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 3 July 2019

Decision of the

Dispute Resolution Chamber (DRC) judge

passed on 3 July 2019,

by Philippe Diallo (France), DRC judge,

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

club C, Country D

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 9 February 2017, the Country B player, Player A (hereinafter: the Claimant or the player), and the Country D club, club C (hereinafter: the Respondent) concluded an employment contract (hereinafter: the contract), valid as from the date of its signature until 31 January 2018.

2. According to art. 7 of the contract, the Claimant was entitled to receive from the Respondent, inter alia, “a monthly gross amount of EUR 805.00 [payable] by the 20th day of the month for the previous month”.

3. In accordance with art. 8 of the contract: “the [Respondent] undertakes: to ensure that the [Claimant] has the conditions for training and playing in matches”.

4. On 30 March 2017, the Claimant sent a letter to the Respondent, referring to the art. 8 of the contract and requesting the Respondent “to immediately include the [Claimant] in the first team trainings and the preparations for the upcoming matches of [the Respondent]”, as he was “still not a part of the (first) team, nor ever invited to be one”.

5. On 24 April 2017, the Claimant put the Respondent in default of payment of the monthly instalments of February and March 2017, in the amount of EUR 805 each. The Claimant also requested, once again, to be “immediately included in the first team trainings and preparations for the upcoming matches of [the Respondent]”.

6. Subsequently, on 22 May 2017, the Claimant unilaterally terminated the contract in writing on the basis of “non fulfilment of the contractual obligations by the [Respondent]”.

7. On 6 November 2017, the Claimant lodged a claim against the Respondent before FIFA requesting outstanding remuneration and compensation for breach of contract in the total amount of EUR 28,980, plus interest, amount broken down by the Claimant as follows:

- EUR 2,415 as outstanding salaries, corresponding to the monthly instalments as from February 2017 until April 2017 in the amount of EUR 805 each, plus interest since their respective due dates;

- EUR 7,245 as compensation for breach of contract, corresponding to the salaries as from May 2017 until January 2018, in the amount of EUR 805 each, plus interest since the date in which the claim was lodged;

- EUR 19,320 as additional compensation, calculated by the Claimant as the sum of 24 monthly instalments of EUR 805 each, plus interest since the date in which the claim was lodged.

8. In his claim the Claimant held that he terminated the contract with just cause as he “did not receive his wages for the period of three consecutive months” and as the Respondent was no longer interested in his services as the Respondent excluded “him from training which also constitutes a clear breach of contract”. The Claimant further stressed that his professional career has been jeopardized since “he was not allowed to participate in any match of the [Respondent], not even in any training, for no reason […]”.

9. In its reply, the Respondent rejected the Claimant’s claim sustaining that, upon entering into the contract with the Claimant, “fulfilment of the contract obligations became impossible due to changed circumstances”.

10. In this regard, the Respondent explained that since 1 February 2017, it is immersed in a procedure of compulsory settlement before the District Court in Country D.

11. In this sense, the Respondent held that, as a consequence of being immersed in the procedure of compulsory settlement, it did not get the license to perform in the Premiere League of Country D during the season 2017/2018. Therefore, the Respondent allegedly concluded verbal mutual termination agreements with all the players, by which the Respondent allegedly “terminated the contracts with all players since the team [that played] in the Premier league no longer existed”.

12. Furthermore, the Respondent maintained that the Claimant did not fulfil his contractual obligations, since he stopped “training and performing” once the Respondent no longer competed.

13. Moreover, and regarding the Claimant’s requests, the Respondent explained that:

a. Since the Claimant signed the Contract on 9 February 2017, he is “not entitled to the whole monthly amount for February 2017”;

b. For the calculation of compensation, two circumstances should be taken into account:

i. The first one refers to the alleged jurisprudence of the Football Association of Country D, which: “declares up to max 6 months’ salary as a reasonable and justified amount for the compensation for breach of the contract and consequently the [Claimant]’s Claim should be rejected”. The second one refers to the execution of the contract, which, according to the Respondent “actually never started”;

ii. The amount of 19,320 EUR as additional compensation “is clearly set too high”. In this respect, the Respondent “disputes strongly that any amount for the additional damages is payable by the [Respondent] to the [Claimant] because there are absolutely no such reasons for such damages”.

14. In his replica, the Claimant denied the arguments of the Respondent, referred to his previous argumentation and further argued that the fact of being in a procedure of compulsory settlement is “completely irrelevant for the substance of this case” since, according to the Respondent itself, “the ban about compulsory settlement start was published on 1 February 2017 and the contract was signed on 9 February 2017; hence, later”.

15. In addition, the Claimant referred to the Respondent’s argumentation regarding the absences of the Claimant during training sessions and stressed that: “the [Respondent] was clearly invited on numerous occasions to allow the [Claimant] to join the team but the [Claimant] was completely ignored on each and every instance”.

16. In its duplica, the Respondent maintained its previous arguments and held that the fact that the Claimant “tried to contact the [Respondent]” in order to participate in training sessions and matches are “baseless” since the Claimant “did not prove any of it”. In this respect, the Respondent argued that, since the Claimant “was absent from trainings for more than two weeks, the absence of the [Claimant] was a serious violation of the contract, which occurred even before the [Respondent] failed to fulfil its obligations”.

17. By means of its correspondence dated 4 September 2017 and 17 January 2019, the Football Association of Country D confirmed that the Respondent has remained affiliated to the Football Association of Country D and is currently participating in organized football within the competitions of the said association.

18. Upon request of FIFA, the Claimant stated that he did not sign a new professional employment contract since the end of his contract with the Respondent and declared that he joined the Country B club, club E, as an amateur and that he “received no salary from club E or any other football club from 22 May 2017 until 31 January 2018”.

II. Considerations of the DRC judge

1. First of all, the DRC judge analysed whether he was competent to deal with the case at hand. In this respect, the DRC judge took note that the present matter was submitted to FIFA on 6 November 2017. Consequently, the DRC judge concluded that the 2017 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 DRC judge referred to art. 3 par. 2 and 3 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 (edition June 2019) the DRC judge is competent to decide on the present matter, which concerns an employment-related dispute with an international dimension between a Country B player and a Country D club.

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, he 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 present claim was lodged in front of FIFA on 6 November 2017, the 2016 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. The DRC judge started by acknowledging the above-mentioned facts as well as the documentation contained in the file. 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. In particular, the DRC judge recalled that, in accordance with art. 6 par. 3 of Annex 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 TMS.

5. Having said this, the DRC judge proceeded with an analysis of the circumstances surroundings 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.

6. First of all, the DRC judge acknowledged that, on 9 February 2017, the Claimant and the Respondent had concluded an employment contract valid as from the date of its signature until 31 January 2018, pursuant to which the Respondent undertook, inter alia, to pay to the Claimant a monthly salary of EUR 805, payable “by the 20th day of the month for the previous month”.

7. In continuation, the DRC judge noted that, according to the Claimant, during the course of the employment relationship, the Respondent failed to remit to him three monthly salaries, i.e. February, March and April 2017 and excluded him from participating in any training sessions and matches, and, therefore, after having put it in default on 24 April 2017, he had just cause to terminate the employment contract on 22 May 2017. In this regard, the Claimant affirmed that he had no alternative but to terminate the contract and deemed that the Respondent should be held liable for the early termination of said contract.

8. In continuation, the DRC judge took note that the Respondent, for its part, maintained that, since 1 February 2017, it is immersed in a procedure of compulsory settlement before the District Court in Country D, and that, in view of the fact that i) the Respondent’s office is located in Country D and ii) the contractual obligations were to be performed in Country D, law of Country D is applicable and prevails over any other law.

9. In this context, the DRC judge first wished to stress that when deciding a dispute before the DRC, FIFA’s regulations prevail over any national law chosen by the parties. In this regard, the Chamber emphasized that the main objective of the different FIFA Regulations is to create a standard set of rules to which all the actors within the football community are subject to and can rely on. This objective would not be achievable if the DRC would have to apply the national law of a specific party on every dispute brought to it. Therefore, the DRC judge deemed that it is not appropriate to apply the principles of a particular national law to a dispute brought before it but rather the Regulations on the Status and Transfer of Players, general principles of law and, where existing, the Chamber’s well-established jurisprudence.

10. In continuation, the DRC judge noted that the Respondent affirmed that, as a consequence of being immersed in the procedure of compulsory settlement, it did not get the license to perform in the Premiere League of Country D during the season 2017-2018 and that said circumstances allegedly led it to conclude “verbal mutual termination agreements with all the players”, because, pursuant to law of Country D, if contractual obligations become impossible to fulfil, obligations revoke. For these reasons, the Respondent rejected the Claimant’s claim in its entirety.

11. Furthermore, the DRC judge also observed that the Respondent affirmed that the Claimant did not fulfil his contractual obligations, since the Claimant allegedly stopped “training and performing” once the Respondent no longer competed. Furthermore, the DRC judge noted that the Respondent held that “since the [Claimant] was absent from trainings for more than two weeks, the absence of the [Claimant] was a serious violation of the contract, which occurred even before the [Respondent] failed to fulfil its obligations”.

12. In light of the foregoing, the DRC judge considered that the underlying issue in this dispute, considering the parties’ position, was to determine as to whether the Claimant had just cause to terminate the employment contract and to determine the consequences thereof.

13. In this context, and in relation to the documentation and explanations provided by the Respondent, the DRC judge recalled the basic principle of the burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. At this point, the DRC judge deemed it appropriate to clarify that, in the present case, the Respondent bore the burden of proving either the payment of the Claimant’s salaries or that it had a valid reason for not having done so.

14. With respect to the request put forward by the Respondent to reject the claim of the Claimant due to its “procedure of compulsory settlement”, the DRC judge stressed that in accordance with the jurisprudence of both the DRC and the Court of Arbitration for Sport, bankruptcy/insolvency procedures do not affect procedures in front of the DRC. In fact, the DRC judge wished to outline that it is only requested to address the recognition of the Claimant’s claim and not the execution of a possible debt. What is more, the DRC judge noted that according to the correspondence dated 4 September 2017 and 17 January 2019 of the Football Association of Country D, the Respondent remains affiliated to the Football Association of Country D and is currently participating in organized football within the competitions of the said association.

15. On account of the above, the DRC judge was of the unanimous opinion that the Respondent cannot use its situation of insolvency, for which the Claimant holds no liability, as an exemption to avoid complying with its financial obligations towards the Claimant. Consequently, the DRC judge decided that the argumentation of the Respondent cannot be followed on this point. Moreover, the DRC judge was comfortably satisfied with this conclusion by the fact that, the Respondent concluded a contract with the Claimant on 9 February 2017, i.e. after it had entered into the compulsory settlement procedure on 1 February 2017.

16. Furthermore, and concerning the Respondent’s allegations that it allegedly concluded a mutual termination with the player and that the Claimant allegedly stopped “training and participating” once the club no longer competed in the Premiere League of Country D, the DRC judge observed that the Respondent had not provided any evidence in support of its argumentation. Consequently, the DRC judge decided to reject the Respondent’s argument in this connection.

17. In light of the foregoing, the DRC judge concluded that, at the time the Claimant terminated the employment contract on 22 May 2017, three monthly salaries remained outstanding.

18. On account of the above, in light of the persistent violations of the Respondent’s contractually agreed financial obligations, the DRC judge came to the conclusion that on 22 May 2017, the Claimant had just cause to unilaterally terminate the employment contract and that the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

19. Having established that the Respondent is to be held liable for the early termination of the employment contract, 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 established that the Claimant is entitled to receive from the Respondent compensation for breach of contract, in addition to any outstanding payments on the basis of the relevant employment contract.

20. Along those lines, the DRC judge firstly referred to the Claimant’s request regarding the outstanding remuneration at the time of the unilateral termination of the employment contract. In this respect, the DRC judge concurred that the Respondent must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”.

21. Consequently, and bearing in mind that the Claimant terminated his employment contract on 22 may 2017, the DRC judge decided that the Respondent is liable to pay to the Claimant outstanding remuneration in the amount of EUR 3,220, pertaining to his monthly salaries of February to April 2017 as well as of May 2017, since said month was also fully worked by the Claimant.

22. In addition, taking into consideration the Claimant’s Claim, the DRC judge decided to award the latter interest at the rate of 5% p.a. on the amount of EUR 3,220 as from the respective due dates until the date of effective payment.

23. Moreover, and taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

24. In continuation, the DRC judge focused his attention on the calculation of the amount of compensation for breach of contract due to the Claimant by the Respondent 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 player 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.

25. In application of the relevant provision, the DRC judge 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 DRC judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

26. 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. 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 termination and concluded that he would have been entitled to receive EUR 6,440 as remuneration had the employment contract been executed until its regular expiry date, i.e. 31 January 2018.

27. In continuation, the DRC judge assessed as to whether the player 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(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.

28. In this respect, the DRC judge observed that the player remained unemployed since the termination of the employment contract at the basis of the present dispute until its regular expiry, i.e. 31 January 2018. In this context, the DRC judge further noted that, according to the information contained in the TMS, it appears that the Claimant did not enter into a new employment relationship during the relevant period of time. Consequently, the DRC judge decided that the Claimant was entitled to the amount of EUR 6,440 as compensation for breach of contract, which is considered by the DRC judge to be a fair and reasonable amount.

29. In addition, taking into consideration the Claimant’s claim, the DRC judge decided to award the Claimant interest at the rate of 5% p.a. as of the date of the claim, i.e. 6 November 2017, until the date of effective payment.

30. Subsequently, the DRC judge analysed the request of the Claimant corresponding to “additional compensation” in the amount of EUR 19,320. In this regard, the DRC judge deemed it appropriate to point out that the request for said compensation presented by the Claimant had no contractual basis and pointed out that no corroborating evidence had been submitted that demonstrated or quantified the damage suffered. Consequently, the DRC judge decided to reject the Claimant’s request relating to “additional compensation”.

31. The DRC decided that the claim of the Claimant is partially accepted and concluded its deliberations by rejecting any further claim of the Claimant.

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, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 3,220, plus interest, calculated as follows:

a. 5% p.a. on the amount of EUR 805 as of 21 March 2017 until the date of effective payment;

b. 5% p.a. on the amount of EUR 805 as of 21 April 2017 until the date of effective payment;

c. 5% p.a. on the amount of EUR 805 as of 21 May 2017 until the date of effective payment;

d. 5% p.a. on the amount of EUR 805 as of 22 May 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 6,440, plus 5% interest p.a. as from 6 November 2017 until the date of effective payment.

4. In the event that the aforementioned sums plus interest due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

5. Any further claim lodged by the Claimant is rejected.

6. 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 DRC judge of every payment received.

*****

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

e-mail: info@tas-cas.org

For the DRC judge:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives