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 6 June 2018

Decision of the

Dispute Resolution Chamber (DRC) judge

passed in Zurich, Switzerland, on 6 June 2018,

by Jon Newman (United States of America)

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 19 July 2017, the player of Country B, Player A (hereinafter : the Claimant), and the club of Country D, Club C (hereinafter: the Respondent) signed an employment contract (hereinafter: the contract) valid as from 1 August 2017 until 30 May 2018.

2. In accordance with the contract art. 4, the Claimant was entitled inter alia to the following:

 a monthly salary in the amount of USD 7,000 , payable “by the end of each calendar month”;

 USD 20,000, payable “with signing contract”;

 USD 5,000 payable at the “end of contract”.

 Furthermore, the contract provides in its art. 4.4, that the Claimant is entitled to USD 500 “for every team win”.

3. The contract does not contain a clause relating to compensation for breach of contract.

4. According to the documentation on file, on 14 December 2017, the Claimant sent a letter to the Respondent, by means of which he put the Respondent in default of payment of the total amount of USD 46,500, corresponding to 4 monthly salaries from August 2017 until November 2017, to part of the signing fee and various bonuses stating only having received USD 4,000 from the Respondent. In accordance with the default notice, the Claimant requested the payment of the requested amounts and gave a deadline of 10 days to the Respondent to remedy the breach.

5. On 24 December 2017, the Claimant unilaterally terminated the contract in writing, stressing that he was terminating the contract with just cause since the Respondent, allegedly failed to remit him the amounts previously requested.

6. On 2 January 2018, the Claimant lodged a claim against the Respondent before FIFA regarding outstanding remuneration and compensation for breach of contract, requesting the total amount of USD 94,000. The Claimant broke down the requested amount as follows:

a) USD 54,000 as outstanding remuneration plus interest “from the day being delayed for the accrued earnings”, amount which corresponds to:

 USD 35,000 in respect to the salaries of August, September, October, November and December, all 2017 in the amount of USD 7,000 each;

 USD 16,000 as the outstanding part of the amount due “with signing contract” (hereinafter: the sign-on fee), since the Claimant sustained having received only USD 4,000 out of the USD 20,000 established as sign-on fee;

 USD 3,000 as bonuses for games won by the team, since according to the Claimant, the team won 6 games while he was playing.

b) USD 40,000 as compensation for breach of contract, corresponding to “an amount equal to the remaining salaries of (his) contract and for the termination installment”, to which the Claimant also requested 5% interest as from the date of the claim.

c) The Claimant further requested sporting sanctions to be imposed on the Respondent.

7. In his claim, the Claimant explained that he deemed that he terminated the contract with just cause as, from his point of view, the Respondent breached its contractual obligations towards him by not paying him “for a substantial period of time”, and that in consequence, he should be entitled to outstanding remuneration and compensation for breach of contract.

8. In spite of having been invited to do so, the Respondent did not reply to the claim.

9. After being requested by FIFA, the Claimant informed that he has remained unemployed since date of termination of the contract i.e. as from 24 December 2017 until “today”.

II. Considerations of the DRC judge

1. First of all, the Dispute Resolution Chamber judge (hereinafter also referred to as DRC judge or the judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the present matter was submitted to FIFA on 2 January 2018. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. article 21 of the Procedural Rules).

2. Subsequently, the DRC judge referred to art. 3 par. 2 and par. 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018) the DRC judge 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 of Country D.

3. In particular, and in accordance with art. 24 par. 2 lit. i) of the Regulations on the Status and Transfer of Players, the DRC judge confirmed that he may adjudicate in the present dispute which value does not exceed CHF 100,000.

4. Furthermore, the DRC judge 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 par. 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 2 January 2018, the 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

5. The competence of the DRC judge and the applicable regulations having been established, the judge entered into the substance of the matter. In this respect, the DRC judge started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the DRC judge emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

6. In this respect, the DRC judge acknowledged that the Claimant and the Respondent signed an employment contract on 19 July 2017 valid as from 1 August 2017 until 30 May 2018.

7. In continuation, the DRC judge acknowledged that, in accordance with the contract, the Respondent undertook the obligation to pay to the Claimant inter alia a monthly salary of USD 7,000, payable “by the end of each calendar month”, as well as the amount of USD 20,000 and USD 5,000, due “with signing contract” and at the “end of contract”, respectively. It was further observed by the DRC judge, that in accordance with the terms of the contract, the Claimant was entitled to USD 500 “for every team win”.

8. In continuation, the DRC Judge noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause on 24 December 2017, after previously having put the club in default on 14 December 2017, since the Respondent allegedly failed to pay the Claimant’s remuneration. In this respect, the Claimant submits to have only received USD 4,000 out of the USD 20,000 established as sign-on fee at the time he terminated the employment contract. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.

9. Subsequently, the DRC judge noted that the Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. Consequently, the DRC judge was of the opinion that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

10. As a consequence of the aforementioned consideration, the DRC judge established that in accordance with art. 9 par. 3 of the Procedural Rules, he shall take a decision upon the basis of the documentation already on file; in other words, upon the statements and documents presented by the Claimant.

11. Along this line, the DRC judge concluded that the underlying issue in the present matter is to determine if the employment contract had been unilaterally terminated by the Claimant with or without just cause and which party was responsible for the early termination of the contractual relationship in question and the consequences thereof.

12. At this stage the DRC Judge recalled that the Claimant held that he did not receive any payment in respect to salaries from the Respondent since the beginning of the contract, and only having received part of the sign-on fee. Along this line, the DRC judge confirmed that in accordance with the contract, the Respondent was obliged to pay to the Claimant at the time the contract was terminated by the Claimant, i.e. on 24 December 2017, USD 28,000, amount corresponding to 4 salaries for the months of August 2017 until November 2017, plus the corresponding full sign-on fee in the amount of USD 20,000.

13. On account of the aforementioned, in particular in view of the considerations under point II./10, II./11 and II./12 above, the DRC judge established that the Respondent, without any valid reason, failed to remit to the Claimant, until 24 December 2017, date on which the Claimant terminated the contract, the total amount of USD 44,000. Consequently, 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 DRC judge was of the opinion that the foregoing situation legitimately caused the Claimant’s confidence in the Respondent respecting its future duties under the contract to be lost and that the Claimant had just cause to unilaterally terminate the employment contract on 24 December 2017 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.

14. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the Chamber focused its attention on the consequences of such termination.

15. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

16. In this regard, the DRC judge addressed the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant, i.e. outstanding remuneration due until 24 December 2017 and clarified that although at the time of the termination the December 2017 was not yet formally due, in view that the month of December 2017 was fully worked, he considered the salary of December 2017 was also due as outstanding remuneration. Therefore, the outstanding remuneration amounts to USD 51,000, amount which corresponds to amount corresponding to 5 salaries for the months of August 2017 until December 2017 in the amount of USD 7,000 each, as well as the remaining balance of the sign-on fee in the amount of USD 16,000.

17. Subsequently, the DRC judge acknowledged the request of the Claimant regarding the payment of the amount of USD 3,000 in relation to a bonus under art. 4.4 of the contract, which the Claimant did not substantiate with any documentary evidence and 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, the DRC judge concluded that the Claimant did not provide sufficient evidence corroborating his entitlement to said bonus. Consequently, the DRC judge decided to reject this part of the Claimant’s claim.

18. Consequently, the DRC judge decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of USD 51,000.

19. In addition, taking into consideration the Claimant’s claim, the DRC judge decided to award the Claimant interest the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the respective amounts due as of the day following the day on which said instalments fell due until the date of effective payment.

20. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the DRC judge focussed its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive an amount of money from the Respondent as compensation for the termination of the contract with just cause in addition to any outstanding payments on the basis of the relevant employment contract.

21. In continuation, the DRC judge 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 DRC judge 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.

22. In application of the relevant provision, the DRC judge 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 DRC judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

23. As a consequence, the DRC judge 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 DRC judge 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.

24. The DRC judge 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 DRC judge to be essential. The DRC judge deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the DRC judge to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

25. Bearing in mind the foregoing, the DRC judge 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 December 2017, until 30 May 2018, and concluded that the Claimant would have received in total USD 40,000 as remuneration had the contract been executed until its expiry date. Consequently, the DRC judge concluded that the amount of USD 40,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

26. In continuation, the DRC judge 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.

27. In this regard, the members of the DRC judge noted that the Claimant had not signed any new employment contract within the period of time between the termination of the contract and its original date of expiry and, thus, had not been able to mitigate damages.

28. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, as well as the impossibility for the Claimant to mitigate his damages, the DRC judge concluded that the Respondent must pay the amount of USD 40,000 as compensation for breach of contract in the case at hand, which he considered as a reasonable and justified amount of compensation.

29. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date of the claim, i.e. 2 January 2018 until the date of effective payment.

30. The DRC judge concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

III. Decision of the DRC judge

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 USD 51,000 plus 5% interest p.a. until the date of effective payment as follows:

 5% p.a. as from 20 July 2017 on the amount of USD 16,000.

 5% p.a. as from 1 September 2017 on the amount of USD 7,000;

 5% p.a. as from 1 October 2017 on the amount of USD 7,000;

 5% p.a. as from 1 November 2017 on the amount of USD 7,000;

 5% p.a. as from 1 December 2017 on the amount of USD 7,000;

 5% p.a. as from 1 January 2018 on the amount of USD 7,000.

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 USD 40,000 plus 5% interest p.a. on said amount as from 2 January 2018 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 DRC judge of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the DRC judge:

Emilio Garcia Silvero

Chief Legal & Integrity Officer

Encl.: CAS directives