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 25 October 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 25 October 2018,

in the following composition:

Geoff Thompson (England), Chairman

Stefano La Porta (Italy), member

Muzammil Bin Mohamed (Singapore), member

Tomislav Kasalo (Croatia), member

Joaquim Evangelista (Portugal), member

on the matter between the player,

Player A, from country A

as First Claimant / Respondent

and the club,

Club B, from country B

as Second Claimant / Respondent

and the club,

Club C, from country A

as intervening party

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 31 August 2016, the Player A, from country A (hereinafter: player or First Claimant / Respondent), born on 8 January 1989, entered into an employment contract (hereinafter: contract) with Club B, from country B (hereinafter: club B or Second Claimant / Respondent) valid as from 31 August 2016 until 31 May 2020.

2. In accordance with the employment contract, the club undertook to pay the player the following amounts:

a) Season 2016/2017:

- EUR 150,000 as “advancement” 7 days after receiving the ITC;

- EUR 25,000 as monthly salary due between September 2016 and June 2017;

- EUR 6,250 per League Match “the player participated in”.

b) Season 2017/2018:

- EUR 150,000 as “advancement” on 30 August 2017;

- EUR 30,000 as monthly salary due between August 2017 and May 2018;

- EUR 5,882 per League Match “the player participated in”.

c) Season 2018/2019:

- EUR 150,000 as “advancement” on 30 August 2018;

- EUR 35,000 as monthly salary due between August 2018 and May 2019;

- EUR 5,882 per League Match “the player participated in”.

d) Season 2019/2020:

- EUR 150,000 as “advancement” on 30 August 2019;

- EUR 35,000 as monthly due payable between August 2019 and May 2020;

- EUR 5,882 per League Match “the player participated in”.

3. On 11 January 2017, the player put the club in default for the payment of EUR 206,250, corresponding to a part of the advance payment, the salaries of November and December 2016 as well as 13 match bonuses.

4. On 28 August 2017, the club issued a letter allowing the player to negotiate a loan transfer for the season 2017/2018 without a transfer fee. Said permission was valid until 6 September 2017.

5. Also on 28 August 2017, the parties signed a document whereby they agreed that in case the player would be transferred on loan to another club for the season 2017/2018, the club would not charge any transfer fee and the player would waive any remuneration from the club, including the “past receivables”. Said agreement was valid until 6 September 2017.

6. On 22 September 2017, the player put the club in default for the payment of EUR 180,000, corresponding to a part of the payment payable on 30 August 2017 and the salary of August 2017.

7. On 27 September 2017, the parties signed a document titled “Protocol” (hereinafter: Protocol), which “governs and defines the terms and conditions for the removing of the notification dated 22.09.2017 that send by the player to the club according the contract between the player and the club starting 31.08.2016 and the end date 31.05.2020”.

8. Furthermore, said protocol contains the following clauses:

- “Pursuant to this Protocol, the Club shall pay the Soccer Player a total sum of 210,000 […] Euro on 25.11.2017, including the advance payment for 2017-2018 season and wages for August and September”.

- “In case the Soccer Player terminates the Professional Player’s Contract signed between him and the Club without just cause or the said Contract is mutually terminated or the soccer player is transferred to another club until 25.11.2017, the soccer player hereby agrees, represents and undertakes that he shall waive the above-mentioned receivables, and the Club hereby agrees, represents and undertakes that it accepts such waiver and it shall not demand any fee in case the soccer player is transferred to another club until 25.11.2017”.

- “If the club doesn’t full fill the obligations in this protocol on the date of 25.11.2017 player has a special right to terminate the professional football player contract without giving any notice or warning”.

- “By paying this amount, neither Party shall be entitled to any further right or receivables from the other Party for these months, retroactively and under any other name whatsoever, irrespective of whether such rights or claims are governed in negotiable instruments, and the Parties hereby irrevocably and definitely release each other”.

9. On 2 November 2017, the player sent a notification to the club insisting that the payment of 10,000 (approx. EUR 2,400), was a bonus payment related to the match against Club D, from country B and not a “payment for contract” as the receipt indicated.

10. On 27 November 2017, on 13:05 local time, the player terminated the contract with the club since no payment was received from the club. In his termination letter, the player also alleged that “mobbing” against him occurred.

11. On 27 November 2017, on 14:07 local time, the club made a payment of EUR 210,000 to the player.

12. On 28 November 2017, the club sent a letter to the player stating that the termination was “unfair” since the payment was remitted and it denied any “mobbing” against the player.

13. On 11 December 2017, the player lodged a claim against the club in front of FIFA maintaining that the club is to be held liable for the early termination of the contract. Therefore, he requested to be awarded payment of the following monies:

- EUR 30,000 corresponding to the outstanding salary of October 2017;

- EUR 5,882 as match bonus;

- EUR 1,210,000 as compensation for breach of contract, corresponding to the residual value of the contract.

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

14. In particular, the player held that he terminated the contract with just cause since the club failed to comply with its financial obligations set out in the protocol by 25 November 2017. In this regard, he explained having checked his bank account on 25, 26 and 27 November 2017 and that he did not receive the relevant payment before he terminated the contract on 27 November 2017, 13:05 local time, with a letter sent via fax. In this regard, he submitted a fax report dated 27 November 2017, indicating the exact time, i.e. 13:05 local time, the notice was sent to the club.

15. In this regard, he maintained that the club remitted the relevant payment one hour after having received the termination on 27 November 2017 in order to pretend that the player terminated the contract while receiving the payment in question. In support of his allegation, the player submitted a printout of his bank account. showing that the relevant payment was received on 27 November 2017, 14:07 local time.

16. According to the player and since he and the club use the same bank, payments could have been done at any time, even on a Saturday.

17. Moreover, the player held that he was told to find a new club after the club was relegated at the end of the season 2016/2017 and that he “was exposed to mobbing” since he did not find a new club. In this regard, he explained that he was not in the “team-line up” anymore and the club stopped paying his salaries.

18. According to the player, after signing the protocol, he only played in one match and his salaries for October and November 2017 remained unpaid.

19. In addition, the player claimed EUR 5,882 as a match bonus related to a game against Club D, from country B played on 30 October 2017.

20. On 13 December 2017, the club lodged a separate claim against the player in front of FIFA, maintaining that the player is to be held liable for the early termination of the contract, and requesting to be awarded compensation for breach of contract in the amount of EUR 1,810,000.

21. In its arguments, the club maintained that the player terminated the contract without just cause since the due date of the relevant payment fell on a Saturday and it remitted the payment on the first business day after, i.e. on 27 November 2017. The club argued that the payment was remitted “within the legally permitted term”.

22. Moreover, it maintained that if a payment date falls on a holiday or on a non-working day, the deadline to pay automatically extends to the next working day.

23. In this context, the club alleged that the player terminated the contract even though he knew the payment would arrive on 27 November 2017.

24. In this regard, the club held that it immediately reacted to the player’s termination and sent a letter on 28 November 2017, stating that the termination was “unfair”.

25. Furthermore, the club held that the player requested to be transferred to another club after its relegation at the end of the season 2016/2017, which led the club to give the player permission to enter into negotiations. Subsequently, the player failed to find a new club.

26. Moreover, the club alleged having paid all the salaries of the season 2016/2017 on time.

27. Regarding compensation, the club asserted that it suffered losses caused by the player’s termination without just cause as follows:

- EUR 807,048 as remuneration paid to the player;

- EUR 500,000 as transfer fee paid for the player to the former club;

- EUR 265,000 paid to a player’s agent;

- EUR 143,558 as “taxes charged” on payments to the former club and player’s agent;

- EUR 26,000 paid as solidarity contribution in connection with the player’s transfer.

In this regard, the club submitted the transfer agreement concluded with the player’s former club, Club X, from country X confirming the above-mentioned transfer fee.

28. Furthermore, the club argued that it lost a valuable player and possible income from a transfer fee.

29. Finally, the club requested compensation in the amount of EUR 1,810,000 corresponding to the total “contract price” agreed upon on 31 January 2016.

30. In his reply to the club’s claim, the player reiterated his position and rejected the club’s claim.

31. The player insisted that the club already failed to pay salaries on time during the season 2016/2017.

32. Furthermore, the player rejected the club’s argument that a due date for a payment is automatically extended to the next working day. He maintained that the club should have remitted the payment on the last working day before the weekend or on the Saturday itself, since according to him this was an option as well.

33. In this regard, the player argued that there is a difference regarding time-limits between written submissions and payments.

34. What is more, the player held that the club made the payment only after receiving the player’s termination and it is now trying to justify it, in bad faith. In this context, the player argued that the club would need to prove that it issued the payment before receiving the termination.

35. Finally, the player purported that he terminated the contract on 27 November 2017 in good faith due to the outstanding amount at the moment of termination in combination with the “mobbing”.

36. In addition, the player alleged that the club’s claim for compensation is “not understandable”.

37. In the club’s reply to the player’s claim, it reiterated its position and rejected the player’s claim.

38. The club referred to the protocol and argued that the player could have been transferred until 25 November 2017, in which case he would have waived the payment in question, which is why no further payments were issued in between.

39. Furthermore, the club denied any “mobbing” and argued that the player wanted to leave the club.

40. Regarding the possibility of remitting the payment on the weekend, the club argued that it does “not execute banking transactions by using mobile or Internet banking” , since it needs the approval of the board and subsequently places a written order with the bank, which needs to be open for business.

41. On 30 January 2018, the player signed a new employment contract with the Club C, from country A, valid as from 30 January 2018 until 31 May 2021, including the following salaries, paid 14 times per calendar year:

- EUR 8,200 during the remainder of the season 2017/2018;

- EUR 14,000 as of 1 July 2018 until 31 May 2021.

42. After being informed about the dispute at stake, the player’s new club, Club C, from country A submitted its comments and held that it was informed by the player about a dispute in front of FIFA, but that it is not in a position to submit any comments as to the substance.

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 11 December 2017 by the player, and on 13 December 2017 by the club, respectively. 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 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 from country A and a country B club.

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 (edition June 2018), and considering that the present claim was lodged on 11 December 2017 by the player and on 13 December 2017 by the club, 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. First of all, the members of the Chamber recalled that, on 31 August 2016, the parties concluded an employment contract, valid as of 31 August 2016 until 31 May 2020.

6. In continuation, the DRC noted that the player lodged a claim against the club maintaining that he had terminated said employment contract with just cause on 27 November 2017, on 13:05 local time, since the club failed to remit remuneration in the total amount of EUR 210,000, as agreed upon in the protocol. What is more, the player argued that the club only remitted the amount in question as a reaction to his termination, submitted one hour before the transaction. 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, lodged a separate claim against the player, maintaining that he terminated the contract without just cause since it paid the amount agreed upon in the protocol on time, since 25 November 2017 was a Saturday and it remitted the payment on the first working day thereafter, on 27 November 2017. In this respect, the Respondent requested to be awarded compensation for breach of contract.

8. 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 player had just cause to terminate the employment contract on 27 November 2017 and to decide on the consequences thereof.

9. 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.

10. In so doing, the DRC took note that before terminating the contract on 27 November 2017, the player had sent a default notice to the club on 22 September 2017 requesting payment of EUR 180,000, corresponding to a part of the payment payable on 30 August 2017 and the salary of August 2017. The Chamber further established, that the parties signed the protocol on 27 September 2017 in order to “remove” said default notice.

11. In continuation, the Chamber turned its attention to the content of said protocol (cf. point I.8. above), which is at the basis of the player’s termination of the employment relationship.

12. For the sake of good order, the Chamber wished to recall the content of said protocol, which establishes, inter alia, that “the Club shall pay the Soccer Player a total sum of 210,000 […] Euro on 25.11.2017”.

13. Considering the wording of the protocol, which clearly refers to 25 November 2017 as due date of the payment, established by both parties in agreement, the Chamber determined that the club failed to remit the payment on time and rejected the club’s argumentation.

14. In continuation, the DRC turned its attention again to the wording of the protocol, which reads, inter alia: “If the club doesn’t full fill the obligations in this protocol on the date of 25.11.2017 player has a special right to terminate the professional football player contract without giving any notice or warning”.

15. In this regard, the Chamber noted that it remained undisputed that the player terminated the contract before the Respondent remitted the amount in question on 27 November 2017. In other words, at the moment of termination, the amount resulting from the protocol, i.e. EUR 210,000 remained outstanding.

16. In light of such delay in payment, after having put the club in default already on 22 September 2017 and thereafter having granted a further time-limit to the club to remedy its default in concluding the protocol, the members of the Chamber deemed that the player could in good faith believe that, the Respondent would have persisted in the non-compliance of its financial obligations.

17. On account of the considerations above and in particular since the payment to the player was only remitted after the agreed date in the protocol and after the player had already terminated the contract on 27 November 2017, the DRC concluded that the player terminated the contract with just cause and in accordance with the protocol.

18. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the player 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 player.

19. The Chamber took note of the acknowledged payment of the club, i.e. EUR 210,000, after the termination. According to the protocol, said payment covered “the advance payment for 2017-2018 season and wages for August and September”. On account of the above, the members of the Chamber concluded that the player remained entitled to receive his salaries of October and November 2017, i.e. EUR 60,000.

20. Furthermore, taking into account the player’s evidence provided regarding the claimed bonus and the club’s partial payment on 2 November 2017, the player is entitled to the residual amount of EUR 3,482, related to the match bonus claimed.

21. On account of the considerations above, 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 63,482 with regard to the salaries due to him in October and November 2017 and the match bonus mentioned above, as well as interest of 5% p.a. as from the respective due dates.

22. 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.

23. 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 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.

24. 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.

25. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

26. The members of the Chamber then turned their attention to the remuneration and other benefits due to the player 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.

27. 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 player until its natural expiration, bearing in mind that he would have received in total EUR 1,180,000 as remuneration for the period as from 1 December 2017 until 31 May 2020. Consequently, the Chamber concluded that the amount of EUR 1,180,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

28. 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.

29. In this respect, the Chamber recalled that the player had found new employment with the Club C, from country A as from 30 January 2018 until 31 May 2021, including a remuneration in the total amount EUR 433,000 until 31 May 2020, which shall be deducted, leading to a mitigated compensation in the amount of EUR 747,000.

30. Consequently, on account of the above-mentioned considerations, the Chamber decided to partially accept the player’s claim and that the club must pay the amount of EUR 747,000 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

31. In addition, taking into consideration the player’s claim, the Chamber decided to award the player interest at the rate of 5% p.a. as of the date of claim, 11 December 2017, until the date of effective payment.

32. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the club and the player are rejected.

III. Decision of the Dispute Resolution Chamber

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

2. The Second Claimant / Respondent, Club B, has to pay to the First Claimant / Respondent, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 63,482 plus interest until the date of effective payment as follows:

a. 5% p.a. as of 1 November 2017 on the amount of EUR 30,000;

b. 5% p.a. as of 27 November 2017 on the amount of EUR 33,482.

3. The Second Claimant / Respondent has to pay to the First Claimant / Respondent, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 747,000 plus 5% interest p.a. as of 11 December 2017 until the date of effective payment.

4. In the event that the aforementioned amounts plus interest are not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

5. Any further claim lodged by the First Claimant / Respondent is rejected.

6. The claim of the Second Claimant / Respondent is rejected.

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

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

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl: CAS directives