F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2019-2020) – fifa.com – atto non ufficiale – Decision 26 March 2020

Decision of the

Dispute Resolution Chamber

passed on 26 March 2020,

in the following composition:

Clifford Hendel (USA), Deputy Chairman

Michele Colucci (Italy), member

Pavel Pivovarov (Russia), member

on the claim presented by the player,

Georges Mandjeck, Cameroon,

represented by Mr Laurent Fellous

as Claimant

against the club,

Sparta Praha, Czech Republic

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 18 July 2017, the Cameroonian player, Georges Mandjeck (hereinafter: Claimant or player) signed a “League Professional Player Contract” (hereinafter: the contract) with the Czech club, Sparta Praha, (hereinafter: Respondent or club), valid as from the date of signature until 30 June 2020.

2. Article I.2 of the contract stipulated the following: “The Player is a natural person – self-employer […] on Income Tax […] registered in the public register […] and who enters into a legal relationship with the club for the purpose of its representation, especially in the area of the sport and thereto related activities”.

3. According to Annex 1, clause 1, to the contract, the player is entitled to the following:

a) EUR 39,000 per month “+ VAT is applicable per month”:

b) Six instalments, corresponding to “Fix Bonus” of EUR 78,000 each “+ VAT is applicable”, payable as follows:

i) 31 October 2017;

ii) 28 February 2018;

iii) 31 October 2018;

iv) 28 February 2019;

v) 31 October 2019;

vi) 28 February 2020.

4. According to Annex 1, clause 2, to the contract, ”the condition for the bonus according to this stipulation to become payable is that the Player is a player of [the Respondent] as of the installment maturity date, i.e. the player is not on a loan in a third club nor has he been transferred to a third club and his professional contract with [the Respondent] is valid and effective.”

5. As per Article VI.5 of the contract, “in case that the player is registered for the payment of the value added tax […] he is obliged to issue an invoice complying with the conditions of the tax document […] at the latest by the 10th day of the month following the month, for which the Player is entitled to his remuneration”.

6. Pursuant Article VI.6 of the contract, “by the signature hereof, the club and the player confirm that in compliance with the applied legal regulations of the Czech Republic […] the player shall be obliged to pay the applicable income tax from the paid remuneration, health insurance and social security insurance”.

7. Article VI.7 of the contract stipulated the following: “The player is obliged to conclude available health insurance according to his discretion for the coverage of health costs of the healthcare institutions of the Czech Republic for the event of a disease or injury of the player”.

8. Article VI.8 of the contract held the following: “The club is obliged to provide the player with both basic and expert medical care executed by the club doctor and paid from the health insurance of the player […]”.

9. By means Article IX of the contract, “the validity of the contract shall [inter alia] end:

a) By the expiration of the period, for which it was agreed, unless the contracting parties agree in writing on the extension thereof within the said period;

b) By a written agreement of both contracting parties;

c) By immediate termination by the player in case that the club violates the obligation established in [cf. I.3] for the period of at least three months, unless the club meets this obligation within the additional period of 7 days from the delivery of the written notice.

10. As per Article X.5 of the contract, “this contract shall be governed by the law of the Czech Republic. The contracting parties undertake to enforce their mutual rights and obligations in compliance with the legal regulations of the Czech Republic, regulations of the EU, regulations of the [Czech FA], UEFA and FIFA”.

11. On 1 January 2018, the Respondent and the French club, FC Metz, signed a loan agreement regarding the temporary transfer of the player from the Respondent to FC Metz, as from 1 January 2018 until 30 June 2018.

12. As per clause 7 of said loan agreement, the Respondent “will be obliged to pay to the player the gross remuneration under the terms and conditions of the [contract signed between the player and the Respondent] dated 18 July 2017 […] for the period of duration of the temporary transfer of the player”.

13. In addition, the player and FC Metz signed an employment contract by means of which the player was, inter alia, entitled to a monthly salary of EUR 17,000 “gross”.

14. On 14 March 2018, the player informed the club in writing of the following: “As it is written in my contract I should have logically received a payment of 78.000 € […] If at the end of this month I have not received this payment of 78.000 €, I will ask my lawyer to […] keep in touch and resolve this problem by the legal ways”.

15. On 26 July 2018, the Respondent and the Israeli club, Maccabi Haifa, signed a loan agreement regarding the temporary transfer of the player from the Respondent to Maccabi Haifa, as from 26 July 2018 until 20 June 2019.

16. Pursuant to clause 3.4 of said loan agreement, “the parties and the player agreed that during the period the player will be entitled to receive the remuneration solely from Maccabi based on the employment contract which will be concluded between the player and Maccabi. The player will not [be] entitled to receive during the period any remuneration from Sparta based on the professional contract concluded between the player and Sparta dated 18 July 2017.”

17. On 24 July 2018, the player and Maccabi Haifa signed an employment contract by means of which the player was entitled to 10 monthly instalments of NIS 112,685 “gross”.

18. Furthermore, as per said employment contract, “the amounts in NIS that the player is entitled to receive […] were calculated upon the exchange rate of EUR 1 = NIS 4.23. Each month all the payments under this [contract] shall be recalculated according to the actual exchange rate at the end of the month is respect of which the payment is made”.

19. On 20 September 2018, the player wrote a letter the Respondent making reference to Article X.5 of the contract (cf. I.10). In continuation, the player held the following: “By reading the contract, at least two illegalities appear:

- The use of fix bonuses;

- The application of the [VAT] compelling the player to:

o Edit monthly invoices

o Pay taxes

In doing so, the [Respondent] especially reduces the salary amount and modulate its budget regarding the [Czech FA]. Hence, the contract is contrary to:

- The FIFA and UEFA regulations,

- The EU regulations, it being specified that the European Commission wishes to put an end to that system,

- The FIFPro requirements.

Consequently, [the player] is entitled to pursue the immediate termination of his [contract]. Failure to strictly comply with this request within 10 days of this letter […] legal proceedings and all necessary actions [will be brought against the Respondent]”.

20. On 4 January 2019, amended on 6 March 2019, the player lodged a claim against the Respondent for breach of contract in front of FIFA, holding the following: “In this context, in application in particular of regulations and case law of the [EU and FIFA, the DRC] is requested to:

a) declare the requalification of the Contract into an employment contract;

b) recognize that the many shortcomings of [the Respondent] provide for a just cause within the meaning of the [RSTP];

c) order [the Respondent] to pay:

i) EUR 234,000 excl. interest rate, corresponding to outstanding remuneration;

ii) EUR 805,263 incl. Tax, corresponding to the residual value of the Contract;

iii) EUR 387,736.47 corresponding to damages;

iv) EUR 8,000.00 including tax, corresponding attorney fees”.

21. In said claim, the player underlined that the fact that his work relationship with the Respondent has the status of “self-employer”, and the fact that he had not received his “Fixed Bonuses” from the Respondent, provided him a just cause to terminate the contract.

22. In particular, the player referred to Annex 1 to the contract, and held that he had not received the amount of EUR 234,000 as “Fix Bonus”, corresponding to the instalments due on the following dates:

a) 28 February 2018;

b) 31 October 2018;

c) 28 February 2019.

23. Consequently, the player requested that the Respondent pay him outstanding remuneration in the amount of EUR 234,000.

24. With regard to his status as “self-employer”, the player argued that such a status is contrary to FIFA Regulations as well as EU Law. The player inter alia highlighted that under EU case law, a worker is interpreted broadly as (I) a person (II) performing services (III) under the direction of another (IV) for remuneration, and that football players fall under this definition.

25. In fact, the player himself underlined that:

- He performed real and effective work, both while training and by participating in the matches of the Respondent;

- He performed these services in favour of the Respondent and under its direction;

- These services were concluded for a certain period, namely from July 18 2017 until “June 30 2020”;

- In return for these services, he receives remuneration equal to EUR 39,000.00 per month.

26. Thus, the player concluded that, as a professional football player, he should be considered an employee and not a self-employer.

27. Having said this, the player referred to Clause VI.5 of the contract, and highlighted that in order to receive his salary he is obliged to issue an invoice each month. In this regard, the player explained that this obligation to obtain his salary cost him money, since he had to hire a person to:

- Edit monthly invoices;

- Prepare VAT statements and prepare all the payment instruction for tax payments;

- Prepare statements and payment instructions for the social security insurance and for the health insurance.

28. The player then referred to DRC Jurisprudence and stated that “the payment of remuneration for services rendered dependent on the issuance of an invoice […] cannot be acceptable”.

29. Given the above, the player argued that he is “entitled to seek the recognition of a just cause” to terminate his employment relationship with the Respondent, because his labour status with the Respondent “makes the continuation of the employment relationship impossible”.

30. Consequently, the player further alleged that he would be entitled to the residual value of the contract for the 2019/2020 season in the amount of “EUR 805,263”, including bonuses and taxes.

31. In addition, the player requested the amount of EUR 387,736.47, corresponding to “damages”, as follows:

- Czech Koruna (CZK) 4,494,755, “equal to EUR 175,686.89”, which he allegedly paid as VAT in 2017 and 2018;

- CZK 779,946, “equal to EUR 60,985.20” for the years 2017 and 2018, which he allegedly paid as social security contributions and medical insurance;

- CZK 27,225 “equal to EUR 1,064.38” which he allegedly paid for hiring using the services of a tax accountant in order to obtain his salary;

- EUR 50,000, as damages for concluding a contract as self-employer instead of a standard employment contract;

- EUR 100,000 corresponding to “moral damages”.

32. In reply to the player’s claim, and with regard to the alleged unpaid fixed bonuses, the Respondent referred to Annex 1 to the contract and held that the player was not entitled to fixed bonuses if he was loaned out to another club. As per the Respondent, given that the player was firstly loaned out to FC Metz, and later to Maccabi Haifa, it did not have the obligation to pay the fixed bonuses to the player.

33. With regard to the labour status as self-employer of the player, the Respondent argued that the reason for this is that the “law of the Czech Republic does not allow the clubs to hire the players as employees [because there are] essential differences between regular employment and professional sports”. In particular, “the player must typically meet a number of conditions and restrictions that are not applicable in the area of “common” labour law – the players may be […] obliged to meet particular diet criteria and may be fined for breach of their health regimen”.

34. According to the Respondent, considering the player as a self-employed person, “is the only possible option that is in accordance with applicable statutory provisions and judicial decision of the highest courts. If the Club would consider its professional players as employees and the relationship would be on the basis of employment, the Club would not be able to fulfil the statutory obligations set out for employment in the Labour Code and such employment relationship would be considered null and void. Current model of a relationship between the Player and the Club based on self-employment is not a decision of the Club as it is only option that is in conformity with the legal system of the Czech Republic.”

35. Having said this, the Respondent did acknowledge that “(a)s the Czech Republic is one of the few remaining countries where the football players do not have the status of employees, it is sensible to predict that this change of status of football players is inevitable and only a matter of time”.

36. With regard to the player’s obligation to pay VAT and compulsory insurances, the Respondent acknowledged that “the fact that the professional athletes are considered as the self-employees under the Czech law, imposes an additional obligations on the players.” However, as per the Respondent, it is “obliged to provide the Player with any assistance which the Player would need in this connection”, and “the remuneration of the Player is always also increased by the VAT”.

37. The Respondent underlined that the player has not suffered any financial damages, and that he entered into “the contract by a mutual agreement of both parties under no pressure whatsoever”. In conclusion, the Respondent requested FIFA to dismiss the player’s claim in its entirety.

38. In his replica, the player reiterated that he is entitled to EUR 234,000 corresponding to the fixed bonus, since he was not on loan “at a third club”, as the contract stipulates, but rather with “another club”.

39. In continuation, the player argued that in its reply, the Respondent failed to counter argue that the status of self-employer is contrary to EU Law, reminding the Respondent of the supremacy of EU law on national laws.

40. Moreover, the player held that the Respondent’s position that it did not have a choice but to engage the player as a self-employer cannot be upheld, since such the contract is contrary to EU Law and FIFA regulations.

41. In its duplica, the Respondent referred to Annex 1 to the contract, and explained that “third club” is to be understood as a party, or third party, other than the player and the Respondent.

42. With regard to the player’s references to EU law and EU case law, the Respondent argued that “FIFA is not entitled to interpret law of the EU […] and therefore FIFA is not entitled to assess the conformity of the contract with the law of the EU”.

43. The Respondent further stated that “every professional sports club in the Czech Republic (not only the football clubs in the highest professional league in the Czech Republic) uses the exact same model as [the Respondent] in relation to the professional players and its professional agreements. This means that any decision of the FIFA ruling against such model would cause chaos and confusion in the whole sports community and it would severely disrupt legal certainty”.

44. According to the information in TMS, following his loan with Maccabi Haifa, the player was reregistered with The Respondent on 5 August 2019. Furthermore, the contract uploaded by the Respondent to the TMS, is the contract signed between the parties on 18 July 2017.

Player Georges Mandjeck, Cameroon / Sparta Praha, Czech Republic Page 9 of 13

II. Considerations of the Dispute Resolution Chamber

1. First of all, the three members of 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 4 January 2019. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

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 par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players 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 Cameroonian player and a Czech club.

3. In continuation, 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 4 January 2019, the 2018 edition of the 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 and arguments as well as the documentation on 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 this respect, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 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 recalled that the Claimant and the Respondent signed the “League Professional Player Contract”, which was valid as as from the date of signature until 30 June 2020. The Chamber acknowledged that, in accordance with the contract, the Respondent committed itself to pay to the Claimant EUR 39,000 per month, as well as six “Fix Bonus” instalments of EUR 78,000 each, payable on 31 October 2017, 28 February 2018, 31 October 2018, 28 February 2019, 31 October 2019, and 28 February 2020, respectively.

6. In continuation, the DRC recalled that the Claimant lodged a claim before FIFA for breach of contract, inter alia requesting EUR 234,000 as outstanding remuneration, as well as the total amount of EUR 1,192,999.47 compensation. Furthermore, the Chamber acknowledged that the Claimant also requested “the requalification of the Contract into an employment contract” (cf. I.20).

7. In light of the above, the Chamber established that the first issue at stake is determining as to whether the Claimant can claim compensation for breach of contract in the first place. Along these lines, the DRC noted that pursuant to Art. 17 of the Regulations, a party can request compensation for breach of contract in case the other party terminated the contract without just cause. Similarly, the Chamber recalled that, in accordance with its well-established practice, a party can request compensation for breach of contract if that same party terminated the contract with just cause.

8. Having said this, the Chamber deemed it essential to point out that neither the Claimant nor the Respondent, ever terminated the contract in question. In fact, the DRC emphasized that, according to all the information at its disposal, including the information contained in the TMS, the Claimant is currently registered with the Respondent.

9. As such, the DRC concluded that the Claimant’s claim for compensation the total amount of EUR 1,192,999.47, corresponding to the residual value of the contract, as well as to damages, is to be rejected in its entirety.

10. In continuation, the Chamber turned its attention to the Claimant’s request EUR 234,000 as outstanding remuneration. In this context, the DRC recalled that, according to the Claimant, he was entitled to “Fixed Bonuses” under the contract with the Respondent, but that the Respondent had failed to pay him the instalments due on 28 February 2018, 31 October 2018, and 28 February 2019 respectively.

11. Similarly, the Chamber took note that, according to the Respondent, the player was not entitled to the fixed bonuses if he was loaned out to another club. Thus, the DRC further evoked that, as per the Respondent, given that the player was firstly loaned out to FC Metz, and later to Maccabi Haifa, it did not have the obligation to pay the fixed bonuses to the player.

12. Having recalled the above, the Chamber firstly deemed it is essential to take into account the wording of the paragraph regarding the bonus found in Annex 1 to the contract. It stated: “The condition for the bonus according to this stipulation to become payable is that the player is a player of [the Respondent] as of the instalment maturity date, i.e. the player is not on a loan in a third club”.

13. Having carefully analysed said clause, the DRC unanimously concluded that by “third club” the parties meant any other club.

14. The DRC understood the above provision to be clear: once the Claimant is loaned out to another club, he would not be entitled to the fixed bonuses stipulated in the contract with the Respondent. As per the Chamber, this assumption is further confirmed by the fact that the Claimant received the first bonus instalment of the fixed bonus of 31 October 2017, i.e. when he was registered and playing for the Respondent.

15. In addition, the DRC wished to emphasize that the Claimant’s financial damages for being loaned to another club are minimalized. In particular, the Chamber recalled that the Claimant was entitled to a monthly salary of EUR 17,000 “gross” while loaned to FC Metz, while he had an income of approximately EUR 266,395 for the duration of the loan at Maccabi Haifa.

16. In light of the above, the DRC decided to reject the Claimant’s claim for outstanding remuneration in its entirety.

17. Next, the Chamber turned to Claimant’s final request, namely “the requalification of the Contract into an employment contract”.

18. In this regard, the Chamber recollected that, according to the Claimant, his status as self-employer was contrary to FIFA Regulations as well as EU Law, highlighting that he should be regarded as an employee instead.

19. The DRC further took note of the alleged disadvantages listed by the Claimant for having the status of self-employer, including hiring a person to:

- Edit monthly invoices;

- Prepare VAT statements and prepare all the payment instruction for tax payments;

- Prepare statements and payment instructions for the social security insurance and for the health insurance.

20. Subsequently, the Chamber firstly turned to its Regulations, as well as to its well-established jurisprudence, and concluded that neither the FIFA RSTP, nor its jurisprudence, provide for a prohibition of the self-employment of professional football players.

21. In fact, the DRC underlined that a player will always have the possibility to terminate the contract under Art. 14 of the Regulations, as well as requesting compensation for breach of contract in case contract termination without just cause under Art. 17 of the Regulations, regardless of the employment status of the player.

22. The Chamber thus established that it follows from the above that it is not in a position to requalify “the Contract into an employment contract”, as the Claimant requested. Consequently, the DRC decided to reject this part of the Claimant’s claim in its entirety.

23. Having said this (and cognizant that the following is mere dictum, which in ordinary circumstances, the Chamber would avoid), the three members of the Chamber wished to take the opportunity to state that, although the Regulations do not prohibit the status of self-employer of professional football players, it has significant doubts as to the appropriateness of granting such a status to professional football players in general.

24. In this regard, the three members of the DRC understand that playing for a club as a self-employer could be disproportionately unfavourable for the player, given that he is likely to have the obligation to send monthly invoices, as well as the obligation to pay his own VAT, health insurance and injury related costs. In addition, the three members of the Chamber emphasized that, given that these players are not considered “employees” or “workers”, it is difficult, if not impossible, for them the to unionize and to negotiate collective bargaining agreements and/or standard contracts with the FA’s, clubs and leagues of those countries where self-employment of football players is the standard.

25. In addition, the three members of the Chamber wished to point out that a possible further negative consequence for self-employed football players is the impossibility to have recourse to certain EU Directives concerning labour rights, or similar applicable national or transnational rules. In this regard, the three members of the DRC recalled that pursuant to, for example, the EU Directive on the protection of employees in the event of the insolvency of their employer and the EU Fixed-term Work Directive, only those workers who are considered employees under national law fall under the respective Directives.

26. While noting the Respondent’s observation that “any decision of the FIFA ruling against such model [i.e., the self-employment model followed in the Czech Republic and a few other countries] would cause a chaos and confusion to the whole sporting community and….would severely disrupt legal certainty,” the three members of the Chamber take comfort in the Respondent’s prediction that a legislative change in the current Czech position “is inevitable and only a matter of time,” and would welcome such change being effected promptly.

27. Finally, as regards 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.

28. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that the claim lodged by the Claimant is rejected in its entirety.

*****

Decision of the Dispute Resolution Chamber

The claim of the Claimant, Georges Mandjeck, is rejected.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note related to the appeal procedure:

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