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,

Miroslav Sedlák, Slovakia,

represented by Mr Peter Lukasek

as Claimant

against the club,

SC Ritzing, Austria,

represented by Mr Wolfang Rebernig

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 1 February 2019, the Slovakian player, Miroslav Sedlak (hereinafter: the Claimant or the player), and the Austrian club, SC Ritzing (hereinafter: the Respondent or the club) (hereinafter jointly referred to as the parties), concluded an employment contract (hereinafter: the contract) valid as from 1 February 2019 until 15 June 2020.

2. Clause IV.1. of the contract provided that the player shall be entitled to a monthly net salary in the amount of EUR 950 to be paid 12 times a year.

3. Moreover, clause IV.6. provided that the salary shall be paid on a monthly basis between the 10. and 15. day of the following month, a grace period of 10 days shall be applicable.

4. Furthermore, in accordance with clause IX.3. of the contract, the player undertook, in particular, to bring all disputes arising from the player's contract, before addressing the competent courts, to the attention of the competent bodies of the Austrian Football League, to exhaust the legal remedies available under the statutes of the Austrian Football League and to make use of the internal arbitration provided for in the statutes.

5. Finally, clause IX.8. of the contract stipulated that said contract is subject to Austrian law. The clause also underlined that subject to IX.3. of this contract, all legal disputes arising between the parties from the legal relationship regulated by this contract shall be decided exclusively by the competent regional court.

6. With the correspondence dated 3 May 2019, received by the club on 14 May 2019, the player put the club in default for the payment of EUR 1,900, corresponding to the monthly salaries of February and March 2019, giving the club a deadline of 10 days to pay the overdue amount.

7. Subsequently, with the correspondence dated 5 June 2019, received by the club on 12 June 2019, the player put the club in default for the payment of EUR 2,850, corresponding to the monthly salary of February, March and April 2019.

8. In continuation, after the club failed to pay any amounts requested with the previous letters, the player terminated the contract with his correspondence dated 27 June 2019, received by the club on 3 July 2019, invoking the club’s failure to comply with its contractual obligations.

9. On 17 July 2019, the player lodged a claim against the club in front of FIFA, requesting it to pay him EUR 16,150 as outstanding remuneration and compensation for breach of contract.

10. In addition, the player further requested interest at a rate of 5% p.a. over the aforementioned amounts as of 4 July 2019 until the date of effective payment, as well as sporting and disciplinary sanctions to be imposed on the Respondent.

11. In his claim, the player explained the player deemed that the club failed to pay any salary and therefore, in accordance with art. 14bis of the RSTP, he terminated the contract with just cause.

12. Furthermore, the player deemed that “Pursuant to the article 17 para 1, of the FIFA RSTP, in all cases, party in breach shall pay compensation (…) the Respondent has breached the Employment contract and the Claimant’s fundamental rights without just cause and therefore shall be liable for payment of compensation”.

13. In its reply to the claim, the club contested FIFA’s competence with as a consequence that the claim of the player should be deemed as inadmissible.

14. In this respect, the club referred to clause IX.3. of the contract according to which, in its opinion, the parties agreed that in case of a dispute relating to the employment contract, the deciding bodies of the Austrian football federation shall be competent. In addition, the club sustained that the contract stipulated as well a clause in favor of national courts.

15. In continuation, the club held that the present matter was an exclusively national matter as the Respondent is an Austrian club playing in the Austrian league.

16. Finally, upon being asked by FIFA, the player sustained that he remained unemployed as from the termination of the contract.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 17 July 2019. Consequently, the 2018 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 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 2020) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a club and a player that have an international dimension.

3. As a consequence, the Dispute Resolution Chamber would, in principle, be competent to decide on the present litigation which involves a Slovakian player and an Austrian club regarding an employment-related dispute.

4. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of clause IX.3. of the contract alleging that the competent bodies to deal with any dispute deriving from the relevant employment contract are the deciding bodies of the Austrian football federation.

5. On the other hand, the Chamber noted that the Claimant referred to the competence of the FIFA DRC to adjudicate in and on the claim lodged by him against the Respondent.

6. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the 2020 edition of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. Equally, the members of the Chamber referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

7. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC is competent to settle an employment-related dispute between a club and a player of an international dimension, is that the jurisdiction of the relevant national arbitration tribunal or national court derives from a clear reference in the employment contract.

8. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute contained a clear jurisdiction clause.

9. In this respect, the Chamber recalled that Clause IX.3. of the contract stipulates that (clause as described above): “The player undertakes, in particular, to bring all disputes arising from the player's contract, before addressing the competent courts, to the attention of the competent bodies of the Austrian Football League, to exhaust the legal remedies available under the statutes of the Austrian Football League and to make use of the internal arbitration provided for in the statutes”.

10. Having examined the relevant provision, the Chamber underlined that said clause not only did not name a specific deciding body, nevertheless the Respondent also failed to provide any relevant documentation in this matter.

11. In addition, the Chamber also took note of the Respondent’s argument referring to the competence of national courts and, in this respect, the Chamber deemed that this applied only as second instance and due to the abovementioned, said point could not be taken into consideration.

12. In continuation, the Chamber also held that the Respondent’s argument as to the fact that the present matter would be an exclusively national matter as the Respondent is an Austrian club playing in the Austrian league could not be retained nor followed due to the fact that the Claimant is from Slovakia.

13. On account of all the above, the Chamber established that the Respondent’s objection towards the competence of FIFA to deal with the present matter has to be rejected, and that the Dispute Resolution Chamber 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.

14. In continuation, the Chamber analyzed 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 (edition 2020) and, on the other hand, to the fact that the present claim was lodged on 17 July 2019. Therefore, the Dispute Resolution Chamber concluded that the June 2019 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.

15. The competence of the Chamber and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, 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.

16. Having said this, the Chamber proceeded with an 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.

17. In this respect and first of all, the members of the Chamber acknowledged that, on 1 February 2019, the Claimant and the Respondent had concluded an employment contract valid as from 1 February 2019 until 15 June 2020 which provided the remuneration of EUR 950 to be paid 12 times a year, on a monthly basis between the 10. and 15. day of the following month, however a grace period of 10 days shall apply.

18. Moreover, the Chamber observed that by correspondence dated 3 May 2019, received by the Respondent on 14 May 2019, the Claimant put it in default for the payment of EUR 1,900, corresponding to the monthly salary of February and March 2019, giving it a deadline of 10 days to pay the overdue amount.

19. In addition, the Chamber underlined as well that by correspondence dated 5 June 2019, received by the Respondent on 12 June 2019, the Claimant put it in default a second time for the payment of EUR 2,850, corresponding to the monthly salary of February, March and April 2019.

20. Following this, the members of the Chamber took note as well that, after the Respondent failed to pay any amounts requested with the previous letters, the Claimant terminated the contract with his correspondence dated 27 June 2019, received by it on 3 July 2019, invoking the its failure to comply with its contractual obligations.

21. Within the above in mind, the Chamber observed that in the Claimant’s opinion, the Respondent having failed to pay any salary despite having been duly put in default, it should be liable to pay him outstanding remuneration as well as compensation for breach of contract in the total amount of EUR 16,150, due to the operated termination of the contract with just cause in accordance with art. 14bis of the Regulations.

22. On account of the above, the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the contract had been terminated by the Claimant with just cause and, subsequently, to determine the consequences thereof.

23. Having said that, the Chamber held that, on the date of termination of the contract by the Claimant, i.e. by correspondence dated 27 June 2019, received by the Respondent on 3 July 2019, the Respondent had allegedly failed to pay the Claimant’s remuneration due as from February 2019.

24. Furthermore, the DRC noted that the Respondent had been given the opportunity to reply to the claim submitted by the Claimant, but that the Respondent had failed to present its response as to the substance in this respect, referring only as to its challenge of FIFA’s competence and its request to consider the present claim as inadmissible. In this way, the DRC deemed that the Claimant’s allegations as to the substance remained undisputed and therefore, that the Respondent accepted said allegations.

25. On account of the preceding, the Chamber concluded that the Respondent failed to remit any remuneration in respect of the aforementioned defaults, and therefore established that the Respondent, without any valid reason, failed to remit to the Claimant the remuneration totalling EUR 4,750.

26. Consequently, the DRC referred to art. 14bis par. 1 of the Regulations, which, inter alia, stipulates that, in case a club unlawfully fails to pay a player at least two monthly salaries on their due dates, the player will be deemed to have had a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted it a deadline of at least 15 days to fully comply with its financial obligations.

27. In this respect, on account of the above and considering that, when the player terminated the contract, at least two monthly salaries were due despite the fact that the Claimant provided the Respondent with the required deadline to remedy the default, the DRC concluded that, by correspondence of 27 June 2019, received by the Respondent on 3 July 2019, the Claimant had a just cause to unilaterally terminate the employment contract.

28. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant as mentioned above, in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

29. As established above (cf. point II.25.), and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 4,750 as outstanding remuneration.

30. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the aforementioned sum as of the date of receipt by the Respondent of the Claimant’s termination on 3 July 2019, i.e. 4 July 2019 being one day after, until the date of effective payment.

31. 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 further 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.

32. 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.

33. 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 established that no such compensation clause was included in the contract at the basis of the matter at stake.

34. 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. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body.

35. The members of the Chamber then turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract in the calculation of the amount of compensation.

36. Bearing in mind the foregoing, the Chamber 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 the Claimant would have received EUR 10,925 as remuneration had the employment relationship been executed until its regular expiry date of 15 June 2020, i.e. 11.5 monthly salaries. Consequently, the Chamber concluded that the amount of EUR 10,925 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

37. In continuation, the Chamber assessed as to 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 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.

38. The Chamber recalled that, after termination of the contract, the Claimant was not able to mitigate his damages, as he remained unemployed.

39. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of EUR 10,925 to the Claimant as compensation for breach of contract.

40. 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. 17 July 2019, until the date of effective payment.

41. The DRC concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

42. Furthermore, taking into account the consideration under number II./14. 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.

43. In this regard, the Chamber established that, in virtue of the aforementioned provision, it has competence to impose a sanction on the Respondent. 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.

44. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amount due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

45. 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.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Miroslav Sedlák, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, SC Ritzing, has to pay to the Claimant the amount of EUR 4,750, plus 5% interest p.a. as from 4 July 2019 until the date of effective payment.

4. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of EUR 10,925, plus 5% interest p.a. as from 17 July 2019 until the date of effective payment.

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

6. 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.

7. 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).

8. 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).

9. The ban mentioned in point 8. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

10. 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.

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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 article 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

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer