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

Johan van Gaalen (South Africa), member

Pavel Pivovarov (Russia), member

Daan de Jong (the Netherlands), member

on the claim presented by the player,

Player A, Country B,

as Claimant

against the club,

Club C, Turkey

as Respondent

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 10 August 2016, the Player of Country B, Player A (hereinafter: the Claimant) concluded an employment contract with the club of Country D, Club C (hereinafter: the Respondent), valid as from 12 August 2016 until 31 May 2020.

2. According to art. 4.2 of the employment contract, for each season, the Claimant was entitled to a total remuneration of EUR 200,000, to be paid in 10 monthly instalments of EUR 20,000 each, from August until May of the next year without further specifications concerning the due dates.

3. According to the same provision, “despite above stated contracts payment schedule, the [Respondent] has the option of paying total of monthly salaries as well as total monthly performance […] earning payments in two instalments in January and May every season instead of monthly settlements”.

4. Pursuant to art. 5. lit. m. of the employment contract, the Claimant was entitled – inter alia – to “one medium size sedan car and furnished apartment (max 2500 TL Monthly rent) during the duration of this contract”.

5. By letter dated 21 December 2018, the Claimant put the Respondent in default of the payment of EUR 60,000, consisting of his salaries as from September until November 2018 and 10,000, consisting of his accommodation expenses as from August until November 2018. With the same correspondence, the Claimant asked to be reintegrated “in the training process of the senior team” of the Respondent. The Claimant asked the Respondent to comply with his request within the following 15 days.

6. On 8 January 2019, the Claimant unilaterally terminated the contract in writing, claiming that the Respondent had not complied and that, furthermore, in the meantime also his salaries related to December 2018, as well as his accommodation expenses for that month, had fallen due and not remitted to him.

7. On 1 February 2019, the Claimant signed an employment contract and a “Mutual Agreement” with the club of Country B, club E, valid as from the date of signature until 15 June 2020, according to which he was entitled to a salary of 1,500 per month.

8. On 11 February 2019, the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that he had just cause to terminate the employment relationship and requesting:

a. outstanding remuneration in the amount of EUR 80,000 and 12,500;

b. compensation for breach of contract in the amount of EUR 300,000 and 37,500;

c. 5% interest p.a. on the above-mentioned amounts as from the respective due dates and sanctions to be imposed on the Respondent.

9. More specifically, the Claimant explained that, not only had the Respondent excluded him from the “training process of the senior team”, but it had also failed to remit to him his salaries as from September 2018 and his accommodation expenses as from August 2018 until December 2018.

10. Consequently, the Claimant maintained that he had just cause to terminate the employment contract on 8 January 2019, given that, by then, he had accrued the following outstanding dues:

a. EUR 80,000 as outstanding salaries, i.e. EUR 20,000 per month as from September until December 2018;

b. 12,500 as accommodation expenses, i.e. 2,500 per month as from August until December 2018.

11. In its reply, the Respondent acknowledged having failed to remit to the Claimant his salaries as from September until November 2018 and his accommodation expenses as from August until November 2018. However, according to the Respondent, the said circumstance did not mean that it had “not fulfilled payment obligation”.

12. The Respondent explained that, according to art. 4 of the employment contract, it had the “right to pay whole unpaid salary and expenses in January 2019” and that it would have done so had the Claimant not terminated the employment contract in January 2019.

13. Furthermore, the Respondent admitted having gone through financial difficulties “during the last season”.

14. In any case, in the event that the DRC deemed that the Claimant terminated the employment contract with just cause, the Respondent asked that it be considered in the calculation of compensation that the Claimant has concluded an employment contract with the club of Country B, club E. Additionally, the Respondent maintained that the accommodation expenses should not be counted in the calculation of compensation since, by terminating the employment contract, the Claimant “set aside expenses as such”.

15. In his replica, the Claimant substantially reiterated his position and added that the Respondent had showed “abusive behaviour in the summer 2018” not only by excluding him from the training sessions but also by failing to register him after the end of his loan to the club of Country F, club G, on 31 May 2018. In this respect, the Claimant submitted correspondences from the Respondent dated 17 July, 30 July, 16 August and 31 August 2018, by means of which the latter informed the former that he “doesn’t need to attend training and is released from all obligations to the [Respondent] arising from [the contract] until the end of letter deadline”.

16. Moreover, the Claimant pointed out that the contractual provision recalled by the Respondent is unilateral and unbalanced. As such, according to the Claimant, the said clause is invalid since potestative in nature.

17. In any case, in the event that the DRC deemed the said clause valid, the Claimant explained that he had just cause to terminate the contract anyway, since at the time of termination, i.e. January 2019, the Respondent “was in debt on pro-rata basis of more than two salaries”. Moreover, the Claimant added that the said clause did not concern accommodation expenses and, thus, the Respondent’s failure to remit them to him “for such a long period itself constitutes a just cause”.

18. In its duplica, the Respondent entirely reiterated its position.

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 Claimant submitted his claim to FIFA on 11 February 2019. Consequently, the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition June 2018) the Dispute Resolution Chamber is in principle competent to deal with the matter at stake, which concerns an employment-related dispute between a Player of Country B and a club of Country D.

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 June 2018), and considering that the claim was lodged on 11 February 2019, the June 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 continuation, the DRC noted that, according to the Claimant, during the course of the employment relationship, the Respondent failed to remit to him 4 monthly salaries, i.e. September, October, November and December 2018, as well as the accommodation costs provided in the employment contract for the months as from August until December 2018 and, therefore, after having put it in default on 21 December 2018, he had just cause to terminate the employment contract on 8 January 2019.

6. The members of the Chamber then took note that the Respondent, for its part, did not contest having failed to pay to the Clamant his salaries and his accommodation, however claimed it had the right to do so on the basis of art. 4 of the employment contract, according to which the Respondent could pay the “whole unpaid salary and expenses in January 2019”.

7. In light of the foregoing, the DRC considered that the underlying issue in this dispute, considering the parties’ position, was to determine as to whether the Claimant had just cause to terminate the employment contract in relation to his outstanding dues and to determine the consequences thereof.

8. In this respect, and considering the Respondent’s position, the members of the DRC turned their attention to the content of the clause it had invoked, which provided that “despite above stated contracts payment schedule, the [Respondent] has the option of paying total of monthly salaries as well as total monthly performance […] earning payments in two instalments in January and May every season instead of monthly settlements”.

9. After having duly analysed the said provision, however, the members of the DRC wished to point out that, in accordance with the DRC longstanding jurisprudence, such clauses are deemed null and void in consideration of – amongst others – the financial consequences that their application would entail for the players. In this respect, the members of the Chamber were eager to emphasise that the essence of any labour relationship is to be seen in the contractual obligation that a party undertakes to provide his or her services in turn of a remuneration, the payment of which represents the main obligation of the other party. Shifting the focus to the case at stake, the members of the DRC observed that applying the said clause would have determined for the Claimant the obligation to provide his services towards the Respondent for 6 months, i.e. from August 2018 until January 2019, without having the Respondent any obligation to remunerate him for that period of time. Consequently, as it had done before in similar occasions, the DRC considered the said clause invalid.

10. In light of the foregoing, the members of the Chamber concluded that, at the time the Claimant terminated the employment contract on 8 January 2019, 4 monthly salaries and the accommodation costs related to 5 months remained outstanding.

11. On account of the above, in light of the persistent violations of the Respondent’s contractually agreed financial obligations, the DRC came to the conclusion that on 8 January 2019, the Claimant had just cause to unilaterally terminate the employment contract and that the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

12. Having established that the Respondent is to be held liable for the early termination of the employment contract, the members of the DRC focused their attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC established that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract, in addition to any outstanding payments on the basis of the relevant employment contract.

13. Along those lines, the DRC firstly referred to the Claimant’s request regarding the outstanding remuneration at the time of the unilateral termination of the employment contract. In this respect, the DRC concurred that the Respondent must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”.

14. In this context, the DRC recalled that the Respondent did not contest having failed to remit to the Claimant the claimed amounts. Consequently, and bearing in mind that the Claimant terminated his employment contract on 8 January 2019, the DRC established that a total amount of EUR 80,000 and 12,500, corresponding, respectively, to the Claimant’s salary entitlements connected to the period between September and December 2018 and his accommodation cots between the months of August and December 2018 remained outstanding and decided that the Respondent is liable to pay to the Claimant the said amounts.

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 and accommodation, 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, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract due 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.

17. 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.

18. 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 he would have been entitled to receive EUR 300,000 as remuneration had the employment contract been executed until its regular expiry date, i.e. 31 May 2020.

19. In continuation, the Chamber assessed as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been able to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract(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.

20. In respect of the above, the Chamber recalled that, following the termination of the employment contract at stake, on 1 February 2019, the Claimant signed an employment contract with the club of Country B, club E, valid as from the date of signature until 15 June 2020, according to which he was entitled to a salary of 1,500 per month.

21. Consequently, the Chamber established that the Claimant had been able to mitigate his damages for a total amount of EUR 12,272 during the relevant period of time by means of his new employment relationship.

22. However, in application of the criteria outlined in art. 17 par. 1 point. ii of the Regulations, and considering that the early termination of the contract was due to overdue payables, the Chamber noted that, in addition to the mitigated compensation, the player is entitled to an amount corresponding to three monthly salaries.

23. In this context, the Chamber recalled that, according to the employment contract, the player was entitled to a monthly salary in the amount of EUR 20,000. Therefore, the Chamber calculated that the corresponding amount as established in the previous paragraph is equal to EUR 60,000.

24. Consequently, bearing in mind on the one hand that the Claimant had been able to mitigate his damages for EUR 12,272 only and, on the other, that the overall compensation may never exceed the rest value of the prematurely terminated contract, the Chamber established that the payable compensation corresponds to the total amount of EUR 300,000.

25. On account of all the abovementioned considerations, the specificities of the case at hand as well as the player’s general obligation to mitigate his damage, the Chamber decided that the Respondent must pay the total amount of EUR 300,000 to the Claimant as compensation for breach of contract, plus 5 % interest p.a. as from the date of the claim of the player, i.e. 11 February 2019.

26. The Chamber concluded its deliberations in the present matter by rejecting any further claim of the Claimant.

27. Furthermore, taking into account the consideration under number II./3. above, the Chamber 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 Chamber 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 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 Chamber 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.

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 outstanding remuneration in the amount of EUR 80,000 and 12,500, plus 5% interest p.a. as follows:

a. on the amount of EUR 20,000 as from 1 October 2018 until the date of effective payment;

b. on the amount of EUR 20,000 as from 1 November 2018 until the date of effective payment;

c. on the amount of EUR 20,000 as from 1 December 2018 until the date of effective payment;

d. on the amount of EUR 20,000 as from 1 January 2019 until the date of effective payment;

e. on the amount of 2,500 as from 1 September 2018 until the date of effective payment;

f. on the amount of 2,500 as from 1 October 2018 until the date of effective payment;

g. on the amount of 2,500 as from 1 November 2018 until the date of effective payment;

h. on the amount of 2,500 as from 1 December 2018 until the date of effective payment;

i. on the amount of 2,500 as from 1 January 2019 until the date of effective payment.

3. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of EUR 300,000, plus 5% interest p.a. as from 11 February 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 point 2. and 3. above.

6. The Respondent shall provide evidence of payment of the due amounts in accordance with point 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 point 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 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