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 15 June 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 June 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Mario Gallavotti (Italy), member

Guillermo Saltos Guale (Ecuador), member

Johan van Gaalen (South Africa), member

Joaquim Evangelista (Portugal), 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 28 July 2015, the player of country B, Player A (hereinafter: player or Claimant), and the club of country D, Club C (hereinafter: club or Respondent), concluded an employment contract (hereinafter: contract) valid as of 28 July 2015 for the duration of “two (2) football seasons, i.e. 2015-2016 and 2016-2017”.

2. According to the Transfer Matching System (TMS), the sporting seasons in Country D ran as follows:

- 2015/2016: As of 12 August 2015 until 31 May 2016;

- 2016/2017: As of 12 August 2016 until 31 May 2017.

3. On 29 July 2015, the parties concluded an agreement (hereinafter: agreement), “which will become an integral part” of the contract, valid for the duration of “two (2) football seasons, i.e. 2015-2016 and 2016-2017”.

4. According to the contract, the club undertook to pay the player a total remuneration of EUR 10,780 for each season, payable in ten instalments of EUR 1,078, starting on 31 August and ending on 31 May of the respective year, with “a sixty day grace period for each payment”.

5. According to the agreement, the club undertook to pay the player the following amounts:

- EUR 2,500 after passing the medical examination;

- EUR 1,250 as monthly instalment starting on 31 August 2015 until 31 May 2016, with “a sixty day grace period for each payment”.

- EUR 2,000 as monthly instalment starting on 31 August 2016 until 31 May 2017, with “a sixty day grace period for each payment”.

6. The agreement contains the following clause: “The club is responsible to offer to the player a fully furnished apartment in a city of country D, while the player is responsible to pay electricity, telephone and water bills”.

7. Furthermore, according to the agreement, the player is entitled to an “additional amount” of EUR 2,000 in case he “plays 70% of the games”.

8. On 6 June 2016, the player sent a default notice to the club, requesting payment of EUR 9,650 corresponding to the salaries of March, April and May 2016 plus a bonus and accommodation costs.

9. On 30 June 2016, the player sent a second default notice to the club, requesting payment of EUR 9,650 corresponding to the salaries of March, April and May 2016 plus a bonus and accommodation costs. In said letter, the player pointed out that he would terminate the contract if the club would not remit the salaries for March and April 2016 as well as the bonus and accommodation costs within 3 days.

10. On 5 July 2016, the player terminated the contract due to the non-fulfilment by the club of its financial obligations.

11. On 8 August 2016, the player lodged a claim in front of FIFA maintaining that the club is to be held liable for the early termination of the contract and he requested to be awarded the following monies:

- EUR 6,750 corresponding to outstanding salaries for the months of March to May 2016;

- EUR 900 corresponding to 3 months of accommodation costs;

- EUR 2,000 as bonus resulting from the agreement;

- EUR 30,000 as compensation for breach of contract and agreement.

Moreover, the player requested to be reimbursed for his legal costs.

12. In his arguments, the player held that he had just cause to terminate the contract since the club failed to pay the salaries as of March until May 2016 as well as accommodation costs and a bonus.

13. Regarding the accommodation costs, the player referred to the clause in the agreement, and argued that “the monthly rent of the apartment was equal to the amount of EUR 300”. In this context, he claimed reimbursement for 3 months.

14. Moreover, the player pointed out that he played more than 70% of the matches in the season 2015/2016 and that therefore, he would be entitled to the bonus of EUR 2,000 as agreed upon in the agreement.

15. Furthermore, the player claimed compensation in the total amount of EUR 30,000 corresponding to the residual amount as per the contract and the agreement.

16. The club, for its part, acknowledged outstanding remuneration in the amount of EUR 9,650, but rejected the player’s claim for compensation. Further, the club pointed out that it has already deposited the outstanding remuneration for the player with the Football Association of Country D.

17. In its arguments, the club held that the player is not entitled to compensation for the season 2016/2017 since it allegedly terminated the contract on 9 March 2016 due to the club’s relegation.

18. Furthermore, the club contested the competence of FIFA to deal with the present matter, referring to article 13 of the “standard employment contract”, which stipulates that “Any employment dispute between the Club and the Player shall fall under the exclusive jurisdiction of the National Dispute Resolution Chamber of the Football Association of Country D and shall be resolved according to the applicable regulations of the Football Association of Country D”.

19. In this context, the club argued that said “standard employment contract came into force in during 2015 and is obligatory for all Football Clubs and Players in Country D”.

20. Furthermore, the club referred to article 14 of the contract which states: “The player […] shall in all respects and at all times obey and comply, with all applicable Laws and Regulations of the Country D”.

21. The club further held that the National Dispute Resolution Chamber in Country D meets the requirements of art. 22 lit. b of the FIFA Regulations on the Status and Transfer of Players (hereinafter: RSTP).

22. After the player was requested to submit comments regarding the jurisdiction only, he insisted that FIFA’s Dispute Resolution Chamber is competent to deal with the present matter, since neither the contract nor the agreement “make any clear reference” to the National Dispute Resolution Chamber in Country D.

23. On 26 August 2016, the player signed a new employment contract with the club of country B, Club E, valid as from 26 August 2016 until 30 June 2017, including a monthly salary of 24,000 in the currency of country B.

24. On 31 January 2017, the player signed another employment contract with the club of country F, Club G, valid as from 31 January 2017 until 30 June 2017, including the following remuneration:

- EUR 679 as monthly salary;

- EUR 873.50 as additional instalment due on 31 March 2017;

- EUR 873.50 as additional instalment due on 30 June 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 8 August 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 would, in principle, be 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. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding body on the basis of art. 13 of the “standard employment contract” in Country D invoking an alleged jurisdiction of the National Dispute Resolution Chamber of the Football Association of Country D.

4. In turn, the DRC noted that the Claimant rejected such position and insisted that FIFA has competence to deal with the present matter.

5. Taking into account the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. In this regard, the members of the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

6. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC can settle an employment-related dispute between a club and a player of an international dimension, is that the competence of the relevant arbitration tribunal derives from a clear reference in the employment contract.

7. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the contract or the agreement at the basis of the present dispute actually contained a clear and exclusive arbitration clause in favour of National Dispute Resolution Chamber of the Football Association of Country D.

8. On account of the above, and due to the fact that neither the contract nor the agreement, i.e. the documents at the basis of the dispute, contain an arbitration clause, the Chamber established that the Respondent’s objection to the competence of FIFA to deal with the present matter has to be rejected.

9. For the sake of completeness, the Chamber referred to the Respondent’s argument that article 13 of the “standard employment contract” would be applicable. In this context, the DRC established that said clause is totally irrelevant as the article referred to does not appear in the contract actually signed by the parties.

10. On account of the above, the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to deal with the present matter as to the substance.

11. In continuation, 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 8 August 2016, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

12. 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.

13. In this respect, the Chamber recalled that, on 28 July 2015, the parties had signed an employment contract valid for “two football seasons”, i.e. until 31 May 2017.

14. Furthermore, the DRC acknowledged that on 29 July 2015, the parties signed the agreement, as integral part of the contract, with the same period of validity.

15. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent, maintaining that the latter shall be held liable for the early termination of the contract. In this regard, the DRC took note, that the Claimant argued having had just cause to terminate the contract on 5 July 2016 and consequently, requested outstanding remuneration, compensation for breach of contract and reimbursement of legal fees.

16. The DRC further noted that the Respondent, for its part, acknowledged the outstanding remuneration claimed by the player, but rejected being liable to pay compensation since it allegedly deposited the outstanding remuneration for the player with the Football Federation of Country D.

17. Having said this, the members of the Chamber acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated by the Claimant with or without just cause and to decide on the consequences thereof.

18. With the above in mind, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ 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.

19. The members of the Chamber noted that the player had sent two default notices to the club requesting payment of his outstanding dues before he terminated the contract on 9 July 2016 due to the club’s non fulfilment of its financial obligations.

20. In this respect, the Chamber wished to emphasise that, according to the Claimant, he had not received payments in the amount of EUR 9,650, corresponding to the salaries of March, April and May 2016 plus accommodation costs and bonuses.

21. The Chamber then turned its attention to the arguments of the Respondent, which acknowledged the debt in full, but held that it had deposited said amount with the Football Association of Country D.

22. Due to the fact, that the Respondent did not submit any evidence in support of its allegations, its argument of having deposited the debt must be rejected.

23. In any case, even if such a payment could have been established, the Chamber wished to point out that there is no reason to remit the remuneration to the Federation instead of the player.

24. In this context, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant remuneration totalling EUR 9,650 up to 9 July 2016, corresponding to three monthly salaries plus bonuses and accommodation costs.

25. Consequently, and considering that the Respondent had thus 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 9 July 2016 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

26. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

27. Bearing in mind that the Respondent acknowledged its debt towards the player without being able to proof that it remitted the claimed amount to the player, the Chamber accepted the player’s claim for outstanding remuneration.

28. Consequently, on account of the above and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amount of EUR 9,650 with regard to the remuneration due to him between March and May 2016.

29. Moreover, and taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

30. 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 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.

31. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains 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.

32. 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. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

33. The members of the Chamber then 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, if any, in the calculation of the amount of compensation.

34. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Claimant until its natural expiration, bearing in mind that he would have received in total EUR 28,780 as remuneration for the period as from 9 July 2016 until 31 May 2017. Consequently, the Chamber concluded that the amount of EUR 28,780 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

35. 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.

36. In this respect, the Chamber recalled that the Claimant had found new employment with the club of country B, Club E, as from 26 August 2016 until 30 January 2017. In accordance with the employment contract signed between the Claimant and Club H, the Claimant was entitled to a monthly salary of 24,000 in the currency of country B.

37. What is more, the DRC noted that the Claimant signed another employment contract with the club of country F, Club G, valid as from 31 January 2017 until 30 June 2017, including the following remuneration:

- EUR 679 as monthly salary;

- EUR 873.50 as additional instalment due on 31 March 2017;

- EUR 873.50 as additional instalment due on 30 June 2017.

38. Consequently, on account 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 to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 24,190.50 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

39. In addition, as regards the claimed legal expenses, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to its long-standing and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the Chamber decided to reject the Claimant’s request relating to legal expenses.

40. The members of the Chamber concluded their deliberations by rejecting any further claim of the Claimant.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is admissible.

2. The claim of the Claimant is partially accepted.

3. 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 9,650.

4. 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 24,190.50.

5. In the event that the aforementioned amounts are not paid by the Respondent within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance 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 article 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:

Omar Ongaro

Football Regulatory Director

Encl: CAS directives