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 26 June 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 26 June 2019,

in the following composition:

Geoff Thompson (England), Chairman Eirik Monsen (Norway), member

Stéphane Burchkalter (France), member

Joseph Antoine Bell (Cameroun), member

Stefano La Porta (Italy), 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 between the parties

I. Facts of the case

1. On a unspecified date, 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 1 August 2018 until 31 July 2019.

2. According to art. 3 of the contract, the Claimant was entitled to receive a total remuneration of USD 200,000 of which USD 100,000 was payable as an “advance payment”, and the remaining USD 100,000 were divided in 12 monthly arrears of USD 8,333 payable “at the end of each month”.

3. On 4 December 2018 and on 17 December 2018, the Claimant sent two correspondence to the Respondent by means of which he put the latter in default and requested the payment of USD 83,333 corresponding to (1) the remainder of the “advance payment” of an amount of USD 50,000 and (2) the monthly salaries for the months of August, September, October and November 2018 of an amount of USD 33,333. The Claimant gave 10 days to the Respondent to comply.

4. On 25 December 2018, the Claimant sent to the Respondent a correspondence by means of which he, inter alia, informed the latter of the unilateral termination of the contract with immediate effect “due to the repeated violations of the [Respondent]” and in absence of any reply to his default notices.

5. On 3 January 2019, the Claimant lodged a claim against the Respondent before FIFA, requesting outstanding remuneration and compensation for breach of contract in the total amount of USD 155,000, broken down by the player as follows:

- USD 50,000 as “outstanding part of the sign-on fee” plus 5% interest p.a. as from 2 August 2018;

- USD 33,332 corresponding to the outstanding monthly instalments as from August 2018 until November 2018, plus 5% interest p.a. as from the respective due dates;

- USD 66,667 as compensation for breach of contract corresponding to the residual value of the contract –i.e as from December 2018 until July 2019–, plus 5% interest p.a. as from the date of termination of the contract, i.e. 25 December 2018;

- USD 5,000 as “legal costs”.

6. In his claim, the Claimant affirmed that he terminated the contract with just cause on 25 December 2018, since the Respondent “repeatedly failed to pay […] his financial entitlements and despite various reminders, the [Respondent] did not remedy the numerous contractual breaches [and did] not even reply to the default notices”.

7. Despite having been invited to do so, the Respondent did not reply to the claim of the Claimant.

8. After having been invited by FIFA, the Claimant informed FIFA that he did not entered into any further employment contract after the termination of the contract with the Respondent.

9. On 20 March 2019, the player further informed FIFA that the Respondent had paid him “USD 25,000 for the months of August to October 2018” and “USD 41,660 for the months of November 2018 to March 2019”. As such, the Claimant asserted that “the total amount claimed (…) can be reduced with USD 66,660”.

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 3 January 2019. 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 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 June 2019 edition of the Regulations on the Status and Transfer of Players, 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 June 2019 edition of the Regulations on the Status and Transfer of Players, and considering that the present claim was lodged on 3 January 2019, 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. In particular, the DRC recalled that, in accordance with art. 6 par. 3 of Annex 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.

5. In this respect, the Chamber first acknowledged that the Claimant and the Respondent signed an employment contract valid as from 1 August 2018 until 31 July 2019. In this respect, the Chamber observed that according to art. 3 of the contract, the Claimant was entitled to receive a total remuneration of USD 200,000 of which USD 100,000 was payable as an “advance payment”, and the remaining USD 100,000 in 12 monthly arrears of USD 8,333 payable “at the end of each month”.

6. In continuation, the DRC noted that the Claimant lodged a claim against the Respondent arguing that he had terminated the employment contract with just cause on 25 December 2018 invoking that the Respondent had not complied with its financial obligations despite having been put in default on two occasions prior to the termination.

7. The Chamber 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 USD 83,333 as outstanding remuneration plus interest, corresponding to USD 50,000 as the remainder of the signing-on fee, and USD 33,333 representing the salaries of August, September, October and November 2018. The Claimant further requested the amount of USD 66,667 plus interest, as compensation for breach of contract, corresponding, according to the Claimant, to the residual value of the contract as from the date of termination of the contract until 31 July 2019. What is more, the Claimant requested the attribution of USD 5,000 to cover legal expenses.

9. 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.

10. 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.

11. The DRC took also note that the Claimant informed FIFA that the Respondent had paid, according to the two declarations provided by the Claimant on 20 March 2019, the amount of USD 66,660, which according to the Claimant, corresponds to the monthly salaries from August 2018 until March 2019. In particular, the DRC noted that the Claimant subsequently amended his claim, requesting that the amount of USD 66,660 be deducted from the amounts initially claimed (cf. point I./.5 above).

12. Then, 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 in at least two occasions. Furthermore, the Chamber duly noted that on the date of the termination of the contract, i.e. 25 December 2018, four monthly salaries and a substantial part of a lump-sum fee remained outstanding, for a total amount of USD 83,333.

13. Consequently, in view of the foregoing and in line with the DRC’s longstanding jurisprudence in this respect, the Chamber concluded that the Claimant had just cause to unilaterally terminate the contract and that, as a result, the Respondent is to be held liable for the early termination of the employment contract.

14. 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.

15. 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, and taking into consideration that the Claimant indicated that the Respondent had paid all overdue salaries that were originally claimed, the DRC decided that the Respondent is liable to pay to the Claimant outstanding remuneration in the amount of USD 50,000, consisting of the remainder of the lump-sum fee.

16. 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 2 August 2018 on the aforementioned sum until the date of effective payment.

17. 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.

18. 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.

19. 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.

20. 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 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. In this respect, the DRC concluded that the remaining value of the contract as from its early termination until the regular expiry of the contract amounts to USD 33,332, since the Claimant acknowledged having received from the Respondent a payment corresponding to the overdue salaries as from August 2018 until 25 December 2018, as well as the salaries from January 2019 to March 2019, and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

21. In continuation, the Chamber assessed 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 this respect, the DRC deemed it necessary to refer to the first sentence of 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”).

22. In this regard, the Chamber took note that the Claimant stated that he did not sign any new employment contract since he unilaterally terminated his contract with the Respondent.

23. In this respect, the DRC observed that the player remained unemployed since the termination of the employment contract at the basis of the present dispute until its regular expiry, i.e. 31 July 2019. In this context, the DRC further noted that, according to the information contained in the TMS, it appears that the Claimant did not enter into a new employment relationship during the relevant period of time. Consequently, the DRC decided that the Claimant was entitled to the amount of USD 33,332 as compensation for breach of contract, which is considered by the DRC to be a fair and reasonable amount.

24. 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. 3 January 2019, until the date of effective payment.

25. With regard to the claimed legal expenses, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to its long-standing and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the Chamber decided to reject the Claimant’s request relating to legal expenses.

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

27. 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.

28. 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.

29. 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.

30. 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.

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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 USD 50,000 plus 5% interest p.a. on said amount as from 2 August 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 USD 33,332 plus 5% interest p.a. on said amount as from 3 January 2019 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 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 points 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 into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amounts due plus interest 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 plus interest 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.

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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. 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.

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