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 10 August 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 10 August 2018,

in the following composition:

Geoff Thompson (England), Chairman

Carlos González Puche (Colombia), member

Eirik Monsen (Norway), member

Juan Batista Mahiques (Argentina), member

Daan de Jong (The Netherlands), 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 1 February 2015, the Player of Country B, Player A (hereinafter: the player or Claimant) and the Club of Country D, Club C (hereinafter: the club or Respondent) concluded an employment contract (hereinafter: the contract), valid as from ‘the 2015 to 2018 football season’, according to the player between 1 February 2015 and 31 December 2018.

2. Furthermore, a declaration referred to as ‘registration of player under written contract’ is on file, which holds that the player agrees to be registered with the club as from 1 February 2015 until 31 December 2018.

3. According to the ‘schedule’ attached to the contract, the player was entitled to receive a monthly salary of 350,000 (approximately USD 1,811 on 1 February 2015) per month, from 1 February 2015 until 31 December 2018.

4. Article 12.4.1 of the contract holds the following clause: ‘A footballer’s contract may be terminated without pay or without notice (or payment in lieu thereof) for serious misconduct I the first occurrence thereof, repeated misconduct, or for any misconduct in respect of which the footballer has received a written warning during the preceding 12 (twelve) months’.

5. Moreover, article 12.4.3 stipulates the following: ‘The following (or similar forms of misconduct) are examples of serious breaches for which a football’s contract may be terminated without pay, without notice or payment in lieu of notice on the first occurrence thereof. These examples are not limited: 12.4.3.1 Insubordination to any coach or management of the club, 12.4.3.2. The failure to attend training or any club function without reasonable excuse, 12.4.3.3 The failure to arrive at the match whether League, Cup, friendly or training without reasonable excuse. 12.4.3.4 Any failure to comply with the League E or any other Football Regulations, 12.4.3.5 The taking of any banned or prohibited substance, 12.4.3.6 Physical assault of another footballer or employee of the club, 12.4.3.7 The communication of adverse comment regarding the club to the media without prior written consent of the club’.

6. In accordance with article 18 of the contract the following is agreed between the parties: ‘Notwithstanding the fact that this is a fixed term contract, the club may terminate this agreement by the giving on one (19 month’s written notice prior to its expiry if: 18.1 the footballer is found guilty of misconduct justifying termination, 18.2 the footballer is found to be incapable of competently fulfilling the job for which he has been employed, 18.3 To this end, terms of termination shall be agreed by both parties’.

7. On 10 August 2017, the player lodged a claim against the club in front of FIFA, requesting outstanding remuneration and compensation for breach of contract to be paid by the club, as follows:

Outstanding remuneration in the total amount of 7,350,000, specified as follows:

 21 monthly salaries of 350,000 each, corresponding to the period ‘31 October 2015 to 30 June 2017’;

 5% interest p.a. as from 31 October 2015;

Compensation for breach of contract in the total amount of 6,300,000, as follows:

 18 monthly salaries of 350,000 each, corresponding to the period between 30 June 2017 and 31 December 2018;

 ‘an additional fine’, ‘for non-payment of the outstanding salaries as narrated above’;

 5% interest p.a.

8. Finally, the player requested for sporting sanctions to be imposed on the club.

9. In his claim, the player explains that for the first year, the club only paid him the monthly salaries in the period between ‘February till September 2015’ and that in the period thereafter, the club ‘stopped paying his monthly because he was injured and due to poor performance without a written notice’.

10. What is more, the player explains that he put the club in default on several occasions for the outstanding remuneration, that is, on 6 and 23 February 2016, on 18 and 25 March 2016, on 6 June 2016, on 30 July 2016, on 23 September 2016, on 14 and 28 October 2016, on 16 November 2016, on 24 February 2017, on 5 April 2017 and on 4 July 2017, however to no avail. Furthermore, the player sent letters to the Football Federation of Country D on 24 May 2017 and on 7 July 2017, requesting his outstanding salaries and pointing out, in the first letter, that he wished his contract to be terminated. In addition, the player sent letters to the ‘League Management Company’ on 26 May 2017 and 9 July 2017, requesting intervention and asking for the payment of his receivables.

11. Subsequently, on 9 June 2017, the club sent a letter to the player, offering an amicable solution. On 14 June 2017, the player’s representative replied to said letter, indicating that the player agreed with finding an amicable solution and was waiting for a proposal from the club.

12. On 13 July 2017, after not having received a reply to his letter dated 14 June 2017, the player sent a letter to the club, explaining that due to the lack of reply, he was no longer willing to enter into an amicable settlement, as well as that he would ‘test this case at the Dispute Resolution Chamber of FIFA’.

13. Further, the player explains that only on 30 June 2017, the club issued ‘his clearance (transfer certificate) without paying the outstanding salaries […]’. As a result of the delay in issuing the clearance letter, the player explains that he could not find a new club to play for.

14. In its reply, the club denied to have received any of the default letters, the player alleged to have sent. Further, the club explains that after the player’s letter dated 14 June 2017, ‘it was waiting for the player’s representatives, but they failed to show up’.

15. In addition, the club explains that the player failed to fulfil his contractual obligations ‘by putting in poor performances’ and that on 24 June 2015, it warned the player to improve his performance. What is more, the club argues that due to his injury, the player failed to fulfil his contractual obligations, although it ‘paid salaries and other emoluments’ and that as per the contents of article 12.4.1 and 12.4.3 and article 18, the contract could be validly terminated. Finally, the club explains that these articles were the reason that it sent its letter dated 9 June 2018 to the player.

16. In conclusion, the club requests the rejection of the player’s claims, also arguing, without further clarification, that ‘the suit offends the provision of section 24 (1) of the Regulations on the Status and Transfer of Players, Zurich, December 2004/October 2007’.

17. In his replica, the player denied the club’s argument that it never received any correspondence from the player. In this respect, the player submitted copies of 8 letters he alleged to have sent to the club, all containing a stamp of the ‘Football Agency of State F’, and confirming receipt of the respective letters. Further, the player refers to the club’s letter dated 9 June 2017, in which the club confirmed that it received the player’s correspondence, as well as to his letter dated 14 June 2017, in which he explained that he was waiting for a proposal from the club.

18. In addition, the player argued that only a misconduct of a certain severity can justify the termination of a contract, and that his alleged poor performance was definitely not a valid reason for the club to unilaterally terminate the contract.

19. Despite being invited to do so, the club did not submit its duplica.

20. Finally, the player informed FIFA that since he left the club, he remained unemployed.

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 10 August 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 (editions 2016 and 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 10 August 2017, the 2016 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. In this respect, the Chamber recalled that on 1 February 2015, the parties had signed an employment contract, valid as from the 2015 season (which according to the information in TMS started on 8 March 2015) until the end of the 2018 season (which according to the information in TMS ended on 31 December 2018), on the basis of which the player was entitled to receive a monthly salary of 350,000.

6. In continuation, the members of the Chamber noted that the player lodged a claim against the club, maintaining that the club, as from October 2015 stopped paying his monthly remuneration, due to an alleged injury and alleged poor performance. Further, the player alleges that, after having put the club in default on several occasions, to no avail, he received from the club on 30 June 2017 a document referred to as ‘release letter’. On 13 July 2017, he finally informed the club that he was no longer interested in finding an amicable solution to the dispute about the outstanding remuneration arisen between them and that he would lodge a claim before FIFA, claiming to be awarded compensation for breach of the employment contract.

7. On the other hand, the Chamber noted that the club did not deny the non-payment of the salaries to the player, and further asserted that it could validly terminate the player’s contract due to his injury, as the player was not able to fulfil his contractual duties and to offer his services to the club, as well as due to the player’s poor performance.

8. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute was to determine whether the contract had been terminated by one of the parties, on which date and whether such termination was made with or without just cause. Subsequently, the Chamber needed to determine the consequences of the early termination of the contractual relationship by one of the parties.

9. First of all, the Chamber noted that the parties concluded a valid and legally binding employment contract on 1 February 2015, valid until the end of the 2018 season, which circumstances remained uncontested by the club in the context of the current proceedings.

10. Moreover, in the light of the main reason at the basis of the non-payment of the salaries and the alleged termination of the contract in the matter at hand, i.e. the player’s injury and his alleged poor performance, the Chamber first of all wished to address several aspects from its longstanding and well-established jurisprudence.

11. In this respect, the Chamber first took into consideration that an injury or health condition of a player can be no valid reason to cease the payment of a player’s remuneration and even less so to terminate an employment contract. In this regard, the Chamber highlighted that it is the club’s responsibility to secure the continuation of payment of remuneration in such cases, possibly by means of adequate insurance. Furthermore, the Chamber took into account that the club had ceased the payment of the player’s remuneration as early as in October 2015.

12. What is more, with regard to the player’s alleged poor performance, the members of the Chamber wished to emphasise that the alleged unsatisfactory performance of a player is a purely unilateral and subjective evaluation made by the club. Taking into account the Chamber’s longstanding and well-established jurisprudence in this respect, said circumstances cannot by any means be considered as a valid reason to terminate the contract of a player, as they are the result of a purely subjective perception, not measurable in objective criteria.

13. On account of all of the above, the members of the Chamber unanimously rejected the club’s argumentation that it had a valid reason to stop paying the player’s remuneration.

14. The Chamber, however, noted from the case file that there was no explicit termination letter from any of the parties on file. In view of the foregoing, the Chamber deemed it appropriate to consider that the club, by issuing a clearance letter dated 30 June 2017, in which it allowed the player to transfer to any other club, had effectively terminated the contract.

15. Consequently, considering that on 30 June 2017 the club apparently was no longer interested in the player’s services and that it had repeatedly and for a significant period of time been in breach of its contractual obligations towards the player, without any valid justification, the Chamber decided that the club had no just cause to unilaterally terminate the employment contract with the player on 30 June 2017. As a result, the club is to be held liable for the early termination of the employment contact without just cause.

16. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract without just cause by the club.

17. First of all, the members of the Chamber concurred that the club must fulfil its obligations as per employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, and taking into account that the player alleged that on 30 June 2017, he had not received from the club any of the amounts he was entitled to as from October 2015, the Chamber decided that the club is liable to pay to the player the remuneration that was outstanding at the time of the termination, i.e. the amount of 7,350,000, consisting of 21 monthly salaries of 350,000 each for the period between October 2015 and June 2017.

18. Moreover, in line with the Chamber’s longstanding jurisprudence, the Chamber decided that the club has to pay 5% interest p.a. on the amount of 7,350,000 as from 10 August 2017, i.e. the date of the player’s claim.

19. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the player is entitled to receive from the club compensation for breach of contract in addition to any outstanding salaries on the basis of the relevant employment contract.

20. 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 player 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.

21. 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 by the club. 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.

22. Subsequently, and in order to evaluate the compensation to be paid by the club, the members of the Chamber took into account the remuneration due to the player in accordance with the employment contract as well as the time remaining on the same contract, along with the professional situation of the player after the early termination occurred.

23. In this respect, the Chamber pointed out that at the time of the termination of the employment contract on 30 June 2017, the contract would run until the end of the 2018 season, which ends according to the information in the TMS on 31 December 2018, in which period (July 2017 until December 2018) 18 instalments of 350,000 each were still to be paid to the player. Consequently, taking into account the financial terms of the contract, the Chamber concluded that the remaining value of the contract as from its early termination by the club until the regular expiry of the contract amounts to 6,300,000 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 verified as to whether the player 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.

25. However, the Chamber noted that the player did not find new employment with another club during the relevant period of time and established that as a result thereof, no amounts shall be deducted from the amount of compensation for breach of contract as calculated in point II.23 above.

26. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of 6,300,000 to the player, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

27. Additionally, taking into account the Chamber’s longstanding jurisprudence, the Chamber decided that the club has to pay 5% interest p.a. on the amount of 6,300,000 as from 10 August 2017, the date the claim was lodged by the player.

28. Moreover, in relation to the player’s request for an additional fine is rejected due to the lack of a legal basis.

29. The Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the player are 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 7,350,000, plus 5% interest p.a. as from 10 August 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 6,300,000, plus 5% interest p.a. as of 10 August 2017 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 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

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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives