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 7 March 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 7 March 2019,

in the following composition:

Geoff Thompson (England), Chairman

Stijn Boeykens (Belgium), member

Tomislav Kasalo (Croatia), member

Daan de Jong (The Netherlands), member

Elvis Chetty (Seychelles), 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 arisen between the parties

I. Facts of the case

1. On 29 July 2017, the Player of Country B, Player A (hereinafter: Claimant) and the Club of Country D, Club C (hereinafter: Respondent) concluded an employment contract (hereinafter: contract), valid as from 1 August 2017 until 1 August 2019.

2. According to clause 4 of the contract, the Claimant was entitled to a yearly remuneration in the amount of USD 160,000, payable as follows:

- An advance payment of USD 50,000;

- A monthly salary of USD 9,166 payable “at the end of every Gregorian month”.

3. In addition, the Claimant was entitled to the following benefits:

- housing

- transportation

- insurance

- “one ticket around trip for the player and his family entire the season from Country B to Country D to Country B.”

4. Clause 4.9 of the contract establishes that “The club can cancel this contract at any time after pay one month salary for player.”

5. On 25 January 2018, the Respondent sent a notice to the Claimant stating that it terminated the contract relying on clause 4.9 of the contract. The Respondent further informed the Claimant that, according to said provision, it would pay one monthly salary to the Claimant and that his “full dues will be settled until the date of termination of the contract.”

6. In his correspondence dated 8 May 2018 addressed to the Respondent, the Claimant stressed that the unilateral termination by the Respondent had caused him sporting and financial damages and proposed to reach an amicable settlement.

7. On 14 August 2018, the Claimant lodged a claim against the Respondent before FIFA maintaining that the Respondent unilaterally terminated the contract without just cause and he asked to be awarded the total amount of USD 573,170 as compensation for breach of contract, which was detailed follows:

- USD 274,170 corresponding to the salaries allegedly due as from 25 January 2018 until 1 August 2019;

- USD 54,000 corresponding to housing allowances as of 25 January 2018 until 1 August 2019;

- USD 18,000 corresponding to car benefits as of 25 January 2018 until 1 August 2019;

- USD 18,000 corresponding to insurance coverage and medical costs as of 25 January 2018 until 1 August 2019;

- USD 9,000 corresponding to flights tickets for the Claimant and his family as of 25 January 2018 until 1 August 2019;

- USD 200,000 as moral damages.

8. In his claim, the Claimant argued that clause 4.9 of the contract does not comply with FIFA Regulations, as it can be invoked by the Respondent only, at any time and does not provide for a genuine compensation. Therefore, the Claimant held that clause 4.9 cannot be considered valid and that the Respondent terminated the contract without just cause.

9. In reply to the Claimant’s claim, the Respondent acknowledged having terminated the contract according to clause 4.9 and having remitted to the Claimant one monthly salary as compensation in cash.

10. In spite of having been invited to do so, the Claimant has not commented on the Respondent’s position.

11. On 31 January 2019, the Claimant signed a new employment contract with the Club of Country B, Club E, valid as from 31 January 2019 until 30 June 2019, entitling him to a remuneration of EUR 2,628 per month.

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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 14 August 2018. Consequently, the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: 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 Players (edition June 2018), and considering that the present claim was lodged on 14 August 2018, the June 2018 edition of the said Regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, the members of the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the DRC 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. Moreover, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

5. First of all, the DRC acknowledged that, on 29 July 2017, the Claimant and the Respondent concluded an employment contract valid as from 1 August 2017 until 1 August 2019.

6. In this regard, the DRC recalled that according to clause 4 of the contract, the Respondent undertook to pay to the Claimant a yearly remuneration in the amount of USD 160,000 payable by means of an advance payment of USD 50,000 as well as a monthly salary of USD 9,166 to be paid “at the end of every Gregorian month.”

7. In continuation, the members of the Chamber noted that, by means of a letter dated 25 January 2018 remitted to the Claimant, the Respondent unilaterally terminated the contract invoking a contractual termination clause in accordance with which the Respondent could put an end to the employment relationship at any time against payment of one monthly salary to the Claimant.

8. What is more, the DRC acknowledged that the Claimant lodged a claim against the Respondent, arguing that the aforementioned termination clause had to be considered invalid and that, as a consequence, the Respondent terminated the contract without just cause and that he was entitled to receive compensation for breach of contract.

9. Subsequently, the Chamber took into consideration that, in its reply, the Respondent acknowledged having terminated the contract by means of its termination notice dated 25 January 2018 in accordance with clause 4.9 of the contract. The members of the Chamber further noted that the notice of termination did not include any reason for the premature termination of the contract.

10. At this stage, in order to be able to establish, first and foremost, as to whether, as claimed by the Claimant and denied by the Respondent, the latter terminated the employment contract without just cause, the Chamber turned its attention to art. 4.9 of the employment contract, which was invoked by the Respondent in its defence.

11. As stated above, according to clause 4.9 of the employment contract “The club can cancel this contract at any time after pay one month salary for player.”

12. In this respect, the Chamber agreed that it could not accept said clause as being valid, as it provides for a termination right to the benefit of the Respondent only, even though according to the same clause the Claimant was entitled to receive one monthly salary by way of compensation. In addition to the unbalanced character of clause 4.9, the DRC stressed that according to the wording of said clause, such right could be exercised by the Respondent at any time and apparently without any reason for termination, which clearly contravenes with the principle of maintenance of contractual stability as set out in Chapter IV of the Regulations.

13. Therefore and taking into consideration the Chamber’s constant jurisprudence in this regard, the Chamber decided that the Respondent could not legitimately put an end to the contractual relationship with the Claimant by invoking clause 4.9 of the employment contract. Consequently, the Chamber rejected the Respondent’s argument in this respect.

14. Having established the above, the Chamber took into account that neither in the notice of termination nor during the proceedings in front of FIFA had the Respondent presented any reasons as to why it terminated the contract.

15. Therefore and taking into account the Chamber’s longstanding jurisprudence in this respect, the members of the Chamber decided that the Respondent had no just cause to unilaterally terminate the contract and that, as a result, the Respondent is to be held liable for the early termination of the employment contract without just cause on 25 January 2018.

16. Subsequently, the Chamber turned its attention to the consequences of the early termination of the contract without just cause by the Respondent.

17. Having said that, on account of the above, the DRC decided that in accordance with art. 17 par. 1 of the Regulations the Claimant is entitled to receive compensation for breach of contract from the Respondent.

18. In this context, the Chamber outlined that, in accordance with the 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.

19. In application of the relevant provision, the DRC held that it first of all had to clarify whether the pertinent employment contract contained a clause, 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, taking into account the consideration under point II./12. above, the DRC established that no such compensation clause was included in the employment contract that could be taken into consideration in the matter at stake.

20. 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.

21. The DRC took into account that in his calculation of the amount of compensation, the Claimant included, inter alia, salaries and fringe benefits calculated as of the date of the termination of the contract, i.e. 25 January 2018, until the original date of expiry of the contract.

22. 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 early termination until its regular date of expiry. In this respect, the DRC took into account that as from 25 January 2018 until 31 July 2018, the Claimant would have earned USD 64,162 in salary, keeping in mind that USD 50,000 for the first season was payable in advance when the player arrived at the club and that the Claimant had not indicated that such advance payment, or any other payment due prior to 25 January 2018 for that matter, had remained unpaid. In addition, the Chamber took into account that according to the contract the Claimant would have been entitled to an income of USD 160,000 for the second season.

23. At this stage, the Chamber wished to stress that in the absence of any monetary value in the contractual conditions relating to fringe benefits such as housing or transportation and of any documentary evidence in this connection (cf. art. 12 par. 3 of the Procedural Rules), no such fringe benefits can be taken into consideration in the calculation of the amount of compensation.

24. Consequently, the Chamber concluded that the remaining value of the contract as from its early termination until the regular expiry of the contract amounts to USD 224,162 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

25. In continuation, while referring to art. 17 par. 1 ii. of the Regulations and stressing that the early termination of the contract in the matter at hand is not due to overdue payables, 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 able 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 regard, the Chamber took note that according to the information available in the TMS, the Claimant had signed a new employment contract with the Club of Country B, Club E, valid as from 31 January 2019 until 30 June 2019, entitling him to a remuneration in the total approximate amount of USD 15,000 corresponding to five monthly salaries.

27. In addition, the Chamber took into account that it has remained uncontested that the Claimant already received one monthly salary from the Respondent in this context, i.e. the amount of USD 9,166.

28. Taking into account all the aforementioned elements as well as the specificities of the matter at hand, the DRC decided that the Respondent is liable to pay to the Claimant the amount of USD 200,000 as compensation for breach of contract.

29. In addition, as regards the Claimant’s claim pertaining to air tickets, on the basis of the information provided by FIFA Travel and referring to its jurisprudence, the Chamber decided that the Respondent must pay to the Claimant the amount of CHF 540 for 1 air ticket to return back home.

30. Equally, in the absence of any monetary value in the contractual condition relating to insurance coverage and of any documentary evidence relating to said coverage and medical costs (cf. art. 12 par. 3 of the Procedural Rules), the Chamber had to reject the Claimant’s claim amounting to USD 18,000 relating to these items.

31. Subsequently, the DRC analysed the request of the Claimant corresponding to compensation for moral damages in the amount of USD 200,000. In this regard, the Chamber deemed it appropriate to point out that the request for said compensation presented by the Claimant had no legal or regulatory basis and pointed out that no corroborating evidence had been submitted that demonstrated or quantified the damage suffered.

32. Therefore, the Chamber decided to reject the Claimant’s claim relating to moral damages.

33. Finally, the Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

34. 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.

35. 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.

36. 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.

37. 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 compensation for breach of contract in the amounts of USD 200,000 and CHF 540.

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 amounts mentioned under point 2 above.

5. The Respondent shall provide evidence of payment of the due amounts in accordance with point 2 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).

6. In the event that the amounts due in accordance with point 2 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 amounts are 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 sums 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 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 Officer

Encl: CAS directives