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

Eirik Monsen (Norway), member

Johan van Gaalen (South Africa), member

Pavel Pivovarov (Russia), member

Daan de Jong (The Netherlands), 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 31 August 2015, the Player of Country B, Player A, (hereinafter: the player or the Claimant) and the club Of Country D, club C, (hereinafter: the club or the Respondent) signed an employment contract (hereinafter: the contract) valid as from the date of its signature until 31 May 2016.

2. In accordance with clause 3 of the contract, the club undertook to pay to the player, inter alia, the total amount of EUR 209,000, as follows:

- EUR 50,000 on 31 August 2015;

- EUR 13,500 on 30 September 2015;

- EUR 13,500 on 31 October 2015;

- EUR 13,500 on 30 November 2015;

- EUR 13,500 on 1 January 2016;

- EUR 13,500 on 31 January 2016;

- EUR 13,500 on 28 February 2016;

- EUR 51,000 on 31 March 2016;

- EUR 13,500 on 30 April 2016;

- EUR 13,500 on 31 May 2016.

3. Furthermore, paragraph 1 of the section named “Special Provisions”, under art. 3 of the contract (hereinafter: paragraph 1 of the contract), reads as follows: “If the club doesn’t realize their payment undertakings within 90 days following the payment dates, the football player has the right to annul the contract as one-sided immediately by sending a notification and allowing a period of 1 month”.

4. In addition, paragraph 10 of the section named “Special Provisions”, under art. 3 of the contract (hereinafter: paragraph 10 of the contract), reads as follows: “Payments made or which will be made under the name of down payment or guaranteed money, will have the quality of advance of payment and as a result of football player’s serving at the club at the end of season, they will be accepted as progress payment. If the football player leaves the club in halftime for any season (just or unjust annulment), the yearly down payment or guaranteed money will be proportionated as per the period he stayed at the club and the remaining portion will be set off the monthly payments”.

5. On 22 December 2015, the player put the club in default of payment, in writing, of the amount of EUR 40,500 corresponding to the monthly instalments due in September, October and November 2015 –in the amount of EUR 13,500 each–, granting the club a seven days’ deadline to remedy the default.

6. Subsequently, on 6 January 2016, the player unilaterally terminated the contract, in writing, since the club allegedly failed to remedy the default.

7. Thereafter, on 20 September 2016, the player sent a second default notice to the club, requesting the latter to pay the amount of EUR 67,500, corresponding to the monthly instalments due in September 2015, October 2015, November 2015 and January 2016; granting the club a ten days’ deadline to comply with its financial obligations.

8. In reply thereof, on 30 September 2016, the club sent a letter to the player, where the former firstly stated that, during the season 2015/2016, the club’s income decreased and “payment difficulties showed up”. Nevertheless, the club held that the player terminated the contract without just cause on 6 January 2016, since –according to paragraph 1 of the contract– “if payments are not made within 90 days, the agreement is terminated by giving one month period”; requirement with which the player did not comply, according to the club.

9. On 24 May 2017, the player lodged a claim against the club before FIFA, requesting outstanding remuneration and compensation for breach of contract, as noted below: a) Outstanding remuneration in the amount of EUR 54,000, broken down by the player as follows: - EUR 13,500 corresponding to the instalment due on 30 September 2015; - EUR 13,500 corresponding to the instalment due on 31 October 2015; - EUR 13,500 corresponding to the instalment due on 30 November 2015; - EUR 13,500 corresponding to the instalment due on 1 January 2016. In addition, the player requested interest of 5% p.a. as from the due dates until the date of effective payment. b) Compensation for breach of contract in the amount of EUR 105,000, broken down by the player as follows: - EUR 13,500 corresponding to the instalment due on 31 January 2016; - EUR 13,500 corresponding to the instalment due on 28 February 2016; - EUR 51,000 corresponding to the instalment due on 31 March 2016; - EUR 13,500 corresponding to the instalment due on 30 April 2016; - EUR 13,500 corresponding to the instalment due on 31 May 2016.

In addition, the player requested interest of 5% p.a. as from the date on which the claim was lodged, i.e. 24 May 2017, until the date of effective payment.

10. In his claim, the player stressed that he “has fulfilled all his obligations towards the Respondent” but the Respondent “has never fully and timely paid the wages” the Claimant was entitled to. Therefore, according to the player, he had no alternative but to terminate the contract on 6 January 2016. Furthermore, the player explained that, due to the lack of payment of his wages, he has “experienced vast difficulties”, since he had “designed his life and plans within the scope of [the contract]”.

11. On its part, the club rejected the arguments raised by the player and argued the following:

a. That, according to art. 28 of the Regulations on the Status and Transfer of Players issued by the Football Federation of Country D (hereinafter: Football Federation of Country D), in order for a player to have just cause to terminate his contract, he must have put the club in default of payment, granting the latter 30 days to remedy the default and, only 7 days after that deadline had expired, the player might terminate the contract. In this regard, the club held that the player terminated the contract without just cause on 6 January 2016, since the player did not comply with the aforementioned provision.

b. Moreover, the club asserted that the player “claims more than his receivables”, since, according to the club, in addition to the instalment of EUR 50,000 paid on 31 August 2015, the club made the following payments to the player:

- 4,000 on 30 October 2015;

- EUR 1,625 on 1 December 2015;

- 2,000 –which according to the club equals to EUR 1,875– on 11 December 2015.

In this respect, the club submitted copy of the banking extracts related to the aforementioned payments.

c. That, according to paragraph 10 of the contract (see point I.4 above), should the player terminate the contract –with or without just cause– “in the winter break”, the player would only be entitled to the moneys corresponding to the period actually worked for the club, which will be calculated on a pro rata basis, considering the whole value of the contract. In this context, the club held that, the whole value of the contract, i.e. EUR 209,000, divided into the total days of the term of the contract, i.e. 275 days, would result in a pro rata entitlement of EUR 760 per day. That being said, the club further held that, since the player terminated the contract on 6 January 2016, he only worked for the club for 128 days. Hence, according to the calculation made by the club, the player, in principle, would only be entitled to EUR 97,280 (corresponding to EUR 760 x 128 days = EUR 97,280); which, after the deduction of the payments already made to the player, i.e. EUR 53,500 (namely 50,000 + 1,625 + 1,875 = EUR 53,500), would result in a final entitlement of EUR 43,780.

d. That, should FIFA deem that the player is entitled to compensation for breach of contract, any earnings received by the player upon entering into a new contract with any other new club shall be deducted from the claimed compensation. In addition, the club stated that, should the salary of the player at the new club be lower than the one stipulated in the contract, the player “is required to bear this loss”.

12. In his replica, the player reiterated his previous arguments as well as his request for relief. In addition, the player made comments as to the argument raised by the club regarding the application of art. 28 of the Regulations issued by the Football Federation of Country D. In this regard, the player held that the said provision aims to “protect the clubs against football players” where the former fail to comply with its financial obligations towards the latter. Moreover, the player held that, since the club was already in default of payment of four monthly instalments, “it won’t make any sense to give an extra time [of 30 days] to the club” to remedy the default. 13. Despite being invited to do so, the Respondent failed to provide any further comments.

14. After being requested by FIFA, the player informed the FIFA administration that he did not sign any new contract during the relevant period, namely as of the date of his unilateral termination until the date of the natural expiry of the contract.

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 24 May 2017. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2017; 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 2019), 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 2019), and considering that the present claim was lodged on 24 May 2017, the 2016 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 31 August 2015 until 31 May 2016, which entitled the Claimant to a total salary of EUR 209,000, broken-down as detailed under point I.2 above.

6. Moreover, the DRC acknowledged that it was undisputed that, on 22 December 2015, the Claimant put the Respondent in default of payment of EUR 40,500, corresponding to the monthly salaries of September, October and November 2015, and thereafter terminated the contract on 6 January 2016.

7. In continuation, the DRC noted that the Claimant alleged that the Respondent breached the contract as it failed to pay him EUR 54,000, corresponding to four monthly salaries. Moreover, the Claimant emphasised that the Respondent was constantly late with the payment of his salaries and stressed that, in view of the above-mentioned circumstances, he terminated the contract with just cause.

8. Equally, the Chamber took note of the reply of the Respondent, which maintained that the Claimant terminated the contract without just cause as he did not put the club in default and terminated the contract in accordance with the time-limits allegedly set by the regulations of the Football Federation of Country D.

9. Moreover, the Respondent argued that it provided the Claimant with the payments listed under point I.11, lit. b. above and that, pursuant to paragraph 10 of the contract, as a consequence of his unilateral termination, he was entitled to the amount of EUR 43,780 only.

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 paragraph I.11 above. In this respect, the members of the Chamber took note that the Claimant did not dispute such payments and, consequently, reached the unanimous conclusion that the following amounts were paid by the Respondent and, thus, shall be deducted from the player’s receivables:

- 4,000, corresponding approximately to EUR 1,248, on 30 October 2015;

- EUR 1,625 on 1 December 2015;

- 2,000, corresponding approximately to EUR 624, on 11 December 2015.

13. As to the club’s argumentation that the Claimant terminated the contract without just cause because he did not comply with the time-limits allegedly provided by the regulations of the Football Federation of Country D, the DRC first took note that the Respondent did not corroborate its allegations with sufficient supporting evidence. Moreover, the members of the Chamber wished to emphasise that the contract at the basis of the dispute does not contain any contractual stipulation regarding the application of the regulations of the Football Federation of Country D invoked by the Respondent.

14. 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 50,503 to the player. Moreover the members of the Chamber pointed out that such amount is equivalent to more than three 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.

15. 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 6 January 2016 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.

16. 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 50,503.

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

a. on the amount of EUR 13,500 as of 1 October 2015 until the date of effective payment;

b. on the amount of EUR 12,252 as of 1 November 2015 until the date of effective payment;

c. on the amount of EUR 11,251 as of 1 December 2015 until the date of effective payment;

d. on the amount of EUR 13,500 as of 2 January 2016 until the date of effective payment.

18. 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.

19. 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.

20. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber acknowledged that the Respondent invoked the application of paragraph 10 of the contract, according to which “Payments made or which will be made under the name of down payment or guaranteed money, will have the quality of advance of payment and as a result of football player’s serving at the club at the end of season, they will be accepted as progress payment. If the football player leaves the club in halftime for any season (just or unjust annulment), the yearly down payment or guaranteed money will be proportionated as per the period he stayed at the club and the remaining portion will be set off the monthly payments”.

21. In this respect, the members of the Chamber stressed that the aforementioned provision is not only clearly unilateral and in favour of the club, but does not constitute a compensation clause, as it does not provide the payment of any compensation, regardless of the termination being with or without just cause. 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 105,000, had the contract been executed until its expiry date.

22. 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.

23. 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 105,000, which is to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.

24. 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. 24 May 2017, until the date of effective payment.

25. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

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 50,503, plus interest, calculated as follows:

a. 5% p.a. on the amount of EUR 13,500 as of 1 October 2015 until the date of effective payment;

b. 5% p.a. on the amount of EUR 12,252 as of 1 November 2015 until the date of effective payment;

c. 5% p.a. on the amount of EUR 11,251 as of 1 December 2015 until the date of effective payment;

d. 5% p.a. on the amount of EUR 13,500 as of 2 January 2016 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 105,000, plus 5% interest p.a. as from 24 May 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 remittances are to be made and to notify the Dispute Resolution Chamber 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. 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