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 8 April 2021
Decision of the
Dispute Resolution Chamber
passed on 8 April 2021
regarding an employment-related dispute concerning the player Luan Ferreira de
Oliveira
COMPOSITION:
Geoff Thompson (England), Chairman
Tomislav Kasalo (Croatia), member
Jerome Perlemuter (France), member
CLAIMANT:
Luan Ferreira de Oliveira, Brazil
Represented by Bichara & Motta Advogados
RESPONDENT:
Leixoes SC, Portugal
Represented by Ms Susana Rios Oliveira
I. FACTS OF THE CASE
1. On 1 July 2020, the Brazilian player, Luan Ferreira de Oliveira (hereinafter: the player or the
Claimant) and the Portuguese club, Leixoes SC (hereinafter: the club or the Respondent) signed
an employment contract (hereinafter: the contract) valid for three seasons.
2. The contract established inter alia the following remuneration in favour of the player:
a. Season 2020/2021: EUR 9,000 net in 12 instalments of EUR 750 each, the first instalment
to be paid in the subsequent month;
b. Season 2021/2022: EUR 15,240 net in 12 instalments of EUR 1,270 each, the first
instalment to be paid in the subsequent month;
c. Season 2022/2023: EUR 15,240 net in 12 instalments of EUR 1,270 each, the first
instalment to be paid in the subsequent month.
3. According to the information available in the Transfer Matching System (TMS), the season
202/2021 in Portugal started on 3 August 2020 and ends on 30 June 2021.
4. Clauses 13.2 and 13.3 of the contract respectively read as follows:
“2. Leixões SAD is entitled to unilaterally terminate this contract with no need to invoke just
cause, being immediately dissociated from the Player, both labor and sportively, provided that
is sends a written communication addressed to the Player with 30 (thirty) days in advance,
counted from the date the same shall operate its effects.
3. Upon the sending of the communication provided in the previous item, an immediate
payment in the amount corresponding to the monthly remunerations that would be due to the
Player in case this agreement was fully complied shall be made to the Player.”
5. On 25 August 2020, the club informed the player that he would be loaned to a third club. The
club gave the player a deadline of 24h to decide if he accepted such loan, under penalty of
terminating the contract.
6. The player rejected such loan.
7. On 27 August 2020, the club informed the player that he could no longer access the club’s
facilities and that he should leave his apartment, which had been provided by the club.
8. On the same date, the player wrote to the club and requested an official position regarding his
contractual situation.
9. On 28 August 2020, the player reiterated his request.
10. On the same date, the club’s president announced he had resigned from office.
11. On 1 September 2020, having received no reply, the player reiterated his requests.
12. On 2 September 2020, the club responded and argued that the contract was unknown to the
previous administration of the club and that the club could not accept its existence. The club
further argued that the player had been invited to try-outs only.
13. On 14 September 2020, the player unilaterally terminated the contract via a letter sent by his
lawyers.
14. On 30 September 2020, the Portuguese league confirmed that the player had not been
registered by the club.
15. On 13 October 2020, the club responded to the termination letter of the player, and argued
that the power of attorney was not valid in Portugal. The club further stated that the termination
was not valid since no contract existed.
16. On 23 September 2020, the player ratified the termination of the contract in writing.
17. The player signed an amateur contract with the club UD Santarém on 20 September 2020, valid
for the 2020/2021 season. According to such contract, the player was entitled to EUR 100 for
the month of September and EUR 500 monthly for the subsequent period.
18. The player explained that the contract with the new club was terminated by mutual agreement
on 31 December 2020.
II. PROCEEDINGS BEFORE FIFA
19. On 14 January 2021, the Claimant filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a. The claim of the Claimant
20. The Claimant claimed that the contract was a valid document as it was signed by the respective
administrators of the club at the time of its execution, and that such contract contained all the
essential criteria for it to be considered valid.
21. The player argued that he had just cause to terminate the contract on the grounds of art. 14
(2) of the FIFA Regulations on the Status and Transfer of Players. He explained that he was never
paid by the club and, as such, requested outstanding remuneration and compensation for
breach of contract, as follows:
a. EUR 1,500 as outstanding remuneration as salaries of July and August 2020;
b. EUR 37,980 as Compensation for breach of contract.
22. The player furthermore requested that no mitigation be considered since clauses 13.2 and 13.
3 were considered liquidated damages clauses, and informed that he signed an amateur
contract after the termination of the contract with the Respondent.
23. The player also requested to be awarded interest of 5% p.a. as from the due dates on the
amounts sought.
b. Position of the Respondent
24. The Respondent argued that it does not recognize the validity of the contract since, under
Portuguese law, contracts need to be executed “by hand”. The club nevertheless recognized
that the contract was never registered with the Portuguese league.
25. Additionally, the Respondent argued that it was undergoing a “special revitalization process”
and thus art. 24bis should not apply to the case at hand.
III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
a. Competence and applicable legal framework
26. 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 15 January 2021 and submitted for decision
on 8 April 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.
27. 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. b) of the
Regulations on the Status and Transfer of Players (edition February 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
Portuguese club.
28. 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 February 2021), and considering that
the present claim was lodged on 14 January 2021, the January 2021 edition of said regulations
(hereinafter: the Regulations) is applicable to the matter at hand as to the substance.
b. Burden of proof
29. 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.
30. 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
31. 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.
32. The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that the parties dispute the validity of the contract, and consequently
whether the termination of the contract took place with or without just cause. The DRC was
also observant of the argumentation of the Respondent as to the application of art. 24bis of
the Regulations in the matter at hand.
33. In this context, the Chamber acknowledged that its task was to determine the following:
a. Is the contract a valid and binding document on the parties?
b. Did the player have just cause to terminate the contract?
c. What are the consequences of the termination?
d. Is art. 24bis applicable to the matter at hand?
34. The DRC then proceeded to examine each matter.
i. Is the contract a valid and binding document on the parties?
35. The DRC started, first of all, by recalling the Chamber’s well-established jurisprudence which
dictates that, in order for an employment contract to be considered as valid and binding, apart
from the signature of both the employer and the employee, it should contain the essentialia
negotii of an employment contract, such as the parties to the contract and their role, the
duration of the employment relationship and the remuneration payable by the employer to the
employee.
36. The Chamber then turned to the copy of the contract provided by the Claimant, and at the
members’ unanimous opinion, such contains all the essentialia negotii in order to be considered
as a valid and binding employment contract in accordance with the jurisprudence of the
Chamber. In particular, the document contains the signature of both parties, provides for the
duration of the employment relationship, i.e. three seasons, provides for the payable
remuneration to the Claimant, and, moreover, it can be clearly inferred that said document
relates to the Claimant as being employed in order to play as a footballer with the Respondent.
37. At this point, the Chamber observed the argumentation of the Respondent according to which
the contract had not been registered, and also not executed “by hand”, which would be invalid
under Portuguese law.
38. As to the matter of the registration, the Chamber stressed that in line with the contents of
article 18 par. 4 of the Regulations, as well as the jurisprudence of the DRC, the validity of an
employment contract cannot be made conditional upon the execution of (administrative)
formalities, such as, but not limited to, the registration procedure in connection with the
international transfer of a player, which are of the sole responsibility of a club and on which a
player has no influence.
39. In this regard, the DRC pointed out that it is the responsibility of the engaging club to ensure
that the player is properly registered with his new club in order to be able to provide it with his
services. Since the club is supposedly interested in acquiring the rights of the player and in
benefiting from his services, it is also expected from it that it acts accordingly in view of
obtaining, for instance, the player’s ITC and his subsequent registration.
40. The DRC consequently confirmed that the registration or not of the contract is irrelevant in
determining if the contract was a valid and binding document.
41. As to the matter of the execution of the contract by hand, the DRC stressed that the
Respondent, who carried the burden of proof in this respect as per the cited art. 12 par. 3 of
the Regulations, failed to present any evidence in support of its reasoning. More in particular,
the DRC stressed that no evidence at all was advanced by the Respondent, who filed solely a
power of attorney authorising its legal representative to act on its behalf in these proceedings.
As a consequence, the Chamber found no reason to uphold the argumentation of the
Respondent.
42. Although confident of the foregoing line of reasoning, the Chamber added, for the sake of
completeness, that the longstanding jurisprudence of the DRC denotes that the FIFA regulations
prevail over another national law chosen by the parties. To this end, the members of the
Chamber recalled, in line with this reasoning, that the objective of the Regulations on the Status
and Transfer of Players, and the FIFA regulations in general, is to create a standard regulatory
framework to which all actors within the football community are subject to and can trust. The
Chamber pointed out that this approach has been confirmed in multiple occasion by the Court
of Arbitration for Sport, and referred, for instance, to case CAS 4471 to confirm their assessment. The DRC furthermore established that this objective would not be achievable if the
FIFA bodies had to apply the national law of a specific party to each dispute brought before it.
In this regard, it was stressed that it is in the interest of football that the recognition of a contract
is based on uniform criteria and not on provisions of national legislation, which may vary
considerably from one country to another.
43. On account of the above, the Chamber set aside the argumentation of the Respondent and
confirmed that the document of 1 July 2020 i.e. the contract is a valid employment contract
concluded by the parties.
ii. Did the player have just cause to terminate the contract?
44. Having found that the contract was valid and binding on the parties, the DRC moved to the
issue of the termination by the player. In doing so, the Chamber confirmed that the Respondent
filed no objection to the arguments raised by the player in support of his reasoning that he had
just cause to terminate the contract.
45. Having the above in mind and turning to the evidence on file, the DRC found that irrespective
of the change of administration of the club, it was clear that the club not only defaulted the
player his payments of July and August 2020, but also that it tried to force the player to be
loaned.
46. Additionally, the DRC observed that the player was also threatened with eviction from his
accommodation.
47. Bearing in mind the foregoing, the Chamber highlighted 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.
48. The Chamber noted that the player multiple times rejected the club’s position to loan him and
requested a clarification of his status with the club.
49. In consideration of the specific constellation described above as well as the contents of article
14 of the Regulations, in particular paragraph 2 of said article, the Chamber found that the club
substantially breached the contract, entailing therefore that the player had just cause to
terminate the contract.
50. The club shall hence bear the consequences that follow.
iii. What are the consequences of the termination?
51. Having stated the above, the members of the Chamber turned their attention to the question
of the consequences of such unjustified breach of contract committed by the Respondent.
52. The Chamber observed that the outstanding remuneration at the time of termination, coupled
with the specific requests for relief of the player, are equivalent to two salaries under the
contract, i.e. July and August 2020, amounting to EUR 750 each.
53. As a consequence, and in accordance with the general legal principle of pacta sunt servanda,
the Chamber decided that the club is liable to pay to the player the amounts which were
outstanding under the contract at the moment of the termination, i.e. EUR 1,500.
54. In addition, taking into consideration the player’s request as well as the constant practice of the
Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest
at the rate of 5% p.a. on the outstanding amounts as from their due dates until the date of
effective payment.
55. Having stated the above, the Chamber turned to the calculation of the amount of compensation
payable to the player by the club 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 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.
56. In application of the relevant provision, the Chamber 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 took in particular
consideration the argumentation of the player that clauses 13.2 and 13.3 of the contract
constitute the so-called liquidated damages clauses, which in his opinion would prevent the
consideration of any mitigation.
57. To this end, the DRC noted that such clauses give respect to the club terminating the contract
and not the player. Hence, it suffices in the Chamber’s opinion that that they cannot apply to
the case at hand.
58. As a consequence, the members of the Chamber determined that the amount of compensation
payable by the club to the player had to be assessed in application of the other parameters set
out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the
amount of compensation payable.
59. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with
the calculation of the monies payable to the player under the terms of the contract until its
expiry date. Consequently, the Chamber concluded that the amount of EUR 37,980 serves as
the basis for the determination of the amount of compensation for breach of contract. Such
amount is broken down as follows:
a. EUR 7,500 as the remainder of salaries (i.e. 10 months) for the season 2020/2021;
b. EUR 15,240 for the season 2021/2022;
c. EUR 15,240 for the season 2022/2023.
60. In continuation, the Chamber 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. According to the constant practice of the DRC
as well as art. 17 par. 1 lit. ii) of the Regulations, such remuneration under a new employment
contract shall be taken into account in the calculation of the amount of compensation for
breach of contract in connection with the player’s general obligation to mitigate his damages.
61. Indeed, the player found employment with UD Santarém between 20 September 2020 and 31
December 2020. In accordance with the pertinent employment contract, the player was entitled
to EUR 1,600 for the cited period. Therefore, the Chamber concluded that the player mitigated
his damages in the total amount of EUR 1,600.
62. Subsequently, the Chamber 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 confirmed that the contract termination took place
due to said reason i.e. overdue payables by the club, and therefore decided that the player shall
receive additional compensation.
63. In this respect, the DRC highlighted that theoretically the player would be entitled to EUR 2,250
as additional compensation. However, the Chamber recalled that as per the clear wording of
article 17 of the Regulations, the amount of compensation (including any additional
compensation) cannot exceed the residual value of the contract.
64. As a consequence, it was decided to award the amount of additional compensation of EUR
1,600 to the player.
65. Consequently, on account of all of the above-mentioned considerations and the specificities of
the case at hand, the Chamber decided that the club must pay the amount of EUR 37,980 to
the player (i.e. EUR 37,980 minus EUR 1,600 plus EUR 1,600), which was to be considered a
reasonable and justified amount of compensation for breach of contract in the present matter.
66. Lastly, taking into consideration the player’s request as well as the constant practice of the
Dispute Resolution Chamber in this regard, the Chamber 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.
iv. Compliance with monetary decisions
67. Finally, taking into account the applicable Regulations, the Chamber referred to par. 1 lit. 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.
68. 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. The overall maximum duration
of the registration ban shall be of up to three entire and consecutive registration periods.
69. At this point, the Chamber took note of the Respondent’s argumentation that on the grounds
of art. 24bis par. 3 of the Regulations, the consequences established under said article should
be excluded on account of the alleged fact that the Respondent was undergoing a “special
revitalization process” in Portugal.
70. Once again the Chamber noted however that there is no evidence on file regarding the club
being under any kind of insolvency proceeding. Consequently, on the grounds of the club’s
failure to discharge its burden of proof in line with art. 12 par. 3 of the Procedural Rules, the
DRC found that such line of argumentation could only be rejected. For the sake of
completeness, the DRC nonetheless observed that in previous cases, Portuguese clubs
undergoing the same proceeding as the one alleged (but not proven) by the Respondent have
been able to make payment to creditors in compliance with art. 24bis of the Regulations.
71. The DRC thus confirmed that art. 24bis shall apply to the case at hand. Therefore, bearing in
mind the above, the DRC decided that the Respondent must pay the full amount due (including
all applicable interest) to the Claimant within 45 days of notification of the decision, failing
which, at the request of the Claimant, a ban from registering any new players, either nationally
or internationally, for the maximum duration of three entire and consecutive registration periods
shall become immediately effective on the Respondent in accordance with art. 24bis par. 2, 4,
and 7 of the Regulations.
72. The Respondent shall make full payment (including all applicable interest) to the bank account
provided by the Claimant in the Bank Account Registration Form, which is attached to the
present decision.
73. 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. 8 of
the Regulations.
d. Costs
74. 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.
75. 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.
76. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by
any of the parties.
IV. DECISION OF THE DISPUTE RESOLUTION CHAMBER
1. The claim of the Claimant, Luan Ferreira de Oliveira, is partially accepted.
2. The Respondent, Leixoes SC, has to pay to the Claimant, the following amount:
- EUR 1,500 net as outstanding remuneration plus 5% interest p.a. as from 1 September
2020 until the date of effective payment;
- EUR 37,980 net as compensation for breach of contract without just cause plus 5% interest
p.a. as from 14 January 2021 until the date of effective payment.
3. Any further claims of the Claimant are rejected.
4. Full payment (including all applicable interest) shall be made to the bank account set out in the
enclosed Bank Account Registration Form.
5. Pursuant to article 24bisof the Regulations on the Status and Transfer of Players if full payment
(including all applicable interest) is not paid within 45 days of notification of this decision, the
following consequences shall apply:
1. The Respondent shall be banned from registering any new players, either nationally or
internationally, up until the due amount is paid. The maximum duration of three entire and
consecutive registration periods.
2. The present matter shall be submitted, upon request, to the FIFA Disciplinary Committee in
the event that full payment (including all applicable interest) is still not paid by the end of
the of the three entire and consecutive registration periods.
6. The consequences shall only be enforced at the request of the Claimant in accordance
with article 24bis paragraphs 7 and 8 and article 24ter of the Regulations on the Status and
Transfer of Players.
7. 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).
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