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 1 February 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 1 February 2019,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), member

Johan van Gaalen (South Africa), member

Stefano La Porta (Italy), member

Pavel Pivovarov (Russia), 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 between the parties

I. Facts of the case

1. On 12 July 2016, the player A, from country A (hereinafter: Claimant) and the Club B, from country B (hereinafter: Respondent), signed an employment contract (hereinafter: contract), valid as from 1 July 2016 until 30 June 2018.

2. According to clause 2 of the contract, the Respondent undertook to pay the Claimant an annual remuneration of EUR 35,000 during both the 2016-17 and the 2017-18 season, “payable until the 20th day of the following month”.

3. Furthermore, also in accordance with clause 2 of the contract, if in the 2016-17 season the Respondent would be promoted to the first league, the Claimant’s annual remuneration for the 2017-18 season would be doubled to EUR 70,000.

4. Moreover, as per clause 2 of the contract, the Claimant was entitled to housing for himself and his family.

5. According to clause 4 of the contract, the Claimant was entitled to receive, “at the beginning of his leave and in the Christmas season, an allowance equivalent to his basic remuneration”.

6. On 13 September 2016, the country B League informed the football players’ union from country B (hereinafter: players’ union) in writing that “as requested … no record of any sporting employment contract has been registered between the [Claimant] (…) and [the Respondent]”.

7. On 2 February 2017, the Claimant informed the players’ union that the Respondent had provided him with housing and food in accordance with the contract, but had failed to register him and the contract with the Football Federation of country B and to pay his monthly salary. The Claimant requested that the players’ union contact the Respondent and demand it to pay the outstanding remuneration as well as to register him with the Football Federation of country B “within 48 hours”.

8. On 7 April 2017, the Claimant terminated the contract in writing. In his termination letter, the Claimant argued that since signing the contract, the Respondent only paid him EUR 2,929 on 13 September 2016 and made two payments of EUR 1,750 in September and October 2016, respectively. In his letter, the Claimant further held that the Respondent had not registered him and that, on 21 December 2016, he was “forbidden to practice and was prevented from attending the [Respondent]”, as a result of all of which he returned to country A. The Claimant also referred to the notification of 2 February 2017 and stated that the Respondent had failed to reply to it.

9. On 15 March 2018, the Claimant lodged a claim in front of FIFA against the Respondent maintaining that he had just cause to terminate the contract and requested to be awarded:

a) EUR 21,828 corresponding to outstanding remuneration (i.e. part of the September 2016 salary, salaries as from October 2016 until March 2017 as well as the Christmas allowance);

b) EUR 78,751 as compensation for breach of contract by the Respondent on the basis of an annual salary of EUR 70,000 for the second season alleging that the Respondent was promoted to the first league;

c) Interest “at a rate of 5% from the date when the first salary was due until full payment”.

10. In this context, the Claimant held that in light of clause 2 of the contract, he was entitled to a monthly salary of EUR 2,917.

11. However, as per the Claimant, the Respondent only paid the July 2016 salary on 13 September 2016 by bank transfer in the amount of EUR 2,929 and made two cash payments in the amount of EUR 1,750 each, during the months of September and October 2016. Therefore, according to the Claimant, at the time he terminated the contract, the Respondent owed him part of his September 2016 salary as well as his salary as from October 2016 until March 2017 and the Christmas allowance.

12. In addition, the Claimant alleged that the Respondent had not registered him and the contract with the Football Federation of country B, as a result of which he was prevented from exercising his professional activity.

13. Furthermore, according to the Claimant, on 21 December 2016, he was “forbidden to practice with the team and informed that he had to leave the [Respondent]”.

14. The Claimant argued that for these reasons he returned to his country.

15. Consequently, as per the Claimant, on 2 February 2017, he sent by registered mail the aforementioned formal notification “to the [Respondent]”, which remained unanswered by the Respondent.

16. Despite being invited to do so, the Respondent failed to provide its reply to the Claimant’s claim.

17. Upon request, the Claimant informed FIFA that since he returned to country A he has “played as an amateur for the country A clubs Club C and Club D in the country A third tier and therefore he had not signed any employment contract nor received any salaries”.

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 15 March 2018. Consequently, the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is 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 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 15 March 2018, the 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the 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 recalled that, on 12 July 2016, the Claimant and the Respondent signed an employment contract valid as from 1 July 2016 until 30 June 2018. In this sense, the Chamber acknowledged that, in accordance with the contract, the Respondent was obliged to pay to the Claimant a remuneration of EUR 35,000 during both the 2016-17 and the 2017-18 season, “payable until the 20th day of the following month”.

6. The DRC further took into consideration that the Claimant maintained that he had just cause to terminate the contract due to the amount of outstanding remuneration and the fact that he was not registered with the Football Federation of country B as a result of which he was prevented from exercising his professional activity.

7. In continuation, the DRC recalled that the Claimant requested to be awarded the remuneration that allegedly had remained outstanding as well as compensation for the alleged breach of contract by the Respondent.

8. Subsequently, the Chamber noted 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. By not presenting its position to the claim, the DRC was of the opinion that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

9. 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 documentation already on file; in other words, upon the statements and documents presented by the Claimant.

10. As a result, the Chamber established that the primary issue at stake is determining whether the Claimant had a just cause to terminate the contract. In this respect, the Chamber deemed it essential to make a brief recollection of the Claimant’s arguments regarding the contract termination as well as the documentation presented in relation thereto.

11. In this context, the Chamber evoked that, according the Claimant, the Respondent had only paid him a total amount of EUR 6,429 between July and October 2016, and that, consequently, part of his September 2016 salary as well as his salary as from October 2016 until March 2017 and the Christmas allowance remained outstanding, on the basis of a monthly remuneration of EUR 2,917.

12. Moreover, the DRC noted that, as per the Claimant, the Respondent had not registered him and the contract with the Football Federation of country B, as a result of which he was prevented from exercising his professional activity.

13. In continuation, the Chamber took into account that, as per the Claimant, on 21 December 2016, he returned to his home country for the above reasons and after the Respondent informed him that he was forbidden to practice with the team and that he had to leave the Respondent.

14. In addition, the Chamber established that it remained undisputed that the parties signed a valid employment contract on 12 July 2016 in accordance with which the Claimant was entitled to an annual remuneration of EUR 35,000 for the 2016-17 season (cf. clause 2 of the contract). In this respect, the Chamber further considered that, in the absence of a clear contractual stipulation as to the payment due dates of said annual remuneration and taking into account the contractual addition that the amount was payable “until the 20th day of the following month”, the EUR 35,000 was payable in 12 monthly instalments, each of which fell due until the 20th day of the following month. The Chamber further took into account that in addition to the aforementioned EUR 35,000, in accordance with clause 4 of the contract, the Claimant was entitled to receive “at the beginning of his leave and in the Christmas season, an allowance equivalent to his basic remuneration”. In the absence of any further contractual stipulation with regard the relevant amounts and payment due dates, the Chamber agreed that said allowance was equivalent to the amount of 1 of the aforementioned monthly instalments and fell due at the start of the time period to which the allowance is related.

15. On account of the above and bearing in mind that the Claimant’s allegations remained uncontested, the DRC concluded that the Claimant had remained at the Respondent’s disposal as from the beginning of the contractual duration on 1 July 2016 until at least 21 December 2016 and that during this period of time the Claimant had only received the amount of EUR 6,429 from the Respondent. Consequently, with regard to the monthly salaries, the Chamber established that, when the Claimant left the Respondent on 21 December 2016, five monthly salaries, i.e. as from July until and including November 2016, had fallen due, whereas the Respondent had only paid an amount that fully covers two monthly salaries (July and August 2016) and a small part (i.e. approx. 20%) of the 3rd salary (September 2016).

16. What is more, the DRC took into account that, based on the facts that the Claimant’s allegation was not contested and that the country B League informed the players’ union on 13 September 2016 that there was no record of registration of the Claimant’s contract, the Respondent had failed to register the contract and the Claimant with the Football Federation of country B. As a consequence, the Claimant was not able to play in official competitions for the Respondent and, as such, was prevented from carrying out his profession. As has been previously sustained by the DRC, 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 fact, the non-registration of a player prevents him from being eligible to play for his club.

17. With regard to the non-registration of the contract, the Chamber further wished to emphasise, in particular, that by not carrying out the relevant steps for the registration procedure of the employment contract although this being the responsibility of the Respondent, the Respondent had refused to accept the Claimant’s services without any valid reason. As has been previously established by the DRC, such conduct constitutes, in the Chamber’s view, a clear breach of contract without just cause.

18. On account of all the above, while recalling that the Claimant remained at the Respondent’s disposal until in December 2016, by leaving the Respondent on or about 21 December 2016, the Chamber determined that the Claimant had de facto terminated the employment contract, with just cause, at that point in time.

19. That said, the Chamber concluded that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant and should therefore bear the consequences of its breach of the employment contract, including the payment of compensation, if any, to the Claimant, in addition to any outstanding amounts at the time of termination.

20. Having established the above, the DRC first proceeded to establish the amount of outstanding remuneration still due to the Claimant by Respondent on the date of the early termination of the contract.

21. In this context, the DRC recalled that, according to the Claimant, a total amount of EUR 21,828 was still outstanding including a part of the September 2016 salary, monthly salaries as from October 2016 until March 2017, as well as the Christmas allowance.

22. Firstly, with regard to the outstanding salary, the Chamber referred to its previous arguments, and evoked that the employment relationship was terminated on or about 21 December 2016. In other words, up until this date, the Claimant was contractually entitled to five monthly salaries (July until November 2016) plus a Christmas allowance, thereby totalling EUR 17,496. However, the DRC further recalled that the Claimant had only received a total amount of EUR 6,429 from the Respondent.

23. On account of the aforementioned considerations, the DRC established that the Respondent failed to remit the Claimant’s remuneration in the total amount of EUR 11,067.

24. Consequently, the DRC decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of EUR 11,067.

25. In addition, taking into consideration the Claimant’s claim and constant jurisprudence, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 11,067, as from the respective due dates until the date of effective payment.

26. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract payable by the Respondent to the Claimant in the case at stake. In doing so, the members of the Chamber first 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.

27. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

28. As a consequence, the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The DRC 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. In this regard, the DRC emphasized beforehand that each request for compensation for contractual breach has to be assessed on a case-by-case basis taking into account all specific circumstances of the respective matter.

29. In order to estimate the amount of compensation due to the Claimant in the present case, the Chamber first turned its attention to the remuneration and other benefits due to him under the existing contract and/or the new contract(s), which criterion was considered to be essential. The DRC deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows it to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

30. In view of the foregoing, the DRC firstly determined the total residual of the contract between the Claimant and the Respondent. In this light, the Chamber recalled that as per the Claimant, he was entitled to EUR 70,000 for the second year of the contract, given that the Respondent allegedly was promoted to the country B’s first league.

31. In this regard, and taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had not substantiated his allegation that the Respondent had obtained the promotion to the country B’s first league with pertinent documentary evidence in accordance with art. 12 par. 3 of the Procedural Rules. Consequently, the DRC decided that the amount of EUR 35,000 shall be taken into consideration as annual remuneration for the second season.

32. Given the above considerations, and taking into account that according to the contract the Claimant’s yearly remuneration is EUR 35,000 for both the 2016/2017 season and the 2017/2018 season, the DRC concluded that the residual value of the contract includes 19 monthly salaries, one “beginning of his leave”-bonus, and one Christmas bonus. The Chamber thus established that the total residual value of the contract is EUR 61,236, which amount shall serve as the basis for the calculation of the amount of compensation.

33. 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. 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 termination of contract with just cause in connection with the player’s general obligation to mitigate his damages.

34. In this regard, the Chamber observed that after the termination of the contract with the Respondent, the Claimant had not signed an employment contract with another club.

35. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 61,236 to the Claimant as compensation for breach of contract.

36. In addition, taking into account the Claimant’s request as well as the Chamber’s constant jurisprudence, 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. 15 March 2018, until the date of effective payment.

37. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

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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 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 EUR 11,067, plus interest at the rate of 5% p.a. until the date of effective payment as follows:

a. 5 % p.a. on the amount of EUR 2,319 as from 21 October 2016;

b. 5 % p.a. on the amount of EUR 2,916 as from 21 November 2016;

c. 5 % p.a. on the amount of EUR 2,916 as from 21 December 2016;

d. 5 % p.a. on the amount of EUR 2,916 as from 1 January 2017.

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 EUR 61,236, plus 5% interest p.a. as from 15 March 2018 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 points 2. and 3. are not paid by the Respondent within the stated time limits, 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 remittance is 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 (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

Encl. CAS directives