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 9 May 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Country B, on 9 May 2019,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), member

Eirik Monsen (Norway), member

Pavel Pivovarov (Russia), member

Todd Durbin (USA), 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 30 July 2018, the player of Country B, Player A (hereinafter: the Claimant or the player), and the club of Country D, Club C (hereinafter: the Respondent or the club), concluded an employment contract (hereinafter: the contract), valid as of 30 July 2018 until 30 July 2020.

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

 EUR 2,000 as monthly salary;

 EUR 10,000 as bonus for “winning the championship”.

3. Art. 4 of the contract, with the subtitle “the club’s obligations towards the football player”, contains, inter alia, the following clauses:

 “Payment of expenses for the treatment of sports injuries occurring during the performance of duties – engagement in sports activities”;

 “Providing meals and accommodation while at the Club”.

4. Art. 6 of the contract reads, inter alia, as follows: “The contract must be signed by the contracting parties and will enter into force on the date of verification by the authorized body of the Football Federation”.

5. On 11 October 2018, the player sent a letter to the club and requested payment of the outstanding amount of EUR 4,500, corresponding to his salaries for August and September 2018 as well as accommodation costs of EUR 250 per month. The player informed the club that he would exercise his right to terminate the contract if the outstanding dues were not remitted within 15 days.

6. On 18 October 2018, the player sent another letter to the club, stating that he was not allowed to train with the team anymore and requested to immediately be reinstated to the team’s training.

7. On 12 November 2018, the player terminated the contract with the club in writing due to club’s non-fulfilment of its financial obligations.

8. On 10 December 2018, the player lodged a claim in front of FIFA against the club for breach of contract and requested the following amounts:

 EUR 6,799.20 corresponding to outstanding salaries for 3 months and 12 days;

 EUR 41,465.20 as compensation corresponding to the residual value of the contract, corresponding to the period of 20 months and “22 days”;

 EUR 20,000 corresponding to the championship bonus in case the club would win it during the seasons 2018/2019 and/or 2019/2020;

 EUR 180 as reimbursement of medical costs;

 EUR 6,000 as reimbursement for accommodation costs (24 months of EUR 250);

 EUR 12,000 as additional compensation corresponding to monthly salaries.

Furthermore, the player requested interest of 5% p.a. as of 12 November 2018.

9. In his claim, the player maintained that the club failed to remit any salaries even though the player started training with the team.

10. Furthermore, the player argued that he put the club in default, but instead of remitting his salaries, the club excluded him from the trainings of the team.

11. As a consequence of the non-payment of his salaries, the player held that he terminated the contract with just cause on 12 November 2018.

12. The player further referred to the additional compensation based on art. 17 of the Regulations and argued that since the club failed to remit any salaries and did exclude him from training, he would be entitled to an additional compensation of six instead of three monthly salaries.

13. Regarding the reimbursement of his medical costs, the player submitted receipts of payments in hospitals.

14. Moreover, the player claimed being entitled to reimbursement of his accommodation costs since the club agreed to remit EUR 250 to him per month in this regard.

15. On 24 December 2018, the club sent a letter to the player arguing that, due to the medical condition of the player and since he did not provide “proof of his health condition”, the contract could not be validated and confirmed by the Football Federation of Country D (hereinafter: Football Federation of Country D), and as a consequence thereof remained invalid.

16. In its reply to the claim, the club rejected the player’s claim and argued that the contract never entered into force since it could not be validated and confirmed by the Football Federation of Country D due to the player’s mistake.

17. Furthermore, the club maintained that the player was injured, which was noted already on the second day of training. Subsequently, the club requested him to undergo a medical examination and to provide the club with “proof of his health condition”.

18. According to the club, the player was then informed that he would not be permitted to train with the team anymore, before receiving “medical clearance”.

19. The club further held that the player acted in bad faith by not revealing prior injuries before signing the contract.

20. As a consequence of the player not delivering “proof of his health condition”, the club stated that it could not “present the contract of services entered into to the Football Federation of Country D for verification and validation”.

21. In this regard, the club referred to art. 6 of the contract (cf. point I.4. above) and to the Regulations of the Football Federation of Country D, and brought forward that it was informed by the Football Federation of Country D that “the signed contract is not valid if it’s not confirmed by Football Federation of Country D”, which lead the club to conclude that the contract never entered into force.

22. The player confirmed that he remained unemployed as of 12 November 2018.

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 10 December 2018. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; 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 of Country B and a club of Country D.

3. In continuation, 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 10 December 2018, the June 2018 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, the Chamber noted that the parties entered into an employment contract valid as of 30 July 2018 until 30 July 2020, which entitled the Claimant, inter alia, to a monthly salary of EUR 2,000.

6. In continuation, the DRC acknowledged that it remained undisputed that the Claimant, on 12 November 2018, after having put the club in default previously, sent a letter to the Respondent, by means of which he terminated the contract due the club’s non-compliance with its financial obligations. According to the player, the club failed to pay any remuneration due under the existing contract. In line with the above, the Claimant argued having terminated the contract with just cause and therefore requested to be awarded with his outstanding dues, reimbursement of health and accommodation costs, bonuses as well as compensation for breach of contract.

7. The Chamber further took notice of the Respondent’s argumentation that the player acted in bad faith since he allegedly failed to reveal a pre-existing injury before signing the contract. Furthermore, the club argued that the contract was never verified by its Federation and therefore did not enter into force. In this regard, the Respondent requested to reject the player’s claim.

8. In view of the allegations and arguments presented by the parties involved in the present matter, the Chamber underlined that in order to be able to establish as to whether, as claimed by Claimant, a breach of contract had been committed by the Respondent, it should first of all pronounce itself on the issue of the validity of the contract, which was signed by and between the player and the club.

9. In this context, the Chamber duly noted that whereas both parties acknowledged having signed the contract, the Respondent argued that the contract cannot be considered as valid since, due to the player’s mistake, the Football Federation of Country D could not “validate” the contract as foreseen in its art. 6 (cf. point I.4. above) and therefore, the contract did not enter into force.

10. In this respect, the DRC considered relevant to recall 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 validation by a Federation, which are of the sole responsibility of one party and on which the other party has no influence.

11. In continuation, the members referred to the DRC’s longstanding jurisprudence, according to which the responsibility to conduct the necessary medical examinations prior to the signing of an employment contract is incumbent on the Respondent. A club wishing to employ a player has to exercise due diligence and carry out all relevant medical examination prior to entering into an employment contract with a player.

12. On account of the foregoing, the Chamber came to the firm conclusion that the arguments of the Respondent cannot be upheld and that the contract signed by and between the Claimant and the Respondent was a valid employment contract binding the parties as from 30 July 2018 until 30 July 2020.

13. Having established the above, the members of the Chamber turned their attention to the second issue at stake, namely whether the contract was terminated by the Claimant with or without just cause and to decide on the consequences thereof.

14. 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.

15. In doing so, the DRC recalled that it has remained undisputed that the Claimant terminated the contract on 12 November 2018 by means of a letter, referring to outstanding remuneration in the amount of EUR 6,799.20, which correspond to more than three monthly salaries.

16. In this context, the members of the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant any remuneration under the contract and that at the time of termination remuneration totalling EUR 6,000, corresponding to three monthly salaries as from August to October 2018, remained outstanding. What is more, the Chamber took into account that the Claimant had put the Respondent in default before terminating the contract.

17. 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 12 November 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.

18. 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.

19. Bearing in mind the above, the Chamber, in accordance with the general legal principle of pacta sunt servanda, decided that the club is liable to pay to the player the amount of EUR 6,000 with regard to the remuneration due to him between August and October 2018.

20. Moreover, taking into account the player’s claim, art. 4 of the contract and the documentation submitted by the Claimant, the DRC decided that the player shall be reimbursed for the requested medical costs in the amount of EUR 180.

21. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a., on the aforementioned amounts, as of 12 November 2018 until the date of effective payment.

22. Furthermore, taking into account the player’s claim and in the absence of any monetary value in the contractual condition relating to accommodation and of any documentary evidence in this connection (cf. art. 12 par. 3 of the Procedural Rules), the Chamber had to reject the Claimant’s claim amounting to EUR 6,000 relating to the alleged accommodation costs.

23. As regards the Claimant’s claim relating to the bonuses in connection with the club’s possible win of the championship during the seasons 2018/2019 and/or 2019/2020, the members of the Chamber stressed that the payment and the amount of such bonuses are linked to matches to be played in the future, i.e. after the termination of the relevant contract, and, therefore, are fully hypothetical. Consequently, the Chamber decided to reject such claim.

24. 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.

25. 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.

26. 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.

27. As a consequence, the DRC determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the parameters set out in art. 17 par. 1 of the Regulations.

28. In line with the above, 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.

29. 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 42,000 as remuneration for the period as from November 2018 until 30 July 2020. Consequently, the Chamber concluded that the amount of EUR 42,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

30. 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. In this respect, the DRC deemed it necessary to refer to the first sentence of art. 17 par. 1 lit. ii) of the Regulations, according to which, in case the player signed a new contract by the time of the decision, the value of the new contract for the period corresponding to the time remaining on the prematurely terminated contract shall be deducted from the residual value of the contract that was terminated early (the ”Mitigated Compensation”).

31. However, the members of the Chamber noted that the player remained unemployed as from the termination of the contract until the date of the decision and, therefore, decided that he should be entitled to receive compensation in the amount of EUR 42,000 for this period of time, corresponding to the residual value of the contract.

32. Subsequently, the Chamber turned its attention to the second sentence of art. 17 par. 1 lit. ii) of the Regulations, according to which, in addition to the mitigated compensation, the player shall be 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.

33. With the above in mind, and since according to art. 17 par. 1 lit ii) the overall compensation may never exceed the rest value of the prematurely terminated contract, the DRC decided to reject the player’s request for additional compensation.

34. Consequently, on account of the above-mentioned considerations, the Chamber decided that the Respondent must pay the amount of EUR 42,000 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

35. 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. 10 December 2018, until the date of effective payment.

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

37. 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.

38. 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.

39. 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.

40. 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 EUR 6,180 as outstanding remuneration, plus 5% interest p.a. as of 12 November 2018 until the date of effective payment.

3. The Respondent has to pay to the Claimant the amount of EUR 42,000 as compensation for breach of contract, plus 5% interest p.a. as of 10 December 2018 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 amount 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 plus interest 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 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. 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