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 23 April 2020

Decision of the

Dispute Resolution Chamber

passed on 23 April 2020,

in the following composition:

Geoff Thompson (England), Chairman

José Luis Andrade (Portugal), member

Stijn Boeykens (Belgium), member

on the claim presented by the player,

Stefan Jevtoski, FYR Macedonia

represented by Mr Georgi Gradev

as Claimant

against the club,

FC Arsenal-Kyiv, Ukraine

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 3 July 2018, the North Macedonian player Stefan Jevtoski (hereinafter: the player or the Claimant) concluded an employment contract (hereinafter: the contract) with the Ukrainian club, FC Arsenal-Kyiv (hereinafter: the club or the Respondent), valid as from 11 July 2018 until 30 June 2020.

2. According to the contract, the club undertook to pay the player, inter alia, a basic monthly salary of USD 250 along with an additional monthly salary of either USD 800, if the Claimant played for the youth team, or USD 1,800, if he played for the first team of the Respondent.

3. Furthermore, the contract that the player’s salary will raise to USD 2,800 “in case if the [Claimant] will play in the first team (…) ten matches with time in the field of 45 or more minutes”.

4. Moreover, according to the contract, the Respondent undertook to pay a monthly rental allowance of USD 300 to the Claimant.

5. According to art. 5.6 of the contract, “the Parties should avoid resolving disputes in general courts and apply for this purpose to the relevant Chamber of the Dispute Resolution of the Federation of Football of Ukraine”.

6. Art. 6.8 of the contract reads as follows: “If the club terminates the contract unilaterally and without just cause reasons, the Player shall receive compensation in the amount of wages for the period in three months (in case if the period remaining before the expiry of the Contract exceeds three months) or in the amount of wages for the period remaining before the expiry of the contract, less than three months.”

7. Between April and June 2019, the Claimant put the Respondent in default of USD 15,100 corresponding to unpaid salaries and rental allowances for the period between October 2018 and March 2019, whilst the Respondent indicated in response that the player had breached the terms of the contract by having remained abroad following surgery, even though the club requested him to return.

8. On 5 June 2019, the Claimant unilaterally terminated the contract.

9. On 6 June 2019, the player lodged a claim for breach of contract against the club requesting payment of the following monies:

- USD 21,800 corresponding to outstanding remuneration as well as 5% interest p.a. as from the respective due dates;

- USD 61,850 corresponding to the residual value of the contract as well as 5% interest p.a. as from 5 June 2019.

In addition, the Claimant requested the imposition of sanctions on the Respondent.

10. In his claim, the player maintained that the amount of USD 21,800 remained outstanding:

- USD 350 corresponding to “a balance of the August 2018 salary”;

- USD 250 corresponding to “a balance of the October 2018 salary”;

- USD 900 corresponding to “a balance of the November 2018 salary”;

- USD 2,050 corresponding to “a balance of the December 2018 salary”;

- USD 15,250 corresponding to his salaries between January and May 2019 (5x USD 3,050);

- USD 3,000 corresponding to his accommodation allowance as of August 2018 until May 2019.

11. Furthermore, the player argued that he had just cause to terminate the contract as, inter alia, more than 5 monthly salaries remained outstanding.

12. In addition, the Claimant held having regularly, in more than 10 official matches for more than 45 minutes, played for the Respondent. Therefore, in combination with the contractual clause (cf. point I.III above), his salary increased to USD 2,800 as of January 2019.

13. Moreover, the player sustained that he faced an injury that required surgery in February 2019. The player then returned to Croatia for a post-operational 1 month break, with the Respondent’s alleged approval.

14. In its reply, the club referred to art. 5.6 of the contract and insisted that FIFA is note competent to deal with the matter at hand, as the Ukrainian Football Association (UAF) NDRC was exclusively competent.

15. In addition, the Respondent highlighted that (a) the UAF NDRC guarantees equal representation as it is composed of 12 members, of which the Chairman and his deputy are elected by the UAF, 5 members are elected by the player’s union of Ukraine and 5 members are elected by clubs; and (b) its decisions are appealable at CAS. In this regard, the Respondent quoted the relevant articles of the Regulations without providing a copy of the actual regulations.

16. As to the substance, the Respondent stated that the basic monthly salary was gross, and that the amount “net” to be taken into account should be USD 201.25 and that the player stopped playing in any matches as from January 2019, which would disqualify him from claiming any supplementary salary from then on.

17. In addition, the Respondent also held that in any case, the compensation clause of clause, art. 6.8 of the contract, should be applied.

18. In his replica, the Claimant insisted on FIFA’s competence and held that clause 5 of the contract is not exclusive and, in accordance with art. 3.3 of the UAF NDRC Regulations, said body cannot consider this case if it is already ongoing in front of FIFA.

19. Moreover, the Claimant pointed out that the Respondent’s failed to provide the NDRC Regulations. Furthermore, the player argued that the UAF NDRC chair and deputy chair are elected solely by the UAF Executive Committee and therefore it does not fulfil FIFA’s independence and impartiality requirements.

20. As to the substance, the Claimant explained that the Respondent failed to prove its allegations as to the actual percentage to be deducted from the basic monthly salary and also that it paid any deductions to the relevant local tax authorities.

21. Moreover, the Claimant deemed that his absence in January due to his injury had no influence on the clause triggered in December 2018 as to his raise of salary, no contractual basis having been provided for this eventuality. Furthermore, as to the compensation clause, the Claimant sustained that such scenario did not occur, as it was not the club which terminated the contract. Finally, the Claimant reiterated his position and referred to his initial claim.

22. In its duplica, the Respondent sustained that the contract provided the monthly basic salary “including” taxes and the supplementary agreement “excluding” taxes, consequently it held that the relevant rules of the Ukrainian tax code should be applied to said salary. In addition, the Respondent held that the compensation clause would apply automatically should the Claimant be considered to have terminated the contract with just cause. Finally, the Respondent reiterated the content of its previous submission.

23. On 31 August 2019, the Claimant signed a an employment contract with the North Macedonian club FK Rabotnicki, valid as from the date of signature until 14 June 2020, including a monthly salary of Macedonian Denar (MKD) 12,500 (approx. USD 218).

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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 6 June 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 edition of 2018 of the Procedural Rules is applicable to the matter at hand.

1. Subsequently, the DRC 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 (edition March 2020), the Dispute Resolution Chamber is, in principle, competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a North Macedonian player and a Ukrainian club.

2. However, the Chamber acknowledged that the club contested the competence of FIFA’s deciding bodies on the basis of art. 5.6 of the contract highlighting that the Ukrainian Football Association (UAF) has an independent deciding body to deal with the matter, i.e. the Ukrainian Football Association (UAF) NDRC.

3. Taking into account the above, the members of the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the Association and/or a collective bargaining agreement. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to FIFA Circular no. 1010 dated 20 December 2005. In this regard, the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

4. In continuation, the DRC members pointed out that the Respondent failed to submit the applicable Regulations of the Ukrainian Football Association (UAF) NDRC. In this regard, the Chamber wished to stress that the club was unable to prove that, in fact, the Ukrainian Football Association (UAF) NDRC meets the minimum procedural standards for independent arbitration tribunals as laid down in art. 22 lit. b) of the Regulations on the Status and Transfer of Players, in FIFA Circular no. 1010 as well as in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations.

5. In this respect, the DRC referred to the principle of equal representation of players and clubs and underlined that this principle was one of the very fundamental elements to be fulfilled, in order for a national dispute resolution chamber to be recognised as such. Indeed, this prerequisite is mentioned in the Regulations on the Status and Transfer of Players, in the Circular no. 1010 as well as in art. 3 par. 1 of the NDRC Regulations, which illustrates the aforementioned principle as follows: “The NDRC shall be composed of the following members, who shall serve a four-year renewable mandate: a) a chairman and a deputy chairman chosen by consensus by the player and club representatives (…); b) between three and ten player representatives who are elected or appointed either on proposal of the players’ associations affiliated to FIFPro, or, where no such associations exist, on the basis of a selection process agreed by FIFA and FIFPro; c) between three and ten club representatives (…).” In this respect, the FIFA Circular no. 1010 states the following: “The parties must have equal influence over the appointment of arbitrators. This means for example that every party shall have the right to appoint an arbitrator and the two appointed arbitrators appoint the chairman of the arbitration tribunal (…). Where arbitrators are to be selected from a predetermined list, every interest group that is represented must be able to exercise equal influence over the compilation of the arbitrator list.”

6. What is more, while analysing the limited documentation submitted by the parties in this respect, i.e. only extracts and quotes of the alleged regulations, it appears that the Chairman and the deputy Chairman are appointed by the UAF.

7. Taking into account the foregoing, the members of the Chamber were of the opinion that the Ukrainian Football Association (UAF) NDRC does not fully respect the principle of equal representation, as laid down in FIFA Circular no. 1010.

8. In view of all the above, the DRC established that the club’s objection to the competence of FIFA to deal with the present matter has to be rejected and that the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

9. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the present claim was lodged on 6 June 2019, the June 2019 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

10. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. The members of the Chamber started by acknowledging the facts of the case, as well as the documentation contained in the 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.

11. Having said that, the DRC acknowledged that, on 3 July 2018, the Claimant and the Respondent signed an employment contract pursuant to which the Respondent undertook to pay to the Claimant a basic monthly salary of USD 250, accommodation allowance of USD 300 per month, along with an additional monthly salary of either USD 800 if the Claimant played for the youth team or USD 1,800 if he played for the first team of the Respondent. The members of the Chamber took also note that that the player’s salary would be raised to USD 2,800 after having played 10 matches of at least 45 minutes.

12. The Chamber further acknowledged that, according to the Claimant, the Respondent had failed to remit salaries in the total amount of USD 21,800, corresponding to more than 5 monthly salaries, and that the player had put the Respondent in default before terminating the contract on 5 June 2019.

13. Moreover, the members of the Chamber duly noted that the Respondent rejected the player’s claim and argued that certain deductions as per Ukrainian tax law had to be made to the player’s salary. Further, the DRC noticed that the Respondent deemed that art. 6.8 of the contract would be applicable at hand.

14. On account of the above, the DRC acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated with or without just cause and to decide on the consequences thereof.

15. With the above in mind, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

16. In this regard, the DRC judge examined the Respondent’s position and noted that the club failed to submit corroborating evidence in support of its argument that certain deductions to the player’s salary had to be made due to Ukrainian tax law.

17. What is more, the Chamber noted, that it remained uncontested that the player was entitled to a monthly salary of USD 2,800 as of January 2019, in accordance with the contractual clause agreed upon between the parties. In this regard, the Chamber took note of the Respondent’s argument that the player was not able to play matches for the club as of January 2019, but from the documentation on file, it appears that the relevant contractual clause was triggered before the player got injured.

18. In conclusion, the Chamber observed that the club failed to remit more than five monthly salaries to the Claimant without a valid explanation. Therefore, the members of the Chamber had to reject the Respondent’s arguments.

19. Furthermore, as a consequence of the aforementioned considerations and taking into account the documentation presented by the parties to the dispute, the Chamber established that more than five monthly salaries and accommodation allowances, corresponding the amount of USD 21,800, remained outstanding at the time of the termination of the contract by the Claimant. Consequently, the Chamber concurred that the Respondent had seriously neglected its financial contractual obligations towards the Claimant.

20. On account of the above and taking into consideration the Chamber’s longstanding jurisprudence in this respect, the Chamber decided that the Claimant had just cause to unilaterally terminate the contract on 5 June 2019 and that the Respondent is to be held liable for the early termination of the contract with just cause by the player.

21. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

22. On account of the above considerations and the documentation on file, the DRC decided that, in accordance with the general legal principle of “pacta sunt servanda”, the Respondent is liable to pay the USD 21,800 to the Claimant.

23. In addition, and taking into consideration the player’s claim and the jurisprudence of the Chamber, the DRC decided to award on the aforementioned amounts interest until the date of effective payment as follows:

- 5% p.a. on the amount of USD 650 as from 1 September 2018;

- 5% p.a. on the amount of USD 300 as from 1 October 2018;

- 5% p.a. on the amount of USD 550 as from 1 November 2018;

- 5% p.a. on the amount of USD 1,200 as from 1 December 2018;

- 5% p.a. on the amount of USD 2,350 as from 1 January 2019;

- 5% p.a. on the amount of USD 3,350 as from 1 February 2019;

- 5% p.a. on the amount of USD 3,350 as from 1 March 2019;

- 5% p.a. on the amount of USD 3,350 as from 1 April 2019;

- 5% p.a. on the amount of USD 3,350 as from 1 May 2019;

- 5% p.a. on the amount of USD 3,350 as from 1 June 2019.

24. Moreover, and taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

25. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract 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 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.

26. In application of the relevant provision, the Chamber held that it 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 Chamber established that art. 6.8 of the contract does not apply, as the player terminated the contract and not as covered in the relevant clause, the Respondent. The DRC noted that no compensation clause was included in the employment contract at the basis of the matter at stake which would cover the termination of the player.

27. 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. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

28. The members of the Chamber then turned their 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 the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

29. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Claimant until its natural expiration, bearing in mind that he would have received in total USD 43,550 as remuneration for the period as from 6 June 2019 until 30 June 2020. Consequently, the Chamber concluded that the amount of USD 43,550 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

30. In continuation, the Chamber 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, 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.

31. In this respect, the Chamber recalled that the Claimant had found new employment with the North Macedonian club, FK Rabotnicki, as from 31 August 2019 until 14 June 2020, including a monthly salary of MKD 12,500 (approx. USD 218), which leads to a total of USD 2,180. Said amount shall be deducted, which leads to a mitigated compensation in the amount of USD 41,370.

32. Subsequently, the Chamber turned its attention to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an additional compensation of three monthly salaries, subject to the early termination of the contract being due to overdue payables. In case of egregious circumstances, the additional compensation may be increased up to a maximum of six monthly salaries, whereby the overall compensation may never exceed the rest value of the prematurely terminated contract.

33. With the above in mind, the Chamber decided to award the Claimant additional compensation corresponding to three monthly salaries, but was restricted to not exceed the rest value of the prematurely terminated contract, i.e. USD 43,550.

34. Consequently, on account of the above-mentioned considerations, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of USD 43,550 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

35. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the date of the claim, i.e. 6 June 2019, until the date of effective payment.

36. The DRC concluded its deliberations by rejecting any further claim of the Claimant.

37. Furthermore, taking into account the consideration under number II./9. above, the DRC 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.

38. 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.

39. 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.

40. Finally, the members of 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, Stefan Jevtoski, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, FC Arsenal-Kyiv, has to pay to the Claimant outstanding remuneration in the amount of USD 21,800, plus interest at the rate of 5% p.a. until the date of effective payment, as follows :

i. 5% interest p.a. on the amount of USD 650 as from 1 September 2018;

ii. 5% interest p.a. on the amount of USD 300 as from 1 October 2018;

iii. 5% interest p.a. on the amount of USD 550 as from 1 November 2018;

iv. 5% interest p.a. on the amount of USD 1,200 as from 1 December 2018;

v. 5% interest p.a. on the amount of USD 2,350 as from 1 January 2019;

vi. 5% interest p.a. on the amount of USD 3,350 as from 1 February 2019;

vii. 5% interest p.a. on the amount of USD 3,350 as from 1 March 2019;

viii. 5% interest p.a. on the amount of USD 3,350 as from 1 April 2019;

ix. 5% interest p.a. on the amount of USD 3,350 as from 1 May 2019;

x. 5% interest p.a. on the amount of USD 3,350 as from 1 June 2019.

4. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of USD 43,550, plus interest at the rate of 5% p.a. as from 6 June 2019 until the date of effective payment.

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

6. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail addresses as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts plus interest mentioned under point 3 and 4 above.

7. The Respondent shall provide evidence of payment of the due amounts plus interest in accordance with point 3 and 4 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).

8. In the event that the amounts due plus interest in accordance with point 3 and 4 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 plus interest 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).

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

10. 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 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