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 10 August 2018
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 10 August 2018,
in the following composition:
Geoff Thompson (England), Chairman
Carlos González Puche (Colombia), member
Eirik Monsen (Norway), member
Juan Bautista Mahiques (Argentina), member
Daan de Jong (The Netherlands), 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 23 January 2017, 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) signed an employment contract (hereinafter: the contract) valid as from the date of signature until 31 May 2017.
2. According to art. 3 of the contract, the player was entitled to a salary of EUR 200,000, payable in four instalments of EUR 50,000 each on the following dates: 10 February, 10 March, 10 April and 31 May 2017.
3. Art. 3, lit. c) of the contract stipulates that “in case of non-payment of salaries, […] in the amount of at least two consecutive instalments, the Player shall inform the Club officially and in written notice form. The Player will be entitled to terminate the employment contract with just cause if the Club fails to fulfil its financial obligations within 15 days upon the receipt of the formal written notice”.
4. On 19 April 2017, the player put the club in default of payment in the total amount of EUR 135,000, corresponding to part of the first instalment and to the entire second and third instalment, setting a time limit expiring on 4 May 2017 in order to remedy the default.
5. According to the player, on 16 May 2017 he sent a letter to the club by means of which he terminated the contract, affirming that more than 15 days had passed since he put the club in default.
6. On 16 June 2017, the player lodged a claim against the club before FIFA for breach of contract, requesting the following:
a) EUR 135,000 as outstanding salaries, broken-down as follows:
- EUR 35,000 as part of the first instalment;
- EUR 50,000 for the second instalment;
- EUR 50,000 for the third instalment.
b) EUR 50,000 as compensation for breach of contract, corresponding to the remaining value of the contract;
c) Interest at 5% p.a. on the aforementioned amounts as of the due dates;
d) Sporting sanctions on the club.
7. In his claim, the player affirmed that he rendered his services to the club and terminated the contract with just cause on 16 May 2017.
8. Moreover, the player maintained that, after said termination of the contract, he did not sign any new employment contract with any other club during the relevant period.
9. Despite having been invited to provide its comments on the present matter, the club did not reply to the claim within the deadline set by the FIFA administration.
II. Considerations of the Dispute Resolution Chamber
1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or the 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 16 June 2017. Consequently, the DRC concluded that the 2017 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the 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 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 16 June 2017, the 2016 edition of said regulations (hereinafter: the 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 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.
5. Having said that, the members of the Chamber acknowledged that, on 23 January 2017, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 31 May 2017, pursuant to which the Claimant was entitled to a total salary of EUR 200,000, payable in four instalments of EUR 50,000 each, respectively on 10 February, 10 March, 10 April and 31 May 2017.
6. Moreover, the DRC acknowledged that, on 19 April 2017, the Claimant put the Respondent in default of the payment of outstanding salaries in the total amount of EUR 135,000.
7. Furthermore, the Chamber observed that the Claimant eventually terminated the contract alleging that more than 15 days had passed since the date of his previous default notice.
8. In continuation, the DRC noted that the Claimant affirmed that the Respondent breached the contract as it failed to pay the outstanding salaries for the total amount EUR 135,000, corresponding to part of the first instalment and to the entire second and third instalment set out in the contract. Moreover, the Claimant emphasised that the Respondent did not reply to his notice of termination and stressed that, in view of the above-mentioned circumstances, he terminated the contract with just cause.
9. At this point, the members of the Chamber observed that the Respondent did not submit its reply to the claim within the time limit set by the FIFA Administration. As a result, in line with art. 9 par. 3 of the Procedural Rules as well as the Chamber’s constant jurisprudence in this regard, the DRC established that it shall take a decision on the basis of those documents on file that were provided prior to the deadline set by FIFA, in casu, on the statements and documents presented by the Claimant.
10. With the above in mind, 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.
11. In so doing, the members of the DRC observed that the Claimant put the Respondent in default of payment on 19 April 2017 for the amount of EUR 135,000 and, thereafter on 16 May 2017, he terminated the contract. In this regard, the DRC recalled that, according to art. 3 lit. c) of the contract “in case of non-payment of salaries, […] in the amount of at least two consecutive instalments, the Player shall inform the Club officially and in written notice form. The Player will be entitled to terminate the employment contract with just cause if the Club fails to fulfil its financial obligations within 15 days upon the receipt of the formal written notice”.
12. On account of the above, the Chamber concluded that not only the Claimant terminated the contract in accordance with art. 3 lit. c) of the contract, but also that the Respondent had blatantly neglected its contractual obligations towards the Claimant by failing to pay the latter salaries in the amount of EUR 135,000, which corresponds to more than half of the salary set out in the contract.
13. On account of the above-mentioned considerations, the Chamber decided that the Claimant terminated the contract with just cause and, therefore, the Respondent is to be held liable for said termination.
14. 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”. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant part of the first instalment, as well as the entire second and third instalment, in the total amount of EUR 135,000.
15. In addition, 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 day following the day on which each instalment fell due in accordance with the contract until the date of effective payment.
16. In continuation and 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 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.
17. 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.
18. 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.
19. 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. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the contract as from its termination and concluded that the Claimant would have been entitled to receive EUR 50,000, namely the fourth and last instalment, as remuneration had the contract been executed until its regular expiry date, i.e. 31 May 2017.
20. 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.
21. 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 in the present matter and, therefore, he was not able to mitigate his damages.
22. Consequently, on account of all of the above-mentioned considerations, the Chamber decided that the Respondent must pay the amount of EUR 50,000 to the Claimant as compensation for breach of contract.
23. 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. 16 June 2017, until the date of effective payment.
24. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.
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 135,000, plus 5% interest p.a. until the date of effective payment, as follows:
a. as of 11 February 2017, on the amount of EUR 35,000;
b. as of 11 March 2017, on the amount of EUR 50,000;
c. as of 11 April 2017, on the amount of EUR 50,000.
3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 50,000, plus 5% interest p.a. as of 16 June 2017 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 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 Dispute Resolution Chamber of every payment received.
*****
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