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 14 June 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 3 July 2017 until 3 July 2019.

2. According to Clause 4.1 of the employment contract, for the “first year”, the Claimant was entitled to USD 150,000, payable as follows: a. USD 30,000 as “advance when the [Claimant] arrived at the [Respondent]”; b. USD 10,000 as monthly salary payable “at the end of every Gregorian month”.

3. Furthermore, by means of Clause 4, for the “second year”, the Claimant was entitled to USD 180,000, payable as follows: a. USD 30,000 as “advance”; b. USD 12,500 as monthly salary.

4. In accordance with Clause 4.6 of the employment contract, the Respondent shall comply with “insurance covering injury, medical treatment, […] during the term of [the Claimant’s] contract with [the Respondent], provided that it shall include insurance coverage for the cases whose effects extend after the end of the contract”.

5. On 9 July 2018, the Claimant wrote to the Respondent that, on both 3 July 2018 and 5 July 2018, he was told by the Respondent that it was no longer interested in his services. In this regard, the Claimant further wrote that the Respondent had not paid the monthly salaries corresponding to May and June 2018, thereby being “in debt with the player in the amount of USD 20,000”.

6. In said letter, the Claimant further held that in case the Respondent “is interested in terminating the Contract, it shall present to the [Claimant] the relevant proof of payment of the total amount of USD 40,635.02 […], corresponding to the unpaid salaries (USD 20,000), the reimbursement of the medical treatment costs (USD 10,635.02) and the penalty clause (USD 10,000) […] within 15 days from the receipt of this notification”.

7. By letter dated 18 July 2018, the Claimant reiterated that USD 20,000 corresponding to the monthly salaries of May 2018 and June 2018 remained outstanding, as well as his medical expenses in the amount of USD 10,635.02. The Claimant further “put [the Respondent] officially on default” for the payment of said amounts by 2 August 2018.

8. On 2 August 2018, the Claimant terminated the contract in writing. In his termination letter, the Claimant emphasized that the monthly salaries corresponding to May, June and July had remained unpaid. In addition, the Claimant held that the “2018/2019 Signing Fee“, due on “30 July 2018” had also remained unpaid.

9. On 3 August 2018, the Claimant lodged a claim for termination of contract with just cause and requested the payment of the following amounts:

a. USD 62,500, corresponding to the “salaries from May to July 2018 and the signing fee for the 2018/2019 season;

b. USD 10,635.02, corresponding to the medical expenses incurred;

c. USD 137,500 as compensation for breach of contract by the Respondent, corresponding to the residual value of the contract.

10. With his claim, the Claimant further requested to be awarded 5% interest p.a. “over the total amount of USD 210,635.02 […], counted from 3 August 2018, i.e. within 15 (fifteen) days” until the date of effective payment.

11. According to the Claimant, on 6 April 2018, he sustained an injury that required surgery and physiotherapy.

12. In this context, the Claimant explained that his medical costs amounted to USD 10,635.02, but that the Respondent refused to reimburse these costs.

13. According to the Claimant, on 3 July 2018, the Respondent informed him that it was no longer interested in his services. Furthermore, as per the Claimant, after requesting outstanding remuneration on 5 July 2018, the Respondent answered “Dear Player A, if you find a club go ahead good luck”.

14. Finally, the Claimant argued that the Respondent completely ignored his letters of 9 July 2018 and 18 July 2018.

15. In its reply, the Respondent held that the Claimant signed a “financial clearance […] after suffering an injury […] and traveled on 26/04/2018 and did not return again to club […] and his contract was canceled from the date of his travel and reached and paid him dues to the date of travel”.

16. In his replica, the Claimant argued that the “Financial Clearance” document presented by the Respondent “does not mention the alleged mutual termination of the contract”. As per the Claimant, the document had the objective of declaring that he had collected from the Respondent all his salaries due until 26 April 2018, but did not mean that he waived “any future earnings from the contract”.

17. Despite having been invited to do so, the Respondent failed to provide its final comments.

18. The Claimant informed FIFA that on 17 August 2018 he signed an employment contract with the club of Country E, Club F, valid as from the date of signature until 31 May 2019, according to which, he was entitled to 10 monthly salaries of USD 15,850 each.

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 XX 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 XY 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 3 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 3 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 14 June 2017, the Claimant and the Respondent concluded an employment contract valid as from 3 July 2017 until 3 July 2019, pursuant to which the Respondent undertook to pay to the Claimant, for the “first year”, USD 150,000, payable as follows: a. USD 30,000 as “advance when the [Claimant] arrived at the [Respondent]” and b. USD 10,000 as monthly salary payable “at the end of every Gregorian month”. The DRC further noted that the employment contract provided, for the “second year”, that the Claimant was entitled to USD 180,000, payable as follows: a. USD 30,000 as “advance” and b. USD 12,500 as monthly salary.

7. Moreover, the DRC took note that, according to Clause 4.6 of the employment contract, the Respondent shall comply with “insurance covering injury, medical treatment, […] during the term of [the Claimant’s] contract with [the Respondent], provided that it shall include insurance coverage for the cases whose effects extend after the end of the contract”.

8. In continuation, the members of the Chamber observed that, according to the Claimant, he had just cause to unilaterally terminate the employment contract on

2 August 2018, due to the fact that, with regards to the season 2018/2019, the Respondent had failed to remit to him the signing-on fee as well as his monthly salaries from May until July 2018.

9. Moreover, the DRC took note that the Claimant maintained that he was entitled to the reimbursement of the medical expenses he had incurred in relation to the injury he had sustained during his employment relationship with the Respondent.

10. In continuation, the Chamber took note that the Respondent, for its part, maintained that the parties had mutually terminated the employment contract on 26 April 2018 and that, on the said date, the Claimant left the country and never returned. Moreover, the Chamber observed that the Respondent claimed that he had paid the Claimant all of his dues up to the day he left the country.

11. Having clarified the above, the Chamber highlighted that the underlying issue in this dispute was to first establish the date on which the employment contract had been terminated and, subsequently, whether it had been terminated by the Claimant with just cause as well as to, eventually, determine the consequences thereof.

12. In this respect, bearing in mind art. 12 par. 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 Chamber observed that the club produced a copy of a document entitled “Financial Clearance”, dated 26 April 2018, signed by the player. However, after having analysed its content, the members of the DRC concurred that it could not be concluded from that document that the parties had agreed to terminate the employment contract on 26 April 2018.

13. Consequently, the DRC established that the employment contract had been terminated on 2 August 2018, when the Claimant addressed the Respondent with the relevant termination letter.

14. Having determined that the Claimant had terminated the employment contract on 2 August 2018, it remained to be seen whether he had done so with just cause.

15. In this respect, the Chamber observed that the Respondent did not contest that, by the time the Claimant addressed it with his second default letter on 18 July 2018, his salaries of May and June 2018 as well as the signing-on fee for the season 2018/2019 were outstanding. Moreover the members of the DRC observed that it also remained undisputed that the Claimant provided the Respondent with 15 days to remedy its default and that the Respondent never reacted to any of the default letters.

16. Therefore, the DRC concluded that the Respondent had failed to pay to the Claimant his signing-on fee and 3 monthly salaries of USD 12,500 each as per the employment contract, for a total amount of USD 62,500, as claimed.

17. The foregoing having been established, the members of the Chamber noted that it remained to be determined whether the Claimant was entitled to the reimbursement of the medical expenses incurred. In this respect, bearing in mind art. 12 par. 3 of the Procedural Rules, the Chamber observed that the Claimant submitted a copy of a document entitled “Medical Budget”, from which it results that he incurred in medical costs for treatment received in Country B for an amount of USD 10,635.02.

18. However, the members of the DRC recalled that, in accordance with the employment contract, the Respondent undertook to comply with insurance covering the Claimant’s costs, meaning that any medical costs incurred by the Claimant would be borne by the insurance and not by the Respondent. In this respect, the DRC observed that the question of whether the Respondent complied with its obligation to insure the Claimant, as stipulated in the employment contract, is not in dispute. Moreover, the Chamber deemed it fit to point out that the Claimant received his treatment outside of Country D and, in accordance with the DRC’s constant practice, the reimbursement of medical costs incurred in a country other than the country of the club is only granted if it is expressly stipulated in the contract. The Chamber noted that this is not the case in the matter at hand.

19. Consequently, the Chamber decided to dismiss the Claimant’s request as to the reimbursement of the medical expenses.

20. However, the Chamber concluded that, at the time the Claimant terminated the employment contract, the total amount of USD 62,500 was outstanding, corresponding to the signing-on fee and his salaries of May, June and July 2018. Therefore, the members of the Chamber considered that the Respondent had neglected its contractual obligations towards the Claimant, reason for which the latter had a just cause to terminate the contract on 2 August 2018, having previously put the Respondent in default of its financial obligations on 9 and 18 July 2018.

21. As a result, the Chamber decided that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant.

22. In continuation, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant, the Chamber decided that the Respondent must fulfil its obligations as per the employment 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 USD 62,500, pertaining to the signing-on fee as well as his monthly salaries of May, June and July 2018.

23. In addition, taking into consideration the specific request of the Claimant on the point, the Chamber decided to award the latter interest at the rate of 5% p.a. on the amount of USD 62,500 as from 3 August 2018 until the date of effective payment.

24. 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.

25. 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.

26. 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 observed that the employment contract does not contain any such clause.

27. 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 employment contract as from its termination and concluded that the Claimant would have been entitled to receive USD 137,500 as remuneration had the employment contract been executed until its regular expiry date, i.e. 3 July 2019.

28. In continuation, the Chamber assessed whether the Claimant had 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 the 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.

29. In respect of the above, the Chamber recalled that, according to the information provided by the Claimant, on 17 August 2018 he signed an employment contract with the club of Country E, Club F, valid as from the date of signature until 31 May 2019, according to which, he was entitled to 10 monthly salaries of USD 15,850 each.

30. Consequently, the Chamber established that the value of the new employment contract concluded between the Claimant and the new club for the period as from 2 August 2018 until and including May 2019 exceeds the residual value of the employment contract with the Respondent for the same period of time. Therefore, the Chamber decided that, even though the Respondent is liable for the early termination of the employment contract with just cause by the Claimant, there is no amount that should be awarded to the Claimant as compensation for breach of contract for the period as from August 2018 until 31 May 2019, since the Claimant has been able to fully mitigate his damages for said time period.

31. However, the members of the Chamber noted that the Claimant was not able to mitigate his damages in relation to the month of June 2019 and, therefore, decided that he should be entitled to receive compensation for this specific period of time, i.e. the amount of EUR 12,500 in accordance with the employment contract at the basis of the present dispute.

32. Moreover, in application of the criteria outlined in art. 17 par. 1 point. ii of the Regulations, and considering that the early termination of the contract was due to overdue payables, the Chamber noted that, in addition to the mitigated compensation, the Claimant is entitled to an amount corresponding to three monthly salaries.

33. In this context, the Chamber recalled that, according to the employment contract, the Claimant was entitled to a monthly salary in the amount of USD 12,500. Therefore, the Chamber calculated that the corresponding amount as established in the previous paragraph is equal to USD 37,500.

34. Consequently, and with the addition of the three monthly salaries to the mitigated compensation, the Chamber established that the payable compensation corresponds to the total amount of USD 50,000.

35. On account of all the abovementioned considerations, the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damage, the Chamber decided that the Respondent must pay the total amount of USD 50,000 to the Claimant as compensation for breach of contract, plus 5% interest p.a. on the said amount as of the date of the claim until the date of effective payment.

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

37. 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.

38. 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.

39. 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.

40. 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 62,500 plus interest at the rate of 5% p.a. as from 3 August 2018 until the date of effective payment.

3. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of USD 50,000, plus interest at the rate of 5% p.a. as from 3 August 2018 until the date of effective payment.

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

5. 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 amounts mentioned under points 2. and 3. above.

6. The Respondent shall provide evidence of payment of the due amounts in accordance with points 2. and 3. 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).

7. In the event that the amounts due plus interest in accordance with points 2 and 3 above are 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).

8. The ban mentioned in point 7 above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

9. In the event that the aforementioned sums plus interest are 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