F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – coach disputes / controversie allenatori (2020-2021) – fifa.com – atto non ufficiale – Decision 23 March 2021

Decision of the

Single Judge of the Players’ Status Committee

passed on 23 March 2021

regarding an employment-related dispute concerning the coach Bilek Michal

BY:

Vitus Derungs (Switzerland), Single Judge of the PSC

CLAIMANT:

Bilek Michal, Czech Republic

Represented by Kardama Temur

RESPONDENT:

Astana FC, Kazakhstan

Represented by SILA Lawyers

I. FACTS OF THE CASE

1. On 15 January 2020, the Czech coach, Bilek Michal (hereinafter: Claimant), and the Kazakhstani club, Astana FC (hereinafter: Respondent) signed an employment contract valid as from date of signature until 31 December 2020 (hereinafter: the Contract).

2. In accordance with the Contract, the Respondent undertook to pay to the Claimant inter alia a monthly gross basic of Kazakhstani Tenge (“KZT”) 21,178,000.

3. Clause 1.1 of the Contract reads as follows (quoted verbatim):

“Under this employment contract Employee undertakes to perform work in person as a First team Head Coach and to observe the labor policy, and the Employer undertakes to provide the Employee with work as per the agreed job function, to ensure the working environment stipulated by the Labor Code of the Republic of Kazakhstan (hereinafter – the Code), laws of the Republic of Kazakhstan, other regulatory acts of the Republic of Kazakhstan, the Employer’s acts, to pay a salary to the Employee in a timely manner and in full.”

4. Clause 7.3 of the Contract reads as follows (quoted verbatim):

“The employer has the right to terminate this labor agreement by mutual agreement of the Parties (paragraph 7.1.1.) without observing the requirements, established by the Labor Code of the mandatory notification of the Employee, with the payment to the Employee the last compensation in the amount of no more than two monthly the salary base salary of the Employee (paragraph 3.1.)”

5. Clause 9.2 of the Contract reads as follows (quoted verbatim):

“The Parties have agreed that any disputes arising out of this employment contract or related to it are subject to settlement before judicial bodies of FIFA in the manner prescribed by the Disciplinary Code of FIFA”.

6. On 1 May 2020, an Additional Agreement No. 1 to the Employment contract was signed by the parties (hereinafter: the Amendment), extending the labour relationship from 01 April 2020 until 31 December 2020 and increasing the monthly salary of the Claimant to KZT 23,587,411.

7. On 1 September 2020, the Claimant received an e-mail letter with ref. No. 529 dated 29 August 2020 (hereinafter: the Termination Letter), as well as Order No. 269-L dated 29 August 2020, according to which the Respondent decided to unilaterally terminate the Contract. The Termination Letter reads as follows (quoted verbatim):

“For unsatisfactory sports performance in the matches of the knockout round I of the UEFA Champions League 20/21 between Dynamo-Brest FC and Astana FC (6:3), tour 4 of the Kazakhstan Professional Football League between Tobol FC and Astana FC (2:0), we hereby inform you on the unilateral termination of the Employment Agreement No. 20/20 dated 15.01.2020 with the effect from 29.08.2020.”

8. On 2 September 2020, the Claimant sent a notice to the Respondent requesting “payment of all amounts due to me under the Agreement must be made no later than on 02.09.2020 inclusive”.

9. On 9 September 2020, the Claimant filed a complaint to the Dispute Resolution Chamber of the Kazakhstan Football Federation (hereinafter: DRC KFF).

10. On 16 September 2020, the Claimant received a letter from the DRC KFF, in which the Claimant was prompted the appeal to FIFA PSC, as per Clause 9.2. of the Contract.

II. PROCEEDINGS BEFORE FIFA

11. On 1 October 2020, the Claimant filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a. The claim of the Claimant

12. According to the Claimant, the Respondent shall be liable to pay the amount for the consent to the signing of the Contract in the amount of KZT 80,052,210 including withholding taxes.

13. In the Claimant’s opinion, sporting sanctions must be imposed on the Respondent.

14. Based on the Claimant’s submissions, the calculation of compensation for early termination of the Contract was the following:

Monthly basic salary is KZT 23,587,411 * 4 months — 10% individual income tax = KZT 84,914,679 (net).

15. Furthermore, the Claimant states that under the Claimant’s direction, the Respondent has won 3 matches. However, bonuses in the amount of the equivalent of USD 7,000 have never been paid. Hence, the claimant filed the following calculation of debt on payment of bonuses: USD 7 000 * 424.85 (rate of NB RK on 24.09.2020) = KZT 2 973 950 (net). Thus, the Claimant requested bonus payments in the amount of KZT 2,973,950.

16. The Claimant submits that “on the basis of paragraph 4 of Article 113 of the Labour Code of the Republic of Kazakhstan, the failure to pay wages by the employer in full and within the terms established by the employment or collective contracts, the employer is liable in accordance with the laws of the Republic of Kazakhstan. The employer pays the employee a debt and a penalty for the period of arrears in payment. The amount of the penalty is calculated on the basis of 1.25-times official refinancing rate of the National Bank of the Republic of Kazakhstan. The percentage to calculate the penalty is 11.25% (9.00% * 1.25). Considering the fact that the debt of [the Respondent] on payment of remuneration for consent to the signing of the Employment contract amounts to KZT 80,052,210 (net), and the default period is 116 days (from 02.06.2020 to 24.09.2020), the penalty is KZT 2,862,140 (net)”.

17. The requests for relief of the Claimant were the following:

a. “To collect the debt on payment of remuneration for consent to the signing of the Employment contract in the amount of KZT 80,052,210 including withholding taxes (net).

b. To collect compensation for early termination of the Employment contract without just cause in the amount of KZT 84,914,679 including withholding taxes (net).

c. To recover the outstanding bonus payments in the amount of KZT 2,973,950 taking into account the withholding of taxes (net).

d. To collect penalties for the period of delay in payment of remuneration for consent to the signing of the Employment contract in the amount of KZT 2,837,467

e. To collect penalties for delay in payment of arrears under the contract, as well as compensation for early termination of the Employment contract, starting from the date of [the Claim] to the day of actual payment of the debt.

f. To apply sporting sanctions to [the Respondent].”

18. On 30 October 2020, the Claimant confirmed receipt of the amount of KZT 80,052,210 requested as “consent to the signing of the Employment contract” as first prayer for relief, paid by the Respondent.

b. Position of the Respondent

19. According to the Respondent, pursuant to Art. 7.3 of the Contract, “the employer has the right to terminate this labour agreement by mutual agreement of the Parties (paragraph 7.1.1.) without observing the requirements, established by the Labour Code on the mandatory notification of the Employee, with the payment to the Employee the last compensation in the amount of no more than two monthly the salary base salary of the Employee”.

20. The Respondent argues that the Claimant requests the PSC to oblige the Respondent to pay the penalty for delay in payment of the Sign-up bonus at the rate of 11,25% per annum. The Respondent is of the opinion that such high penalty is abusive and cannot be considered valid.

21. In this regard, the Respondent refers to FIFA and CAS jurisprudence, which according to the Respondent “are quite consistent in their jurisprudence regarding the rate of penalty for delay in payments and, as a general rule, decide to reduce high penalty interests to the rate of 5% per year usually applied in accordance with Art. 104 par. 1 of the Swiss CO”.

22. Taking into account that the date of the final payment of the Sign-up bonus is 7 October 2020, the amount of interest for delay in that payment is KZT 1,399,820 calculated as follows: the debt of KZT 80,052,210 * 210 (days from 2.06.2020 to 7.10.2020) / 366 (days in 2020) * 5% = KZT 1,399,820. 39. As to the interest in delay in other arrears under the Contract claimed by the Claimant, the Respondent also believes that it should be calculated, if necessary, based on the rate of 5% per annum.

23. The Respondent further argued that Art. 7.3 of the Contract is completely in line with Art. 17 par. 1 of the FIFA Regulations on the Status and Transfer of Players (RSTP), providing that “in all cases, the party in breach shall pay compensation. Subject to the provisions of Article 20 and Annexe 4 in relation to training compensation, and unless otherwise provided for in the contract…”. The Respondent submitted that the Parties to the Contract mutually agreed that in case of unilateral termination of the Contract by the Employer the latter shall pay the Claimant the amount equal to 2-month salary of the Claimant.

24. The Respondent underlines that its liability before the Claimant for the early termination of the Contract without just cause shall be limited to the amount stipulated in Art. 7.3 of the Contract. Therefore, the compensation due to the Claimant for early termination of the Contract does not exceed as follows: KZT 23,587,411 (salary as per Art. 3.1 of the Contract as amended by the Additional Agreement) x 2 = KZT 47,174,822 gross minus 10% tax = KZT 42,457,339.80.

25. Moreover, the Respondent submits that the Claimant’s claims on the bonus payments are “unfounded, unsubstantiated and, consequently, shall be rejected by the PSC due to the lack of proof”.

26. Lastly, the Respondent argues that the Claimant’s request for sporting sanctions to be imposed on the Respondent should be dismissed “due to a lack of sufficient legal interest and hence, a lack of standing to sue on the part of the Claimant, as well as due to lack of legal basis for imposing such sanctions”.

27. The requests for relief of the Respondent, were the following:

a. “The Claim submitted by the Claimant is partially upheld.

b. The Respondent has to pay the Claimant no more than the following amounts: ˗ KZT 42,457,339.80 as a compensation for breach of contract without just cause plus 5% interest p.a. as from 29 August 2020 until the date of effective payment; ˗ KZT 1,399,820 as 5% interest p.a. for delay in payment of the fee for consent to sign an employment contract.

c. Any further claims of the Claimant are rejected.”

III. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PLAYERS’ STATUS COMMITTEE

a. Competence and applicable legal framework

28. 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 case at hand. In this respect, he took note that the present matter was presented to FIFA on 1 October 2020 and submitted for decision on 24 March 2021. Taking into account the wording of art. 21 of the January 2021 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.

29. Subsequently, the Single Judge referred to art. 3 par. 1 of the Procedural Rules and observed that in accordance with art. 23 par. 1 in combination with art. 22 lit. c) of the Regulations on the Status and Transfer of Players (edition February 2021), the Single Judge is competent to deal with the matter at stake, which concerns an employment-related dispute between with an international dimension between a Czech coach and a Kazakhstani club.

30. Subsequently, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Player (edition February 2021), and considering that the present claim was lodged on 1 October 2020, the October 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

31. The Single Judge 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. Likewise, the Single Judge stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which he may consider evidence not filed by the parties.

32. In this respect, the Single Judge also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.

c. Merits of the dispute

33. The competence of the Single Judge and the applicable regulations having been established, the Single Judge entered into the merits of the dispute. In this respect, the Single Judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the Single Judge 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.

i. Main legal discussion and considerations

34. The foregoing having been established, the Single Judge moved to the substance of the matter, and took note of the fact that the Claimant had confirmed receipt of part of the amount initially claimed. Hence, the Single Judge confirmed he had to adjudicate on the issues of the bonuses sought by the Claimant, as well as on the matter of compensation for breach of contract only.

35. In this regard, the Single Judge clarified that it is uncontested by the parties that the Contract was terminated by the Respondent on 29 August 2021 without just cause. However, he noted that the parties had submitted diverging arguments regarding the amount of compensation the Claimant shall be entitled to.

36. Accordingly, the Single Judge turned to the issues of the bonuses sought by the Claimant. To this end, the Single Judge determined that as no documentation had been submitted by the Claimant in support of this allegation, this request had to be rejected on the grounds of the Claimant’s failure to meet his burden of proof in accordance with art. 12 par. 3 of the Procedural Rules.

37. Subsequently, the Single Judge turned to the issue of the calculation of the compensation payable to the Claimant and scrutinised the documentation on file, and in particular clause 7.3 of the Contract in order to ascertain as to whether the relevant clause contained a liquidated damages clause as argued by the Respondent. In this regard, the Single Judge referred to CAS jurisprudence, according to which a so-called liquidated damages clause can be considered as “a mutually agreed upon contractual clause that allows the parties to establish in advance in their contract the amount to be paid by either party in the event of unilateral, premature termination without just cause”.

38. After careful analysis the Single Judge determined that the clause at hand appeared not to contain a liquidated damages clause. The Single Judge considered that as per the wording of the clause in question, it was clear that the payment established therein was to be in consideration of (a) non-fulfilment of the requirements of the Kazakhstan Labour Code, i.e. the mandatory “notification” of the employee, and (b) with the termination taking place “by mutual agreement”. It sufficed to the Single Judge then that the clause cannot apply to the case at hand.

39. Additionally, and for the sake of completeness, the Single Judge acknowledged that the Contract was drafted by the Respondent, and as a consequence the principle contra proferentem should be applied in its interpretation.

40. Hence, the Single Judge determined that this clause was not drafted with the intention of pre-agreeing a compensation in the case of breach of contract without just cause.

41. As a consequence, the Single Judge determined that the amount of compensation payable by the club to the coach had to be assessed in consideration of the amounts due to Claimant under the Contract, which criterion was considered to be essential.

42. The Single Judge then proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until the end of the term and determined that the Claimant would be entitled to receive from the Respondent salaries in the total amount of KZT 84,914,679.

43. Consequently, the Single Judge concluded that the amount of KZT 84,914,679 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand. In continuation, the Single Judge verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. The Single Judge confirmed that the Claimant had not found new employment.

44. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Single Judge decided that the Respondent must pay the amount of KZT 84,914,679 as compensation for breach of contract in the case at hand.

45. Once the above had been established, the Single Judge referred to the matter of interest. In this regard, the Single Judge noted that the Claimant argued that based on the law of the country concerned (Kazakhstan), the default interest applicable shall be 11.25%. However, the Single Judge noted that the Claimant failed to provide any documentation in support of this allegation.

46. Thus, based on well-established jurisprudence of the PSC, the Single Judge deemed that it would be correct to grant 5% interest as from the date the amount was due.

ii. Costs

47. Lastly, the Single Judge referred to article 18 par. a lit. i) of the Procedural Rules, according to which no costs shall be levied by the parties for claims lodged between 10 June 2020 and 31 December 2020 (both inclusive). Accordingly, the Single Judge decided that no procedural costs were to be imposed on the parties.

48. Likewise, and for the sake of completeness, the Single Judge recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.

IV.

DECISION OF THE SINGLE JUDGE OF THE PLAYERS’ STATUS COMMITTEE

1. The claim of the Claimant, Bilek Michal, is partially accepted.

2. The Respondent, Astana FC, has to pay to the Claimant, the amount of KZT 84,914,679 net as compensation for breach of contract without just cause plus 5% interest p.a. on said amount as from 1 September 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

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

5. The Respondent 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).

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

1.

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.

7. This decision is rendered without costs.

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).

CONTACT INFORMATION:

Fédération Internationale de Football Association

FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland

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