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 11 April 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 11 April 2019,

in the following composition:

Geoff Thompson (England), Chairman

Alexandra Gómez Bruinewoud (Uruguay), member

Stefano Sartori (Italy), member

Daan de Jong (The Netherlands), member

Muzammil bin Mohamed (Singapore), member

on the claim presented by the club,

Club A, Country B

as Claimant

against the player,

Player C, Country D

as Respondent

and the club,

Club E, Country F

as Intervening Party

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 3 November 2016, the Player of Country D, Player C (hereinafter: the Respondent), born on 12 June 1991, and the Club of Country B, Club A (hereinafter: Claimant), signed an employment contract (hereinafter: contract) valid as from the date of signature until 3 November 2017.

2. As per clause A.4 of the contract, the Respondent was entitled to an amount of USD 80,000 for the duration of the contract, payable as follows:

a) USD 40,000 as a sign-on fee;

b) USD 1,000 as monthly salary;

c) USD 10,000 on 1 February 2017;

d) USD 10,000 on 1 May 2017;

e) USD 8,000 on 1 August 2017.

3. Clause C of the contract holds that “the [Respondent] can terminate unilaterally the contract from one side and go new club outside Country B if he pay 200,000 USD include 25% as agent commission”.

4. On 3 August 2017, the Claimant lodged a claim in front of FIFA against the Respondent maintaining that he unilaterally terminated the contract. In this context, the Claimant held that “the [Respondent] should fulfil the penalty clause and pay 200.000 U$$ (…) as agreed on the contract signed between us and impose on him any consequences relating to his termination”.

5. According to the Claimant, the Respondent was granted permission to visit his home country for the period 5 July 2017 until 13 July 2017.

6. However, as per the Claimant, the Respondent did not return to the Claimant after his authorised leave.

7. The Claimant further explained that it found out through the press that the Claimant had signed an employment contract with the Club of Country F, Club E (hereinafter: Intervening Party).

8. The Claimant further stated that the Football Association of Country F (hereinafter: the Football Association G) requested the International Transfer Certificate (ITC) for the Respondent on 21 August 2017. According to the Claimant, the Football Association G indicated that the Respondent unilaterally terminated his contract on the basis that he had not received his salaries.

9. In this regard, the Claimant acknowledged that only USD 8,000, corresponding to the instalment that was due on 1 August 2017, remained unpaid, given that the Respondent had left the Claimant.

10. In support of its position, the Claimant provided, inter alia, 20 payment receipts corresponding to the Respondent’s salary, all signed by the Respondent, in the total amount of USD 69,600.

11. In his reply, the Respondent acknowledged that he travelled to Country D on 5 July 2017 with the Claimant’s authorisation and that he was to return 1 week later. He explained that, on or around 7 July 2017, he was contacted by the Intervening Party who told him that he could join them “as a free player, because the Football Association of Country B was suspended by FIFA and that [the Claimant] could’t take place anymore in the games in the CAF Confederation Cup”.

12. The Respondent further stated that, after having ascertained that such information was correct, on 9 July 2017, he signed an employment contract with the Intervening Party, since he deemed that he could not properly fulfil his obligations with the Claimant due to the FIFA suspension.

13. According to the information in the Transfer Matching System (TMS), the Respondent signed an employment contract with the Intervening Party on 16 August 2017, valid during 3 years starting as from the 2017-18 season and ending at the 2019-20 season. According to this employment contract, up until November 2017, the Respondent was to receive the following payments:

a) USD 33,875 on 1 September 2017;

b) USD 6,775 on 1 October 2017;

c) USD 6,775 on 1 November 2017.

14. Despite having been invited to do so, the Intervening Party did not provide its comments on the matter.

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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 3 August 2017. Consequently, the 2017 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 a Club of Country B, a Player of Country D, with the intervention of a Club of Country F.

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 3 August 2017, the 2016 edition of the 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 and arguments as well as the documentation on file. 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 this respect, 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 TMS.

5. In this respect, the Chamber firstly recalled that the Respondent signed an employment contract with the Claimant on 3 November 2016, valid until 3 November 2017. Moreover, the DRC highlighted that it remained undisputed that the Claimant granted the Respondent permission to leave on 5 July 2017 and that he was to return by 13 July 2017.

6. The Chamber further took into account that the Respondent failed to return to the Claimant after the end of his authorised leave. Furthermore, the Chamber underlined that, according to the information in TMS, the Respondent signed an employment contract with the Intervening Party on 16 August 2017. Finally, the DRC noted that, in its claim, the Claimant requested USD 200,000 “as agreed on the contract signed between [the Claimant and the Respondent]”, for breach of contract by the Respondent.

7. On account of the above, the DRC came to the first conclusion that, by failing to return to the Claimant by 13 July 2017, the Respondent de facto unilaterally terminated the contract on 14 July 2017.

8. Given the above, the Chamber understood that the primary issue at stake is determining whether the Respondent had a just cause to terminate the contract with the Claimant and to decide on the consequences thereof. In this respect, the Chamber deemed it essential to make a brief recollection of the parties’ arguments regarding the contract termination.

9. In this context, the DRC firstly recalled that, according to the Claimant, the Football Association G indicated that the Respondent had unilaterally terminated the contract on the basis that it had not received his salaries. However, the Chamber further evoked that, as per the Claimant, only USD 8,000 corresponding to the instalment that was due on 1 August 2017 remained unpaid, given that the Respondent had left the Claimant.

10. In continuation, the Chamber took into account the arguments of the Respondent, who held that, during his authorised leave period, he was allegedly informed by the Intervening Party that he could join them “as a free player, because the Football Association of Country B was suspended by FIFA”. Furthermore, the DRC noted that the Respondent concluded that he could no longer properly fulfil his contractual obligations vis-à-vis the Claimant.

11. Having said that, the Chamber referred to its well-established jurisprudence, and was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract without prior warning. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employee to assure the employer’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can always only be an ultima ratio.

12. With the above considerations in mind, the DRC firstly held that, without entering into the merits of the alleged suspension of the Football Association of Country B (hereinafter: Football Association H), such situation cannot per se constitute a valid reason for any player to terminate his employment contract. What is more, the Chamber further underlined that, in the matter at hand, there is no indication whatsoever that the Respondent contacted the Claimant to inquire about the situation regarding the Football Association H and the potential consequences with regard the employment relationship between himself and the Claimant.

13. Finally, and considering the Respondent’s unauthorised absence, the DRC held that the Claimant had a valid reason to withhold the payment of USD 8,000 that fell due on 1 August 2017.

14. On account of the above, the Chamber came to the firm conclusion that the arguments of the Respondent cannot be upheld and that, by failing to return to the Claimant, the Respondent terminated the contract without just cause on 14 July 2017.

15. Subsequently, after having established that the Respondent terminated the contract without just cause, the DRC established that, in accordance with art. 17 par. 1 of the Regulations, the Respondent is liable to pay compensation to the Claimant for breach of contract. Furthermore, in accordance with the unambiguous contents of art. 17 par. 2 of the Regulations, the Chamber established that the Respondent’s new club, i.e. the Intervening Party, shall be jointly and severally liable for the payment of compensation. In this respect, the Chamber was eager to point out that the joint liability of the Intervening Party is independent from the question as to whether the new club has committed an inducement to contractual breach or any other kind of involvement by the new club. This conclusion is in line with the well-established jurisprudence of the Chamber that was repeatedly confirmed by the Court of Arbitration for Sport (CAS).

16. Having stated the above, the Chamber focussed its attention on the calculation of the amount of compensation for breach of contract 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 as well as the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period. The DRC recalled that the list of objective criteria is not exhaustive and that the broad scope of criteria indicated tends to ensure that a just and fair amount of compensation is awarded to the prejudiced party.

17. In application of the relevant provision, the Chamber held that it first of all 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.

18. In this context, the Chamber wished to recall that, in accordance with Clause C of the contract (cf. point I.3), “the [Respondent] can terminate unilaterally the contract from one side an go new club outside Country B if he pay 200,000 USD include 25% as agent commission”. Furthermore, the DRC pointed out that the Claimant requested USD 200,000 on the basis of said Clause C.

19. However, while analysing the aforementioned clause, the members of the Chamber noted that said clause only grants the Respondent the right to terminate the contract by paying a predetermined amount to the club and does not provide for an amount of compensation payable by the contractual parties in the event of breach of contract. As such, and in accordance with the longstanding jurisprudence of the DRC in this respect, the Chamber decided that, by means of said clause, the parties did not agree upon a compensation payable in case of breach of contract. Consequently, the DRC concluded that the aforementioned clause cannot be taken into consideration in the determination of the amount of compensation.

20. 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 stated 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.

21. 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 financial terms of the former contract and the new contract, the value of which constitutes an essential criterion in the calculation of the amount of compensation in accordance with art. 17 par. 1 of the Regulations. The members of the Chamber deemed it important to emphasise that the relevant compensation should be calculated based on the average fixed remuneration, i.e. excluding any conditional or performance related payment, agreed by the player with his former club and his new club, as well as considering the period of time remaining on the contract signed between the player and the former club.

22. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the fixed remuneration payable to the Respondent under the terms of the employment contract signed with the Claimant for the period that was remaining since the unilateral termination of the contract by the player until its expiry, i.e. from 14 July 2017 until 3 November 2017.

23. In this regard, the Chamber noted that, as per the employment contract signed with the Claimant, the Respondent was entitled to one instalment of USD 8,000 due on 1 August 2017, as well as monthly remuneration in the amount of USD 1,000 for the remaining contractual period, i.e. a total fixed remuneration of USD 11,000.

24. In continuation, the DRC equally took note of the Respondent’s remuneration for the relevant period under the terms of his employment contract with his new club, i.e. the Intervening Party, which corresponded to the total amount of USD 47,425.

25. Taking into account the above, the Chamber concluded that, for the relevant period, the Respondent’s average remuneration amounted to USD 29,213.

26. On account of the above, and taking into account all the aforementioned objective elements in the matter at hand, the DRC decided that the total amount of USD 29,213 was to be considered a reasonable and justified amount to be paid as compensation for breach of contract in the case at hand.

27. Furthermore, the Chamber decided that, in accordance with art. 17 par. 2 of the Regulations, the Intervening Party shall be jointly and severally liable for the payment of the aforementioned amount of compensation.

28. In continuation, the Chamber focussed its attention on the further consequences of the breach of contract in question and, in this respect, it addressed the question of sporting sanctions against the Respondent in accordance with art. 17 par. 3 of the Regulations. The cited provision stipulates that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on any player found to be in breach of contract during the protected period.

29. In this respect, 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 regard, the DRC pointed out that the Respondent, whose date of birth is 12 June 1991, was 25 years of age when he signed his employment contract with the Claimant on 3 November 2016, entailing that the unilateral termination of the contract occurred within the applicable protected period.

30. With regard to art. 17 par. 3 of the Regulations, the Chamber emphasised that a suspension of four months on a player’s eligibility to participate in official matches is the minimum sporting sanction that can be imposed for breach of contract during the protected period. This sanction, according to the explicit wording of the relevant provision, can be extended in case of aggravating circumstances. In other words, the Regulations intend to guarantee a restriction on the player’s eligibility of four months as the minimum sanction. Therefore, the relevant provision does not provide for a possibility to the deciding body to reduce the sanction under the fixed minimum duration in case of mitigating circumstances.

31. With the above in mind, the members of the Chamber wished to recall the sequence of the events of the present matter. First, the DRC recalled that, by not returning to the Claimant by 13 July 2017, the Respondent de facto unilaterally terminated the contract without just cause with the Claimant on 14 July 2017.

32. Having stated that, the DRC was eager to emphasise that the Respondent raised his income considerably by concluding an employment contract with the Intervening Party and underlined that only one month passed between the unilateral contract termination with the Claimant and the conclusion of the new contract with the Intervening Party.

33. Consequently, taking into account the circumstances surrounding the present matter, the Chamber was of the opinion that the Respondent only terminated the contract with the aim of signing a new contract with the Intervening Party. As such, the DRC decided that, by virtue of art. 17 par. 3 of the Regulations, the Respondent is to be sanctioned with a restriction of four months on his eligibility to participate in official matches.

34. Finally, the members of the Chamber turned their attention to the question of whether, in view of art. 17 par. 4 of the Regulations, the player’s new club, i.e. the Intervening Party, must be considered to have induced the Respondent to unilaterally terminate his contract with the Claimant without just cause during the protected period and, therefore, shall be banned from registering any new players, either nationally or internationally, for two entire and consecutive registration periods.

35. In this respect, the Chamber recalled that, in accordance with art. 17 par. 4 of the Regulations, it shall be presumed, unless established to the contrary, that any club signing a professional player who has terminated his previous contract without just cause has induced that professional to commit a breach. Consequently, the Chamber pointed out that the party that is presumed to have induced the player to commit a breach carries the burden of proof to demonstrate the contrary.

36. Having stated the above, the members of the Chamber took note that, based on the response provided by the Respondent, it appeared that the Intervening Party induced the Respondent to terminate his contract with the Claimant and sign for the Intervening Party instead, on the alleged basis that the Football Association H was suspended by FIFA and that the Claimant would not be able to participate in international competitions. Furthermore, the DRC placed particular emphasis on the fact that the Intervening Party failed to provide any comments on the matter after it was invited to do so.

37. In light of the aforementioned, and given that the Intervening Party did not provide any explanation as to its possible non-involvement in the Respondent’s decision to unilaterally terminate his employment contract with the Claimant, the DRC had no option other than to conclude that the Intervening Party had not been able to reverse the presumption contained in art. 17 par. 4 of the Regulations and that, accordingly, the latter had induced the Respondent to unilaterally terminate his employment contract with the Claimant.

38. In view of the above, the Chamber decided that, in accordance with art. 17 par. 4 of the Regulations, the Intervening Party shall be banned from registering any new players, either nationally or internationally, for the two entire and consecutive registration periods following the notification of the present decision. The Intervening Party shall be able to register new players, either nationally or internationally, only as of the next registration period following the complete serving of the relevant sporting sanction. In particular, it may not make use of the exception and the provisional measures stipulated in art. 6 par. 1 of the Regulations in order to register players at an earlier stage.

39. 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, Club A, is partially accepted.

2. The Respondent, Player C, is ordered 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 USD 29,213.

3. The Intervening Party, Club E, is jointly and severally liable for the payment of the aforementioned compensation.

4. In the event that the aforementioned amount is not paid within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and 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 and the Intervening Party, 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. A restriction of four months on his eligibility to play in official matches is imposed on the Respondent, Player C. This sanction applies with immediate effect as of the date of notification of the present decision. The sporting sanctions shall remain suspended in the period between the last official match of the season and the first official match of the next season, in both cases including national cups and international championships for clubs.

8. The Intervening Party, Club E, 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.

*****

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