F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2018-2019) – fifa.com – atto non ufficiale – Decision 24 August 2018
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 24 August 2018,
in the following composition:
Geoff Thompson (England), Chairman
Johan van Gaalen (South Africa), member
Joaquim Evangelista (Portugal), member
Todd Durbin (USA), member
Stefano La Porta (Italy), member
on the claim presented by the player,
Player A, from country A
as Claimant
against the club,
Club B, from country B
as Respondent
regarding an employment-related dispute
arisen between the parties
I. Facts of the case
1. On 16 December 2016 the Player A, from country A (hereinafter: the Claimant or the player) and the Club B, from country B (hereinafter: the Respondent or the club), concluded an employment contract valid as from 1 December 2016 until 30 November 2017 (hereinafter: the contract).
2. According to “Schedule A” of the contract, the Claimant was, inter alia, entitled to receive the following amounts:
“First Year: Season 2016: USD 11,000 per month and must be paid no later than 7th of the following month.”
3. According to “Schedule B” of the contract, the Claimant was inter alia entitled to receive the following amounts for the first year:
“(i) Total salary player for 2016/2017 season is USD 168,000.
(ii) Advance payment from salary USD 36,000 deducted from total salary.
(iii) 1 Flight Ticket Return for family not exchangeable for money and person
(iv) Accommodation furnished apartment or equivalent
(v) National Car
(vi) Bonus will be determined by [the Respondent].
4. Clause 3.11 of the contract provides the following: “If [the Claimant] is unable to play or attend training or ill, he shall immediately report that fact to [the Respondent] and must inform [the Respondent] of the date on which he will be able to resume training or to play again. [The Claimant] shall obtain a medical certificate signed by a registered medical practitioner approved by the Member and shall submit the certificate to [the Respondent] (…).
5. Clause 3.3 provides the following: “[The Claimant] shall ensure that he is at all times at his best physical condition and adhere to the norms set by the Football Association of country B and must perform his obligations under this Contract at the highest level of sportsmanship. [The Claimant] represents and warrants that he does not have any physical or mental disability which is not disclosed to the member and which may impede or adversely affect his performance.”
6. Clause 4.2 provides: “If after seven days [the Claimant]’s performance is still unsatisfactory to the Head Coach or [the Respondent], he will be given a second and final written warning to improve his performance. If after the final warning is given, [the Claimant]’s performance is still not satisfactory to the Head Coach or [the Respondent], then [the Respondent] have the right to take the diminution salary action according to the schedule given below:
(i) 30 days after the final warning and [the Claimant’s] performance is still unsatisfactory to the member, then the member has the right to cut 10 % from the players monthly salary;
(ii) 30 days after the 10 % cut from [the Claimant’s] monthly salary and in the opinion of the member, the player is still performing unsatisfactorily, then the member has the right to cut maximum of 20% from the player’s monthly salary.
(iii) 30 days after the 20% cut from [the Claimant’s] monthly salary and in the opinion of the member, the player is still performing unsatisfactorily, then the member has the right to cut maximum of 30% from [the Claimant]’s monthly salary.
(iv) If after 120 days after the date of the final warning and [the Claimant] is still performing unsatisfactorily, then [the Respondent] can terminate this contract in accordance to clause 8.4.
7. Furthermore, clause 5.1 provides: ”[The Respondent] shall take disciplinary action against [the Claimant] in the event of misconduct, inefficiency and poor performance.”.
8. Moreover, Clause 8.4 states the following regarding termination of the contract:
“This contract may be terminated immediately by [the Respondent] without notice and the Member is released from all the Contract’s obligation if:
(i) [The Claimant] is charged under clause 4.2 or clause 5, or if [the Claimant] and [the Respondent] mutually agree to end the contract.”
9. On 23 January 2017, the Respondent sent a letter titled “Training Attendance Notice” to the Claimant, containing the following: ”[The Respondent] would like to inform you that we have already decided that you are not required to come for training with the team anymore starting 23 January 2017.”.
10. On 17 February 2017, the Respondent unilaterally terminated the contract in writing. The termination letter reads inter alia as follows:
“We have been informed that you have issues concerning your health which has effected your physical achievement. We have taken considerable time and effort to consult with several specialists in this field with no solution to your health and physical. As such with reference to the terms of yours Players Contract, your duties, responsibilities has rendered your inability to perform and the team cannot be jeopardized in their preparation and progress for the country B Super League Football Championship.
We hereby give you notice that pursuant (…) to more specifically clause 3.3 of [the contract], we hereby with immediate effect terminate your contract vide clause 8 of the contract, and hereby shall pay USD 36,000 as advance payment of one year salary being full and final compensation sum.
Please take note we hereby terminate your contract also in accordance with clause 4 of the Contract ie Performance Review, wherein your health has clearly affected your physical ability and the core of the terms of your contract could not be fulfilled by you as stipulated and agreed in the said Contract.”.
11. On 20 February 2017, in reply to the termination letter, the Claimant sent a correspondence to the Respondent contesting the unilateral termination and trying to reach an amicable settlement with the Respondent, whereby giving the latter a deadline until 22 February 2017 to reply, “whether [the Respondent] wants to continue the labour relationship with [the Claimant] to avoid any legal dispute”.
12. On 29 May 2017, the Claimant lodged a claim against the Respondent before FIFA for outstanding remuneration and compensation for breach of contract by the club and requested the payment of a total amount of USD 132,000, amount detailed as follows:
USD 22,000, as outstanding remuneration corresponding to the salaries of December 2016 and January 2017, plus 5% interest p.a. as from the due dates.
USD 110,000, as compensation for breach of contract corresponding to 10 monthly salaries from February 2017 until November 2017, plus 5% interest p.a. as from the date of termination i.e. 17 February 2017.
13. In support of his claim, the Claimant explained that on 20 December 2016, he suffered from food poisoning and that he had to stay in the hospital for a few days. Furthermore, the player stated that on 5 January 2017 he joined the trainings again.
14. In continuation, the Claimant referred to the club’s letter of 23 January 2017 and held that since that date he was not allowed to train with the club. According to the Claimant, the Respondent terminated the contract due to his food poisoning. Indeed, according to him, the Respondent used the fact that he had fallen ill as an excuse in order to get rid of him.
15. Furthermore, the Claimant maintained that his contract was terminated without just cause and that terminating his contract on basis of alleged health reasons does not constitute a valid reason.
16. Moreover, the Claimant argued that clause 8 of the contract should not be considered valid, as it is “one-sided and contradictory”.
17. In respect of his financial claim, the Claimant acknowledged receipt of the advance payment of USD 36,000 but held that at the date of termination, the salaries of December 2016 and January 2017 remained outstanding.
18. In its reply, the Respondent maintained that the player was allegedly in the hospital until 22 December 2016 and that he had not provided a medical certificate to the Respondent following his discharge from hospital.
19. Thus, the Respondent declared that it was expecting the Claimant to attend trainings following his discharge from hospital, but instead the Claimant allegedly missed trainings on 23 and 24 December 2016 without any explanation.
20. The Respondent further underlined that the coach reported to the management of the club that the Claimant was in a “dubious state” and that the results of a fitness test showed that his fitness level was “only acceptable at the minimum requirement”.
21. The Respondent explained that following an alleged poor performance during a match on 16 January 2017, the coaching staff voiced its concerns to the Claimant as to his poor performance, and the latter subsequently decided not to attend trainings on 20 and 21 January 2017 without any explanation or authorization, thereby violating clause 3.11 of the contract.
22. The Respondent concludes that the Claimant did not act in a professional way, having been absent from trainings, even though he was “fully aware that pre-season training and friendly match are important to [the Respondent] in preparing a good team for the start of the country B Super League 2017”.
23. Furthermore, the Respondent stated the following: “The Respondent feeling frustrated and upset with the behavior shown by the Claimant towards the Respondent and teammates and decided to issue a letter to the Claimant on 23 January 2017 that he is not requires to attend the training and concurrently internal disciplinary proceeding conducted to determine next course of action against the Claimant.”.
24. The Respondent further explained: “The Respondent’s disciplinary committee has found that the Claimant has acted not in accordance to the Contract and fail to show that he is determined and interested to play for the Respondent. As such, the disciplinary committee agree to terminate the service of the Claimant with immediate effect on 17 February 2017 in accordance to clause 5 of the contract.”.
25. The Respondent emphasized that the termination was done in accordance with art. 8.4 of the contract “according to the terms and conditions that had been agreed by both parties after both parties executed the contract.”
26. In addition, the Respondent argued that despite all the above mentioned, it, in good will, still agreed to pay the Claimant the amount of USD 36,000, which the player allegedly accepted.
27. As regards the Claimant’s claim for compensation for breach of contract, the club argued that, based on the contract, the player was to receive a salary of USD 11,000 per month.
28. Along this line, the club maintained that the player’s total salary is USD 132,000 (USD 11,000 x 12 months) and not USD 168,000, which the club deemed to be a typographical error in the contract.
29. Finally, the club maintained that it had paid USD 36,000 as advance payment, which should be deducted from the total salary of the player as stipulated in “Schedule B” of the contract, and as such affirmed that “it has duly paid 3 months of the Claimant’s salary”. The Respondent, therefore, deemed that the Claimant’s claim for the salaries of December 2016 and January 2017 “is baseless”.
30. Furthermore, the Respondent asserted that the Claimant had signed a new contract with the club Club C and that the DRC should reduce the player’s “loss of income (if any)” in light of his remuneration with his new club.
31. The player submitted his replica on 25 July 2017, i.e. after expiry of the relevant deadline, which was set by the FIFA administration until 24 July 2017.
32. Finally, the player informed FIFA that on 1 March 2017 he signed an employment contract with the Club C, from country A, valid as from 1 March 2017 “until end of 2018 season” and provided a copy of said contract. Based on this document, the Claimant was entitled to receive a monthly salary of 260,000.
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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 29 May 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) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).
2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 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 country A player and a country B club.
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 par. 2 of the Regulations on the Status and Transfer of Players (editions 2016 and 2018), and considering that the present claim was lodged on 29 May 2017, the 2016 edition of said regulations (hereinafter: the 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 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. First of all, the members of the Chamber acknowledged that the parties were contractually bound by means of an employment contract valid as from 1 December 2016 until 30 November 2017.
6. In this context, the Chamber took note that the Claimant lodged a claim against the Respondent for outstanding remuneration and compensation for breach of contract, requesting the payment of the total amount of USD 132,000. More specifically, the Claimant indicated that by means of a letter dated 17 February 2017, the Respondent terminated the contract in writing without just cause, which he promptly rejected on 20 February 2017. The Claimant further held that at the moment of termination, his salaries of December 2016 and January 2017 remained outstanding, although it was noted that he acknowledged the receipt of the advance payment of USD 36,000.
7. Along this line, the members of the DRC duly observed that the Claimant explained that he suffered from food poisoning on 20 December 2016 and that he had to stay in the hospital for a few days as a consequence of this ailment and that he was not allowed to train with the Respondent since 23 January 2017.
Moreover, the Chamber noted that the Claimant held that the Respondent used his illness as an excuse to get rid of him and that terminating a contract on basis of alleged health reasons cannot constitute a valid reason to justify it.
8. The DRC took note that the Respondent, for its part, rejected the Claimant’s claim. In this regard, the DRC observed that the Respondent maintained that it, in fact, had terminated the contract with just cause on 17 February 2017. In particular, the Respondent’s argumentation in support of its position in the current matter can be summarized as follows:
a) After his illness, the Claimant failed to provide a medical certificate to the Respondent following his discharge. According to the Respondent, the Claimant missed trainings on 23 and 24 December 2016 without any explanation;
b) The coach reported to the management of the Respondent that the Claimant’s fitness test showed that his fitness level was “only acceptable at the minimum requirement”;
c) The coaching staff of the Respondent voiced its concerns to the Claimant following an alleged poor performance during a match on 16 January 2017, and the latter subsequently decided not to attend trainings on 20 and 21 January 2017 without any explanation or authorization;
d) The Respondent decided to issue the letter of 23 January 2017 informing the Claimant that he does not have to attend trainings anymore after “feeling frustrated and upset with the behavior shown by the Claimant”. According to the Respondent, at this point in time, it decided to conduct internal disciplinary proceedings in order “to determine next course of action against the Claimant.”;
e) The Respondent’s disciplinary committee decided to prematurely terminated the contract with immediate effect as of 17 February 2017, since, according to the Respondent, “[the Respondent]’s disciplinary committee has found that the Claimant has acted not in accordance to the Contract and fail to show that he is determined and interested to play for the Respondent”.
f) That the termination of the contract was done “according to the terms and conditions that had been agreed by both parties after both parties executed the contract.”, and in accordance with clause 8.4 of the contract.
9. Furthermore, it was observed by the members of the Chamber that the Respondent held that its payment of USD 36,000, acknowledged by the Claimant as advance payment, should be deducted from the total salary. In this regard, the Respondent maintained that the amount of USD 168,000 stipulated in the contract as the total salary of the Claimant for the relevant season is an alleged typographical error, and that the Claimant’s total salary amounts to USD 132,000, and therefore, the Claimant’s claim in relation to the allegedly outstanding salaries of December 2016 and January 2017 “is baseless”.
10. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute, considering the claim of the Claimant and the allegations of both parties, was to determine whether the employment contract had been unilaterally terminated with or without just cause by the Respondent. The DRC also underlined that, subsequently, if it were found that the employment contract was terminated without just cause, it would be necessary to determine the consequences for the party that was responsible for the early termination of the contractual relation without just cause.
11. In continuation, the DRC recalled the content of the termination notice of the Respondent dated 17 February 2017, which is transcribed in point I./10. above and reverted to the Respondent’s argument that it decided to cease the employment relationship with the Claimant since he had not acted in compliance with the contract, by allegedly not performing to the expected performance standard, while referring to clause 8.4 of the contract.
12. In this context, the Chamber was keen to emphasize that, in accordance with its longstanding and well-established jurisprudence, the unsatisfactory performance of a player does not constitute a just cause for a club to prematurely terminate the employment relationship, as this judgement is subjective and unmeasurable. Thus, due to the subjective and arbitrary nature of such grounds for dismissal, the Chamber concluded that this argument of the Respondent in order to justify the unilateral termination of the contract could not be sustained.
13. Moreover, the Chamber was eager to emphasise that, according to its well-established jurisprudence, an injury or health condition of a player can be no valid reason to cease the payment of a player’s remuneration and even less so to terminate an employment contract.
14. Furthermore, the Chamber was of the unanimous opinion that it could not accept clause 8.4 of the contract as valid in order to justify the premature termination of the contract, since the application of the clause appears to be linked to the player's sporting performance, which, according to the constant jurisprudence of the DRC, cannot in itself, be considered as a valid reason for terminating an employment contract. Consequently, the Chamber rejected the Respondent’s argument in this regard.
15. On account of all of the above, the members of the Chamber unanimously reached the conclusion that the Respondent terminated the contract without just cause on 17 February 2017.
16. Prior to establishing the consequences of the breach of contract without just cause by the Respondent in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it had to address the issue of any unpaid remuneration at the moment the contract was terminated by the Respondent.
17. In this regard, the Chamber, 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, took due note that the Respondent had failed to present conclusive documentary evidence demonstrating that the amount of USD 168,000, stipulated in the contract as the total salary for the season 2016-2017, is in fact merely a typographical error, and unanimously concluded that the amount paid to the Claimant of USD 36,000, which has been acknowledged by the latter, refers to the amount that was supposed to be paid as advance payment in accordance with the wording of “Schedule B” of the contract. In consequence, the members of the Chamber deemed that the Claimant’s salary for December 2016 and January 2017, which had formally fallen due on the date of termination, had to be awarded to the Claimant as outstanding remuneration, since the Respondent did not present evidence of payment of these salaries.
18. Consequently, in accordance with the principle of pacta sunt servanda, the DRC decided that the Respondent is liable to pay the Claimant the amount of USD 22,000 as outstanding remuneration.
19. 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 USD 11,000, respectively, as of the day following the day on which said amounts fell due.
20. Subsequently, the Chamber focused its attention on the calculation of the amount of compensation payable to the Claimant by the Respondent in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.
21. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a 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.
22. Subsequently, 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 as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber pointed out that the Claimant asserted that the contract was to run until 30 November 2017
23. 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 employment contract until 30 November 2017. Consequently the Chamber concluded that the amount of USD 110,000 (i.e. salary as from February 2017 until 30 November 2017 under the contract) serves as the basis for the determination of the amount of compensation for breach of contract.
24. In continuation, the Chamber remarked that the Claimant informed FIFA that following the early termination of the employment contract at the basis of the present dispute, he had found new employment with the Club C, from country A, which ran as from 1 March 2017 “until end of 2018 season”, in accordance with which he would be remunerated with a monthly salary 260,000, which corresponds approximately to USD 46,500, for the overlapping period between the contracts. 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.
25. In view of all of the above, the Chamber decided that the Respondent must pay the amount of USD 63,500 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.
26. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber, the DRC decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 29 May 2017, until the date of effective payment.
27. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further request filed 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 B, 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 22,000, plus 5% interest p.a. until the date of effective payment as follows:
5% p.a. as of 8 January 2017 on the amount of USD 11,000;
5% p.a. as of 8 February 2017 on the amount of USD 11,000.
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 63,500 plus 5% interest p.a. on said amount as from 29 May 2017 until the date of effective payment.
4. In the event that the amounts plus interest 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.
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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 Dispute Resolution Chamber:
Omar Ongaro
Football Regulatory Director
Encl: CAS directives