 June 2017, the player lodged a claim against the club before FIFA requesting to be awarded USD 6,500 as outstanding remuneration corresponding to his salary of May 2017.

9. In his claim, the player explained that the club asked him to play five official games with the team in order for him to receive his salaries, which matches he allegedly played, but that the club did not fulfil its financial obligations towards him. The player further considered that since the signature of the contract, the club has been luring him with the promise of being paid.

10. Moreover, the player stated that, on 2 May 2017, following his various requests for payment of his receivables, he received from the club 2 out of 3 monthly salaries as well as the amount of USD 41,000 corresponding to the signing-on fee.

11. Furthermore, the player indicated that his wife was pregnant and hospitalized in Country B and that the club, after an initial refusal, accepted that he visit her.

12. The player further indicated that he felt insecure in Country D as he received threats from the club’s fans, who allegedly came to his hotel to intimidate him.

13. The player mentioned having asked the club to mutually terminate the employment contract, but the club refused for the reason that it was satisfied with his performance.

14. According to the player, due to the situation, he left Country D and since his return to Country B he has been receiving threats via social media and the club threatened to block his future transfer.

15. On 16 August 2017, in its reply to the claim, the club rejected the player’s arguments and lodged a counterclaim against him for breach of contract without just cause requesting the following:

- Compensation in the amount of USD 100,000 plus 5% interest as from 1 June 2017; alternatively,

- Compensation in the amount of USD 108,670 plus 5% interest as from 1 June 2017; subsidiarily,

- Order the player to reimburse the amount of USD 14,170 it allegedly paid in excess of his entitlements as well as hotel charges in the amount of USD 14,500.

16. The club argued that it made several payments to the player: a first payment of USD 19,500 on 2 March 2017, after he played his first match, a further payment in the amount of USD 20,000 on 4 April 2017 and the last payment of USD 21,000 on 17 April 2017.

17. Furthermore, the club indicated that it accepted the player’s request for a temporary absence as from 24 May 2017 until 1 June 2017 in order for the player to visit his wife but, according to the club, he failed to return.

18. In addition, the club submitted a letter of the player dated 5 May 2017, which it received from the Football Federation of Country B on 12 June 2017 on behalf of the player, stating that as his wife was still hospitalized, he informed the club that “As my contract expires on 28th July 2017, I no longer find the importance of returning to Country D to continue the adventure with the Club” due to, inter alia, the delay in the payment of his salary, the seizure of his passport and security problems at the hotel.

19. Furthermore, the club submitted a copy of its written reply to the player, dated 12 June 2017, by means of which the club stated that he has not returned to the club after his temporary absence until 1 June 2017 and granted the player a last deadline of 7 days to resume his contractual obligations with the club. According to said reply of the club, otherwise, according to article 13 of the contract, it would exercise its right to terminate the contract.

20. The club also stressed that, according to article 6 of the contract, the player was responsible to pay taxes. However, considering the alleged breach of contract by the player on 1 June 2017, the club was not in the capacity to deduct such amounts and it was now responsible to pay taxes to the financial authorities.

21. Consequently, the club argued that the player has overdue payments towards it in an amount of USD 14,170 corresponding to (i) overpaid salaries due to the early contract termination and (ii) tax deduction in accordance with tax law of Country D. In this regard, the club explained that until 1 June 2017, the player was entitled to receive the amount of USD 46,330 after tax deduction and since the club already paid the amount of USD 60,500 to him, the player has been paid USD 14,170 in excess of his entitlements.

22. In addition, the club asserted that it has provided the player with accommodation and food in accordance with the contract and, as the player left Country D before the end of his contract, he shall reimburse the club for extra hotel charges it allegedly incurred in the amount of USD 14,500.

23. Moreover, the club rejected the player’s argument regarding the alleged threats of fans at the hotel.

24. In his reply to the club’s counterclaim, the player stressed that the club authorised his temporary absence until 1 June 2017 and he denied having received phone calls or letters from the club during his period of leave.

25. The player also asserted that his letter dated 5 May 2017 submitted by the club is forged as he was still in Country D at this time and not in Country B as mentioned in the letter.

26. Furthermore, the player argued that the amendment to the contract signed on 11 February 2017 has to be considered illegal pursuant to article 18.4 of the Regulations on the Status and Transfer of Players, as the payments are subject to a successful medical examination. The player also deemed that the compensation clause set out in article 8 of the contract is non-proportional and abusive.

27. Upon request, the player informed FIFA that he signed a new employment contract with the club of Country F, Club E (hereinafter: Club E or intervening party), valid as from 5 September 2017 until 5 July 2018.

28. Club E, for its part, provided its comments on the present matter acknowledging having signed an employment contract with the player.

29. In addition, Club E informed FIFA that it has sent a letter to the club requesting it to sign the “Third Party Ownership” (TPO), which is a document to be uploaded in the “Transfer Matching System” (TMS), but the club did not reply. According to Club E, the club refused to authorize the issuance of the International Transfer Certificate (ITC) by the Football Association of Country D. Club E underlined that it requested the provisional registration of the player via the Football Federation of Country F, which was registration was approved by FIFA.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) 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 14 June 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 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 par. 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 14 June 2017, the 2016 edition of the said regulations (hereinafter: 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 DRC entered into the substance of the matter. In this respect, the members of the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the DRC 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. First of all, the members of the Chamber acknowledged that the parties were bound by an employment contract, which was signed on 25 January 2017 and valid as from 28 January 2017 until 28 July 2017, according to which the Claimant/Counter-Respondent was entitled to receive, inter alia, the amount of USD 40,000 in six monthly instalments of USD 6,500 each until in June 2017 on the last day of the corresponding month.

6. The Chamber noted that the Claimant/Counter-Respondent, on the one hand, maintained that the Respondent/Counter-Claimant failed to pay his salary for May 2017 in spite of the club’s promises and authorisation to visit his wife in Country B as of 24 May until 1 June 2017.

7. The Respondent/Counter-Claimant, on the other hand, rejected such claim and lodged a counterclaim against the Claimant/Counter-Respondent for breach of contract considering that the latter had acted in violation of his contractual obligations by not returning to the club to resume his duties after his approved absence. In this regard, the Claimant/Counter-Respondent held that his absence was authorised until 1 June 2017 and that he never received any communication from the Respondent/Counter-Claimant during his period of leave. In addition, the Claimant/Counter-Respondent explained that he felt insecure in Country D due to threats he allegedly had received from the club’s fans.

8. Having said that, the Chamber acknowledged that it has remained undisputed that the Claimant/Counter-Respondent was authorized to be absent from the club as from 24 May 2017 until 1 June 2017. In addition, it has remained uncontested that the Claimant/Counter-Respondent never returned to the club in order to resume his contractual duties following the end of his authorised period of leave, which, as a matter of fact, forms the basis of the counterclaim for breach of contract put forward by the Respondent/Counter-Claimant.

9. Subsequently, the Chamber examined as to whether the Claimant/Counter-Respondent had valid reasons not to return to the club to resume his contractual duties until the date of expiry of the employment contract, i.e. 28 July 2017.

10. In this regard, the members of the Chamber recalled that according to the Claimant/Counter-Respondent, he was facing security problems in Country D considering that he had received several threats from fans of the club at his hotel, which threats allegedly persisted via social media when he was in Country B. However, with reference to art. 12 par. 3 of the Procedural Rules, according to which any party claiming a right on the basis on an alleged fact shall carry the burden of proof, the Chamber took into consideration that the Claimant/Counter-Respondent had not presented any documentation corroborating such allegations.

11. In continuation, the Chamber turned its attention to the financial circumstances surrounding the present matter and took into consideration that according to the Claimant/Counter-Respondent, his salary for May 2017 had remained outstanding. After examination of the documentation submitted by the Respondent/Counter-Claimant in relation with the payments it maintained having made to the player, which had not been contested by the player, the members of the Chamber concluded that such documentation did not demonstrate that the player’s salary for May 2017 had been paid by the club.

12. In this context, the Chamber recalled that according to the Respondent/Counter-Claimant it had paid the Claimant/Counter-Respondent USD 14,170 in excess of his contractual entitlements claiming that, until 1 June 2017, the player had only been entitled to receive the amount of USD 46,330 after tax deductions, whereas it had paid the amount of USD 60,500 to the player. The members of the DRC decided that such claim must be rejected, since, on the one hand, the employment contract does not indicate whether the player’s salary is net or gross and, on the other hand, art. 6 of the contract does not make specific reference to taxes being deductible from the player’s remuneration.

13. Consequently, the Chamber established that by the time the Claimant/Counter-Respondent had to return to the club in order to resume his contractual duties, one monthly salary had remained unpaid.

14. On account of the above considerations and the well-established jurisprudence of the Dispute Resolution Chamber, the Chamber concurred that the Claimant/Counter-Respondent had no valid reasons not to resume his contractual duties at the club and that such conduct clearly constitutes a breach of contract.

15. Accordingly, the Chamber decided that the Claimant/Counter-Respondent is to be held liable for the early termination of the employment contract without just cause.

16. Having established that the Claimant/Counter-Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber decided that in accordance with art. 17 par. 1 of the Regulations, the Claimant/Counter-Respondent is liable to pay compensation to the Respondent/Counter-Claimant.

17. On account of the above, and before addressing the calculation of the amount of compensation for breach of contract payable by the Claimant / Counter-Respondent, the DRC first proceeded to establish the amount of outstanding remuneration, if any, still due to the Claimant / Counter-Respondent for services rendered under the employment contract until its early termination.

18. In this regard, the Chamber recalled that the Claimant/Counter-Respondent asked to be awarded his salary for May 2017 and that the Respondent/Counter-Claimant had not been able to demonstrate with corroborating documentation that said salary was paid. Furthermore, the Chamber took into consideration that the player was absent in May 2017 with the club’s authorisation. As a result, the Chamber decided that the Claimant/Counter-Respondent is entitled to receive his salary for May 2017 in the amount of USD 6,500.

19. On account of the above, the Chamber decided that the Respondent/Counter-Claimant must pay outstanding remuneration in the amount of USD 6,500 to the Claimant/Counter-Respondent.

20. 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 player under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years as well as the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period.

21. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract.

22. The members of the Chamber recalled that art. 8 of the contract deals with the scenario in which the club would have terminated the contract with just cause, which, thus, does not apply to the matter at hand.

23. As a consequence, the Chamber determined that the amount of compensation payable by the Claimant/Counter-Respondent to the Respondent/Counter-Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The DRC recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the DRC emphasized beforehand that each request for compensation for contractual breach has to be assessed on a case-by-case basis taking into account all specific circumstances of the respective matter.

24. Having said this, the Chamber turned its attention to the remuneration and other benefits due to the player under the existing contract and the new contract. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and any new contract(s) in the calculation of the amount of compensation. In the matter at hand, however, the DRC deemed that the only objective element that it could take into consideration as regards the player’s remuneration was the remaining value of the existing contract, bearing in mind that the player’s new contract was signed when the original end date of the contract at stake had already expired.

25. In this regard, the DRC established that the residual value of the employment contract between the Claimant/Counter-Respondent and the Respondent/Counter-Claimant is of USD 6,500 corresponding to the player’s salary for June 2017, bearing in mind that, whereas the contract ran until 28 July 2017, the last contractual payment fell due on the last day of June 2017.

26. The Chamber continued by underlining that the Respondent/Counter-Claimant had not provided any further conclusive evidence that could be taken into consideration by the Chamber in accordance with art. 17 par. 1 of the Regulations when determining the amount of compensation payable.

27. Taking into account the above and the specificities of the matter at hand, the Chamber decided that the Claimant/Counter-Respondent must pay the amount of USD 6,500 to the Respondent/Counter-Claimant as compensation for breach of contract.

28. In addition, taking into account the Respondent/Counter-Claimant’s request and the Chamber’s constant jurisprudence in this regard, the Chamber decided that the Claimant/Counter-Respondent must pay interest of 5% p.a. on the amount of compensation as of the date on which the counterclaim was lodged, i.e. 16 August 2017, until the date of effective payment.

29. Furthermore, in accordance with art. 17 par. 2 of the Regulations, the Chamber decided that the Intervening Party shall be jointly and severally liable for the payment of the aforementioned amount of compensation.

30. As regards the Respondent/Counter-Claimant’s claim that the Claimant/Counter-Respondent shall reimburse the amount of USD 14,500 relating to extra hotel charges it allegedly incurred due to the premature termination of the employment contract, the Chamber took into account that the employment contract does not include any monetary value in relation to the accommodation to be provided by the Respondent/Counter-Claimant to the Claimant/Counter-Respondent and that the Respondent/Counter-Claimant did not present any calculation nor proof of payment of the alleged hotel expenses and concluded that, therefore, such request of the Respondent-Counter-Claimant must be rejected.

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

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant / Counter-Respondent, Player A, is partially accepted.

2. The counterclaim of the Respondent / Counter-Claimant, Club C, is partially accepted.

3. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent outstanding remuneration in the amount of USD 6,500, within 30 days as from the date of notification of this decision.

4. In the event that the aforementioned amount due to the Claimant / Counter-Respondent is not paid within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and 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 / Counter-Respondent is rejected.

6. The Claimant / Counter-Respondent is directed to inform the Respondent / Counter-Claimant immediately and directly of the account number to which the remittance under number 3. above is to be made and to notify the Dispute Resolution Chamber of every payment received.

7. The Claimant / Counter-Respondent has to pay to the Respondent / Counter-Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of USD 6,500 plus 5% interest p.a. as from 16 August 2017 until the date of effective payment.

8. The Intervening Party, Club E, is jointly and severally liable for the payment of the amount of USD 6,500 to the Respondent / Counter-Claimant.

9. In the event that the aforementioned amount plus interest due to the Respondent / Counter-Claimant 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.

10. Any further claim lodged by the Respondent / Counter-Claimant is rejected.

11. The Respondent / Counter-Claimant is directed to inform the Claimant / Counter-Respondent and the Intervening Party immediately and directly of the account number to which the remittance under number 7. above 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

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