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 13 October 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 13 October 2016,

in the following composition:

Geoff Thompson (England), Chairman

Theo van Seggelen (Netherlands), member

Wouter Lambrecht (Belgium), 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 1 July 2012, the Player of Country B Player A (hereinafter: the player or Claimant) and the Club of Country D Club C (hereinafter: the club or Respondent) signed an employment contract valid as from 1 July 2012 until 31 May 2016 (hereinafter: the contract).

2. According to article 3 of the contract, the player was entitled to receive, inter alia, the following amounts:

 during the 2012/2013 season, the total amount of EUR 1,000,000;

 during the 2013/2014 season, the total amount of EUR 1,000,000;

 during the 2014/2015 season, the total amount of EUR 1,200,000;

 during the 2015/2016 season, the total amount of EUR 1,200,000, payable in 10 (ten) instalments of EUR 120,000 in the period between August 2015 and May 2016, due on the 30th day of the respective month, however in February 2016, due on the 28th day of said month.

3. Further, article 3 of the contract provides for the 2015/2016 season for the following clauses:

- ‘The Professional Football Player will receive 10.000€ (ten thousand euro) per match salary for every official match he takes part in the first 11 players squad, net %75 per match salary for every official match he joins the match later and %50 per match salary for every official match he is placed in the first 18 players squad but he does not enter the game’;

- ‘The company will provide housing/rental allowance of up to 2.000 USD (max) per month. In the event the effective rental fees are higher, The Player has to cover the difference’;

- ‘The company will provide 4 business round tickets for the player per season from Country D to Country B’.

4. On 12 August 2015, the player lodged a claim before FIFA against the club, claiming the total amount of EUR 1,539,152, detailed as follows:

Compensation for breach of contract in the amount of EUR 450,000, specified as follows:

 the residual value of the contract in the 2015/2016 season amounting to EUR 1,200,000, minus the value of the new contract the player signed with Club E in the amount of EUR 750,000, leading to a total amount of EUR 450,000 as compensation for breach of contract. Further, the player requests interest on the amount of EUR 450,000 as from 29 July 2015.

Additional ‘indemnity’, based on the Swiss Code of Obligations in the amount of EUR 720,000, specified as follows:

 ‘employee’s wage for six months’, in the amount of EUR 120,000 each, leading to the total amount of EUR 720,000, plus interest as from 29 July 2015.

An additional amount of EUR 369,152, specified as follows:

 EUR 340,000 as ‘appearance fee’ for the 34 official matches to be played in the 2015/2016 season, based on the clause in article 3 of the contract.

 EUR 20,000 as ‘rental contribution’ for the period between August 2015 and May 2016, based on the clause in article 3 of the contract.

 EUR 9,152 as flight tickets based on the clause in article 3 of the contract.

5. In particular, the player states that on 29 July 2015, the club unilaterally terminated the contract, due to ‘squad limitation brought by Football Association of Country D’. According to the player, said termination was made without just cause.

6. In addition, the player states that on 4 August 2015, he signed a new contract with the Club of Country D Club E, valid as from 4 August 2015 until 31 May 2016, according to which contract, he was entitled to receive an amount of EUR 750,000 in the period between 4 August 2015 and 31 May 2016.

7. In its reply to the claim of the player, the club stated that at the beginning of the 2015/2016 season, the Football Association of Country D amended its regulations and declared ‘that the League F Clubs can only register 28 players’. Further, the club states that it needed to submit a list of 28 players to the Football Association of Country D who would be registered for the next season, by no later than 3 September 2015. As a result thereof, the players that were not in said list were not eligible to play in the 2015/2016 season.

8. According to the club, it decided not to add the player on the list of 28 players, ‘because of his insufficient performance’. Furthermore, the club asserted that it was willing to permit the transfer of the player without requesting any transfer fee, however that this ‘bona fide approach’ however ‘remained inconclusive’ and that it therefore had no other choice than to unilaterally terminate the contract on 29 July 2015.

9. Furthermore, the club holds that already on 4 August 2015, the player signed a new contract with Club E and that already on 6 August 2015, he lodged a claim before FIFA.

10. As to the substance, the club argues that it had only two options: either to (a) continue the contractual relationship with the player, having as a consequence that the player would not be able to play official matches, or (b) to permit the player to transfer to another club, in order to keep playing ‘competitive football’. In this respect, the club holds that the player wanted to stay at the club, but that he did not improve his performance. The club argues that as a result thereof, it had no other option than to unilaterally terminate the contract, even more because it allegedly concluded a settlement agreement with UEFA, in order to balance its incomes and expenses in respect of the Financial Fair Play Regulations.

11. In addition, the club argues that the real intention of the player was to terminate his contract, to transfer to another club and to request for compensation. The club holds that the player was the only player who did not agree ‘to terminate his contract mutually or to transfer another Club (without any transfer fee)’.

12. With respect to the amounts claimed by the player, the club asks for the rejection of the entire claim. In relation to the amounts claimed as compensation for breach of contract and indemnity, the club argues that the player cannot request for both amounts and that the request for indemnity in the amount of EUR 720,000, has to be rejected. The request of EUR 450,000 as compensation for breach of contract also needs to be rejected, because the player ‘could have signed a higher amounted contract but he did not even search for it’.

13. Moreover, the club argues that regarding the appearance fees, the player could never have been entitled to these amounts, because he was not eligible to play in the 2015/2016 season. Further, in the club’s view, the claim for rental contribution and flight tickets also needs to be rejected, because these amounts were only due if the contractual relation would have continued. Subsequently, the club holds that the new contract with Club E also provides for appearance fees, flight tickets and rental contribution. Finally, the club states that since the termination of the contract did not occur in the protected period, no sporting sanctions can be imposed.

14. In conclusion, the club requests for the rejection of the entire claim of the player, as well as for the legal expenses of the club and procedural costs to be paid by the player.

15. In his replica, the player holds that the club unilaterally terminated the contract without just cause, since the alleged poor performance of a player cannot be considered as a valid reason to terminate the contract. Furthermore, the player maintains that he tried to mitigate his damages as much as possible and that his calculation of the amount requested as compensation for breach of contract, is correct, because Swiss law should be applied in the matter at hand.

16. In its duplica, the club argues that it terminated the contract with just cause, and that it took into account both the interests of the player as well as the interests of the club.

17. Furthermore, the club denies to have terminated the contract with the player because of his alleged poor performance. In this respect, the club explains that the player did not perform his regular sporting performance, in order to force the club to terminate his contract. As a result, the player was not added to the list of 28 players being eligible to play for the club in the 2015/2016 season. In order to avoid negative consequences for the player’s sporting career, the club holds that it had no other choice than to terminate the contract.

18. Furthermore, the club emphasized that the player did not suffer any damages or losses, because on 4 August 2015, he signed a new contract with Club E.

19. The club further refers to the fact that the transfer window only closed on 1 September 2015 and that until said date, the player could have found another club that would have paid a higher amount, in order to further mitigate his damages. Finally, the club states that the player claimed the total amount of EUR 1,519,152, which is higher than the amount he would have received if the contract would not have been terminated.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 12 August 2015. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 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 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2016), 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. 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 (edition 2016), and considering that the present claim was lodged on 12 August 2015, the 2015 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. 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 Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber 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.

5. First of all, the members of the Chamber acknowledged that the parties were contractually bound by means of an employment contract valid as from 1 July 2012 until 31 May 2016.

6. In this respect, the player maintained that the club unilaterally terminated the contract on 29 July 2015 without just cause and therefore, requested the total amount of EUR 1,539,152 as compensation for breach of contract.

7. The Chamber noted that the club, on the other hand, rejected the claim put forward by the player. The club holds that on 29 July 2015, it terminated the contract with player on the basis of his sporting performance, in combination with the fact that it was ordered by the Football Association of Country D to limit its squad for the next season to 28 players and that the performance of the player was not good enough to stay in the squad. According to the club, based on these circumstances, it had no other option than to terminate the contract. Furthermore, the club holds that the player’s claim for compensation cannot be accepted since he should have done more to mitigate his damages.

8. In this framework, the members of the Chamber highlighted that the underlying issue in this dispute, considering the diverging position of the parties, was to determine as to whether the club had terminated the contract with or without just cause on 29 July 2015 and subsequently, to determine the consequences of the early termination of the contractual relationship by the club.

9. First and foremost, the Chamber wished to emphasise that, while referring to art. 12 par. 3 of the Procedural Rules, the club’s argument that the Football Association of Country D ordered the club to limit its squad to 28 players, is not supported by any documentary evidence.

10. In any case, the DRC wished to underline that an alleged change of rules by the Football Association of Country D cannot be held against the player.

11. Furthermore, the DRC stressed that it can be noted from the documents on file, that the main reason for the club at the basis of the termination of the contract in the matter at hand, was the player’s alleged ‘insufficient performance’.

12. With the above in mind, the Chamber recalled its longstanding and well-established jurisprudence which dictates that the alleged poor performance of a player, is a purely unilateral and subjective evaluation by the club and therefore cannot, by any means, be considered as a valid reason to terminate the contract of a player, as it is the result of a purely subjective perception, not measurable in objective criteria. Thus, it cannot be considered as just cause for the premature termination of an employment contract.

13. On account of all of the above, the members of the Chamber decided that the club terminated the contract on 29 July 2015 without just cause.

14. In view of the above, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the player is entitled to receive from the club compensation for breach of contract.

15. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club in the case at stake. In doing so, the members of the Chamber firstly 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 player 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.

16. In application of the relevant provision, the Chamber held that it first of all 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.

17. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

18. Bearing in mind the foregoing as well as the claim of the player and the fact that the club terminated the contract on 29 July 2015, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract until 31 May 2016, taking into account that in the period between 29 July 2015 and 31 May 2016, apart from the monthly salaries, the player was also entitled to receive 11 monthly payments of housing allowance in the amount of USD 2,000 each (approximately EUR 1,773) from the club.

19. What is more, with regard to the player’s claim pertaining to appearance fees in the total amount of EUR 340,000, the Chamber argued that, in view of its undeniably variable character and uncertainty from one season to another, it could not establish that the club would have paid the player for the 2015/2016 season ‘appearance fees’, and, if any, in what proportion. Consequently, it had no other alternative but to refuse to take into consideration said ‘appearance fees’ while assessing the residual value of the contract.

20. Consequently, the Chamber concluded that the amount of EUR 1,219,500 (i.e. the monthly salaries for the 2015/2016 season in the amount of EUR 1,200,000, as well as the housing allowance until and including May 2016 in the amount of EUR 19,500), serves as the basis for the determination of the amount of compensation for breach of contract.

21. In continuation, the Chamber verified as to whether the player 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.

22. In this regard, the Chamber recalled that on 4 August 2015, the player signed an employment contract with the Club of Country D Club E, valid until 31 May 2016, in accordance with which he was entitled to receive a total amount of EUR 750,000, as well as housing allowances in the total amount of EUR 8,300. This employment contract enabled the player therefore to earn an income of EUR 758,300 during said period of time. Furthermore, the Chamber decided to not take into account the reimbursement of flight tickets for the calculation of the amount of compensation, since both the contract with the club, as well as the contract with Club E provided for reimbursement of flight tickets.

23. As a result, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided to partially accept the players’ claim and that the club must pay the amount of EUR 461,200 as compensation for breach of contract in the case at hand.

24. In addition, taking into account the player’s request, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 12 August 2015, until the date of effective payment.

25. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the player is 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, compensation for breach of contract in the amount of EUR 461,200 plus 5% interest p.a. on said amount as from 12 August 2015 until the date of effective payment.

3. In the event that the amount due to the Claimant in accordance with the above-mentioned number 2. is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. Any further claim lodged by the Claimant is rejected.

5. 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.

****

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 / www.tas-cas.org

For the Dispute Resolution Chamber:

Marco Villiger

Deputy Secretary General

Encl.: CAS directives