F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2016-2017) – fifa.com – atto non ufficiale – Decision 11 October 2016

Decision of the Single Judge of the Players’ Status Committee

passed in Zurich, Switzerland, on 11 October 2016,

by

Mr Geoff Thompson (England),

Single Judge of the Players’ Status Committee,

on the claim presented by the coach

Coach A, Country B

as “Claimant”

against the club

Club C, Country D

as “Respondent”

regarding a contractual dispute between the parties

I. Facts

1. On 1 January 2015, the coach of Country B, Coach A (hereinafter: the Claimant) and the club of Country D, Club C (hereinafter: the Respondent) concluded an employment contract (hereinafter: the contract), by means of which the Claimant was appointed as “Assistant coach”, valid as from the date of signature until 31 December 2016.

2. Article 2.1 of the contract established that “Party B [i.e. the Claimant] must fulfil all duties as Assistant Coach, and do his best to reach the annual target as set out by Party A [i.e. the Respondent]. Party B shall be subordinated to Head Coach of the Team. Party B may not be suspended by Party A”.

3. Articles 5 and 6 of the contract provided the following remuneration, and other benefits for the Claimant to be paid by the Respondent :

 Yearly salary of EUR 288,000 payable in 24 equal instalments of EUR 12,000 payable every 15th of each next month;

 4 Round trip economy class flight tickets for the route Country B to Country D or Country D to Country B;

 One cellular phone with credit paid by the Respondent;

 Car with driver 24/7 to be shared with the three other assistants of the Head Coach;

 Health insurance.

4. Article 8.3 (4) of the contract established that “[D]uring the contract period, if Party A´s [i.e. the Respondent] team lost 5 consecutive matches in Super League of Country D, Party A has the right to terminate the contract, subject to payment of compensation in the amount of 50% of all the salaries of Party B [i.e. the Claimant] that he would have earned until the end of the validity term of this contract. No mitigation shall requirement shall apply. The compensation shall be payable within 30 days following the premature cancellation (termination) of this contract”.

5. Article 10 of the contract provided that: “If Party A [i.e. the Respondent] cancels (terminates) this contract prematurely without just cause or if Party B [i.e. the Claimant] terminates this contract prematurely but with just cause (unless just cause emanates from a force majeure circumstances, e.g. Flood, earthquake, etc.), Party A shall pay the compensation to Party B. The compensation shall be paid in the amount of the salaries of Party B that he would have earned until the end of the validity term of this contract, and within 30 day from the date when the contract was prematurely terminated. No mitigation shall apply”.

6. On 18 November 2015, the Claimant lodged a claim in front of FIFA against the Respondent arguing that the latter had breached the contract without just cause. In this respect, the Claimant requested from the Respondent the amount of EUR 192,000 as compensation corresponding to the remaining salaries until the end of the contract as well as an interest at a rate of 5% per year from 23 July 2015 until the date of payment and the sum of EUR 20,000 related to the “Claimant´s attorney fees and other expenses incurred for the defence of its interests in the present arbitration”.

7. According to the Claimant, from January 2015 until July 2015, he performed his contractual obligations as an assistant coach without any complaint from the Respondent. However, on 22 July 2015, the Respondent sent a notice informing the head coach, Coach E and the rest of his staff, i.e. the Claimant and the other assistant coaches, of their respective suspensions from their training and coaching activities for Respondent´s first team. In this regard, the letter read as follows: “On account of that the results of the games of Club C in 2015 season does not reach the expectation of the club [i.e. the Respondent], after we [i.e. the Respondent] discussed with the board of director of our club, we are now inform you that the club has made the decision to suspend your duties of Head Coach (Coach E), Coach-Team Manager (Coach F), Assistant Coach (Coach A[i.e. the Claimant], Physical Coach (Coach G) and Kinetotherapist (Therapist H) from 22 July 2015. The club will have a meeting with you and will make a final decision later”. In this regard, the Claimant maintained that from the very next day after said communication, the Claimant and the rest of the staff were deprived of their driver and interpreter and the Respondent did not allow them to render the agreed services upon the contract.

8. In continuation, on 31 July 2015, a letter was sent to the Respondent, FIFA and the Football Association of Country D on behalf of the Claimant and the rest of the technical staff, requesting the immediate reinstatement in their employment positions and setting a 5 days deadline to provide an answer.

9. Moreover, on 6 August 2015, and considering the lack of reply of the Respondent, the Claimant sent another letter to the Respondent, FIFA and the Football Association of Country D, underlining the lack of reply and granting an additional deadline of 48 hours in order to find an amicable solution to the matter.

10. In this regard, the Claimant argued that on 11 August 2015, through a letter received by email dated 4 August 2015, the Respondent presented an offer to the Claimant in order to terminate the contract, providing the following:

“The club [i.e. the Respondent] now decides to pay you [i.e. the Head Coach, Coach E] and your staff [i.e. including the Claimant] 50% of the remaining part of your salaries (from 1 July 2015 to 31 December 2016, namely EUR 1,425,000 net), the payments will be made in two instalments via an intermediary company. The details of the payments are as follows:

1. The first instalment: the amount of EUR 712,500 net will be paid to you within 30 September 2015;

2. The second instalment: the amount of EUR 712,500 net will be paid to you within 31 March 2016.

If you agree with the above-mentioned terms, the club will give you and your staff a release letter and you can leave Country D from this date, moreover, you can start to negotiate with any other club regarding your new contract after the termination agreement has been signed between you and the club”.

11. In reply to said proposal, on the same day, the Claimant sent a final proposal for a final amicable settlement, requesting the payment of the 75% of the remaining salaries and providing the following: “in order to put a final end to this situation present, conveys here a final offer whereby the Club [i.e. the Respondent] will be disbursing to my clients [i.e. including the Claimant] a 75% of the remaining net salaries under their employment agreements in one lump sum payment to be effectively paid within 15 days from the signature of the settlement. By means of this offer, this Party [i.e. the Claimant] would be renouncing to a net sum corresponding to 25% of their remaining salaries, which this party considers more than fair lessening of their actual entitlement (…). In light of the current situation and as it has been evidenced the Club´s determination to terminate the employment rapports, and the consequent lack of any need of my clients´ professional services to be rendered, this Party considers pointless for the coaching staff to remain in Country D. Therefore, unless the club will provide satisfactory reason for their stay, they will be authorized to depart from Country D back to their places of origin”.

12. According to the Claimant, the Respondent expressly accepted the departure of the Claimant and the rest of the staff, providing to all of them a return flight ticket, as well as appointing a new head coach and as a consequence a new coaching staff on 28 August 2015). According to the Claimant, by adopting such inappropriate conduct as well as by not replying to the last proposal of the Claimant, the Respondent clearly committed a material breach of the contract.

13. Finally and in reply to the communication sent by the head coach, Coach E, on 26 October 2015, the Respondent sent a proposal on 4 November 2015, and dated 2 November 2015, presenting a second offer to the Claimant and the rest of the staff, as follows:

“The club [i.e. the Respondent] now agrees to pay you and your staff EUR 1,300,000 [i.e. including the Claimant] as the compensation, the payment will be made in one instalment via an intermediary company. If you agree with the above-mentioned terms, the club will sign termination agreements with you and your staff and after the agreement signed you can negotiate your new contract with any other club. If you cannot accept said terms, we will follow the terms of your employment contract as usual”.

14. In reply, the Claimant refused the aforementioned proposal by means of a correspondence dated 5 November 2015, “as no substantial progress has been made in relation to the first offer delivered on 11 August 2015”.

15. In light of all of the above, according to the Claimant, the Respondent clearly breached the contract without just cause due mainly to the following reasons:

 the contract specifically prohibited the implementation of a suspension;

 the suspension is a “masquerade attempting to conceal the actual determination of the club [i.e. the Respondent], i.e. terminate the employment contract” and the lack of performance of the Claimant cannot serve as a legal basis for such suspension;

 the Respondent´s appointment of a new head coach along with a new coaching staff confirmed the lack of interest in the services rendered by the Claimant;

 the Respondent prevented the Claimant from performing and fulfilling the main tasks for which he was hired;

16. Consequently, the Claimant requested the application of article 10 of the contract and, considering that the Respondent had already paid all the salaries until August 2015, claimed the total amount of EUR 192,000, corresponding to the remaining salaries provided in the contract, as well as 5% interest per year from 23 July 2015 until the effective payment.

17. In its reply to the claim lodged against it, the Respondent only submitted the same statement of defence already provided in the case XXX concerning the head coach, Coach E, without adding anything regarding the present dispute against the Claimant.

18. As a consequence, the Claimant was of the opinion that the Respondent had failed to exercise its right of defence in the present dispute.

II. Considerations of the Single Judge of the Players´ Status Committee

1. First of all, the Single Judge of the Players’ Status Committee (hereinafter also referred to as: the Single Judge) analysed whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 18 November 2015. Consequently, the Single Judge concluded that the 2015 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 in hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the Single Judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that in accordance with art. 23 par. 1 and 3 in combination with art. 22 lit. c) of the 2015 edition of the Regulations on the Status and Transfer of Players, he would be, in principle, competent to deal with employment-related disputes between a club or an association and a coach of an international dimension.

3. In continuation, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, he recalled that the claim was submitted to FIFA on 18 November 2015 and concluded that the 2015 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance (cf. art. 26 par. 1 and 2 of the Regulations).

4. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started his analysis by acknowledging the facts of the case and the arguments of the parties as well as the documents contained in the file. However, the Single Judge emphasised that in the following considerations he will only refer to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. In this respect and to begin with, the Single Judge acknowledged that, on 1 January 2015, the Claimant and the Respondent had concluded a contract valid from the date of signature until 31 December 2016, by means of which the Claimant was appointed as “Assistant coach”.

6. In continuation the Single Judge turned his attention to the content of article 5 and 6 of the contract which established, inter alia, a yearly salary of EUR 288,000 payable by the Respondent to the Claimant in 24 equal instalments of EUR 12,000.

7. In continuation, the Single Judge remarked that, on the one hand, the Claimant had argued that the Respondent clearly breached the contract due to the following reasons: (a) suspension of the Claimant, specifically prohibited by the contract, and in an attempt to conceal the actual determination of the club, i.e. the termination of the contract; (b) the appointment of a new coach along with a new coaching staff (c) the behaviour of the Respondent preventing him from fulfilling his main tasks for which he was hired in accordance with the contract. Consequently, the Claimant requested from the Respondent the payment of compensation for the breach of contract in the amount of EUR 192,000 in application of article 10 of the contract as well as 5% interest p.a. as from 23 July 2015.

8. On the other hand, the Single Judge remarked that the Respondent, for its part, submitted the same answer as the one corresponding to the case XXX concerning the head coach, Coach E. In this way, the Single Judge recalled that the Respondent renounced to its right of defence and, thus, accepted the allegations of the Claimant.

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

10. In light of the above, the Single Judge deemed that he had to address the question of which party was responsible for the early termination of the contractual relationship in question and whether such termination had occurred with or without just cause.

11. In continuation, the Single Judge also underlined that, subsequently, if it were found that the contract was breached by one of the parties without just cause, it would be necessary to determine the consequences for the party that caused the unjust breach of the relevant contract.

12. In view of the above, the Single Judge went on to deliberate as to whether the circumstances surrounding the suspension of the Claimant by the Respondent can be considered as a just cause for the Claimant to have prematurely terminated the contract.

13. In doing so, the Single Judge noted that the Respondent had never contested having suspended the contract by means of the letter addressed to the Respondent and the rest of the technical staff on 22 July 2015 which stipulated the that “on account of that the results of the games of Club C in 2015 season does not reach the expectation of the club”, as well as to the fact that he appointed a new head coach on 28 August 2015.

14. In continuation, the Single Judge was eager to emphasise that only a breach or misconduct which is of a certain severity might justify the termination of a contract without prior warning. 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. The Single Judge was also keen to underscore that a premature termination of an employment contract can always only be an ultima ratio.

15. In view of all the above, the Single Judge considered that at the time of the suspension of the contract, i.e. on 22 July 2015, and considering that the Respondent had not submitted any arguments, the Claimant had good reasons to believe that the reinstatement for him and the rest of the coaching staff would not occur. In particular, considering that the club appointed a new coach along with a new coaching staff on 28 August 2015 and that they were deprived from exercising their duties as per the contract and all based on their alleged low performance. Additionally, the Single Judge underlined that the wording of the contract was clear enough and prohibited in article 2 the suspension of the Claimant. Consequently, the Single Judge held that the objective circumstances at the time and specially the suspension, is to be considered in itself a serious breach of contract by the Respondent.

16. In light of the aforementioned, the Single Judge came to the conclusion that the Respondent had terminated the contract without just cause on 22 July 2015.

17. Having established that the Respondent is to be held liable for the early termination of the employment contract as of 22 July 2015, the Single Judge went on to consider the amount of compensation that should be granted following the Respondent’s unjustified termination of the contract.

18. Having established the above-mentioned, the Single Judge went on to assess the potential financial consequences of the breach of the contractual relationship by the Respondent.

19. In this regard, upon a careful examination of the contract concluded between the Claimant and the Respondent, the Single Judge took note that Article 10 of the contract provided that: “If Party A [i.e. the Respondent] cancels (terminates) this contract prematurely without just cause or if Party B [i.e. the Claimant] terminates this contract prematurely but with just cause (unless just cause emanates from a force majeure circumstances, e.g. Flood, earthquake, etc.), Party A shall pay the compensation to Party B. The compensation shall be paid in the amount of the salaries of Party B that he would have earned until the end of the validity term of this contract, and within 30 day from the date when the contract was prematurely terminated. No mitigation shall apply”.

20. The Single Judge held that this contractual clause is to the benefit of the Claimant only, i.e. it is not reciprocal as it does not grant the same rights to the Respondent, and that, therefore, said clause cannot be taken into consideration in the determination of the amount of compensation.

21. As a consequence of the above, the Single Judge concluded that the amount of compensation due to the Claimant had to be assessed in accordance with other criteria a taking into consideration the residual value of the contract according to the longstanding jurisprudence of the Players’ Status Committee.

22. Bearing in mind the above, and taking into account that the contract was valid until 31 December 2016, the Single Judge of the Players’ Status Committee decided that the Claimant was entitled to the remaining value of his salary as compensation for the unilateral termination of the contract without just cause. Consequently, the Single Judge concluded that the amount of EUR 192,000, corresponding to the salaries from September 2015 until December 2016, serves as the basis for the final determination of the amount of compensation for breach of contract.

23. In continuation, the Single Judge verified as to whether the Claimant 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 Players’ Status Committee, 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 coach’s general obligation to mitigate his damages.

24. The Single Judge noted that, according to the Claimant, he remained unemployed and therefore no mitigation shall apply.

25. Consequently, on account of all the above-mentioned considerations and the specificities of the case at hand, the Single Judge decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 192,000 as compensation for breach of contract in the case at hand as well as 5% interest per year on the said amount from 23 July 2015 until the date of effective payment.

26. Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which, in the proceedings before the Players’ Status Committee, including its Single Judge, costs in the maximum amount of CHF 25,000 are levied. The costs are to be borne in consideration of the parties’ degree of success in the proceedings (cf. art. 18 par. 1 of the Procedural Rules).

27. In respect of the above, and taking into account that the Claimant’s claim was partially accepted as well as considering that the Respondent was the party at fault, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA.

28. Furthermore and according to Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute. Consequently and taking into account that the total amount at dispute in the present matter is over CHF 200,001 the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

29. In conclusion, and considering the particularities of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000 has to be paid by the Respondent.

*****

III. Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, Coach A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, Coach A, within 30 days as from the date of notification of the present decision, the amount of EUR 192,000 as compensation for breach of contract as well as 5% interest per year on the said amount from 23 July 2015 until the date of effective payment.

3. If the aforementioned amount, plus interest, is not paid within the aforementioned deadline, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

4. Any further claims lodged by the Claimant, Coach A, are rejected.

5. The final amount of costs of the proceedings in the amount of CHF 20,000 are to be paid by the Respondent, Club C, within 30 days of notification of the present decision as follows:

5.1 The amount of CHF 16,000 to FIFA to the following bank account with reference to case nr. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

5.2 The amount of CHF 4,000 to the Claimant, Coach A.

6. The Claimant, Coach A, is directed to inform the Respondent, Club C, immediately and directly of the account number to which the remittances under points 2. and 5.2 are to be made and to notify the Players’ Status Committee of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport, Avenue de Beaumont 2, 1012 Lausanne, Switzerland

Tel: +41 21 613 50 00 / Fax: +41 21 613 50 01 / e-mail: info@tas-cas.org / www.tas-cas.org

For the Single Judge of

the Players’ Status Committee:

Marco Villiger

Deputy Secretary General