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 12 June 2020

Decision of the

DRC Judge

passed via videoconference, on 12 June 2020,

regarding an employment-related dispute concerning the player Frank Kalanda

BY:

Daan de Jong (Netherlands), DRC Judge

CLAIMANT:

Frank Kalanda, Uganda

RESPONDENT:

AS Kigali, Rwanda

I. FACTS OF THE CASE

1. On 11 July 2017, the Ugandan player, Frank Kalanda, (hereinafter: the Claimant or player), and the club from Rwanda, AS Kigali, (hereinafter: the Respondent or club) concluded an employment contract valid as from the date of signature until 10 July 2020 (hereinafter: the contract), pursuant to which the Respondent undertook to pay the Claimant a monthly salary of 350,000 Rwandan Francs (RWF) and RWF 50,000 for accommodation.

2. On 20 July 2019, the Claimant received a letter from the Respondent dated 15 July 2019, by means of which the latter released the Claimant as a free player.

3. Consequently, on 22 July 2019 and 30 July 2019, the Claimant sent letters to the Fédération Rwandaise de Football Association (FERWAFA) and the Respondent, requesting RWF 4,800,000 corresponding to the salaries and accommodation for the remaining period of the contract, to no avail.

4. On 20 January 2020, the Claimant lodged a claim against the Respondent in front of FIFA for outstanding remuneration and compensation for breach of contract, claiming the following:

a) “Rwanda francs 700,000 as salary arears for the months of July and August 2019;

b) Rwanda francs 100,000 as accommodation spent by the player while in Rwanda for the month of July and August 2019 that remain unpaid by the respondent club contract to terms of the contract;

c) Rwanda francs 1,875,642 as compensation for the residual term of the prematurely terminated contract (11 months). This figure is after the subtraction of the value of the new contract;

d) Or in the alternative, in case para. 26 (a) is denied, we pray that the Claimant be awarded Rwanda Francs 2,216,667 as compensation for the residual term of the prematurely terminated contract (13 months). This amount is also after deduction of the value of the new contract (13 months);

e) Rwanda francs 1,050,000 as damages to the player for the arbitrary conduct of the club and for unilateral termination of the contract within the protected period.

5. The Claimant argued that the Respondent terminated the contract without just cause and he should, therefore, be entitled to the compensation for breach of contract in the amount of the residual value of the contract, taking into account his new contract signed on 26 August 2019 with the Ugandan club, Express Football Club.

6. Despite having invited to do so, no correspondence has been received from the club, AS Kigali, in response to the claim.

II. CONSIDERATIONS OF THE DRC JUDGE

1. First of all, the DRC judge analysed whether he was competent to deal with the matter at stake. In this respect, the DRC judge took note that the present matter was submitted to FIFA on 20 January 2020 and decided on 12 June 2020. Thus, the June 2020 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.

2. Subsequently, the DRC judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 and 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the DRC judge is competent to deal with the matter at stake, which concerns an employment–related dispute with an international dimension.

3. Furthermore, the DRC judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, the DRC judge confirmed that, in accordance with art. 26 par. 1 and par. 2 of the said Regulations and considering that the present claim was lodged in front of FIFA on 20 January 2020, the January 2020 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC judge and the applicable regulations having been established, the DRC judge entered into the substance of the matter. In this respect, the DRC judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the DRC judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. In this respect, the DRC judge acknowledged that, on 11 July 2017, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 10 July 2020, pursuant to which the Respondent undertook to pay to the Claimant a monthly salary of RWF 350,000 and RWF 50,000 for accommodation.

6. Moreover, the DRC judge took that on 20 July 2019, via letter dated 15 July 2019, the Respondent unilaterally terminated the contract by having released the Claimant as a free player.

7. Having recalled the above, the DRC judge observed that, the Claimant, in his claim, requested outstanding remuneration and compensation for breach of contract.

8. The DRC judge further noted that despite having been invited to do so, the Respondent did not submit an answer to the claim. By not presenting its position to the claim, the DRC judge was of the opinion that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

9. Furthermore, as a consequence of the aforementioned consideration, the DRC judge concurred that in accordance with art. 9 par. 3 of the Procedural Rules, he shall take a decision upon the basis of the documentation already on file; in other words, upon the statements and documents presented by the Claimant.

10. Bearing in mind the foregoing, the DRC judge considered the documentation on file and deemed that the main issue of the present dispute is to determine whether the employment contract was unilaterally terminated with or without just cause by the Respondent.

11. In this respect, the DRC judge referred to the termination letter of the club dated 15 July 2019, in which it stated inter alia that the player “has been released by AS KIGALI and is free to join any club of his choice.”

12. In continuation, the DRC judge was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract without prior warning. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to assure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can always only be an ultima ratio.

13. Referring to the concrete circumstances of the case, the DRC judge noted that no evidence was provided by the Respondent of any attempt of the club to preserve the contract before unilaterally terminating it and that the termination of the contract and the claim remained unanswered by the Respondent. Furthermore, no justification whatsoever was given by the club to terminate the contract with the player. Thus, the DRC judge concluded that the Respondent did not have just cause to prematurely terminate the employment contract with the Claimant.

14. On account of the above, the DRC judge decided that the Respondent did not have a just cause to unilaterally terminate the employment relationship with the Claimant on 20 July 2019 and, consequently, the latter must bear the financial and/or sporting consequences of the early termination, in addition to any outstanding payments on the basis of the relevant employment contract.

15. First of all, the DRC judge concurred that the Respondent must fulfill its obligations as per employment contract in accordance with the general legal principle of “pacta sunt servanda”.

16. Consequently, the DRC judge firstly noted that the player claims that on the date of termination his salaries for July and August 2019 were outstanding, however since the termination occurred on 20 July 2019 the aforementioned amounts had not yet fallen due. Thus, no outstanding remuneration is due to the Claimant.

17. Having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the DRC judge focused his attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract.

18. In continuation, the DRC judge focused his attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the DRC Judge 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 DRC judge held that he 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 DRC judge 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 DRC judge 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 DRC judge 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.

21. The DRC judge then turned his 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 him to be essential. The DRC judge deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows him to take into account both the existing contract and the new contract in the calculation of the amount of compensation.

22. Bearing in mind the foregoing, the DRC judge proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its date of termination without just cause by the Respondent, i.e. 20 July 2019, until the end of the contract, and concluded that the Claimant would have received in total RWF 4,930,000 as remuneration had the contract been executed until its expiry date, taking into account his monthly salary as well as the monthly accommodation fee. Consequently, the DRC judge concluded that the amount of RWF 4,930,000 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 DRC judge 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 judge, 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. The DRC judge noted that the Claimant signed an employment contract with the Ugandan club, Express Football Club, valid as from 26 August 2019 until 31 May 2021, i.e. 21 months, in accordance with which he would be remunerated with a monthly salary of Ugandan Shilling (UGX) 940,000 (i.e. UGX 700,000 as salary and UGX 240,000 as transportation fee) and a sign on fee of UGX 4,000,000. Considering that the contract concluded by the Claimant and the Respondent would have expired on 10 July 2020, and in accordance with the constant practice of the Dispute Resolution Chamber and the general obligation of the Claimant to mitigate his damages, the amount that shall to be taken into account in the calculation of the amount of compensation for breach of contract is equal to UGX 13,703,220. Such remuneration under the new employment contract corresponds approx. to RWF 3,339,920.

24. In view of all of the above, the DRC judge decided that the Respondent must pay the amount of RWF 1,590,080 to the Claimant as compensation for breach of contract without just case, which is considered by the DRC judge to be a reasonable and justified amount as compensation.

25. Furthermore, taking into account the consideration under number II./3. above, the DRC judge 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.

26. In this regard, the DRC judge 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.

27. Therefore, bearing in mind the above, the DRC judge 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.

28. Finally, the DRC judge 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.

29. The DRC judge concluded his deliberations in the present matter by establishing that Claimant’s claim is partially accepted and that any further claim lodged by the Claimant is rejected.

III. DECISION OF THE DRC JUDGE

1. The claim of the Claimant, Frank Kalanda, is partially accepted.

2. The Respondent, Club AS Kigali, has to pay to the Claimant compensation for breach of contract without just cause in the amount of RWF 1,590,080.

3. Any further claims of the Claimant are rejected.

4. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

5. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount due, plus interest as established above is not paid by the Respondent within 45 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:

 1.

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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players). 2.

In the event that the payable amount as per in this decision is 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 the FIFA Disciplinary Committee.

7. The ban mentioned in point 6. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Procedural Rules).

CONTACT INFORMATION:

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