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 15 April 2020

Decision of the

Dispute Resolution Chamber (DRC) judge

passed on 15 April 2020,

by Stijn Boeykens (Belgium), DRC judge

on the claim presented by the player,

Jorge Orti Gracia, Spain,

represented by Asociación de Futbolistas Españoles

as Claimant

against the club,

Hong Kong Pegasus FC, Hong Kong

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 19 July 2019, the Spanish player, Jorge Orti Gracia, (hereinafter: the Claimant), and the club from Hong Kong, Pegasus FC, (hereinafter: the Respondent) concluded an employment contract valid as from 15 July 2019 until 31 May 2020 (hereinafter: the contract), pursuant to which the Respondent undertook to pay the Claimant a monthly salary of Hong Kong Dollars (HKD) 35,100.

2. According to art. 3 of the pre-contract signed by the parties on 28 June 2019, the Respondent “will offer two-economy round-trip tickets for Party B [Claimant] from Spain to Hong Kong during the contract period. (One of the round-trip ticket will be bought by the player’s agent with the money of the commission).”

3. Moreover, in accordance with art. 4 of the pre-contract, the Respondent “will provide accommodation to Party B [Claimant] during the contract period, Party A [Respondent] should responsible for all of the utilities fee (include electricity and water fee) in this period. Party B [Claimant] will share the flat with other players from July 2019 to Aug 2019. Party B [Claimant] will have own flat from Sept 2019 to May 2020”.

4. According to the Claimant, the contract was terminated by the Respondent on 30 September 2019 via Whatsapp message. In such message, the Respondent informed him that the termination was “due to his poor performance”, and that he would receive the salary of September 2019 as well as a return flight ticket to Spain.

5. The Claimant further stated that he ignored the termination and kept on attending trainings until he was not allowed to train with the first team any longer. Moreover, he should have been provided with an individual apartment as from 1 September 2019 but that was not the case, therefore he had to stay in a hotel.

6. The Claimant added that he tried to get information from the Hong Kong Football Association about his situation. The Hong Kong FA informed the Claimant that the Respondent communicated to it, on 3 October 2019, that it had terminated his contract and cancelled his registration “however the club insists (though today’s message) “Jorge Orti Garcia is still under our employment contract and has daily training until end of May 2020 although his performance is not up to our head coach standard”.

7. Later on, the Hong Kong FA forwarded a message it received from the Respondent to the Claimant stating the following: “Sorry for the mistaken letter from our club secretary date 30/9/2019. Our club ONLY want to cancel Jorge Orti Garcia’s quota in HKFA and it will transfer to another player whom is from Argentina, because under HKFA regulation each FC ONLY has six quotas for oversea players. All conditions especially the employment contract with Jorge Orti Garcia remain the same NO change.” The Hong Kong FA further informed the Claimant that this meant that he was not eligible to play for League and cup matches “in other words, if the club has not cancelled his registration (“license”) as a player, there is still possibility for him to play for the club”.

8. Finally, the Claimant held that the Respondent terminated the contract without just cause with the sole purpose of freeing a spot in the foreign quota list for a new foreign player and that despite his numerous default notices, the Respondent did not reply to him. Consequently, on 24 October 2019, the Claimant terminated the contract.

9. On 5 November 2019, the Claimant lodged a claim against the Respondent in front of FIFA for outstanding remuneration and compensation for breach of contract, claiming the payment of the following amounts, plus 5% interest p.a. as from 24 October 2019 until the date of effective payment:

A. HKD 34,820.48 as outstanding remuneration, detailed as follows:

 HKD 27,179.19 for the 24 days worked during the month of October;

 HKD 1,646.7 as reimbursement for accommodation costs as the Claimant had to live in a hotel as from 3 October until 7 October 2019, while according to the contract he should have been provided with an apartment as from 1 September 2019;

 HKD 5,999.59 as reimbursement for the flight tickets of the Claimant and his wife.

B. HKD 253,625.81 as compensation for breach of contract, corresponding to:

 HKD 7,925.81 for the last 7 days of October 2019;

 HKD 245,700 corresponding to the months of November 2019 to May 2020.

C. HKD 35,100 as compensation for moral damages;

D. Sporting sanctions to be imposed on the Respondent.

10. In its reply to the claim, the Respondent, first of all, pointed out that, when the Claimant returned to Hong Kong on 21 September 2019, after a month spent in Spain where he had gone to recover from a knee injury, the Claimant, on 28 September 2019, played a Premier League match. After the match the club’s management was not satisfied with his performance and on 30 September 2019, via WhatsApp, informed the Claimant that the club had decided to terminate his contract. Nevertheless, the Respondent sustained that the mentioned communication to the Claimant served as a serious warning and not as a formal termination notice. With this regards, the Respondent sustained that it did not take any further and/or formal action and therefore the contractual relationship between the parties continued.

11. The Respondent further maintained that after several unjustified complaints in a series of letters sent to the club, the Claimant, on 24 October 2019, informed the Respondent about his decision to terminate the contract with just cause, in accordance with art. 14 of the FIFA’s RSTP.

12. With regards to the above, the Respondent held that after the Claimant missed the training sessions on 24 and 25 October 2019, without any prior notice, the Respondent issued two warning letters to him, both dated 25 October 2019, by means of which the Respondent informed the Claimant about the potential consequences of terminating the contract.

13. Furthermore, the Respondent addressed the matter regarding the club’s quota assigned to another foreign player. The club highlighted that the Claimant was still duly registered with the Respondent, it was an internal decision which could be easily re-arranged according to the Claimant’s performance and that such decision cannot be considered as a breach of the employment contract.

14. Moreover, the Respondent held that the Claimant was never precluded from joining the club’s training sessions, “it is normal practice that coaches are entitled to tailor training to players according to their individual physical conditions. Mr. Orti’s conditions were not 100% recovered at that time, it would make perfect sense that he was given breaks or milder exercises during the training sessions.”

15. In addition, the Respondent maintained that, when it tried to reach out to the player in order to ask the reason why he missed the aforementioned training sessions, the Respondent, on 4 November 2019, found out that he was not in Hong Kong, therefore breaching the contract.

16. Finally, the Respondent submitted evidence that the Claimant was provided with an accommodation while the Respondent was looking for a suitable flat and that the related expenses have been paid by the Respondent and offset by a loan of HKD 5,000 granted by the Respondent to the Claimant.

17. To conclude, the Respondent held that the Claimant’s termination notice was defective as it did not fully comply with the contractual provisions, meaning that the contract was not terminated by him on 24 October 2019. Therefore, the Respondent rejected any claim from the Claimant on matters not covered by the contract and requested the following:

 To consider that the last working day of the Claimant was the 25th November 2019 (instead of what he claimed i.e. 24 October 2019). The Respondent never failed or refused to pay to the Claimant any salary he was entitled to and the Respondent was willing to pay his October 2019 salary as well as the November 2019 salary on a pro-rata basis [i.e. October salary amounting to HKD 35,10.00 and from 1 November 2019 to 25 November 2019, amounting to HKD 29,250.00 (HKD 35,100.00/30*25)];

 To reject the compensation for alleged breach of contract as well as the “moral damage” claimed by the Claimant;

 “Regarding his claim for hotel expenses from 3 October 2019 to 7 October 2019 amounting to HK$ 1,646.70, we have already offset such fee from the Loan of HK$ 5,000.00 Mr. Orti owned us […].”

 Concerning the Claimant’s claim for the flight changing fee of HKD 1,000, it occurred without the Respondent prior knowledge and approval. The Respondent agreed to provide him with one set of economy round-trip tickets from Spain to Hong Kong. However, since the Claimant bought his own return ticket to Spain -without informing the Respondent- , the Claimant has not still utilized his return ticket, therefore the Respondent does not have to reimburse the flight changing fee. With regards to the flight fee paid by the Claimant for his wife, it was not foreseen in the contract to provide flight tickets for an additional person.

 Finally, the Respondent rejected any sporting sanction proposed by the Claimant: “We are of the view that we did not breach any provisions of the Player’s Agreement. It was Mr. Orti who breached the Player’s Agreement, and we are just exercising our lawful rights under the Player’s Agreement to terminate it.”

II. Considerations of the DRC judge

1. First of all, the DRC judge analysed whether he was competent to deal with the matter at stake. In this respect, the DRC judge took note that the present matter was submitted to FIFA on 5 November 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 DRC judge 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, the DRC judge is competent to deal with the matter at stake, which concerns an employment–related dispute with an international dimension.

3. Furthermore, the DRC judge 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, the DRC judge confirmed that, in accordance with art. 26 par. 1 and par. 2 of the said Regulations and considering that the present claim was lodged in front of FIFA on 5 November 2019, the October 2019 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC judge and the applicable regulations having been established, the DRC judge entered into the substance of the matter. In this respect, the DRC judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the DRC judge emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. In this respect, the DRC judge acknowledged that, on 19 July 2019, the Claimant and the Respondent concluded an employment contract valid as from 15 July 2019 until 31 May 2020, pursuant to which the Respondent undertook to pay to the Claimant a monthly salary of HKD 35,100.

6. Moreover, the DRC judge took that on 24 October 2019, the Claimant terminated his contract invoking just cause on the basis of the Respondent’s conduct, mainly by having previously communicated to him its intention to terminate the contract due to alleged bad performance, excluded him from the first team and precluded his possibility to play, by freeing his spot in the foreign quota list for a new foreign player.

7. Having recalled the above, the DRC judge observed that, the Claimant, in his claim, requested outstanding remuneration in the amount of HKD 34,820.48 and compensation for breach of contract in the amount of HKD 253,625.81, plus 5% interest p.a. as from 24 October 2019 until the date of effective payment.

8. The DRC judge further noted that the Respondent explained that the Claimant had unilaterally terminated the contractual relationship without just cause, pointing out that it had fulfilled all its contractual obligations towards him. The Respondent further considered that the fact that the Claimant has been de-registered as one of the foreign players is not enough reason to terminate a contract taking into account that the club could re-arranged it according to the future player’s performance.

9. The DRC judge considered the positions of the parties and deemed that the main issue of the present dispute is to determine whether the employment contract had been unilaterally terminated with or without just cause by the Claimant, and which party was responsible for the early termination of the contractual relationship in question.

10. The DRC judge focused on the Respondent’s allegation with this specific issue. In this respect, the DRC judge noted that the Respondent sustained that the de-registration was to be considered as potentially temporary in nature given that the Claimant would allegedly be re-registered as soon as his performance improved.

11. First of all, the DRC judge considered relevant to recall his longstanding jurisprudence, according to which, besides the timely payment of remuneration, the access to training and the possibility to participate in competitions with his fellow team mates in official matches are also fundamental rights of the player under an employment contract.

12. Thus, the DRC judge considered that the Respondent by de-registering the player due his alleged poor performance, even for a limited time period, effectively barred, in an absolute manner, his potential access to competitions and, as such, violated one of his fundamental rights as a football player.

13. Therefore, the DRC judge established that the de-registration of a player constitutes a serious breach of contract since it de facto prevents a player from being eligible to play for his club and perform as per his employment contract.

14. Furthermore, the DRC judge noted that such de-registration was based on the alleged unsatisfactory performance of the player, for which no evidence was presented and which in any case consists of subjective criteria, not assessable in measurable parameters and consequently not justifiable of the harsh measure taken against the player in the present case.

15. The DRC judge equally noted that it remained undisputed between the parties that the club, based also on the player’s alleged poor performance, had informed him via Whatsapp of its clear intention to terminate the contract. This communication, followed be the player’s de-registration, justified by the club’s supposed dissatisfaction with the player’s performance, consist of a serious, unjustified breach of the contract by the Respondent. At this point, the DRC judge deemed it appropriate to also remind the parties that a player’s alleged poor performance, as per his well-established jurisprudence, cannot be considered as a just cause for a club to terminate a player’s contract.

16. On account of the above, the DRC judge decided that the Claimant had just cause to unilaterally terminate the employment relationship with the Respondent on 24 October 2019 and, consequently, the latter must bear the financial and/or sporting consequences of the early termination, in addition to any outstanding payments on the basis of the relevant employment contract.

17. First of all, the DRC judge concurred that the Respondent must fulfill its obligations as per employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the DRC judge decided that the Respondent is liable to pay to the player the remuneration that was outstanding at the time of the termination, i.e. the amount of HKD 23,820.89 as a consequence of the termination with just cause on 24 October 2019. This amount consists of the player’s pro-rata salary for October 2019 (HKD 27,174.19), minus the loan of HKD 5,000 granted by the club to the player, plus HKD 1,646.7 as reimbursement for accommodation paid by the player.

18. Furthermore, considering the Claimant’s claim for interest and also taking into account the DRC judge’s longstanding jurisprudence, the DRC judge ruled that the club must pay 5% interest p.a. on the amount of HKD 23,820.89 as from 25 October 2019 until the date of effective payment.

19. Having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the DRC judge focussed his attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC judge decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract.

20. In continuation, the DRC judge focused his attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the DRC Judge 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 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.

21. In application of the relevant provision, the DRC judge held that he first of all had to clarify as to whether the pertinent employment contract contains 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 DRC judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

22. As a consequence, the DRC judge 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 judge 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. The DRC judge then turned his attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by him to be essential. The DRC judge deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows him to take into account both the existing contract and the new contract in the calculation of the amount of compensation.

24. Bearing in mind the foregoing, the DRC judge proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its date of termination with just cause by the Claimant, i.e. 24 October 2019, until the end of the contract, and concluded that the Claimant would have received in total HKD 245,700 as remuneration had the contract been executed until its expiry date. Consequently, the DRC judge concluded that the amount of HKD 245,700 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

25. In continuation, the DRC judge 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 enabled to reduce his loss of income. According to the constant practice of the DRC judge, 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. The DRC judge noted that the Claimant was not able to mitigate his damages, as he did not sign a new employment contract for the relevant period of time.

26. In addition, taking into account the Claimant’s request and the DRC’s well-established jurisprudence, the DRC judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of HKD 245,700 as of 25 October 2019, until the date of effective payment.

27. Furthermore, taking into account the consideration under number II./3. above, the DRC judge referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

28. In this regard, the DRC judge pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

29. Therefore, bearing in mind the above, the DRC judge decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

30. Finally, the DRC judge recalled that the above-mentioned ban 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.

31. The DRC judge concluded its deliberations in the present matter by establishing that Claimant’s claim is partially accepted and that any further claim lodged by the Claimant is rejected.

III. Decision of the DRC judge

1. The claim of the Claimant, Jorge Orti Gracia, is partially accepted.

2. The Respondent, Hong Kong Pegasus FC, has to pay to the Claimant the amount of HKD 23,820.89 as outstanding remuneration plus interest at the rate of 5% p.a. as from 25 October 2019 until the date of effective payment.

3. The Respondent has to pay to the Claimant the amount of HKD 245,700 as compensation for breach of contract plus interest at the rate of 5% p.a. as from 25 October 2019 until the date of effective payment.

4. Any further claim lodged by the Claimant is rejected.

5. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts mentioned under points 2. and 3. above.

6. The Respondent shall provide evidence of payment of the due amounts in accordance with points 2. and 3. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amounts due plus interest in accordance with points 2. and 3. above are not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

8. The ban mentioned in point 7. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

9. In the event that the aforementioned sums plus interest are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the Dispute Resolution Chamber. 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 article 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 (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

For the DRC judge:

Emilio García Silvero

Chief Legal & Compliance Officer