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 25 October 2018
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 25 October 2018,
in the following composition:
Geoff Thompson (England), Chairman
Stefano La Porta (Italy), member
Muzammil Bin Mohamed (Singapore), member
Tomislav Kasalo (Croatia), member
Joaquim Evangelista (Portugal), 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 7 July 2017, the Player of Country B, Player A (hereinafter: the player or Claimant) and the Club of Country D, Club C (hereinafter: the club or Respondent), concluded an employment contract, valid as from 7 July 2017 until 31 May 2019 (hereinafter: the contract).
2. According to article 5 of the contract, the player was entitled to inter alia receive for the 2017/2018 season, the following amounts:
EUR 35,000, due on 7 July 2017;
10 instalments of EUR 20,000 each in the period between August 2017 and May 2018, due on the last day of the respective month;
a bonus of EUR 30,000, in case ‘the team to be champion in current league’.
3. Furthermore, according to article 5 of the contract, the player was inter alia entitled to receive in the 2018/2019 season, if the club would play in the First Division of Country D, the following amounts:
EUR 50,000, due on 7 July 2018;
10 instalments of EUR 20,000 each in the period between August 2017 and May 2018, due on the last day of the respective month;
a bonus of EUR 30,000, in case ‘the team to be champion in current league’;
Moreover, if the club would play in the Tournament E in the 2018/2019 season, the player would be entitled to inter alia receive the following amounts:
EUR 80,000, due on 7 July 2018;
10 instalments of EUR 25,000 each in the period between August 2017 and May 2018, due on the last day of the respective month;
a bonus of EUR 30,000, in case ‘the team to be champion in current league’.
4. On 17 May 2018, the player lodged a claim before FIFA against the club, claiming outstanding remuneration and compensation for breach of contract to be paid by the club, broken down as follows:
Outstanding remuneration in the total amount of EUR 162,660, specified as follows:
EUR 160,000 as 8 outstanding salary payments of EUR 20,000 each for the period between September 2017 and April 2018;
5% interest p.a. as from the respective due dates, according to the player on 16 May 2018 amounting to EUR 2,660;
Compensation for breach of contract in the total amount of EUR 420,000, as follows:
EUR 270,000, as the residual value of the contract for the period between May 2018 and 30 May 2019, corresponding to 11 monthly payments of EUR 20,000 as well as 1 payment of EUR 50,000, due on 7 July 2018;
EUR 30,000 as bonus payment for the club promoting to the Tournament E;
EUR 120,000 as additional compensation, based on article 337c of the Swiss Code of obligations.
Furthermore, the player requested 5% interest p.a. on the total amount of EUR 582,660 ‘after the expiry of the aforementioned deadline’, as well as that sporting sanctions shall be imposed on the club.
5. In his claim, the player explains that the club failed to pay him several monthly salaries, as a result of which on 2 May 2018, he put the club in default for the total amount of EUR 160,000, corresponding to 8 monthly salaries, providing the club a 10 days’ deadline to pay, however to no avail.
6. After not having received the requested outstanding amounts, the player argues that on 16 May 2018, he had no other choice than to unilaterally terminate the contract with immediate effect, because of outstanding remuneration in the total amount of EUR 160,000, corresponding to 8 monthly salaries.
7. In its reply to the player’s claim, the club argues that it never received ‘any notification from the player or his representative’, as well as that the player signed a new contract with the Club of Country F, Club G. As a result, the club asks for the rejection of the player’s claims.
8. After being requested to do so, the player confirmed that on 1 July 2018, he signed a contract with the Club of Country F, Club G, valid in the period between 1 July 2018 and 30 June 2019, according to which he was entitled to a total amount of EUR 76,371.42 in the period between 1 July 2018 and 31 May 2019.
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 matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 17 May 2018. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).
2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2018), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a 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 2018), and considering that the present claim was lodged on 17 May 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 arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.
5. In this respect, the Chamber noted from the information on file that the parties had signed an employment contract, valid as from 7 July 2017 until 31 May 2019, according to which the player was inter alia entitled to receive a monthly salary of EUR 20,000, under the conditions detailed in point I.3. above.
6. In continuation, the members of the Chamber noted that the player lodged a claim against the club, maintaining that he had terminated the employment contract with just cause on 16 May 2018, after having previously put the club in default, since the club allegedly failed to pay him eight monthly salaries in the amount of EUR 20,000 each. Consequently, the player asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.
7. On the other hand, the Chamber noted that the club asserted that it never received any notification from the player or his representative, as well as that the player had already found new employment with a Club of Country F. As a result, of the foregoing circumstances, the club requests the rejection of the player’s claims.
8. With the aforementioned considerations in mind, in particular, the opposite position of the parties, the Chamber deemed that the underlying issue in this dispute was to determine whether on 16 May 2018, the player unilaterally terminated the contract with or without just cause. Subsequently, the Chamber needed to determine the consequences of said early termination of the contractual relationship by the player, as well as to establish which party is to be held responsible for said consequences.
9. Entering into the substance of the matter, the Chamber noted that in accordance with the employment contract, until the day the contract was terminated by the player, i.e. on 16 May 2018, the monthly salaries for the period between August 2017 and April 2018, corresponding to EUR 20,000 each, had fallen due. What is more, from the information on file, and the documentation submitted by the player, the Chamber noted that the player argued that the club had only paid him the salary for August 2017, leaving the salaries for the period between September 2017 and April 2018 in the total amount of EUR 160,000 unpaid.
10. Furthermore, the Chamber duly noted that the club did not contest that said salaries had remained unpaid, however only argued that it never received a default noticed from the player or his representative.
11. In this respect, the DRC wished to recall that according to the legal principle of the burden of proof contained in art. 12 par. 3 of the Procedural Rules, any party claiming a right on the basis of an alleged fact shall carry the burden of proof.
12. In view of the above, with respect to the question whether the club was made aware of the outstanding amounts by the player via a default notice, the DRC noted that the player, on the one hand, had submitted documentary evidence that his default notice dated 2 May 2016 was duly delivered to and received by the club on its fax number which is also published on its official website, by submitting copies of a positive fax transmission export. On the other hand, the club could not substantiate its defence that it never received the default notice with further explanations or documentation, and did not provide any justification as to why the salaries had remained unpaid.
13. What is more, irrespective of the question whether the default notice was duly received by the club, the members of the Chamber were of the firm opinion that the club was in flagrant breach of its contractual obligations, by not paying the salary to the player almost as from the beginning of the contractual relation. As a consequence, the DRC decided to reject the club’s argumentation.
14. Furthermore, the Chamber wished to point out that the fact that the player, after the unilateral termination of the contract with the club, after three months had found new employment with another club, is in this specific matter of no legal relevance in relation to determining whether or not the player had a just cause to terminate the contract on 16 May 2018.
15. As a consequence of the aforementioned considerations and taking into account the documentation presented by the parties to the dispute, the Chamber established that eight monthly salaries, corresponding to the period between September 2017 and April 2018, i.e. the total amount of EUR 160,000, had fallen due and remained outstanding at the time of the termination of the contract by the player, i.e. on 16 May 2018. Consequently, the Chamber concurred that the club had seriously neglected its financial contractual obligations towards the player.
16. Consequently, and considering that the club, without valid reason, had repeatedly and for a significant period of time been in breach of its contractual obligations towards the player, the Chamber decided that the player had a just cause to unilaterally terminate the employment contract on 16 May 2018 and that, as a result, the club is to be held liable for the early termination of the employment contact with just cause by the player.
17. In continuation, having established that the club is to be held liable for the early termination of the employment contract with just cause by the player, the Chamber focused its attention on the consequences of such termination.
18. In this regard, prior to establishing the consequences of the breach of contract with just cause by the player in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it had to address the issue of any unpaid remuneration at the moment the contract was terminated by the club.
19. In his statement of claim, the player alleges that his remuneration relating to the months of September, October, November and December 2017, as well as to the months of January, February, March and April 2018, according to the player amounting to the total amount of EUR 160,000, was to be considered outstanding. The club, for its part, did not contest said allegation and the Chamber established therefore that the club had to pay the aforementioned amount as outstanding remuneration to the player.
20. Consequently, the members of the Chamber determined that the club has to pay the amount of EUR 160,000, as well as, considering the player’s claim for interest and also taking into account the Chamber’s longstanding jurisprudence, 5% interest p.a. until the date of effective payment as follows:
a. 5% p.a. as of 1 October 2017 on the amount of EUR 20,000;
b. 5% p.a. as of 1 November 2017 on the amount of EUR 20,000;
c. 5% p.a. as of 1 December 2017 on the amount of EUR 20,000;
d. 5% p.a. as of 1 January 2018 on the amount of EUR 20,000;
e. 5% p.a. as of 1 February 2018 on the amount of EUR 20,000;
f. 5% p.a. as of 1 March 2018 on the amount of EUR 20,000;
g. 5% p.a. as of 1 April 2018 on the amount of EUR 20,000;
h. 5% p.a. as of 1 May 2018 on the amount of EUR 20,000.
21. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the player is entitled to receive from the club compensation for breach of contract in addition to any outstanding salaries on the basis of the relevant employment contract.
22. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including in particular, the remuneration and other benefits due to the player 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.
23. 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.
24. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.
25. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the day of the unilateral termination, i.e. 16 May 2018 until 31 May 2019. In this respect, the Chamber wished to point out that claimed bonus payment of EUR 30,000 for a promotion to the Tournament E could not be taken into account for the calculation of the residual value of the contract, as the player failed to submit any corroborating documentation of said circumstance. Therefore, the Chamber had to assume that the club was not promoted to the Tournament E and participates in the First Division of Country D in the 2018/2019 season. In view of the foregoing, the Chamber established that the player was entitled to his salary for May 2018 in the amount of EUR 20,000, as well as 10 monthly salaries of EUR 20,000 each and a lump sum payment of EUR 50,000 for the entire 2018/2019 season. Consequently, the Chamber concluded that the amount of EUR 270,000 serves as the basis for the determination of the amount of compensation for breach of contract.
26. In continuation, the Chamber verified as to whether the player 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 the player’s general obligation to mitigate his damages.
27. According to the information in the TMS, as well as based on the documentation provided by the player, on 1 July 2018, the player found employment with the Club of Country F, Club G. In accordance with the pertinent employment contract which has been made available by the player, valid until 30 June 2019, the player was entitled to receive a total amount of EUR 76,371.42 in the period between 1 July 2018 and 31 May 2019.
28. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 193,629 to the player, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.
29. Moreover, taking into account the player’s request as well as its longstanding jurisprudence, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 17 May 2018, until the date of effective payment.
30. Finally, the Chamber decided to reject the player’s request for additional compensation in the amount of EUR 120,000, due to the lack of a contractual and regulatory basis.
31. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the player is rejected.
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 within 30 days as from the date of notification of this decision, outstanding remuneration in the amounts of EUR 160,000, plus 5% interest p.a. until the date of effective payment as follows:
a. 5% p.a. as of 1 October 2017 on the amount of EUR 20,000;
b. 5% p.a. as of 1 November 2017 on the amount of EUR 20,000;
c. 5% p.a. as of 1 December 2017 on the amount of EUR 20,000;
d. 5% p.a. as of 1 January 2018 on the amount of EUR 20,000;
e. 5% p.a. as of 1 February 2018 on the amount of EUR 20,000;
f. 5% p.a. as of 1 March 2018 on the amount of EUR 20,000;
g. 5% p.a. as of 1 April 2018 on the amount of EUR 20,000;
h. 5% p.a. as of 1 May 2018 on the amount of EUR 20,000.
3. The Respondent has to pay to the Claimant within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 193,629, plus 5% interest p.a. as of 17 May 2018 until the date of effective payment.
4. Any further claim lodged by the Claimant is rejected.
5. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.
6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances are to be made and to notify the Dispute Resolution Chamber of every payment received.
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Note relating to the motivated decision (legal remedy):
According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00 / Fax: +41 21 613 50 01
e-mail: info@tas-cas.org / www.tas-cas.org
For the Dispute Resolution Chamber:
Omar Ongaro
Football Regulatory Director
Encl. CAS directives