F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2020-2021) – fifa.com – atto non ufficiale – Decision 18 February 2021

Decision of the

Dispute Resolution Chamber

passed on 18 February 2021

regarding an employment-related dispute concerning the player Giuliano Victor de Paula

COMPOSITION:

Omar Ongaro (Italy), Deputy Chairman

Elvis Chetty (Seychelles), member

Stijn Boeykens (Belgium), member

CLAIMANT:

GIULIANO VICTOR DE PAULA, Brazil

Represented by Mr Marcelo Amoretty

RESPONDENT:

AL NASSR, Saudi Arabia

Represented by Mr Daniel Muñoz

I.

I. FACTS OF THE CASEFACTS OF THE CASE

1. On 19 August 2018, the Brazilian player, Giuliano Victor de Paula (hereinafter: the Claimant or the player) and the Saudi club, Al Nassr (hereinafter: the Respondent or the club) concluded an employment contract (hereinafter: the contract) valid as from 18 August 2018 until 17 August 2021.

2. Clause 4.1 of the contract stipulates the remuneration of the player during the different seasons, as follows:

a. For the season 2018/2019: EUR 4,500,000 net divided in 12 monthly salaries of EUR 375,000 each payable between September and August; being 4 of those monthly salaries, i.e. EUR 1,500,000, payable “upon signing and executing this contract”;

b. For the season 2019/2020: EUR 4,500,000 net divided in 12 monthly salaries of EUR 375,000 each payable between September and August; being 4 of those monthly salaries, i.e. EUR 1,500,000, payable on 31 August 2019;

c. For the season 2020/2021: EUR 4,500,000 net divided in 12 monthly salaries of EUR 375,000 each payable between September and August; being 4 of those monthly salaries, i.e. EUR 1,500,000, payable on 31 August 2020.

3. Clause 4.2 of the contract establishes bonuses the player would be entitled to obtain. In particular, clause 4.2.1 provides that the player is entitled to an amount of EUR 100,000 “for each one of the following occasions: (12, 20, 30 goals/assists) in the official matches during the season”. Such bonus was payable 60 days after the bonus target was reached.

4. Clause 4.3 of the contract establishes the additional retributions in favour of the player:

a. 3 round-trip business class tickets between Brazil and Saudi Arabia per year;

b. 6 round-trip economy class tickets between Brazil and Saudi Arabia per year;

c. 2 luxury cars with driver for the term of the contract;

d. A luxury house;

e. Tuition fee of the school for the player’s children;

f. Medical insurance for the player and his family.

5. On 19 July 2019, the player put the club in default of payment of the following, granting the club with a deadline of 15 days to cure the breach:

a. his monthly salaries of June and July of EUR 375,000 each;

b. EUR 100,000 as bonus for achieving 20 goals/assists on 19 February 2019;

c. EUR 350,000 as bonus for winning the Saud League on 16 May 2019;

d. SAR 31,440.50 as medical and school expenses.

6. On 20 August 2019, the player reiterated his previous letter and awarded the club with additional 7 days to cure the breach.

7. On 19 December 2019, the player put the club in default of payment of EUR 750,107 corresponding to the unpaid portion of his advance salaries payable on 31 August 2019, granting the club with a deadline of 15 days to cure the breach.

8. Allegedly, on 13 April 2020, the Saudi Professional League issued a circular letter advising all Saudi clubs to apply 50% reductions on the salaries of players, coaches and technical staff upon the suspension of all sporting activities due to Covid-19.

9. On 15 April 2020, the club sent a circular letter to the players, informing them, inter alia, that the club would “initiate a bilateral resolution in line with the relevant laws and declarations adjudicating the outbreak of COVID-19” in view of the negative financial impact caused upon the outbreak of Covid-19.

10. On 22 April 2020, the player sent a letter dated 21 April 2020 to the club, whereby he informed the latter about his non-acceptance to the 50% reduction on his salaries and suggested negotiating an eventual reduction in the form of a bilateral resolution. Moreover, the player put the club in default of payment of EUR 1,225,000, broken down as follows:

a. Salaries of February, March and April 2020: EUR 1,125,000

b. Bonus for 12 goals/assists accomplished on 19 December 2019: EUR 100,000.

11. By means of his letter dated 17 June 2020, the player put the club in default of payment of the salaries of February, March, April and May 2020, in the amount of EUR 1,500,000 as well as individual bonuses in the amount of EUR 200,000 (EUR 100,000 each for 12 and 20 goals/assist accomplished) and granted the club a 15 days’ deadline to remedy the default.

12. On the same date, 17 June 2020, the club sent a correspondence to the player informing him that a collective agreement was reached with the players.

13. In this context, on 18 June 2020, the player sent another correspondence to the club, requesting information from the latter as to the said collective agreement and stressed that he was never part of the discussions.

14. The club replied thereto via a letter dated 19 June 2020, whereby it informed the player that: (a) it did not receive his letters of 21 April and 17 June 2020; (b) that the negotiations for the collective agreement were made through the captain of the team; and (c) that the player was the only player who did not sign the collective agreement.

15. By means of a letter dated 21 June 2020, the player put the club in default of payment of the total amount of EUR 2,075,000 corresponding to the salaries of February, March, April, May and June 2020, in the amount of EUR 1,875,000 as well as individual bonuses in the amount of EUR 200,000 (EUR 100,000 each for 12 and 20 goals/assist accomplished) and granted the club a 15 days’ deadline to remedy the default.

16. On the same date, 21 June 2020, the player sent a second letter to the club whereby the former stressed that, as far as he knew, at least 2 other players did not sign the said collective agreement and that he was “open to discuss a solution other than the 50% reduction”.

17. On 22 June 2020, the club replied thereto and informed the player that it was acting in accordance with the FIFA guidelines issued in the FIFA Circular no. 1714. Moreover, the club stressed that it was 90% of the players who signed the collective agreement. Furthermore, the club offered the player to have an online meeting with one of its lawyers on the following day, 23 June 2020.

18. On 23 June 2020, the club sent a letter to the player reiterating its invitation for the player to meet with the club and amicably solve the matter.

19. On 24 June 2020, the parties allegedly had a meeting, where the club insisted on the 50% reduction on the player’s salaries and the player offered alternatives such as the early termination of the contract at the end of the current season “without the necessity of any kind of payment for any of the parties”; however, to no avail.

20. On 25 June 2020, the club informed the player that it had issued a decision and as such would enforce a 50% reduction on the player’s salaries during the period of suspension of sporting activities.

21. By means of his letter dated 28 June 2020, the player expressed to the club his non-acceptance of the unilateral decision taken by the club to reduce his earnings and further put the club in default of payment of the salaries of February, March, April, May and June 2020 in the amount of EUR 1,875,000 as well as individual bonuses in the amount of EUR 200,000 and granted the club a 15 days’ deadline to remedy the default.

22. On 28 June 2020, the club sent a correspondence to the player, informing the latter that it had proceeded with the payment all outstanding amounts in the total value of EUR 1,236,805, broken down as follows:

a. EUR 375,000 as salary of February;

b. EUR 282,361 as pro-rata salary of March;

c. EUR 189,722 as salary of April;

d. EUR 189,722 as salary of May;

e. EUR 200,000 as bonuses.

II.

II. PROCEEDINGS BEFORE FIFAPROCEEDINGS BEFORE FIFA

23. On 23 July 2020, the Claimant filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a.

a. The claim of The claim of the the ClaimantClaimant

24. In his request for relief, the player requested to be awarded outstanding remuneration in the amount of EUR 592,817, plus 5% interest p.a. as from the corresponding due dates until the date of effective payment, broken down by the player as follows:

a. EUR 92,639 corresponding to the unpaid part (50%) of the last 15 days of the salary of March 2020;

b. EUR 185,278 corresponding to the unpaid part (50%) of the salary of April 2020;

c. EUR 185,278 corresponding to the unpaid part (50%) of the salary of May 2020;

d. EUR 129,622 corresponding to the unpaid part (50%) of the 20 first days of the salary of June 2020.

25. The player further requested FIFA “not to recognize the unilateral decision issued by the club, on 25 June 2020, regarding the salary reduction for the player, having in mind [that it] was not in line with the FIFA guidelines, and consequently to declare that the said unilateral decision is not valid” .

26. In his claim, the player referred to the conduct of the club and held that it had already decided to unilaterally reduce his entitlements since April 2020 and that, as from that date until June 2020, the club was only aiming at convincing the player to accept the 50% reduction on his salaries.

27. As to the amounts paid by the club, the player acknowledged having received the outstanding remuneration due for the months of February and the first 15 days of March 2020. Nevertheless, as to the amounts due as from 15 March 2020 until 20 June 2020 (date on which the sporting activities were allegedly resumed), the player held that the club unlawfully deducted 50% of his salaries.

28. In his claim, the player referred to the FIFA Circular no. 1714 issued on 7 April 2020 whose chapter “Agreements that cannot be performed as the parties originally anticipated”, lit (i) states, inter alia, that “clubs and players [should] work together to find appropriate collective agreements on a club or league basis regarding employment conditions for any period where the competition is suspended due to COVID-19 outbreak”.

29. Furthermore, the player referred to the same chapter, lit (iii), which stipulates that “unilateral decisions to vary agreements will only be recognised where they are made in accordance with the national law or are permissible within CBA structure or another collective agreement mechanism”.

30. In this context, the player argues that, every time the club tried to negotiate with the player, it was not a bilateral negotiation, as suggested by the club, but the club trying to convince the player to accept the 50% reduction on his salaries; and that the decision to reduce the player’s entitlements, taken by the club on 25 June 2020, was unilateral.

31. The player further pointed out that in order to assess whether a unilateral decision is reasonable, the principles of good faith, reasonableness and proportionality shall be taken into account. In this regard, the player explained that there was no good faith and that the position of the player was not taken into account, since the club was following the instructions given by the Saudi League on its letter dated 13 April 2020, whereby it advised the clubs to reduce the players’ salaries in 50% without negotiating anything with the players.

32. As to the conclusion of a real collective agreement, the player held that there was no collective agreement signed, but individual agreements signed between the club and different players who accepted the salary reduction and waived their right to challenge said reduction before any court. The player further stressed that the captain of the team was never entitled to represent the whole team in order to negotiate on their behalf.

33.

33. The player also explained that he is only discussing the unilateral decision made by the club on 25 June 2020, but that he is willing to maintain the employment relationship with the club, according to what is agreed under the contract.

b.

b. The claim of The claim of the the ClaimantClaimant

34.

34. The Respondent did not reply to the claim.

III.

III. CONSIDERATIONS OF THCONSIDERATIONS OF THE DISPUTE RESOLUTIONE DISPUTE RESOLUTION CHAMBERCHAMBER

a.

a. Competence and applicable legal frameworkCompetence and applicable legal framework

35. 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 presented to FIFA on 23 July 2020 and submitted for decision on 18 February 2021. Taking into account the wording of art. 21 of the January 2021 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.

36. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and observed that in accordance with art. 24 par. 1 in combination with art. 22 lit. a) and b) of the Regulations on the Status and Transfer of Players (edition January 2021), 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 Brazilian player and a Saudi club.

37. Subsequently, 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 Player (edition January 2021), and considering that the present claim was lodged on 23 July 2020, the June 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b.

b. Burden of proofBurden of proof

38. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. Likewise, the DRC stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed by the parties.

39. In this respect, the Chamber also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.

c.

c. Merits of the disputeMerits of the dispute

40. The competence of the DRC and the applicable regulations having been established, the DRC entered into the merits of the dispute. In this respect, the DRC started by acknowledging all the above-mentioned facts as well as the arguments and the 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.

i. Main legal discussion and considerations

41. Having said this, the DRC acknowledged that in accordance with the contract, the player was entitled to receive inter alia EUR 4,500,000 net per year, divided in 12 monthly salaries of EUR 375,000 each, payable between September and August of the following year.

42. Furthermore, the DRC took note that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent had failed to pay him the following remuneration:

a. EUR 92,639 corresponding to the unpaid part (50%) of the last 15 days of the salary of March 2020;

b. EUR 185,278 corresponding to the unpaid part (50%) of the salary of April 2020;

c. EUR 185,278 corresponding to the unpaid part (50%) of the salary of May 2020;

d. EUR 129,622 corresponding to the unpaid part (50%) of the 20 first days of the salary of June 2020.

43. Subsequently, the DRC took into account that the Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. In this way, the DRC considered that the Respondent renounced its right to defence and thus accepted the allegations of the Claimant.

44. Furthermore, as a consequence of the aforementioned consideration, the DRC concurred that in accordance with art. 9 par. 3 of the Procedural Rules, it shall take a decision upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

45. Taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had substantiated his claim pertaining to outstanding remuneration with sufficient documentary evidence.

46. Nonetheless, the DRC took note of the fact that the reduction of the player’s salaries was made on the context of the COVID-19 pandemic. To this end, the Chamber wished to highlight that the decision by the club to unilaterally reduce the player’s salary is dated 25 June 2020, and such decision affected the player’s remuneration as from March 2020, that is, coinciding with the suspension of the footballing activity in Saudi Arabia.

47. At this point, the Chamber highlighted that FIFA issued a set of guidelines, the COVID-19 Guidelines, which aim at providing appropriate guidance and recommendations to member associations and their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19 and ensure that any response is harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an additional document, referred to as FIFA COVID-19 FAQ, which provides clarifications on the most relevant questions in connection with the regulatory consequences of the COVID-19 outbreak and identifies solutions for new regulatory matters.

48. The DRC also wished to refer to the fact that said guidelines – as per the explicit wording of FAQ no. 16, as well as pages 6 and 7 of the FIFA COVID-19 Guidelines – are only applicable to “unilateral variations to existing employment agreements”.

49. In this respect, while referring to the jurisprudence of the DRC and bearing in mind that the player’s claim remained uncontested, the members of the Chamber found that the reduction of the player’s salary could not be accepted due to its retroactive effect. In other words, the Chamber decided that until June 2020 the club could not reduce the player’s salary because it had never informed the player of such decision.

50. On account of the aforementioned considerations, the Chamber established that the Respondent failed to remit to the Claimant the total amount of EUR 592,817 net corresponding to the player’s salaries of March, April, May, and June 2020.

51. Consequently, the members of the Chamber decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of EUR 592,817 net.

52. In addition, taking into consideration the Claimant’s request, the members of the Chamber decided to award the Claimant 5% interest p.a. on the amount requested as from one day after the date when they should have been paid, until the date of effective payment.

ii. Compliance with monetary decisions

53. Finally, taking into account the applicable Regulations, 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.

54. In this regard, the DRC highlighted 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.

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

56. 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.

57. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties.

d.

d. CostsCosts

58. The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC proceedings relating to disputes between clubs and players in relation to the maintenance of contractual stability as well as international employment related disputes between a club and a player are free of charge”. Accordingly, the Chamber decided that no procedural costs were to be imposed on the parties.

59. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.

IV.

IV. DECISIONDECISION OF THE DISPUTE RESOLUTION CHAMBEROF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, GIULIANO VICTOR DE PAULA, is accepted.

2. The Respondent, AL NASSR, has to pay to the Claimant the following amounts:

- EUR 92,639 net as outstanding remuneration plus 5% interest p.a. as from 1 April 2020 until the date of effective payment;

- EUR 185,278 net as outstanding remuneration plus 5% interest p.a. as from 1 May 2020 until the date of effective payment;

- EUR 185,278 net as outstanding remuneration plus 5% interest p.a. as from 1 June 2020 until the date of effective payment;

- EUR 129,622 net as outstanding remuneration plus 5% interest p.a. as from 1 July 2020 until the date of effective payment.

3. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

4. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

5. In the event that the amount due, plus interest as established 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 following consequences shall arise:

 1.

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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players). 2.

In the event that the payable amount as per in this decision 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 the FIFA Disciplinary Committee.

6. This decision is rendered without costs.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

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) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, 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 Procedural Rules).

CONTACT INFORMATION:

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