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

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 a contractual dispute arisen between the parties.

I. Facts of the case

1. On 1 June 2016, 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, valid as “from date of signing this agreement, up to the last competitive game of season 2016/17”.

2. According to point 2.1 of the employment contract, the Claimant was entitled to receive from the Respondent a monthly salary amounting to EUR 5,000 “which shall be paid without delay at the end of each month”.

3. Pursuant to point 5 of the employment contract, “if the [Claimant] breaches any of the conditions enclosed within this agreement, the [Respondent] may unilaterally terminate the contract with a just cause. If the [Respondent] breaches any of the conditions enclosed within this agreement, the [Respondent] may unilaterally terminate the contract with just cause”.

4. According to point 6 of the employment contract, “In the case of any disputes between the parties, it is hereby agreed that the applicable law is Football Association of Country D, FIFA and UEFA regulations. Any dispute between the parties shall be considered by FIFA Dispute Resolution Chamber and CAS (Court of Arbitration for Sport in Lausanne)”.

5. On 30 January 2017, the Claimant lodged a claim in front of FIFA against the Respondent, alleging that the latter terminated the contract without just cause and requesting a compensation amounting to EUR 25,000, plus 5% interest p.a. as of 6 December 2016 until the date of effective payment.

6. More specifically, the Claimant explained that the Respondent did not pay compensation equivalent to 5 monthly salaries, i.e. the residual value of the contract from 6 December 2016 to May 2017, since the last competitive game of the season 2016/2017 took place on 30 April 2017.

7. In addition, the Claimant requested “costs of these proceedings including annual interest of 5% per annum starting from the day of this judgements is reached, until final payment is made”.

8. In particular, the Claimant explained that, on 6 December 2016, the Respondent decided to terminate the contract without justified reasons and, as a consequence, it should compensate him by paying the residual value of the contract.

9. Furthermore, the Claimant alleged having sent a default notice to the Respondent to obtain payment of compensation and that the Respondent replied to him by offering the payment of half of the residual value of the contract, allegedly in accordance with Law of Country D.

10. The Respondent presented its position arguing that FIFA is not competent to decide on this matter since there is a pending dispute before the NDRC of the Football Association of Country D (Football Association E). In this respect, the Respondent stated having lodged a claim on 31 January 2017 before the NDRC of the Football Association E (hereinafter also: the NDRC).

11. With regards to the NDRC, the Respondent argued that it is an independent tribunal in accordance with art. 22 of the FIFA Regulations on the Status and Players and enclosed a copy of article 64 of the Football Association E´s statutes which refers to “The Complaints Board”.

12. Concerning the substance of the dispute, the Respondent confirmed having terminated the contract with the Claimant due to sporting reasons, i.e. for “lack of expected results and discontent within the dressing room”.

13. Furthermore, the Respondent rejected the amount claimed by the Claimant and explained that it had offered him a check amounting to EUR 12,500, equivalent to half of the residual value of the contract allegedly in accordance with Law of Country D. In this regard, the Respondent submitted a copy of the relevant national law “Employment and Industrial Relations Act” an referred to its article (11), which states “An employer who dismisses an employee before the expiration of the time definitely specified by a contract of service, shall pay to the employee one-half of the full wages that would have accrued to the employee in respect of the remainder of the time specifically agreed upon”.

14. In addition, the Respondent alleged that the Claimant did not accept its offer and, as a consequence, “it deposited said cheque with the Football Association E for NDRC´s consideration”.

15. In its replica, the Claimant rejected the Respondent´s allegation in relation to FIFA´s lack of competence. The Respondent referred to point 6 of the contract which states that “the applicable law is FIFA Regulations and the competent body for resolving this dispute is FIFA DRC”.

16. Moreover, the Claimant argued that he is a Citizen of Country B and, consequently, the NDRC is not competent to deal with this matter.

17. In conclusion, the Claimant rejected the Respondent´s allegations in their entirety, and reiterated that the Respondent unilaterally terminated the contract without a justified reason. In this regard, the Claimant maintained that the reasons invoked by the Respondent are inaccurate, unfounded and invalid.

18. In its final comments, the Respondent reiterated its previous allegations and confirmed that it should have been the NDRC to hold jurisdiction in this matter and not FIFA in accordance to the contract. Moreover, the Respondent argued that the international dimension in this matter did not exist since the coach was a Resident of Country D.

19. Upon being invited to do so, the Claimant informed FIFA that he remained unemployed as from 6 December 2016 until 9 August 2018.

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 30 January 2017. Consequently, the Single Judge concluded that the 2017 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 a Club of Country D.

3. In continuation, the Single Judge acknowledged that the Respondent contested the competence of FIFA deciding bodies to hear the present claim, alleging that, on 31 January 2017, it had lodged a claim against the Claimant before the NDRC of the Football Association E and that said claim is currently pending.

4. In this respect, however, the Single Judge observed first and foremost that, according to point 6 of the employment contract, “[a]ny dispute between the parties shall be considered by FIFA Dispute Resolution Chamber and CAS (Court of Arbitration for Sport in Lausanne)”.

5. Moreover, the Single Judge took into account that the Respondent did not provide any evidence of the existence of a claim pending before the NDRC of the Football Association E and that, in any case, the present claim was lodged in front of FIFA on 30 January 2017, i.e. one day before the one allegedly filed by the Respondent in front of said national body.

6. In light of the foregoing, the Single Judge concluded that he was competent to entertain the present dispute.

7. The above having been clarified, 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 30 January 2017. In view of the foregoing, the Single Judge concluded that the 2016 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.

8. 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.

9. In this respect and first of all, the Single Judge acknowledged that, on 1 June 2016, the Claimant and the Respondent concluded an employment contract, valid as “from date of signing this agreement, up to the last competitive game of season 2016/17”, and pursuant to which the Claimant was entitled to a monthly salary amounting to EUR 5,000, to be paid by the end of each month.

10. Subsequently, the Single Judge took note that the Claimant argued that the Respondent had unilaterally terminated the employment contract without just cause on 6 December 2016 and, thus, deemed that he had to be compensated adequately.

11. In continuation, the Single Judge observed that, for its part, the Respondent acknowledged having terminated the employment contract due to the Claimant’s alleged “lack of expected results and discontent within the dressing room”. Moreover, the Single Judge took note that the Respondent maintained having offered the Claimant a check amounting to EUR 12,500, equivalent to half of the residual value of the contract allegedly in accordance with Law of Country D, which the Claimant had refused.

12. In respect of the above and only for the sake of the argument, the Single Judge thought worth it to recall that, when deciding a dispute before a FIFA judicial body, FIFA’s regulations prevail over any national law chosen by the parties. In this regard the Single Judge emphasized that the main objective of the FIFA regulations is to create a standard set of rules to which all the actors within the football community are subject to and can rely on. This objective would not be achievable if the pertinent FIFA deciding body had to apply the national law of a specific party on every dispute brought before it. This should apply, in particular, also to the termination of a contract. In this respect, the Single Judge wished to point out that it is in the interest of football that the rules on termination of contracts are based on uniform criteria rather than on provisions of national law that may vary considerably from one country to the other. Therefore, the Single Judge deemed that, in any case, it would not be appropriate to apply the principles of a particular national law to the termination of the contract but rather the Regulations, the general principles of law and, where existing, the FIFA PSC’s well-established jurisprudence.

13. Consequently, the Single Judge deemed it worth to clarify that Law of Country D is not applicable to the matter at stake.

14. The foregoing having been established, the Single Judge observed that it remained uncontested that, on 6 December 2016, the Respondent decided to terminate the employment contract with the Claimant in relation to his alleged poor sportsmanship.

15. The Single Judge, therefore, observed that the underlying issue in the matter at hand is to establish whether the foregoing stance constituted a termination of the contract without just cause and, in the affirmative, to determine the consequences thereof.

16. 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.

17. 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.

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 6 December 2016 and, thus, the Claimant is entitled to receive from the Respondent compensation for breach of contract.

19. Nevertheless, before entering the analysis of the consequences of the unjust breach of contract on the part of the Respondent, the Single Judge deemed it appropriate to first assess whether any outstanding remuneration was still due by the Respondent to the Claimant. In this regard, the Single Judge recalled that the Respondent had not provided any evidence of any payments performed towards the Claimant and referred to the content of art. 12 par. 3 of the Procedural Rules in accordance with which any party deriving a right from an alleged fact shall carry the burden of proof.

20. In view of the aforementioned, considering the specific request of the Claimant as well as the content of the contract with regard to the latter’s monthly remuneration, bearing in mind that the contract between the parties had been terminated on 6 December 2016 and taking into account the legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, the Single Judge resolved that the Respondent, in order to fulfil its obligations established in contract has to pay to the Claimant the outstanding amount of EUR 972, corresponding to the latter’s salary for the first 6 days of December 2016.

21. Additionally and with regard to the Claimant’s request for interest, the Single Judge decided that the Respondent has to pay to the Claimant 5% interest p.a. over the amount of EUR 972 as from 7 December 2016 until the date of effective payment.

22. Having established the aforementioned and turning his attention to the compensation payable to the Claimant by the Respondent following the termination without just cause of contract by the latter, the Single Judge observed that, in the lack of a specific contractual provision establishing the amount of compensation in case of early termination by any of the parties, the amount of compensation due to the Claimant had to be assessed in accordance with other criteria.

23. Equally, the Single Judge verified as to whether the Claimant had signed a new employment contract after having been dismissed by the Respondent on 6 December 2016 by means of which he would have been enabled to reduce his loss of income. According to his constant practice, such remuneration under a new employment contract would 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 in this respect that, according to the Claimant´s own declaration, he had not been able to conclude any new employment contract as from 6 December 2016 until 9 August 2018, i.e. after the ordinary expiry of the one at the basis of the present dispute.

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 established that the amount of EUR 24,028, corresponding to the remaining value of the contract, had to be considered fair and reasonable as compensation for breach of contract.

26. Equally and with regard to the Claimant’s request for interest, the Single Judge, in accordance with his well-established jurisprudence, decided that the Respondent has to pay to the Claimant 5% interest p.a. on the amount of EUR 24,028 as from 7 December 2016 until the date of effective payment.

27. 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.

28. In this respect, the Single Judge highlighted that the claim is almost entirely accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Respondent has to bear the costs of the current proceedings in front of FIFA.

29. 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 50,000, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 5,000.

30. In conclusion and in view of the specific circumstances of the case, the Single Judge determined the costs of the current proceedings to the amount of CHF 5,000.

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

32. 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, Coach A, is partially accepted.

3. The Respondent, Club C, has to pay to the Claimant, Coach A, within 30 days as from the date of notification of this decision, the amount of EUR 972 as outstanding remuneration, plus a 5% annual interest applicable from 7 December 2016 until the date of effective payment.

4. The Respondent, Club C, has to pay to the Claimant, Coach A, within 30 days as from the date of notification of this decision, the amount of EUR 24,028 as compensation for breach of contract, plus a 5% annual interest applicable from 7 December 2016 until the date of effective payment.

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

6. If the aforementioned sum, plus interest as provided above, are 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.

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

7.1 The amount of CHF 1,000 has to be paid directly to the Claimant, Coach A.

7.2 The amount of CHF 4,000 has to be paid 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

8. The Claimant, Coach A, is directed to inform the Respondent, Club C, immediately and directly of the account number to which the remittance under

Coach A, Country B / Club C, Country D 11

points 3., 4. and 7.1 above 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 (CAS)

Avenue de Beaumont 2

CH-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 Garcia Silvero

Chief Legal & Compliance Officer