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 14 June 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 14 June 2019,

in the following composition:

Geoff Thompson (England), Chairman

Tomislav Kasalo (Croatia), member

Wouter Lambrecht (Belgium), 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 27 July 2017, the player of Country B Player A (hereinafter: player or Claimant) and the club of Country D, Club C (hereinafter: club or Respondent) entered into an employment contract (hereinafter: the contract) valid as of 27 July 2017 until 31 May 2019.

2. According to the contract, during the 2018/2019 football season, the Respondent undertook to pay the Claimant salaries in the total amount of EUR 200,000, as follows:

- EUR 20,000 on 31 July 2018;

- EUR 18,000 on the last day of each month, from August 2018 until May 2019, i.e. 10 months.

3. On 11 November 2018, the player sent a letter titled “Notice of termination” to the club and put the latter in default for the non-payment of the salaries as from July to October 2018, i.e. 4 monthly salaries, amounting to EUR 74,000. The player granted the club 15 days to pay the relevant amount.

4. On 27 December 2018, the player lodged a claim against the club in front of FIFA requesting “to terminate unilaterally the employment contract (…) with just cause by virtue of outstanding salaries of the club”. In this regard, the player requested the following monies:

a. EUR 92,000 as outstanding salaries composed of:

- EUR 20,000 as the salary of July 2018;

- EUR 18,000 as the salary of August 2018;

- EUR 18,000 as the salary of September 2018;

- EUR 18,000 as the salary of October 2018;

- EUR 18,000 as the salary of November 2018.

b. EUR 108,000 as compensation for breach of contract, corresponding to the residual value of the contract.

Further, the player requested interest as of the respective due dates on the outstanding salaries.

5. In his claim, the player underlined that he already encountered the same difficulties with the club during the first season with the Respondent and that he had already sent a default notice on 26 July 2018.

6. Therefore, the player indicated that he wanted to “terminate unilaterally the employment contract with the club”. Furthermore, the player explicitly indicated to FIFA that he “wants now to play in another team in Country D, however he is not free to do so as the contract with Club C is still in force. Provided that we are fully complied with terms and conditions of article 14bis of regulation on the transfer and status of player [edition 2018], we would like to be able to sign an employment contract with another football team within the current transfer period”.

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

8. Finally, upon FIFA’s request, the player informed FIFA that, on 18 January 2019, he signed a new employment contract, valid as of 18 January 2019 until 31 May 2020, with the club of Country D Club E which provides for a monthly salary of EUR 13,000 during the 2018-2019 season.

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 27 December 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 and par. 2 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 2019), and considering that the present claim was lodged on 27 December 2018, 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 27 July 2017, the parties concluded an employment contract, valid as of 27 July 2017 until 31 May 2019, according to which the Claimant, inter alia, was entitled to an amount of EUR 20,000 on 31 July 2018 as well as to ten monthly instalments of EUR 18,000 between August 2018 and May 2019.

6. In continuation, the DRC noted that the Claimant lodged a claim against the Respondent maintaining that he wanted to “terminate unilaterally the employment contract with the club” after having put the club in default, since the club failed to remit remuneration for more than 4 months. 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 in fact terminated by the Claimant, whether he had just cause for said termination 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, on 11 November 2018, the Claimant put the Respondent in default for the non-payment of the salaries from July 2018 to October 2018, i.e. 4 monthly salaries, corresponding to an amount of EUR 74,000.

12. Furthermore, the Chamber recalled that it remained uncontested that the Respondent failed to remit any remuneration as of July 2018, and therefore established that the Respondent, without any valid reason, failed to remit to the Claimant remuneration totalling EUR 110,000, corresponding to the salaries as of July 2018 until December 2018.

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 Respondent is to be held liable for breach of contract without just cause. Furthermore, taking into consideration the Chamber’s constant practice in similar matters where there has been no written notice of termination, the DRC decided that the contract is to be considered terminated on the date of the Claimant’s claim for breach of contract in front of FIFA, i.e. 27 December 2018.

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. As established above (cf. point II.12.), 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 110,000 as outstanding remuneration, corresponding to the salaries as of July 2018 until December 2018.

16. 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.

17. 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.

18. 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.

19. 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.

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. 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.

21. The Chamber then turned its 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.

22. 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 90,000 as remuneration for the period as from 1 January 2019 until 31 May 2019. Consequently, the Chamber concluded that the amount of EUR 90,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

23. 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.

24. In this respect, the Chamber recalled that the Claimant had found new employment with the club of Country D, Club E, as from 18 January 2019 until 31 May 2020, which remuneration during the overlapping period shall be deducted, leading to a mitigated compensation in the amount of EUR 25,000.

25. 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.

26. With the above in mind, the Chamber decided to award the Claimant additional compensation corresponding to three monthly salaries, i.e. EUR 54,000, in accordance with the above-mentioned provision.

27. 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 79,000 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

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

29. 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.

30. 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.

31. 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.

32. 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 outstanding remuneration in the amount of EUR 110,000, plus interest at a rate of 5 % per year until the date of effective payment, as follows :

a. as of 1 August 2018 on the amount of EUR 20,000;

b. as of 1 September 2018 on the amount of EUR 18,000;

c. as of 1 October 2018 on the amount of EUR 18,000;

d. as of 1 November 2018 on the amount of EUR 18,000;

e. as of 1 December 2018 on the amount of EUR 18,000;

f. as of 1 January 2019 on the amount of EUR 18,000.

3. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of EUR 79,000.

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 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 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).

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.

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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