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 19 April 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 19 April 2018,

in the following composition:

Geoff Thompson (England), Chairman

Takuya Yamazaki (Japan), member

Tomislav Kasalo (Croatia), member

Daan de Jong (The Netherlands), member

Abu Nayeem Shohag (Bangladesh), member

on the claim presented by the player,

Player A, Country B

as Claimant / Counter-Respondent

against 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. On 15 August 2015, the player of Country B, Player A (hereinafter: the Claimant / Counter-Respondent), and the club of Country D, Club C (hereinafter: the Respondent / Counter-Claimant), signed an employment contract (hereinafter: the contract), valid as follows: “begins from season 2015/2016 and ends at the end of season 2015/2016”.

2. The contract established a total remuneration due to the Claimant / Counter-Respondent of USD 188,976, payable in 4 four equal instalments of USD 47,244 each, due on 1 September 2015, 1 January 2016, 1 April 2016 and 1 August 2016, respectively.

3. Clause 4.5 of the contract established that “the [Claimant / Counter-Respondent] should bear the taxes of this contract and other remuneration according to the law.”.

4. Furthermore, the contract does not contain a clause regarding the financial consequences in case of breach of contract by any of the parties.

5. On 2 December 2015, the Claimant / Counter-Respondent put the Respondent / Counter-Claimant in default of payment in the amount of USD 37,244 corresponding to the allegedly partially paid instalment due on 1 September 2015, establishing a deadline of 3 days for payment, stating that otherwise he will terminate the contract.

6. On 7 December 2015, the Claimant / Counter-Respondent sent to the Respondent / Counter-Claimant a letter by means of which he unilaterally terminated the contract invoking just cause.

7. On 10 December 2015, the Claimant / Counter-Respondent lodged a claim against the Respondent / Counter-Claimant in front of FIFA for outstanding remuneration and compensation for breach of contract, requesting the total amount of USD 178,976, plus 5% interest p.a. as from 7 December 2015. This amount was broken down as follows:

- USD 37,244 as outstanding remuneration corresponding to the allegedly partially paid first instalment due on 1 September 2015; and

- USD 141,732 as compensation for breach of contract equivalent to the remaining value of the contract, corresponding to the three instalments payable on 1 January 2016, 1 April 2016 and 1 August 2016, respectively.

8. In this context, the Claimant / Counter-Respondent held that the Respondent / Counter-Claimant only paid him USD 10,000 out of the total sum of USD 47,244 agreed on the contract for the first instalment, and thus, failed to pay the complete first instalment, which remained unpaid for more than 3 months. In this respect, the Claimant / Counter-Respondent deemed that he terminated the contract with just cause since “the [Respondent / Counter-Claimant] had not fulfilled its obligations fixed in [the contract]”.

9. On its reply, the Respondent / Counter-Claimant rejected the claim and lodged a counterclaim against the Claimant / Counter-Respondent.

10. First, the Respondent / Counter-Claimant confirmed that it paid to the Claimant / Counter-Respondent the amount of USD 10,000 which corresponds to the first instalment due on 1 September 2015. In this regard, the Respondent / Counter-Claimant held that this was the amount due to the Claimant / Counter-Respondent for said instalment after all the alleged applicable deductions. In this respect, the Respondent / Counter-Claimant held having paid the governmental taxes and other mandatory fees on behalf of the Claimant / Counter-Respondent, in accordance with clause 4.5 of the contract in the total amount of USD 33,542.20 and having deducted said amount out of the first instalment.

11. Along this line, the Respondent / Counter-Claimant detailed that the amount of USD 33,542.20 was deducted as follows:

- USD 18,896.70, corresponding to the “sports professions syndicate tax”, which corresponds to 10% of the contract value, as stipulated by the laws of Country D and as confirmed by the Football Association of Country D;

- USD 11,811, corresponding to “income tax of 25%” in accordance with law of Country D; and

- USD 2,834.50, corresponding to the fee of registration of the contract in the Football Association of Country D, equivalent to 1.5% of the contract value.

12. Hence, according to the Respondent / Counter-Claimant, the Claimant / Counter-Respondent left without permission after he sent the default notice. In this respect, the Respondent / Counter-Claimant sustained that the Claimant / Counter-Respondent did not attend training sessions since 21 November 2015.

13. Moreover, the Respondent / Counter-Claimant stated having provided the Claimant / Counter-Respondent with accommodation and a private car with driver, in accordance with the contract.

14. Having said that, the Respondent / Counter-Claimant argued that considering the first instalment was related to the period between 30 September 2015 and 1 January 2016 and since the Claimant / Counter-Respondent failed to fulfil his obligations during this period, the contract was terminated without just cause.

15. Regarding its counterclaim, the Respondent / Counter-Claimant requested the reimbursement of USD 50,000 corresponding to the amounts “paid under [the Claimant / Counter-Respondent’s] name”.

16. On 21 June 2016, the Claimant / Counter-Respondent’s replica was received, i.e. after the time limit set by FIFA (31 May 2016) to submit his comments on the Respondent / Counter-Claimant’s reply had expired.

17. After being requested by FIFA, the Claimant / Counter-Respondent informed that he remained unemployed as of the date of termination i.e. 7 December 2015 until 27 September 2016.

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 10 December 2015. Consequently, 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, 2017 and 2018 editions 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 and 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player of Country B and a club of Country D.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions 2015, 2016 and 2018), and considering that the present claim was lodged on 10 December 2015, the 2015 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation 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.

5. In this respect, the Chamber recalled that the parties had signed an employment contract, valid as follows: “begins from season 2015/2016 and ends at the end of season 2015/2016”. Moreover, the DRC observed that the contract established that the Claimant / Counter-Respondent was entitled to the total amount of USD 188,976 as remuneration, amount payable in 4 equal instalments of USD 47,244 each, due on 1 September 2015, 1 January 2016, 1 April 2016 and 1 August 2016, respectively.

6. Furthermore, the members of the Chamber took due consideration to the fact that on 2 December 2015, the Claimant / Counter-Respondent put the Respondent / Counter-Claimant in default of payment in the amount of USD 37,244 corresponding to the allegedly partially paid first instalment, granting it a deadline of 3 days for payment. Subsequently, the DRC noted that the Claimant / Counter-Respondent unilaterally terminated the contract on 7 December 2015, after not having received any amount after the default notice.

7. In continuation, the members of the Chamber acknowledged that the Claimant lodged a claim against the Respondent, maintaining that he had terminated the employment contract with just cause on 7 December 2015, after previously having put the Respondent / Counter-Claimant in default, since the latter allegedly failed to pay him USD 37,244, out of the first instalment. Consequently, the Claimant / Counter-Respondent asked to be awarded with his outstanding dues as well as with the payment of compensation for breach of the employment contract.

8. In reply thereto, the DRC observed that the Respondent / Counter-Claimant, for its part, rejected the claim and lodged a counterclaim against the Claimant / Counter- Respondent.

9. In this context, the DRC noted that on its counterclaim, the Respondent / Counter-Claimant requested the reimbursement of the amounts allegedly paid by it on behalf of the Claimant / Counter-Respondent’s. Moreover, the Respondent / Counter-Claimant held that the Claimant / Counter-Respondent terminated the contract without just cause, since according to it, USD 10,000 was the amount the Claimant / Counter-Respondent was entitled for the first instalment after all the alleged applicable deductions, in accordance with clause 4.5 of the contract, amount which the Respondent / Counter-Claimant sustained it was duly paid. In addition to that, the Respondent / Counter-Claimant sustained that the Claimant / Counter-Respondent left without permission on 21 November 2015, before sending the default letter.

10. On account of the aforementioned, in particular in view of the circumstances, the members of the Chamber pointed out that it first of all had to determine which amount the player was entitled to in connection with the first instalment, in view of the Respondent / Counter-Claimant’s allegation in this regard.

11. In this respect, the DRC recalled the contents of 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 burden of proof.

12. In this regard, the DRC observed that according to the Respondent / Counter-Claimant, it deducted the amount of USD 33,542.20, as it allegedly paid on behalf of the Claimant / Counter-Respondent, the following amounts:

- USD 18,896.70, corresponding to the “sports professions syndicate tax”;

- USD 11,811, corresponding to “income tax of 25%”; and

- USD 2,834.50, corresponding to the fee of registration of the contract, equivalent to 1.5% of the contract value.

13. Against such background, and after analysing the documents submitted by the by the Respondent / Counter-Claimant, the DRC concluded that said documents could not be considered as conclusive and satisfactory evidence that the Respondent / Counter-Claimant indeed paid the alleged amounts on behalf of the player.

14. Hence, the members of the Chamber were of the unanimous opinion that the Respondent / Counter-Claimant did not prove that it paid the alleged applicable deductions as it sustained. Therefore, the DRC concurred that the argumentations of the Respondent / Counter-Claimant cannot be followed.

15. With the abovementioned considerations, the Chamber established that in the absence of conclusive documentation regarding the payment of the alleged applicable deductions on behalf of the Claimant / Counter-Respondent, the Claimant / Counter-Respondent was entitled to receive the first instalment as it was agreed between the parties in the contract, i.e. the amount of USD 47,244.

16. Furthermore, the Chamber referred to the Respondent / Counter-Claimant’s counterclaim, by means of which it requested the reimbursement of the amounts allegedly paid on behalf of the Claimant / Counter-Respondent, and continuing with the same line of reasoning, concluded that the Respondent has not provided conclusive and satisfactory evidence to enable the Chamber to establish that the Respondent / Counter-Claimant was indeed entitled for the reimbursement of the requested amount.

17. Subsequently, and having established the above, the members of the DRC examined the question as to whether the contract had been terminated by the Claimant / Counter-Respondent with or without just cause on 7 December 2015.

18. In this context, the members of the Chamber firstly, considered that it was important to clarify whether the Claimant / Counter-Respondent left the Respondent / Counter-Claimant on 21 November 2015, as the latter held.

19. In so doing, the DRC concurred that that the abovementioned allegation of the Respondent / Counter-Claimant had to be rejected, based on art. 12 par. 3 of the Procedural Rules, as no evidence was provided in connection with the alleged absence of the Claimant / Counter-Respondent.

20. In continuation, as to the question whether the Claimant / Counter-Respondent had or did not had just cause to terminate the contract, it remains uncontested that the contract was terminated in writing by the Claimant / Counter-Respondent on 7 December 2015. In this regard, the Claimant / Counter-Respondent deemed having just cause to terminate the contract after only having received USD 10,000 of the first instalment.

21. In the light of this, the DRC duly noted that, the first instalment payable to the Claimant / Counter-Respondent was equivalent to 25% of the total remuneration, in this context, the Claimant / Counter-Respondent only received 5.3% of said remuneration. Subsequently, it was considered by the Chamber that the Claimant / Counter-Respondent, did not receive a substantial amount during a considerable period of time since the contract had been running for more than 3 months.

22. Moreover, the Chamber took into account the particular circumstances of the present case, and concluded that, in view of the Respondent / Counter-Claimant’s position in the present matter, the Respondent / Counter-Claimant was not willing to pay more than USD 10,000 on each of the remaining instalments, therefore, the members of the Chamber unanimously established that the Claimant / Counter Respondent had just cause to terminate the contract on 7 December 2015.

23. On that basis, the DRC concurred that the Respondent / Counter-Claimant must fulfil its obligations as per employment contract in accordance with the general legal principle of “pacta sunt servanda”. Therefore, Chamber decided that the Claimant / Counter-Respondent is entitled to outstanding remuneration in the amount of USD 37,244 corresponding to the first instalment.

24. Having stated the above, the Chamber turned to the calculation of the amount of 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.

25. 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.

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.

27. Bearing in mind the foregoing as well as the claim of the Claimant / Counter-Respondent, the Chamber proceeded with the calculation of the compensation and in this regard, it pointed out that the Claimant / Counter-Respondent determined the residual value of the contract in the amount of USD 141,732, corresponding to the second, third, and fourth instalments established in the contract. In line with the above request, the Chamber decided to take into account said amount, when calculating the amount of compensation.

28. Consequently, the Chamber concluded that the amount of USD 141,732, as per the Claimant / Counter-Respondent’s claim, serves as the basis for the determination of the amount of compensation for breach of contract.

29. Hence, the Chamber verified as to whether the Claimant / Counter-Respondent 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 Claimant / Counter-Respondent’s general obligation to mitigate his damages.

30. This being established, the DRC noted that the Claimant / Counter-Respondent did not sign any employment contract with another club during the relevant period of time.

31. As a consequence of the above, the Chamber decided that the Respondent / Counter-Claimant must pay the amount of USD 141,732 to the Claimant / Counter-Respondent, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

32. Moreover, the DRC concluded that any further claim lodged by the Claimant is rejected.

33. Finally, the Chamber decided to reject the counterclaim lodged by the Respondent / Counter-Claimant.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant / Counter-Respondent, Player A, is accepted.

2. 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, outstanding remuneration in the amount of USD 37,244.

3. The Respondent / Counter-Claimant 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 141,732.

4. In the event that the amounts due to the Claimant / Counter-Respondent in accordance with the above-mentioned points 2. and 3. are not paid by the Respondent / Counter-Claimant within the stated time limits, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. The Claimant / Counter-Respondent is directed to inform the Respondent / Counter-Claimant 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.

6. The counterclaim of the Respondent / Counter-Claimant is rejected.

*****

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

CH-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:

Emilio García Silvero

Chief Legal & Integrity Officer

Encl. CAS directives