DECISIONI DI GIUSTIZIA SPORTIVA • F.I.F.A. - CAMERA DI RISOLUZIONE DELLE CONTROVERSIE - CONTROVERSIE DI LAVORO

• Data decisione: 11 aprile 2019 • Stagione sportiva: 2018/2019

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 11 April 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 11 April 2019,

in the following composition:

Geoff Thompson (England), Chairman

Alexandra Gómez Bruinewoud (Uruguay), member

Stefano Sartori (Italy), member

Daan de Jong (the Netherlands), member

Muzammil Bin Mohamed (Singapore), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C, Country D

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 7 August 2017, the Player of Country B, Player A (hereinafter: player or the Claimant), and the club of Country D, Club C (hereinafter: club or the Respondent) concluded an employment contract (hereinafter: the contract), valid as of 7 August 2017 until 30 June 2018.

2. According to the contract, the club undertook to pay the player a monthly salary of 12,300 during the season 2017/2018, as well as a signing fee in the amount of 32,000, payable on 31 August 2017.

3. Art. 3 of the contract, with the title “Contract termination with just cause without notice”) reads, inter alia, as follows:

- (…)

- “If initiated measures (work and residence permit) were not successful“).

4. Also on 7 August 2017, the parties signed an amendment to the contract (hereinafter: the amendment), which, inter alia, contains the following clauses:

- “The Parties are willing to extend the Agreement for one sporting season (i.e. the contract shall last until 30 June 2019 instead of 30 June 2018). The Club however exposes that due to the labour rules valid in Country D for non-EU employees, it is necessary to proceed with an initial one-year contract and then extend it for a second year with an amendment.”

- “Therefore, the Parties have agreed to amend the Agreement in that sense, at the following conditions. The scope is to secure the second contractual year, to determine the contractual conditions for the second contractual year and to introduce an exit clause in favour of the Player during the transfer window of the summer 2018.”

5. According to the amendment, the club undertook to pay the player the following monthly salary:

- 12,300, if the club would remain in Second League of Country E;

- 16,250, if the club would be promoted to First League of Country E.

6. Art. 1 of the amendment states: “The Club and the Player extend the Agreement [the contract] for one sporting season, i.e. until 30 June 2019 (and not 30 June 2018 as initially agreed).”

7. Art. 4 of the amendment reads as follows: “For the sake of clarity, the Parties precise that all the other provisions of the initial Agreement [the contract] remain fully valid and in force and will apply to the second contractual year as well.”

8. On 16 May 2018, after a request from the club, the immigration office of Country D sent an email to the club, referring to its: “Foreigners Act”, confirming that it is not possible to extend the residence permit of the player. Said email includes a reference to art. 25 of Country D’s Foreigners Act, which reads as follows: “The short stay permit may be granted for time limited stays and for immediately successive stays of up to one year in total. It shall be granted only for a specific purpose of stay. If it is proven that there is an extraordinary need, it may be extended once for a maximum period of six months.”

9. On 17 May 2018, after a request from the club, the immigration office of Region F, Country E, sent an email to the club, confirming that is not possible for non-EU citizens to get a residence permit in Region F while working in Country D.

10. On 22 May 2018, the parties held a meeting to discuss the situation of the player’s residence permit in Country D. According to the notes of said meeting, the correspondence dated 17 May 2018 from the immigration office in Country D was discussed and as a conclusion it was agreed to look into possibilities for a permit in Country E, Country G and to request a “permit XX” for the player in Country D.

11. On 23 May 2018, after a request from the club, the immigration office of Region J, Country E, sent an email to the club, confirming that the situation in Region J is the same as in Region F.

12. On 12 June 2018, the club requested a residence “permit XX” for the player with the immigration office of Country D.

13. On 5 July 2018, the immigration office of Country D sent a letter to the club rejecting its application for the residence permit of the player, referring to art. 13 of Country D’s Foreigners Act and due to the lack of “interest of the national economy”.

14. On 10 July 2018, the club terminated the contractual relationship with the player, referring to art. 3 of the contract and the fact, that the residence permit in Country D was denied.

15. On 12 July 2018 and 13 July 2018, the player sent letters to the club, insisting that such termination was without just cause and requested the club to remit compensation for breach of contract.

16. On 18 July 2018, the club replied to the player arguing that it tried to obtain the residence permit and without such permit the contract had to be cancelled, as foreseen in its content.

17. On 4 August 2018, the player signed an employment contract with the Club of Country X, Club K, valid as from 4 August 2018 until 31 May 2020, including a signing on fee in the amount of EUR 40,000 as well as a monthly salary of EUR 3,000 for the season 2018/2019, payable during 10 months.

18. On 9 August 2018, the player lodged a claim in front of FIFA against the club for breach of contract and requested compensation in the amount of 98,790.74 plus interest of 5% p.a. as of 10 July 2018 as well as sporting sanctions for the club.

19. On 23 October 2018, after a request from the club, the immigration office of Region L, Country G, sent an email to the club, confirming that is not possible for non-EU citizens to get a residence permit in Country G while working in Country D. Said request from the club referred to a previous request via telephone, dated 24 May 2018, without a previous reply in writing.

20. In his claim, the player maintained the club terminated the contract, which was extended due to the conclusion of the amendment, without just cause.

21. In this regard, the player argued that it was the club’s obligation to obtain the residence permit, not only in the beginning of the contractual relationship, but also for the period of the extension. In this regard, the player pointed out that he put himself at the club’s full disposal and even suggested the solution to obtain a residence permit in Country E or Country G.

22. The player further held that in 2017 the club applied for a “Foreigners act X”, granted for a maximum period of 12 months, and under extraordinary circumstances renewable for a maximum of 6 months. He brought forward that the club should have applied for a “permit XX” or “permit XXX”, which is usually applied for employment relationships longer than 12 months.

23. In this context, the player pointed out that the club did not do its best to obtain the necessary permit, and terminated the contract without just cause.

24. Moreover, the player maintained that in light of art. 18 par. 4 of the FIFA Regulations on the Status and Transfer of Players (hereinafter: Regulations) and the jurisprudence of the Chamber, the club’s action constituted an unjustified breach of contract.

25. Along those lines, the player averred that he was entitled to the residual value of the contract as compensation. In particular, the player argued that 145,967.74 corresponds to the residual value of the contract for 11 months and 21 days until 30 June 2019.

26. Furthermore, the player argued that the signing on fee resulting from the contract would also be due during the extended period and therefore he argued to be entitled to an additional amount of 32,000 as part of his compensation.

27. The player further acknowledged having mitigated his damages by signing a new contract in the total amount of EUR 70,000, i.e. the monthly salaries and the sign on fee during the season 2018/2019 (cf. point I.17. above), which is why he deducted 79,177, as per the alleged conversion. As a result, the player claimed the final amount of 98,790.74 as compensation for breach of contract.

28. In its reply, the club rejected the player’s claim and held that in addition to the contract, the amendment for the second contractual year was conditional and dependent on the issuance of a residence and work permit for the player for the second season.

29. Furthermore, the club argued that the case at hand does not violate art. 18 par. 4 of the Regulations, since the validity of the employment contract was not subject to a work permit, but rather that the parties agreed upon a reason for a termination in case such work permit would not be granted for an additional year.

30. Moreover, the club pointed out that it did everything it could to obtain such work permit for the player, which was finally rejected by the authorities. In this regard, the club referred to its correspondence with the immigration office of Country D, Region F, Region J and Region L.

31. Additionally, the club submitted a letter from the Chief Legal Officer of the Football League of Country E, in which he purports that the validity of a contract cannot depend on the issuance of a work permit, but that an existing employment relationship can be terminated if such permit is no longer granted. In his statement, he bases such opinion on the “General Contract Terms of the Employment Contract”, which are part of the standard employment contract in the Football League of Country E.

32. In line with the above, the club maintained that the contract was not terminated without just cause, but in accordance with art. 3 of the contract and the amendment.

33. In his replica, the player reiterated his position, referred to the wording of the amendment and disagreed with the club’s argument that such amendment was subject to the issuance of the relevant permit.

34. Furthermore, the player argued that the club could and should have done more to resolve the situation regarding the permit. What is more, the player insisted that the club did not seriously take into account the option that the player could obtain a permit in Country E or Country G.

35. The player further held that the “General Contract Terms of the Employment Contract” and the opinion of the Chief Legal Officer of the Football League of Country E should not be taken into account, since FIFA regulations prevail over national law.

36. Moreover, the player rejected the club’s interpretation of art. 18 par. 4 of the Regulations and maintained that the club should have taken the necessary steps before signing the contract and that it cannot rely on the absence of a work permit to terminate the contractual relationship.

37. In its duplica, the club reiterated its position and rejected the player’s argumentation.

38. Furthermore, the club denied the allegation that it would have been possible to obtain a permit either in Country E or Country G.

39. Additionally, the club argued that the “permit X” was already issued at the moment the contract and the amendment were signed. Thus, the club would not have had a choice to request a different permit. In this regard, the club purported that it did take all necessary steps to obtain a new permit, but that it was denied by the authorities.

40. Moreover, the club held that the “General Contract Terms of the Employment Contract” as a part of the contract, are applicable, even more since there is no contradiction between said terms and art. 18 par. 4 of the Regulations.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 9 August 2018. Consequently, the DRC concluded that the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

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 employment-related dispute with an international dimension between an Player of Country B and a club of Country D.

3. Subsequently, 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 9 August 2018, the June 2018 edition of said 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 acknowledged that, on 7 August 2017, the player and the club had signed an employment contract, valid until 30 June 2018, and according to which the player was entitled to receive a sign-on fee of 32,000 as well as a monthly salary of 12,300 during the season 2017/2018.

6. Moreover, the DRC noted that, on the same date, the parties concluded an amendment to the contract, in order to extend the contractual relationship until 30 June 2019. According to said agreement, the club undertook to pay the player for the season 2018/2019, a monthly salary of 12,300 in case the club participates to Second League of Country E and 16,250 in case the club participates to First League of Country E.

7. In continuation, the members of the Chamber noted that the player lodged a claim against the club maintaining that it terminated the contract without just cause on 10 July 2018, since it was the Respondent’s obligation to obtain the work and residence permit, not only at the beginning of the contractual relationship, but also for the period of the extension. In this regard, the Claimant brought forward that the club did not do its best to obtain the relevant permits and maintained that, in light of art. 18 par. 4 of the Regulations, the club’s action constitutes an unjustified breach of the contract. Consequently, the player claimed compensation for breach of contract.

8. Furthermore, the DRC acknowledged that the club rejected such argumentation and held that it did everything it could to obtain a permit for the player by referring to its requests to the authorities in Country D, Country E and Country G. Furthermore, the club argued having applied for a work and residence permit XX in Country D and that said application was rejected by the local authorities on 5 July 2018. In this framework, the Respondent argued having acted in accordance with the content of the amendment when terminating the contract with the Claimant.

9. On account of the above, the members of the Chamber highlighted that the underlying issue in this dispute, considering the diverging position of the parties, was to determine as to whether the Respondent terminated the employment contract on 10 July 2018 with or without just cause and to decide on the consequences thereof.

10. In this context, 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.

11. In this framework, the Chamber considered relevant to recall art. 18 par. 4 of the Regulations as well as its jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of administrative formalities, such as, but not limited to, the application for a work permit, which are of the sole responsibility of a club and on which a player has no influence.

12. What is more, the DRC observed that the Respondent argued that the above-mentioned provision would in casu not be applicable since the validity of the extension is not disputed. According to the club, the parties agreed upon a possibility to terminate the contractual relationship in case such permit could not be obtained.

13. With the above in mind, the members of the Chamber turned their attention to the wording of art. 3 of the contract, which stipulates that the contract could be terminated with just cause “if initiated measures (work and residence permit) were not successful“.

14. Furthermore, the DRC recalled the content of the amendment, which, inter alia, stipulates:

15. After having thoroughly examined the content of the amendment in connection with art. 3 of the contract, the members of the Chamber were of the unanimous opinion that the parties intended to extend the validity of the contract for the season 2018/2019, subject to the issuance of a work and residence permit, thus, in clear contradiction to the aforementioned art. 18. par. 4 of the Regulations.

16. In this context, the members wished to emphasise that the contents of art. 18. par. 4 of the Regulations are of mandatory nature and cannot be contractually amended or circumvented.

17. Moreover, the DRC recalled the principle according to which, as confirmed by its longstanding jurisprudence, the application for a work permit is an administrative formality and therefore is the sole responsibility of a club and cannot affect the validity of a contract. Consequently, with the above in mind, in the Chamber’s opinion, the fact that the contract was executed during one season and then extended for another season with an option to terminate in case of lack of the work and residence permit is not compatible with the above-mentioned principle. The members of the Chamber wished to emphasise that a different conclusion would lead to a circumvention of art. 18 par. 4 of the Regulations and cannot be accepted.

18. Additionally, the DRC pointed out that art. 3 of the contract in itself is not clear enough to comfortably establish which kind of “initiated measures” the club had to take in order to trigger such clause.

19. On account of all the above-mentioned considerations, the Chamber concluded that the club did not have just cause to terminate the contract on 10 July 2018.

20. In continuation and having established the above, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract.

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 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 contract at the basis of the matter at stake.

23. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the regulations. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its termination and concluded that the Claimant would have been entitled to receive 143,910 as remuneration had the employment contract been executed until its regular expiry date, i.e. 30 June 2019.

24. In this context, the DRC noted that the Claimant alleged being entitled to a “signing fee” of 32,000, as further part of his compensation, for the season 2018/2019, in analogy to the provision contained in the contract, which provides for such a fee payable on 31 August 2017. Bearing in mind art. 12 par. 3 of the Procedural Rules and the clear reference of the contract regarding the due date, i.e. 31 August 2017 only, said argumentation of the Claimant was rejected by the Chamber due to the lack of contractual basis.

25. Consequently, the Chamber concluded that the amount of 143,910 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

26. In continuation, the Chamber assessed 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 able to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract(s) shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

27. In respect of the above, the Chamber recalled that the Claimant signed an employment contract with the Club K, valid as from 4 August 2018 until 31 May 2020, including a signing fee in the amount of EUR 40,000 as well as total remuneration of EUR 30,000 during the season 2018/2019. Therefore, the DRC concluded that the Claimant was able to mitigate his damages during the relevant period for the amount of EUR 70,000, which shall be deducted, leading to a mitigated compensation in the amount of 64,910.

28. Consequently, on account of the above-mentioned considerations, the DRC decided that the Respondent must pay the amount of 64,910 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

29. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount of compensation as of the date on which the claim was lodged, i.e. 9 August 2018, until the date of effective payment.

30. The DRC decided that the claim of the player is partially accepted and 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 pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

33. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

34. Finally, the Chamber recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant the amount of 64,910 as compensation for breach of contract, plus 5% interest p.a. as of 9 August 2018 until the date of effective payment.

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

4. 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 amount mentioned under point 2. above.

5. The Respondent shall provide evidence of payment of the due amount in accordance with point 2. above to FIFA to the e-mail addres, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount plus interest due in accordance with point 2. above is 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 amount is 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).

7. The ban mentioned in point 6. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

8. In the event that the aforementioned sum plus interest is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport (CAS)

Avenue de Beaumont 2

CH-1012 Lausanne

Country E

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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives