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 12 January 2021

Decision of the

Single Judge of the Players' Status Committee

passed in Zurich, Switzerland, on 12 January 2021,

regarding an employment-related dispute concerning the coach Drago Mamic

BY:

Stefano La Porta (Italy), Single Judge of the PSC

CLAIMANT:

DRAGO MAMIC, Croatia

Represented by Mr. Ivan Smokrovic

RESPONDENT:

SAIF SC LTD, Bangladesh

I. FACTS

1. On 1 May 2020, the Croatian coach Drago Mamic (hereinafter: the coach or Claimant) and the Bangladesh club Safa SC (hereinafter: the club or Respondent) signed an employment agreement, valid for the period between 1 July 2020 ‘completion of Bangladesh Premier Football League Season 2020-2021 and AFC Cup 2020-2021’

2. Based on article 4 of the contract, the coach is entitled to a monthly salary of USD 4,000 net.

3. On 10 September 2020, the coach received a letter from the club, by means of which the contract was terminated, because of the fact that due to the COVID-19 pandemic, the club could no longer fulfil its financial obligations.

4. On 2 October 2020, the coach requested the club to revoke its termination, however to no avail.

5. On 26 October 2020, the Claimant lodged a claim against the Respondent before FIFA, claiming the following amounts, as well as ‘statutory default interest, within 15 days’, the full value of the contract in the amount of USD 48,000, related to the salary payments due to the coach in the period between 1 July 2020 and 30 June 2021.

6. Furthermore, the coach claimed that the club be ordered to pay procedural costs.

7. In his claim, the Claimant explains that he deems that the termination was made without just cause, as the club could not simply escape its financial obligations because of the COVID-19 pandemic.

8. In its reply to the claim, the club asked for the rejection of the coach’s claim and explains that it concluded the contract ‘in the premise’ that the situation in Bangladesh in connection with COVID-19 would improve, but later found out that the league was abandoned by the Bangladesh FA on 22 May 2020.

9. As a result, the club claims that it had no other alternative then to negotiate on a mutual termination of the contract the coach. However, on 9 September 2020, the coach informed the club that he did not want to mutually terminate the contract as a result of which the club had to unilaterally terminate the contract. The club explains that he refusal of the coach to enter into negotiations is considered a violence of the spirit of FIFA Circular 1714, based on which parties are encouraged to settle COVID-19 related disputes by mutual consent.

10. Furthermore, the club explains that under Bangladesh law, the coach is considered a temporary worker and that as a result thereof, the coach would not be entitled to damages for compensation. Moreover, the club argues that the contract was considered void and that due to the COVID-19 pandemic, a situation of force majeure, which made it possible - also in line with article 119 of the Swiss Code of Obligations - to terminate the contract.

11. In conclusion, the club deems that the termination of the contract was valid under section 26 of the Bangladesh Labor Act, 2006 and Section 56 of the Contract Act, 1872.

12. After having bene requested about an update about his contractual situation, the coach informed FIFA that he remained unemployed after the unilateral termination of the contract.

II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PSC

1. First of all, the Single Judge of the PSC (hereinafter also referred to as Single Judge) analysed whether he was competent to deal with the case at hand. 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 of the PSC referred to art. 3 par. 1 of the Procedural Rules and emphasised that, in accordance with art. 24 par. 1 in combination with art. 22 lit. c) of the Regulations on the Status and Transfer of Players, the Single Judge of the PSC is competent to deal with matters which concern employment-related disputes with an international dimension between a coach and clubs.

3. In continuation, the Single Judge of the PSC analysed which edition of the Regulations of the Status and Transfer of Players should be applicable to the present matter. In this respect, the Single Judge of the PSC confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the claim was lodged on 26 October 2020, the June 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

4. With the above having been established, the Single Judge of the PSC entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents contained in the file. However, the Single Judge of the PSC emphasized that in the following considerations it will refer only to facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Single Judge noted that, on 1 May 2020, the Claimant concluded a contract with the Respondent, valid for the period between 1 July 2020 and the ‘completion of Bangladesh Premier Football League Season 2020-2021 and AFC Cup 2020-2021’.

6. Subsequently, the Single Judge observed that the Claimant lodged a claim before FIFA for breach of contract without just cause, arguing that the Respondent unilaterally terminated the contract without valid reasons on 10 September 2020, allegedly because of the consequences of the COVID-19 pandemic.

7. Conversely, the Single Judge noted that, according to the Respondent, the claim of the Claimant cannot be upheld, as the termination of the contract had to be made because of the outbreak of the COVID-19 pandemic, which it considers to be a force majeure. Moreover, the Respondent argues that the termination of the contract under Bangladesh law as valid, and that the Claimant is not entitled to compensation for breach of contract anyway, in light of the contents of Bangladesh law.

8. In view of the above, the Single Judge considered that the main legal issue at stake is to determine whether the Respondent had a just cause to unilaterally terminate the contract on 10 September 2020.

9. In this respect, the Single Judge first of all wish to address that the Respondent argues that it had to terminate the contract with the Claimant as a result of the COVID-19 pandemic, which was to be considered a force majeure in the opinion of the Respondent.

10. Bearing in mind the above, the Single Judge wished to refer to the fact that, in light of the worldwide COVID-19 outbreak, FIFA issued a set of guidelines, the COVID-19 Guidelines, which aim at providing appropriate guidance and recommendations to member associations and their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19 and ensure that any response is harmonised in the common interest. Moreover, on 11 June 2020, FIFA issued an additional document, referred to as FIFA COVID-19 FAQ, which provides clarification about the most relevant questions in connection with the regulatory consequences of the COVID-19 outbreak and identifies solutions for new regulatory matters.

11. Analysing the concept of a situation of force majeure, the Single Judge noted that, based on the contents of the FIFA COVID-19 Guidelines and the FIFA COVID-19 FAQ, FIFA did not declare that the COVID-19 outbreak was a force majeure situation in any specific country or territory, or that any specific employment or transfer agreement was impacted by the concept of force majeure.

12. In other words, in any given dispute, it is for a party invoking force majeure to establish the existence of said event under the applicable law/rules as well as the consequences that derive in connection thereto. The analysis of whether a situation of force majeure existed has to be considered on a case-by-case basis, taking into account all the relevant circumstances.

13. With this idea in mind, the Single Judge acknowledged the specific circumstances of the present matter, which concern the disruptions caused by the COVID-19 pandemic in the football world. The Single Judge understood that, within this context, the interruption of football competitions in Bangladesh as from May 2020 led the Respondent to decide to start negotiations about a mutual agreement to terminate the contract with the Claimant, as the Respondent had concluded the contract assuming that the situation regarding COVID-19 in Bangladesh would improve.

14. It follows from the abovementioned consideration that the Single Judge concluded that in the matter at hand, the Respondent was not able to demonstrate that it was facing a force majeure situation: it even decided to conclude a contract with the Claimant during the COVID-19 pandemic, speculating that the situation as a result of the pandemic would improve.

15. The Single Judge further noted that – since the parties could not reach an agreement as to the termination of the contract – the Respondent decided to unilaterally terminate the contract with the Claimant on 10 September 2020. Based on these circumstances, the Single Judge was of the opinion that the COVID-19 Guidelines were not applicable to the matter at hand, as said Guidelines are only applicable to unilateral variations of existing contracts. To unilateral terminations of contracts, like in the matter at hand, the Regulations are applicable, as well as the longstanding jurisprudence of the Dispute Resolution Chamber and the Players’ Status Committee.

16. In view of the foregoing, the Single Judge was eager to emphasise that – in view of the jurisprudence of the Dispute Resolution Chamber and the Players’ Status Committee - only a breach or misconduct which is of a certain severity justifies the termination of a contract. 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 ensure 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 only ever be an ultima ratio measure.

17. Within this context, the Single Judge observed that, after it could not reach an amicable settlement – the Respondent decided to unilaterally terminate the contract on 10 September 2020, without further exploring any other options to continue the employment relations hip with the Claimant, e.g. exploring the possibility to make a variation to the contract or other measures.

18. Therefore, in the view of the Single Judge, the Respondent’s termination letter of 10 September 2020 appears to be premature since, at that stage, the contractual relationship existing between the parties was not beyond repair.

19. Finally, as to the Respondent’s allegations that the termination was valid under Bangladesh law, the Single Judge wished to point out that the contract at stake does not only refer to the applicability to the Bangladesh law, but also to the relevant IFFA Regulations. In this respect, the Single Judge wished to point out that that when deciding a dispute before the one of FIFA’s deciding bodies, FIFA’s regulations prevail over any national law chosen by the parties.

20. 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 FIFA’s deciding bodies would have to apply the national law of a specific party on every dispute brought to 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 termination of contract is based on uniform criteria, rather than on provisions of national law that may vary considerable from country to country. Therefore, the Single Judge deemed that it is not appropriate to apply the principles of a particular national law to the termination of the contract but rather the RSTP, general principles of law and, where existing well-established jurisprudence.

21. In view of all the previous considerations, the Single Judge established that the termination of the contract on 10 September 2020 was without just cause and, as a result, the Claimant is entitled to outstanding remuneration and compensation for breach of contract

22. First of all, the Single Judge concurred that the Respondent must fulfill its obligations as per employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”.

23. Consequently, the Single Judge decided that the Respondent is liable to pay to the Claimant the remuneration that was outstanding at the time of the termination, i.e. the amount of USD 8,000, consisting of two monthly salaries USD 4,000 each for the months of July and August 2020.

24. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Players’ Status Committee in this regard, the Single Judge decided to award the Claimant interest at the rate of 5% p.a. on the amount of USD 8,000 as of 26 October 2020.

25. In continuation, the Single Judge focused his attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the Single Judge firstly recapitulated that, in accordance with the jurisprudence of the Players’ Status Committee, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years.

26. In view of the above, the Single Judge proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until its original date of expiration.

27. In particular, the Single Judge noted that, following the contract, the Claimant was entitled to a salary of USD 4,000 per month, i.e. USD 48,000 per year.

28. Therefore, the Single Judge understood that, since the early termination of the contract on 10 September 2020 and until original date of expiration of the contract, i.e. 31 August 2021 (end of the season 2020/2021), the Claimant would have received a total amount of USD 56,000. The Single Judge however noted that the Claimant limited its claim to the total amount of USD 48,000, out of which USD 8,000 are awarded as outstanding remuneration.

29. Consequently, the Single Judge established that the amount of USD 40,000 shall serve as the basis for the calculation of the payable compensation.

30. Subsequently, 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. According to the constant practice in this regard, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with Claimant’s general obligation to mitigate his damages.

31. In this respect, the Single Judge observed that the Claimant informed the FIFA Administration that after the unilateral termination of the contract, he had remained unemployed.

32. As a result, the Single Judge understood that the Claimant was therefore unable to mitigate his damages and that no further amount shall be deducted from the amount of USD 40,000 the Claimant is in principle entitled to.

33. In view of the above, the Single Judge established that the Respondent shall pay to the Claimant the amount of USD 40,000 as compensation for breach of contract without just cause.

34. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber and the Players’ Status Committee in this regard, the Single Judge decided to award the Claimant interest at the rate of 5% p.a. on the amount of USD 40,000 as of 26 October 2020.

35. In continuation, the Single Judge of the PSC 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 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.

36. In this respect, the Single Judge of the PSC referred to the Covid-19 Football Regulatory Issues – FAQ, published on 11 June 2020 which establish that, given the current circumstances, for any claim lodged between 10 June 2020 and 31 December 2020 (both inclusive), there will be no requirement to pay an advance of costs and no procedural costs shall be ordered. Therefore, the Single Judge established that the present decision shall be rendered without costs.

III. DECISION OF THE PLAYERS' STATUS COMMITTEE

1. The claim of the Claimant, Drago Mamic, is accepted.

2. The Respondent, Saif SC Ltd, has to pay to the Claimant, the following amount:

- USD 8,000 as outstanding remuneration plus 5% interest p.a. as from 26 October 2020 until the date of effective payment;

- USD 40,000 as compensation for breach of contract without just cause plus 5% interest p.a. as from 26 October 2020 until the date of effective payment;

3. 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.

4. 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).

5. This decision is rendered without costs.

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.

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

www.fifa.com | legal.fifa.com | psdfifa@fifa.org | T: +41 (0)43 222 7777