F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2018-2019) – fifa.com – atto non ufficiale – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland19 June 2019

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 19 June 2019,

by

Mr Vitus Derungs (Switzerland),

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 an employment-related contractual dispute

arisen between the parties.

I. Facts of the case

1. On 13 and 14 June 2017 respectively, the Coach of Country B, Coach A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent) signed an employment contract (hereinafter also referred to as: the first contract) dated 1 August 2017 and valid as from 1 August 2017 until 1 August 2018.

2. In accordance with the first contract, the Claimant was entitled to an “annual compensation in the amount of USD 150,000 payable as follows:

a. 40% of the total amount of the contract is payable at the signing of the contract;

b. 30% of the total amount of the contract is payable at the beginning of the second round of the Premier League of Country D for season 2017/2018;

c. 30% of the total amount of the contract is payable at the end of the Premier League of Country D for season 2017-2018”.

3. In accordance with art. 19 of the first contract, the Claimant had the obligation to “submit a team/player evaluation to the [Respondent] by at least 30 days before the opening of Football Association E registration period. […] if for any reason the [Claimant] does not submit the team evaluation by this deadline, the [Claimant] agrees that payments shall be withheld until evaluations are received by the [Respondent]”.

4. In accordance with art. 31 of the first contract, in case of termination of the contract by the Respondent without just cause, “the [Respondent] shall compensated the [Claimant] a liquidized damage, and not as a penalty, in the amount of 15% of the total amount of the contract.” Art. 32 of the first contract, provides that in case of termination by the Claimant without just cause, “the [Claimant] shall compensate the [Respondent] a liquidized damage, and not as a penalty, in the amount of 15% of the total amount of the contract”.

5. Moreover, the first contract provides in its art. 34 that “in the event the contact is terminated for just cause, all obligations of the [Respondent] to make further payment of provide any other consideration hereunder shall cease as of the date of termination. In no case shall the [Respondent] be liable to the [Claimant] for the loss of any collateral business opportunities, or any benefits, perquisites, income or consequential damages suffered by the [Claimant] as a result of the [Respondent]’s termination of his employment”. In addition, the first contract provides in its art. 36 that “in the event the contract is terminated without cause, all obligations of the [Respondent] to the [Claimant] pursuant to this contract shall cease as of the date of any such termination. If the [Claimant] terminates his employment under the contract prior to its expiration in accordance with the foregoing, his compensation and benefits, to the extent not already vested, shall cease upon the termination date”.

6. Furthermore, art. 35 of the first contract provides that “in addition to its normally understood meaning in employment contracts, the term cause shall include, without limitation, any of the following: […] b. Material, significant or repetitive non-immaterial violations or breaches by the [Claimant] of the contract, of the [Respondent] rules and regulations which, if curable, are not cured by the [Claimant] within 10 days of his receipt of written notice from the [Respondent] regarding the alleged breach; […] l. if the team falls off the top six ranking positions in League F”.

7. The first contract provides that it “shall be construed, enforced, and governed by its terms and subsidiary in accordance with the laws of Country D”.

8. According to the Respondent, on 22 and 24 September 2017 respectively, the parties signed a second employment contract (hereinafter: the second contract) dated 17 August 2017 and valid as from 1 August 2017 until 1 August 2018.

9. According to the Respondent, on 13 January 2018, it unilaterally terminated the contract with the Claimant.

10. On 25 February 2019, the Claimant put the Respondent in default of the payment of USD 90,000, claiming that out of the USD 150,000 that he was entitled to under the contract, only USD 60,000 had been paid to him. With his letter, the Claimant gave 10 days to the club to remedy its default.

11. On 23 March 2018, the Claimant lodged a claim in front of FIFA against the Respondent, requesting the total amount of USD 90,000 plus 5 % interest p.a. as of the due dates. The Claimant maintained that, out of USD 150,000 he was entitled to in total, he only received USD 60,000 from the Respondent.

12. In its reply, the Respondent argued that FIFA was not competent to deal with the case. The Respondent based its argumentation on art. 22 (c) of the RSTP, explaining that the Football Association of Country D (hereinafter: Football Association E) has a “Dispute Resolution Chamber at the national level with a jurisdiction to hear an employment related dispute arising between a club and a coach”.

13. Notwithstanding the above and as to the merits, the Respondent argued that the second contract was the valid one. Moreover, the Respondent maintained that it terminated the contract with just cause, in light of art. 36 (b) and (l) of the second contract (i.e. art. 35 (b) and (l) of the first contract), claiming that, at the time of termination, i.e. end of the first stage of the Premier League of Country D, the Respondent was ranked 9 in the Football Association E league, beneath the 6th place. Furthermore, the Respondent argued that the Claimant did not submit the report provided in art. 20 of the second contract. The club requested that the claim be rejected if admissible.

14. The Respondent further argued that, should the contract be considered as having been terminated without just cause, in application of art. 32 and 33 of the second contract (i.e., respectively, art. 31 and 32 of the first contract), the Claimant would be entitled to 15% of the total amount of the contract. The Respondent calculated the daily salary of the Claimant as being USD 410.95 per day. The Respondent claimed that the Claimant begun his employment later than provided by the contract, on 24 September 2017 and is not entitled to the salary for the period as from 1 August 2017 to 23 September 2017. The Respondent argued that the compensation due to the Claimant should be USD 19,171 for the timeframe from 24 September 2017 to 13 January 2018. The Respondent further explained that, since he had received USD 60,000, the Claimant was actually overpaid in the amount of USD 14,490 for the relevant timeframe. Deducting the alleged overpaid amount from the compensation it calculated, the Respondent argued that the Claimant would then only be entitled to USD 4,681.

15. In his replica, concerning the competence of FIFA to hear the present matter, the Claimant maintained that the Respondent’s argument regarding the Football Association E NDRC has no contractual basis.

16. On the substance, the Claimant declared that he only signed the first contract, and that the second contract is forged. The Claimant argued that the ranking of the team does not constitute just cause to terminate the contract.

17. The Claimant further denied having agreed to a compensation of 15% of the value of the contract in case of termination by the Respondent and added that, as English was not his first language, he did not understand what he agreed to. In addition, he argued that in any case he should be awarded the entire remaining value of the contract as he stayed unemployed until the end of the contract.

18. In its duplica, the Respondent argued that the first contract and the second contract are identical except for the numbering of the articles and the date of signatures. Regarding the Claimant’s allegation that he did not understand the clauses of the contract, the Respondent argued that the Claimant signed it knowingly.

19. On the termination, the Respondent maintained that it terminated with just cause, arguing that in a previous case lodged before FIFA, where a coach’s contract provided that in the event of non-qualification to the World Cup, the Federation had the right to terminate, the PSC had recognized that the contract had been terminated by the Federation on the date the national team was not qualified for the competition.

20. The Respondent reiterated its argument that no salary should be granted to the Claimant for the period between 1 August 2017 and 22 September 2017, when he allegedly arrived in Country D.

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 23 March 2018. Consequently, the Single Judge concluded that the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at 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 4 in combination with art. 22 lit. c) of the Regulations on the Status and Transfer of Players (edition 2019), he shall adjudicate on an employment–related dispute with an international dimension between a Coach of Country B and an Club of Country D.

3. Moreover, the Single Judge acknowledged that the Respondent contested the competence of FIFA’s deciding bodies. More specifically, the Single Judge noted that the Respondent considered that, given that the Football Association E has a “Dispute Resolution Chamber at the national level with a jurisdiction to hear an employment related dispute arising between a club and a coach”, the present dispute should be entertained by the said body rather than the PSC Single Judge.

4. In relation to the above-mentioned argument, however, the Single Judge observed that neither of the two contracts provided during the course of these proceedings contains any jurisdiction clause referring the competence to hear the disputes arising thereof to an independent arbitral tribunal established at national level. Consequently, the Single Judge dismissed the Respondent’s claim on the point and concluded that he is competent to hear the case at hand.

5. 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 referred, on the one hand, to art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2019), and on the other hand, to the fact that the present claim was lodged with FIFA on 23 March 2018. In view of the foregoing, the Single Judge concluded that the 2018 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.

6. 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. The Single Judge, however, emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence which he considered pertinent for the assessment of the matter at hand.

7. In this respect and first of all, the Single Judge acknowledged that, 13 and 14 June 2017 respectively, the Claimant and the Respondent signed an employment contract dated 1 August 2017 and valid as from 1 August 2017 until 1 August 2018 and according to which the Claimant was entitled to a remuneration in the total amount of USD 150,000.

8. At this stage, the Single Judge deemed it appropriate to recall that the Respondent, on the one hand claimed that a second contract, allegedly signed on 22 and 24 September 2017 respectively, should be considered as the basis of the present dispute and that, on the other hand, it argued that the two contracts are identical except for the numbering of the articles and the date of the signatures. Consequently, and in light of the fact that the Respondent did not provide an original copy of the second employment contract the validity of which had been contested by the Claimant, the Single Judge took into account the first contract as the valid document at the basis of the present dispute.

9. The foregoing having been established, the Single Judge noted that, in accordance with art. 19 of the employment contract, the Claimant had the obligation to “submit a team/player evaluation to the [Respondent] by at least 30 days before the opening of Football Association E registration period. […] if for any reason the [Claimant] does not submit the team evaluation by this deadline, the [Claimant] agrees that payments shall be withheld until evaluations are received by the [Respondent]”.

10. Moreover, the Single Judge took note that, in the context of defining just cause for termination, art. 35 of the employment contract provided that, “in addition to its normally understood meaning in employment contracts, the term cause shall include, without limitation, any of the following: […]b. Material, significant or repetitive non-immaterial violations or breaches by the [Claimant] of the contract, of the [Respondent] rules and regulations which, if curable, are not cured by the [Claimant] within 10 days of his receipt of written notice from the [Respondent] regarding the alleged breach; […] l. if the team falls off the top six ranking positions in League F”.

11. Subsequently, the Single Judge took note that the Claimant argued that the Respondent had unilaterally terminated the employment contract without just cause on 13 January 2018 and, therefore, requested to be compensated accordingly.

12. In continuation, the Single Judge observed that, for its part, the Respondent acknowledged having terminated the employment contract and that it did so due to the latter’s poor sportsmanship in light of the team’s results and that it was entitled to do so on the basis of art. 35 lit. l. of the employment contract.

13. In light of the above, the Single Judge observed that it remained uncontested that, on 13 January 2018, the Respondent terminated the employment contract and, thus, the underlying issue in the matter at hand is to determine whether it had just cause to terminate and, subsequently, to establish the consequences thereof.

14. That said, the Single Judge pointed out, first of all, that – in accordance with the longstanding jurisprudence of FIFA’s deciding bodies – poor sportsmanship does not constitute a valid reason to terminate an employment contract. Furthermore, in a case like the one at stake, the Respondent had the right to put an end to the employment relationship in relation to the achievement of sport results which, depending on the performance of a plurality of athletes forming the team, could not even be directly linked to the Claimant. Given its potestative and unilateral character, the Single Judge did not take into account art. 35 lit. l. of the employment contract and dismissed the Respondent’s argumentation relying on it.

15. Furthermore, the Single Judge referred to the Respondent’s argument concerning the Claimant’s obligation to submit in due time a report to the Respondent in accordance with art. 19 of the employment contract (cf. supra point II. 9). In this respect, the Single Judge underlined that the contractual provision established, as consequence of its non-fulfilment, that “payments shall be withheld until evaluations are received by the [Respondent]”. That said, the Single Judge observed that the Respondent had not imposed any financial sanctions prior to terminating the employment contract.

16. In this context, the Single Judge wished to emphasize that only a breach or misconduct which is of a certain severity justifies 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. Hence, if there are more lenient measures which can be taken in order for an employer to assure 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 always only be an ultima ratio.

17. Consequently, bearing in mind that art. 19 pf the employment contract itself provided for those more lenient measures to be taken, the Single Judge concluded that the Respondent could not validly rely on the recalled contractual provision to justify the premature termination of the employment relationship with the Claimant.

18. In light of the foregoing considerations, the Single Judge determined that the Respondent did not have just cause to terminate the employment contract on 13 January 2018 and, thus, the Claimant is entitled to receive from the Respondent compensation for breach of contract.

19. In this context, the Single Judge observed that, according to art. 31 of the employment contract, in case of termination by the Respondent without just cause, “the [Respondent] shall compensated the [Claimant] a liquidized damage, and not as a penalty, in the amount of 15% of the total amount of the contract.” Moreover, the Single Judge noted that art. 32 of the employment contract, provides that in case of termination by the Claimant without just cause, “the [Claimant] shall compensate the [Respondent] a liquidized damage, and not as a penalty, in the amount of 15% of the total amount of the contract”.

20. In relation to the above, the Single Judge took note of the Claimant’s allegation that, due to his limited command of English, he had no knowledge of the contents of the said clauses contained in the employment contract he signed. In this respect, the Single Judge deemed it fit to emphasise that a party signing a document of legal importance without knowledge of its precise contents, as a general rule, does so on its own responsibility. Consequently, the Single Judge concluded that such argument could not be upheld.

21. The foregoing clarified, the Single Judge duly analysed the content of said clauses and acknowledged that they provide for the amount of compensation payable in the event of the termination of the employment contract without just cause by both the parties. In this respect, the Single Judge acknowledged that said contractual clauses do not include a precise and specific amount of compensation; however, they clearly provided for a determinable amount of compensation payable by the party terminating the contract, which amount corresponds to 15% of the value of the employment contract and, as such, was not considered disproportionate by the Single Judge.

22. On account of the above, the parties having contractually agreed on a compensation reciprocally payable in the event of breach of contract and such compensation not being deemed disproportionate, the Single Judge concluded that the provision contained under art. 31 and 32 of the pertinent employment contract has to be considered as valid and fully effective, i.e. the amount of compensation provided for in art. 31 shall be awarded to the Claimant. Furthermore, for these reasons, the Single Judge concurred that any remuneration under any other new employment contract is irrelevant in the case at hand.

23. Bearing in mind the foregoing, the Single Judge decided that the Respondent shall pay to the Claimant 15% of the value of the employment contract, i.e. USD 22,500 as compensation.

24. In addition, taking into account the Claimant’s request as well as the constant practice of the FIFA deciding bodies in this regard, the Single Judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount of compensation as of 13 January 2018, until the date of effective payment

25. 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 and the 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 and are normally to be paid by the unsuccessful party.

26. In this respect, the Single Judge highlighted that the claim is partially accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Claimant and the Respondent have to bear the costs of the current proceedings in front of FIFA.

27. 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 claimed amount in the present matter is lower than CHF 100,000, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 10,000.

28. In conclusion and in view of the fact that the case did not present particular complexities, the Single Judge determined the costs of the current proceedings to the amount of CHF 7,000.

29. Consequently, the Single Judge decided that the Claimant has to pay the amount of CHF 2,000 and the Respondent the amount of CHF 5,000 in order to cover the costs of the present proceedings.

30. The Single Judge concluded his deliberations by establishing that any further claim lodged by the Claimant is rejected.

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

1. The claim of the Claimant, Coach A, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of USD 22,500 as compensation for breach of contract, plus interest of 5% on the aforementioned amount from 13 January 2018 until the effective date of payment.

4. If the aforementioned sum, plus interest as established above, 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.

5. Any further claims lodged by the Claimant are rejected.

6. The final costs of the proceedings in the amount of CHF 7,000 are to be paid within 30 days as from the date of notification of this decision, as follows:

6.1 The amount of CHF 5,000 has to be paid by the Respondent 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

6.2 The amount of CHF 2,000 has to be paid by the Claimant to FIFA. Given that the Claimant has already paid the amount of CHF 2,000 as advance of costs at the start of the present proceedings, the Claimant does not have to pay an additional amount as costs of the proceedings.

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance under point 3 above is 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

For the Single Judge of the

Players’ Status Committee:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl. CAS directives