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 16 August 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 16 August 2019,

in the following composition:

Geoff Thompson (England), Chairman

Eirik Monsen (Norway), member

Pavel Pivovarov (Russia), 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 an unspecified date, the Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), signed an employment contract (hereinafter: the contract), valid as from 13 January 2018 until 12 January 2019.

2. In accordance with article 9 of the contract, the Respondent undertook to pay to the Claimant, inter alia, a monthly salary of USD 4,814 “payable in [currency of Country D] ”, without further specifications concerning due dates of payment.

3. By means of a letter dated 29 March 2018, the Respondent informed the Claimant that: “As your acceptance of practice and training by the coach is less and your performance and ability are going down from time to time and you failed to improve the same, we notify you that we have served you grave notice along with 15 days salary penalty based on club’s disciplinary manual […]”.

4. Subsequently, by means of letters dated 3 April, 9 April and 16 April 2018, the Claimant put the Respondent in default of payment of the amount of USD 4,818 corresponding to the salary of March 2018.

5. By means of a document dated 12 April 2018, the Respondent informed the Claimant that, “[since] you did not show any improvement both in your conduct and performance despite the fact that you have received first warning […] I hereby notify that it is decided as per the discipline manual article 12 number 12:18 letters B to reduce the monthly salary to be paid to you to 50,000 / Fifty Thousand / and this is last warning effective from 9 April 2018”. Furthermore, on the said document –along with his signature– the Claimant wrote down the following sentence: “I sign but I do not agree”.

6. On 17 April 2018, the Respondent made a partial payment of the salary of March 2018, in the total amount 21,188.

7. On 18 April 2018, the Claimant put the Respondent in default of payment of the remaining part of the salary of March 2018.

8. By means of a letter dated 4 May 2018, the Respondent unilaterally terminated the contract. In particular, the Respondent informed the Claimant that: “[…] considering that you were expected to improve yourself and make yourself fit for the required activity with regards to the consecutive warnings to this end, instead of improvement, your status has been getting lower every day. As such, because you have neglected the warning addressed to you in accordance with article 12, Sub-article 12.18 letter C of the Club Disciplinary manual, I hereby notify you that it has been resolved to terminate your employment contract agreement effective May 4, 2018”.

9. On 22 May 2018, the Claimant lodged a claim against the Respondent before FIFA, requesting outstanding remuneration and compensation for breach of contract, plus 5% interest p.a. “on all the amounts” as from their due dates until the date of effective payment, as follows:

a. Outstanding remuneration in the amount of 332,151 as follows:

- 64,410 corresponding to the remaining part of the salary of January 2018;

- 45,114 corresponding to the remaining part of the salary of February 2018;

- 97,898 corresponding to the remaining part of the salary of March 2018;

- 110,710 corresponding to the remaining part of the salary of April 2018;

- 17,019 corresponding to the salary of the first four days of May 2018.

b. Compensation for breach of contract in the amount of 1,089,222 as follows:

- 114,879 corresponding to the salary of the remaining twenty seven days of May 2018;

- 923,286 corresponding to the salaries as from June until December 2018;

- 51,057 corresponding to the proportional salary of January 2019.

10. More specifically, the Claimant explained that the Respondent terminated the contract due to his alleged poor performance, unilaterally establishing “the expected standard [he] needs to comply with”. In this regard, the Claimant held that “the decision to terminate a player’s contract based on performance is in the sole discretion of the club and is exercised unilaterally by the club”, which “results in any clause regarding performance being void”. In this context, the Claimant maintained that, on 4 May 2018, the Respondent unilaterally terminated the contract without just cause.

11. In its reply, the Respondent held that the Claimant repeatedly violated “bedroom and dining hall disciplines”, not showing up “in the residence” and failing to “report for training”. In this context, the Respondent argued that it warned the Claimant in writing twice, on 3 March and on 3 April 2018, but that, since the Claimant “continued violating the contractual agreement and made no improvement of performance was observed”, it had no alternative but to terminate the contract.

12. In his replica, the Claimant stressed that the Respondent did not contest the arguments he raised, and reiterated his previous argumentation. In addition, the Claimant contested the arguments raised by the Respondent. In particular, the Claimant denied: (i) having missed any training until the date of termination of the contract by the Respondent, (ii) having misbehaved, (iii) having ever received a copy of the Respondent’s disciplinary regulations, whose penalties the Claimant considers “disproportionate” and “unreasonable”. Moreover, the Claimant reiterated that an “alleged poor performance does not justify early termination of a fixed term contract and the player respectfully submit that the club terminated [the contract] without just cause”.

13. Despite having been invited to do so, the Respondent failed to provide its final comments.

14. Lastly, the Claimant informed the FIFA Administration that he had not signed any new employment contract after the termination of the one at stake.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Chamber pointed out that, contrary to the information contained in FIFA’s letter dated 15 May 2019, by means of which the parties were informed of the composition of the Chamber, the member E could not participate in the deliberations in the case at hand, due to unforeseen personal circumstances and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member F refrained from participating and, thus, the Dispute Resolution Chamber adjudicated the case in presence of three members.

2. Its composition having been defined, the Dispute Resolution Chamber (hereinafter also referred to as: Chamber or DRC) analysed whether it was competent to deal with the matter at stake. In this respect, the DRC took note that the present matter was submitted to FIFA on 22 May 2018. Consequently, the DRC concluded that the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

3. 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 June 2019), the DRC is competent to deal with the matter at stake, which concerns an employment–related dispute with an international dimension between an Player of Country B and an Club of Country D.

4. Furthermore, the DRC 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 confirmed that, in accordance with art. 26 par. 1 and par. 2 of the said Regulations (edition June 2019) and considering that the present claim was lodged in front of FIFA on 22 May 2018, the 2018 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.

5. The competence of the DRC and the applicable regulations having been established, the members of 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.

6. In this respect, the DRC acknowledged that, on an unspecified date, the Claimant and the Respondent concluded an employment contract valid as from 13 January 2018 until 12 January 2019, pursuant to which the Claimant was entitled to a monthly salary of USD 4,814, “payable in [] at prevailing official Bank exchange rate”, without further specifications concerning due dates of payment.

7. In continuation, the members of the Chamber observed that, according to the Claimant, the Respondent had unilaterally terminated the employment contract without just cause on 4 May 2018 invoking as a justification his alleged poor performances and, therefore, requested to be compensated accordingly.

8. In continuation, the members of the Chamber noted that the Respondent, for its part, acknowledged having terminated the employment contract and that it did so due to the Claimant’s poor sportsmanship as well as his alleged repeated violations of “bedroom and dining hall disciplines”.

9. On account of the above, the Chamber observed that it remained uncontested that, on 4 May 2018, the Respondent terminated the employment contract and, thus, the underlying issue in the matter at hand is to determine whether it had just cause to do so and, subsequently, to establish the consequences thereof.

10. That said, the members of the DRC pointed out, first of all, that – in accordance with its longstanding jurisprudence – poor sportsmanship does not constitute a valid reason to terminate an employment contract.

11. In this context, the Chamber wished to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract without prior warning. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to assure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can always only be an ultima ratio.

12. With regards to the Respondent’s further argument that the Claimant had repeatedly violated “bedroom and dining hall disciplines”, the members of the Chamber deemed it worth to emphasise that, assuming that the foregoing could anyhow be relevant in order to assess whether the Respondent had lawfully terminated the contract on 4 May 2018 and bearing in mind art. 12 para. 3 of the Procedural Rules pursuant to which any party claiming a right on the basis of an alleged fact shall carry the burden of proof, the Respondent had not provided any proof of its allegations.

13. In light of the foregoing considerations, the DRC determined that the Respondent did not have just cause to terminate the employment contract on 4 May 2018 and, thus, the Claimant is entitled to receive from the Respondent compensation for breach of contract.

14. In continuation, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant, the Chamber decided that the Respondent must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, and bearing in mind that the Respondent did not contest the Claimant’s argument concerning his outstanding dues, the Chamber decided that the Respondent is liable to pay to the Claimant 332,151, pertaining to the unpaid part of the his salaries of January, February, March and April 2018, as well as the four days worked in May 2018.

15. In addition, taking into consideration the claim and considering that the employment contract did not provide due dates for the payment of the salaries, the Chamber decided to award to the Claimant interest at the rate of 5% p.a. on the relevant amounts as from the first day of the month following the one to which they relate.

16. In continuation and having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber decided that, taking into consideration art.17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to the aforementioned outstanding remuneration.

17. In this context, the Chamber outlined that in accordance with said provision the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the Claimant 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.

18. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber observed that the employment contract does not contain any compensation clause.

19. As a consequence, the members of 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. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its termination and concluded that the Claimant would have been entitled to receive 1,089,222 as remuneration had the employment contract been executed until its regular expiry date, i.e. 12 January 2019.

20. In continuation, the Chamber assessed 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(s) 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.

21. In respect of the above, the Chamber recalled that the Claimant had not signed any employment contract following the termination of the one at the basis of the present dispute.

22. Consequently, the Chamber decided that the Respondent must pay the amount of 1,089,222 to the Claimant as compensation for breach of contract.

23. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, 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. 22 May 2018, until the date of effective payment.

III. Decision of the Dispute Resolution Chamber:

1. The claim of the Claimant, Player A, is 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 amount of 332,151, plus interest, calculated as follows:

a. 5% p.a. on the amount of 61,410 as of 1 February 2018 until the date of effective payment;

b. 5% p.a. on the amount of 45,114 as of 1 March 2018 until the date of effective payment;

c. 5% p.a. on the amount of 97,898 as of 1 April 2018 until the date of effective payment;

d. 5% p.a. on the amount of 110,710 as of 1 May 2018 until the date of effective payment;

e. 5% p.a. on the amount of 17,019 as of 4 May 2018 until the date of effective payment.

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 1,089,222, plus 5% interest p.a. as from 22 May 2018 until the date of effective payment.

4. In the event that the aforementioned sums plus interest due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

5. 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. 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 & Compliance Officer