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), Deputy Chairman
Joaquim Evangelista (Portugal), member
Johan van Gaalen (South Africa), member
Todd Durbin (USA), member
Zola Majavu (South Africa), 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
arisen between the parties
I. Facts of the case
1. On 28 July 2015, the player from country B, Player A (hereinafter: player or Claimant), and the club from country D, Club C (hereinafter: club or Respondent), signed an employment contract (hereinafter: contract) valid as from 28 July 2015 until 31 May 2017.
2. According to art. 2 of the contract, the club undertook to pay the player the following amounts for the sporting season 2015/2016:
EUR 30,000 in cash upon signature and EUR 20,000 on 14 August 2015;
EUR 170,000, payable via 10 equal monthly instalments of EUR 17,000 each at the end of the month, as from August 2015 until May 2016.
3. Furthermore, for the sporting season 2016/2017 the player is entitled to the same remuneration as for the sporting season 2015/2016, payable as follows:
EUR 30,000 on 31 July 2016 and EUR 20,000 on 14 August 2016;
EUR 170,000, payable via 10 equal monthly instalments of EUR 17,000 each at the end of the month, as from August 2016 until May 2017.
4. On 13 January 2016, the player put the club in default of payment of EUR 51,000 granting it four days to pay. In said letter, the player inter alia stressed that the club did not pay his monthly remuneration for the months of October, November and December 2015.
5. On 18 January 2016, the player sent a “second and final warning” letter to the club, granting it a final deadline until 22 January 2016 to pay the three outstanding salaries and specifying that in the absence of payment, he would terminate the contract.
6. On 24 January 2016, the player sent a notice of termination of contract to the club. In said letter, the player inter alia specified that given the club’s absence of reaction to his warnings, the parties’ employment relationship could not continue due to the club’s fault and that he had just cause to terminate the contract.
7. On 27 January 2016, the player lodged a claim against the club before FIFA, inter alia asserting that the club repeatedly failed to comply with its financial obligations. In particular, the player highlighted that although he put the club in default twice, the club did not make any payment.
8. Therefore, the player holds that he terminated the contract with just cause and asks that the club be ordered to pay the following amounts:
EUR 51,000 as outstanding remuneration;
EUR 305,000 as compensation for breach of contract, corresponding to the remaining value of the contract until 31 May 2017;
5% interest per year on both aforementioned amounts, calculated as from the date of the player’s claim against the club, i.e. 27 January 2016.
9. The player further asks that sanctions be imposed on the club.
10. In spite of having been invited to present its position on the player’s claim, no response was received from the club.
11. On 27 January 2016, the player signed an employment contract with the club from country E, Club F, valid as from its signature date until 30 June 2017.
12. According to said contract, the player is entitled to the following amounts:
EUR 750 per month, at the end of each month, twelve months per year;
EUR 750 as Christmas bonus, EUR 375 as Easter bonus and EUR 375 as holiday benefit;
EUR 41,050, payable as from 28 February 2016 until 31 May 2017.
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 27 January 2016. 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 from country B and a club from 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 27 January 2016, 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 available on file. 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. Having said that, the Chamber acknowledged that the parties had signed an employment contract valid as from 28 July 2015 until 31 May 2017, in accordance with which the Claimant was entitled to receive, for the period of time as from August 2015 until May 2016, EUR 220,000 via the payment of an amount of EUR 50,000 in two installments as well as EUR 170,000 via ten equal monthly payments of EUR 17,000 each. The DRC further acknowledged that for the period of time as from August 2016 until May 2017, the club also undertook to pay the player the total amount of EUR 220,000.
6. In continuation, the members of the Chamber took into account that, on 13 and 18 January 2016, the Claimant put the Respondent in default of payment of the amount of EUR 51,000, corresponding to his entire monthly remuneration for the months of October, November and December 2015, and that, on 24 January 2016, having reportedly received no payment or reaction from the Respondent to his default notices, the Claimant notified the club of the termination of the contract on the basis of the alleged outstanding remuneration.
7. Consequently, the Claimant held that he had just cause to terminate the contract on 24 January 2016 and claimed that, as a result, the Respondent is liable to pay compensation for breach of contract in addition to the outstanding remuneration.
8. On the other hand, the DRC noted that although the Respondent was invited to present its position on the Claimant’s claim, no answer was received from the Respondent to the Claimant’s statement of claim.
9. In view of the aforementioned, the Chamber deemed that the Respondent had renounced its right to defence and, thus, had accepted the allegations of the Claimant.
10. Furthermore, as a consequence of the aforementioned consideration, the DRC decided that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.
11. Having so found, the members of the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the Claimant had just cause to terminate the employment contract on 24 January 2016 and to decide on the consequences thereof.
12. Against such background, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the Claimant’s arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.
13. By doing so, the Chamber took into account the Claimant’s allegation that the Respondent had failed to pay his monthly remuneration for the months of October, November and December 2015 in the total amount of EUR 51,000, which was the motive for the Claimant to terminate the contract on 24 January 2016 after having previously put the Respondent in default.
14. Bearing in mind the consideration under numbers II./8. to II./10. above as well as art. 2 of the contract, the Chamber established that when the Claimant terminated the contract on 24 January 2016, the Respondent had not paid to the Claimant his salary for October, November and December 2015 in the total amount of EUR 51,000, all payments of which had fallen due and remained unpaid by the Respondent after having been put in default twice by the Claimant.
15. On account of the above, 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 contract on 24 January 2016 and that, as a result, the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.
16. Prior to dealing with the consequences of the early termination of the employment contract with just cause by the Claimant, the members of the Chamber considered that the Respondent must fulfil its contractual obligations in accordance with the general legal principle of “pacta sunt servanda” and pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination of the contract.
17. Accordingly, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 51,000, corresponding to his contractual salaries relating to October, November and December 2015, each in the amount of EUR 17,000.
18. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 51,000 as of the date of the Claimant’s claim, i.e. 27 January 2016.
19. In continuation, having established that the Respondent is to be held liable for the termination of the contract with just cause by the Claimant, the Chamber decided that, in accordance with art. 17 par. 1 of the Regulations, the Respondent is liable to pay compensation to the Claimant. Consequently, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake.
20. 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.
21. 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.
22. 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body.
23. Having said that, the members of the Chamber turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract in the calculation of the amount of compensation.
24. In this respect, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its date of termination with just cause by the Claimant, i.e. 24 January 2016, until its ordinary date of expiry, i.e. 31 May 2017, and concluded that, had the contract been executed until its expiry date, the Claimant would have received in total EUR 305,000, i.e. 15 monthly salaries of EUR 17,000 each plus EUR 50,000 payable via two instalments falling due on 31 July 2016 and 14 August 2016, respectively. Consequently, the Chamber concluded that the amount of EUR 305,000 serves as the basis for the final determination of the compensation for breach of contract in the matter at hand.
25. In continuation, the Chamber verified 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 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.
26. In this respect, the Chamber recalled that the Claimant had found new employment with the club from country E, Club F as from 27 January 2016 until 30 June 2017. In accordance with the employment contract signed between the Claimant and Club F, the Claimant was entitled to receive remuneration amounting to EUR 54,925 during the relevant period of time until 31 May 2017.
27. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damage, the Chamber decided that the Respondent must pay the amount of EUR 250,075 to the Claimant as compensation for breach of contract.
28. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 27 January 2016, until the date of effective payment.
29. The Chamber concluded its deliberations in the present matter by rejecting any further claim lodged by the Claimant.
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 EUR 51,000 plus 5% interest p.a. as from 27 January 2016 until the date of effective payment.
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 EUR 250,075 plus 5% interest p.a. as from 27 January 2016 until the date of effective payment.
4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA 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 remittances are 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