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 27 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 27 February 2020,

in the following composition:

Clifford Hendel (USA), Chairman

Roy Vermeer (The Netherlands), member

Stefano La Porta (Italy), member

on the claim presented by the player,

Player A, Country B,

as Claimant / Counter-Respondent I

against the club,

Club C, Country D

as Respondent / Counter-Claimant

with the club

Club E, Country F

as Counter-Respondent II

regarding an employment-related dispute

between the parties

I. Facts

1. On 19 July 2018, the player from Country B, Player A (hereinafter: the player or the Claimant/Counter-Respondent I) and the club from Country D, Club C (hereinafter: the club or the Respondent/Counter-Claimant), concluded an employment contract valid “for 2 seasons from beginning of season 2018-2019 and 2019-2020 until the full sport season” (hereinafter: the contract).

2. Pursuant to the contract, the player was entitled to receive from the club EUR 450,000 for each season, as follows:

a. EUR 180,000, equivalent to 40% of EUR 450,000, respectively on 19 July 2018 and 1 July 2019;

b. EUR 45,000, equivalent to 10% of EUR 450,000, respectively on 27 September 2018 and 27 September 2019;

c. EUR 90,000, equivalent to 20% of EUR 450,000, respectively on 10 January 2019 and 10 January 2020;

d. EUR 45,000, equivalent to 10% of EUR 450,000, respectively on 10 March 2019 and 10 March 2020;

e. EUR 90,000, equivalent to 20% of EUR 450,000, respectively on 10 May 2019 and 10 May 2020.

3. On 25 October 2018, the parties signed an amendment to the contract (hereinafter: the amended contract), by means of which the player’s salary for the seasons 2018/2019 and 2019/2020 was increased from EUR 450,000 to EUR 510,000 for each season. Moreover, art. 2 of the amended contract specified the following:

- “the manner of payment for the season 2018-2019 will be based on the amount of the original contract (450,000 EUROS) and the amount increased from the original contract for the season 2018-2019 (which sums to 60,000 EUROS) will be paid in cash” on 4 November 2018;

- “if the [club’s] decision was to extend the contract for the season 2020/2021 and/or 2021/22, the amount for the each these seasons will be 560,000 EURO net”.

4. Furthermore, according to art. 4 of the amended contract, the “term of this contract is for 4 seasons, 2018-2020 and optional seasons 2020-2022. The [club] solely reserves the decision of validity of termination of the contract for the seasons 2020-2021 and 2021-2022 and the [player] has no right to claim any compensation if the [Respondent] decides to terminate the contract”.

5. During a match played on 26 April 2019, the player sustained an injury to his shoulder.

6. On 15 May 2019, the player returned to Country B for the seasonal holidays.

7. On 5 June 2019, the player addressed a correspondence to the club, putting it in default of the payment of the amount of EUR 102,000, which was allegedly due on 10 May 2019, giving it 15 days to remedy its default, i.e. until 20 June 2019.

8. By letter dated 27 June 2019, the player unilaterally terminated the employment contract with immediate effect.

9. On 4 July 2019, the player lodged a claim against the club, maintaining that he had just cause to terminate the employment relationship, and requesting the latter be ordered to pay him outstanding remuneration in the amount of EUR 102,000, plus 5% interest p.a. as from 11 May 2019 until the date of effective payment, and compensation for breach of contract in the amount of EUR 1,630,000 “or, alternatively, the amount of EUR 510,000” as compensation for breach of contract, plus 5% interest p.a. as from 28 June 2019 “or, alternatively, as from the submission of this claim” until the date of effective payment.

10. The player explained, first of all, that, after having signed the contract and moved to Country D, he found out that it was hard for him “to get used to the life in Country D and work style”. Nonetheless, the player indicated that he was performing well for the club.

11. However, the player added that the club made the payments with “huge delay” and only partially. The player further pointed out that the club had explained to him that, due to international sanctions, payments could only be performed in cash. Moreover, the player recalled that these payments were always made in peculiar ways, such when he was instructed to receive a bag full of cash in a public restroom inside the airport of Country F. The player claims this was frequent.

12. The player added that, after having opposed the club’s modus operandi and having signed the amended contract, the living situation in Country D got worse as his performance had not been as good, to the point that – feeling no longer safe in the country due to alleged threats by fans made to him – he tried to leave on 27 October 2018 but without success, as his departure was “hindered at airport in Country D”.

13. The player further recalled that, at that point, he started communicating to the club his fears concerning the threats he had started receiving from the supporters as well as his concerns about outstanding salaries. However, according to the player, the payments “continued to be delayed and outstanding”.

14. The player explained that, as of 15 May 2019, the club had not yet paid to him the amount of EUR 60,000, representing the increase in his salary for the season 2018/2019 that was due on 4 November 2018, as well as his salary payment of EUR 102,000 due on 10 May 2019.

15. The player further recalled that he tried to get in touch with members of the club’s management concerning his outstanding dues but to no avail.

16. The player, therefore, concluded that he had just cause to terminate the employment contract on 27 June 2019, since, by then, the club had failed to remit to him remuneration in the total amount of EUR 102,000.

17. The player further pointed out that he had been absent from trainings and matches only twice, namely in December 2018 and May 2019, however rightfully so because:

a. In December 2018 the Respondent had delayed his payments despite numerous and constant reminders;

b. In May 2019, he was on a medical leave due to his injured shoulder.

18. Moreover, the player recalled that, apart from not paying him his dues, the club also threatened his safety by, inter alia, forcing him to accept payments in an illegal way and by exporting and importing currency in other countries beyond the limits permitted.

19. Additionally, the player deemed that the clause of the amended contract reserving to the club the right to unilaterally terminate the contract for the seasons 2020/2021 and 2021/2022 should be declared invalid and, thus, the duration of the employment relationship should be considered as from the season 2018/2019 until the end of the season 2021/2022.

20. The player signed an employment contract with the club from Country F, Club E (hereinafter: the Counter-Respondent II), valid as from 6 August 2019 until 31 May 2021. According to the said contract, he was entitled to a total fixed amount of EUR 1,390,000.

21. The club, for its part, rejected the player’s claim and counterclaimed against him and the Counter-Respondent II.

22. The club pointed out that, upon signature of the contract, the player had received the first payment of EUR 180,000. The club also maintained that it paid EUR 45,000 to the player on 28 September 2018.

23. The club further explained that it always paid the player his salaries and that it was never put in default by him until he left Country D.

24. The club further recalled that, following the player’s absence, it sent him a first warning on 20 November 2018. The club added that, since the player did not come back to Country D, it sanctioned him with a monetary fine but informed that it would cancel such fine if the player came back to Country D by 23 November 2018. However, as the player did not come back, the club recalled that it sent him a further notification of absence on 23 November 2018.

25. The club recalled that, when he finally returned, the player failed to attend the training sessions on 25 November 2018.

26. The club further recalled that, on 26 November 2018, the player informed it about his intention to go back to Country B.

27. The club also recalled that following a meeting between the parties, the player left Country D on 29 November 2018 and that, on 8 December 2018, the club sent a further notice to him.

28. The club added that, on 3 January 2019, the player came back to Country D and, although he was not able to perform with the rest of the team, his salaries were regularly paid.

29. The club concluded that, from the player’s behaviour, it can be noted that he was not feeling well in Country D and forced his move to Country F where he signed a new employment contract with the Counter-Respondent II.

30. In light of the above, the club counterclaimed against the player and his new club compensation for breach of contract in the amount of EUR 2,530,000, consisting of EUR 900,000 as damaged suffered, and calculated on the “mercantile value” of the player, and EUR 1,630,000 in relation to the residual value of the amended contract.

31. The Counter-Respondent II, for its part, argued that the player had just cause to terminate the contract as the club had repeatedly failed to pay him his salaries. Additionally, the Counter-Respondent II submitted that it did not induce the player to terminate the contract as the employment relationship between the player and the Counter-Respondent II only started after the player had already filed a claim before FIFA. The Counter-Respondent II is therefore of the position that it cannot be considered jointly liable for the termination of the contract.

32. Alternatively, the Counter-Respondent II claimed that should it be the case that FIFA finds that the player terminated the contract without just cause, the compensation requested by the club “is totally contradictory”, “seriously wrong” and “excessive, disproportionate and arbitrary”, as the club would be benefited from the salaries it did not have to pay the player for the remainder of the contract; hence, the Counter-Respondent II claimed that this amount should be considered as mitigation and not additional compensation. The Counter-Respondent II concluded by requesting that no sporting sanction or joint liability be applied against it.

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 4 July 2019. 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 members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition January 2020), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from Country B, a club from Country D, and a club from Country F.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition January 2020), and considering that the present claim was lodged on 4 July 2019, the June 2019 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and documentation on file. However, the DRC 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. By doing so, the Chamber firstly recalled that the parties had signed an employment contract, as amended on 25 October 2018, valid as from the season 2018/2019 until the end of the season 2021/2022, in accordance with which the Claimant/Counter-Respondent I was entitled to receive, inter alia, as follows:

- EUR 180,000 on 19 July 2018;

- EUR 45,000 on 27 September 2018;

- EUR 60,000 on 4 November 2018;

- EUR 90,000 on 10 January 2019;

- EUR 45,000 on 10 March 2019;

- EUR 90,000 on 10 May 2019;

- EUR 510,000 for the season 2019/2020;

- EUR 560,000 for the seasons 2020/2021 and 2021/2022.

6. In continuation, the members of the Chamber took into account that, on 27 June 2019, the player notified the club of the termination of the contract on the basis of outstanding remuneration, which amounted to EUR 102,000. The club, for its part, submits that the player terminated the contract without just cause, and requested compensation for breach of contract and that the Counter-Respondent II be considered jointly liable.

7. The DRC highlighted that the central issue in the matter at stake would be, thus, to determine as to whether the player had just cause to terminate the contract on 27 June 2019.

8. In this sense, the Chamber took note that the parties, as per their submissions, concurred that the residual value of the contract was EUR 1,630,000, which matches the player’s remuneration for seasons 2019/2020, 2020/2021, and 2021/2022. Additionally, the Chamber observed the contents of the amended contract, and took note of its article 4, according to which the term of the employment relationship between the player and the club was 4 seasons. Consequently, the Chamber concluded, and emphasized, that it stands undisputed contract, as amended, would expire on 30 June 2022.

9. Additionally, the Chamber wished to emphasize that, according to the player, at the time of the termination of the contract, the total amount of EUR 102,000 was yet to be paid by the club.

10. Lastly, the DRC observed that the player granted the club in writing, on 5 June 2019, with a deadline of 15 days to cure its default, to no avail.

11. The Chamber then turned its attention to the arguments of the club and acknowledged that according to the latter the player’s salaries were “paid regularly”.

12. In continuation, the DRC recalled that according to the legal principle of the burden of proof contained in art. 12 par. 3 of the Procedural Rules, any party claiming a right on the basis of an alleged fact shall carry the burden of proof. With that in mind, the Chamber observed that the club did not presented evidence of payment of the player’s requested salaries in the amount of EUR 102,000.

13. As such, and in light of the player’s submissions, the Chamber concluded that the club failed to pay the player salaries in the total amount of EUR 102,000 which, since the player was not paid on a monthly basis, corresponds to 2.4 salaries.

14. On account of the above and taking into consideration the Chamber’s longstanding jurisprudence in this respect, the Chamber decided that the player had just cause to unilaterally terminate the contract on 27 June 2019 and that the club is to be held liable for the early termination of the contract with just cause by the player.

15. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amounts which were outstanding under the contract at the moment of the termination, i.e. EUR 102,000.

16. In addition, taking into consideration the Claimant/Counter-Respondent I’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the members of the Chamber decided to award the Claimant/Counter-Respondent I interest at the rate of 5% p.a. on the outstanding amount of EUR 102,000 as of 11 May 2019 until the date of effective payment.

17. In continuation, 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 player 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.

18. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains a provision by means of which the parties had beforehand agreed upon an amount of 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.

19. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

20. The members of the Chamber then turned their attention to the remuneration and other benefits due to the player 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.

21. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract as from its date of termination with just cause by the player, i.e. 27 June 2019, until 30 June 2022, and concluded that the player would have received in total EUR 1,630,000 as remuneration had the contract been executed until its expiry date. Consequently, the Chamber concluded that the amount of EUR 1,630,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

22. In continuation, the Chamber verified as to whether the Claimant/Counter-Respondent I 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, and article 17 par.1 lit. ii) of the Regulations, 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.

23. The Chamber recalled that the player signed an employment contract with the Counter-Respondent II, valid until 31 May 2021, in accordance with which the player was to receive a total fixed remuneration of EUR 1,390,000. Accordingly, the Chamber concluded that the mitigated compensation due to the player, comprehending both the residual value of the contract and the amounts the player was able to mitigate, amounts to EUR 240,000.

24. Further, the Chamber turned its attention to art. 17 par. 1 lit ii) of the Regulations, and observed that, subject to the early termination of the contract being due to overdue payables, in addition to the mitigated compensation, the player shall be entitled to an amount corresponding to three monthly salaries as additional compensation.

25. The Chamber then proceeded to calculate the additional compensation, and noted that the player was entitled to an average salary of EUR 44,583.33 in line with the contract. Accordingly, the player is entitled to receive three times the referred amount, that is, EUR 133,750.

26. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand as well as the player’s general obligation to mitigate his damage, the Chamber decided to partially accept the player’s claim and that the club must pay the amount of EUR 373,750 as compensation for breach of contract in the case at hand.

27. In addition, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the Claimant/Counter-Respondent I interest of 5% p.a. on the amount of compensation as of 4 July 2019 until the date of effective payment.

28. 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.

29. In this regard, the DRC 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.

30. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent/Counter-Claimant does not pay the amounts due to the Claimant/Counter-Respondent I within 45 days as from the moment in which the Claimant/Counter-Respondent I, 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.

31. The DRC 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 Dispute Resolution Chamber

1. The claim of the Claimant/Counter-Respondent I, Player A, is partially accepted.

2. The counterclaim of the Respondent/Counter-Claimant, Club C, is rejected.

3. The Respondent/Counter-Claimant has to pay to the Claimant/Counter-Respondent I the amount of EUR 475,750, plus interest as follows:

- at the rate of 5% p.a. on the amount of EUR 102,000 as from 11 May 2019 until the date of effective payment;

- at the rate of 5% p.a. on the amount of EUR 373,750 as from 4 July 2019 until the date of effective payment.

4. Any further claim lodged by the Claimant/Counter-Respondent I is rejected.

5. The Claimant/Counter-Respondent I is directed to inform the Respondent/Counter-Claimant, 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./3. above.

6. The Respondent/Counter-Claimant shall provide evidence of payment of the due amount in accordance with point III./3. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amount plus interest due in accordance with point III./3. above is not paid by the Respondent/Counter-Claimant within 45 days as from the notification by the Claimant/Counter-Respondent I of the relevant bank details to the Respondent/Counter-Claimant, the Respondent/Counter-Claimant 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).

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

9. 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 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 (CAS)

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Tel: +41 21 613 50 00

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer