F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2016-2017) – fifa.com – atto non ufficiale – Decision 3 November 2016
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 3 November 2016,
in the following composition:
Thomas Grimm (Switzerland), Deputy Chairman
Alejandro Marón (Argentina), member
Eirik Monsen (Norway), member
on the claim presented by the player,
Player A, Country B,
as Claimant
against the club,
Club C, Country D
as Respondent
regarding an employment-related dispute between the parties
I. Facts of the case
1. On 15 July 2015, the Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), signed an employment contract valid from 23 July 2015 until 22 July 2016.
2. In accordance with the employment contract, the Claimant was inter alia entitled to receive total remuneration of USD 950,000 plus amenities, as follows:
a. USD 330,000 to be paid after the signature of the contract;
b. USD 200,000 to be paid on 30 December 2015;
c. USD 35,000 as monthly salary.
3. After having put the Respondent in default for a first time on 22 February 2016, on 24 May 2016, the Claimant put the Respondent in default for a second time of a total of USD 550,000. This corresponds to USD 315,000 for the salaries allegedly due between August 2015 and April 2016 (i.e. 9 x USD 35,000), the salary of May 2016 due on 31 May 2016 (i.e. USD 35,000) and the payment due on 30 December 2015 (i.e. USD 200,000). The Claimant warns that should the payment of allegedly outstanding sums not be made then the player will unilaterally terminate his employment.
4. On 1 June 2016, the Claimant notified the Respondent of the unilateral termination of the employment contract on the basis that he had not been paid since July 2015. He reminds the Respondent that it is in default of the payment of a total of USD 550,000.
5. On 14 June 2016, the Claimant lodged a claim in front of FIFA claiming the total amount of USD 830,000 plus 5% interest p.a. from the relevant due dates broken down as follows:
a. USD 550,000 as outstanding remuneration:
i. USD 350,000 as ten monthly salaries of USD 35,000 between August 2015 and May 2016;
ii. USD 200,000 as the payment due on 30 December 2015.
b. USD 280,000 as compensation for breach of contract:
i. USD 70,000 as two monthly salaries due as the residual value of the contract corresponding to June and July 2016;
ii. USD 210,000 as six monthly salaries in light of the concept of the specificity of sport.
6. The Claimant alleges that he was not paid during the entirety of the employment relationship, barring the sign-on fee. The Claimant further claims that he put the Respondent in default of payment twice. According to the Claimant, such default notices in combination with the outstanding amounts, clearly granted him a just cause to terminate the contract.
7. In spite of having been invited to do so, the Respondent did not present its position to the claim.
8. The Claimant informed FIFA that he did not find a new employment contract during the months of June and July 2016.
II. Considerations of the Dispute Resolution Chamber
1. First, the Dispute Resolution Chamber (hereinafter also referred to as the Chamber or the DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 14 June 2016. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (2015 edition; hereinafter: the Procedural Rules) are applicable to the matter at hand (cf. article 21 of the Procedural Rules).
2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2, in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (2016 edition), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Player of Country B and a Club of Country D.
3. In this respect, the Chamber was eager to emphasise that contrary to the information contained in FIFA’s letter dated 28 October 2016 by means of which the parties were informed of the composition of the Chamber, the member Mr E and the member Mr F refrained from participating in the deliberations in the case at hand, due to the fact that the member Mr E has the same nationality as the Claimant and that, in order to comply with the prerequisites of equal representation of club and player representatives, the member Mr F also refrained from participating and thus the Dispute Resolution Chamber adjudicated the case in the presence of three members in accordance with art. 24 par. 2 of the Regulations.
4. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (2016 edition), and considering that the present claim was lodged on 14 June 2016, the 2016 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.
5. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the members of the Chamber started by acknowledging all the aforementioned facts as well as the arguments and documentation submitted by the parties. The Chamber, however, emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.
6. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause on 1 June 2016, after previously having twice put the Respondent in default, since the Respondent allegedly failed to pay the Claimant’s remuneration. In this respect, the Claimant submits having only received the contractually provided sign-on fee at the time he terminated the employment contract. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.
7. The Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. Consequently, the Chamber deemed that the Respondent had renounced to its right of defence and, thus, had accepted the allegations of the Claimant.
8. As a consequence of the aforementioned consideration, the members of the Chamber concurred that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents on file, in other words, upon the statements and documents presented by the Claimant.
9. In view of the foregoing, in particular the considerations to be found in points II.7 and II.8 above, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant, until 1 June 2016, i.e. the date on which the Claimant terminated the employment contract, the total amount of USD 550,000. Consequently, and considering that the Respondent had repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 1 June 2016 and that, as a result, the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant.
10. Having established the above, the members of the Chamber decided that in accordance with the general legal principle of pacta sunt servanda, the Respondent must fulfil its obligations as per the employment contract concluded with the Claimant and consequently is to be held liable to pay the outstanding amount of USD 550,000 to the Claimant.
11. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at a rate of 5% p.a. as of the day following the day on which each of the relevant payments included in the total amount of USD 550,000 fell due in accordance with the pertinent employment contract.
12. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause, the Chamber focused its attention on the consequences of such a termination. In this regard, the members of the Chamber not only determined that the Respondent was to pay USD 550,000 as outstanding remuneration to the Claimant plus interest, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.
13. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the Respondent in the case at stake. In doing so, the members of the Chamber first recapitulated that in accordance with art. 17 par. 1 of the Regulations, 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, and depending on whether the contractual breach falls within the protected period.
14. In application of the relevant provision, the Chamber held that it first had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.
15. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable.
16. Bearing the foregoing in mind as well as the claim of the Claimant, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 22 July 2016. Consequently, the Chamber concluded that the amount of USD 70,000 (i.e. remuneration for June and July 2016) serves as the basis for the determination of the amount of compensation for breach of contract.
17. In continuation, the Chamber 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 of the DRC, 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 the player’s general obligation to mitigate his damages.
18. In this regard, the members of the Chamber noted that the Claimant had not signed any new employment contract within the period of time between the termination of the contract and its original date of expiry and, thus, had not been able to mitigate his damages. In this context, the Chamber found it reasonable that the Claimant had not been able to find new employment within the relevant period of two months only.
19. Consequently, on account of all the aforementioned considerations and the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damages, the Chamber decided that the Respondent must pay to the Claimant the amount of USD 70,000 as compensation for breach of contract in the case at hand.
20. In addition, taking into account the Claimant’s request as well as the constant practice of the DRC in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation due as of the date of claim, i.e. 14 June 2016.
21. Furthermore, with regard to the claim of the Claimant relating to compensation due in relation to the specificity of sport, the DRC concluded that the Claimant had not fully substantiated his claim with documentary evidence in accordance with art. 12 par. 3 of the Procedural Rules. That is, there is not supporting documentation relating to the Claimant’s claim pertaining to compensation due in relation to the specificity of sport. Consequently, the DRC decided to reject this part of the Claimant’s claim.
22. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.
III. Decision of the Dispute Resolution Chamber
1. The claim of the Claimant, Player A, is partially accepted.
2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 550,000 plus 5% interest p.a. until the date of effective payment as follows:
a. 5% p.a. as of 1 September 2015 on the amount of USD 35,000;
b. 5% p.a. as of 1 October 2015 on the amount of USD 35,000;
c. 5% p.a. as of 1 November 2015 on the amount of USD 35,000;
d. 5% p.a. as of 1 December 2015 on the amount of USD 35,000;
e. 5% p.a. as of 31 December 2015 on the amount of USD 200,000;
f. 5% p.a. as of 1 January 2016 on the amount of USD 35,000;
g. 5% p.a. as of 1 February 2016 on the amount of USD 35,000;
h. 5% p.a. as of 1 March 2016 on the amount of USD 35,000;
i. 5% p.a. as of 1 April 2016 on the amount of USD 35,000;
j. 5% p.a. as of 1 May 2016 on the amount of USD 35,000;
k. 5% p.a. as of 1 June 2016 on the amount of USD 35,000.
3. The Respondent has to pay to the Claimant, within 30 days, as from the date of notification of this decision, compensation for breach of contract in the amount of USD 70,000 plus 5% interest p.a. from 14 June 2016 until the date of effective payment.
4. In the event that the amounts due to the Claimant in accordance with the aforementioned points 2. and 3. are not paid within the stated time limit, 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 Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.
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Note relating to the motivated decision (legal remedy):
According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00
Fax: +41 21 613 50 01
e-mail: info@tas-cas.org
For the Dispute Resolution Chamber:
Marco Villiger
Deputy Secretary General
Encl. CAS directives