F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision 29 March 2018
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 29 March 2018,
in the following composition:
Thomas Grimm (Switzerland), Deputy Chairman
Roy Vermeer (the Netherlands), member
Alexandra Gómez Bruinewoud (Uruguay), member
Wouter Lambrecht (Belgium), member
Joel Talavera (Paraguay), 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
regarding an employment-related dispute
arisen between the parties
I. Facts of the case
1. According to the Player of Country B, Player A (hereinafter: the Claimant / Counter-Respondent or the player), on 10 June 2016, he entered into an employment contract with the Club of Country D Club C (hereinafter: the Respondent / Counter-Claimant or the club) valid as from 1 July 2016 until 30 June 2017 (hereinafter: the contract). The player only provided an unsigned copy of said alleged contract.
2. In accordance with the alleged contract, the player was entitled to a salary of USD 550,000, payable as follows:
a) USD 5,000 as “advance payment”;
b) USD 110,000 on 1 July 2016;
c) USD 30,000 on 1 September 2016;
d) USD 45,000 on 1 October 2016;
e) USD 45,000 on 1 November 2016;
f) USD 45,000 on 1 December 2016;
g) USD 45,000 on 1 January 2017;
h) USD 45,000 on 1 February 2017;
i) USD 45,000 on 1 March 2017;
j) USD 45,000 on 1 April 2017;
k) USD 45,000 on 1 May 2017;
l) USD 45,000 on 1 June 2017.
3. Moreover, the reported contract provided the following “bonuses” for the player:
“For win any match in League (League E) depends on the team manager decision.
League E 80.000 $ Dollars
Third place in League E 30.000 $ Dollars
League F 30.000 $ Dollars
League G 20.000 $ Dollars
Flat/house (Villa)
Car
2 Business Class tickets plus 3 economy class tickets for him & his Family”.
4. Art. 10 allegedly stipulates as follows: “10.1 The Club and the Player shall be entitled to terminate this Contract upon 15 days notice in writing for just cause according with the regulations of FIFA governing this matter. Neither Party shall be entitled to unilaterally terminate this Contract without just cause (according with the regulations of FIFA governing this matter).
10.2 […] The Club may at any time terminate this Contract without notice if the Player (i) commits any material breach of the obligations on his part herein contained; and/or (ii) commits wilful misconduct or gross negligence.
10.3 In case termination by the player, he has to pay to the club the total value of the contract.
10.4 The Player deserves two months salaries in case termination by the club”.
5. On 13 August 2016, the club sent the player a document, named “Termination Letter” (hereinafter: the termination letter), by means of which it referred to “the employment contract entered between our club and [the player] on 10 June 2016” and communicated its decision to exercise “the buy-out clause set out in clause 10.4 of the referenced employment contract”.
6. Furthermore, according to the termination letter, “Club C herein undertakes to transfer the compensation amount (i.e. 2 monthly salaries)” and “the employment relationship between [the player] and Club C is from present moment on officially terminated”.
7. On 16 August 2016, the club issued another document, whereby it stated that the player had received “two months’ salary from the club total amount is: 91,667$”.
8. On 20 February 2017, the player lodged a claim in front of FIFA against the club, whereby he requested compensation for breach of contract in the amount of “EUR 403,446”, allegedly corresponding to his salaries for the period between September 2016 and June 2017. In addition, the player also requested the “bonuses / benefits which he would be entitled”. In this respect, the player explained that he did not submit a copy of the contract signed by the parties, alleging that the club, on the date such contract was allegedly signed, told him it would send it to him, but eventually did not.
9. Moreover, the player sustained that the club paid him the advance payment and the salary of July 2016 and terminated the contract without just cause on 13 August 2016. In particular, according to the player, the aforementioned termination was without just cause because the club, in the termination letter, did not invoke any justification for that and, thus, breached art. 10.1 of the contract (cf. point 5 above).
10. Furthermore, the player also acknowledged receipt of the amount of EUR 85,354.20 “as a form of compensation” from the club, in accordance with the club’s letter of 16 August 2016 (cf. point 8 above).
11. In its reply, the club first contested FIFA’s jurisdiction alleging that the claim was directed against “Club C”, which is allegedly “a multi-sports club in the State of Country D” and “a separated legal entity” not affiliated to the Football Association of Country D. In particular, the club averred that only “Company J” is affiliated to the Football Association of Country D, while “Club C” is its only shareholder but “not an affiliated member of the Football Association H and/or a league recognized by the Football Association H”. In this context, the club submitted a certificate apparently issued by the Ministry of Business & Trade of Country D, according to which “Club C” is the sole owner of “Company J”.
12. In continuation, the club rejected the player’s arguments and lodged a counterclaim against him.
13. As to the argumentations of the player, the club stated that it accepted “during summer 2016 […] to give the Player a period of trial”. However, the club pointed out that the club eventually decided to not enter into an employment contract with the player and informed the latter about the termination of their “relationship”. As a consequence, the club stated that no employment contract was concluded between the player and the club.
14. As to the payment of USD 91,667 made by the club, the latter argued that such payment constituted “a gesture of gratuity [..] in order to compensate him for his efforts during the club’s trainings, the coverage of his expenses and the loss of opportunity to sign an employment contract with another club” during the period of “almost two months”. Nonetheless, the club also argued that such payment not only was not related to the alleged employment contract, as the amount of USD 91,667 does not correspond to two monthly salaries pursuant to said contract, but was also not due.
15. Furthermore, the club affirmed that the termination letter was sent allegedly due to an internal misunderstanding of the administration of the club, which used a “standard template used for other occasions”.
16. In continuation, the club averred that the alleged contract was neither signed by the parties nor registered at the Football Association of Country D. In addition, the club affirmed that the player did not participate in any official match with the club.
17. As to the counterclaim, the club requested the reimbursement of USD 91,667 plus 5% interest p.a. as from 15 August 2016, based on the fact that such amount had been paid by the club without reason. In particular, the club sustained that, as no employment contract existed, the player was not entitled to receive any amount and, thus, had been unduly enriched.
18. Moreover, the club alternatively argued that, “in the unlike condition that FIFA DRC would consider that an employment contract was duly concluded […] the Player had received an amount equal to 401,500.00 / or the equivalent in USD 110,000 with regards to his participation in the trainings of the club for approximately two months” and “in addition, the Player received also an amount of 334,584.55 or the equivalent in USD 91,667.00/ on 14 August 2016“. Thus, the club concluded that the player had been duly enriched, as it had received a total amount of USD 201,667, “corresponding to 36% of his overall alleged remuneration”.
19. Despite having been invited by the FIFA administration to do so, the player did not provide any comment on the club’s submissions. However, he informed that, on 23 February 2017, he entered into a new employment contract with the club
Club K, valid as from 18 February 2017 until 31 October 2017, providing a monthly salary of EUR 6,000.
II. Considerations of the Dispute Resolution Chamber
1. First of all, the Dispute Resolution Chamber (hereinafter: the DRC or the Chamber) analyzed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 20 February 2017. Consequently, the 2017 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 Procedural Rules).
2. Subsequently, the DRC noted 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 2018), 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 / Counter-Claimant contested the competence of FIFA’s deciding bodies, arguing that the claim was directed against “Club C”, but that “only Company J” is an affiliated member of the Football Association of Country D. In this respect, the members of the Chamber first examined the documentation provided by the parties and, in particular, the termination letter and the letter dated 16 August 2016 (cf. points I.5. and I.7. respectively) and noticed that said documentation was issued by and only included the logo of “Club C”.
4. In addition, 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) and, within this context, it observed that, according to the information provided on the TMS, only Club C appears as an affiliated member of the Football Association of Country D. Thus, the members of the Chamber unanimously concurred that the Respondent is a club affiliated to the Football Association of Country D and that the claim is clearly directed against it.
5. In view of the above, the Chamber decided to reject the Respondent / Counter-Claimant’s argument in this regard and, thus, concluded that the DRC is competent to deal with the matter at stake.
6. Its competence having been established, the Chamber decided thereafter to analyse 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 (edition 2018), and considering that the present matter was submitted to FIFA on 20 February 2017, the 2016 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.
7. 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.
8. First, the Chamber noted that, according to the Claimant / Counter-Respondent, he concluded an employment contract with Respondent / Counter-Claimant on 10 June 2016, valid as from 1 July 2016 until 30 June 2017 and providing a total salary of USD 550,000.
9. In continuation, the DRC acknowledged that it remained undisputed by the parties that, on 13 August 2016, the club sent the player a document named “termination letter”, whereby it referred to an employment contract “entered between [the club] and [the player] on 10 June 2016” and informed the player about its decision to exercise the clause under art. 10.4 of the referenced employment contract, undertaking to pay the player “the compensation amount (i.e. 2 months salaries)”. Moreover the DRC also noted that, on 16 August 2016, the Respondent / Counter-Claimant issued a document whereby it stated that the player had received two monthly salaries from the club, in the amount of USD 91,667.
10. Bearing in mind the above, the members of the Chamber took note that the Claimant / Counter-Respondent maintained that the club terminated the contract on 13 August 2016 without just cause and requested compensation for breach of contract in the amount of USD 403,446, corresponding to the salaries provided in the contract for the period between September 2016 and June 2017.
11. Equally, the DRC took note of the position of the Respondent / Counter-Claimant, which affirmed that it had not concluded any employment contract with the Claimant / Counter-Respondent. Moreover, the Respondent / Counter-Claimant affirmed that the termination letter was sent due to an internal misunderstanding of the club’s administration, which sent a “standard template” allegedly used in other occasions.
12. Furthermore, the DRC noted, the Respondent / Counter-Claimant affirmed that the club offered the player a trial period “during summer 2016”, after which it paid him the amount of USD 91,667 as a “gesture of gratuity” and in order to compensate him for said trial period of “almost two months”.
13. In continuation, the Respondent / Counter-Claimant argued that the payment of the aforementioned amount had been made by the club without reason as no employment contract existed. In view of that, the Respondent / Counter-Claimant lodged a counterclaim against the player, requesting the reimbursement of the amount of USD 91,667.
14. In view of the aforementioned considerations, the members of the Chamber highlighted that the first issue to address in this dispute, considering the diverging position of the parties, was to determine whether, on 10 June 2016, the parties concluded an employment contract.
15. In this respect, the Chamber noticed that the copy of the alleged contract submitted by the Claimant / Counter-Respondent was not signed by the relevant parties. Having noticed the above, the members of the Chamber firstly referred to art. 12 par. 3 of the Procedural Rules, according to which any party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. The application of the said principle in the present matter led the members of the Dispute Resolution Chamber to conclude that, in principle, it was up to the player to prove that said contract had been indeed concluded by the parties on 10 June 2016.
16. In this context, the DRC underlined that the termination letter issued by the club referred to a contract concluded on 10 June 2016 and that the club undertook to pay a compensation of “2 months salaries” pursuant to art. 10.4 of that contract. What is more, the Chamber recalled that, according to art. 10.4 of the contract submitted by the player, he was entitled to two monthly salaries in case of termination of the contract by the club (cf. point I.4.).
17. Furthermore, the DRC noticed that the Respondent / Counter-Claimant acknowledged having also paid the player the amount of USD 110,000 for “his participation to the trainings of the clubs for approximately two months”, arguing that he received a total amount of USD 201,667 from the club.
18. Finally, the members of the Chamber recalled that, according to the contract submitted by the player, the club committed to pay a total salary of USD 550,000 as follows:
a) USD 5,000 as “advance payment”;
b) USD 110,000 on 1 July 2016;
c) USD 30,000 on 1 September 2016;
d) USD 45,000 on 1 October 2016;
e) USD 45,000 on 1 November 2016;
f) USD 45,000 on 1 December 2016;
g) USD 45,000 on 1 January 2017;
h) USD 45,000 on 1 February 2017;
i) USD 45,000 on 1 March 2017;
j) USD 45,000 on 1 April 2017;
k) USD 45,000 on 1 May 2017;
l) USD 45,000 on 1 June 2017.
19. In view of the above-mentioned considerations, the members of the Chamber were comfortably satisfied that the player and the club entered into an employment relationship and that it was quite plausible that the terms thereof were exactly as the ones established in the unsigned copy presented by the player. In particular, the payments made by the player clearly match with the amounts and dates of those contained in the unsigned copy of the contract. Furthermore, the members of the Chamber were further comforted with such conclusion by the fact that the club’s arguments appear to be contradictory, in particular with reference to the payment of the amount of USD 91,667, which the club itself confirmed with its correspondence dated 16 August 2016. Equally relevant, the Chamber found, was the fact that in the termination letter the club explicitly referred to “the employment contract entered between” the parties. In this regard, the DRC was not impressed by the argument of the club that allegedly this letter was just a wrong template.
20. Having established that the Claimant / Counter-Respondent and the Respondent / Counter-Claimant concluded the contract on 10 June 2016, the members of the Chamber considered that the second issue of this dispute was to determine whether, on 13 August 2016, said contract had been terminated by the club with or without just cause, and to determine thereafter the consequences of said termination.
21. In this regard, the Chamber pointed out that, on 13 August 2016, the club terminated the contract without providing any justification for such termination and only informed the player of its decision to proceed with the payment of the compensation pursuant to art. 10.4 of the contract. Consequently, the DRC concluded that the club terminated the contract without just cause and, thus, it is to be held liable for the early termination of the contract.
22. In continuation, having established that the Respondent / Counter-Claimant 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 Clamant / Counter-Respondent is entitled to receive from the Respondent / Counter-Claimant an amount of money as compensation for breach of contract.
23. In particular, the Chamber focused its attention on the calculation of the amount of such compensation payable to the Claimant / Counter-Respondent by the Respondent / Counter-Claimant 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 / Counter-Respondent 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.
24. 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 context, the members of the Chamber recalled the content of art. art. 10 of the contract, which on the one hand stipulates that “10.3 In case termination by the player, he has to pay to the club the total value of the contract” and, on the other hand, that “10.4 the player deserves two monthly salaries in case termination by the club”.
25. The members of the Chamber duly analysed the content of said clause and agreed that it does not grant the same rights to the parties and it is clearly drafted to the benefit of the Respondent / Counter-Claimant. In this regard, it can be noted that said clause entitles, in case of termination of the contract by the other party, the club to the total value of the contract and the player to only two monthly salaries. Consequently, and in view of the general principle of proportionality and of the balance of rights of the parties, the members of the Chamber unanimously agreed that said clause cannot be taken into consideration in the determination of the amount of compensation.
26. 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.
27. 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 until 30 June 2017. In this regard, the members of the Chamber recalled that the Claimant / Counter-Respondent acknowledged receipt of the payment of USD 91,667 made by the Respondent / Counter-Claimant after the termination of the contract and, thus, concluded that the player would have received a total remuneration of USD 343,333, had the contract been executed until its expiry date.
28. In continuation, the Chamber verified as to whether the player had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.
29. Indeed, the player found employment with the Club of Country L, Club K, with which he signed a contract valid from 18 February 2017 until 31 October 2017, with a monthly salary of EUR 6,000, totalling thus EUR 30,000, which approximately correspond to USD 31,500.
30. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the club must pay the player the amount of USD 311,833 which, is to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.
31. The members of the Chamber concluded their deliberations by rejecting any further claim of the player.
32. Finally, the DRC also rejected the counterclaim lodged by the club, as it has been established that the latter terminated the contract without just cause.
III. Decision of the Dispute Resolution Chamber
1. The claim of the Claimant / Counter-Respondent, Player A, is admissible.
2. The claim of the Claimant / Counter-Respondent is partially accepted.
3. The Respondent / Counter-Claimant, Club C, 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 USD 311,833.
4. In the event that the aforementioned amount is not paid by the Respondent / Counter-Claimant 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 the FIFA Disciplinary Committee for consideration and a formal decision.
5. Any further claim lodged by the Claimant / Counter-Respondent is rejected.
6. The counterclaim of the Respondent / Counter-Claimant 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 remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.
*****
Note relating to the motivated decision (legal remedy):
According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00 / Fax: +41 21 613 50 01
e-mail: info@tas-cas.org / www.tas-cas.org
For the Dispute Resolution Chamber:
Omar Ongaro
Football Regulatory Director
Encl.: CAS directives