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 22 October 2020

Decision of the

Dispute Resolution Chamber

Passed on 22 October 2020,

regarding an employment-related dispute concerning the player Paul Acquah

COMPOSITION:

Clifford J. Hendel (USA/France), Deputy Chairman

Angela Collins (Australia), member

Abu Nayeem Shohag (Bangladesh), member

CLAIMANT:

PAUL ACQUAH, Ghana

Represented by Mr. Felix Majani

RESPONDENT:

WAZITO FC, Kenya

I. FACTS OF THE CASE

1. On 2 July 2019, the Ghanaian player, Paul Acquah (hereinafter: the player or the Claimant) and the Kenyan club, Wazito FC (hereinafter: the club or the Respondent) concluded an employment contract (hereinafter: the contract), valid as from the date of signature until 2 July 2022.

2. According to its art. 1.2, the contract could be renewed for a further period of 1 year, on the condition that “the player meets the requirements on performance and fitness”.

3. Art. 1.3 of the contract also stipulates that the “this contract is purely a performance based contract. The measures for performance by the club are:

i. Minimum of 50% actively playing in the 1st eleven.

ii. Disciplinary issues against the Club’s Code of Conduct.”

4. According to art. 2 of the contract, the club undertook to pay the player the following remuneration:

- KES 150,000 as a sign-on fee per year;

- KES 90,000 per month as salary, which “shall be inclusive of house allowance and commuter allowance”;

- KES 12,000 as winning bonus for every match won “in the event the player makes it to the match day squad of 18 players”;

- KES 5,000 for “any match that ends in a draw” but “on the condition that the team wins the premier league at the end of the season. This amount shall be paid as a lump sum”.

- One month salary if “the team lifts the title” and on the condition that the player has “featured through the league. The Club threshold shall be 50% of the entire season matches”.

- KES 200,000 “in the event the team lifts the Go TV title”;

- KES 100,000 “if among the most valuable players and league”.

5. Arts. 18.1.1 and 18.1.2 of the contract granted the club the possibility to terminate the contract “by giving 1 months’ notice to the player” among other reasons if the player “performs below the minimum set standard in terms of performance and is hence deemed as a surplus to the club”.

6. On 1 July 2020, the club informed the player of the termination of the contract. Referring to COVID-19 pandemic, the club stated that “in relation to this and in order to keep the club afloat for the future, the club has decided to terminate your contract with effect from 1st August 2020.” By the same correspondence, the club further undertook to pay the player his full salary for the month of June and half of his salary for July 2020.

7. In a press article dated 7 July 2020, it was indicated that the club released 12 players citing hard economic times.

8. On 7 July 2020, Mr Ricardo Badoer, President of the club, wrote in social media a message containing crude and foul language, which inter alia stated as follows: “Today the wazito FC cleaning continues. Kicking out no good (…) players that were recruited without my approval. All they did was (…) lose games. (…). They lacked self respect and love for the game”.

9. On 13 July 2020, the player’s representatives wrote to the club ascertaining as follows: “you disguised the Covid 19 pandemic to forcefully, unilaterally and without just cause terminate the above players’ employment contracts” and “You threatened and continue to threaten to kick the players out of their apartments with full knowledge that they have no alternative accommodation being foreigners who cannot leave the country given the closure of all airports by the Kenyan Government in the wake of the Covid 19 pandemic”. As such, the player requested the payment of KES 1,630,000 corresponding to compensation for breach of contract, 6 months’ salary as additional compensation for specificity of sport, outstanding remuneration for July 2020 and the unpaid sign-on fee. Moreover, the player asked Mr Badoer to “issue a public statement apologizing for his derogatory statements”.

10. By the time this decision was passed, the player had been unable to find new employment.

II. PROCEEDINGS BEFORE FIFA

a. The claim of the Claimant

11. In his claim filed on 24 July 2020, the player first stated that during the entire contractual relationship, the club never paid the sign-on fee to the player.

12. In continuation, the player explained that just before the suspension of the league on 7 April 2020 due to Covid-19, the club announced on 3 April 2020 that it would not subject its players to pay cuts. The player stated that the club continued to pay the players.

13. However, the player explained that on 15 May 2020, the club’s president gave an interview on a local radio, during which he declared that: “We have talked to new players. We are going to bring in new players. We had some (…) players. We still have some (…) players. They are going to go out”.

14. The player furthermore stated that in another interview dated 26 May 2020, the club’s president declared that “We have several Wazito players crying today [because] they are going to find out they are going to be fired… (…) Wazito players…”.

15. The player submitted video files with the full interviews of the club’s president in support of his claim. The contents of the interviews contained crude and foul language used by the club’s president.

16. On 1st July 2020, date on which the club terminated the contract, the player stated that the club also terminated the contracts of 11 other players.

17. The player then referred to the club’s president social media publication dated 7 July 2020, and furthermore explained that the club’s president gave a third interview on the same local radio on 10 July 2020, where he said that “We based (the termination) of course on performance. Our future goals. I was not involved in hiring these players. Their salaries were too high compared to performance. Again, we came to that conclusion based on performance. We will see new players come in. I can’t have people not performing or letting down their teammates”.

18. The player argued that the club terminated the contract without just cause, in breach of the FIFA Regulations on the Status and Transfer of Players. To this extent, the player argued that no force majeure occurred in relation to Covid-19 considering that the club never suffered financial difficulties and the club acknowledged that the player was fired due to poor performance.

19. The player also emphasised the content of the social media publication dated 7 July 2020 to support his allegations. Moreover, the player argued that the club did try to find a solution, in other words the termination was not an ultima ratio.

20. The player held that the club failed to pay him his annual sign-on fee (KES 150,000) and his salary of July 2020 (KES 90,000). The player also requested the residual value of his contract as compensation, as well as additional compensation in the amount equivalent to six months salaries for egregious circumstances.

21. In light of the above, the player requested the following:

a. KES 2,375,806 as compensation for breach of contract;

b. KES 240,000 as outstanding remuneration, broken down as follows:

i. KES 90,000 as salary of July 2020;

ii. KES 150,000 as sign-on fee;

c. KES 540,000 as additional compensation.

22. The player further requested interest at 5% p.a. on the outstanding amounts as from 1 August 2020 and not specifically on the compensation, as well as costs of the proceeding.

b. Position of the Respondent

23. The Respondent did not reply to the claim despite having been invited to do so.

III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

a. Competence and applicable legal framework

24. 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 24 July 2020 and submitted for decision on 22 October 2020. 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.

25. 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 October 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 Ghanaian player and a Kenyan club.

26. 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 October 2020), and considering that the present claim was lodged on 24 July 2020, the June 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

27. 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.

28. 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. Merits of the dispute

29. 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

30. The foregoing having been established, the DRC moved to the substance of the matter, and took note of the fact 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.

31. Furthermore, because 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 on file, in other words, upon the statements and documents presented by the Claimant.

32. In continuation, the DRC reverted to the player’s position, according to which the termination of the contract took place without just cause. The DRC further noted that the Claimant had adequately provided evidence pertaining to the termination of the contract at the club’s initiative, and hence established that the player had sufficiently substantiated his claim.

33. Having said that, the Chamber wished to refer to the fact that, in light of the worldwide COVID-19 outbreak, 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 clarification about the most relevant questions in connection with the regulatory consequences of the COVID-19 outbreak and identifies solutions for new regulatory matters.

34. Analysing the concept of a situation of force majeure, the members of the Chamber noted that, based on the contents of the FIFA COVID-19 Guidelines and the FIFA COVID-19 FAQ, FIFA did not declare that the COVID-19 outbreak was a force majeure situation in any specific country or territory, or that any specific employment or transfer agreement was impacted by the concept of force majeure.

35. In other words, in any given dispute, it is for a party invoking force majeure to establish the existence of said event under the applicable law/rules as well as the consequences that derive in connection thereto. The analysis of whether a situation of force majeure existed has to be considered on a case-by-case basis, taking into account all the relevant circumstances.

36. Furthermore, the deciding body recalled that the aforementioned COVID-19 documents issued by FIFA - 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”. Therefore, except where a termination of a contract occurred following a unilateral variation made as a result of COVID-19 (in which case the validity of the variation must first be assessed under the guidelines), said guidelines do not apply to assess unilateral terminations of existing employment agreements. The members of the Chamber further noted that for the assessment of disputes that are presented before the FIFA judicial bodies concerning the unilateral termination of a contract, the FIFA Regulations as well as the established jurisprudence of the Chamber shall apply. The Chamber noted that, in the present case, there was no variation of the contract prior to its termination. The guidelines are therefore inapplicable and only the FIFA Regulations and the jurisprudence of the Chamber will apply.

37. Following these general observations, the members of the Chamber deemed it important to outline that it remained uncontested that the Respondent terminated the contract based the performance of the player, which the club deemed to be poor, in light of the social media publications and interviews given by the club’s representative. The DRC further outlined that the termination even contradicted the club’s previous stance regarding the COVID-19 pandemic, and concluded that the reasons invoked by the club in its letter dated 1 July 2020.

38. In this context, the DRC underlined contents of the contract, in particular clauses 1.3, 18.1.1 and 18.1.2 and noted that such clauses appear to be unilateral and to the benefit of the Respondent only. What is more, the DRC stressed that the decision on the lining-up of players in a match is normally left fully to the discretion of the club, and that “poor performance” is based purely on subjective criteria. In the light of such potestative character of the pertinent contractual clauses, the DRC established that they cannot be accepted.

39. In this respect, the Chamber was 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.

40. Additionally, the DRC recalled the longstanding jurisprudence of the Dispute Resolution Chamber, according to which poor performance does not constitute just cause for termination of a contract. Equally and for the sake of completeness, the Chamber concluded that even if the termination had taken place due to the COVID-19 pandemic, such termination would also have been made without just cause.

41. On account of the foregoing considerations, the Chamber decided that the club had no legal basis to unilaterally terminate the contract. Accordingly, the DRC determined that the club is to be held liable for such early termination of the contract without just cause.

ii. Consequences

42. In continuation, having established that the club is to be held liable for the early termination of the contract with just cause, the DRC focused its attention on the consequences of such termination.

43. In this regard, DRC determined on the grounds of the principle pact sunt servanda that the club was not only to pay the amount of KES 150,000 as outstanding remuneration to the player, corresponding to his sign-on fee, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.

44. In addition, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC decided to award the player interest at the rate of 5% p.a. on the cited outstanding amount as of 1 August 2020 until the date of effective payment.

45. Having stated the above, the DRC turned to the calculation of the amount of compensation payable to the player by the club in the case at stake. In doing so, it 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.

46. In application of the relevant provision, the DRC held that it first of all had to clarify as to whether the pertinent employment contract contained 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.

47. As a consequence, the DRC 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 further recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable.

48. Bearing in mind the foregoing, the DRC proceeded with the calculation of the monies payable to the player under the terms of the contract until its term. Consequently, the DRC concluded that the amount of KES 2,165,806 (i.e. 1 July 2020 until 2 June 2022 à KES 90,000 each month, pro-rata) serves as the basis for the determination of the amount of compensation for breach of contract.

49. In continuation, the DRC verified as to whether the player 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, and confirmed that the player was unable to find new employment.

50. In this respect, the DRC referred to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an amount corresponding to three monthly salaries as additional compensation should the termination of the employment contract at stake be due to overdue payables. In the case at hand, the Chamber clarified that the contract termination had not taken place due to said reason i.e. overdue payables by the club, and therefore decided that the player is not entitled to receive additional compensation.

51. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the club must pay the amount of KES 2,165,806, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

52. Taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC decided to award the player interest on said compensation at the rate of 5% p.a. as of the date of claim, until the date of effective payment.

53. Finally, on account of the club’s president behaviour, which the DRC found to be unacceptable in light of the manner and language he addressed the players in his public manifestations, the Chamber deemed it necessary to refer the case to the FIFA Disciplinary Committee due to the possible violations of art. 11 of the FIFA Disciplinary Code.

iii. Compliance with monetary decisions

54. Finally, the DRC 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.

55. 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.

56. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, communicates the relevant bank details to the Respondent, 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 Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

57. The DRC recalled that the above-mentioned bans 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.

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

d. Costs

59. The DRC 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.

60. Likewise and for the sake of completeness, the DRC 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. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, PAUL ACQUAH, is partially accepted.

2. The Respondent, WAZITO FC, has to pay to the Claimant the following amounts:

- KES 150,000 as outstanding remuneration plus 5% interest p.a. as from 1 August 2020 until the date of effective payment;

- KES 2,165,806 as compensation for breach of contract without just cause plus 5% interest p.a. as from 24 July 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

4. 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.

5. 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).

6. 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.

7. The decision is rendered free of 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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