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 9 May 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 May 2019,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), Member

Eirik Monsen (Norway), Member

Todd Durbin (USA), Member

Pavel Pivovarov (Russia), Member

on the claim presented by the player,

Player A, Country B,

as Claimant

against the club,

Club C, Country D

as Respondent

regarding an employment-related dispute arisen between the parties

I. Facts of the case

1. The Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent) entered into an employment contract valid from 19 July 2018 until 31 May 2020.

2. According to art. 3 of the contract, the Claimant was entitled to receive for the seasons 2018/2019 and 2019/2020, a monthly remuneration of EUR 20,000 payable on the 30th of each month from August to May (i.e. EUR 200,000 per season), as well as a lump sum payment of EUR 130,000 per season payable on 19 July 2018 and 19 July 2019.

3. In addition, art. 3 foresaw that should the Respondent play in the ‘‘League E of Country D at the end of 2018/2019 football season”, the Claimant would be entitled to a monthly remuneration of EUR 30,000 payable on the 30th of each month from August to May (i.e. EUR 300,000 per season), as well as a lump sum payment of EUR 195,000 payable on 19 July 2019.

4. On 16 August 2018, the Claimant sent a correspondence to the Respondent requesting to be registered with the Football Federation of Country D (hereinafter: the Football Federation F) “in the next 7 days” otherwise he would unilaterally terminate his contract. The Claimant indicated that the Respondent’s “first match was on 12 August 2018 [and] because [the Respondent] didn’t fulfil its obligations [the Claimant] could not have a duty in the team. This situation is exactly against to [sic] effective employment principle and [Claimant’s] right to play”.

5. On 20 August 2018, the Respondent replied to the Claimant and stated that it will register the Claimant before the end of the first registration period of the Football Federation F for the season 2018-2019 on 31 August 2018. In addition, the Respondent declared that should the Claimant terminate his contract before said date it “will apply to FIFA against the [Claimant] to claim termination compensation and sporting sanctions against [him]”.

6. On 20 September 2018, the Claimant sent another correspondence to the Respondent, by means of which he declared that he had not received the EUR 130,000 lump sum that fell due on 19 July 2018. The Claimant gave to the Respondent a 15 days deadline to comply with said payment, and reserved his rights to terminate his contract unilaterally and lodge a claim in front of FIFA should the Respondent not do so.

7. On 8 October 2018, the Claimant sent to the Respondent a correspondence by means of which he informed the latter of the unilateral termination of the contract with “just cause” with immediate effect and declared that he would lodge a claim in front of FIFA in that regard.

8. On 30 October 2018, the Claimant lodged a claim against the Respondent in front of FIFA, arguing that since July 2018 the Respondent had breached the contract it signed with him on 19 July 2018 by not registering him with the Football Federation of Country D and by not respecting the remuneration clauses of said contract, and requested the following to be awarded:

a) The payment of EUR 170,000 of overdue payables with 5% interest p.a. from the due date of each payment, amounting to:

i. EUR 130,000 representing the lump sum payment due on 19 July 2018;

ii. The salaries for August and September 2018, i.e. EUR 20,000 x 2 = EUR 40,000;

b) That the Claimant had just cause to terminate the contract;

c) The payment of EUR 655,000 corresponding to the residual value of the contract that was unilaterally terminated by the Claimant with 5% interest p.a. from the 8 October 2018;

d) The payment of EUR 120,000 “with its interest” as “additional compensation”;

e) The payment of EUR 120,000 “with its interest” as an “indemnity of six months [salary]”; and

f) Sporting sanctions to be imposed on the Respondent.

9. On 7 February 2019, the Claimant’s claim was sent to the Respondent, and on 8 February 2019 it requested the FIFA administration to be provided with a deadline extension “due to having the necessary documents translated into English language in order to attach them to the reply brief”. Said extension was granted by the FIFA administration to the Respondent.

10. On 10 March 2019, the aforementioned deadline expired without any reply from the Respondent.

11. Upon request, the Claimant informed FIFA that on 12 January 2019, he signed an employment contract with the Club of Country D, Club G, valid as from 12 January 2019 until 31 May 2020, and according to which he is entitled to earn:

a) A total fixed remuneration of EUR 125,000 for the period 12 January-31 May 2019; and

b) A total fixed remuneration of EUR 255,000 for the period 1 July 2019-31 May 2020.

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 30 October 2018. Consequently, the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) are applicable to the matter at hand (cf. article 21 of the 2018 edition 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 DRC 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 (edition June 2018), and considering that the present claim was lodged on 30 October 2018, the June 2018 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. The members of the Chamber started by acknowledging the facts of the case, as well as the documentation contained in the file. 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 first acknowledged that the Claimant and the Respondent signed an employment contract valid as from 19 July 2018 until 31 May 2020. In this respect, the Chamber observed that according to art. 3 of the contract, the Claimant was entitled to receive for the season 2018/2019 (1) a lump sum payment of EUR 130,000 on 19 July 2018 and (2) a monthly salary of EUR 20,000 payable on the 30th of each month from August 2018 to May 2019. In addition, the Claimant was entitled to receive for the season 2019/2020 (1) a lump sum payment of EUR 130,000 on 19 July 2019 and (2) a monthly salary of EUR 20,000 payable on the 30th of each month from August 2019 to May 2020. Furthermore, the Chamber observed that art. 3 of the contract indicated that should the Respondent be promoted to the ‘‘League E of Country D” at the end of the season 2018/2019, the Claimant would be entitled to (1) a lump sum payment of EUR 195,000 on 19 July 2019 and (2) a monthly salary of EUR 30,000 payable on the 30th of each month from August 2019 to May 2020.

6. In continuation, the DRC noted that 30 October 2018 the Claimant lodged a claim against the Respondent arguing that he had terminated the employment contract with just cause on 8 October 2018 based on the fact that the Respondent had not complied with its financial obligations, namely the payment of a lump-sum fee as well as two monthly salaries, and this despite having been put in default on several occasions prior to the termination. In addition, the Chamber duly noted that the Claimant had requested to be registered with the Respondent.

7. The DRC observed that as a consequence the Claimant asked to be awarded the aforementioned outstanding dues along with the payment of compensation for breach of the employment contract.

8. In this respect, the Claimant requested to be awarded EUR 170,000 as outstanding remuneration plus interest, corresponding to EUR 130,000 as the lump-sum fee payable on 19 July 2018, and EUR 40,000 representing the salaries of August and September 2018.

9. The Claimant further requested the amount of EUR 655,000 plus interest, as compensation for breach of contract, corresponding, according to the Claimant, to the residual value of the contract as from the termination until 31 May 2020.

10. What is more, the Claimant requested the award of EUR 120,000 plus interest as additional compensation for breach of contract.

11. The Claimant also requested the award of EUR 120,000 plus interest as an “indemnity of six months [salary]”, as well as the imposing of sporting sanctions on the Respondent.

12. The Chamber acknowledged 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. In this way, the Chamber considered that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

13. Furthermore, as a consequence of the aforementioned consideration, the Chamber concurred that in accordance with art. 9 par. 3 of the Procedural Rules it shall take a decision upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

14. In this respect, the DRC observed that on 16 August 2018, that is to say almost a month after the Claimant and the Respondent signed the contract and after the Respondent apparently played its first competitive fixture, the Claimant requested to be registered with the Respondent. The Chamber duly noted that in response, the Respondent referred to the fact that it had until the last day of the registration period, i.e. 31 August 2018, to register the Claimant and assured him it would do so by said date. The DRC also acknowledged that the Respondent told the Claimant that should he terminate his contract before the expiry of said registration period, it would lodge a claim against him in front of FIFA requesting compensation and sporting sanctions to be imposed on him. What is more, the Chamber observed that the Claimant indicated in his claim that the Respondent had ultimately failed to register him by 31 August 2018.

15. In view of the above and bearing in mind that in the absence of a response from the Respondent to the claim, the DRC deemed that it remained uncontested that the Claimant was never registered with the Respondent at any point during the duration of their contractual relationship. Consequently, the Chamber was of the opinion that such situation might have led the Claimant to legitimately believe that the Respondent was never interested in his services. In addition, the DRC stressed that by its actions, namely by not registering the player before the end of the relevant registration period despite stating that it would do so, the Respondent, for all intents and purposes, effectively deceived the Claimant.

16. In view of the above, the members of the DRC considered important to point out, as it has been previously sustained by the DRC, that among a player’s fundamental rights under an employment contract, is not only his right to a timely payment of his remuneration, but also his right to access training and to be given the possibility to compete with his fellow team mates in the team’s official matches. In this context, the DRC emphasized that in principle, by refusing to register a player, a club is effectively barring, in an absolute manner, the potential access of a player to competition and, as such, violating one of his fundamental rights as a football player. What is more, the Chamber insisted that, by wrongly letting the Claimant believe that he would be registered before 31 August 2018, the Respondent acted egregiously and severely prejudiced the Claimant’s rights.

17. What is more, the DRC considered that in the absence of reply of the Respondent to the claim, the remunerations referred to by the Claimant in his default notices and his claim had to be considered outstanding.

18. In view of the foregoing, the Chamber concluded that the Respondent did not put forward any reason to justify the outstanding payments nor provided any substantial proof that any of the alleged outstanding payments were made to the Claimant.

19. Consequently, the DRC vigorously highlighted that the Respondent had not remedied the default in payments in spite of having been given the opportunity by the Claimant to do so on at least two occasions. Furthermore, the Chamber duly noted that on the date of the termination of the contract, i.e. 8 October 2018, two monthly salaries and a lump-sum fee remained outstanding, for a total amount of EUR 170,000. What is more, the Chamber underlined that the Claimant had, in his last default notice dated 20 September 2018, given a 15-days deadline to the Respondent.

20. At this point, the Chamber recalled the provisions set out in art. 14bis par. 1 of the Regulations, according to which in the case of a club unlawfully failing to pay a player at least two monthly salaries on their due dates, the player will be deemed to have a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted a deadline of at least 15 days for the debtor club to fully comply with its financial obligation(s). In light of its conclusion regarding the outstanding remuneration towards the Claimant as well as the fact that the latter had duly put the Respondent in default, granting it a 15 days deadline to remedy such default, the DRC established that the Claimant had just cause to unilaterally terminate the contract in accordance with art. 14bis of the Regulations, and that, as a result, the Respondent is to be held liable for the early termination of the employment contract.

21. Bearing in mind the previous considerations, the Chamber turned its attention to the consequences of the early termination of the contract with just cause by the Claimant.

22. First of all, the DRC concurred that the Respondent must fulfil its obligations as per the employment contract up and until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the DRC decided that the Respondent is liable to pay to the Claimant outstanding remuneration in the amount of EUR 150,000, consisting of two monthly salaries of EUR 20,000 for the months of August and September 2018 and the lump-sum fee of EUR 130,000 that was payable on 19 July 2018.

23. 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. as of the respective due dates of the aforementioned sums until the date of effective payment.

24. Furthermore, the DRC decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to the aforementioned outstanding remuneration.

25. In this context, the Chamber outlined that, in accordance with the said provision, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the 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.

26. In application of the relevant provision, the DRC 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 an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the DRC established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

27. 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. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its early termination until its regular date of expiry.

28. In this respect, the DRC noted that in his claim, the Claimant calculated the remaining value of the contract based on the fulfilment of the clause described in art. 3 (cf. I./3. above), i.e. the promotion of the Respondent to the ‘‘League E of Country D at the end of 2018/2019 football season”. However, the DRC acknowledged that the Claimant did not provide any evidence in support of such event occurring, and in any case, the Chamber highlighted that it was public knowledge that at the time of the present decision, the Respondent could not be promoted to said league at the end of the season 2018/2019. Therefore, the Chamber concluded that the remaining value of the contract as from its early termination until the regular expiry of the contract amounts to EUR 490,000 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

29. In continuation, the Chamber 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 able to reduce his loss of income. In fact, the DRC recalled the provisions set out in art. 17 par. 1 lit ii. of the Regulations according to which “in case the player signed a new contract by the time of the decision, the value of the new contract for the period corresponding to the time remaining on the prematurely terminated contract shall be deducted from the residual value of the contract that was terminated early (the “Mitigated Compensation”)”.

30. Indeed, the Chamber took note that the Claimant signed a new employment contract with the Club of Country D, Club G on 12 January 2019. According to this agreement, the Claimant would be entitled to receive a total fixed remuneration of EUR 380,000 for the period 12 January 2019 – 31 May 2020. Therefore, the DRC concluded that the Claimant shall be awarded EUR 110,000 as “Mitigated Compensation”.

31. Furthermore, the DRC emphasised that, pursuant to art. 17 par. 1 lit ii. of the Regulations, a player, in case of the early termination of the contract being due to overdue payables, in addition to the “Mitigated Compensation”, shall also be entitled to an amount corresponding to three monthly salaries (i.e. the “Additional Compensation”). What is more, in case of egregious circumstances, the Additional Compensation may be increased to a maximum of six monthly salaries.

32. Taking into account all the aforementioned elements as well as the specificities of the matter at hand, in particular the egregious conduct of the Respondent (cf. II./14. to 16. above), the DRC decided that in the present matter the “Mitigated Compensation” shall correspond to six monthly salaries. Consequently, the Respondent is liable to pay to the Claimant the total amount of EUR 230,000 as overall compensation for breach of contract.

33. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber 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. 30 October 2018, until the date of effective payment.

34. The DRC concluded its deliberations in the present matter establishing that any further claim lodged by the Claimant was rejected.

35. Furthermore, taking into account the consideration under number II./3. above, the Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

36. In this regard, the Chamber pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

37. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

38. Finally, the Chamber recalled that the above-mentioned sanction will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant outstanding remuneration in the amount of EUR 170,000 plus 5% interest p.a. as follows:

a. on the amount of EUR 130,000 as of 20 July 2018 until the date of effective payment;

b. on the amount of EUR 20,000 as of 31 August 2018 until the date of effective payment; and

c. on the amount of EUR 20,000 as of 1 October 2018 until the date of effective payment.

3. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of EUR 230,000, plus 5% interest p.a. on said amount as from 30 October 2018 until the date of effective payment.

4. Any further claim lodged by the Claimant is rejected.

5. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts mentioned under point 2. and 3. above.

6. The Respondent shall provide evidence of payment of the due amounts in accordance with points 2. and 3. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amounts due in accordance with points 2. and 3. above are not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

8. The ban mentioned in point 7. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

9. In the event that the aforementioned sums are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request to FIFA’s Disciplinary Committee for consideration and a formal decision.

*****

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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives