DECISIONI DI GIUSTIZIA SPORTIVA • F.I.F.A. - CAMERA DI RISOLUZIONE DELLE CONTROVERSIE - CONTROVERSIE DI LAVORO

• Data decisione: 23 aprile 2020 • Stagione sportiva: 2019/2020

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 23 April 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 23 April 2020,

in the following composition:

Geoff Thompson (England), Chairman

José Luis Andrade (Portugal), member

Stijn Boeykens (Belgium), member

on the claim presented by the player,

Guilherme Augusto Alves Dellatorre, Brazil,

represented by Mr Rafael Queiroz Botelho

as Claimant

against the club,

Suphanburi FC, Thailand,

represented by Messrs. Menno Teunissen and Thomas Spee

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 17 July 2019, the Brazilian player, Guilherme Augusto Alves Dellatorre (hereinafter: the Claimant or player) and the Thai club, Suphanburi FC (hereinafter: the Respondent or club) signed an employment contract valid as of 17 July 2019 until 30 November 2019.

2. The financial conditions of the contract were as follows (cf. art. 3 of the employment contract):

 A total of USD 180,000 net for the year 2019, paid as follows:

i. One lump sum as “settlement fee” of USD 30,000 to be paid in Thai Baht to be paid on 31 July 2019,

ii. The remaining value of USD 150,000 to be paid in monthly instalments, i.e. 5 monthly instalments of USD 30,000 each to be paid in Thai Baht each month on the last business day,

 A bonus scheme mutually agreed upon based on the achievements of the club and club policies,

 One lump sum of Thai Baht 300,000 for the use of a car, accommodation expenses and an air ticket to be paid on 31 July 2019,

 Should the club remain competing in the Thai League 1 in 2020, the player shall receive a special bonus of USD 15,000.

3. The employment contract the following relegation clause (art. 16 of the contract):

“This Contract will terminate without any liability for either party if the Club’s senior men’s first team is relegated from the Thai League 1 for ordinary sports reasons. On such relegation, this Contract shall terminate with effect from the end of the month in which the Club’s senior men’s played its last match”.

4. Furthermore, the employment contract included the following clause regarding its extension:

“The club agreed that contract extension clause starting from 1st December 2019 and ending on 30th November 2020 can be trigger should the Club remain competing in the Thai League 1 for the Season 2020. Terms and conditions shall be as follows:

a) Guarantee total USD 400,000 (US Dollars Four Hundred Thousand) net after tax annual income for the year 2020.

b) The Club shall pay one lump sum amount that is USD 70,000 (US Dollars Seventy Thousand) as a settlement fee to be paid in Thai Baht on 2nd December 2019.

c) The remaining value of USD 330,000 (US Dollars Three Hundred Thirty Thousand) will be paid in monthly instalments by way of salary, adding up to 12 (Twelve) monthly salaries of USD 27,500 (US Dollars Twenty Seven Thousand Five Hundred) to be paid in Thai Baht due each month on the last business day.

d) Bonus Scheme will be mutually agreed by the Club and the Player based on the achievement of the Club and the Club’s policies. The Player is permitted to receive bonus payments from the Club in accordance with its policies.

e) The Club will provide one lump sum amount that is Baht 600,000 (Baht Six Hundred Thousand) to be use for car, accommodation expenses and air ticket to be paid on 31st July 2020.”

5. The employment contract also contains a clause in the event of a unilateral termination of the employment contract:

“In the event that either Club or Player want to unilaterally terminate the contract extension clause starting from 1st December 2019 and ending on 30th November 2020 without just cause before the expiration, it shall pay 3 (Three) months’ worth of salary to the other party.”

6. On 27 October 2019, the Claimant received a termination letter from the Respondent. The Respondent based the termination on the club’s relegation from the Thai League 1.

7. On 4 November 2019, the Claimant objected to the termination, in particular “due to the fact that the Club was not relegated from Thai League 1”.

8. On 12 November 2019, the Respondent confirmed the termination based on the relegation.

9. On 25 November 2019, the Claimant sent a letter to the Respondent, referring to the alleged non-relegation of the club and requesting the salary of November 2019, as well as three additional salaries as foreseen in the termination clause (cf. par. I.5. above), granting the Respondent ten days to remedy the default, to no avail.

10. On the same day, the Thai FA issued a statement confirming that the Respondent was eligible to play in the Thai League 1 for the season 2020 on the grounds that one of the teams had withdrawn from participation.

11. On 3 January 2020, the Claimant sent another letter to the Respondent, informing the latter that the extension of the employment contract had been triggered and the Respondent should therefore comply with its contractual obligations. In particular, the Claimant requested the payment of USD 127,500, corresponding to the salaries of November 2019 (USD 30,000), December 2019 (USD 27,500) and the advance payment of USD 70,000, granting the Respondent 15 days in order to remedy the default, to no avail.

12. On 21 January 2020, the Claimant lodged a claim against the Respondent for outstanding remuneration and compensation for breach of contract. In his claim, the Claimant maintained that the Respondent had unilaterally terminated the Contract without just cause by (1) “defaulting the Player’s salary of November 2019” and (2) “denying the automatic extension for the 2020 season”.

13. The player made the following requests:

 “overdue salaries” amounting to USD 127,500,

 Compensation for breach of contract amounting to USD 302,500, corresponding to the balance of the player’s earnings for the season 2020, or at least USD 100,000 corresponding to the compensation clause,

 5% interest p.a. “counted from each event of default”,

 All procedural costs imposed on the Respondent,

 Sanctions imposed on the Respondent in accordance with art. 14bis and 17 of the Regulations on the Status and Transfer of Players.

14. The club, for its part, rejected the player’s claim entirely and maintained that it merely triggered the application of art. 16 of the employment contract (cf. par. I.3. above) and that the said clause allowed both parties to terminate the contract upon sporting relegation. In this context, the Respondent underlined that, in accordance with the Thai 1 league rules, it was undoubtedly one of the three teams relegated at the end of the 2019 season.

15. The Respondent deems that it has fulfilled its obligations towards the Claimant by having paid him until the end of October 2019.

16. Furthermore, the Respondent held the view that the employment contract only contained an option for its extension upon the condition that the club would remain in the Thai League 1. Thus, the Respondent denied the Claimant’s allegation that the extension of the contract would be automatic.

17. The Respondent referred to the jurisprudence of the Dispute Resolution Chamber, which has found relegation clauses to be valid insofar as they were reciprocal, i.e. they are to benefit of both the player and the club, and that they are not viewed as potestative.

18. The Respondent, therefore, concluded that the relegation clause cannot be seen as null and void.

19. In continuation and whilst once again referring to national regulations, the Respondent asserted that, at the date of termination of the employment contract, i.e. on 27 October 2019, the team had indeed been relegated for sporting reasons. The club thus concludes that there was no further obligation on its part to pay the salary of November 2019.

20. As to the fact that another team, PTT Rayong, withdrew from the Thai League 1 for the season 2020, and the subsequent decision of the national football authorities to allow the Respondent to compete in the Thai League 1 in the season 2020, the Respondent affirmed that such decision is of an administrative nature and does not have an impact on the terms of art. 16 of the employment contract.

21. Finally, the Respondent stated that a revocation of the termination dated 27 October 2019 is not possible and that the decision to reinstate the Respondent in the Thai League 1 was made on 25 November 2019, this is, after it had terminated the player’s contract.

22. In view of the foregoing, the Respondent requested the Dispute Resolution Chamber:

 To dismiss the Claimant’s claim and requests for sporting sanctions,

 Alternatively, to condemn the Respondent to pay a maximum of two monthly salaries as compensation, bearing in mind it has already paid the salary of October 2019,

 To order the Claimant to bear the legal fees and costs in this matter.

23. Upon the FIFA administration’s request, the player confirmed that on 5 February 2020, he signed an employment contract with the Brazilian club Mirassol FC, which was valid as from the same date of signature until 6 May 2020. According to such contract, the Player was entitled to a monthly gross salary of BRL 5,000.

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. In this respect, it took note that the present matter was submitted to FIFA on 21 January 2020. 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. Subsequently, the DRC referred to art. 3 par. 1 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b) of the Regulations (edition January 2020), it is competent to decide on the present litigation, which concerns an employment-related dispute with an international dimension between a Brazilian player and a Thai club.

3. Furthermore, the DRC analysed which edition of the Regulations should be applicable as to the substance of the matter. In this respect, the Chamber confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations (edition March 2020) and considering that the present matter was submitted to FIFA on 21 January 2020, the January 2020 edition of said Regulations is applicable to the present matter as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the Chamber entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents 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.

5. In this regard, Chamber recalled that the parties had concluded an employment contract valid as of 17 July 2019 until 30 November 2019. The said contract included an extension clause and a relegation clause as described in par. I.3. and I.4. above.

6. The Chamber further acknowledged that the dispute between the parties arose when the Respondent made use of the relegation clause in order to terminate the contract. Indeed, on 27 October 2019, the Respondent notified the Claimant of the unilateral termination of the contract, referring to art. 16 of the employment contract, this is, the relegation clause.

7. The Claimant contested the triggering of the relegation clause in view of the fact that the team, although initially relegated, was thereafter reinstated in the Thai League 1 as another team dropped out. The Claimant refers in this context to the extension clause, according to which the contract could be extended by one season if the team would remain in the Thai League 1. The Claimant therefore concludes that the Respondent did not have a just cause to terminate the employment contract, and claims outstanding remuneration and compensation for breach of contract.

8. In view of the parties’ divergent positions in this matter, the Chamber established that the main issue to be addressed is whether the Respondent had a just cause to terminate the employment contract on 27 October 2019 by making use of the relegation clause. Furthermore, the Chamber would have to draw the consequences of such termination.

9. The Chamber, therefore, started to analyse the validity and applicability of the relegation clause as provided for in art. 16 of the employment contract.

10. Art. 16 of the employment contract indeed provides as follows:

11. The Chamber, referring to its own jurisprudence, held that such clauses may, as a matter of principle, be seen as valid as long as they are not potestative in nature and that it is reciprocal, i.e. it provides for equal rights of the parties to terminate the employment relationship due to the team’s relegation.

12. The Chamber underlined that a relegation clause is in essence not potestative as it depends on an occurrence of an event which is not in one of the parties’ control, but it solely depends on other circumstances, i.e. the relegation of the team. Therefore, the parties are, as a general rule, entitled to stipulate a clause according to which the contract will terminate if the team is relegated.

13. As to the reciprocity, the Chamber, looking at the exact wording of the clause, held that it must be seen as reciprocal as it clearly mentions that the contract will terminate “without any liability for either party”.

14. In light of the above, the Chamber concluded that the relegation clause contained in the employment contract is valid and freely concluded between the parties.

15. As to its applicability, the Chamber paid particular attention to the fact that the clause in question explicitly mentioned that the relegation must be for sporting reasons. In this context, the Chamber had to side with the Respondent and established that, indeed, it remained uncontested that the team had indeed been relegated for sporting reasons after the last match of the season 2019. According to the relevant Thai 1 League regulations, the team was relegated as it finished in 14th place of the championship, this is, being one of the bottom three teams in the ranking.

16. The circumstance that the team was, thereafter, reinstated within the Thai League 1 was a decision of an administrative nature, which, in any case, took place after the Respondent had already terminated the contract.

17. In this context, the Chamber was eager to emphasise that it can only analyse whether the club had a just cause to terminate the contract at the moment in time when such termination occurred, and not base its analysis on events that may have occurred after the termination.

18. The Chamber, in view of the specific circumstances of the present matter, concluded that the relegation clause had indeed been triggered due to the team’s relegation for sporting reasons, and that the Claimant was indeed entitled to proceed to the termination of the contract on 27 October 2019.

19. The latter having been established, the DRC continued its analysis of the present matter by focusing on the issue as to whether the extension clause was to be deemed as applying automatically. In this regard, the Chamber again referred to the wording of the relevant clause:

20. In this regard, the Chamber was unanimous in its conclusion that the aforementioned clause undoubtedly contained a condition, this is, that the Respondent would remain in the Thai League 1. As a consequence, the extension of the contract for one more season was not automatic.

21. Although, once again, the club ended up remaining in the Thai League 1 for the season 2020, one must look at the chronology of events in the present matter. The club had validly already made use of the relegation clause at the end of the season 2019. Therefore, logically, the contract could not be extended.

22. In light of all the aforementioned considerations, the Chamber unanimously came to the conclusion that the Respondent terminated the employment contract on 27 October 2019 with just cause. In fact, it shall be deemed that the contract came to a natural expiry at the end of the season 2019, without the Respondent being in need to formally proceed to the termination of the contract.

23. As a consequence, the Claimant’s claim for compensation for breach of contract must be rejected.

24. This being established, the Chamber turned its attention to the Claimant’s claim for outstanding remuneration, in particular the fact that the Respondent failed to pay the salary of November 2019. In this regard, the DRC reiterated that the Respondent did not, formally speaking, have to terminate the contract on 27 October 2019, since, according to the relegation clause, the contract would expire at the end the season 2019 should the team be relegated. Thus, the Chamber established that it would be fair and proportionate to award the player the salary of November 2019, corresponding to the final month of the contract.

25. In view of the foregoing, the Chamber decided that, in accordance with the principle of pacta sunt servanda, the Respondent must pay the Claimant the amount of USD 30,000 corresponding to the salary of November 2019, as well as 5% interest p.a. as from 30 November 2019 until the date of effective payment.

26. The DRC concluded its deliberations by establishing that any further claims of the Claimant are rejected.

27. Finally, taking into account the consideration under number II.3. 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.

28. 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.

29. 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.

30. 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.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Guilherme Augusto Alves Dellatorre, is partially accepted.

2. The Respondent, Suphanburi FC, has to pay the Claimant USD 30,000 plus interest at the rate of 5% p.a. as from 30 November 2019 until the date of effective payment.

3. Any other requests for relief are rejected.

4. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amount mentioned under point 2. above.

5. The Respondent shall provide evidence of payment of the due amount in accordance with point 2. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount plus interest due in accordance with point 2. 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 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 (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

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

8. In the event that the aforementioned sum plus interest 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 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

www.tas-cas.org

For the Dispute Resolution Chamber:

_____________________________________

Emilio García Silvero

Chief Legal & Compliance Officer