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 24 August 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 24 August 2018,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Joaquin Evangelista (Portugal), member

Todd Durbin (USA), member

Stefano La Porta (Italy), member

on the matter between the player,

Player A, Country B

as Claimant

and the club,

Club C, Country D

as Respondent

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 18 July 2016, the player of Country B, Player A (hereinafter: the Claimant or the player) and the club of Country D, Club C (hereinafter: the Respondent or the club) signed an employment contract (hereinafter: the contract) valid as from 1 August 2016 until 31 May 2017.

2. According to art. VI par. 1 of the contract, the Claimant was entitled to a monthly salary of EUR 1,700. Moreover, art. VI par. 2 stipulates that the Claimant was entitled to a monthly allowance for accommodation in the amount of EUR 120. Both the salary and allowance were payable on the last day of the month subsequent to that they referred to.

3. Article XV of the contract stipulates the following: “with respect to settling disputes, the Contracting Parties declare they acknowledge the jurisdiction of chamber of the Football Association of Country D, the Committee of the Football Association of Country D, Arbitration Court, FIFA Arbitration bodies and Court of Arbitration in Sports in (CAS) Lausanne”.

4. Art. VI par. 9 of the contract provides that the Respondent is entitled to “make the following deductions from the salary and the accommodation allowance:

a) wage advance the [Claimant] is obliged to refund in case the conditions for paying out the salary are not met,

b) any sums extracted from the [Claimant] under an enforceable court injunction or other relevant authority’s decision,

c) pecuniary penalties and fines and sanctions [the Claimant] is charged with under an enforceable decision of relevant authorities,

d) unlawfully received social security benefits, pension or pension advances, means-tested benefits, pecuniary allowance for compensation of adverse social impacts of severe disability provided the Athlete is ordered to refund any of those in an enforceable decision issued under special provisions,

e) unsettled travel expense advances,

f) [Claimant’s] sickness benefits or a part thereof the [Claimant] ceased to be entitled to or has never been entitled to,

g) Severance pay or a part thereof the [Claimant] is obliged to refund”.

5. Furthermore, art. XII par. 4 of the contract stipulates that “by signing this contract, [the Claimant] acknowledges that pursuant to the Club’s internal disciplinary regulations, [the Respondent] may proceed as follows, without limitation: […] b) demote the player temporarily or permanently so that he plays for the junior team in the event his athletic performance declines (team B of Club C), and sanction him with a fine worth 50% of the [Claimant’s] monthly salary under the art. VI sec. 1 as of the month in which [the Respondent] decides on the [Claimant’s] demotion until termination of his employment under this contract and the salary paid out to the [Claimant] shall be reduced by the sum of the fine above”.

6. Art. XIV par. 1 of the contract provides that “all notifications between the contracting parties shall be done via registered mail, in person or by e-mail”.

7. According to its art. XVIII par. 8, the contract “is governed by law of Country D”.

8. By means of a letter dated 1 November 2016, and received by the Claimant on 19 December 2016, the club informed the player that, because of the level of his performance with the team, he was temporarily transferred to “team B of Club C” and he was fined with a 50% reduction of his monthly salary as of November 2016 until May 2017.

9. On 22 December 2016, the Claimant replied contesting the fine imposed by the Respondent and requesting to be informed of the starting date of the team’s trainings after the winter break. Moreover, the Claimant affirmed that he received only a partial payment of his salaries as of August until October 2016 and requested the club to complete the payment thereof within seven days.

10. On the same date, the Respondent acknowledged receipt of the aforementioned player’s reply and committed to provide him with the club’s position in due course.

11. On 5 January 2017, the Claimant sent a further letter to the Respondent, whereby he reiterated his previous position and granted the club five further days to inform him about the starting date of the trainings.

12. On 9 January 2017, the Respondent replied to the Claimant alleging that he had already been informed that the start of the team’s trainings was scheduled for 5 January 2017 but, despite that, he did not attend it. Moreover, the Respondent alleged that the Claimant left without permission on 20 November 2016, while the team’s trainings continued until 4 December 2016. Consequently, the Respondent argued that the Claimant was in breach in contract.

13. Moreover, the Respondent maintained that the player’s “downgrading to Team B” and the fine had been imposed by the club in compliance with art. XII par. 4 lit. b) And art. VI par. 9 lit. c) Of the contract.

14. Furthermore, the Respondent affirmed that, pursuant to law of Country D, it had to apply the withholding tax on the salary paid to the Claimant.

15. In conclusion, the Respondent requested the Claimant to immediately start complying with his contractual obligations.

16. On 10 January 2017, the Claimant rejected the Respondent’s allegations and insisted on his former requests. In particular, the player requested the club to complete the payment of his salaries for the period between August and November 2016 and to revoke the fine imposed on him, within seven days. Finally, the Claimant informed the Respondent that he was “preparing his immediate return to Country D and the club’s training sessions”.

17. On 14 January 2017, the Claimant sent a letter to the Respondent, by means of which he terminated the contract, affirming that he lost confidence in the club’s intention to comply with its contractual obligations. In this context, the Claimant acknowledged that, until he left the club, he had accepted that the Respondent did not pay him the allowance, but directly provided him with an accommodation. Nonetheless, according to the player, while he was booking his flight tickets for returning to Country D, he had been informed by the club’s “Technical Director and/or Team Manager” that his former accommodation in Country D was no longer available.

18. On 24 January 2017, the Respondent replied to the Claimant contesting that his contractual termination did not fall into any of the scenarios provided by the contract and law of Country D. However, the Respondent also proposed the Claimant to conclude an agreement whereby the parties would amicably terminate the contract as of 5 January 2017.

19. On 20 April 2017, the Respondent sent a letter to the Claimant whereby it acknowledged that he did not conclude the proposed termination agreement and it was terminating the contract as the Claimant did not render his services to the club “since the beginning of the year 2017”.

20. On the same date, the Respondent sent the Claimant a “notice of sanction” by means of which it informed him that the Respondent had imposed on him a sanction of EUR 970 per month for the period between January and April 2017, due to his breach of contract.

21. On 2 May 2017, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract, requesting the following:

a) EUR 1,934, plus 5% interest p.a. as of the due dates, as outstanding salaries broken-down as follows:

- EUR 313.40 as part of the salary of August 2016;

- EUR 329.60 as part of the salary of September 2016;

- EUR 256.70 as part of the salary of October 2016;

- EUR 1,034.30 as part of the salary of November 2016.

b) EUR 8,500 as compensation for breach of contract corresponding to remaining value of the contract;

c) “additional compensation up to six months’ salaries plus interest” and “additional compensation based on the objective criteria of the case and the specificity of sport”;

d) Sporting sanctions on the club.

22. In his claim, the Claimant affirmed that, at the end of November 2016, he left the team before the beginning of the winter break with the permission of the Respondent. In particular, the Claimant stated that he requested for such permission already in September 2016. In this regard, the Claimant alleged that, when he left, the Respondent informed him that the date of restart of trainings after the winter break would be communicated in due course.

23. Moreover, the Claimant maintained that the fine, which had been notified to him on 19 December 2016, was unlawful. More specifically, the Claimant affirmed that he did not commit any disciplinary offence and the Respondent did not hear him before imposing said sanction.

24. Furthermore, the Claimant argued that the Respondent was not entitled to make deductions to his salaries between August and November 2016. In particular, the Claimant considered that art. VI par. 9 of the contract provided the complete list of cases in which said deductions were admissible, the application of the withholding tax being not amongst them.

25. Finally, the Claimant pointed out that his salary for November 2016 was reduced to EUR 665.70 and the Respondent allegedly refused to pay for his accommodation. As a consequence thereof, the Claimant sustained that the Respondent, by paying him such reduced amount, de facto prevented him from buying the tickets for coming back to Country D after the winter break and to find an accommodation.

26. In conclusion, the Claimant argued that he terminated the contract with just cause as the club arbitrarily downgraded him to the B team, reduced his salaries and prevented him from returning to Country D. Such circumstances allegedly made him lose confidence in the Respondent’s intention to comply with its obligations and justified his termination of the contract.

27. In its reply to the claim, the Respondent entirely rejected the Claimant’s requests and affirmed that he breached the contract as he failed to attend the team’s training sessions regularly and to maintain the necessary level of physical fitness. In particular, as he allegedly “was not able to play even a half-time”, the club decided to downgrade him to the B team and imposed a fine of 50% of his salary pursuant to art. XII par. 4 lit. b) Of the contract.

28. According to the Respondent, the above-mentioned decision was taken on 21 October 2016 and its content was orally communicated to the Claimant by the club’s coach “on last week of October” and eventually in writing with the letter dated 1 November 2016. Nonetheless, the Respondent acknowledged having “delivered the ruling post to its execution”, arguing that, however, art. XIV par. 1 of the contract allowed to communicate it “even in speaking”.

29. Moreover, the Respondent affirmed that the Claimant did not attend the team’s trainings as of 21 November 2016, without the Respondent’s permission, and he was “duly notified in writing of his holiday schedule which had been determined from December 5, 2016 to January 5, 2017”.

30. Furthermore, the Respondent maintained that it terminated the contract with just cause on 30 April 2017, due to the prolonged Claimant’s breach of contract. In particular, the Respondent stressed that the player left the club on 21 November 2016 and neither came back nor accepted the club’s proposal for a mutual termination of the contract.

31. As to the salaries claimed by the Claimant, the Respondent acknowledged that it deducted the “income tax” from his salaries, as allegedly imposed by the law of Country D. In particular, the Respondent affirmed that, upon the execution of the contract, it informed the player of such deduction and that his monthly salary was of EUR 1,700 “brutto”.

32. In his replica, the Claimant insisted on his previous arguments and rejected the Respondent’s allegations. In particular, he affirmed that he never received the club’s decision dated 21 October 2016 and pointed out that he never trained with the B team.

33. Furthermore, the Claimant argued that, as only on 9 January 2016 the Respondent informed him that the trainings had restarted on 5 January 2016 and allegedly never requested him to return to Country D, it showed that it was not interested in his services anymore.

34. Finally, the Claimant maintained that the Respondent’s behaviour had detrimental consequences on his career, as he did not conclude any new employment contract as of the date of termination of the contract until the date of its natural expiry. On account of the above, the player also requested an “additional compensation equal to 6 months salaries, i.e. EUR 10,200”.

35. In its duplica, the Respondent contested FIFA’s jurisdiction arguing that, in accordance with art. XVIII par. 8 of the contract, the “Court of Country D and the jurisdiction of Country D” were competent to deal with an employment dispute.

36. Finally, the Respondent concluded reiterating its previous arguments and affirming that it repeatedly requested the Claimant to fulfil his contractual obligations, but to no avail.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as: the 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 2 May 2017. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2017; 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 2018), the Dispute Resolution Chamber would, in principle, be 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. However, the Chamber acknowledged that the Respondent, in its final comments, contested FIFA’s jurisdiction to entertain the claim of the player, alleging that the “Court of Country D and the jurisdiction of Country D” were competent in accordance with art. XVIII para. 8 of the contract.

4. With the above in mind, the Chamber wished to recall that, in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, without prejudice to the right of any player or club to seek redress before a civil court for employment-related disputes, it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement.

5. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that a deciding body other than the DRC is competent to settle an employment-related dispute between a club and a player of an international dimension, is that the jurisdiction of the relevant national body or court derives from a clear reference in the employment contract.

6. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute contained a clear and exclusive jurisdiction clause in favour of the Courts of Country D.

7. In this respect, the Chamber first of all referred to the art. XVIII par. 8 of the contract, according to which “the contract is governed by the law of Country D”. The Chamber concluded that such clause is a not a clause of choice of forum, but rather a choice of law. Consequently, the DRC affirmed that art. XVIII par. 8 of the contract does not provide for the exclusive jurisdiction of the courts of Country D in case of dispute between the parties to the contract.

8. On the contrary, the Chamber underlined that art. XV of the employment contract explicitly stipulates that, “with respect to settling disputes, the Contracting Parties declare they acknowledge the jurisdiction of (…) FIFA Arbitration bodies and Court of Arbitration in Sports in (CAS) Lausanne”.

9. In view of the above, the Chamber established that the Respondent’s objection to the competence of FIFA to deal with the present matter had to be rejected and that the DRC is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

10. 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 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 2 May 2017, the 2016 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

11. 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.

12. In so doing, the Chamber first took note that, on 18 July 2016, the Claimant and the Respondent entered into the contract, valid as from 1 August 2016 until 30 June 2018, which entitled the player to a monthly salary of EUR 1,700 and to a monthly allowance for accommodation of EUR 120, both payable until the last day of each subsequent month.

13. Moreover, the members of the Chamber observed that it remained undisputed that the player left the club on 21 November 2016 and eventually, on 19 December 2016, he received a letter from the club dated 1 November 2016, whereby he was temporarily transferred to “B team of Club C” and fined with a 50% reduction of his monthly salary as from November 2016. Furthermore, the DRC took note that the player contested the fine of the club, repeatedly put it in default for the payment of outstanding salaries and eventually, on 14 January 2017, terminated the contract.

14. In continuation, the members of the Chamber took note that the Claimant maintained that he remained absent as from the end of November 2016 with the Respondent’s permission and that the latter arbitrarily downgraded him to the B team, reduced his salaries and prevented him from returning to Country D. In particular, the Claimant acknowledged that the Respondent directly provided him with an accommodation before he left, but allegedly refused to do so as of 14 January 2017.

15. The Chamber further noted that the Respondent, for its part, rejected the claim and alleged that the player’s transfer to the B team and the imposition of the fine had been decided by the club on 21 October 2016 in accordance with art. XII par. 4 lit. b) Of the contract (cf. point I.5.), due to the alleged poor performance of the player in the trainings. Moreover, the Respondent maintained that the monthly salary indicated in the contract was to be intended as gross and, thus, it had to apply the withholding tax provided by the law of Country D on the payments made to him.

16. Furthermore, the Respondent affirmed that the Claimant remained absent as of 21 November 2016 without the club’s authorisation and despite he had been allegedly informed about the restart of the trainings scheduled for 5 January 2017. As a consequence thereof, the Respondent argued that the Claimant terminated the contract with just cause.

17. In view of the aforementioned considerations, the members of the Chamber highlighted that the underlying issue in this dispute, considering the diverging position of the parties, was to determine whether, on 14 January 2017, the contract had been terminated by the Claimant with or without just cause and to determine thereafter the consequences of said termination.

18. In this context, the Chamber was eager to emphasise first that, according to its well established jurisprudence, only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, a contract may be terminated prematurely only when there are objective criteria which do not reasonably permit one to expect the continuation of the employment relationship. Hence, if there are more lenient measures which can be taken in order for an employee to ensure 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 only be an ultima ratio.

19. Moreover, the Chamber referred to art. 12 par. 3 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber, according to which any party claiming a right on the basis of an alleged fact shall carry the burden of proof. Thus, it is up to the Claimant to substantiate and provide documentary evidence with regard to alleged circumstances which, according to the player, justified his decision to terminate the contract.

20. Having established the above, the Chamber proceeded with an analysis of the circumstances surrounding the present matter and, in so doing, first turned its attention to the fine imposed on the Claimant by the Respondent. Nevertheless, the Chamber noted that, according to the Respondent, it was entitled to impose the relevant fine and to “demote the player” in view of art. XII par. 4 lit. b) Of the contract, according to which the club was entitled to “demote the player temporarily or permanently so that he plays for the junior team in the event his athletic performance declines (team B of Club C), and sanction him with a fine worth 50% of the [Claimant’s] monthly salary”.

21. In this regard, the Chamber recalled its long-standing jurisprudence, according to which, in principle, the imposition of a fine, or any other available financial sanction in general, shall not be used by clubs as a means to set off outstanding financial obligations towards players. Moreover, the members of the Chamber emphasised that the Respondent did not provide any evidence that the Claimant was given the opportunity to defend himself within the context of the alleged disciplinary proceedings.

22. Regardless of the question as to whether such measure as set out in the aforementioned contractual term would have been applicable to the situation in the present matter, the Chamber agreed that a decrease in any payments to the player by the club could not have been validly applied on the basis of the aforementioned art. XII par. 4 lit. b) Due to the unilateral and arbitrary character of such clause.

23. In this context, and for the sake of completeness, the members of the Chamber wished to highlight that, in general, potestative clauses, i.e. clauses that contain obligations which fulfilment are conditional upon an event that one party entirely controls, cannot be considered since they generally limit the rights of the other contractual party in an excessive manner and lead to an unjustified disadvantage of the latter towards the other.

24. Consequently, on account of the aforementioned considerations the Chamber decided to disregard the alleged fine imposed on the Claimant and to reject the Respondent’s arguments in this regard.

25. In continuation, with respect to the applicability of the withholding tax allegedly provided by the law of Country D, the DRC first wished to emphasise that, pursuant to art. VI par. 1 of the contract, the player’s monthly salary was not expressly stipulated as gross. In this context, the members of the Chamber acknowledged that, according to art. VI par. 9 of the contract, the application of the withholding tax was indeed not included among the deductions applicable to the player’s salary. Furthermore, the members of the Chamber were of the unanimous opinion that the Respondent did not provide sufficient evidence, pursuant to art. 12 par. 3 of the Procedural Rules, that the application of said withholding tax was agreed between the parties or provided by the law of Country D.

26. On account of the above-mentioned considerations, the members of the Chamber consequently rejected the Respondent’s argumentations about the application of taxes provided by the law of Country D and concluded that the player was entitled to receive the salary as stipulated in the contract.

27. Having stated the above, the Chamber further observed that when the player put the club in default for the last time (i.e. 10 January 2017) and eventually terminated the contract (i.e. 14 January 2017), an amount corresponding to around one monthly salary was outstanding, being the salary for the month of December 2016 payable until 31 January 2017 only.

28. Furthermore, the members of the Chamber wished to pointed out that, regardless of the question whether the club was intentioned to provide the player with the monthly allowance stipulated in the contract or an accommodation, it remained undisputed that the Claimant, on the date he terminated the contract, had already been informed that the trainings of the team had restarted and he had not returned to Country D. On account of the above, the DRC was of the opinion that the Claimant did not prove, to the Chamber’s satisfaction, that the Respondent had prevented him from returning to Country D and render his services to the club.

29. In view of the all aforementioned circumstances, the Chamber was of the unanimous opinion that, at the time of the unilateral termination of the contract by the player, there were no objective circumstances which would have prevented, in good faith, the continuation of the employment relationship. As such, the DRC held that the Claimant terminated the contract without just cause on 14 January 2017.

30. Notwithstanding the above, the Chamber observed that it remained uncontested that the Claimant did not receive part of the salary for the period between August and November 2016. Consequently, in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent has to pay the Claimant the corresponding claimed amount of EUR 1,934.

31. In addition, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the members of the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the outstanding amount of EUR 1,934, as follows:

- as of 1 October 2016, on the amount of EUR 313.40;

- as of 1 November 2016, on the amount of EUR 329.60;

- as of 1 December 2016, on the amount of EUR 256.70;

- as of 1 January 2017, on the amount of EUR 1,034.30;

- as of 1 November 2016, on the amount of USD 16,666.

32. Finally, the members of the Chamber, in view of the fact that the Claimant terminated the contract without just cause on 14 January 2017, decided that the player is not entitled to receive compensation for breach of contract.

33. The Dispute Resolution Chamber concluded its 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 admissible.

2. The claim of the Claimant is partially accepted.

3. 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 1,934, plus 5% interest p.a. until the date of effective payment, as follows:

a. as of 1 October 2016, on the amount of EUR 313.40;

b. as of 1 November 2016, on the amount of EUR 329.60;

c. as of 1 December 2016, on the amount of EUR 256.70;

d. as of 1 January 2017, on the amount of EUR 1,034.30.

4. In the event that the aforementioned amount plus interest is 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 remittance is 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

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00 / Fax: +41 21 613 50 01

e-mail: info@tas-cas.org / www.tas-cas.org

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl.: CAS directives