F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2019-2020) – fifa.com – atto non ufficiale – Decision 16 August 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 16 August 2019,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Pavel Pivovarov (Russia), 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 12 August 2016, the Player of Country B, Player A (hereinafter: the Claimant) signed an employment contract with the Club of Country D, Club C (hereinafter: the Respondent) valid from 12 August 2016 until 31 May 2017.

2. Under the terms of article 3 of the contract, the Claimant was entitled to receive, inter alia, the following amounts:

a. EUR 40,000 as “advance payment”, payable on 15 August 2016;

b. EUR 120,000 as “salary payments”, payable in 10 monthly instalments of EUR 12,000 each, as from 1 September 2016 until 1 June 2017, always on the first day of the month.

3. On 21 March 2017, the Claimant put the Respondent in default of payment of the amount of EUR 48,000, corresponding to 4 outstanding salaries for the months of December 2016 to March 2017. The Claimant gave the Respondent a deadline of seven days by which to pay him the specified amount, failing which he would open proceedings before FIFA.

4. By means of a correspondence dated 3 May 2017, the Claimant informed the Respondent that he was terminating the employment contract and that “the professional footballer contract was dissolved for justifiable reasons unilaterally”.

5. On 20 October 2017, the Claimant lodged a claim against the Respondent in front of FIFA maintaining that he had just cause to terminate the contract and requesting to be awarded the total amount of EUR 84,000, consisting of:

a. EUR 48,000 as outstanding salaries for the months of December 2016 to March 2017 (4 x EUR 12,000), plus 5% interest p.a. as from the relevant due dates;

b. EUR 36,000 as compensation for breach of contract, corresponding to the remaining value of the contract, plus 5% interest p.a. as from the date of claim.

6. More in particular, the Claimant argued that, while he duly performed his duties towards the Respondent during the employment relationship, the latter did not fulfil its financial obligations. In this respect, he explained that “despite our countless efforts, the [Respondent] did not pay the amount on the granted time limit and therefore the contract dated 12 August 2016 is terminated unilaterally and with just cause by the [Claimant] on 3 May 2017”.

7. In its reply, the Respondent alleged that it had paid the following amounts to the player “until the date of termination” of the contract:

a. EUR 54,000 on 14 July 2016;

b. EUR 20,000 on 26 August 2016;

c. EUR 10,000 on 30 September 2016;

d. EUR 34,000 on 2 December 2016;

e. EUR 12,000 on 5 January 2017;

f. EUR 5,000 on 20 March 2017.

8. In this regard, the Respondent affirmed that “due to economic difficulties of the [Claimant], my client previously paid EUR 54,000 on 14 July 2016 to the [Claimant] before signing the contract” and held that “because of beginning date of the [Respondent]’s transfer season, foregoing employment contract signed on 12 August 2016”. Furthermore, the Respondent stated that “as it can be seen, my client paid 135.000 Euros to the [Claimant] on the date of termination and as of the date of notification, which is 21/03/2017, the [Claimant] is owed 124.000 Euros”.

9. Furthermore, the Respondent reaffirmed that a total of EUR 135,000 had been paid to the Claimant and submitted the following documentation drafted in Language of Country D in support of its argumentation:

a. An undated bank account statement from the “Bank E”, drafted in Language of Country D and titled “Transactions”, which seems to indicate that the amount of “179,000” had been paid to the Claimant by the Respondent on 14 July 2016;

b. A bank account statement dated 31 August 2016, from the “Bank E”, drafted in Language of Country D and titled “Transactions”, which seems to indicate that the amount of “66,440” had been paid to the Claimant by the Respondent on 26 August 2016;

c. A bank account statement dated 11 October 2017, from the “Bank E”, drafted in Language of Country D and titled “Transactions”, which seems to indicate that the amount of “10,000” had been paid to the Claimant by the Respondent on 30 September 2016;

d. A bank account statement dated 22 June 2018, from the “Bank F”, drafted in Language of Country D and titled “Transactions”, which seems to indicate that the amount of EUR 34,000 had been paid to the Claimant by the Respondent on 2 December 2016;

e. An untranslated payment order dated 5 January 2017 made by the Respondent in favor of the Claimant for an amount of EUR 12,000;

f. An untranslated payment order dated 17 March 2017 made by the Respondent in favor of the Claimant for an amount of EUR 5,000.

10. In his replica, the Claimant reiterated his previous arguments and acknowledged that the Respondent presented several payments receipts drafted in Language of Country D only.

11. With regard the payment of EUR 54,000 dated 14 July 2016, the Claimant affirmed that the parties signed a first contract (hereinafter: the first contract), which was allegedly valid as from 6 January 2016 until 31 May 2017 and which was allegedly terminated by the Claimant with just cause on 31 May 2016 “due to unpaid salaries”.

12. In this regard, the Claimant stated that “after the termination, the [Respondent] wanted to continue to benefit from the services of the [Claimant] and therefore the parties agreed to sign the disputed agreement”. Moreover, the Claimant held that he “wanted to secure the non-paid allowances arising from the agreement dated 6 January 2016 in the amount of EUR 54,000 and requested the payment to be completed before signing the new agreement”. What is more, the Claimant declared that the Respondent had to pay said amount on 14 July 2016 and considered that “this payment belongs to the second half of the 2015-2016 season and cannot be deducted”. In this regard, the player provided a payment receipt dated 14 July 2016, which contains the following reference: “Payment referring to the allowances”.

13. With regard the payment of EUR 20,000 dated 26 August 2016, the Claimant held that “according to the disputed agreement dated 12 August 2016, the [Respondent] is obliged to pay the [Claimant] EUR 20,000 on 25 July 2016 as down payment” and affirmed that “the payment made in the amount of EUR 20,000 dated 26 August 2016 refers to the payment of 25 July 2016 as down payment”.

14. With regard the payment of EUR 10,000 dated 30 September 2016, the Claimant stated that such payment refers “to the partial payment of 15 August 2016 as down payment”.

15. With regard the payment of EUR 34,000 dated 2 December 2016, the Claimant affirmed that said payment refers to the Claimant’s outstanding salaries for the months of September and October 2016 (i.e. 2 X EUR 12,000), as well as the remaining part of the advance payment (i.e. EUR 10,000).

16. Moreover, with regard the payment of EUR 12,000 dated 5 January 2017, the Claimant affirmed that said payment refers to the Claimant’s outstanding salary for the month of November 2016.

17. Equally, and with regard the alleged payment of EUR 5,000 made by the Respondent on 20 March 2017, the Claimant affirmed that the Respondent did not “prove that it paid the [Claimant] said amount” and held that according to art. 9 par. 1 lit. e of the Procedural Rules, all evidence such as payment receipt have to be translated into one of the official FIFA languages. In this regard, the Claimant stated that the Respondent failed to submit the necessary translations into one of the FIFA language and “therefore the documents presented by the [Respondent] cannot be taken into account and must be rejected”.

18. Despite having been invited by FIFA to do so, the Respondent did not submit any additional comments on the matter at hand.

19. The Claimant informed FIFA that he had not signed any new employment contract with another club until 1 June 2017.

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 Claimant submitted his claim to FIFA on 20 October 2017. Consequently, the 2017 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 2019) the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute between a Player of Country B and a Club of Country D.

3. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 12 August 2019 by means of which the parties were informed of the composition of the Chamber, the member Eirik Monsen and the member Daan de Jong refrained from participating in the deliberations in the case at hand, due to the fact that the member Eirik Monsen has the same nationality as the Claimant and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member Daan de Jong refrained from participating and thus the Dispute Resolution Chamber adjudicated the case in presence of three members in accordance with art. 24 par. 2 of the Regulations.

4. 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 2019), and considering that the claim was lodged on 20 October 2017, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

5. 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.

6. First, the Chamber noted that the parties entered into an employment contract valid as of 12 August 2016 until 31 May 2017, which entitled the Claimant to a total salary of EUR 160,000, broken-down as detailed under point I.2 above.

7. Moreover, the DRC acknowledged that it was undisputed that, on 21 March 2017, the Claimant put the Respondent in default of payment of EUR 48,000, corresponding to the monthly salaries of December 2016 to March 2017, and thereafter terminated the contract on 3 May 2017.

8. In continuation, the DRC noted that the Claimant alleged that the Respondent breached the contract as it failed to pay him his salaries since December 2016 and stressed that, in view of the above-mentioned circumstances, he terminated the contract with just cause.

9. Equally, the Chamber took note of the reply of the Respondent, which maintained that the Claimant terminated the contract without just cause and that it paid to the Claimant the total amount of EUR 135,000 up to the date of termination of the contract as described in point I.7 above. In this regard, the Respondent argued that it provided the Claimant with the payments listed under point I.9 above.

10. In view of the foregoing considerations, the Chamber deemed that the underlying dispute in the matter at hand was whether the relevant employment contract had been terminated by the Claimant with or without just cause and, depending on this finding, it would have to determine the consequences of said termination.

11. In continuation, the members of the Chamber referred to the basic principle of burden of proof, as established in art. 12 par. 3 of the Procedural Rules, according to which any party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

12. With the above in mind, the DRC first went on to analyse the banking extracts submitted by the Respondent in order to prove the execution of the payments under paragraphs I.7 and I.9 above. In this respect, the DRC noted that the Claimant acknowledged all the payment made by the Respondent under point I.7 a) to e) above, but claimed that these payments covered other outstanding amounts due to him.

13. In this context, and with regard to the amount of EUR 54,000 paid by the Respondent to the Claimant on 14 July 2016, the DRC noted that the Claimant affirmed that the parties had been bound by a previous employment relationship and that said payment “belongs to the second half of the 2015-2016 season”. In this regard, the DRC observed that said amount had been paid to the Claimant prior to the signature of the contract at hand and that such payment could not be linked to any amount due under the contract. Consequently, the DRC decided that it could not take said payment into account.

14. Furthermore, and concerning the Respondent’s allegation that it had paid to the Claimant EUR 5,000 on 20 March 2017, the DRC, 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, observed that the Respondent had not provided any evidence duly translated into one of the four FIFA official languages in support of the alleged payment, which had been contested by the Claimant. Consequently, the DRC decided that it could not take the said alleged payment into account.

15. In continuation, the members of the Chamber observed that, according to art. 3 of the contract, the Claimant was entitled to receive from the Respondent as from the date of signature of the contract (i.e. 12 August 2016) until the date of termination (i.e. 3 May 2017), the total amount of EUR 148,000.

16. In this context, the Chamber noted that the Claimant acknowledged having received the total amount of EUR 76,000 from the Respondent during the same period of time. Consequently, the DRC reached the unanimous conclusion that the following amounts were paid by the Respondent and, thus, shall be deducted from the Claimant’s receivables:

- EUR 20,000 on 26 August 2016;

- EUR 10,000 on 30 September 2016;

- EUR 34,000 on 2 December 2016;

- EUR 12,000 on 5 January 2017.

17. On account of the aforementioned considerations, and considering that the Respondent did not invoke any other reason to justify the non-payment of the Claimant’s salaries, the Chamber deemed that the Respondent, on the date of termination of the contract, failed to pay the amount of EUR 72,000 to the Claimant. Moreover the members of the Chamber pointed out that such amount is equivalent to six monthly salaries and concluded that, as the Respondent failed to pay said remuneration without any valid reason, it could be established that the Respondent had seriously neglected its contractual obligations towards the Claimant in a continuous manner and for a significant period of time.

18. In view of the above, and taking into consideration the Chamber’s longstanding jurisprudence in this respect, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 3 May 2017 and that, as a result thereof, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

19. In continuation, having established the above, the Chamber focused its attention on the consequences of such termination. In this regard, in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent shall pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination, i.e. EUR 72,000.

20. In addition, taking into consideration the foregoing and the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as follows:

a. 5% p.a. over the amount of EUR 12,000 as from 1 January 2017 until the date of effective payment;

b. 5% p.a. over the amount of EUR 12,000 as from 1 February 2017 until the date of effective payment;

c. 5% p.a. over the amount of EUR 12,000 as from 1 March 2017 until the date of effective payment;

d. 5% p.a. over the amount of EUR 12,000 as from 1 April 2017 until the date of effective payment;

e. 5% p.a. over the amount of EUR 24,000 as from 20 October 2017 until the date of effective payment.

21. Furthermore and having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to the aforementioned outstanding remuneration.

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

23. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained 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.

24. 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. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the contract as from its termination and concluded that the Claimant would have been entitled to receive EUR 12,000, had the contract been executed until its expiry date, i.e. 31 May 2017.

25. In continuation the Chamber assessed whether the Claimant has 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 DRC, such remuneration under a new employment contract(s) shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

26. In this respect, the members of the DRC acknowledged that the Claimant was not able to conclude a new employment contract during the relevant period and, as such, was not able to mitigate his damages. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the Respondent must pay the Claimant the amount of EUR 12,000, which is to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.

27. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 20 October 2017, until the date of effective payment.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 72,000, plus 5% interest p.a. as follows:

a. 5% p.a. over the amount of EUR 12,000 as from 1 January 2017 until the date of effective payment;

b. 5% p.a. over the amount of EUR 12,000 as from 1 February 2017 until the date of effective payment;

c. 5% p.a. over the amount of EUR 12,000 as from 1 March 2017 until the date of effective payment;

d. 5% p.a. over the amount of EUR 12,000 as from 1 April 2017 until the date of effective payment;

e. 5% p.a. over the amount of EUR 24,000 as from 20 October 2017 until the date of effective payment.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 12,000, plus 5% interest p.a. on said amount as of 20 October 2017 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

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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. 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

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer