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 September 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 14 September 2018,

in the following composition:

Geoff Thompson (England), Chairman

Jérôme Perlemuter (France), member

Elvis Chetty (Seychelles), member

Stefano Sartori (Italy), member

Takuya Yamazaki (Japan) 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 29 August 2016, 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 2 September 2016 until 30 June 2017.

2. According to chapter XII of the contract, the player was entitled, inter alia, to a monthly salary of 1,850,000 in the currency of Country D, payable on the 10th day of each month.

3. Furthermore, chapter XII stipulates the following:

“Parties further agree that Employer is entitled to unilaterally terminate the present contract with the date of 31. December 2016. That Employe [sic] expressly accept, in case of which Employer is obliged to notify the Employee about its decision until 15. December 2016” (hereinafter: the termination clause).

4. In addition art. 9 d) of the contract establishes that: “The Employer is obliged: […] in line with his health and safety policy to ensure the accident insurance of the Employee to the extent demanded by the rules of the sports federation, furthermore to ensure the regular medical and dentist examination of the Employee by qualifies experts in connection with the sports activities of the Employee”.

5. By means of a letter dated 8 December 2016, the club terminated the contract with the player as per 31 December 2016, referring to chapter XII.

6. On 19 February 2018, the player lodged a claim against the club for breach of contract in front of FIFA, requesting the payment of the following amounts:

- “Respondent Club shall pay to the player the amount of 11.100.000 in the currency of Country D [i.e. 6 x 1,850,000 in the currency of Country D], corresponding to EUR 35.690, as compensation for breach of the contract;

- The Respondent Club shall pay to the player the amount of EUR 10.537 as reimbursements for the expenses of medical treatments;

- An interest rate of 5% p.a. is applicable to the amount owed to the player as per date such amount became due, i.e., 5% p.a. since 1 January 2017.”

7. In his claim, the player argued that the club unilaterally terminated the contract, after the player suffered a “very serious injury during a training”. In addition, the club “didn’t provide him with the medical treatments necessary for his recovery as professional football player.”

8. Furthermore, the player deemed that “taking in consideration that the clause in the employment contract (clause XII point of the contract between the parties) is of unilateral and potestative nature and exclusively to benefit the Club. And at the same time that excludes the players’ right to compensation for the remaining period of the contract. The referred clause should be considered invalid and contrary to the FIFA regulations and therefore, the Player is entitled to an compensation which is now the amount of the salaries until the end of the contract.”

9. In its reply, the club requested to reject the claim, as it is unfounded. The club stressed, that it was “entitled to terminate the contract on 31 December 2016 since in the employment contract the parties expressly agreed that this opportunity is provided for the respondent, i.e. the respondent acted lawfully in the course of the termination of the employment contract.”

10. In addition, the club argued that, “by examining other sections of the Personal Conditions [Chapter XII], the fundamental importance of these provisions in respect of the employment contract can be clearly established since the parties provided for the claimant’s salary, the payment deadline, or the date of starting employment. The claimant’s reasoning that the provisions set out in Article (XII) of the Personal Conditions are invalid is incomprehensible because the claimant bases his compensation fee on another provision of Article XII, though he fails to explain it in his claim”.

11. The club further emphasised the importance of the contractual freedom of the parties and that it “is one of the pillars of all legal systems which includes that the parties may conclude agreements freely and they can determine the content of the contract freely. No legal system may fail to take into account the contractual freedom of the parties since that would result in the serious breach of the private autonomy of the parties.”

12. In regards to the player’s injuries, the club argued that “the claimant only enclosed the documents issued by Hospital E of Country D as an exhibit of his claim which provided treatment for him free of charge given that the respondent continuously paid the health contribution – on basis of which the claimant was entitled to the treatment free of charge – during the term of the employment relationship. This is the reason why the documents submitted by the claimant fail to contain any payment obligation”.

13. According to TMS, the player signed a contract with Club F on 1 July 2017 i.e. after the expiry of the contract with Club C.

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 19 February 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 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 (editions of January 2018 and June 2018), and considering that the present claim was lodged on 19 February 2018, the January 2018 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 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. First of all, the members of the Chamber acknowledged that on 29 August 2016, the player and the club signed an employment contract valid as from 2 September 2016 until 30 June 2017. In this respect, the Chamber noted that the player, on the one hand, maintains that the club breached the contract by sending him a letter, 8 December 2016, maintaining that the contract would be terminated as per 31 December 2016, based on the termination clause in chapter XII of the contract and following a serious injury suffered by him. The club, on the other hand, rejects such claim and submits that it acted according to the employment contract, which was expressly agreed upon by both parties.

6. In this framework, the Chamber deemed that the underlying issue in this dispute was to determine whether the termination of the contract by the club, based on the termination clause in chapter XII of the contract, was made with or without just cause, and subsequently, to determine the consequences of such early termination by the club.

7. The Chamber proceeded to analyse the termination clause in Chapter XII of the contract, which reads as follows: “Parties further agree that Employer is entitled to unilaterally terminate the present contract with the date of 31. December 2016. That Employe [sic] expressly accept, in case of which Employer is obliged to notify the Employee about its decision until 15. December 2016.”

8. In this respect, the Chamber held that it could not consider the application of said clause as it clearly provides for a unilateral termination right to the sole benefit of the Respondent without any compensation due to the Claimant, with a clearly unilateral and potestative nature.

9. Having taken into account the previous consideration, the Chamber decided that the termination clause in chapter XII of the contract does not constitute a valid contractual basis to invoke the unilateral termination of the contract, without the payment of any compensation to the employee.

10. Furthermore and for the sake of completeness of its analysis, the Chamber was eager to emphasise that an injury cannot be considered as a just cause for the premature termination of a valid employment contract.

11. As a result of the foregoing, the members of the Chamber came to the conclusion that, by means of its letter dated 8 December 2016, the club terminated the contract with the player without just cause, with effect as from 31 December 2016.

12. Having established the above, the Chamber turned its attention to the question of the consequences of the unilateral termination of the contract by the Respondent without just cause on 31 December 2016.

13. Subsequently and prior to assessing the relevant criteria in determining the amount of compensation due to the player by the club, the Chamber first of all recalled that the player, in addition to his claim for compensation for breach of contract in the amount of 11,000,000 in the currency of Country D, is also claiming the amount of EUR 10,537 as medical expenses allegedly related to his injury.

14. In relation to the claim of the player for medical expenses, the members of the Chamber deemed it first important to refer to the content of art. 12 par. 3 of the Procedural Rules, which establishes that “Any party claiming a right on the basis of an alleged fact shall carry the burden of proof”. Bearing in mind the foregoing, the DRC wished to point out that the player had only submitted some medical reports, which however did not state any costs. As a result of the foregoing, the Chamber decided that the player could not prove, to the Chamber’s satisfaction, that costs in the amount of EUR 10,537 were incurred by him and that the club was in fact obliged to reimburse said costs. Therefore, the members of the Chamber decided to reject this part of the player’s claim.

15. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club 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, and depending on whether the contractual breach falls within the protected period.

16. In application of the relevant provision, the Chamber held that first of all, it 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. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

17. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

18. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from its date of termination without just cause by the Respondent, i.e. 31 December 2016, until 30 June 2017, and concluded that the Claimant would have received in total amount of 11,100,000 in the currency of Country D, i.e. 6 monthly salaries à 1,850,000 in the currency of Country D each, as remuneration had the contract been executed until its expiry date. Consequently, the Chamber concluded that the amount of 11,100,000 in the currency of Country D serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

19. In continuation, the Chamber verified as to whether the player had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract 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.

20. The Chamber noted that the Claimant did not sign any employment contract with another club during the relevant period of time and therefore no further deductions should be made to the amount of 11,100,000 in the currency of Country D.

21. In addition, taking into account the Claimant’s request and the DRC’s well-established jurisprudence, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of 11,100,000 in the currency of Country D as of the date on which the claim was lodged, i.e. 19 February 2018, until the date of effective payment.

22. Finally, the Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are 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, compensation for breach of contract in the amount of 11,100,000 in the currency of Country D plus 5% interest p.a. on said amount as from 19 February 2018 until the date of effective payment.

3. In the event that the amount due to the Claimant in accordance with the above-mentioned number 2. is 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.

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

5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance in point 2. above is to be made and to notify the Dispute Resolution Chamber of every payment received.

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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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives