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 13 January 2021

Decision of the

DRC Judge

passed in Zurich, Switzerland, on 13 January 2021,

regarding an employment-related dispute concerning the player Marko MIRIC

BY:

Jon Newman (USA), DRC Judge

CLAIMANT:

MARKO MIRIC, Serbia

Represented by Mr. Mico Petkovic

RESPONDENT:

FK BORAC BANJA LUKA, Bosnia and Herzegovina

Represented by Mr. Drazen Nikolic

I. FACTS

1. On 23 June 2019, the player and the club concluded an employment agreement, valid between 23 June 2019 and 15 June 2021, according to which the player was entitled to receive a gross monthly salary of BAM 671.64, as well as an addendum to said contract.

2. Moreover, according to clause 2 of the addendum, the player was entitled to a monthly additional amount of BAM 9,550.

3. Based on clause 3 of the addendum, the player was entitled to a maximum amount of BAM 10,000 “during validity of the employment agreement”.

4. Based on clause 4, a sign-on fee in the amount of BAM 80,000 was also to be paid to the player, in 4 instalments as follows:

- BAM 20,000 upon ‘conclusion of the employment agreement’;

- BAM 20,000 due on 31 January 2020;

- BAM 20,000 due on 30 June 2020;

- BAM 20,000 due on 31 January 2021.

5. On 6 May 2020, the player put the club in default for the total amount of BAM 60,000, corresponding to the unpaid salaries for January, February and March 2020, providing a 10 days’ deadline, however to no avail.

6. On 19 May 2020, the player unilaterally terminated the contract with the club, based on the outstanding salaries.

7. On 11 October 2020, the player lodge a claim against the club, by means of which he claimed the following amounts:

- Bosnian convertible Mark (BAM) 61,648 as outstanding remuneration, corresponding to the unpaid salaries for the months of January (partially) February, March, April and May (pro rata) 2020 (3 x BAM 10,000, plus BAM 5,519 for January 2020 and BAM 6,129 for May 2020), as well as the unpaid sign-on fee that fell due on 31 January 2020 in the amount of BAM 20,000, plus 5% interest p.a. as from 19 May 2020;

- BAM 158,908 as compensation for breach of contract, corresponding to the remaining value of the contract in the period between May 2020 and June 2021, minus the mitigation, plus 5% interest p.a. as from 12 October 2020.

8. In his claim, the player explains that he deems that he had a just cause to terminate the contract.

9. In its reply to the claim, the club requested for the rejection of the player’s claim.

10. The club explains that it terminated the contract with the player with just cause on 15 May 2020, as he apparently was absent without a valid reason for mandatory meeting (for which he was invited on 8 May 2020) with the club management and training on 11 May 2020.

11. In addition, the club explains that the player informed them that he would not be able to join for the mandatory meeting on 11 May 2020, as he was still in Serbia, which had closed its borders with Bosnia and Herzegovina. The club argues that it never gave permission for the player to travel to Serbia and that the player had to be sanctioned with disciplinary measures.

12. On 12 May 2020, the club informed that disciplinary proceedings had been started against him for “unjustified non-attendance of trainings and meetings” and requested the player to submit – within 8 days of receipt of the correspondence - a written answer. Said request was sent to the only known address of the player, his apartment in Banja Luka, Bosnia, as a result of which the shipment was returned to the club’s premises on 15 May 2020.

13. In view of the foregoing, on 15 May 2020, the club issued a decision to terminate the player’s contract with immediate effect and to impose a fine of BAM 3,000 on the player.

14. In conclusion, the club deems that it had a just cause to terminate the contract of the player, ‘in accordance to labor law in BH’.

15. On 17 August 2020, the player signed a new contract with the Serbian club FK Radnicki 1923, valid between 17 August 2020 and 31 May 2022, according to which the player was entitled to a monthly salary of RSD 33,000 net, as well as a sign-on fee of RSD 580,000.

II. CONSIDERATIONS OF THE DRC JUDGE

1. First of all, the DRC Judge (hereinafter also referred to as DRC judge) analysed whether it was competent to deal with the case at hand. Taking into account the wording of art. 21 of the June 2020 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 Judge referred to art. 3 par. 1 of the Procedural Rules and emphasised 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, he is competent to deal with matters which concern employment-related disputes with an international dimension between players and clubs, such as the present one, which involves a Serbian player and a Bosnian club.

3. In continuation, the DRC Judge analysed which edition of the Regulations of the Status and Transfer of Players should be applicable to the present matter. In this respect, the DRC Judge confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering the date when the claim was lodged, the June 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

4. With the above having been established, the DRC Judge entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents contained in the file. However, the DRC Judge emphasized that in the following considerations it will refer only to facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

5. In continuation, the DRC judge took into account that, on 23 June 2019, the Claimant and the Respondent signed a contract, valid between 23 June 2019 and 15 June 2021.

6. What is more, on 19 May 2020, the Claimant notified the Respondent of the termination of the contract on the basis of outstanding remuneration. The Respondent, for its part, submits that it had terminated the contract with the Claimant already on 15 May 2020, with just cause, as the Claimant was absent from several training sessions and because he had travelled back to Serbia, without permission of the Respondent.

7. The DRC judge highlighted that the central issue in the matter at stake would be, thus, to determine whom had unilaterally terminated the contract on which date, and whether said termination was made with or without just cause.

8. In this respect, the DRC judge first of all wished to emphasize that, based on the information on file, there is no decisive evidence that the Respondent had effectively notified its alleged decision dated 15 May 2020 to terminate the contract, to the Claimant. On the other hand, the Claimant was able to demonstrate (with a proof of notification) that he sent his termination letter dated 19 May 2020 to the Respondent. As a result, the DRC judge decided that it could be established that the Claimant had unilaterally and prematurely terminated the contract with the Respondent on 19 May 2020.

9. In respect to the termination, the DRC judge further noted that from the information on file, it turned out that the on the date of termination of the contract, 19 May 2020, the salaries for February, March, April and a part of May 2020 remained unpaid

10. Furthermore, the DRC jugde noted that the Respondent had not contested that the abovementioned salaries, in the total amount of BAM 55,591, had not been paid to the Claimant. However, the Respondent deemed that – since the Claimant was absent from a meeting held at the Respondent’s offices on 11 May 2020 as he travelled without the Respondent’s permission to Serbia – it had a just cause to terminate the contract on 15 May 2020. Moreover, the Respondent deemed that it was entitled to impose fine of BAM 3,000 on the Claimant, for ‘unjustified non-attendance of trainings and meetings‘, as he could not provide valid reasons for his absence after he was invited to take part in a disciplinary investigation on 12 May 2020.

11. In this context, the DRC judge noted that he had to examine whether the reasons put forward by the Respondent could justify the termination of the contract in the present matter.

12. In this respect, the DRC judge eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to ensure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

13. In view of the above, the DRC judge observed that the Respondent – despite the fact it allegedly did not give permission to travel back to Serbia – did not contract the Claimant at all to discuss a solution to the issue but only started a disciplinary proceeding and eventually terminated the Claimant’s contract after it did not receive a reply from him. However, regardless of the question whether the Claimant was allowed to return to Serbia or whether he should be present at the Respondent’s premises on 11 May 2020, the DRC judge was of the firm opinion that the Respondent did, in any case, not have just cause to prematurely terminate the employment contract with the Claimant. The DRC judge deemed that such breach could not legitimately be considered as being severe enough to justify the termination of the contract and that there would have been more lenient measures to be taken (e.g., among others, trying to find an amicable solution for the matter at hand).

14. Moreover, the DRC judge addressed the issue of the fine of BAM 3,000 imposed on the Claimant by the Respondent for the fact that apparently without the Respondent’s permission, he returned to Serbia on an unspecified date and as a result could not join for a meeting at the Respondent’s premises on 11 May 2020, as Serbia had closed its borders with Bosnia and Herzegovina.

15. In this context, the DRC judge also noted that it appeared that the Respondent had only sent the invitation to take part in the disciplinary proceedings to the Claimant’s address in Bosnia and Herzegovina, whereas the Respondent knew that the Claimant had returned to Serbia. Therefore, it could not be established that the Claimant at all was aware of the disciplinary proceedings initiated by the Respondent. As such, it could not be established that a due process was followed as to the investigation why the Claimant was absent.

16. Furthermore, and irrespective of the foregoing consideration, the DRC judge wished to point out that the imposition of a fine, or any other available financial sanction in general, shall not be used by clubs as a means to set off outstanding financial obligations towards players. Consequently, the DRC judge decided to reject the Respondent’s argument in this connection and decided to not take into account the fine of BAM 3,000 imposed on the Claimant.

17. Furthermore, as a consequence of the aforementioned considerations and taking into account the documentation presented by the parties to the dispute, the DRC judge established that at least three monthly salaries, for the months of February, March and April 2020, as well as the pro rata part of the May 2020 salary, had fallen due and remained outstanding at the time of the termination of the contract by the Claimant. Consequently, the DRC judge concurred that the Respondent had seriously neglected its financial contractual obligations towards the Claimant.

18. On account of the above and taking into consideration the Chamber’s longstanding jurisprudence in this respect, the DRC judge decided that the Claimant had just cause to unilaterally terminate the contract on 19 May 2020 and that the Respondent is to be held liable for the early termination of the contract with just cause by the player.

19. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the DRC judge decided that the Respondent is liable to pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination, i.e. BAM 55,591. corresponding to the unpaid part of the January 2020 salary, the salaries for February, March and April 2020 and the unpaid sign-on fee that fell due on 31 January 2020.

20. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC judge decided to award the Claimant interest at the rate of 5% p.a. on the outstanding amount of BAM 55,591 as of 19 May 2020 until the date of effective payment.

21. In continuation, the DRC judge 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.

22. In this context, the DRC judge 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.

23. In application of the relevant provision, the DRC judge 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 DRC judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

24. Subsequently, and in order to evaluate the compensation to be paid by the Respondent, the DRC judge 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 DRC judge pointed out that at the time of the termination of the employment contract on 19 May 2020, the contract would run for the period between May 2020 and 15 June 2021. Consequently, taking into account the financial terms of the contract, the DRC judge concluded that the remaining value of the contract as from its early termination by the Claimant until the regular expiry of the contract amounts to BAM 175,000, i.e. two lump sum payments of BAM 20,000 each, as well as BAM 135,000 as salaries due in the period between My 2020 and 15 June 2021. The DRC judge that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

25. In continuation, the DRC judge remarked that following the early termination of the employment contract at the basis of the present dispute the Claimant had found new employment with the Serbian club FK Radnicki 1923, valid between 17 August 2020 and 31 May 2022. Based on said contract, the Claimant was entitled to a monthly salary of Serbian Dinar (RSD) 33,000 net, as well as a sign-on fee of RSD 580,000. For the overlapping period between May 2020 and 15 June 2021, this amounted to the total amount of RSD 910,000 or approximately BAM 15,095.

26. Consequently, in accordance with the constant practice of the Dispute Resolution Chamber and the general obligation of the Claimant to mitigate his damages, such remuneration under the new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract.

27. As a result, the DRC judge concluded that the mitigated compensation amounts to BAM 159,905.

28. Furthermore, the DRC judge emphasised that, pursuant to art. 17 par. 1 lit ii. of the Regulations, in case of the early termination of the contract being due to overdue payables, a player shall in addition to the mitigated compensation, also be entitled to an amount corresponding to three monthly salaries (i.e. the additional compensation). Also, the overall compensation may never exceed the rest value of the prematurely terminated contract.

29. With the above in mind, the DRC judge took into account that the awarding of three additional monthly salaries would exceed the rest value of the prematurely terminated contract, which is not in line with the wording of art. 17 par. 1 lit ii of the Regulations. As a result, the DRC judge decided to award the Claimant an overall compensation to the residual value of the contract, i.e. until the amount of BAM 175,000.

30. Consequently, the DRC judge decided that the Respondent must pay the amount of BAM 175,000 to the Claimant as compensation for breach of contract, which is considered by the DRC judge to be a reasonable and justified amount as compensation.

31. Furthermore, taking into account the Claimant’s petition and the constant practice of the Dispute Resolution Chamber, the DRC judge decided to award the Claimant interest at the rate of 5% p.a. on the amount of compensation, as from 12 October 2020 until the date of effective payment.

32. Furthermore, taking into account the consideration under number II./3. above, the DRC judge 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 DRC judge 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 judge 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.

35. Finally, the DRC judge 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, Marko Miric, is accepted.

2. The Respondent, FK Borac Banja Luka, has to pay to the Claimant, the following amount:

- Bosnian convertible Mark (BAM) 55,591 as outstanding remuneration, plus 5% interest p.a. as from 19 May 2020;

- BAM 175,000 as compensation for breach of contract without just cause, plus 5% interest p.a. as from 12 October 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.

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:

Fédération Internationale de Football Association

FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland

www.fifa.com | legal.fifa.com | psdfifa@fifa.org | T: +41 (0)43 222 7777