F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2018-2019) – fifa.com – atto non ufficiale – Decision 9 May 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 May 2019,

in the following composition:

Geoff Thompson (England), Chairman

Eirik Monsen (Norway), member

Todd Durbin (USA), 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 14 January 2018, the Player of Country B, Player A (hereinafter: the Claimant or the player) and the Club of Country D, Club C (hereinafter: the Respondent or the club) concluded an employment contract valid as from 15 January 2018 until 31 December 2019 (hereinafter: the contract).

2. According to art. 2.1 of the contract, the Claimant was entitled to the following sign-on fee:

a) USD 13,000 as first instalment payable upon receipt of the relevant ITC “for the first season (2018)”;

“ b) the second instalment (performance based) will be negotiated for and paid in January 2019”.

3. Pursuant to art. 2.2 of the contract, the Respondent committed to pay the Claimant “a basic net salary” of USD 1,500.

4. In accordance with art. 2.4 of the contract, the Respondent committed to pay the following bonuses:

a) 2,000 for “a home win”;

b) 2,500 for “an away winning”;

c) “unutilised substitutes will be paid 80% of the above bonuses”.

5. Pursuant to art. 5, lit. c) of the contract, the termination of the contract “shall be […]

“on disciplinary grounds for breach of trust, club’s regulations, codes and procedures”.

6. On 31 May 2018, the Respondent sent a letter to the Claimant, whereby it stated that his performance “has not been successful” and requested him “to show cause within 48 hours why the club should not take any action against [him]”.

7. On 21 June 2018, the Respondent sent a further letter to the Claimant, by means of which it terminated the contract with immediate effect due to “poor performance”. In particular, the Respondent stated that the Claimant’s performance evaluation “does not meet the club’s standards”. Furthermore, the Respondent informed the Claimant that he would be paid one month salary “in lieu of notice”.

8. On 6 August 2018, the player lodged a claim in front of FIFA against the club for breach of contract, requesting compensation for breach of contract in the amounts of USD 65,500 and 41,200, plus 5 % interest p.a. as of 21 June 2018, broken-down as follows:

a) USD 27,000 for the remaining salaries as of July 2018 until December 2019;

b) USD 13,000 for the second instalment of the sign-on fee as per art. 2.1 lit. b) of the contract;

c) 12,400 as bonuses for matches played by the club after the termination of the contract during season 2018;

d) 28,800 as bonuses for matches to be played by the club after the termination of the contract during season 2019;

e) USD 15,500 as additional compensation on the basis of the specificity of sport.

Furthermore, the Claimant requested USD 5,000 for legal costs and sporting sanctions to be imposed on the Respondent.

9. In his claim, the Claimant argued that his alleged “poor performance” could not constitute a just cause for the termination of the contract. Moreover, he emphasised that the club’s evaluation of his performance was subjective and the termination had no contractual basis.

10. As to the requested compensation for breach of contract, the Claimant pointed out that the second instalment of the sign-on fee should be at least of the same amount of the first one, namely USD 13,000 (cf. point I.2).

11. Moreover, as to the claimed bonuses, the player maintained that he was entitled to 80% of the bonuses set out in the contract for the matches already won by the club after the termination of the contract and for those which the same club would have “reasonably” won until the natural expiry of the contract.

12. In its reply, the Respondent affirmed that the Claimant, at the moment of the signature of the contract, declared to be born on 28 September 1989, as confirmed by his passport. Nonetheless, the Respondent maintained that it was eventually informed that, as resulting from the Transfer Matching System, his date of birth was 28 September 1984 and, due to such discrepancy, he was “disqualified by the Confederations of African Football (CAF)”.

13. According to the Respondent, the fact that the Claimant was allegedly 5 years older than he declared determined that his performance was not as expected by the club (he allegedly played only 2 matches out of 18). Furthermore, the Respondent alleged that the Claimant, upon request of the club (cf. point I.6), admitted his poor performance in writing and such admission justified the termination of the contract.

14. Upon request of the FIFA Administration, the Claimant informed that he did not conclude any employment contract with other 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 Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 6 August 2018. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; hereinafter: Procedural Rules) are 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 and 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition June 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. At this point, the Chamber was eager to emphasize that, contrary to the information contained in FIFA’s letter dated 3 May 2019, by means of which the parties were informed of the composition of the Chamber, the member Roy Vermeer refrained from participating in the deliberations of the case at hand due to certain personal circumstances and, in order to comply with the prerequisite of equal representation of the club’s and player’s representatives, also the member Pavel Pivovarov refrained from participating. Thus, the Dispute Resolution Chamber adjudicated the case in presence of three members in accordance with art. 24 par. 2 of the Regulations.

4. In continuation, 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 (edition June 2018), and considering that the present claim was lodged on 6 August 2018, the June 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

5. 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 started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, 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. In addition, the Chamber 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).

6. First, the Chamber noted that the parties entered into an employment contract valid as of 15 January 2018 until 31 December 2019, which entitled the Claimant, inter alia, to a monthly salary of USD 1,500.

7. In continuation, the DRC acknowledged that it remained undisputed that the Respondent, on 21 June 2018, sent a letter to the Claimant, by means of which it terminated the contract due the alleged player’s “poor performance” and committed to pay one month salary “in lieu of notice”.

8. After having taken note of the above, the DRC also took note of the position of the parties in the present matter. In this respect, the Claimant argued that the Respondent terminated the contract without just cause and requested compensation for breach of contract from the latter.

9. Equally, the members of the Chamber took note of the position of the Respondent, which maintained that the player was 5 years older than he declared at the moment of the signature of the contract and it argued that such circumstance determined that his performance did not reach the level expected by the club. Moreover, the Respondent held that the Claimant expressly admitted his poor performance in writing and such admission justified the termination of the contract.

10. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute, considering the claim of the Claimant and the allegations of both parties, was to determine whether the employment contract had been unilaterally terminated with or without just cause by the Respondent. The DRC also underlined that, subsequently, if it were found that the employment contract was terminated without just cause, it would be necessary to determine the consequences for the party that was responsible for the early termination of the contractual relation without just cause.

11. In this respect, the Chamber acknowledged that, according to the Respondent, the Claimant was allegedly 5 years older than he declared, as confirmed by the alleged fact the player had been “disqualified by the Confederations of African Football (CAF)”. With the above in mind, the DRC recalled the basic principle of burden of proof, as established in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

12. In light of the foregoing, the DRC took note that the Respondent did not corroborate the allegation of sporting sanctions imposed by CAF on the player with any evidence. Moreover, the members of the Chamber wished to point out that the Respondent did not provide sufficient evidence in order to demonstrate that the age declared by the Claimant was not correct. What is more, the DRC wished to emphasise that, even in the alleged case of any discrepancy concerning the age of the player within the documentation available to the club at the moment the contract was concluded, the Respondent would have been expected to exercise the required diligence before concluding the relevant contract.

13. On account of the above, the Chamber agreed that the Respondent’s argumentation regarding the alleged age of the player could not be upheld and proceeded to analyse whether the player’s alleged level of a performance could be used as a mean for justifying the unilateral termination of the contract.

14. In this respect, the Chamber was keen to emphasise that, in accordance with its longstanding and well-established jurisprudence, the unsatisfactory performance of a player does not constitute a just cause for a club to prematurely terminate the employment relationship, as this judgement is subjective and unmeasurable. Thus, due to the subjective and arbitrary nature of such grounds for dismissal, the Chamber concluded that this argument of the Respondent in order to justify the unilateral termination of the contract could not be sustained.

15. Furthermore, the members of the Chamber wished to emphasise that the aforementioned conclusion cannot be overturned by making use of any alleged subjective self-evaluation that the player could do with reference to his performances, even more if such evaluation is made by the player while he is still under contract with the club. Consequently, the DRC concluded that the player’s alleged admission of poor performance could not be invoked by the Respondent as a reason for justifying the unilateral termination of the contract.

16. On account of all the above, as the Respondent did not refer to any other reason for justifying the termination of the contract, the members of the Chamber decided that the Respondent terminated the contract without just cause on 21 June 2018.

17. In continuation, prior to establishing the consequences of the breach of contract without just cause by the Respondent in accordance with art. 17 par. 1 of the Regulations, the Chamber took note that there was no unpaid remuneration at the moment when the contract was terminated by the Respondent.

18. Having established the above, the Chamber turned its attention to the question of the consequences of the termination of the contract by the Respondent without just cause.

19. In this respect, 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.

20. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the contract at the basis of the present dispute contains 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. In this regard, the Chamber established that no such compensation clause was included in the contract at the basis of the matter at stake.

21. 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. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

22. In order to estimate the amount of compensation due to the Claimant in the present case, the members of the Chamber first 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, if any, in the calculation of the amount of compensation.

23. On the basis of the contract signed by the Claimant and the Respondent, which, after the breach of contract occurred, was to run until 31 December 2019, and in view of a contractually agreed monthly salary of USD 1,500, the Chamber concluded that the amount of USD 27,000 serves as the basis for the final determination of the amount of compensation for breach of contract.

24. 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 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.

25. In respect of the above, the Chamber recalled that the Claimant had not signed any other employment contract after the termination of the one at stake and, therefore, he was not able to mitigate his damages.

26. In continuation, as to the Claimant’s request for second instalment of the sign-on fee pursuant to art. 2.1 lit. b) of the contract, the DRC recalled that said contractual provision merely provided that said instalment was “performance based”, not defined and “will be negotiated for and paid in January 2019”. Consequently the DRC stressed that, in accordance with art. 12 par. 3 of the Procedural Rules, according to which any party claiming a right on the basis of an alleged fact shall carry the respective burden of proof, it would had been up to the Claimant to demonstrate that the aforementioned second instalment had been indeed agreed and defined by the parties and, thus, it should be considered in the calculation of the compensation for breach of contract. Nevertheless, the Chamber deemed it appropriate to point out that no evidence had been submitted by the Claimant in order to demonstrate the existence of such an agreement. Consequently, the members of the Chamber had no other option than to reject that part of the player’s claim.

27. As regards the Claimant’s claim relating to future match bonuses, the members of the Chamber stressed that the payment of such bonuses is linked to matches to be played in the future, i.e. after the termination of the relevant contract and, therefore, is fully hypothetical. What is more, the DRC considered that the Claimant did not provide sufficient evidence related to bonuses for matches allegedly played by the club after the termination of the contract and before he lodged the claim. Consequently, the Chamber decided to reject such part of the claim.

28. On account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the Respondent must pay the Claimant the final amount of USD 27,000, which is to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.

29. 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 aforementioned amount as of the date on which the claim was lodged, i.e. 6 August 2018, until the date of effective payment.

30. Finally, the Dispute Resolution Chamber decided to reject the Claimant’s claim pertaining to legal costs, in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

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

32. Furthermore, taking into account the consideration under number II./4. above, the Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

33. In this regard, the Chamber pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

34. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

35. Finally, the Chamber recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

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 compensation for breach of contract in the amount of USD 27,000 plus 5% interest p.a. as of 6 August 2018 until the date of effective payment.

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

4. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amount plus interest mentioned under point 2. above.

5. The Respondent shall provide evidence of payment of the due amount in accordance with point 2. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount due plus interest in accordance with point 2. above is not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

7. The ban mentioned in point 6. above will be lifted immediately and prior to its complete serving, once the due amount is paid.

8. In the event that the aforementioned sum plus interest is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal 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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives