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 29 July 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 29 July 2016,

in the following composition:

Geoff Thompson (England), Chairman

Santiago Nebot (Spain), member

John Bramhall (England), member

Guillermo Saltos Guale (Ecuador), 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 arisen between the parties

I. Facts of the case

1. On 1 January 2015, the player from country B, Player A (hereinafter: the Claimant), and the club from country D, Club C (hereinafter: the Respondent) signed an employment contract (hereinafter: the contract) valid as from the date of signature until 31 May 2016.

2. In accordance with the contract, the Claimant was entitled to the following remuneration:

 EUR 5,375 gross for the 2014-2015 season payable in 5 instalments of EUR 1,075 with a 90 days grace period. The first instalment was supposed to be paid on 31 January 2015 and the last one on 31 May 2015;

 EUR 14,000 gross for the 2015-2016 season payable in 10 instalments of EUR 1,400 with a 90 days grace period. The first instalment was supposed to be paid on 31 August 2015 and the last one on 31 May 2016.

3. On 2 January 2015, the Claimant and the Respondent signed a document titled “Agreement” (hereinafter: the agreement) by means of which the Respondent undertook the obligation to pay the Claimant, inter alia, additional remuneration, as follows:

 EUR 20,000 for the 2014-2015 season payable in 5 instalments of EUR 4,000 with a 90 days grace period. The first instalment was supposed to be paid on 31 January 2015 and the last one on 31 May 2015;

 EUR 37,000 for the 2015-2016 season payable in 10 instalments of EUR 3,700 with a 90 days grace period. The first instalment was supposed to be paid on 31 August 2015 and the last one on 31 May 2016;

 A bonus payment of EUR 5,000, if the Respondent remained in the first division “in the season 2014/2015”.

4. On 28 August 2015, the Claimant lodged a claim against the Respondent before FIFA for outstanding remuneration and breach of contract without just cause, requesting the amount of USD 72,500, composed as follows:

 EUR 17,500 as outstanding remuneration corresponding to alleged partial outstanding salary for the month of February 2015, in the amount of EUR 2,500, plus alleged outstanding remuneration for the months of March, April and May 2015, in the amount of EUR 5,000, each;

 EUR 50,000 as compensation for breach of contract, corresponding to the remuneration for the 2015-2016 season from August 2015 until May 2016;

 Alleged outstanding payment of EUR 5,000, corresponding to the bonus payment due in case the Respondent remained in the first division, in accordance with the agreement;

 Payment of “Interest rate on the above amounts”;

 Unspecified amount for “legal fees of the present claim” and any other remedy FIFA’s Dispute Resolution Chamber deems appropriate.

5. The Claimant sustained that, on 3 July 2015, he sent a letter to the Respondent through his legal representative, requesting the payment of the alleged partial outstanding remuneration corresponding to the month of February 2015, in the amount of EUR 2,500, plus the alleged outstanding salary for the month of March 2015, in the amount of EUR 5,000, since the grace period of 90 days had already elapsed. The Claimant gave a 3 days deadline to the Respondent to settle the alleged debt, informing the Respondent that if no payment was received before the deadline given, he would then terminate the contract between the parties.

6. On 7 July 2015, the Claimant terminated the contract in writing, stressing that the Respondent failed to pay the alleged debt and therefore, he was terminating the contract with just cause.

7. In his claim, the Claimant stated that as the Respondent did not react to the termination notice, it accepted that the Claimant terminated the contract with just cause. The Claimant further argued that the Respondent failed to “complete with a major part of its obligation”, since it failed to pay all the remuneration due until the date in which the claim was lodged, i.e. the alleged partial payment for February 2015, the months of March, April and May 2015, plus the bonus payment specified in the agreement.

8. The Claimant explained that his salary in accordance with both the contract and the agreement, consisted in EUR 5,000 net per month for the 2014-2015 season, after the deduction of “the Governance’s obligation”, payable in 5 instalments, with the first one due on 31 January 2015 and the last one on 31 May 2015. The Claimant acknowledged that in accordance with the contract and the agreement, there is a grace period of 90 days for payment.

9. In this respect, the Claimant sustained that the grace period of 90 days for payment, is a “one sided clause” which puts him in considerable disadvantage. Nonetheless, the Claimant held that even if this clause is considered valid, the the grace period had already elapsed in respect to his salary for February and March 2015, at the time of termination of the contract.

10. Finally, the Claimant declared that “by not having paid on time the outstanding salaries” the Respondent should be found in breach of its contractual obligations. The Claimant concluded that, in consequence, he was entitled to terminate the contract with just cause, and the Respondent should be held liable for the early termination of the contract.

11. In its reply, the Respondent rejected the Claimant’s claim. First, it argued that it paid the amount in respect to the alleged outstanding remuneration at the time of termination, i.e. the partial salary for February 2015 and the monthly salary for March 2015, in the total amount of EUR 7,500. In this respect, the Respondent sustained that said amount was deposited at the Football Association of country D on 2 June 2015, during the grace period of 90 days and 35 days before the Claimant’s termination of the contract. The Respondent sustained that the amount was deposited at the Football Association of country D because the Claimant refused to receive his salaries despite “numerous calls to do so”.

12. The Respondent explained that, on 10 August 2015, it sent an email to the Claimant requesting him to return to the trainings of the team. Furthermore, the Respondent sustained that the Claimant replied to this email on 19 August 2015, insisting that his termination was lawful.

13. Moreover, the Respondent sustained that it sent another email to the Claimant on 25 August 2015, where it explained the Claimant that his salaries were deposited at the Football Association of country D, while the grace period of 90 days was running, and requesting him to come back to trainings.

14. The Respondent held that the Claimant “behaved in that way because his wish was to be transferred to another club in country B”. In this respect, the Respondent explained that the Football Association of country D received an International Transfer Certificate (ITC) request from the club from country B, Club E, where it is stated that the Claimant signed a contract with said club on 11 August 2015.

15. In this regard, the Respondent explained that, by means of a letter dated 16 September 2015, addressed to the Football Association of country D, it expressed that it had “no objection for the grant to the requested ITC”, as it accepted “[the Claimant]’s wishes to be transferred to another club in country B”, although the Respondent “expressed its disappointment for [the Claimant]’s unprofessional behaviour towards [the Respondent]”.

16. The Respondent held that, during the 90 days grace period, it deposited the total amount of EUR 10,000 at the Football Association of country D, corresponding to the months of April and May 2015, in the amount of EUR 5,000 each, on 31 July 2015 and 31 August 2015, respectively.

17. Subsequently, the Respondent sustained that it sent a letter to the Claimant’s representative in which it informed him that the Claimant refused to receive his salaries, which were deposited at the Football Association of country D and that it was the Respondent’s policy to “not force player to stay in its roster” and therefore, “it gave its permission to [the Claimant] to be transferred to the club of his choice in country B”. In this respect, the Respondent held that the Claimant’s representative replied in writing on 23 September 2015, arguing that the Claimant was not informed that his salaries were deposited at the Football Association of country D.

18. Finally, the Respondent declared that it had deposited the bonus payment of EUR 5,000 on 24 September 2015 at the Football Association of country D.

19. The Claimant, on his part, on 8 February 2016, requested an extension of the deadline to provide his replica. In this respect, on 9 February 2016, the FIFA administration granted an extension of the deadline until 19 February 2016, as the request was received before the time limit expired, and reminded the Claimant that an extension of 10 days may be granted only once, in accordance with the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber – Edition 2015.

20. On 19 February 2016, the Claimant requested a second extension of the deadline to submit his replica. In this regard, the FIFA administration informed the Claimant that, in accordance with its previous communication, as well as the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber – Edition 2015, an extension of the time limit may only be granted once, and therefore, another deadline extension could not be granted. In consequence, the FIFA administration informed the parties that the investigation-phase of the present matter was now closed.

21. According to the information contained in the Transfer Matching System (TMS), the Claimant signed a contract with the club from country B, Club E, valid as from 11 August 2015 until 30 June 2016, according to which he is entitled to receive 12 monthly instalments of EUR 973 each.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the matter at stake. In this respect, the DRC took note that the present matter was submitted to FIFA on 28 August 2015. Consequently, the Chamber concluded that the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the 2015 editions of the Procedural Rules).

2. Subsequently, the DRC referred to art. 3 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 DRC would be 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. The competence of the Chamber having been established, the Chamber analysed which edition of the Regulations on the Status and Transfer of Players 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 (editions 2015 and 2016), and considering that the present matter was submitted to FIFA on 28 August 2015, the 2015 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. Having established the foregoing, and entering into the substance of the matter, the Chamber continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence which it considered for the assessment of the matter at hand. In particular, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

5. In this respect, the DRC acknowledged that the parties signed an employment contract valid as from 1 January 2015 until 31 May 2016. The DRC noted that according to the contract, the Claimant was entitled to receive, inter alia, remuneration in the amount of EUR 5,375 for the 2014-2015 season, payable in 5 instalments of EUR 1,075 each, with a grace period of 90 days, the first of which was due on 31 January 2015 and the last one was due on 31 May 2015. Furthermore, for the 2015-2016 season, EUR 14,000, to be paid in ten instalments of EUR 1,400 each, with a grace period of 90 days, the first of which was due on 31 August 2015 and the last was one due on 31 May 2016.

6. Moreover, the Chamber took note that the parties signed the agreement on 2 January 2015, according to which the Respondent undertook to pay to the Claimant, inter alia, EUR 20,000 for the 2014-2015 season, payable in 5 instalments of EUR 4,000 each, with grace period of 90 days, the first of which was due on 31 January 2015 and the last one was due on 31 May 2015. Furthermore, for the 2015-2016 season, the amount of EUR 37,000 as remuneration to be paid in ten instalments of EUR 3,700 each, with grace period of 90 days, the first of which was due on 31 August 2015 and the last one was due on 31 May 2016. Moreover, the amount of EUR 5,000 for bonus payment if the Respondent remained in the first division “in the season 2014/2015”.

7. The Chamber further observed that the Claimant had lodged a claim before FIFA against the Respondent seeking payment in the total amount of EUR 72,500, corresponding to outstanding remuneration for the months of February 2015 until May 2015, outstanding bonus payment in the amount of EUR 5,000, as well as compensation for breach of contract and an unspecified amount for legal fees.

8. In this respect, the Chamber paid due consideration to the fact that on 3 July 2015, the Claimant put the Respondent in default, requesting the payment of alleged outstanding remuneration corresponding to the partial unpaid salary for the month of February 2015, in the amount of EUR 2,500, and the salary for the month of March 2015, in the amount of EUR 5,000, since according to the Claimant, the grace period of 90 days had already elapsed. In this respect, the DRC observed that the Claimant gave the Respondent a 3 days deadline to settle the alleged debt, informing it that otherwise he would terminate the contract.

9. The members of the Chamber took note that the Claimant held that his monthly salary for the 2014-2015 season, in accordance with both the contract and the agreement, consisted in EUR 5,000, payable in 5 instalments with a grace period of 90 days, the first one due on 31 January 2015 and the last one was due on 31 May 2015, assertion that was not disputed or contested by the Respondent.

10. Subsequently, it was duly noted by the DRC that on 7 July 2015, the Claimant had terminated the contractual relationship, based on the Respondent’s alleged failure to settle the debt. In addition, the DRC noted that the Claimant was of the opinion that the grace period of 90 days which is stipulated in both the contract and the agreement, is a one-sided clause which puts him in considerable disadvantage with the Respondent. Moreover, the DRC took note of the Claimant’s allegation to have had just cause to terminate the contract, due to the Respondent’s lack of payment of the outstanding salaries and that thus, the latter is to be held liable for the payment of compensation for breach of contract.

11. Subsequently, the Chamber noted that, on the other hand, the Respondent argued that the Claimant did not have just cause to terminate the contract, as according to it, the outstanding remuneration was paid to the Claimant before the termination of the contract on 7 July 2015. In this respect, it was duly observed by the DRC that the Respondent held that since the Claimant refused to receive his salaries, it deposited the outstanding remuneration due to the Claimant, corresponding to the partial salary for February 2015 and March 2015 in the amount of EUR 7,500, at the Football Association of country D on 2 June 2015.

12. Having established the aforementioned, the Chamber concluded that the underlying issue in this dispute, was to determine whether the employment contract had been unilaterally terminated with or without just cause by the Claimant and which party was responsible for the early termination of the contractual relationship in question.

13. In view of the above, the members of the DRC turned their attention to the assertion of the Respondent that the reason that it deposited the outstanding remuneration at the Football Association of country D, instead of paying the Claimant directly, was due to the Claimant refusing to receive his salaries. In this respect, the DRC recalled the contents of art. 12 par. 3 and par. 6 of the Procedural Rules, according to which any party claiming a right on the basis of an alleged fact shall carry the burden of proof and took note that the Respondent did not submit any evidence supporting its allegation, and therefore, concluded that such reasoning could not be followed.

14. In continuation, the Chamber observed that the Respondent held that the outstanding remuneration was deposited within the grace period of 90 days and 35 days before the termination of the contract, on 2 June 2015. In this regard, the Chamber was eager to emphasize that there is no evidence on file that the Respondent informed the Claimant that his salaries had been deposited at the Football Association of country D before the date of termination, i.e. 7 July 2015, as the Respondent only submitted evidence that it first contacted the Claimant on 10 August 2015. Therefore, the Respondent’s argument that the player refused to receive his salaries cannot be upheld.

15. At this stage, the DRC recalled that according to the contract and the agreement, the monthly instalments are due on the “last day” of each month “with a grace period of 90 days”.

16. Subsequently, the Chamber observed that said wording was included in the contract and the agreement as a result of mutual consent of the parties and, therefore, its legal consequences were accepted by the Claimant. In addition, the Chamber recalled that the inclusion of such stipulations in a contract, regarding the payment date of remuneration, is not prohibited by the FIFA Regulations.

17. Consequently, the DRC determined that the grace period for the payment of salaries validly established by the free will of the parties in the contract and the agreement, is applicable to the matter at hand.

18. In this respect, the DRC recalled, as has been confirmed by the Court of Arbitration for Sport (CAS), that although a grace period is generally not contrary to the Regulations, the commencement date for determining how long a club has been in breach of contract will still be the original due date for salary, i.e. the end of each month in the matter at hand.

19. On account of the above-mentioned considerations, the Chamber concluded that, at the time the contract was terminated by the Claimant, i.e. on 7 July 2015, the last salary received by the Claimant was the partial remuneration for the month of February 2015, and therefore, half of the salary for February 2015, and the salaries for the months of March, April and May 2015, remained outstanding. In other words, the Claimant had effectively not received any salary for three and a half months.

20. On account of the aforementioned, 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 7 July 2015 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.

21. In this respect, the Chamber wished to recall that, in line with CAS jurisprudence, in case of continued non-payment after the expiry of a similar grace period, a player would not have to wait another three months before the contractual relationship could be terminated with just cause.

22. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract with just cause by the Claimant.

23. First, the members of the Chamber recalled that the Respondent sustained that there is no outstanding remuneration at the moment, as the corresponding amounts were deposited at the Football Association of country D. In this regard, the DRC highlighted that there is no documentation or evidence on file that would indicate that the Claimant gave his consent to the Respondent in order for it to deposit his remuneration at the Football Association of country D. Furthermore, and for the sake of completeness, the Chamber remarked that in any case, such deposit does not constitute in itself a proof of effective payment to the Claimant, and therefore, the Chamber concurred that the Respondent must fulfill its obligations as per the contract and the agreement, in accordance with the general legal principle of pacta sunt servanda. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant the remuneration that was outstanding at the time of the termination i.e. EUR 22,500 pertaining to his partial salary of February 2015, the salaries of March, April and May, all 2015 and the bonus payment of EUR 5,000, which was acknowleged by the Respondent in its reply to the claim.

24. 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 outstanding remuneration, i.e. EUR 22,500, as of the date on which the claim was lodged, i.e. 28 August 2015, until the date of effective payment.

25. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to any outstanding salaries on the basis of the relevant employment contract.

26. In this context, the Chamber outlined that, in accordance with said provision, 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.

27. 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.

28. 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 remuneration of criteria to be taken into consideration when calculating the amount of compensation payable.

29. Having recalled the aforementioned, and in order to evaluate the compensation to be paid by the Respondent, the members of the Chamber took into account the remuneration due to the Claimant in accordance with the employment contract and the agreement, along with his professional situation after the early termination occurred. Bearing in mind the foregoing 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 contract and the agreement until 31 May 2016. Consequently the Chamber concluded that the amount of EUR 51,000 (i.e. salary as from August 2015 until May 2016 under the contract and the agreement) serves as the basis for the determination of the amount of compensation for breach of contract.

30. In continuation, the Chamber remarked that, according to the information in the Transfer Matching System (TMS), following the early termination of the employment contract at the basis of the present dispute, the Claimant had found new employment with the club from country B, Club E, with a contract valid as from 11 August 2015 until 30 June 2016, in accordance with which he would be remunerated with a monthly salary of EUR 973. Consequently, in accordance with the constant practice of the Dispute Resolution Chamber and the general obligation of the Claimant to mitigate his damages, such remuneration under the new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract.

31. In view of all of the above, the Chamber decided that the Respondent must pay the amount of EUR 41,270 to the Claimant as compensation for breach of contract without just case, which is considered by the Chamber to be a reasonable and justified amount as compensation.

32. 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 amounts of compensation i.e. EUR 41,270 as of the date on which the claim was lodged, i.e. 28 August 2015, until the date of effective payment.

33. In addition, as regards the claimed legal fees, 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 fees.

34. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant 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, outstanding remuneration in the amount of EUR 22,500 plus 5% interest p.a. on said amount as from 28 August 2015 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 41,270 plus 5% interest p.a. on said amount as from 28 August 2015 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 limit, 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.

*****

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:

Marco Villiger

Deputy Secretary General

Encl. CAS directives