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 10 March 2021

Decision of the

DRC Judge

passed on 10 March 2021,

regarding an employment-related dispute concerning the player Fabian Sid Serrarens

BY:

Pavel Pivovarov, (Russia)

CLAIMANT:

Fabian Sid Serrarens, Netherlands

represented by Mr Zabih Etemadi

RESPONDENT:

ARKA Gydinia SSA, Poland

represented by Mr Krzysztof Malinowski

I. FACTS OF THE CASE

1. On 17 July 2019, the parties entered into an employment contract (hereinafter: ‘the contract’) valid as from the date of signature until 30 June 2021.

2. The contract states that the player will receive basic monthly remuneration as follows:

‘Basic remuneration in Polish Zloty (hereinafter: PLN)

a) (---) in 2019/20 season in the amount of: PLN 58 000 +VAT monthly, while the remuneration for July 2019 will amount to PLN 30 000 + VAT;

b) In 2020/21 season: PLN 58 000 + VAT monthly or PLN 62 000 + VAT monthly, if the Claimant in 2019/20 Ekstraklasa gained a minimum 10 CC points.

Matches prizes and other services

During the length of contract, the player will receive an additional monthly remuneration in amount PLN 2,500 +VAT for accommodation, however for the first season he will receive the money in advance (PLN 30 000 + VAT) (…).’

3. Article 10.1 states that this contract dissolves without necessity to make additional statements by the Parties with the lapse of the term for which it was concluded.

4. Article 10.2 states that this contract dissolves without necessity to make additional statements by the Parties, if PZPN does not register the player as its player, according to regulations binding in this scope.

5. Article 10.3 states that this contract may be dissolved by the mutual agreement of the parties expressed in writing, unless null and void.

6. Finally, article 10.4 states the following: ‘Should the club not permitted to participate in the Ekstraklasa for the 2020/21 season for any reason, the contract shall be terminated on the 30 June 2020 without any compensation due to any party’.

7. Furthermore, in accordance with article 10 par. 6 of the Contract, the parties have no right to unilaterally terminate the contract except for the situations explicitly permitted therein.

8. On 10 April 2020, parties mutually agreed to sign an addendum to the contract named (hereinafter: the "Addendum)". The Addendum was agreed given the extraordinary circumstances related to the COVID-19 pandemic with a view ‘to ensure contractual stability as well as protections of players' remuneration’.

9. In the Addendum, the player agreed with a reduction of 50% starting from 14 March 2020 of his individual monthly remuneration as well as his additional remuneration (e.g. match prizes, bonus etc.). The parties agreed that the reduction of remuneration is temporary and is only for the period from 14 March 2020 until 30 June 2020 or from 14 March 2020 until 19 July 2020 in case the 2019/2020 season will be extended due to the COVID-19 measures.

10. Furthermore, the Addendum contains in article 2 par. 3 the following: "In matters not covered by the Agreement (i.e. the Addendum), the provisions of the contract on professional football (i.e. the Contract) concluded by the Parties shall apply accordingly."

11. On 3 July 2020, the club was relegated to the Polish I Liga Polska.

12. On 12 July 2020 the club made a proposal via text message to the player, stating that his contract is only valid for Ekstraklasa games (Polish 1st league) and proposed for an early termination of the contract by mutual consent until 31 July 2020.

13. The player rejected this proposal by the club and lodged a claim against the club before FIFA for breach of contract and contract termination without just cause.

14. In his request for relief, the player requested the following:

- to determine that club had no just cause to unilaterally terminate the contract on 31 July 2020 and that, consequently, the club is held liable for the early termination of the contract without just cause;

- to be awarded a mitigated compensation plus additional compensation, which is calculated on a total amount of EUR 144,082.00, to be increased by 5% interest p.a. over the total amount of compensation as of 1 August 2020 until the day of full payment, within 7 days after decision;

- deduct points from the club in season 2020/2021 and also ban it from registering any new players, either nationally or internationally, for two entire and consecutive registration periods as of 1 January 2021;

- order the club to pay him the extrajudicial costs of EUR 5,000.00 excluding 21% VAT within 7 days after decision;

- order the club to pay for the costs of the current proceedings;

- submit the present matter to FIFA's Disciplinary Committee who will impose the necessary sanctions if the club fails to comply with the DRC decision.

15. In support of his claim, the player started by stating that the word "dissolution" in clause 10 should be read as "termination" which concludes that the contract ends ipso jure by the lapse of the term for which it was concluded, i.e. on 30 June 2021.

16. According to the player, on 13 March 2020, the Ekstraklasa SA (the Polish organizing body) suspended the Polish league due to the outbreak of COVID-19 pandemic. However, following consultation with the Polish government, the Polish league resumed behind closed doors without any spectators on 29 May 2020. All matches of 31-37 round in Ekstraklasa were played and the season 2019/2020 concluded on 19 July 2020.

17. The player alleges that he attended all trainings and official matches as of 1 July 2020 and played as a substitute in the official match in the Ekstraklasa relegation group against Korona Kielce on 3 July 2020. He further states that after the match against Korona Kielce, the club was officially relegated to the Polish I Liga Polska on 3 July 2020 as a result of season 2019/2020 performance in Ekstraklasa.

18. The player adds that the club took the position that based on its relegation, the player’s contract would expire on 31 July 2020. The player rejected this position and argued that he tried to reach an amicable settlement with the club since 13 July 2020 without success.

19. The player further states that on 16 July 2020, he was granted permission to return home to Amsterdam at the end of the 2019/2020 season, however, on 29 July 2020, the club allegedly forced him to travel back to Poland for the first trainings of the pre-season 2020/2021.

20. The player further submits that having attended the pre-season 2020/2021 trainings on 30, 31 July and 1 August 2020, he was sent home with the statement that his contract expired on 31 July 2020 and that if a new club would request the necessary ITC documents for his registration, e.g. TPO and out of contract declaration, the club would comply with such request. The player submits that as a result he unwillingly travelled back home to Amsterdam.

21. Consequently, the player alleges that his contract was terminated without just cause on 31 July 2020 and that as a result, the club is liable to pay compensation due to its unjustified breach of contract.

22. The player argues that at the time of concluding the contract, the parties agreed on a possibility of termination of the contract in case of relegation of the club (cf. clause 10.4 of the contract). However, this does not imply automatic termination and the words “shall be terminated”, should be read to imply that the termination action by one of the parties is necessary, without which the contract ends ipso jure by the lapse of the term for which it was concluded (30 June 2021). As such, the club ought to have invoked the relegation clause before 30 June 2020.

23. Furthermore, the player adds that even if the relegation clause is read to imply “automatic” termination, then the contract between the parties was not terminated on 30 June 2020 since he attended team trainings and also official matches as of 1 July 2020.

24. As to compensation for unjustified breach of contract, the player maintains that the club is liable to pay him compensation for the months of August 2020 until June 2021 which is PLN 58,000 *11 months plus 23% VAT= PLN 784,740).

25. Additionally, the player adds that he is entitled to an additional remuneration of PLN 15,000 plus 23% VAT for the season 2020/2021.

26. The player also states that according to his contract, he is entitled to compensation for the rent of an apartment for PLN 2,500 (plus 23% VAT) per month. As such, the club should pay him the fixed rent amount for the remainder of the contract, i.e. for 1 August 2020 to 30 June 2021, which is: 11 months x PLN 2,500 rent amount per month plus 23% VAT = PLN 33,825.

27. In view of the foregoing, the player submits that he is owed a total residual value of the contract in the amount of PLN 837,015 (i.e. PLN 784,740 + PLN 18,450 + PLN 33, 825).

28. In continuation, the player further submits that the compensation due to him shall be calculated by deducting the value of the new contract signed with his new in the amount of EUR 90,000 from the residual value of the terminated contract.

29. Furthermore, and subject to the early termination of the contract being due to overdue payables, in addition to the mitigated compensation, the player claims that he is entitled to an amount corresponding to three monthly salaries (the "additional compensation"). In this case, the player argues that there are egregious circumstances because of the way the club treated him since 3 July 2020 by:

- allegedly forcing him to come to a mutual termination;

- allegedly bullying him and forcing him to travel back from Amsterdam to Poland on 29 July 2020 just to make him attend in the first two trainings of 2020/2021 pre-season and sending him back home on 1 August 2020;

- the club holding out the prospect of sanctions if the he would not comply with its demand to travel back to Poland for only the first two trainings;

- failing to pay all the expenses incurred by the player like flight tickets and accommodation since 1 August 2020.

30. In conclusion, the player submits that the additional compensation is therefore PLN 75,952.50 x 3 months), totaling PLN 227,857.50, which after conversion to EUR is 50,072.20. Therefore, the player claims a total compensation (mitigated compensation plus additional compensation) amounting to EUR 144,082.

31. In its reply, the club requests that the DRC rejects the player’s claim in its entirety and submits that the type of relegation clause used in the contract is widely recognized in FIFA and CAS jurisprudence. Subsequently, the contractual relationship of the parties automatically ends in the case of relegation of the club, or it give both parties the right to terminate the employment contract in case of relegation.

32. The club further argues that both parties benefit from these kinds of relegation clauses and referenced CAS 2016/A/4549 Aris Limassol FC v. Carl Lombe, award of 4 November 2016 which confirmed that “players themselves also could find it desirable to include such clause in their employment contracts in order to protect their sports career, in that they would not be obliged to play in lower-level competition in the case of relegation of their actual club. Therefore, these clauses can be deemed as a valid way to protect mutual interests of both parties of the contract (...); on the other hand, there are relegation clauses which do not automatically lead to the termination of the contractual relationship in case of relegation but only give one party the opportunity to terminate the employment contract without any regulation of compensation for the other party. These kinds of clauses bear the risk that they contain an unbalanced right to the discretion of one party only without having any interest of any kind for the other party. Therefore, the Sole Arbitrator needs to analyze the balance of interest according to the specific circumstances in the present case”.

33. The club also submits that in accordance with par. 2.9 of the resolution of the Management Board of the Polish FA (PZPN) no. Vlll/124 dated 14 July 2015,"the season means a period of time between the 1st of July of a specific year until the 30th of June of the subsequent year; the same definition of "the season".

34. It is also noteworthy according to the club that in accordance with art. 8.5. lit. c of the resolution of the Management Board of the Polish FA (Ref. no,111/54), in case of relegation of the club to the lower division, it can unilaterally terminate the contract with the player if the statement regarding the termination of the contract is expressed before, respectively, 10 of January or 10 of July.

35. However, the club adds that due to the resolution of the Management Board of the Polish FA no. V/60 dated 25 June 2020 the meaning of art. 8.5. lit. c of resolution no. 111/54 has changed to state that in case of relegation of the club to the lower division, it can unilaterally terminate the contract with the player if the statement regarding the termination of the contract is expressed until 10 days after the end of the season. In order to terminate a contract in said conditions the club has to pay the player damages amounting to 1 month remuneration, but that this stipulation of the resolution was amended because of COVID-19 pandemic related issues.

36. The club adds however that on 13 March 2020, the Department of Logistics of the Games of Ekstraklasa SA informed all players that considering the outbreak of COVID-19, the football matches in Ekstraklasa are suspended until 26 April 2020.

37. The club further submits that on 27 March 2020, the Supervisory Board of Ekstraklasa SA decided that football clubs are allowed to reduce the remuneration of players for the limited period of time due to extraordinary circumstances and as a result of the said resolution, the parties signed an agreement regarding the reduction of the player's remuneration dated 10 April 2020.

38. The club adds that on 07 April 2020, the FIFA COVID-19 Football Regulatory Issues (hereinafter: "the FRI"), entered into force.

39. The club notes that in accordance with the FRI employment agreements and with art. 1.1 of the resolution of the Management Board of the Polish FA dated 12 May 2020, the games of season 2019/2020 resumed and the season ended on 31 July 2020. Therefore players’ permission to take part in these games was automatically extended until 31 July 2020.

40. The club argues that neither party sent written termination of contract notices to the other and in the correspondence between the parties, it is clear, according to the club, that the contract was terminated in accordance with par. 10.4. of the contract.

41. The club adds that before the date of expiration of the contract, it proposed to the player to terminate the contract before the end of July 2020 so that he would not have to come back to Poland only to participate in several activities just before the end of the season, however the player did not agree to said premature termination of the contract; therefore, the club expected him to perform his obligations arising from the contract until the expiration date.

42. The club maintains that it is not very clear what in the player's opinion transpired on 31 July 2020, as in the e-mail enclosed to the claim dated 2 September 2020, the player argues that the club “has terminated his contract without just cause on 31 July 2020" and in the e-mail dated 3 August 2020 the player indicates that the contract: "does not include any expiration clause before the end of the term (2 years) or an automatic termination due to relegation to Polish second league (...)”.

43. As a result the club proceeds to underline that in accordance with par. 10.6 of the contract: "the Parties have no right to unilaterally terminate this contract, except for the situations explicitly permitted in this contract and in the (...) Resolution no. 111/54 dated 27-03-2015 of the Management Board of PZPN with subsequent amendments, which constitutes integral part of this Contract”

44. Taking into account article 10.4 of the contract, the club further submits that considering that the season 2019/2020 ended on 31 July 2020, which the parties to the contract had not foreseen when concluding the contract and considering the undisputed fact that the club was relegated to the lower division at the end of the season 2019/2020, all of the necessary conditions to apply article10.4 of the contract were met.

45. The club further submits that in accordance with article 8.5. lit. c stipulated in the resolution of the Management Board of the Polish FA dated 27 March 2015, in case of relegation of the club to the lower division, the club would have been allowed to unilaterally terminate the contract regardless of the contract stipulation in this matter. The major difference between the condition relating to the expiration of the contract in circumstances provided in article 10.4 of the contract and the situation described in article 8.5.lit. c of said resolution is amounting to the necessity to pay damages in the case stipulated in the resolution and, in accordance with article 10.4 of the contract, no such obligation of the club by virtue of the agreement of the parties.

46. In view of the above, the club concludes by requesting the DRC to reject the player’s claim in its entirety.

47. Finally, on 8 September 2020, the player signed a new employment contract with a Dutch football club Roda JC , which offered a remuneration of EUR 9,000 for the 2020-2021 season.

II. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

1. First of all, the Single Judge of the Dispute Resolution Chamber (hereinafter also referred to as the DRC Judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the present matter was submitted to FIFA by the Claimant on 28 September 2020. Consequently, the DRC Judge concluded that the June 2020 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution (hereinafter: “the Procedural Rules”) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the DRC Judge recalled that in accordance with art. 3 par. 1 of the Procedural Rules in combination with art. 23 par. 1 and art. 22 lit. c) of the 2020 edition Regulations on the Status and Transfer of Players (hereinafter: “the Regulations”) he is, in principle, competent to deal with employment-related disputes between a Dutch player and a Polish club.

3. Furthermore, the DRC Judge analyzed 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 par. 2 of the Regulations on the Status and Transfer of Players (edition August 2020), and considering that the present claim was lodged on 28 September 2020, the August 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC Judge and the applicable regulations having been established, the DRC Judge entered into the substance of the matter. Subsequently, the DRC Judge continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. However, the DRC Judge emphasized 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.

5. With the aforementioned in mind, the DRC Judge noted that on 17 July 2019, the parties entered into an employment contract (hereinafter: “the contract”), valid from the date of signature until 30 June 2021.

6. Furthermore, the DRC Judge noted that on 12 July 2020, the club informed the player that his contract was only valid for Ekstraklasa games (Polish 1st league) and proposed for an early termination of the contract by mutual consent until 31 July 2020. In addition, the DRC judge noted that the player rejected this proposal made by the club and consequently lodged a claim against the club for breach of contract and contract termination without just cause.

7. At this stage, the DRC Judge noted that the main issue to be addressed is whether the club had a just cause to terminate the employment contract, by making use of the relegation clause laid down in article 10.4 of the contract.

8. In continuation, the DRC Judge took note of the fact that the club was relegated to the Polish 2nd league. In this respect, the DRC judge deemed it relevant to point out that said fact is not disputed by the parties.

9. In this context, the DRC Judge turned his attention to article 10 par. 4 (“the relegation clause”) of the Contract which states that: "Should the Club not be permitted to participate in the Ekstraklasa for the 2020/21 season for any reason, the contract shall be terminated on the 30th June 2020 without any compensation due to any Party."

10. At this point, the DRC Judge recalled that according to the well-established jurisprudence of the DRC, a so-called relegation clause may, as a matter of principle, be seen as valid as long as it is not potestative in nature and are reciprocal, i.e. they provide for equal rights of the parties to terminate the employment relationship due to the team’s relegation.

11. In continuation, the DRC Judge made again reference to the Chamber’s well-established jurisprudence and was of the opinion that a relegation clause is in essence not potestative, as it depends on an occurrence of an event which is not in one of the parties’ control, but solely depends on other circumstances, i.e. the relegation of the team. As a result, in the opinion of the DRC judge, the parties are, in principle entitled to stipulate a clause according to which the contract will terminate, if the team is relegated.

12. In regards to the reciprocity, the DRC Judge looked at the exact wording of the clause and was of the opinion that the clause in the matter at hand must be seen as reciprocal. The clause clearly mentions that the contract will terminate “without any compensation due to any Party”, and seems therefore to be applicable to both parties. What is more, both parties can invoke the clause.

13. In light of the above, the DRC Judge concluded that the relegation clause contained in the contract between the parties, is valid and can therefore be upheld. .

14. Along those lines, the DRC Judge came to the conclusion that the contract between the parties came as a result of the relegation clause and in principle came to a natural expiry on 30 June 2020, without the club being in need to formally proceed to the termination of the contract.

15. However, the DRC Judge noted that the player participated in games for the club in July 2020 and further took note of the club’s submission that for COVID-19 reasons, the sporting season 2019/2020 in Poland was officially extended to 31 July 2020 and that therefore, also the players’ permission to take part in games was automatically extended to 31 July 2020. The DRC Judge also noted that the club did not provide any documentary evidence in this respect, , however from that the information contained in the FIFA Transfer Matching System (TMS), it could be concluded that the 2019/2020 sporting season in Poland indeed ended on 31 July 2020.

16. In continuation, the DRC Judge wished to point out that the player did not claim any overdue salaries for the month of for July 2020. Based on this fact, the DRC judge was willing to conclude that the club had paid all salaries until 31 July 2020, and that on said date in view of the extended season as a result of the COVID-19 pandemic and the relegation clause laid down in article 10.4 of the contract, the contract came to an end.

17. Taking into account all of the above and in accordance with the well-established jurisprudence of the Chamber, the DRC Judge decided that the player would not be entitled to compensation for breach of contract, as the contract had expired naturally.

18. In conclusion, the DRC Judge decided that the player’s claim is rejected.

III. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the player, Fabian Sid Serrarens, is rejected.

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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