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

Jerome 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

arisen between the parties

I. Facts of the case

1. On 24 January 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 (hereinafter: the contract), valid as from “24 January 2017, and be effective during the second half of the season of 2016/2017 and 2017/2018 and 2018/2019 football seasons”. In this context, according to the information contained in the Transfer Matching System (TMS), the relevant seasons in Country D run from June until May of the following year.

2. Art. 6 of the contract established that “The [Respondent] is obliged to pay the amounts as written below in return of his services subject to this employment contract, all payments indicated in the employment contract are to be considered as net payments…

For 2016/2017 Football Season: EUR 300,000 (Three Hundred Thousand Euros)

The aforementioned amount is to be paid to the [Claimant] by the [Respondent] as the guarantee payment in 5 instalments on the belowmentioned dates:

On the signing date of this contract: EUR 50,000

Payable by bond dated 30.01.2017: EUR 50,000

28.02.2017: EUR 50,000

31.03.2017: EUR 50,000

30.04.2017: EUR 50,000

31.05.2017: EUR 50,000

For 2017/2018 Football Season: EUR 650,000 (Six Hundred Fifty Thousand Euros)

The aforementioned amount is to be paid to the [Claimant] by the [Respondent] as the guarantee payment on the belowmentioned dates:

31.08.2017: EUR 150,000

-EUR 500,000 of the aforementioned amount is to be paid to the [Claimant] by the [Respondent] as the monthly salary in 10 equal instalments between the period of August 2017-May 2018. The monthly salaries are to be paid the last day of the relevant months.

For 2018/2019 Football Season: EUR 650,000 (Six Hundred Fifty Thousand Euros)

The aforementioned amount is to be paid to the [Claimant] by the [Respondent] as the guarantee payment on the belowmentioned dates:

31.08.2018: EUR 150,000

-EUR 500,000 of the aforementioned amount is to be paid to the [Claimant] by the [Respondent] as the monthly salary in 10 equal instalments between the period of August 2018-May 2019. The monthly salaries are to be paid the last day of the relevant months.

…

6.2 The [Claimant] shall be paid in the amount of EUR 7,500 in relation with the second half of 2016/2017 football season and the amount of EUR 15,000 in relation with the second half of 2017/2018 football season and the amount of EUR 15,000 in relation with the second half of 2018/2019 football season will be paid for the expenses with regard to – including but not limited with – residence, car, flight tickets besides the abovementioned payments. All of the aforesaid expenses (not included medical expenses) are included in abovementioned payment.

6.2 Other benefits in favour of the [Claimant]

The [Claimant] will be entitled to the following bonuses for every season during the contract period

-In case the [Respondent] will finish within first sixth in League E. The [Respondent] shall pay the [Claimant] in the amount of EUR 25,000.

-In case the [Respondent] will be champion in the League E, the [Respondent] shall pay to the [Claimant] in the amount of EUR 100,000.”

3. Moreover, the contract does not contain a clause regarding the financial consequences in case of breach of contract by any of the parties.

4. On 24 April 2017, the Claimant put the Respondent in default in writing, requesting the outstanding amount of EUR 100,000, corresponding to the outstanding salaries of February and March 2017.

5. On 16 June 2017, the Claimant put the Respondent in default in writing, requesting the outstanding payments until the date of the letter, which amounted EUR 92,500.

6. On 7 September 2017, the Claimant put the Respondent in default in writing, requesting the outstanding amount of EUR 200,000, corresponding to the advance payment of August due on 31 August 2017 and the outstanding salary of August 2017, establishing a deadline to the Respondent of 10 days for payment, stating that otherwise he would terminate the contract.

7. On 2 October 2017, the Claimant put the Respondent in default in writing, requesting the outstanding amount of EUR 250,000, corresponding to the advance payment of August due on 31 August 2017 and the outstanding salaries of August and September 2017, establishing a deadline to the Respondent of 10 days for payment, stating that otherwise he would terminate the contract.

8. On 2 November 2017, the Claimant put the Respondent in default in writing, requesting the outstanding amount of EUR 300,000, corresponding to the advance payment of August due on 31 August 2017 and the outstanding salaries of August, September and October 2017, establishing a deadline to the Respondent of 10 days for payment, stating that otherwise he would terminate the contract.

9. On 4 December 2017, the Claimant put the Respondent in default in writing, requesting the outstanding amount of EUR 350,000, corresponding to the advance payment of August due on 31 August 2017 and the outstanding salaries of August, September, October and November 2017, establishing a deadline to the Respondent of 10 days for payment, stating that otherwise he would terminate the contract.

10. In this respect, by means of a letter dated 15 December 2017, the Claimant unilaterally terminated the contract, stressing he had just cause to terminate the contract since the Respondent failed to pay him the amounts requested in the default letters dated 7 September 2017, 2 October 2017, 2 November 2017 and 4 December 2017.

11. On 29 December 2017, the Claimant lodged a claim against the Respondent before FIFA, requesting the total amount of EUR 1,630,000, plus interests as of the respective due dates:

- EUR 365,000 as outstanding payments:

i. EUR 150,000 corresponding to the advance payment of August 2017 due on 31 August 2017;

ii. EUR 200,000 corresponding to the outstanding salaries of August 2017 until November 2017; and

iii. EUR 15,000 corresponding to the “expenses” during the 2017/2018 season, in accordance with art. 6.2 of the contract.

Plus interests as of the respective due dates.

- EUR 965,000 as compensation for breach of contract, plus interests as of the date the contract was terminated i.e. 15 December 2017, amount corresponding to the salaries and expenses for the time frame as from December 2017 until May 2019.

- EUR 300,000 as additional compensation based on art. 337c/3 of the Swiss Code of Obligations.

12. Moreover, in his claim, the Claimant stated that the Respondent’s failure regarding the its contractual obligations towards him began since the first months of the employment relationship, and continued until he terminated the contract.

13. Furthermore, the Claimant held that from the beginning of the 2017/2018 season, he faced a “very unfair treatment”. In this context, the Claimant sustained that without giving any explanation, the Respondent excluded him from the professional team, had him training alone, did not consider him in the pre-season, but according to the Claimant, most importantly, the Respondent cancelled his license on September 2017, after the transfer period was closed, situation that the Claimant considered caused him an enormous damage as he had to end his professional career.

14. Subsequently, the Claimant referred to his default letters dated 7 September 2017, 2 October 2017, 2 November 2017 and 4 December 2017, as well as to his termination letter of 15 December 2017, stating that he did not receive any amount. In this respect, the Claimant deemed having just cause to terminate the contract on 15 December 2017 after the non-payment and the alleged unfair treatment he received.

15. In its reply, the Respondent held that the Claimant terminated the contract without just cause as it did not, allegedly, had any outstanding amounts towards the Claimant as of the date of the termination.

16. In this regard, the Respondent presented payment receipts for the following payments:

- EUR 50,000 on 25 January 2017;

- EUR 25,000 on 1 March 2017;

- EUR 25,000 on 20 April 2017;

- EUR 50,000 on 4 May 2017;

- EUR 65,000 on 17 May 2017;

- EUR 92,500 on 28 June 2017; and

- EUR 200,000 on 9 April 2018.

17. Nevertheless, the Respondent requested that in case the FIFA’s Dispute Resolution Chamber (DRC) considers that the Claimant had just cause to terminate the contract on 15 December 2017, “the calculation compensation has to be made based on the incomes of the [Claimant] after the termination date. The [Claimant] has not signed any employment contract after the termination. In this context we kindly ask FIFA DRC to mas deduction at the rate of 75% minimum from the compensation which will be calculated by FIFA DRC after deductions of the incomes of the [Claimant] after the termination”.

18. In his replica, the Claimant acknowledged the payments made by the Respondent and in this respect, explained that the payments made on 25 January 2017, 1 March 2017, 20 April 2017, 4 May 2017, 17 May 2017 and 28 June 2017, are in relation to the 2016/2017 season, emphasizing that he “has no request in relation with 2016/2017 football season”, and that “the payments shown above are not in relation with the present case”. Nevertheless, held that payment made on 9 April 2018 in the amount of EUR 200,000 should be deducted from the outstanding remuneration requested on his claim. However, the Claimant sustained that he still had a just cause to terminate the contract on 15 December 2017.

19. In its duplica, the Respondent insisted on its reply and reiterated its argumentation.

20. After being requested by FIFA, the Claimant informed that he did not signed any contract after the termination of the contract.

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 29 December 2017. Consequently, 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 2017 and 2018 editions 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 2016 and 2018), and considering that the present claim was lodged on 29 December 2017, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter.

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. In particular, the Single Judge 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 TMS.

5. First of all, the DRC acknowledged that, on 24 January 2017, the Claimant and the Respondent concluded an employment contract valid as from the date of the signature “and be effective during the second half of the season 2016/2017 and 2017/2018 and 2018/2019 football seasons”, that according to TMS runs until 31 May 2019.

6. In this regard, the members of the Chamber duly considered the financial terms of the contract at the basis of this dispute, which are in casu contained in art. 6 of the contract. In this context, the Chamber took note that the Claimant was entitled to receive the following amounts:

- EUR 300,000 for the 2016/2017 season, as salary;

- EUR 7,500 for the 2016/2017 season, as “expenses” in accordance with art. 6.2 of the contract;

- EUR 650,000 for the 2017/2018 season, corresponding to the claimant’s salary;

- EUR 15,000 for the 2017/2018 season, as “expenses” in accordance with art. 6.2 of the contract;

- EUR 650,000 for the 2018/2019 season, as salary; and

- EUR 15,000 for the 2018/2019 season, as “expenses” in accordance with art. 6.2 of the contract.

7. In continuation, the DRC further acknowledged that the Claimant lodged a claim for outstanding remuneration and compensation for breach of contract in front of FIFA against the Respondent, arguing that he terminated the contract with just cause on 15 December 2017, due to the fact that the Respondent failed to pay him the amount of EUR 350,000 corresponding to the advance payment of August 2017, as well as the outstanding salaries of August, September, October and November 2017.

8. Subsequently, the members of the DRC noted that, in support of his claim, the Claimant sustained that the Respondent had been in breach of its payment obligations for the 2017/2018 season, for a significant period of time. In this respect, the DRC observed that the Claimant stated having put the Respondent in default, several times by means of letters dated, 7 September 2017, 2 October 2017, 2 November 2017 and 4 December 2017, respectively, establishing in each default notice a deadline of 10 days for payment, asserting that otherwise he would terminate the employment relationship.

9. Equally, the Chamber referred to the Respondent’s reply to the claim in which it argued not having any outstanding amounts towards the claimant as of the date of the termination of the contract i.e. 15 December 2017, and that in this regard it presented payments receipts dated 25 January 2017, 1 March 2017, 20 April 2017, 4 May 2017, 17 May 2017, 28 June 2017 and 9 April 2018.

10. Finally, the DRC took note of the comments of the Claimant in relation to the Respondent’s reply to the claim. In particular, the members of the DRC noted that the Claimant acknowledged the payments made by the Respondent on 25 January 2017, 1 March 2017, 20 April 2017, 4 May 2017, 17 May 2017 and 28 June 2017, however, emphasizing that the payments were in relation with the 2016/2017 season and that, therefore, they had no relation to the investigation of the present matter since he is not claiming anything from that season. Moreover, the DRC observed that, the Claimant stated that the payment made on 9 April 2018, in the amount of EUR 200,000, should be deducted from the amount requested in his claim.

11. Having recalled the aforementioned facts, the Chamber concluded that the underlying issue in the present matter is to determine if the employment contract had been unilaterally terminated by the Claimant with or without just cause and which party was responsible for the early termination of the contractual relationship in question and the consequences thereof.

12. Having established the above-mentioned, the members of the Chamber, first of all, pointed out that although the Regulations do not define when there is a “just cause” to terminate an employment contract, according to the Dispute Resolution Chamber’s longstanding jurisprudence the late payment of remuneration by an employer does in principle constitute a “just cause” for the termination of an employment contract. In this respect, the Chamber underlined that indeed, the club’s payment obligation is the main obligation towards its players. If the payment of the salary is repeatedly not made at the date designated in the employment contract, this may obviously cause the player’s confidence in the proper fulfilment of future obligations to be lost. However, the DRC was keen to underline that the right of the player to terminate an employment contract with just cause in a situation of late payment by the club of his salary would only be given if the player has, prior to terminating the employment contract, issued the club a warning or in other words, drawn the club’s attention to the breach of the contractual obligations.

13. Reverting to the facts of the present matter, the members of the DRC found that the prerequisite for invoking just cause to terminate an employment contract were, in casu, indeed met. In this regard, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant, until 15 December 2017, date on which the Claimant terminated the contract, the total amount of EUR 350,000, and that prior to this, the Respondent had been warned on several occasions by the Claimant , namely on 7 September 2017, 2 October 2017, 2 November 2017 and 4 December 2017. Consequently, and considering that the Respondent had been repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber was of the opinion that the foregoing situation legitimately cause the Claimant’s confidence in the Respondent respecting its future duties under the contract to be lost.

14. Furthermore, the DRC strongly emphasized that the circumstance that the Respondent paid the amount of EUR 200,000 on 9 April 2018, does not remedy the breach, as the payment was done at a later stage by the Respondent, this is, after the termination of the contract by the Claimant occurred, and cannot in any way repair the Respondent’s disrespect of its contractual obligations.

15. As a consequence, the members of the Chamber reached the conclusion that the Claimant had just cause to unilaterally terminate the employment contract on 15 December 2017, and that as a result, the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant.

16. Having established the legal aspects of the present termination of the employment contract as detailed in the previous considerations, the members of the DRC went on to deal with the financial consequences of said termination.

17. First of all, the Chamber decided that the Respondent must fulfil its obligations as per the employment contract up until the date of the termination of the contract in accordance with the general legal principle of “pacta sunt servanda”.

18. In this context, the members of the DRC recalled the payment of EUR 200,000 on 9 April 2018, and as a result decided to take said payment into account, in particular as to the advance payment of August 2017, corresponding to the amount of EUR 150,000 and the monthly salary of August 2017, corresponding to the amount of EUR 50,000. Consequently, the Chamber concluded that the Respondent is liable to pay to the Claimant outstanding remuneration in the amount of EUR 150,000, consisting of the monthly salaries of September to November 2017, EUR 50,000 each.

19. Furthermore, considering the Claimant’s claim for interest and also taking into account the Chamber’s longstanding jurisprudence, the Chamber ruled that the Respondent must pay 5% interest p.a. on the amounts of EUR 50,000 as from 1 October 2017, EUR 50,000 as from 1 November 2017 and EUR 50,000 as from 1 December 2017.

20. Subsequently, 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 DRC focussed its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the members of the DRC decided that the Claimant is entitled to receive an amount of money from the Respondent as compensation for the termination of the contract with just cause in addition to any outstanding payments on the basis of the relevant employment contract.

21. 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.

22. In application of the relevant provision, the members of 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 employment contract at the basis of the matter at stake.

23. In continuation, and in order to evaluate the compensation to be paid by the Respondent, the members of the DRC took into account the remuneration due to the Claimant in accordance with the employment contract as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the DRC pointed out that at the time of the termination of the employment contract on 15 December 2017, the contract would run until the end of the 2018/2019 football season in Country D, that in accordance with TMS (cf. art. 6 par. 3 of the Annexe 3 of the Procedural Rules) runs until 31 May 2019, which a total of EUR 980,000 as salaries and expenses were still to be paid. Consequently, taking into account the financial terms of the contract, the members of the DRC concluded that the remaining value of the contract as from its early termination by the Respondent until the regular expiry of the contract amounts to EUR 980,000 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

24. In continuation, the Chamber remarked that following the early termination of the employment contract at the basis of the present dispute, the Claimant did not sign a new professional contract during the relevant period of time and was therefore not able to mitigate his damages.

25. In view of all of the above, the members of the Chamber decided that the Respondent must pay the amount of EUR 980,000 to the Claimant as compensation for breach of contract without just cause, which is considered by the DRC to be a justified amount as compensation.

26. As a result, the DRC decided that the Respondent is liable to pay to the Claimant the amount of EUR 980,000 as compensation for breach of contract.

27. In addition, taking into account the Claimant’s request as well as its longstanding jurisprudence, 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. 29 December 2017, until the date of effective payment.

28. Moreover, the DRC referred to the Claimant’s request for additional compensation based on the Swiss Code of Obligations. In this respect, the members of the DRC established that the request of the Claimant cannot be granted as there is no contractual basis in this regard.

29. Finally, the members of the Chamber concluded their 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 150,000, plus interest as follows:

- 5% interest p.a. on the amount of EUR 50,000 as from 1 October 2017 until the date of effective payment;

- 5% interest p.a. on the amount of EUR 50,000 as from 1 November 2017 until the date of effective payment; and

- 5% interest p.a. on the amount of EUR 50,000 as from 1 December 2017 until the date of effective payment.

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 980,000, plus 5% interest p.a. as from 29 December 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 points 2. and 3. are not paid by the Respondent within the stated time limit, 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 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

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 Officer

Encl. CAS directives