F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision15 February 2018

Decision of the Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 February 2018,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Eirik Monsen (Norway), member

Stéphane Burchkalter (France), member

Philippe Diallo (France), member

Joseph Bell (Cameroon), 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 17 June 2016, the Club of Country D, Club C (hereinafter: Respondent) and the Player of Country B, Player A (hereinafter: Claimant), signed an employment contract valid as from the date of signing until 30 June 2018 as well as an annex to the contract (hereinafter together referred to as: contract).

2. The contract establishes that “The parties […] agree that after 30 June 2017 the Club shall decide on the continuation of the remaining part of the Contract”.

3. According to the contract, the Claimant was entitled to receive a monthly net salary of EUR 8,000 payable in Currency of Country D in accordance with the middle exchange rate of the National Bank of Country D on the day of payment. In addition, according to the contract, the Claimant undertook to issue a monthly invoice to the Respondent for services provided and the Respondent undertook to pay the relevant invoices within 15 days.

4. The contract further entitles the Claimant to an apartment paid by the Respondent with a rent of up to EUR 400 a month as well as bonuses for scored goals or assists to scored goals as follows: EUR 1,000 per goal for 1 to 10 goals, EUR 2,000 per goal for 11 to 15, and EUR 3,000 per goal for 15 and more goals.

5. On 25 October 2016, the Claimant put the Respondent in default of payment of the gross amount of 275,070, which, according to the Claimant, equals approx. gross EUR 36,676 in accordance with the medium national bank exchange rate, referring to 3 full monthly salaries and rental payments for July, August, and September 2016, 1 partial salary and rental payment for June 2016, and a bonus for goals scored during a match on 12 August 2016.

6. By letter dated 10 November 2016, the Claimant terminated the contract, claiming that the Respondent still had not paid him the amount of 275,070 set out in his default notice.

7. On 19 December 2016, the Claimant lodged a claim against the Respondent in front of FIFA for breach of contract requesting the following:

a) a declaration that the termination of the contract was with just cause;

b) that the Respondent be ordered to pay outstanding remuneration in the gross amount of EUR 50,389 including :

- the amounts claimed in the default notice, EUR 36,676 corresponding to:

 EUR 4,651 gross relating to his salary for the period as from 17 June 2016 until 30 June 2016, which allegedly fell due on 15 July 2016;

 EUR 9,875 gross relating to his salary for July 2016, which allegedly fell due on 15 August 2016;

 EUR 9,875 gross relating to his salary for August 2016, which allegedly fell due on 15 September 2016;

 EUR 9,875 gross relating to his salary for September 2016, which allegedly fell due on 15 October 2016;

 EUR 200 relating to rent for the period from 17 June 2016 until 30 June 2016, which allegedly fell due on 15 July 2016;

 EUR 400 relating to rent for July 2016, which allegedly fell due on 15 August 2016;

 EUR 400 relating to rent for August 2016, which allegedly fell due on 15 September 2016;

 EUR 400 relating to rent for September 2016, which allegedly fell due on 15 October 2016;

 EUR 1,000 relating to bonus for scored goals, which allegedly fell due on 12 August 2016.

- EUR 9,875 gross relating to his salary for October 2016, which allegedly fell due on 15 November 2016;

- EUR 400 relating to rent for October 2016, which allegedly fell due on 15 November 2016;

- EUR 3,305 gross relating to his salary for the period from 1 until 10 November 2016, which allegedly fell due on 15 November 2016;

- EUR 133 relating the rent for the period from 1 until 10 November 2016, which allegedly fell due on 15 November 2016.

c) that the Respondent be ordered to pay EUR 202,062 as compensation for breach of contract, including:

- EUR 194,195 as “residual value of remuneration” as from 11 November 2016 until 30 June 2018;

- EUR 7,867 as “residual value of rental costs” as from 11 November 2016 until 30 June 2018.

d) 5% interest per year on the aforementioned amounts as from the day they fell due until the effective date of payment;

e) sporting sanctions on the Respondent;

f) that the Claimant’s legal fees as well as procedural costs be at the charge of the Respondent.

8. According to the Claimant, salary and rental payments fell due on the 15th day of the following month and the bonus of EUR 1,000 for scored goals on the day of the relevant match, i.e. 12 August 2016. In this regard, the Claimant presented a document related to his participation in the match of 12 August 2016. Furthermore, in order to support his claim related to the difference between his gross and net salary, the Claimant submitted a copy of invoices he issued to the Respondent for the monthly salaries in that allegedly remained unpaid. In addition, the Claimant presented an exchange rate list apparently issued by the National Bank of Country D applicable as of 8 December 2016.

9. In spite of having been invited to provide its comments on the claim of the Claimant, the Respondent did not reply to the claim.

10. The Claimant informed FIFA that, on 29 January 2017, he concluded an employment contract with the Club of Country B Club E, valid until 31 May 2017. According to said contract, the Claimant was entitled to a monthly gross salary of 425,000. On 12 August 2017, the Claimant concluded an employment contract with the Club of Country B, Club F, valid until 31 May 2018. According to said contract, the Claimant is entitled to a monthly gross salary of 100,000.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 19 December 2016. Consequently, the 2015 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 an 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 Player (edition 2018), and considering that the present claim was lodged on 19 December 2016, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber 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. Having said that, the members of the Chamber acknowledged that, on 17 June 2016, the Claimant and the Respondent concluded the contract, which indicates a period of validity running as from 17 June 2016 until 30 June 2018. It was further noted that according to art. 3 of the contract “The parties […] agree that after 30 June 2017 the club shall decide on the continuation of the remaining part of the Contract”.

6. In this respect, the Chamber wished to point out that the aforementioned art. 3 appears to give the Respondent the possibility of terminating the contract at its complete and utter discretion. The members of the Chamber considered that said clause was, thus, clearly unilateral and potestative and provided for an unacceptable unbalanced employment relationship and that, according to its well established jurisprudence, such clause could not be accepted. Consequently, the Chamber established that 30 June 2018 is the date of expiry of the contract as clearly indicated in the contract, which stipulates that “The Contract is entered into for the period from 17 June 2016 to 30 June 2018, i.e. until the beginning of the summer transfer window in the year in which the Contract expires.”

7. In continuation, the members of the Chamber duly considered the financial terms of the contract. In this respect, the Chamber took note that it had been agreed upon between the parties that the Claimant was to receive a monthly net salary of EUR 8,000 payable in Currency of Country D in accordance with the middle exchange rate of the National Bank of Country D on the day of payment.

8. The Chamber further noted that according to the Claimant, payment of his salary and rent fell due on the 15th day of the month following the month during which he rendered his services and that bonus payments fell due on the day of the relevant match.

9. In addition, the Chamber took note that the Claimant was entitled to rental payments of up to EUR 400 per month and bonuses for scored goals or assists to scored goals amounting to EUR 1,000 per goal for 1 to 10 goals, EUR 2,000 per goal for 11 to 15 goals and EUR 3,000 per goal for 15 and more goals.

10. The Chamber further acknowledged that according to the Claimant, he had just cause to unilaterally terminate the contract on 10 November 2016, due to the fact that the Respondent failed to remit his salary, bonuses and rental payments due as of the month of July 2016 in spite of previously having been put in default of payment by the Claimant.

11. Furthermore, the Chamber took note that the Respondent, for its part, failed to present its response to the claim of the Claimant, despite having been invited to do so. In this way, so the Chamber agreed, the Respondent renounced its right to defence.

12. Moreover, and as a consequence of the aforementioned consideration, the Chamber established that in accordance with art. 9 par. 3 of the Procedural Rules it shall take a decision upon the basis of the documents already on file.

13. On account of the above, the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the contract had been terminated by the Claimant with just cause and, subsequently, to determine the consequences thereof.

14. Having said that, the Chamber concluded that it has remained uncontested that, on the date of termination of the contract by the Claimant, i.e. 10 November 2016, the Respondent had failed to pay the Claimant’s remuneration due as from July 2016.

15. Taking into account all the above, in the absence of any defence of the Respondent and bearing in mind that according to the Claimant salary and rental payments fell due on the 15th day of the following month, the Chamber established that the salaries and rent for June 2016 had been partially outstanding and that the full salaries and rental payments for July 2016 up to September 2016 and the bonus for the match of 12 August 2016 had fallen due and remained unpaid on the date of termination of the contract.

16. On account of the preceding consideration, the Chamber stated that the Respondent had seriously neglected its contractual obligations towards the Claimant. Therefore, the Chamber concluded that the Respondent was found to be in breach of the contract and that, in line with the Chamber’s longstanding and well-established jurisprudence the breach was of such seriousness that the Claimant had just cause to unilaterally terminate the employment contract with the Respondent on 10 November 2016. Consequently, the Chamber decided that the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

17. In continuation, prior to establishing the consequences of the termination of the contract with just cause by the Claimant, the Chamber decided that the Respondent must fulfil its obligations as per the contract in accordance with the general legal principle of “pacta sunt servanda”.

18. In continuation, the Chamber acknowledged that according to the Claimant, the salaries due to him are gross amounts in Currency of Country D, which he then converted into amounts in Euro. In this respect, the Chamber further considered that the documents presented by the Claimant in support of the claimed gross salaries do not conclusively establish the difference between gross and net. In addition, the members of the Chamber took into account that the contract does not include a clear Currency G/EUR exchange rate and that the documentation on file did not suffice to establish the correct exchange rate on the due date of the relevant amounts. Therefore, the Chamber, taking into account the wording of the contract, and especially its article 4 in accordance with which “[…] the Parties agree on a monthly net salary of EUR 8,000.00 […]”, the Chamber considered that the amounts awarded should be net amounts in Euro.

19. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant outstanding remuneration, in particular, part of the salary of June 2016 amounting to EUR 3,768 net and part of the rent for June 2016 amounting to EUR 200, as well as four monthly salaries amounting to EUR 8,000 net each and four monthly rent payments of EUR 400 each due as from 16 August until 16 November 2016 and a scored goal bonus amounting to EUR 1,000 due as from 1 September 2016, totalling the amount of EUR 38,568.

20. In this respect, the Chamber highlighted that even though payment of the Claimant’s salary and rent for October 2016 had not yet fallen due on the date of termination of the contract, the Claimant had rendered his services to the Respondent during the full month of October 2016 and that consequently, such payment should be considered outstanding remuneration and not subject to a possible mitigation.

21. In addition, the Chamber took into account that the Claimant had corroborated his claim relating to the EUR 1,000 bonus amount with evidence and that the Claimant’s alleged difference between his gross and net salary is of 19%. Furthermore, in the absence of a clear contractual due date for payment of scored goals bonuses, the Chamber considered that, if applicable, the scored goal bonuses would fall due at the end of the month in which the relevant match was played.

22. In continuation, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the 16th day of the month following the month during which the Claimant rendered his services with respect to salaries and rent and 5% interest p.a. as of 1 September 2016 on the amount of EUR 1,000 for the scored goal bonus.

23. 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 Chamber further decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to the aforementioned outstanding remuneration.

24. In this context, the Chamber 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.

25. 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 contract at the basis of the matter at stake.

26. 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. The Chamber 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.

27. The members of the Chamber then turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. 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 the new contract in the calculation of the amount of compensation.

28. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its termination and concluded that the Claimant would have received EUR 168,000 as remuneration had the employment contract been executed until its regular expiry date of 30 June 2018, i.e. 20 months’ salary and rental payments. Consequently, the Chamber concluded that the amount of EUR 168,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

29. In continuation, the Chamber assessed as to whether the Claimant has signed an employment contract with another club during the relevant period of time, by means of which he would have been able to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract(s) 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.

30. The Chamber recalled that the Claimant had entered into an employment agreement with the Club of Country B, Club E valid as from 29 January 2017 until 31 May 2017, in accordance with which he was entitled to receive a monthly remuneration of 425,000. Moreover, the Claimant entered into an employment agreement with the Club of Country B, Club F valid as from 12 August 2017 until 31 May 2018 with which he was entitled to receive a monthly remuneration of 100,000.

31. 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 to the Claimant as compensation for breach of contract.

32. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber 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. 19 December 2016, until the date of effective payment.

33. Furthermore, as regards the claimed legal fees, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to its longstanding 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 Chamber decided to reject the Claimant’s request relating to legal expenses.

34. Having established the above, the Chamber focused its attention on the further consequences of the breach of contract by the Respondent within the protected period, and in this respect, addressed the question of sporting sanctions against the Respondent in accordance with art. 17 par. 3 of the Regulations. The cited provision stipulates inter alia that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on a club found to be in breach of contract during the protected period.

35. Subsequently, the members of the Chamber referred to item 7 of the “Definitions” section of the Regulations, which stipulates, inter alia, that the protected period shall last “for three entire seasons or three years, whichever comes first, following the entry into force of a contract, where such contract is concluded prior to the 28th birthday of the professional, or two entire seasons or two years, whichever comes first, following the entry into force of a contract, where such contract is concluded after the 28th birthday of the professional”. In this respect, the Chamber took note that the breach of the employment contract by the Respondent occurred less than 6 months following the entry into force of the contract. Therefore, the Chamber concluded that such breach of contract by the Respondent had occurred within the protected period.

36. As a result, by virtue of art. 17 par. 4 of the Regulations and considering that the Respondent was found in breach of the employment contract without just cause, the Chamber decided that the Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision. In this regard, the Chamber emphasized that apart from the Respondent having clearly acted in breach of the contract within the protected period in the present matter, the Respondent had also on several occasions in the recent past been held liable by the Chamber for the breach of contractual relationships with, inter alia, the players, Player H (case. ref. nr XXX; decided on 20 April 2017), Player J (case. ref. nr. XXX; decided on 20 April 2017) and Player K (case ref. nr. XXX; decided on 30 November 2017).

37. Finally, the Chamber concluded its deliberations by rejecting any further claim lodged by the Claimant.

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 EUR 38,568 plus 5% interest p.a. as follows:

a. 5% p.a. on the amount of EUR 3,968 as from 16 July 2016 until the date of effective payment;

b. 5% p.a. on the amount of EUR 8,400 as from 16 August 2016 until the date of effective payment;

c. 5% p.a. on the amount of EUR 8,400 as from 16 September 2016 until the date of effective payment;

d. 5% p.a. on the amount of EUR 8,400 as from 16 October 2016 until the date of effective payment;

e. 5% p.a. on the amount of EUR 8,400 as from 16 November 2016 until the date of effective payment;

f. 5% p.a. on the amount of EUR 1,000 as from 1 September 2016 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 EUR 149,000 plus 5% interest p.a. as from 19 December 2016 until the date of effective payment.

4. In the event that the amounts plus interest due to the Claimant in accordance with the above-mentioned numbers III./2 and III./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 remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

7. The Respondent, Club C, shall be banned from registering any new players, either nationally or internationally, for the next two entire and consecutive registration periods following the notification of the present decision.

*****

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 Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives