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 14 June 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 14 June 2019,

in the following composition:

Geoff Thompson (England), Chairman

Tomislav Kasalo (Croatia), member

Wouter Lambrecht (Belgium), 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

between the parties

I. Facts of the case

1. On 5 August 2017, the Player of Country B, Player A, (hereinafter: the Claimant), and the Club of Country D, Club C, (hereinafter: the Respondent) signed an employment contract valid as from the date of signature until 21 June 2018.

2. According to articles 2 and 3 of the employment contract, the Claimant was entitled to receive the total amount of USD 170,000 for the entire season, as follows: (i) 35% of the contract, equal to USD 59,500, due ‘after receiving the [Claimant]’s ITC’; (ii) 65% of the contract, equal to USD 110,500, ‘is paid to the [Claimant] as monthly salary’ in the amount of USD 11,050 each, due in the period between August 2017 and May 2018 on the 23rd day of the respective month.

3. Furthermore, according to article 4 of the contract, ‘The [Claimant] is responsible to pay all the contract’s statutory deductions related to overseas of Country D and Country D. [The Claimant] is responsible to fil taxpayers form in TAX Department and player pay tax to legal economical and finance Department to take receipt to submit to Financial Department of [the Respondent]’.

4. In accordance with article 13 of the employment contract, ‘All the expenses related to the agency equal to USD 30,000 as transfer payment which is the [Respondent]’s responsibility and will be paid to the agent or the agency after issuing ITC’.

5. In addition, pursuant to article 7 par. 5 of the contract, ‘[The Claimant] is responsible for the 50% of expenses regarding the registration in Football Federation of Country D and Football Association E and [the Respondent] will pay another 50% of expenses’.

6. By letter dated 8 June 2018, the Claimant put the Respondent in default of the amount of USD 68,800, requesting to be paid by no later than 18 June 2018.

7. On 23 August 2018, the Claimant lodged a claim against the Respondent in front of FIFA, claiming outstanding remuneration in the total amount of USD 105,000, broken down as follows: a. USD 75,000, as outstanding remuneration, consisting of the unpaid part of the salary for the month of November 2017 in the amount of USD 8,700 and 6 unpaid salaries for the period between December 2017 and May 2018 in the amount of USD 11,050 each; b. USD 30,000, as commission due on the basis of article 13 of the contract.

8. With his claim, the Claimant requested 5% interest p.a. on the amount of USD 105,000 as from the respective due dates.

9. According to the Claimant, the contract had expired by law at the end of the season 2017/2018, however the Respondent failed to pay him a total amount of USD 105,000. In this respect, the Claimant further explained that, on 22 May 2018, he received a confirmation via WhatsApp from the Respondent’s director, Director F, that the amount would be paid in 20 days, i.e. by no later than 12 June 2018.

10. In light of the fact that the Respondent did not reply to his default letter, the Claimant held that he had accrued outstanding remuneration in the amount of USD 105,000 and he requested FIFA to be awarded said sum.

11. In its reply, the Respondent indicated its willingness to pay an amount of USD 25,000 to the Claimant’s agent, as well as the amount of USD 44,050 to the Claimant, in case he fulfilled his tax obligations. Furthermore, the Respondent requested that – in case the Claimant did not fulfil his tax obligations – the amount of USD 34,000 would be awarded to the Respondent, as it would be jointly liable for the payment of the relevant taxes to the competent Tax Authorities of Country D.

12. Moreover, the Respondent explained that the Claimant’s registration, in line with article 7 par. 5 of the contract, amounted to USD 8,500, and that it paid said amount in total. As a result, the Respondent deemed that the Claimant still owed it an amount of USD 4,250.

13. In addition, the Respondent claimed having paid in cash, and submitted receipts related to, the following amounts to the Claimant: (i) USD 5,000 on 5 August 2017, paid to the Claimant’s agent on the basis of article 13 of the contract; (ii) USD 1,000 on 24 September 2017, as part of his salary entitlement; (iii) USD 59,500 on 25 October 2017; (iv) USD 21,100 on 25 October 2017; (v) USD 200 on 11 February 2018; (vi) USD 30,000 on 5 May 2018, paid to the player; (vii) USD 10,000 on 20 May 2018.

14. Furthermore, the Respondent confirmed that it still owed USD 25,000 to the Claimant’s agent. Furthermore, the Respondent explained that, since it had paid the total amount of USD 121,700 out of the USD 170,000 that the Claimant was entitled to, while the latter still had to reimburse it USD 4,250 as half of the registration fee, the remaining amount that it had to pay to the Claimant was USD 44,050.

15. What is more, the Respondent argued that, due to tax reasons and in view of article 4 of the contract as well as the Country D Tax Regulations, the Claimant was obliged to request a tax clearance, which he however failed to do. As a result, the Respondent explained that it withheld 20% of the total contract amount, i.e. USD 34,000, ‘as deposit until the [Claimant] acts in accordance with his responsibilities stipulated in article 4 of the contract […]”

16. In his replica, the Claimant acknowledged having signed all the payment receipts submitted by the Respondent and explained that the ‘amount owed by the [Respondent] is less than the initial claim’. Furthermore, according to the Claimant the clause contained in article 7 par. 5 of the contract is abusive, as it is the Respondent’s responsibility to register the contract.

17. In addition, the Claimant argued that he could not pay the relevant taxes, as ‘the [Respondent] did not honour the payments’, as well as that the Respondent could also have solved the problems, by paying the relevant taxes on his behalf, however apparently never did so.

18. In its final comments, the Respondent pointed out that, due to the Claimant’s latest payments’ acknowledgment, his claim currently amounted to USD 44,050. Moreover, the club explained that, due to the tax regulations in Country D, it could not proceed with the payment of taxes on behalf of the Claimant. In addition, the Respondent stated that, on 6 October 2018, it was contacted by the Tax Office of Country D, which tried to receive information on the Claimant’s gross salary.

19. Lastly, the Respondent insisted that, based on article 4 of the contract, the Claimant had to fulfill his tax obligations. Also, the Respondent insisted that the Claimant had to bear the costs for his registration and submitted a copy of a letter dated 16 December 2018 from the Football Association of Country D, confirming that 5% of the total value of the contract, i.e. USD 8,500, had to be considered as the Claimant’s ‘membership fees’.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Chamber pointed out that, contrary to the information contained in FIFA’s letter dated 11 June 2019, by means of which the parties were informed of the composition of the Chamber, the member Johan van Gaalen could not participate in the deliberations in the case at hand, due to unforeseen personal circumstances and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member Stefano La Porta refrained from participating and, thus, the Dispute Resolution Chamber adjudicated the case in presence of three members.

2. Its composition having been defined, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at stake. In this respect, the DRC took note that the present matter was submitted to FIFA on 23 August 2018. Consequently, the DRC concluded that the 2018 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).

3. 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 2019), the DRC 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.

4. Furthermore, the DRC analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, the DRC confirmed that, in accordance with art. 26 par. 1 and par. 2 of the said Regulations (edition June 2019) and considering that the present claim was lodged in front of FIFA on 23 August 2018, the June 2018 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

5. The competence of the DRC and the applicable regulations having been established, the members of 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.

6. In this respect, the DRC acknowledged that, on 5 August 2017, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 21 June 2018, pursuant to which the Respondent undertook to pay to the Claimant the total amount of USD 170,000 as follows: (i) USD 59,500 ‘after receiving the [Claimant]’s ITC’; (ii) USD 110,500, ‘as monthly salary’ in the amount of USD 11,050 each, in the period between August 2017 and May 2018 on the 23rd day of the respective month.

7. Moreover, the DRC took note that, according to art. 4 of the employment contract, ‘The [Claimant] is responsible to pay all the contract’s statutory deductions related to overseas of Country D and Country D. [The Claimant] is responsible to fil taxpayers form in TAX Department and player pay tax to legal economical and finance Department to take receipt to submit to Financial Department of [the Respondent]’.

8. Furthermore, the DRC observed that, pursuant to art. 13 of the employment contract, agency fees in the amount of USD 30,000 were to be paid to the Claimant’s agent.

9. In continuation, the Chamber took note of article 7 par. 5 of the contract, according to which: ‘[The Claimant] is responsible for the 50% of expenses regarding the registration in Football Federation of Country D and Football Association E and [the Respondent] will pay another 50% of expenses’

10. Having recalled the above, the members of the Chamber observed that, according to the Claimant, he had accrued outstanding remuneration in the total amount of USD 105,000, representing monthly salaries as well as agency fees for USD 30,000.

11. Moreover, the Chamber took note that the Respondent, for its part, maintained that (i) it had paid USD 5,000 to the Claimant’s agent and it was willing to pay the remaining USD 25,000 to him only; (ii) it had remitted to the Claimant through various payments the total amount of USD 121,800; (iii) the amount of USD 44,050 still remained outstanding and due to the Claimant, however it would pay it only provided that the latter fulfilled his tax obligations.

12. In light of the above, the members of the DRC deemed it fit, first of all, to point out that, out of the total financial requests originally brought forward by the Claimant, USD 30,000 pertained to alleged agent fees directly payable to his agent. In this respect, the Chamber recalled that, according to the employment contract, said amount was payable directly to the Claimant’s agent, who had already received USD 5,000, and not to the Claimant. Consequently, the DRC dismissed the Claimant’s request on that point.

13. The foregoing having been established, the members of the DRC turned their attention to the residual claimed outstanding amount. In this respect, bearing in mind art. 12 para. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof, the members of the DRC observed that the Respondent provided receipts of payments performed towards the Claimant, signed by him, for a total amount of USD 121,800. Moreover, the members of the Chamber observed that the Claimant confirmed having received those payments.

14. In light of the above, the Chamber highlighted that it remained uncontested that the Respondent had paid to the Claimant the total amount of USD 121,800 in relation to the employment contract the parties had signed for the season 2017/2018.

15. Moreover, regarding the Respondent’s argument concerning the registration fee, the members of the DRC pointed out that the parties had freely agreed upon the content of art. 7 para. 5 when they signed the employment contract. Consequently, the DRC concluded that the Respondent could lawfully deduct half of the Claimant’s registration fee from his receivables, i.e. USD 4,250, amount which had been confirmed by the Football Federation of Country D.

16. The foregoing having been clarified, the DRC moved to the Respondent’s argument concerning the Claimant’s tax obligations. In this respect, and bearing in mind the recalled art. 12 para. 3 of the Procedural Rules, the members of the Chamber observed that the Respondent did not provide any evidence concerning payments made on behalf of the Claimant to the relevant tax authorities. Moreover, the DRC took into account that the Claimant’s argument that he was not in a position to pay taxes on his remuneration as the Respondent had failed to remit to him his remuneration in the first place remained uncontested. Consequently, the members of the Chamber dismissed the Respondent’s argument on the point and concluded that it had to fulfil its financial obligations as per the contract, regardless of alleged tax duties.

17. On account of the above considerations, the DRC decided that, in accordance with the general legal principle of “pacta sunt servanda”, the Respondent is liable to pay to the Claimant the total amount of USD 43,950, representing – after deduction of the proved payments – his monthly salaries as from February until May 2018.

18. In addition, and considering the Claimant’s request, the DRC decided to award the latter 5% interest p.a. on the above mentioned amount as of the respective due dates.

19. The Chamber concluded its deliberations in the present matter by rejecting any further claim of the Claimant.

20. 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.

21. 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.

22. 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.

23. 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 outstanding remuneration in the amount of USD 43,950, plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 24 February 2018 on the amount of USD 10,800;

b. 5% p.a. as of 24 March 2018 on the amount of USD 11,050;

c. 5% p.a. as of 24 April 2018 on the amount of USD 11,050;

d. 5% p.a. as of 24 May 2018 on the amount of USD 11,050.

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 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 amounts are 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 amounts are 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 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 (CAS)

Avenue de Beaumont 2

CH-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