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 18 August 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 18 August 2016,

in the following composition:

Thomas Grimm (Switzerland), Chairman

Johan van Gaalen (South Africa), member

Todd Durbin (USA), member

on the matter between the player,

Player A, Country B

as Claimant / Counter-Respondent

and the club,

Club C, Country D

as Respondent / Counter-Claimant

and the club,

Club E, Country F

as intervening Party

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 12 August 2014, the Player of Country B Player A (hereinafter: the player) and the Club of Country D Club C (hereinafter: the club) signed an employment contract valid as from 2 August 2014 until 31 May 2017 (hereinafter: the contract).

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

In the 2014/2015 season:

 the amount of EUR 375,000, payable in 10 equal instalments in the period between August 2014 and May 2015 and due on the last day of the relevant month;

In the 2015/2016 season:

 the amount of EUR 400,000, payable in 10 equal instalments in the period between August 2015 and May 2016 and due on the last day of the relevant month;

In the 2016/2017 season:

 the amount of EUR 400,000, payable in 10 equal instalments in the period between August 2016 and May 2017 and due on the last day of the relevant month.

3. Moreover, the contract also contains the following clause: ‘This agreement also continues to be valid after the professional football player agreement is signed. If any disputes occur, clauses of this agreement will prevail. […] If the payments are not paid in the due date, %2 default interests (monthly) would apply. […]‘.

4. Furthermore, on 12 August 2014, the player and the club signed a document referred to as ‘Professional Football Player Contract’ (hereinafter: the professional contract), valid as from 12 August 2014 until 31 May 2017.

5. On 8 April 2015, the player unilaterally terminated the contract with immediate effect, because of the outstanding salaries in the amount of EUR 112,500 and the fact that he was forced by the club to train alone. In addition, the player provided a confirmation of the Football Federation of Country D, stating that the contract between the player and the club was unilaterally terminated as per 8 April 2015.

6. On 28 April 2015, the player lodged a claim before FIFA against the club, claiming outstanding remuneration and compensation for breach of contract in the total amount of EUR 987,500, specified as follows:

Outstanding remuneration in the amount of EUR 112,500, specified as follows:

 three monthly salaries for the months January, February and March 2015, in the amount of EUR 37,500 each.

Compensation for breach of contract by the club in the amount of EUR 875,000, as follows:

 EUR 75,000 as residual value of the contract in the months April and May 2015 (i.e. EUR 37,500 x 2);

 EUR 400,000 as residual value of the contract in the period between August

2015 and May 2016 (i.e. EUR 40,000 x 10);

 EUR 400,000 as residual value of the contract in the period between August

2016 and May 2017 (i.e. EUR 40,000 x 10).

Additionally, the player requests 5% interest p.a. ‘as from April 2015’, procedural costs to be paid by the club, as well as ‘disciplinary measures’ to be imposed on the club in case of non-payment.

7. In particular, the player holds that he received the salaries for the period between August and December 2014 as per the contract, however that the club failed to pay him the salaries for January, February and March 2015, in the amount of EUR 37,500 each, therefore, leading to a total outstanding amount of EUR 112,500. Further, the player holds that he was forced to train alone for ’about three weeks’.

8. In its different submissions replying to the claim, the club argued that as from March 2015, the player ‘started to not resume’ his contractual duties, as well as that he left Country D in April 2015.

9. Further, the club holds that ‘only from the claim submit to the FIFA date 8 April 2015 the club is informed that the player terminate his contract. The club never had been informed about any warning and termination before’. According to the club, the player did not ‘act in compliance with the mandatory procedure of termination’, as confirmed by CAS.

10. In addition, the club stated that it was relegated due to the players leave, and that as a ‘result of his departure Club has lost EUR 20,000,000 because of relegation’ and that because of its relegation to the League of Country D, it could no longer pay the amounts as agreed upon in the contracts with its players.

11. Furthermore, the club stressed that the player left Country D without any permission or notification while the season was in progress. Further, the club provided copies of 3 notary records, dated 11 April, 13 April and 14 April 2015, in which the club confirms that the player missed three training sessions (i.e. on 11 April, 13 April and 14 April 2015). The club also submitted a ‘notification’ dated 10 March 2015, in which the player was allegedly informed that he ‘is dropped out of the squad indefinitely’.

12. Moreover, the club reiterated that the player left the club without permission and that he did not ‘act in compliance with the mandatory procedure of termination’. Furthermore, the club holds that the player signed a new contract with the Club of Country F Club E and that ‘he has not damaged’. Therefore, the club concludes that ‘it could be’ that the player is not entitled to compensation at all.

13. With respect to the allegedly outstanding salary, the club holds that it paid the player the amounts of EUR 187,500 and 49,998.57 (according to the club corresponding to EUR 16,500). Therefore, the club holds that the player is not entitled to the amount of EUR 875,000 as compensation for breach of contract.

14. As a result, the club holds that the player terminated the contract without just cause and lodged a counterclaim, claiming payment of the total amount of EUR 987,500 as compensation for the breach of contract.

15. Moreover, the club stated that it follows from the jurisprudence of CAS that ‘the late payments owed under a contract do not constitute a valid reason for termination of the contract without a prior warning’. Because of the fact that the player did not act in line with this jurisprudence, the club holds that the player should pay the residual value of his contract, i.e. the amount of EUR 875,000 to the club, therefore adapting its original counterclaim.

16. Finally, the club asked for the rejection of the player’s claim, and the acceptance of its counterclaim. In addition, the club requested for sporting sanctions to be imposed on the player, as well as on his new club, the Club of Country F Club E. Finally, the club requests that Club E is to be held jointly liable for the payment of the amount of EUR 875,000.

17. In his reply to the counterclaim and submissions of the club, the player denies all the allegations of the club and states that the club did not submit any evidence of its statements. Further, the player holds that on 8 April 2015, he sent the termination letter to the club, and that only ‘at the end of April 2015’, he submitted his claim to FIFA.

18. In addition, the player holds that he only left Country D, after the Football Federation of Country D had expressly declared that the player unilaterally terminated the contract.

19. With respect to the club’s arguments on the mandatory procedure of termination, the player holds that, since three monthly salaries were outstanding and the club violated his rights to perform his football duties, he had a just cause for the immediate termination of the contract.

20. Moreover, the player argues that for 20 consecutive days, he was prevented from accessing training sessions, which has to be considered as ‘serious detriment to a professional football player career’.

21. Subsequently, the player states that the club did not contest that three monthly salaries were outstanding, as well as that it did not contest that the player was ‘separated from the team’ and was forced to practice alone.

22. In conclusion, the player holds that – with reference to the jurisprudence of FIFA’s DRC - he terminated the contract with just cause and that as a result, the counterclaim of the club has to be rejected.

23. In continuation, the player holds that it is clear that the termination date of the contract is 8 April 2015 and that he terminated the contract with just cause on said date. Further, the player rejects the club’s argument that his leave caused the club’s relegation, by pointing out that it was actually the club, who ordered the player to train alone.

24. In addition, the player holds that he only received the amount of EUR 187,500, and denies to have received the amount of 49,998.57. Furthermore, the player states that he indeed did not attend the training sessions on 11 April, 13 April and 14 April 2015, because he terminated the contract on 8 April 2015.

25. In conclusion, the player asks for the rejection of the club’s counterclaim.

26. In reply to the counterclaim lodged by the club, the new club of the player, Club E, confirmed that it concluded an employment contract with the player, valid as from 1 July 2015 until ‘the end of the 2016/2017 season’, according to which the player was entitled to receive a monthly salary of EUR 16,700.

27. Furthermore, Club E holds that it acted in good faith, when it concluded a contract with the player and referred to the confirmation the Football Federation of Country D, stating that the contract between the player and the club was unilaterally terminated as per 8 April 2015, which it received from the player (cf. point 7. above). In conclusion, Club E holds that it never induced the player to breach his contract with the club, since it only entered into negotiations with the player on or around 15 June 2015 and that the player signed the contract with Club E on 1 July 2015.

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 28 April 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 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, with the involvement of a Club of Country F.

3. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 11 August 2016, by means of which the parties were informed of the composition of the Chamber, the Member G and the Member H refrained from participating in the deliberations in the case at hand, due to the fact that the Member G has the same nationality as the player and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the Member H refrained from participating and thus the Dispute Resolution Chamber adjudicated the case in 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 (edition 2016), and considering that the present claim was lodged on 28 April 2015, the 2015 edition of said regulations (hereinafter: 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 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. 6. In doing so, the DRC acknowledged that on 12 August 2014, the club and the player signed an employment contract valid as from 2 August 2014 until 31 May 2017, in accordance with which the player was entitled to receive the total amount of EUR 375,000 during the season 2014/2015, the total amount of EUR 400,000 during the season 2015/2016 and the total amount of EUR 400,000 during the season 2016/2017. 7. In continuation, the Chamber also took note that it remained uncontested by both parties that their contractual relationship was terminated by the player on 8 April 2015. 8. In this regard, the Chamber took note of the argumentation of the player, who insists on the fact that the breach of the contract occurred due to the fault of the club, since it separated him from the first team, as well as that the club failed to pay him his salaries as from January 2015. In this respect, the members of the Chamber noted that the player argued that for more than 20 consecutive days, he had to train alone and was prevented from accessing the club’s training sessions. As a result, according to the above-mentioned circumstances, the player considers that the club breached the contract by excluding him from the first team, and by not paying him his monthly salaries as from January 2015. 9. Furthermore, the members of the Chamber took due note of the fact that the club argued that the player had unilaterally terminated the contractual relationship without just cause, by not fulfilling his contractual duties and by leaving Country D in April 2015. Furthermore, the club held that it paid the player the amounts of EUR 187,500 and 49,998.57, as well as that the player terminated his contract without acting ‘in compliance with the mandatory procedure of termination’. In this respect, the club further referred to the fact that ‘a prerequisite for terminating an employment contract because of a late payment is that the employee must have given a written warning’. Based on the aforementioned circumstances, the club maintained that the player had terminated the contract without just cause and therefore claims EUR 875,000 as compensation for the unjustified termination of the contract by the player.

10. Considering the opposite position of the parties, the Chamber deemed that the underlying issue in this dispute, considering the claim and counterclaim respectively lodged by the parties, was to determine whether the employment contract had been unilaterally terminated with or without just cause by the player, and which party was responsible for the early termination of the contractual relationship in question. The DRC also underlined that, subsequently, if it were found that the employment contract was breached by one of the parties without just cause, it would be necessary to determine the consequences for the party that caused the unjust breach of the relevant employment contract.

11. In this context, the Chamber considered that it remained uncontested by the club that the salaries for the months of January, February and March 2015 were not timely paid and remained outstanding on the date of termination of the contract, as well as that the player was obliged to train alone, the latter circumstance even being explicitly acknowledged by the club, which stated that on 10 March 2015 the player ‘was dropped out of the squad’. Moreover, the DRC took note that it also remained uncontested that the player stayed at least until April 2015 in Country D. On the other hand, the Chamber took note of the argument of the club, that the player remained to ‘not resume his contractual duties’ as from March 2015 and that he had no just cause to terminate the contract.

12. At this point, the members of the DRC first of all considered important to point out, as has been previously sustained by the DRC, that among a player’s fundamental rights under an employment contract, is not only his right to a timely payment of his remuneration, but also his right to access training and to be given the possibility to compete with his fellow team mates in the team’s official matches. In this context, the DRC emphasized that by refusing a player to take part in trainings or official matches, a club is effectively barring, in an absolute manner, the potential access of a player to competition and, as such, violating one of his fundamental rights as a football player. 13. In casu, the DRC pointed out that at the time of the termination of the contract, i.e. on 8 April 2015, it is a fact that the player had been excluded from the club’s first team and was not taking part in the team’s activities for approximately one month. Moreover, the player had not been paid his monthly salary since January 2015.

14. In view of the above, the members of the DRC highlighted that, at the moment the player terminated the contract, i.e. on 8 April 2015, the player could not have expected that his situation of not being part of the first team of the club and not being paid his monthly salary, would improve at short notice and thus, that the player had strong reasons to believe that the club was no longer interested in him. In this respect, and in relation to the argument of the club that allegedly the player did not follow the ‘mandatory procedure of termination’, the DRC highlighted that although the player did not inform the club of its default before terminating the contract on 8 April 2015, it remains uncontested that the club failed to pay to him the monthly salaries for January, February and March 2015. Thus, taking into account such an important delay in payment, the members of the Chamber deemed that the player could in good faith believe that, in spite of a hypothetical notice informing about its default, the club would have persisted on the noncompliance with the financial terms of the contract.

15. In light of the aforementioned, the DRC came to the unanimous conclusion that, considering the situation of the player at the time of the termination, the objective circumstances at the time of the termination did provide the player with a just cause to prematurely terminate the employment contract.

16. Having established that the club is to be held liable for the early termination of the employment contract, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the player is entitled to receive from the club an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

17. Along those lines, the Chamber firstly referred to the player’s request regarding the outstanding salaries at the time of the unilateral termination of the contract, and in this respect noted that the club argued having paid to the player the total amount of EUR 187,500 (allegedly corresponding to the player’s salary for the months of August, September, October, November and December 2014), as well as the amount of 49,998.75. Furthermore, the DRC noted that the club provided payment receipts related to said alleged payments.

18. Subsequently, the members of the Chamber observed that the club had not contested or given any valid explanations or justifications for the non-payment of the relevant salaries for the months of January, February and March 2015 in the amount of EUR 37,500.

19. Furthermore, the members of the Chamber noted that the player did not contest that he had received salary payments up to the amount of EUR 187,500, but contested having received the amount of 49,998.57. In this context, the Chamber was of the unanimous opinion that the club submitted sufficient documentary evidence to prove, at its satisfactory, that it paid the amount of 49,998.57 to the player. As a result, the members of the Chamber held that, it could be established that the player also received said amount, which corresponds to approximately EUR 16,500. 20. In view of the above, the members of the Chamber stressed that the club must fulfill its obligations as per employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, taking into account that the employment contract was terminated on 8 April 2015, the Chamber decided that the club is liable to pay the player the remuneration that was outstanding at the time of the early termination of the employment contract by the player. This outstanding amount corresponding to EUR 96,000, compromised of the outstanding salaries for the months of January, February and March 2015, in the total amount of EUR 112,500, minus the amount of EUR 16,500 that the player received.

21. Moreover, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of outstanding remuneration, i.e. EUR 96,000 as of 28 April 2015, as per the player’s request, until the date of effective payment. 22. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract 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.

23. 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.

24. 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.

25. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 31 May 2017. Consequently the Chamber concluded that the amount of EUR 875,000 (i.e. the salaries as from April 2015 until May 2017) serves as the basis for the determination of the amount of compensation for breach of contract.

26. 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 able 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.

27. In this context, the Chamber noted that the player had signed on 1 July 2015, an employment contract with the Club of Country F Club E, valid as from 1 July 2015 until the end of the 2016/2017 season, by means of which he would receive in the period between 1 July 2015 until 31 May 2017 the total amount of EUR 384,100.

28. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 490,900 to the player which was considered reasonable and proportionate as compensation for breach of contract in the case at hand.

29. In addition, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of compensation, i.e. EUR 490,900 as of the date of the claim, i.e. 28 April 2015 until the date of effective payment.

30. Furthermore, the members of the Chamber decided to reject any further claim lodged by the player.

31. The Chamber concluded its deliberations in the present matter by rejecting the counterclaim lodged by the club, as it has been established that the player had just cause to terminate the employment contract.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant / Counter-Respondent, Player A, is partially accepted. 2. The counterclaim of the Respondent / Counter-Claimant, Club C, is rejected.

3. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 96,000, plus 5% interest p.a. as from 28 April 2015 until the date of effective payment.

4. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 490,900, plus 5% interest p.a. on said amount as from 28 April 2015 until the date of effective payment.

5. In the event that the amounts due to the Claimant / Counter-Respondent in accordance with the above-mentioned numbers 3. and 4. are not paid by the Respondent / Counter-Claimant within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

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

7. The Claimant / Counter-Respondent is directed to inform the Respondent / Counter-Claimant immediately and directly of the account number to which the remittances are 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

For the Dispute Resolution Chamber:

Marco Villiger

Deputy Secretary General

Encl.: CAS directives