F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2019-2020) – fifa.com – atto non ufficiale – Decision 28 February 2020

Decision of the Single Judge of the Players’ Status Committee

passed in Zurich, Switzerland, on 28 February 2020,

by

José Luis Andrade (Portugal)

Single Judge of the Players’ Status Committee,

on the claim presented by the coach

Coach A, Country B

represented by Lawyer C

as Claimant

against the club,

Club D, Country E

as Respondent

regarding a contractual dispute arisen between the parties

I. Facts of the case

1. On 14 December 2018, Coach A from Country B (hereinafter: the Coach or the Claimant) concluded an employment contract (hereinafter: the contract) with the club from Country E, Club D (hereinafter: Club or the Respondent) valid as from 1 January 2019 until 30 December 2020.

2. In accordance with the contract, the coach was hired as a head coach.

3. According to art. 2 of the contract, the head coach was entitled to the following benefits:

• 408,000 in the currency of Country E (approx. EUR 32,950) per annum as “cash pay out”, payable on the 30th day of each month;

• 54,000 in the currency of Country E per annum as “housing rent”;

• 1,000 in the currency of Country E “per 12 points as bonus batch”;

• 30,000 in the currency of Country E as sign on fee “once off”;

• a car.

4. Moreover, art. 2.5 of the contract provided that “the appropriate tax shall be withheld by the club and transmit to the revenue service of Country E accordingly”.

5. Art. 2.6 of the contract stipulated that “the salary may be adjusted negative or positive on the basis of performance and or players conduct”.

6. Furthermore, art. 7 of the contract provided the following:

“7.1 This Contract automatically terminates at the end of the Term.

7.2 Either party may submit a notice of thirty (30) days unless otherwise mutually agreed.

7.3 Club D may immediately terminate the HC under this Contract if the HC at any time:

a. Commits any breach of any of the provisions of this Contract or;

b. The team loses three (3) premier league of Country E games in succession;

c. The team loses nine (9) premier league of Country E games in total;

d. The team attains a position out of the Top 8 by the end of the 2017/18 Premier League of Country E season;

e. Acts in a reckless or negligent manner with respect to the Team and/or any member of it; or

f. Becomes of unsound mind; or

g. Is the subject of criminal indictment or presentment for, is convicted of, any criminal offense that, in the reasonable opinion of Club D, relates to his service under this Contract or his fitness to act as HC of the Team; or

h. Engages in any conduct that is detrimental to or that brings discredit to Club D or its reputation; or

i. Fails or refuses to follow the directives of Club D with respect to his services under this Contract provided that such directives are reasonable; or

j. In the reasonable opinion of the Technical Director, is unable to perform the duties of AHC under this Contract because of repetitive absences or because of illness or otherwise.

7. In accordance with art. 9.1 of the contract, “This contract is governed by the laws of Country E“.

8. On 6 March 2019, the coach put the club in default, arguing that he had not received the salary for February 2019 and requesting that the club collect his work permit from the labour office “to allow [him] to coach in official matches”. Moreover, he held that he was asked to return the car that was contractually provided to him.

9. The coach further argued that allegedly on 27 February 2019, the club’s Vice President came to the training and informed the players and technical staff that the coach had decided not to train until the issuance of his work permit, fact that was contested by the coach. He added that despite that announcement, he still trained the team on the same day.

10. On 20 March 2019, the Club unilaterally terminated the coach’s contract in accordance with art. 7.3 (b) of the contract. The Club ordered the coach to return the Club’s properties in his possession within 7 days and specified that “the team is expected to pay your February salary as it was the last month you worked”.

11. On 25 October 2019, the Coach lodged a claim against the Club in front of FIFA for compensation for breach of contract, requesting the total amount of EUR 67,159, corresponding to:

a. EUR 62,159 as compensation for breach of contract corresponding to the residual value of the contract (22 months), plus 5% interest as from the date of termination i.e. 20 March 2019;

b. EUR 5,000 as legal expenses;

c. The Claimant further requested that all costs related to the present proceeding be at the expense of the Respondent.

12. In his claim, the Coach held that the Club was trying to use his alleged lack of work permit to dismiss him, while his work permit was available at the labour office.

13. Moreover, the coach maintained that the last time the club lost 3 consecutive games was between 2 February 2019 and 14 February 2019, which was a month before the termination, while in accordance with art. 7.3 the termination should have occurred immediately.

14. Finally, the coach held that his salary of January 2019 had been paid late, and that he did not receive the salary of February 2019.

15. In its reply, the Respondent firstly deemed that an independent Arbitration Tribunal exists at national level in Country E and contested the jurisdiction of FIFA. The Respondent deemed Country E laws applicable.

16. In an unsolicited correspondence, the coach argued that FIFA was competent to deal with the matter at hand, arguing that Country E Football Association already ruled that the National Dispute Resolution Chamber of Country E was not competent to hear the current dispute as the coach is a foreigner.

17. On the substance, the Club held that, since the coach did not have a bank account, he was paid by cheque and the coach had to collect his salary from the Respondent’s offices. According to the Club, it was the coach’s fault not to collect the payment as he was absent for about two weeks without any good reason.

18. Moreover, the Club maintained that hiring a coach without a valid work permit would be a criminal offense and added that it did not terminate the contract due to his absence of work permit, but due to poor performance in application of clause 7.3 of the contract, which is not illegal following Country E laws, which is the law applicable to the dispute as per the contract.

19. In its conclusion, the Respondent requested that all costs related to the present proceeding be at the expense of the coach.

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) analyzed whether he was competent to deal with the matter at hand. In this respect, he took note that, according to art. 21 of the November 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution (hereinafter: the Procedural Rules), said edition of the Procedural Rules is applicable to the matter at stake.

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, he is, in principle, competent to deal with the matter at stake.

3. At this point, the Single Judge noted that the Respondent first objected to the admissibility of the present claim, alleging that according to art. 9.1 of the contract, the law of Country E is applicable to the matter at stake.

4. In this regard, the Single Judge noted that the Claimant insisted that FIFA has jurisdiction to deal with the present matter since the Country E Football Association already ruled that the National Dispute Resolution Chamber of Country E was not competent to hear disputes of an international dimension.

5. While analysing whether he was competent to hear the present matter, the Single Judge considered that he should, first and foremost, analyse whether the employment contract at the basis of the present dispute actually contains a jurisdiction clause, clearly stipulating the exclusive jurisdiction of one specific deciding body under the auspices of the Country E Football Association to deal with the present dispute.

6. Having said this, the Single Judge turned his attention to art. 9.1 of the contract, on the basis of which the Respondent contested FIFA’s jurisdiction. According to said art. 9.1, “This Contract is governed by the laws of Country E.”

7. In view of the aforementioned clause, the Single Judge was of the opinion that art. 9.1 of the employment contract does not consist in a choice of jurisdiction, but rather a choice of applicable law, without any further procedural specifications. The Single Judge therefore concluded that the contract does not contain any arbitration or jurisdiction clause.

8. In view of the above, the Single Judge established that the Respondent’s objection to the competence of FIFA to deal with the present matter has to be rejected and that the Single Judge is competent, on the basis of art. 22 lit. c) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

9. Furthermore, the Single Judge analyzed 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, and on the other hand, to the fact that the present claim was lodged with FIFA on 25 October 2019. In view of the foregoing, the Single Judge concluded that the October 2019 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).

10. His competence and the applicable regulations having been established, the Single Judge entered the substance of the dispute, acknowledging the above-mentioned facts as well as the documentation contained in the file. However, the Single Judge emphasized 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.

11. In this respect, the Single Judge noted that the parties concluded a contract valid as from 1 January 2019 until 30 December 2020, according to which the Club undertook to pay to the Coach the benefits detailed in point I/3 above.

12. Subsequently, the Single Judge observed that the Coach lodged a claim against the Club, arguing that on 20 March 2019 the club unilaterally terminated the contract without just cause. In his claim, the coach requested compensation for breach of contract in the total amount of EUR 67,157, corresponding to the residual value of the contract, as well as the legal expenses for the present proceeding.

13. Conversely, the Single Judge noted the arguments of the Club, which in essence held that it had a just cause to unilaterally terminate the contract on 20 March 2019, in accordance with art. 7.3 b) of the contract, due to his poor performance.

14. As a result, the Single Judge understood that the fundamental issue at stake consisted of establishing whether the Club had or not a just cause to unilaterally terminate the contract on 20 March 2019, and deciding on the consequences thereof.

15. In this context, the Single Judge deemed it appropriate to first remind the parties that 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 a party to ensure the fulfilment of the contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

16. The Single Judge focused on the Respondent’s reasoning for the premature termination of the contract. In this respect the Single Judge noted that it remained undisputed between the parties that the Club, based on the coach’s alleged poor performance, had terminated the coach’s contract, based on clause 7.3 b) of the contract. At this point the Single Judge deemed it appropriate to also remind the parties that a coach’s alleged poor performance, as per his well-established jurisprudence, cannot be considered as a just cause for a club to terminate the coach’s contract, even if such possibility was agreed in the contract.

17. Consequently, the Single Judge deemed that clause 7.3. b) of the contract was to be considered as invalid and not-applicable, as goes against the principle of maintenance of contractual stability.

18. On account of the above, the Single Judge decided that the Respondent did not have just cause to unilaterally terminate the employment relationship with the Claimant on 20 March 2019 and, consequently, it must bear the financial consequences of the early termination, in addition to any outstanding payments on the basis of the relevant employment contract.

19. Prior dealing with the calculation of the compensation due to the coach for breach of contract by the club, the Single Judge first decided to determine the amount of the outstanding remuneration due to the coach. In this respect, the Single Judge decided that the Respondent is liable to pay to the player the remuneration that was outstanding at the time of the termination, i.e. the amount of 34,000 in the currency of Country E, corresponding to the salary of February 2019. Therefore, in accordance with the principle of pacta sunt servanda the Club should pay the coach outstanding remuneration in the amount 34,000 in the currency of Country E plus interest of 5% p.a. as from 20 March 2019, in accordance with the coach’s request.

20. Having established the foregoing, the Single Judge went on to establish the amount of compensation due to the coach by the club. In application of the relevant jurisprudence, the Single Judge held that he first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract and which clause is regarded as fair, reciprocal and proportionate. In this respect, the Single Judge

established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

21. In calculating the amount of compensation payable to the coach, the Single Judge first turned his attention to the remuneration and other benefits due to the coach under the existing contract. The Single Judge pointed out that the contract signed between the Claimant and the Respondent was valid as from 1 January 2019 until 30 December 2020.

22. As a result, the Single Judge understood that the contract was terminated on 20 March 2019, and that as from 20 March 2019 until 30 December 2020, the coach would have earned the total amount of 340,000 in the currency of Country E.

23. In continuation, the Single Judge assessed as to whether the coach had signed an employment contract with another club during the relevant period of time, by means of which he would have been able to reduce his loss of income. According to the constant practice of the PSC, such remuneration under a new employment contract(s) shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the general obligation to mitigate his damages.

24. In this regard, the Single Judge remarked that the Claimant had concluded a new employment, which ran from 1 July 2019 until 31 May 2020, in accordance with which the Claimant would receive a monthly salary of 30,000 in the currency of Country E, contract which was mutually terminated on 13 January 2020 with a separate termination agreement. According to the new contract and the termination agreement, the coach was able to mitigate his damages in the amount of 255,000 in the currency of Country E, which shall be taken into account for the calculation of the amount of compensation due to him for breach of contract.

25. As a result, the Single Judge determined that the Club shall pay to the coach the amount of 85,000 in the currency of Country E as compensation for breach of contract.

26. In addition, taking into account the Claimant’s request, the Single Judge decided that the Club must pay to the coach interest of 5% p.a. on the payable compensation as from 25 October 2019 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, including 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 (cf. art. 18 par. 1 of the Procedural Rules).

28. In this respect, the Single Judge reiterated that the claim of the Claimant is almost entirely accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Respondent should 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 total amount in dispute in the present matter, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 10,000.

30. In conclusion, the Single Judge determined the costs of the current proceedings to the amount of CHF 8,000 to be paid by the Respondent in the following manner: CHF 2,000 directly to the Claimant and CHF 6,000 to FIFA.

31. The Single Judge concluded his deliberations by establishing that any further claim of the parties had to be rejected.

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 D, has to pay to the Claimant within 30 days as from the date of notification of the present decision, outstanding compensation in the amount of 34,000 in the currency of Country E, plus 5% interest p.a. on the said amount as from 20 March 2019 until the date of effective payment.

3. The Respondent, Club D, has to pay to the Claimant within 30 days as from the date of notification of the present decision, compensation for breach of contract in the amount of 85,000 in the currency of Country E, plus 5% interest p.a. on the said amount as from the date of claim, i.e. 25 October 2019 until the date of effective 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 claim lodged by the Claimant is rejected.

6. The final costs of the proceedings in the amount of CHF 8,000 are to be paid by the Respondent, Club D , as follows:

6.1 The amount of CHF 6,000 has to be paid to FIFA.

6.2 The amount of CHF 2,000 has to be paid directly to the Claimant.

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2, 3 and 6.2 above are to be made and to notify the Players’ Status Committee of every payment received.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the Dispute Resolution Chamber. Where such decisions contain confidential information, 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 Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

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. 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.

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 García Silvero

Chief Legal & Compliance Officer