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 6 December 2018

Decision of the Dispute Resolution Chamber

passed in Zurich, Switzerland, on 6 December 2018,

in the following composition:

Geoff Thompson (England), Chairman Eirik Monsen (Norway), member Jérôme Perlemuter (France) member

on the matter between the player,

Player A, Country B

as Claimant / Counter-Respondent

and 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 26 January 2018, the Player of Country B, Player A (hereinafter: the Claimant / Counter-Respondent), concluded an employment contract (hereinafter: the contract) with the Club of Country D, Club C (hereinafter: the Respondent / Counter-Claimant), valid as from the date of signature until 31 May 2019.

2. In this regard, the contract stipulated that the Claimant / Counter-Respondent was entitled to the following remuneration: USD 70,000, as “down payment”, payable on 26 January 2018; USD 200,000, payable in monthly instalments of USD 13,333 on the 30th day of each month, from February 2018 until May 2019, except for the month of June 2018 (i.e. 15 instalments in total).

3. Moreover, according to the contract, the Claimant / Counter-Respondent was entitled to the following “fringe benefits”:

“The [Respondent / Counter-Claimant] shall provide the [Claimant / Counter-Respondent] two return Country D Country B Economy class tickets subject to the condition that the [Claimant / Counter-Respondent] requested such tickets timely.

The payments of the house and the payments of the rental car that the [Claimant / Counter-Respondent] will benefit throughout the period of the (…) contract is paid and included within the above mentioned monthly salaries and therefore the [Claimant / Counter-Respondent] cannot demand these fringe benefit payments from the [Respondent / Counter-Claimant at any time].”

4. In addition, the contract stipulated the following:

“2. The procedures and principles of the Regulations of the Football Federation of Country D the Status and Transfer of the Player will be applicable in case of the termination of this Agreement”.

5. On 27 June 2018, the Claimant / Counter-Respondent lodged a claim before FIFA against the Respondent / Counter-Claimant and requested the payment of a total amount of USD 280,000, detailed as follows:

- USD 53,332, as outstanding salaries;

- USD 146,666.63, as residual value of the contract;

- USD 79,999.98 as “additional compensation”, corresponding to six months of salaries and in accordance with the jurisprudence of the Court of Arbitration for Sport (CAS).

6. Moreover, the Claimant / Counter-Respondent stated that he had to pay “the attorney’s fees” for an amount of “10% of the sum herein claimed”, and that this should be taken into consideration for the amount of due compensation.

7. According to the Claimant / Counter-Respondent, the Respondent / Counter-Claimant failed to pay him his salaries between February 2018 until 30 May 2018 (i.e. 4 months). In addition, the Claimant / Counter-Respondent explained that he only received the amount of USD 70,000, corresponding to the “down payment” stipulated in the contract (cf. point I. 2 above).

8. In this respect, the Claimant / Counter-Respondent explained that he sent default notices to the Respondent / Counter-Claimant on 5 May 2018 and 1 June 2018.

9. More specifically, the Claimant / Counter-Respondent requested the amount of USD 39,999 in his default notice of 5 May 2018 and granted 48 hours to the Respondent / Counter-Claimant “to cure its default”, and subsequently requested the amount of USD 53,332 in his default notice dated 1 June 2018, granting a deadline of 24 hours to settle its debt.

10. Within this context, the Claimant / Counter-Respondent explained that he did not receive any reply from the Respondent / Counter-Claimant in relation to the default notices.

11. As a result, the Claimant / Counter-Respondent explained that, on 4 June 2018, he sent a termination letter to the Respondent / Counter-Claimant and to the Football Federation of Country D.

12. Furthermore, the Claimant / Counter-Respondent detailed that he “stayed full time at an hotel room because the [Respondent / Counter-Claimant] did not rent the house (…); never received the car from the [Respondent / Counter-Claimant] (and never received the refund regarding the tax expenses)” and that he ”paid from his own money the return ticket to Country B” for the amount of USD 1,453.39.

13. On 27 August 2018, the Respondent / Counter-Claimant replied to the claim and simultaneously lodged a counterclaim against the Claimant / Counter-Respondent.

14. In this respect, the Respondent / Counter-Claimant acknowledged that it did not pay the Claimant / Counter-Respondent’s salaries, but considered that he “was not totally suffering from any kind of economic harm since the down payment amount (i.e. USD 70.000) was higher than the sum of the non-paid salaries (i.e. USD 53.332)”.

15. As to the default notices, the Respondent / Counter-Claimant considered that the default notices provided by the Claimant / Counter-Respondent do not satisfy the requirements of either FIFA or the Football Federation of Country D. In particular, the Respondent / Counter-Claimant argued that the Claimant / Counter-Respondent failed to give a deadline of 15 days to settle the outstanding amounts. In relation to said requirements, the Respondent / Counter-Claimant referred to art. 2 of the contract, according to which the “procedures and principles of the Regulations of the Football Federation of Country D the Status and Transfer of the Claimant / Counter-Respondent” must be taken into account for the termination of the contract (cf. point I. 4 above).

16. As a result, the Respondent / Counter-Claimant considered that the termination of the contract was without just cause, and requested the payment of compensation from the Claimant / Counter-Respondent. In particular, the Respondent / Counter-Claimant requested the payment of the amount of USD 146,663, corresponding to the residual value of the contract, as well as USD 39,999 as “additional compensation” and corresponding to three months of salaries.

17. In his replica, the Claimant / Counter-Respondent underlined that the Respondent / Counter-Claimant did not deny the existence of the claimed outstanding salaries, and considered that the Respondent / Counter-Claimant’s counterclaim is only based on the deadlines established in his default notices. In this respect, the Claimant / Counter-Respondent explained that the contract does not stipulate particular deadlines in relation to its termination.

18. As a result, the Claimant / Counter-Respondent understood that he had no alternative than complying with the “general rules”, according to which “if the club unlawfully failing to pay a player for at least two monthly salaries on their due dates, the player is entitled to request the early termination by just cause.”

19. In this respect, the Claimant / Counter-Respondent explained that he sent his first default notice on 5 May 2018, “after 4 months of overdue payments” and that, as a proof of good faith, he sent an additional notice on 1 June 2018. Thus, the Claimant / Counter-Respondent considered that it is “unquestionable” that he granted more than 15 days to the Respondent / Counter-Claimant before terminating the contract.

20. As final comments, the Respondent / Counter-Claimant confirmed its previous arguments and insisted that the Claimant / Counter-Respondent terminated the contract without just cause.

21. In this respect, the Respondent / Counter-Claimant insisted that the Claimant / Counter-Respondent failed to meet the Regulations of the Football Federation of Country D or FIFA, as he did not grant a sufficient deadline in his default notices. In articular, the Respondent / Counter-Claimant referred to art. 2 of the “Regulations of the Football Federation of Country D”, according to which, in case of default in the payment of his remuneration, a player “must notify the club via public notary and grant a deadline of 30 days for the club to pay”, and that “the player may only terminate his Contract following 7 days as of from the end of the deadline”.

22. Finally, and after being invited to do so, the Claimant / Counter-Respondent informed FIFA that he did not conclude any new contract following the termination of the contract.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) 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 27 June 2018. Consequently, the 2018 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 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 and 2 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players, (edition June 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. The competence of the Chamber having been established, the Chamber analysed which edition of the Regulations on the Status and Transfer of Players 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 matter was submitted to FIFA on 27 June 2018, the June 2018 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. Having established the foregoing, and entering into the substance of the matter, the Chamber continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. 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 acknowledged that, on 26 January 2018, the parties to the dispute concluded an employment contract valid as from the date of signature until 31 May 2019 and that, according to said contract, the Claimant / Counter-Respondent was entitled to the following remuneration: USD 70,000, as “down payment”, payable on 26 January 2018; USD 200,000, payable in monthly instalments of USD 13,333 on the 30th day of each month, from February 2018 until May 2019, except for the month of June 2018 (i.e. 15 instalments in total).

6. Subsequently, the Chamber noted that the Claimant / Counter-Respondent lodged a claim against the Respondent / Counter-Claimant, maintaining that, after having put the Respondent on default, he had terminated the employment contract on 4 June 2018, by means of a termination letter. In particular, the Chamber noted that, according to the Claimant / Counter-Respondent, the Respondent / Counter-Claimant failed to pay his his salaries between February 2018 until 30 May 2018 (i.e. 4 months), for a total debt of USD 53,332. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.

7. In reply to the Claimant / Counter-Respondent’s request, the Chamber noted that the Respondent / Counter-Claimant simultaneously lodged a counterclaim against the Claimant / Counter-Respondent, arguing that that the default notices provided by the Claimant / Counter-Respondent do not satisfy the requirements of either FIFA or the Football Federation of Country D. In particular, the Chamber noted that, according to the Respondent / Counter-Claimant, the player failed to give a deadline of 15 days to settle the outstanding amounts. As a result, the Chamber understood that, according to the Respondent / Counter-Claimant, the “procedures and principles of the Regulations of the Football Federation of Country D the Status and Transfer of the Player” must be taken into account for the termination of the contract.

8. Consequently, the Chamber understood that the main legal issue at stake is to determine whether the contract had been terminated by the Claimant / Counter-Respondent with or without just cause.

9. In reference to the response provided by the Respondent / Counter-Claimant, the Chamber referred to the facts as acknowledged between the parties, and noted that, on 5 May 2018, the Claimant / Counter-Respondent requested the payment of an amount corresponding to three months of salaries, and that he only terminated the contract a month later, on 4 June 2018. Thus, the Chamber concurred that, regardless of any other formality, the Claimant / Counter-Respondent granted, de facto, an entire month for the Respondent / Counter-Claimant to settle its debt.

10. As a result, the Chamber decided to dismiss the Respondent / Counter-Claimant’s allegations as to the formal aspects of the termination of the contract.

11. Thereafter, the Chamber turned its attention as to the substantive aspects of the termination of the contract, i.e. as to whether the arguments brought by the Claimant / Counter-Respondent could justify a premature termination of the contract.

12. In this respect, the Chamber noted that, at the moment of the termination of the contract, the Respondent / Counter-Claimant failed to pay him a debt corresponding to at least 4 months of salaries.

13. Moreover, the Chamber noted that the Respondent / Counter-Claimant did not fundamentally contest the existence of the aforementioned debt, but rather provided a set of explanations on why it was apparently not settled.

14. In particular, the Chamber observed that the Respondent / Counter-Claimant alleged that the “was not totally suffering from any kind of economic harm since the down payment amount (i.e. USD 70.000) was higher than the sum of the non-paid salaries (i.e. USD 53.332)”.

15. In relation to said allegation, the Chamber noted that the Respondent / Counter-Claimant indeed confirmed its debt, and wished to emphasize that it does not constitute a valid reason to justify the non-payment of the Claimant / Counter-Respondent’s remuneration, as contractually agreed. Indeed, the fact that the Claimant / Counter-Respondent was allegedly in no “economic harm” is irrelevant when determining whether the Respondent / Counter-Claimant actually complied with its contractual obligations which, as explained above, it did not.

16. Therefore, in accordance with its longstanding jurisprudence in this regard, the Chamber considered that, in principle, the reasons provided by the Claimant / Counter-Respondent are sufficient to justify an early termination of the contract with just cause.

17. As a result, the Chamber concluded that, as of 9 July 2018, the Respondent / Counter-Claimant failed to pay without any valid justification the Claimant / Counter-Respondent’s his salaries between February 2018 until 30 May 2018 (i.e. 4 months), for a total debt of USD 53,332.

18. Therefore, in application of the principle of pacta sunt servanda, the Chamber established that the Respondent / Counter-Claimant must pay the amount of USD 53,332 to the Claimant / Counter-Respondent as outstanding salaries.

19. Subsequently, the Chamber observed that, taking into consideration art. 17 par. 1 of the Regulations, in addition to his outstanding dues, the Claimant / Counter-Respondent is entitled to receive from the Respondent / Counter-Claimant compensation for breach of contract on the basis of the relevant employment contract.

20. In continuation, the Chamber outlined that, in accordance with 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 / 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.

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 members of the Chamber noted that no such clause appeared in the present matter.

22. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent / Counter-Claimant to the Claimant / Counter-Respondent 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body.

23. Bearing in mind the foregoing as well as the claim of the Claimant / Counter-Respondent, the Chamber proceeded with the calculation of the monies payable to the Claimant / Counter-Respondent under the terms of the employment contract until 31 May 2019 (i.e. the original date of termination of the contract). In this regard, the members of the Chamber observed, as detailed above, that under the contract, as from the date of termination of the contract until its original expiration date, the Claimant / Counter-Respondent would have received the total amount of USD 146,663 (i.e. July 2018 until May 2019, 11*13,333)

24. Consequently, the Chamber concluded that the amount of USD 146,663 serves as the basis for the determination of the amount of compensation for breach of contract.

25. In continuation, 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 a player’s general obligation to mitigate his damages.

26. As a result, the members of the Chamber established that the amount due by the Respondent / Counter-Claimant as compensation corresponds to USD 146,663.

27. In conclusion, for all the above reasons, the Chamber decided to partially accept the Claimant / Counter-Respondent’s request and that the Respondent / Counter Claimant must pay to the Claimant / Counter-Respondent the amount of USD 146,663 as compensation for breach of contract without just cause, which is considered by the Chamber to be a reasonable and justified amount as compensation.

28. Moreover, the Dispute Resolution Chamber decided to reject the Claimant / Counter-Respondent’s claim pertaining to legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

29. Furthermore, taking into account the aforementioned considerations, 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.

30. In this regard, the Chamber established that, in virtue of the aforementioned provision, it has competence to impose a sanction on the Respondent / Counter-Claimant. More in particular, the DRC pointed out that, against clubs, the sanction shall consist in a ban from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods.

31. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent / Counter Claimant does not pay the amount due to the Claimant / Counter-Respondent within 45 days as from the moment in which the Claimant / Counter-Respondent, following the notification of the present decision, communicates the relevant bank details to the Respondent / Counter Claimant, 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 / Counter-Claimant in accordance with art. 24bis par. 2 and 4 of the Regulations.

32. 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.

33. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant / Counter-Respondent are rejected.

34. Moreover, as a logical consequence of the above-mentioned considerations, the Chamber further established that the counterclaim of the Respondent / Counter-Claimant is rejected.

III. Decision of the Dispute Resolution Chamber

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

2. The Respondent / Counter-Claimant, Club C, has to pay to the Claimant / Counter-Respondent, outstanding remuneration in the amount of USD 53,332.

3. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, compensation for breach of contract in the amount of USD 146,663.

4. Any further claim lodged by the Claimant / Counter-Respondent is rejected.

5. The Claimant / Counter-Respondent is directed to inform the Respondent / Counter-Claimant, 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 / Counter-Claimant must pay the amounts mentioned under points 2 and 3 above.

6. The Respondent / Counter-Claimant 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 / Counter-Claimant within 45 days as from the notification by the Claimant / Counter-Respondent of his bank details to the Respondent / Counter-Claimant, the Respondent / Counter-Claimant shall be banned from registering any new players, either nationally or internationally, up until the due amount is 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.

10. 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 (CAS)

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 Officer

Enclosed: CAS directives