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

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 15 August 2017, 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 1), valid as of 15 August 2017 until 31 May 2018.

2. According to contract 1, the club undertook to pay the following monies to the player:

- EUR 16,000 as monthly salary, payable between August 2017 and May 2018;

- EUR 40,000 as “fixed wage”, “accrued at the end of the season”;

- EUR 35,000 as total bonus for 34 matches if promoted during the season 2017/2018, payable proportional to the matches the player participated in.

3. On 30 June 2018, the parties signed a new employment contract (hereinafter: contract 2), valid as from 30 June 2018 until 31 May 2020.

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

a) For the season 2018/2019:

- EUR 30,000 as monthly salary, payable between August 2018 and May 2019;

- EUR 75,000 as “fixed wage in the 2018-2019 season as from the registration of the contract”.

b) For the season 2019/2020, if the club plays in the League E:

- EUR 32,000 as monthly salary, payable between August 2019 and May 2020;

- EUR 80,000 as “fixed wage”, payable on 31 August 2019.

c) For the season 2019/2020, if the club plays in the League F:

- EUR 20,000 as monthly salary, payable between August 2019 and May 2020;

- EUR 50,000 as “fixed wage”, payable on 31 August 2019.

d) Additional payment:

- EUR 25,000 as bonus payable if the player “plays in the first 11 in 23 League E Matches in the seasons when this contract is in force”.

5. Contract 2 further contains the following clauses:

- “Fixed wages shall be deemed accrued at the end of the season if the player serves for the club in the relevant season. In case the football player terminates the contract unilaterally before the end of the season, the player agrees and undertakes that this payment shall constitute an advance payment and be deducted from his receivables in proportion to the period of time remaining in the contract”;

- “The parties agree and undertake that the football player shall be paid 13,000 Euro each season to rent an apartment of his like to stay and a medium class car for his travel, this payment is included in the fixed wage, and therefore no payment shall be claimed for the accommodation and travel needs. This provision shall apply to all seasons when this contract is in force”.

6. On 7 December 2018, the player sent a letter to the club and requested payment of the total outstanding amount of EUR 308,000, resulting from contract 1 and 2, until 24 December 2018. The player informed the club that he would exercise his right to terminate the contract if the outstanding dues were not remitted within the deadline.

7. On 24 December 2018, the player sent another letter to the club, stating that he was informed by the club’s translator that the club would be willing to pay the amount of EUR 40,000. The player further requested payment of his total outstanding dues until 31 December 2018.

8. On 31 December 2018, the player terminated contract 2 with the club in writing due to club’s non-fulfilment of its financial obligations.

9. On 4 January 2019, the player lodged a claim in front of FIFA against the club for breach of contract and requested the following amounts:

- EUR 75,000 corresponding to outstanding salaries from season 2017/2018;

- EUR 25,000 corresponding to the promotion bonus from season 2017/2018;

- EUR 150,000 corresponding to outstanding salaries from season 2018/2019;

- EUR 75,000 as bonus “for signing contract 2”;

- EUR 13,000 corresponding to the accommodation bonus (season 2018/2019);

- EUR 563,000 as compensation for breach of contract.

Furthermore, the player requested to impose sporting sanctions for the club and claimed interest of 5% p.a., as of the respective due dates.

10. In his claim, the player maintained that he duly fulfilled his contractual obligations, while the club failed to fulfil its financial obligations repeatedly and a total amount of EUR 338,000 remained outstanding at the moment of his termination.

11. In this regard, the player argued that, after having put the club in default, he terminated contract 2 with just cause.

12. Furthermore, the player requested compensation in the total amount of EUR 563,000 corresponding to the residual value of contract 2, as follows:

- EUR 150,000 as residual value of the season 2018/2019;

- EUR 400,000 as residual value of the season 2019/2020;

- EUR 13,000 as agreed accommodation costs for the season 2019/2020.

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

14. On 9 January 2019, the player signed an employment contract with the Club of Country D, Club G, valid as of 10 January 2019 until 31 May 2020, including the following salary:

- EUR 32,250 in total for the season 2018/2019, payable in monthly instalments;

- EUR 100,000 payable in August 2019;

- EUR 50,000 payable in November 2019;

- EUR 50,000 payable in January 2020;

- EUR 90,000 in total for the season 2019/2020, payable in monthly instalments;

- 120,000 (approx. EUR 19,000) as “manager fee” during the season 2019/2020.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred 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 4 January 2019. 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 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 Player (edition June 2018), and considering that the present claim was lodged on 4 January 2019, the June 2018 edition of said regulations (hereinafter: the 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 15 August 2017, the parties concluded contract 1, valid as of 15 August 2017 until 31 May 2018. Moreover, the DRC noted that the parties signed contract 2 on 30 June 2018, valid as of this date until 31 May 2020.

6. In continuation, the DRC noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated contract 2 with just cause on 31 December 2018 since the club failed to remit remuneration in the total amount of EUR 308,000, corresponding to salaries and bonuses in relation to contract 1 and contract 2. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.

7. 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.

8. 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.

9. 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.

10. 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.

11. In doing so, the DRC recalled that it has remained undisputed that, after having put the Respondent in default on 7 December 2018 and 24 December 2018, the Claimant terminated contract 2 on 31 December 2018 by means of a letter, referring to outstanding remuneration.

12. In this context, the members of the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant remuneration totalling EUR 300,000, corresponding to salaries in the amount of EUR 75,000 from the season 2017/2018, to salaries in the amount of EUR 150,000 from the season 2018/2019 as well as the signing-fee for contract 2, i.e. EUR 75,000.

13. 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 31 December 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.

14. 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.

15. Bearing in mind the above, the Chamber and taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had not fully substantiated his claim with pertinent documentary evidence in accordance with art. 12 par. 3 of the Procedural Rules. That is, there is no supporting documentation relating to the Claimant’s claim pertaining to outstanding bonuses, such as the promotion bonus resulting from season 2017/2018. Consequently, the DRC decided to reject this part of the Claimant’s claim.

16. What is more, the members of the Chamber noted that, according to the wording of the contract, the claimed “accommodation bonus” is already included in the player’s “fixed wage” (cf. point I.5. above). Consequently, the DRC decided to reject this part of the Claimant’s claim as well.

17. As established above (cf. point II.12.), the Chamber partially 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 EUR 300,000 with regard to the remuneration due to him during the season 2017/2018 and 2018/2019.

18. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the respective due dates, until the date of effective payment.

19. 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.

20. 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.

21. 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.

22. 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.

23. 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.

24. 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 EUR 550,000 as remuneration for the period as from 31 December 2018 until 31 May 2020, taking into account the amount due to the player in the League E. Consequently, the Chamber concluded that the amount of EUR 550,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

25. 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.

26. In this respect, the Chamber recalled that the Claimant had found new employment with the Club of Country D, Club G, as from 10 January 2019 until 31 May 2020, including a remuneration in the total amount of EUR 341,250, which shall be deducted, leading to a mitigated compensation in the amount of EUR 208,750.

27. 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.

28. With the above in mind, the Chamber decided to award the Claimant additional compensation corresponding to three monthly salaries, i.e. EUR 90,000, 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 EUR 298,750 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

30. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the date of the claim, i.e. 4 January 2019, until the date of effective payment.

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

32. 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.

33. 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.

34. 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.

35. 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 EUR 300,000 as outstanding remuneration, plus interest until the date of effective payment as follows:

a. 5% p.a. as of 1 June 2018 on the amount of EUR 75,000;

b. 5% p.a. as of 1 July 2018 on the amount of EUR 75,000;

c. 5% p.a. as of 1 September 2018 on the amount of EUR 30,000;

d. 5% p.a. as of 1 October 2018 on the amount of EUR 30,000;

e. 5% p.a. as of 1 November on the amount of EUR 30,000;

f. 5% p.a. as of 1 December 2018 on the amount of EUR 30,000;

g. 5% p.a. as of 1 January 2019 on the amount of EUR 30,000.

3. The Respondent has to pay to the Claimant the amount of EUR 298,750 as compensation for breach of contract, plus 5% interest p.a. as of 4 January 2019 until the date of effective payment.

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

7. In the event that the amounts plus interest 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 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).

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 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

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 & Compliance Officer

Encl.: CAS directives