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 25 February 2020

Decision of the

Dispute Resolution Chamber (DRC)

passed on 25 February 2020,

in the following composition:

Omar Ongaro (Italy), Chairman

Stéphane Burchkalter (France), member

Jerome Perlemuter (France), 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 an unspecified date, the player from Country B, Player A (hereinafter: the player or the Claimant) and the club from Country D, Club C (hereinafter: the club or the Respondent) concluded an employment contract (hereinafter: the contract) valid “from second half of season 2018-2019 until the end of season 2021-2022 full sport season”. According to the information contained in the Transfer Matching System the season runs as from July until and including May.

2. Pursuant to article 2 of the contract, the Claimant was entitled to the following remuneration:

a) EUR 150,000 “for the second half of 2018-2019 season and 2019-2020 full season”;

b) EUR 125,000 for the season 2020/2021;

c) EUR 145,000 for the season 2021/2022.

3. Moreover, according to article 3 of the employment contract, the Claimant was entitled to the following payments “for each season”:

a) EUR 25,000, as a signing-on fee;

b) The “rest amount”, payable each month.

4. According to the Claimant, on 16 March 2019, the Claimant flew to Country B “with the intention of returning the following Sunday, 24 March 2019, at the latest”.

5. The Claimant explained that he requested several times the payment of his outstanding remuneration to the Respondent. In this respect, the Claimant pointed out that he received from the Respondent EUR 20,000 out of EUR 25,000 of the signing-on fee (cf. point 3. above) “with a considerable delay and only after [he] constantly reminded the Respondent to do so”.

6. Moreover, the Claimant added that, despite his several reminders, during the months of March and April 2019, the Respondent did not pay any of his salaries, except for one payment of EUR 8,500 on 3 May 2019.

7. The Claimant further sustained that the Respondent “took his passport and did not return it to him”.

8. In this context, the Claimant underlined that, after his requests to obtain the passport in order to travel back to Country B for the seasonal holidays, the Respondent’s asked him to meet on 16 May 2019 in the Respondent’s offices, after a scheduled match, where he would be able to get the passport.

9. The Claimant further recalled that he went alone to the meeting at 1 a.m. and that “he felt intimidated by being there at 1 am in the middle of the night and by the presence of […] three older men”, so he decided to record the conversation. In support of his statements, the Claimant submitted two audio recordings.

10. The Claimant also held that during the meeting, the Respondent accused him of several wrongdoings. As per the player, the club “threatened” him to sign the following documents (hereinafter jointly referred to as the termination agreements):

a) A termination agreement pursuant to which the parties terminated their relationship and the Claimant acknowledged that the Respondent “fulfilled all his obligations including financial matters as per the [...] contract;

b) An undated letter, by means of which he was notified of 3 fines: (i) one of 2% of the contractual value for having been absent in March for 4 days without the Respondent’s permission; (ii) a second fine of 20% of the total value of the contract for having not attended 4 training sessions and (iii) a third one of 2% of the value of the contract for having left the Respondent’s camp on 16 May 2019 without permission.

11. Moreover, the Claimant maintained that the Respondent threatened throughout the meeting that it would keep his passport if he did not sign the aforementioned documents. The Claimant added that he had been intimidated to the point that he was afraid for his life and, eventually, signed the documents.

12. In light of the fact that he signed under duress and the fact that the Respondent obtained an unfair advantage, the Claimant maintained that such documents should be declared null and void.

13. Concerning the unfair advantage, the Claimant maintained that he would have never accepted the untrue allegations contained in the termination agreements (cf. point 11. above) if he had not found himself in straitened circumstances. According to him, there is a “disproportion […] more than evident” between his and the Respondent’s situation deriving from those documents.

14. Furthermore, the Claimant highlighted that the whole set up of the meeting in the middle of the night and the threats suffered in that occasion amount to a condition of duress.

15. On 12 June 2019, the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the club had terminated the employment relationship without just cause and requesting the following:

a) Outstanding remuneration in the amount of EUR 8,500, plus 5% interest p.a. as from 1 May 2019 until the date of effective payment;

b) compensation for breach of contract in the amount of EUR 378,000, corresponding to the residual value of the contract, plus 5% interest p.a. as from 17 May 2019 “or, alternatively, as from the submission of this claim” until the date of effective payment.

16. In its reaction to the claim, the Respondent rejected the claim and pointed out that, upon signature of the contract, the player had received the signing-on fee in the amount of EUR 25,000.

17. The Respondent also explained that the Claimant missed trainings and this led to a disciplinary decision imposed on him on 25 May 2019, which, according to the Respondent, had been accepted by the Claimant with his signature on it.

18. The club further recalled that, on 16 May 2019, the parties convened for a meeting at the end of which it was decided to mutually terminate the employment contract.

19. The Respondent further explained that it paid the Claimant all his salaries until the date of mutual termination of the contractual relationship, i.e. 16 May 2019.

20. The club first of all pointed out that the registration of the meeting produced by the Claimant should be disregarded as invalid evidence. Having said this, the Respondent explained that said termination agreements are fully valid as none of the following conditions of unfair advantage had been fulfilled.

21. In relation to the above, the Respondent pointed out that the Claimant knew in advance that he was invited to a meeting after the last game of the season and he knew that the parties would talk about his contractual situation. Moreover, the Respondent maintained that, at the time of the meeting, the Claimant was clearly willing to leave the country and go back home.

22. Lastly, the Respondent further highlighted that the termination agreements were not signed under any duress.

23. Upon FIFA’s request, the Claimant indicated that he had signed a new contract with the club from Country B, Club E, valid as from 28 January 2020 until 9 June 2020, in accordance with which he was entitled inter alia to an annual salary of 3,150, approx. EUR 3,619.

II. Considerations of the DRC

1. First of all, the Dispute Resolution Chamber (hereinafter: the DRC or the Chamber) 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 12 June 2019. Taking into account the wording of art. 21 of the 2018 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 combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2020), the DRC is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from Country B and an club from 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, and considering that the present claim was lodged on 12 June 2019, the June 2019 edition of said regulations (hereinafter: the Regulations) were applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, it started by acknowledging all the above-mentioned facts, the arguments and the documentation submitted by the Claimant and the Respondent. 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 of all, the DRC noted that the parties entered into an employment contract valid as “from second half of season 2018-2019 until the end of season 2021-2022 full sport season”, according to which the Respondent undertook to pay the Claimant the following remuneration: (i) EUR 150,000 “for the second half of 2018-2019 season and 2019-2020 full season”; (ii) EUR 125,000 for the season 2020/2021; (iii) EUR 145,000 for the season 2021/2022. Furthermore, pursuant to article 3 of the contract, the Chamber noted that the club further committed itself to pay a signing-on fee in the amount of EUR 25,000.

6. The Chamber then reviewed the claim of the Claimant, who maintained that “[his signature] of the two documents was achieved by the Respondent only due to duress or due to an unfair advantage” and therefore requested it to be deemed null and void and the Respondent to be held liable for the termination of the contract without just cause on 16 May 2019.

7. At this stage, the members of the DRC turned their attention to the elements put forward by the Claimant in support of his assertion that he was coerced to sign the termination agreements. In doing so, the Chamber first observed that the Claimant submitted two audio recordings of the meeting held with the Respondent on 16 May 2019.

8. The Dispute Resolution Chamber equally took due note of the fact that the Respondent, for its part, refuted the Claimant’s allegations and affirmed that the termination agreements had been validly concluded on the date indicated therein, namely on 16 May 2019.

9. In view of the aforementioned dissent positions of the parties in respect of the question as to whether the agreement on the termination of the contract had been signed under duress by the Claimant, the members of the Chamber firstly referred to 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 burden of proof.

10. With the above in mind, the members of the Chamber concurred on the fact that it was up to the Claimant to demonstrate that he signed the termination agreements under duress and, consequently, that said documents had not been validly concluded.

11. Having stated the above, the members of the Chamber turned their attention to the evidence submitted by the Claimant in order to support his argumentations and noted that the latter provided two audio recordings of the meeting held with the Respondent on 16 May 2019 (cf. point I.9. above).

12. On account of the above-mentioned considerations and in view of the evidences submitted by the Claimant, the members of the Chamber concurred that such evidences were sufficient to demonstrate that the player signed the documents under duress. In particular, having analysed all the information and documentation provided in this regard, the Chamber made the following considerations:

a) The meeting in question took place late at night, without any representative of the player other than himself present, without a translator, at the club’s premises, in the presence of three senior club officials;

b) The Player was deprived of his passport and blackmailed to sign the termination agreements in order to have it back;

c) The audio recordings clearly show a hostile environment towards the player;

d) The player made clear during the meeting that he was only signing the termination agreements because he was being threatened;

e) The player has discharged its burden of proof (art. 12 par. 3 of the Procedural Rules, audio recordings are valid).

13. That having been established, the Chamber decided that the termination agreements signed on 16 May 2019 were to be considered null and void and, therefore, concluded that the Respondent had terminated the employment contract without just cause on 16 May 2019.

14. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract without just cause by the Respondent.

15. First of all, the members of the Chamber concurred that the Respondent must fulfil its obligations as per the employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant the remuneration that was outstanding at the time of termination i.e. the amount of EUR 8,500, corresponding to the monthly salary for April 2019.

16. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 8,500 as from 1 May 2019 until the date of effective payment.

17. In continuation, 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 any outstanding salaries on the basis of the relevant employment contract.

18. 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.

19. 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 employment contract at the basis of the matter at stake.

20. Subsequently, and in order to evaluate the compensation to be paid by the Respondent, the members of the Chamber took into account the remuneration due to the Claimant in accordance with the employment contract as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber pointed out that at the time of the termination of the employment contract on 16 May 2019, the contract would run for another 36 months. Consequently, taking into account the financial terms of the contract the Chamber concluded that the remaining value of the contract as from its early termination by the Respondent until the regular expiry of the contract amounts to EUR 353,333 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

21. 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 player’s general obligation to mitigate his damages.

22. Indeed, on 28 January 2020, the Claimant concluded an employment contract with the club from Country B, Club E, valid as from the date of signature until 9 June 2020, according to which the Claimant was entitled to an approximate annual salary of EUR 3,619.

23. Consequently, in view of the above, the DRC decided that the Respondent must pay the total amount of EUR 349,714 to the Claimant, which is considered by the DRC to be a reasonable and justified amount as compensation for breach of contract.

24. In addition, taking into account the Claimant’s request, the DRC decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as from 12 June 2019 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.

26. Furthermore, 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.

27. In this regard, the Chamber pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban 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.

28. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts 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.

29. Finally, the Chamber recalled that the above-mentioned ban 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 DRC

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant the amount of EUR 358,214, plus interest as follows:

- at the rate of 5% p.a. on the amount of EUR 8,500 as from 1 May 2019 until the date of effective payment;

- at the rate of 5% p.a. on the amount of EUR 349,714 as from 12 June 2019 until the date of effective payment.

3. Any further claim lodged by the Claimant is 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 amounts mentioned under point III.2. above.

5. The Respondent shall provide evidence of payment of the due amount in accordance with point III.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 III.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 III.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 relating to the motivated decision (legal remedy):

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.

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