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 30 June 2020

Decision of the

SINGLE JUDGE OF THE PLAYERS’ STATUS COMMITTEE

passed via videoconference, on 30 June 2020,

regarding an employment-related dispute concerning the coach, Coach A

BY:

Johan van Gaalen (South Africa), member

CLAIMANT / COUNTER-RESPONDENT

Coach A, Country B & Country C

RESPONDENT / COUNTER-CLAIMANT

Club D, Country E

I. FACTS OF THE CASE

1. On 1 July 2019, the coach, Coach A (hereinafter: the coach or the Claimant / Counter-Respondent), and the club, Club D (hereinafter: the club or the Respondent / Counter-Claimant) concluded an employment contract (hereinafter: the contract) valid as from 1 July 2019 until 1 July 2020.

2. According to art. 1 of the contract, it could be extended for the season 2020/2021 with the consent of both parties.

3. In addition, the contract stipulated the following:

“4. VALUE OF THE CONTRACT – SALARY REMUNERATION AND BONUSES:

The total value of this contract for Season 2019-2020 is amount of net USD 850,000 […]. First season starts on 1 July 2019 and ends on 1 July 2020.

Payments:

USD 300,000 […] of the contract salary will be paid to the Head coach by the club not later than 2 weeks after the signature of the contract.

USD 300,000 […] of the contract salary will be paid to the Head coach in mid-season (December 2019).

USD 250,000 […] of the contract salary will be paid to the Head coach the end of the season 2019-2020. (May 2020).”

“Bonuses:

In recognition of exemplary performance and the additional work that is required for CLUB’s success and as an incentive for COACH to achieve the goals described below, the CLUB agrees to pay to the head coach, within 30 days after the game or the achieved result as following:

A: In case of the club championship in the League F 2019-2020, the Head coach is entitled to receive USD 100,000 […].

B: In case of the club championship in the Country E Cup (Competition G) 2019/2020, the Head coach is entitled to receive USD 50,000 […].

c) For each win in Derby Matches (Match against Club H), the amount of USD 10,000 […] will be paid to the Head coach as his bonus.

Note: bonus for every win in every official match such as league, Country E cup or ACL will be allocated to the head coach, according to the decision of Club D Board and in respect of the Bonus Regulation of the club.

Note: all bonus will be paid by Club D to the coach 30 days after the last official match.”

“8. TERMINATION:

[…]

Note: in case during the first mid-season by the request of the club the contract is terminated, the head coach is entitled to receive the amount of USD 150,000 […] and in addition head coach can keep the signing fee of USD 300,000, which has been given to him the beginning of the season.

Note: in case during the first mid-season, head coach requests for the contract termination, he has to pay back to the club, 50% of all the amounts he has received from the club.

[…]

Note: In case during the second mid-season by the request of the club the contract is terminated, the coach is entitled to receive the 50% of the contract values and he can keep all the received amount which he has received till the termination date, i.e. he can keep the signing fee of USD 300,000 and the mid-season payment of USD 300,00 and receives in addition a compensation of USD 125,000.

Note: In case during the second mid-season, head coach requests for the contract termination, he has to pay back to the club, 30% of all the amounts he has received from the club till the date of the termination and the last instalment of the contractual value and remuneration will not be paid to the head coach.

Note: if a party announces the requests of the contract termination, 20 days should be given to the other party and then the termination will be enforceable.”

4. On 26 December 2019, the club signed a document whereby it indicated that the coach would be entitled to a bonus of USD 1,500 for each win.

5. On 11 October 2019, the coach granted the club 20 days to make the payment of “remaining amount of USD 300,000”, which should have been paid within 2 weeks following the signature of the contract as per art. 4, as well as “the bonus of USD 10,000 for the last Derby won”. Should the payments not be made within the stated deadline, the coach indicated he would consider terminating the contract.

6. In the same letter, the coach further acknowledged the payment of USD 25,000 and USD 40,000 in September 2019.

7. On 22 November 2019, the coach once again asked the club to pay the “remaining amount of USD 300,000” as well as any match bonuses which would be outstanding. The coach however acknowledged the receipt of USD 25,000 on 20 November 2019. Again, the coach informed the club that he would terminate the contract with immediate effect if the aforementioned payment was not made within 20 days.

8. By means of a letter dated 28 November 2019, the coach once again requested the payment of the “remaining amount of USD 300,000” within 20 days.

9. On 16 December 2019, the coach acknowledged receipt of the payment of USD 77,974.53 received at the beginning of December 2019, in addition to the other amounts mentioned above. As such, the coach requested the total amount of USD 451,282.86, corresponding to the outstanding part of the first instalment and the full payment of the second instalment that the coach deemed became overdue, by 19 December 2019 at the latest.

10. On 21 December 2019, the coach reiterated his request and contested the allegations made by the club “according to which the bonus for the derby of USD 10,000 has already been paid to my client, because it is not true.”

11. On 25 December 2019, the club sent two cheques to the coach, one dated 31 December 2019 in the amount of 200,400 and another one dated 1 January 2020 in the amount of 240,000.

12. On the same day, the club informed the coach that “the beginning of the second half season 2019-2020 will be on 1st Feb 2020. We have organized a meeting with Dear Mr. Coach A on Friday on 27th Dec and the parties will negotiate all issues and in the light of all above, payable amount to Mr. Coach A will be transferred in his bank amount A.S.A.P.”

13. On 28 December 2019, the coach requested the following:

“In light of the above, the following amount remain outstanding:

- USD 124,762.86 from the first salary payment of USD 300,000

- USD 300,000 from the second salary payment of USD 300,000

- USD 21,000 as bonus for 11 Pro League and 3 Competition G matches won of USD 1,500 each

- USD 10,000 as bonus for winning the derby

Total: USD 455,762.86

Therefore, I respectfully ask you, for the last time, to proceed to the immediate payment of the total amount of USD 455,762.86 by 31 December 2019 at the latest”.

14. Moreover, the coach informed the club that should the aforementioned payment not be made within the stated deadline, he would terminate the contract on 1 January 2020.

15. On 31 December 2019, the club informed the coach that it “proceeded the retransfer of USD 125,000 and such money has been already deducted from our account and next week this amount would be into Head Coach’s bank account”.

16. By means of a letter dated 1 January 2020, the coach terminated the contract with the club, invoking the club’s non-compliance with its financial obligations.

17. By a text message dated 8 January 2020, the club indicated that there was “a fund transfer to your account” made on the same day.

18. On 4 February 2020, the coach lodged a claim in front of FIFA, requesting the following:

“1.Club D Shall be obliged to pay to Mr. Coach A the amount of USD 300,000, as outstanding salary, plus interest of 5% per year, as of 16 December 2019 until the date of effective payment.

2. Club D shall be obliged to pay to Mr. Coach A the amount of USD 10,000, as bonus for the derby won on 22 September 2019 against Club H, plus interest of 5% per year, as of 2 January 2020 until the date of effective payment.

3. Club D shall be obliged to pay to Mr. Coach A the amount of USD 19,500, as bonus for 10 League F matches won and for 3 Competition G matches won, plus interest of 5% per year, as of 2 January 2020 until the date of effective payment.

4. Club D shall be obliged to pay to Mr. Coach A the amount of USD 250,000 (alternatively the amount of USD 125,000) as compensation for the breach of the employment contract, plus interest of 5% per year, as of the date of the present submission until the date of the effective payment.”

19. In his claim, the coach deemed that the club only made void promises following the default letters, saying it would pay in the coming weeks.

20. According to the coach, following the payments made by the club on 1 and 2 December 2019 in the total amount of USD 77,974.52, the amount of USD 124,762.86 was still outstanding from the first instalment.

21. The coach highlighted that the club played its last match of the first half of the season 2019/2020 on 14 December 2019, i.e. 15 games out of 30. The second instalment therefore became due on said date. However, the club ignored said deadline and did not pay the second instalment.

22. Furthermore, the coach argued that the club was revealing financial information concerning the coach to the media. In his letter dated 16 December 2019, the coach reminded the club that said information was confidential and asked the club to refrain from disclosing said information in public.

23. Moreover, the coach explained that the club informed him that the second instalment would be paid in February 2020 and alleged that the coach had agreed to this. However, the coach contested ever agreeing to this.

24. In addition, the coach deemed that he received checks from the club on 31 December 2019 and 1 January 2020, which were fake and that he never received the amounts.

25. As regards to the payment made by the club on 8 January 2020, the coach acknowledged receipt of the amount of 455,000 (approx. USD 124,657.534), covering approximately the outstanding first instalment. The coach also held that the club tried to convince him to reconsider his termination and offered him more money.

26. Furthermore, the coach argued to have just cause to terminate the contract. Therefore, he requests the payment of outstanding remuneration, compensation and bonuses.

27. Finally, the coach referred to art. 8 of the contract, and argued that he did not have to pay compensation to the club given that he had terminated with just cause. In any case, the coach held that such clause should be declared invalid in accordance with FIFA’s jurisprudence. However, should the PSC decide that such clause is valid, the coach alternatively requested the payment of a compensation amounting to USD 125,000.

28. In its reply, the club rejected the coach’s claim and deemed that he terminated the contract without just cause. In this regard, the club stated in accordance with article 8 “the termination will be enforceable after giving a 20-day period to the other party”.

29. In addition, the club deemed that the coach did not comply with art. 14bis.

30. Moreover, the club argued that the instalment due “in mid-season” was not yet due when the coach terminated the contract. In this regard, the club deemed that the mid-season “occurred from December 27, 2019 until January 31, 2020” and that the “Committee of Competitions” confirmed that the “first half of the season will last until the end of 17th match”.

31. In regards to the late payments, the club highlighted the current situation in Country E and deemed that the coach was aware of this.

32. In addition, according to the club, the coach agreed to the “gradual payments”, which the club argues can be based on the wording used in the coach’s letter (“proceed to the payment”).

33. Furthermore, the club argued that “the head coach’s numerous reminders are not legally effective as the club’s payments were accepted by the head coach verbally, practically, and even in writing”.

34. In regards to the bonuses, the club claimed that had first to be decided by the “Club D Board”, of which the coach was informed about on 18 and 25 December 2019. In addition, it deemed that a “significant part of payment of bonuses for winning the Derby” was made by the club.

35. Moreover, the club stressed that the coach did not fulfil his responsibilities “to have a regular supervision over the performance of youth team during his presence in Country E”. Furthermore, the club highlighted that the coach made several interviews “which resulted to public conflicts and straight confrontations”.

36. Consequently, the club deemed that it was the coach that breached the contract and therefore, the coach shall not be entitled to any compensation. In fact, as, according to the club, the coach breached the contract, the coach shall “pay back the club, 50% of all he has received based on the employment relationship”.

37. Thus, in its counterclaim the club requested the following:

“Club D shall not be obliged to pay to the head coach the amount of USD 250,000 (alternatively the amount of USD 125,000) as compensation for the breach of the employment contract, plus interest of 5% per year. Instead, under second Note of Article 8 of the contract, the head coach has to pay back the club, 50% of all he has received based on the employment relationship. Alternatively, according to fifth Note of Article 8 of the contract, the head coach will not be entitled to receive the last instalment and has to pay back the club, 30% of all he has received based on the contract.”

38. In his reply to the counterclaim, the coach rejected the club’s arguments and deemed that art. 8 of the contract is not valid, as such a “grace period” is not recognised by the RSTP.

39. In regards to the due date of the second instalment, the coach deemed that the club’s interpretation is “absurd” as the wording of the agreement is “very clear” as it stipulates “mid-season” and “December 2019”.

40. In addition, the coach argued that the club did not made any payment in regards to the bonus, despite the club’s statement that it made a “significant part of payment”.

41. Moreover, the coach rejected the club’s arguments about not fulfilling his responsibilities and emphasises that the club didn’t provide any evidence for such a statement.

42. Finally, the coach reiterated his position provided with the statement of claim and deemed that as USD 125,000 (unpaid part of the first instalment) and USD 300,000 (second instalment) remained unpaid until 1 January 2020, the coach terminated with just cause.

II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PAYERS’ 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 4 February 2020. Taking into account the wording of art. 21 of the June 2020 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

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 June 2020 edition of the Regulations on the Status and Transfer of Players, he is competent to deal with the matter at stake which concerns an employment-related dispute of an international dimension between a Coach of Country B and Country C and an Club of Country E.

3. Furthermore, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable to the matter. In this respect, he referred, on the one hand, to art. 26 par. 1 and 2 of the 2020 edition 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 4 February 2020. In view of the foregoing, the Single Judge concluded that the January 2020 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand (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 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.

5. In this respect, the Single Judge acknowledged that, on 1 July 2019, the coach and the club had concluded an employment contract valid as from 1 July 2019 until 1 July 2020, pursuant to which the club undertook to pay to the coach the remuneration as established in point I.3. above.

6. In continuation, the Single Judge remarked that, in his claim to FIFA, the coach claimed that he terminated the contractual relationship with just cause on 1 January 2020 due to the club’s non-compliance with its financial obligations.

7. The Single Judge also noted that, as such, the coach deemed, inter alia, being entitled to claim from the club the payment of outstanding remuneration in the amount of USD 329,500 and of compensation for breach of contract in the sum of USD 250,000, corresponding to the residual value of the contract.

8. In addition, the Single Judge noticed that, for its part, the club, had rejected the claim of the coach and lodged a counterclaim against him, arguing that that the coach terminated the contract without just cause.

9. In this context, the Single Judge acknowledged that the club claimed an amount of “50% of all [the coach] has received based on the employment relationship”.

10. After having thoroughly analysed the submissions of the parties as well as the documentation at his disposal, the Single Judge considered that the underlying issue in this dispute was to determine as to whether the coach had just cause to terminate the employment contract and to determine the consequences thereof.

11. In this respect, the Single Judge first recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

12. In continuation, the Single Judge observed that the coach considered having terminated the contract with just cause as the club failed to pay the coach’s salary in the amount of USD 425,000 at the time of the termination, corresponding to the unpaid part of the first instalment and the entire second instalment, plus an amount of USD 29,500 corresponding to his bonuses.

13. Subsequently, the Single Judge acknowledged the arguments of the club, which deemed that the second instalment in the amount of USD 300,000 was not due at the time of termination, as the “mid-season” ended on 31 January 2020.

14. Moreover, the Single Judge took note of the club’s arguments that it paid a “significant part” of the bonus.

15. In addition, the Single Judge noted that the club argued that the coach agreed to “gradual” payments of his first instalment.

16. In this context, the Single Judge first wished to point out that the club did not provide any evidence that it paid a “significant part” of the bonus and therefore concluded that the club failed to discharge its burden of proof.

17. Having said this, the Single Judge observed that the contract was contradicting itself in regards to the due dates of the bonuses. On one hand, the contract stipulated that the bonus shall be paid within 30 days “after the game of the achieved results” and on the other hand, the contract stated that the bonuses will be paid “30 days after the last official match”.

18. Notwithstanding the above, the Single Judge, however, took note of the fact that the club did not contest that the bonuses have become due.

19. In regards to the alleged agreement to “gradual” payments of the first instalment, the Single Judge referred to the fact that the coach requested the full payment of the first instalment on several occasions and therefore, the Single Judge could not accept such an argument from the club.

20. Subsequently, the Single Judge referred to art. 4 of the contract and emphasised that according to said clause, the second instalment became due in “December 2019”. Consequently, the Single Judge concluded that he could not accept the club’s arguments in respect to the due date of the second instalment, as according to the contract the second instalment became due latest on 31 December 2019.

21. Thus, the Single Judge established that at the time of the termination of the contract by the coach, a total amount of USD 454,500 was outstanding of which USD 425,000 corresponded to the coach’s fixed remuneration. Such an amount corresponds to a pro-rata value of more than 6 monthly salaries.

22. In this regard, the Single Judge wanted to emphasise that one of the main duties of an employer is the payment of the employee’s salaries in a timely manner. Such a timely payment is even more important, if the contract only foresees the payment of 3 instalments throughout the whole year.

23. Consequently, and considering that the club failed to comply with its contractual obligations towards the coach and referring to FIFA’s longstanding jurisprudence, the Single Judge decided that the coach had just cause to unilaterally terminate the employment contract on 1 January 2020 and that, as a result, the club is to be held liable for the early termination of the employment contract with just cause by the coach.

24. In view of all the above, the Single Judge decided that, in accordance with the general legal principle of pacta sunt servanda, the club must fulfil its contractual obligations towards the coach and is to be held liable to pay the coach the amount of USD 329,500, corresponding to the second instalment in the amount of USD 300,000, the bonus for the derby win in the amount of USD 10,000 and the bonus for having won 13 games in the amount of 19,500..

25. In continuation and with regard to the coach’s request for interest, the Single Judge decided that the coach is entitled to receive interest at the rate of 5% p.a. on the amount of USD 329,500 as follows:

- 5% p.a. on the amount of USD 300,000 as from 1 January 2020;

- 5% p.a. on the amount of USD 29,500 as from 2 January 2020.

26. The Single Judge then turned his attention to the compensation payable to the coach by the club following the termination with just cause by the coach.

27. In this respect, the Single Judge held that he first 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. In this regard, the Single Judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake as the termination clause stipulated in art. 8 of the contract is not applicable to a termination of the contract with just cause by the coach. Consequently, the Single Judge held that the compensation can be assessed on the basis of the residual value of the contract in line with the jurisprudence of the Players’ Status Committee.

28. Bearing in mind the foregoing, the Single Judge proceeded with the calculation of the monies payable to the coach under the terms of the employment contract as from the date of termination with just cause by the coach until its natural expiration. Bearing this in mind, the Single Judge deemed that he would have received in total USD 250,000 as remuneration for the period as from January 2020 until 1 July 2020.

29. Consequently, the Single Judge concluded that the amount of USD 250,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

30. In continuation, the Single Judge verified as to whether the coach had signed a new 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.

31. In respect of the above, the Single Judge noted that, according to the information provided by the coach, the coach had not signed a new employment contract after January 2019 and therefore had not been able to mitigate his damages. Consequently, no further deductions should be made to the amount of USD 250,000.

32. In view of the above, the Single Judge concluded that the amount of USD 250,000 is to be paid by the club to the coach as compensation for breach of contract.

33. Equally and with regard to the coach’s request for interest, the Single Judge, in accordance with his well-established jurisprudence, decided that the club has to pay to the coach 5% interest p.a. on the amount of USD 250,000 as from 4 February 2020 until the date of effective payment.

34. Taking into account all the above considerations, the Single Judge decided to partially accept the claim of the coach and reject the counterclaim of the club.

35. 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.

36. In this respect, the Single Judge reiterated that the claim of the coach is partially accepted and that the club is the party at fault. Therefore, the Single Judge decided that the club has to bear the entire costs of the current proceedings in front of FIFA.

37. The Single Judge further observed the temporary amendments outlined in art. 18 par. 2 lit. ii) of the Procedural Rules, which entered in force in 10 June 2020, according to which the maximum amount of procedural costs levied for any claim lodged prior to 10 June 2020, which was yet to be decided at the time of such temporary amendment, shall be equivalent to any advance of costs paid.

38. Accordingly, the Single Judge observed that the coach paid the amount of CHF 5,000 as advance of costs, and therefore decided that the maximum amount of costs of the proceedings corresponds to CHF 5,000.

39. Consequently, the Single Judge determined that the coach shall pay the amount of CHF 5,000 in order to cover the costs of the present proceedings.

III. DECISION OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE

1. The claim of the Claimant / Counter-Respondent, Coach A, is partially accepted.

2. The counterclaim of the Respondent / Counter-Claimant, Club D, is rejected.

3. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, the following amounts:

- Outstanding remuneration in the amount of USD 329,500, plus interest until the date of effective payment as follows :

 5% p.a. on the amount of USD 300,000 as from 1 January 2020;

 5% p.a. on the amount of USD 29,500 as from 2 January 2020.

- Compensation for breach of contract in the amount of USD 250,000, plus 5% interest p.a. as from 4 February 2020 until the date of effective payment.

4. Any further claim lodged by the Claimant / Counter-Respondent is rejected.

5. The Claimant / Counter-Respondent is directed to immediately and directly inform the Respondent / Counter-Claimant of the relevant bank account to which the Respondent / Counter-Claimant must pay the due amount.

6. The Respondent / Counter-Claimant shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amount due, plus interest as established above is not paid by the Respondent / Counter-Claimant within 30 days, as from the notification by the Claimant / Counter-Respondent of the relevant bank details to the Respondent / Counter-Claimant, the following consequences shall arise:

In the event that the payable amount as per in this decision is not paid within the granted deadline , the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

8. The final costs of the proceedings in the amount of CHF 5,000 are to be paid by the Respondent / Counter-Claimant to FIFA (cf. note relating to the payment of the procedural costs below).

For the Players' Status Committee:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Procedural Rules).

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