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 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 12 February 2020,

in the following composition:

Omar Ongaro (Italy), Deputy Chairman

Johan van Gaalen (South Africa), member

José Luis Andrade (Portugal), member

on the claim presented by the player,

Andrej Mrkela, Serbia,

represented by Mr Mico Petkovic

as Claimant

against the club,

ACS Poli Timisoara, Romania

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 27 June 2018, the Serbian player, Mr Andrej Mrkela (hereinafter: the player or the Claimant), concluded an employment contract (hereinafter: the contract) with the Romanian club ACS Poli Timisoara (hereinafter: the club or the Respondent), valid as from 1 July 2018 until 30 June 2020.

2. For the season 2018/2019, the player was entitled, inter alia, to a monthly remuneration of EUR 2,000 “paid in lei at the BNR course of the specific day”. The contract stipulated that “the salary shall be paid on each day of 20 of the month following the month the payment is made for”.

3. On 25 October 2018, the player put the club in default for the payment of EUR 6,000, corresponding to the salaries for July, August and September 2018. Furthermore, the player informed the club about its failure to take care of his work permit, stating that the player cannot enter Romania and join the team.

4. On 21 November 2018, the player unilaterally terminated the contract invoking the club’s the clubs non-compliance with its contractual obligations.

5. On 1 April 2019, the player lodged a claim for breach of contract in front of FIFA and requested the payment of the following amounts:

- RON 44,412, corresponding to the outstanding remuneration for the period from 1 July 2018 until 23 November 2018;

- RON 40,144.2 and EUR 30,000, corresponding to the “compensation for breach of the Employment contract”.

6. In his claim, the player deemed that the club “had seriously and severely neglected its contractual obligations” and therefore he terminated the contract with just cause.

7. In its reply, the club rejected the claim. Although it did not contest the claimed amounts of the player, it argued that the club has entered an insolvency proceeding, which has an effect on the admissibility of the claim.

8. Furthermore, due to the insolvency proceedings, the club denied being at any fault.

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 case at hand. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. With regard to the competence of the Dispute Resolution Chamber, art. 3 par. 1 of the Procedural Rules states that the Dispute Resolution Chamber shall examine its jurisdiction in the light of art. 22 to 24 of the Regulations on the Status and Transfer of Players (edition January 2020). In accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the aforementioned Regulations, the Dispute Resolution Chamber would, in principle, be competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Serbian player and a Romanian club.

3. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies to deal with the matter at hand, because of the existence of insolvency proceedings involving the player and the club before a Romanian court. In this regard, the club deemed that the player “had the obligation to file for his claim to the court”, but that the player failed to do it and therefore is “now time-barred from obtaining these amounts”.

4. The Chamber also took note of the Respondent’s further argument that if FIFA would accept the player’s claim, “the enforcement of such decision would be legally impossible to be enforced”. At his point the DRC went on to analyse the documentation provided by the club in support of its allegations.

5. In this respect, the members of the Chamber noted that the Respondent provided a copy of the court decision in Romanian, however, that it was not able to provide a duly translated version of the decision and, consequently, this document could not be taken into account, in accordance with art. 9 par. 1 lit. e) of the Procedural Rules, which stipulates that all documentation provided in the context of a dispute in front of FIFA should be presented in the original version and, if applicable, translated into one of the official FIFA languages (English, French, Spanish and German).

6. Moreover, for the sake of clarity, the members of the Chamber stressed that in accordance with the jurisprudence of both the DRC and the Court of Arbitration for Sport, bankruptcy/insolvency procedures in principle do not affect procedures in front of the DRC as long as the relevant club remains affiliated to its respective association. What is more, the members of the Chamber noted, from the information on file as well as following publicly available sources that the club is still affiliated to the Romanian Football Federation.

7. Having established the foregoing, the Chamber deemed that the club’s objection to the competence of FIFA to deal with the present matter has to be rejected and it is competent on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

8. Subsequently, the Chamber 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 Chamber referred, on the one hand, to art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions June 2019, October 2019 and January 2020) and, on the other hand, to the fact that the present claim was lodged on 1 April 2019. The Dispute Resolution Chamber concluded that the June 2019 version of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

9. The competence of the Chamber and the applicable regulations having been established, and entering into the substance of the matter, the Chamber started by acknowledging the above-mentioned facts as well as the documentation contained in the file. 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.

10. Having said this, the Chamber proceeded with the analysis of the circumstances surrounding the present matter, the parties’ arguments as well as 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.

11. In this respect, the Chamber observed that the parties had signed an employment contract on 27 June 2018, in accordance with which the player was entitled to receive, inter alia, a monthly remuneration of EUR 2,000 “paid in lei at the BNR course of the specific day”, payable “on each day of 20 of the month following the month the payment is made for”.

12. The Chamber further observed that the Claimant lodged a claim before FIFA, asserting that the he had terminated the employment contract just cause on 21 November 2018, invoking the club’s non-compliance with its contractual obligations. The Chamber noted that the Claimant deemed that the club “had seriously and severely neglected its contractual obligations” as it allegedly did not pay any of his salaries as well as it did not take care of his work permit, disabling him to enter Romania and join the team.

13. Conversely, the Chamber noted that the Respondent rejected the player’s claim, although did not deny its debts towards the player.

14. As a result, the Chamber understood that the main legal issue at stake is to establish whether the player had just cause to terminate the contract.

15. A a preliminary note, the Chamber was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract. 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 ensure 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 only ever be an ultima ratio measure.

16. In this respect, the Chamber went on to analyze the documentation provided during the course of the investigation. In this respect, the Chamber noted that the player submitted evidence that on 25 October 2018, he put the club in default for the payment of EUR 6,000, corresponding to the salaries for July, August and September 2018, before terminating the contract on 21 November 2018. Besides, the Chamber observed that the player asked to be awarded his outstanding dues, as well as the payment of compensation for breach of the employment contract.

17. The Chamber took into account that the Respondent, for its part, does not contest that it owes the Claimant the amounts in question, hence implicitly confirming that it has not made any payment whatsoever to the Claimant. The Respondent’s sole line of defense is that due to the insolvency proceedings, it cannot be at any fault.

18. In view of the above, the Chamber established at this point that, at the date of the termination of the contract, the Respondent owed to the Claimant the amount of EUR 6,000, corresponding to his salaries for July, August and September 2018.

19. In accordance with the employment contract, and taking into account the player’s statements that the club failed to pay him the remuneration he was entitled to until 21 November 2018, the DRC could establish that at the time the contract was terminated, i.e. on 21 November 2018, the Respondent had failed to pay the Claimant five monthly salaries for the period between July 2018 and November 2018. Further, the members of the Chamber noted that said circumstances remained uncontested by the Respondent.

20. In addition, the Chamber noted that the Claimant further invoked for the early termination of the contract that the Respondent did not correctly handle his work permit.

21. In relation to said issue, the DRC observed, the Respondent argued that “the Romanian Authority for Foreign persons denied it justified by our entering into insolvency and by the fact that the club did not have a restructuring plan at the time of the application”.

22. In relation to the work permit, the DRC deemed it appropriate to emphasize that according to its well-established jurisprudence, it is the club’s responsibility to undertake all administrative measures to ensure that the player is provided a visa and/or work permit, in order to perform his work, as per the employment contract. Moreover, since it appears that the club did not pay the player several outstanding salaries, as well as that from the club’s behaviour, it could be established that it appeared to be no longer interested in the services of the player.

23. In view of the above, the Chamber concluded that the club had to be held liable for the early termination of the employment contract with just cause by the player and was liable to compensate the player. In particular, the Chamber considered that the Respondent seriously neglected its financial obligations.

24. In continuation, the Chamber focused its attention on the consequences of such termination.

25. In this regard, prior to establishing the consequences of the breach of contract with just cause by the player in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it had to address the issue of any unpaid remuneration at the moment the contract was terminated by the club.

26. First of all, the members of the Chamber concurred that the Respondent must fulfill its obligations as per employment contract in accordance with the general legal principle of pacta sunt servanda. In his statement of claim, the player alleges that his remuneration, relating to the period between 1 July 2018 and 23 November 2018, was to be considered outstanding.

27. Bearing that in mind, the DRC decided that the player is entitled to the outstanding remuneration for the salaries of July 2018, August 2018, September 2018, October 2018 and November 2018, i.e. EUR 8,000. Recalling the wording of the employment contract, which stipulates that the salary is “paid in lei at the BNR course of the specific day”, the DRC concluded that the outstanding remuneration must be calculated into the local currency, at the exchange rate on the respective due date. The DRC observed that the equivalent amount of EUR 8,000 corresponds to RON 46,586.60.

28. Consequently, the DRC Chamber determined that the club had to pay the equivalent amount of RON 46,586.60 as outstanding remuneration to the player.

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

30. Subsequently, 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. Moreover, the Chamber noted that, following art. 17 par 1. I of the Regulations, in case the player did not sign any new contract following the termination of his previous contract, as a general rule, the compensation shall be equal to the residual value of the contract that was prematurely terminated.

31. 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 its date of termination without just cause by the Respondent, i.e. 21 November 2018 and concluded that the Claimant would have received in total amount of EUR 38,000, corresponding to the period as from December 2018 until 30 June 2020, which corresponds to the original date of expiration of the contract.

32. Consequently, the Chamber concluded that the amount of EUR 38,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand. In this context, the DRC again referred to the contract, which stipulated that the salaries are paid in local currency. In this regard, the Chamber concluded that the applicable conversion rate shall be at the date of termination of employment contract, i.e. RON 177,054.

33. 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. According to the constant practice of the DRC, 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 Claimant’s general obligation to mitigate his damages. The Chamber noted that the Claimant was not able to mitigate his damages, as he did not sign a new employment contract for the relevant period of time.

34. Furthermore, taking into account the consideration under number II./8. 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.

35. In this regard, the Chamber established that, in virtue of the aforementioned provision, it has competence to impose a sanction on the club. More in particular, the DRC pointed out that, against clubs, the sanction shall consist in a ban 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.

36. Therefore, bearing in mind the above, the DRC decided that, in the event that the club does not pay the amount due to the player within 45 days as from the moment in which the player, following the notification of the present decision, communicates the relevant bank details to the club, 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 club in accordance with art. 24bis par. 2 and 4 of the Regulations.

37. Finally, the Chamber recalled that the above-mentioned sanction 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.

38. The Chamber concluded its deliberations by rejecting any further claim lodged by the Claimant.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Andrej Mrkela, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, ACS Poli Timisoara, has to pay to the Claimant outstanding remuneration in the amount of RON 46,586.60.

4. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of RON 177,054.

5. In the event that the due amounts in accordance with points 3. and 4. are not paid by the Respondent within 30 days as from the notification of the decision, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit until the date of effective payment.

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

7. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the email address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts plus interest mentioned under points 3. and 4. above.

8. The Respondent shall provide evidence of payment of the due amounts in accordance with points 3. and 4. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated into one of the official FIFA languages (English, French, German, Spanish).

9. In the event that the amounts due in accordance with points 3. and 4. 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 amounts are 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).

10. The ban mentioned in point 9. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

11. In the event that the amounts due in accordance with points 3. and 4. above 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 related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, 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 Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note related to the appeal procedure:

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.

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