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 20 February 2020
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 20 February 2020,
in the following composition:
Clifford Hendel (USA), Deputy Chairman
Roy Vermeer (The Netherlands), member
Daan De Jong (The Netherlands), 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
Contractual basis
1. On 10 January 2018, the player, Player A (hereinafter: the player or the Claimant) and the club, Club C (hereinafter: the club or the Respondent) entered into an employment contract valid as from the date of signature until the end of the season 2019/2020.
2. The contract stipulated the following:
“7-1-After signature of this contract and receipt of the ITC from football federation of the Country D and after passing the medical test the amount of fifty thousand Euros (50,000 EUR) – not later than eight days, will be paid by the club to the player as signing fee.
7-2- The amount of four hundred and fifty thousand euros (450,000 EUR will be paid as follows:
No.
Month
Date
Amount
[N]otes
1
February 2019
End of the month
26,000
Euros
2
March 2019
End of the month
26,000
Euros
3
April 2019
End of the month
26,000
Euros
4
May 2019
End of the month
26,000
Euros
5
June 2019
End of the month
26,000
Euros
6
July 2019
End of the month
26,000
Euros
7
August 2019
End of the month
26,000
Euros
8
September 2019
End of the month
26,000
Euros
9
October 2019
End of the month
26,000
Euros
10
November 2019
End of the month
26,000
Euros
11
December 2019
End of the month
26,000
Euros
12
January 2020
End of the month
26,000
Euros
13
February 2020
End of the month
26,000
Euros
14
March 2020
End of the month
26,000
Euros
15
April 2020
End of the month
26,000
Euros
16
May 2020
End of the month
26,000
Euros
17
June 2020
End of the month
34,000
Euros
“4-9- For the Player’s absence more than 10 days, the club is legally permitted to initiate legal action against the player according to Art. 17 of FIFA rules.”
“4-10- The Player is committed to greet and fulfil the club internal regulation of disciplinary committee as well as rules and regulations of Country D Pro-League during the season. And in case the player breaches the rules and regulation he will be responsible will accept the penalties according to the rules and his claim and excuse of lack of knowledge about the club internal codes of disciplinary, can not be accepted.”
“6-9- In case that the club terminates the contract unjustified and unilaterally, or in case the player terminates the contract but justifiably, and any possible disputes between the two parties occurs, the dispute should be lodged before FIFA for formal decision”
“8-2. In case of any dispute between both parties, the issue will be taken FIFA and therefore the decision of FIFA juridical bodies is valid enforceable.”
Competence of FIFA and admissibility of the claim
3. The Respondent contested FIFA’s competence to entertain the matter, arguing that clause 4-10 of the contract provides the competence of “Country D FA Dispute Resolution Bodies (or Disciplinary Committee) before referring to FIFA”.
Overview of the case
4. On 6 and 17 June 2019, the Claimant sent default notices to the Respondent, requesting the payment of outstanding remuneration corresponding to half of the signing-on fee and 4 monthly salaries, namely from February 2019 until May 2019.
5. On 17 June 2019, the club invited the player to attend a meeting in Country D on 19 June 2019 “for amount collection and negotiations”.
6. On 18 June 2019, the player rejected the invitation and pointed out that that the players are on a break until 27 June 2019. Moreover, the player informed the club that if it wanted to meet the player it would need to come to Country B. Finally, the player emphasised that the club’s behaviour is “not correct” and that he expects the payment until 21 June 2019, otherwise, he will terminate the contract.
7. On 22 June 2019, the player unilaterally terminated the contract invoking the club’s non-compliance with its financial obligations.
8. On 15 October 2019, the player lodged a claim in front of FIFA requesting the following:
“The Respondent, Club C (Country D), has to pay to the Claimant Player A (Country B), within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of net EUR 148,000.00 plus 5% interest rate per year p.a. until the date of effective payment as follows:
a. 5% p.a. as of 19 January 2019 on the amount of EUR 25,000.00;
b. 5% p.a. as of 01 March 2019 on the amount of EUR 26,000.00;
c. 5% p.a. as of 01 April 2019 on the amount of EUR 26,000.00;
d. 5% p.a. as of 01 May 2019 on the amount of EUR 26,000.00;
e. 5% p.a. as of 23 June 2019 on the amount of EUR 19,000.00.
The Respondent, Club C (Country D), has to pay to the Claimant, Player A (Country B), within 30 days as from the date of notification of this decision, compensation for breach contract in the amount of net EUR 327,000.00 plus 5% interest p.a. as 23 June 2019 until the date of effective payment.”
9. In his claim, the player argued that he terminated the contract with just cause as, on the date of termination, the equivalent of more than 4 monthly salaries were outstanding.
10. In its reply, the club acknowledged that the player was entitled to the salary for the “second half” of the season 2018/2019, but averred that he terminated the contract without just cause as he refused to collect the salaries in Country D upon the club’s invitation. In this respect, the club stressed that the sanctions on Country D constituted a force majeure which blocked the payment process.
11. Finally, the club considered that the player breached the contract, as he did not resume the training after his unilateral termination (despite the club’s request). Consequently, the club considered that the contract was eventually terminated due to the player’s breach of contract, namely art. 4-9.
12. On 18 July 2019, the player signed a new employment contract with the club, Club E, valid as from the date of signature until 15 June 2022 and providing a monthly salary of 15,000 in the currency of country B (approx. EUR 2,000).
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 March 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 (cf. article 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 January 2020), the Dispute Resolution Chamber would, in principle, be competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from Country B and an club from Country D.
3. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of article 4-10 of the employment contract which stipulates that “The Player is committed to greet and fulfil the club internal regulation of disciplinary committee as well as rules and regulations of the Country D Professional League during the season. And in case the player breaches the rules and regulation he will be responsible will accept the penalties according to the rules and his claim and excuse of lack of knowledge about the club internal codes of disciplinary, can not be accepted.”
4. While analysing whether it was competent to hear the present matter, first and foremost, the Chamber deemed it of utmost importance to highlight that the article 4-10 of the contract does not consist in a choice of jurisdiction, but rather a choice of applicable rules which do not concern procedural matters. The members of the Chamber therefore concluded that the contract does not contain any arbitration or jurisdiction clause. Hence, article 4-10 of the contract clearly does not refer to a national dispute resolution chamber or any similar arbitration body in the sense of art. 22 lit. b) of the aforementioned Regulations.
5. In view of all the above, the Chamber established that the Respondent’s objection to 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.
6. Subsequently, the Chamber analysed which 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 on the Status and Transfer of Players (edition January 2020), and considering that the claim was lodged on 15 October 2019, the October 2019 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.
7. 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 the documentation submitted by the parties. 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. In particular, the Chamber recalled that, in accordance with art. 6 par. 3 of Annex 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.
8. Having said this, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well 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.
9. First of all, the members of the Chamber acknowledged that, on 10 January 2018, the player and the club had concluded an employment contract valid as from the date of signature until the end of the season 2019/2020, pursuant to which the club undertook to pay to the player the remuneration, as established in point I.2. above.
10. Furthermore, the members of the DRC took note of the fact that, on 6 and 17 June 2019, the player put the club in default for the payment of EUR 129,000 setting a deadline of 10 days with the first default notice and 4 days with the second default notice.
11. Moreover, the DRC took note that, according to the player, he had just cause to unilaterally terminate the employment contract on 22 June 2019, since the club failed to comply with its financial obligations. In this regard, the player affirmed that he had no alternative but to terminate the contract and deemed that the club should be held liable for the early termination of said contract.
12. Subsequently, the members of the DRC took note that the club, for its part, acknowledged its debt, however, argued that the player refused to the collect the salaries in Country D upon the club’s invitation, and therefore, terminated the contract without just cause.
13. In light of the foregoing, the DRC considered that the underlying issue in this dispute, considering the parties’ position, was to determine as to whether the player had just cause to terminate the employment contract and to determine the consequences thereof.
14. Bearing in mind the arguments put forth by the Claimant and the Respondent, as well as the contents of the employment contract, the Chamber acknowledged that the Respondent did not pay half of the sign-fee as well as the full salaries for the months of February until May 2019, which is undisputed by the Respondent.
15. In view of all the above, the DRC considered that at the time of the termination of the contract, i.e. on 22 June 2019, more than 4 monthly salaries remained unpaid despite being put in default twice.
16. On account of the above and taking into consideration the Chamber’s longstanding jurisprudence in this respect, the Chamber decided that the Claimant had just cause to unilaterally terminate the contract on 22 June 2019 and that the Respondent is to be held liable for the early termination of the contract with just cause by the player.
17. Having established that the club is to be held liable for the early termination of the employment contract, the DRC focused its attention on the consequences of such termination.
18. First of all, the members of the Chamber concurred that the club must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the Chamber decided that the club is liable to pay to the player the remuneration that was outstanding at the time of the termination i.e. the amount of EUR 148,000, consisting of the unpaid part of the sign-on fee and the salaries for the months of February until June 2019.
19. Furthermore, considering the player’s claim for interest and also taking into account the DRC’s longstanding jurisprudence, the DRC ruled that the Respondent must pay interest as follows:
a. on the amount of EUR 25,000 as of 19 January 2019;
b. on the amount of EUR 26,000 as of 1 March 2019;
c. on the amount of EUR 26,000 as of 1 April 2019;
d. on the amount of EUR 26,000 as of 1 May 2019;
e. on the amount of EUR 19,000 as of 23 June 2019.
20. In continuation, the DRC focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.
21. In application of the relevant provision, the DRC held that it first of all had to clarify as to whether the pertinent employment contracts 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 members of the DRC established that no such compensation clause was included in the employment contract at the basis of the matter at stake.
22. As a consequence, the members of the DRC 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 DRC 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. In this regard, the Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the DRC on a case-by-case basis taking into account all specific circumstances of the respective matter.
23. The DRC then turned its 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 DRC deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the DRC to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.
24. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Claimant until its natural expiration, bearing in mind that he would have received in total EUR 327,000 as remuneration for the period as from June 2019 until June 2020. Consequently, the Chamber concluded that the amount of EUR 327,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.
25. In continuation, the members of the DRC 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 art. 17 par. 1 lit. ii) of the Regulations as well as 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.
26. In this respect, the DRC recalled that the Claimant had found new employment with the club from Country B, Club E, as from 18 July 2019 until 15 June 2022, providing for a monthly salary of 15,000, which is approximately EUR 2,000 leading to total value for the period corresponding to the time remaining on the prematurely terminated contract of approx. EUR 24,000, which shall be deducted from the above-mentioned residual value. As a result, the DRC established that the “Mitigated Compensation” amounts to EUR 303,000.
27. Subsequently, the Chamber turned its attention once more to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an “Additional Compensation” of three monthly salaries on top of the “Mitigated Compensation”, subject to the early termination of the contract being due to overdue payables. Furthermore, said provision established that the overall compensation may never exceed the rest value of the prematurely terminated contract.
28. Therefore, taking into consideration the player’s monthly salary under the prematurely terminated contract, the DRC decided to award the Claimant additional compensation in the amount of EUR 327,000, in accordance with the above-mentioned provision.
29. Consequently, on account of the above-mentioned considerations, the Chamber decided to partially accept the Claimant’s claim and held that the Respondent must pay the amount of EUR 327,000 as compensation for breach of contract.
30. In addition, taking into account the player’s request and the DRC’s well-established jurisprudence, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amounts of EUR 327,000 as of the date on which the claim was lodged, i.e. 15 October 2019, until the date of effective payment.
31. The DRC concluded its deliberations by rejecting any further claim of the Claimant.
32. Furthermore, taking into account the consideration under number II./6. 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.
33. 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.
34. 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.
35. 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, Player A, is admissible.
2. The claim of the Claimant is partially accepted.
3. The Respondent, Club C, has to pay to the Claimant outstanding remuneration in the amount of EUR 148,000 plus 5% interest p.a. until the date of effective payment,as follows:
a) on the amount of EUR 25,000 as of 19 January 2019;
b) on the amount of EUR 26,000 as of 1 March 2019;
c) on the amount of EUR 26,000 as of 1 April 2019;
d) on the amount of EUR 26,000 as of 1 May 2019;
e) on the amount of EUR 19,000 as of 23 June 2019.
4. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of EUR 327,000 plus 5% interest p.a. as of 15 October 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 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 points 3. and 4. above.
7. The Respondent shall provide evidence of payment of the due amounts in accordance with point 3. and 4. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, 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 aforementioned amounts 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 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 (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport (CAS)
Avenue de Beaumont 2, CH-1012 Lausanne
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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