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 15 November 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 November 2018,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), member

Johan van Gaalen (South Africa), member

Wouter Lambrecht (Belgium), member

Pavel Pivovarov (Russia), 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 10 January 2018, the player of Country B Player A (hereinafter: player or Claimant) and the club of Country D, Club C (hereinafter: club or Respondent) concluded an employment contract (hereinafter: contract), valid as of 1 January 2018 until 30 June 2021.

2. According to the contract, the club undertook to pay the player the following amounts:

- USD 10,000 “on signing this contract”;

- USD 20,000 “after registration and validity of contract”;

- USD 5,240 as monthly salary.

3. On 20 February 2018, the player put the club in default for the payment of USD 20,000 and the salary of January 2018, i.e. USD 5,240.

4. On 21 February 2018, the club answered in writing to the player’s default notice and informed him that the club “is facing difficulties and delays” in connection with bank transfers in Country D.

5. On 20 March 2018, the player sent another default notice to the club, requesting the amount of USD 20,000 and the salaries of January and February 2018, i.e. USD 10,480.

6. On 30 March 2018, the player terminated the contract since the club failed to comply with its financial obligations. In his termination letter, he pointed out that the total amount of USD 35,720, corresponding to the payment of USD 20,000 and his salaries as of January until March 2018, remained outstanding. Furthermore, the player referred to “inhumane working conditions”, that the club failed to treat his injury and the “lack of food”. In said letter the player informed the club that he “will return immediately to Country B. In case of an obstacle created by the club, FIFA and Country B embassy in Country E will be informed”.

7. On 10 April 2018, the player sent a letter to the club requesting to return his passport in order to be able to leave the country.

8. Subsequently, the player contacted the Country B embassy and after exchanging correspondences between the embassy and the club, the withheld passport was returned and the player was able to leave the country on 3 May 2018.

9. On 15 June 2018, the player lodged a claim in front of FIFA against the club, claiming that the club is to be held liable for the early termination of the contract and re requested to be awarded with the amount of USD 240,000, corresponding to the residual value of the contract.

10. In his claim, the player stated having only received payment of the sign-on fee in the amount of USD 10,000 and that the club failed to remit further payments despite of his default notices.

11. The player further maintained that after his termination, he was not able to leave the country until 3 May 2018 and he was “stuck in the facilities of the club and prevented from exerting his human right of locomotion”. The player further stated that his family in Country B was “scared and distressed” during that time, which was “very serious and dangerous”.

12. Despite being invited to do so, the club has not submitted its position to the claim.

13. The player informed FIFA that, on 1 August 2018, he signed an employment contract with the club F, valid as from 1 August 2018 until 30 May 2020, containing the following salary arrangements:

- During season 2018/2019: An advance payment of USD 5,000 and a monthly salary of USD 4,000;

- During season 2019/2020: An advance payment of USD 5,000 and a monthly salary of USD 5,000.

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 15 June 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 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition June 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. In continuation, 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 June 2018), and considering that the present claim was lodged on 15 June 2018, the June 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 recalled that, on 10 January 2018, the parties concluded an employment contract, valid as of 1 January 2018 until 30 June 2021.

6. In continuation, the DRC noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated said employment contract with just cause on 30 March 2018 since the club failed to remit remuneration in the total amount of USD 35,720, corresponding to the one-time payment of USD 20,000 as well as his salaries as of January until March 2018. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.

7. What is more, the members of the Chamber took note of the Claimant’s referral to “inhumane working conditions” in his termination notice, his allegation that his passport was withheld by the Respondent and that he was not able to leave the country until 3 May 2018.

8. The Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. Consequently, the Chamber deemed that the Respondent had renounced to its right of defence and, thus, had accepted the allegations of the Claimant.

9. As a consequence of the aforementioned consideration, the members of the Chamber concurred that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

10. Having said this, the DRC acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated by the Claimant with or without just cause and to decide on the consequences thereof.

11. With the above in mind, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, 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.

12. In doing so, the DRC recalled that it has remained undisputed that the Claimant terminated the contract on 30 March 2018 by means of a letter, referring to outstanding remuneration in the amount of USD 35,720.

13. In this context, the members of the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant remuneration totalling USD 35,720, corresponding to the one-time payment of USD 20,000 and three monthly salaries. The DRC further noted that the Respondent remitted a first one-time payment of USD 10,000, but subsequently failed to remit any further payments due to the Claimant under the contract.

14. Consequently, and considering that the Respondent had thus repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 30 March 2018 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

15. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

16. Bearing in mind the above, the Chamber accepted the player’s claim for outstanding remuneration and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amount of USD 35,720 with regard to the remuneration due to him between January and March 2018.

17. Moreover, and taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

18. In continuation, the Chamber focused 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 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.

19. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains 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.

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 emphasised 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. The members of the Chamber then turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

22. 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 the date of termination with just cause by the Claimant until its natural expiration, bearing in mind that he would have received in total USD 204,360 as remuneration for the period as from 30 March 2018 until 30 June 2021. Consequently, the Chamber concluded that the amount of USD 204,360 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

23. In continuation, the Chamber verified as to 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 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.

24. In this respect, the Chamber recalled that the Claimant had found new employment with the club F, as from 1 August 2018 until 30 May 2020, including a remuneration in the total amount USD 110,000, which shall be deducted, leading to a mitigated compensation in the amount of USD 94,360.

25. Subsequently, the Chamber turned its attention to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an additional compensation of three monthly salaries, subject to the early termination of the contract being due to overdue payables. In case of egregious circumstances, the additional compensation may be increased up to a maximum of six monthly salaries, whereby the overall compensation may never exceed the rest value of the prematurely terminated contract.

26. With the above in mind, the Chamber recalled that from the evidence on file, in particular from the termination letter dated 30 March 2018, it transpires that the passport of the player was in possession of the club during the contractual relationship. Indeed, in said letter the player already warned the club he would leave Country D and that in case of any “obstacle” he would have to contact the Country B embassy. What is more, on 10 April 2018, the player explicitly requested the return of his passport; however to no avail. It was only until 3 May 2018, and after seeking the assistance of the Country B embassy, that the player was able to leave Country D. Put differently, it can be established with a reasonable degree of certainty, that the club was in possession of the player’s passport before the termination of the contract, that the club remained silent to the player’s request for the return of said document and that, thus, the player remained unemployed and was unable to leave Country D for almost a month due to the club’s behavior. The allegations of the player of “inhumane working conditions” also remained uncontested.

27. In this context, the Chamber wished to recall that the club was given the opportunity to defend itself from the allegations of the player and that it would seem it just decided not do so.

28. In view of the foregoing, and on the basis of the information and documentation on file, the Chamber deemed that the threshold of egregious circumstances is met in the matter at hand and therefore decided to award the Claimant additional compensation corresponding to six monthly salaries, i.e. USD 31,440, in accordance with the above-mentioned provision.

29. Consequently, on account of the above-mentioned considerations, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of USD 125,800 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

30. The DRC concluded its deliberations by rejecting any further claim of the Claimant.

31. Furthermore, taking into account the consideration under number II./3. 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.

32. In this regard, the Chamber established that, in virtue of the aforementioned provision, it has competence to impose a sanction on the Respondent. More in particular, the DRC pointed out that, against clubs, the sanction shall consist in a ban from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods.

33. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amount 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.

34. Finally, the Chamber recalled that the above-mentioned sanction 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 the amount of USD 35,720 as outstanding remuneration.

3. The Respondent has to pay to the Claimant the amount of USD 125,800 as compensation for breach of contract.

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 into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amounts due 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 article 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

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