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 27 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 27 February 2020,

in the following composition:

Roy Vermeer (The Netherlands), member

Stefano La Porta (Italy), member

on the claim presented by the player,

Gilberto Valdenesio Fortunato, Brazil,

represented by Mr Nilo Effori and Ms Cintia R Nicolau

as Claimant

against the club,

Sport Boys Warnes, Bolivia,

represented by Mr Walter M. Rivero Romero

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 2 January 2019, the Brazilian player, Gilberto Valdenesio Fortunato (hereinafter: Claimant) and the Bolivian club, Sport Boys Warnes (hereinafter: Respondent) signed an employment contract (hereinafter: the 1st contract) valid as from 14 January 2019 until 31 December 2019.

2. According to clause 4 of the 1st contract, the Claimant was entitled, inter alia, to a total remuneration of USD 132,000 for the 2019 season, payable in 11 equal instalments of USD 12,000.

3. Clause 6 of the 1st contract provide for the Claimant’s contractual obligations, which include, inter alia, attending all the official matches, training sessions, concentrations and classes.

4. In addition, on 14 January 2019, the parties concluded a complementary agreement (hereinafter: the 2nd contract), valid as from the date of signature until 31 December 2019.

5. As per clause 5 of the 2nd contract, the Claimant was entitled to a total remuneration of USD 132,000 for the 2019 season, payable in 11 equal instalments of USD 12,000.

6. According to clause 11 of the 2nd contract, the Respondent is entitled to terminate the employment contract “for causes attributable to” the Claimant, including the absence of the Claimant “for more than three days without authorization from the [Respondent] or without just cause” (clause 11 f) of the 2nd contract).

7. By means of Clause 15 of the 2nd contract, “for the legal effects deriving from this contract, the legal domicile of [the Claimant] will be indicated as the city of Santa Cruz”.

8. On 12 April 2019, the Claimant sent a default letter to the Respondent, requesting outstanding remuneration in the total amount of USD 21,000, corresponding to the salaries of February and March, granting a deadline until 29 April 2019. In said letter, the Claimant further held that he had only received the amount of USD 3,000.

9. On 18 April 2019, and in reply to the Claimant’s default letter, the Respondent acknowledged the debt but pointed out that “05.4.2019 was the day that all team go to take their money to office of the club and [the Claimant] not was there for take his money”.

10. Furthermore, by means of said letter, the Respondent sustained that the Claimant allegedly left Bolivia to “solve [a] family issue” without the Respondent’s authorization. In this respect, the Respondent held that the Claimant “left Bolivia without any authorization […] and was absent from training days 06 and 07 April 2019”. Having said this, the Respondent underlined that the “coach isn’t authorized to give permission [to leave] the club”.

11. Moreover, the Respondent underlined in said letter that a payment of USD 20,000 was made to the player’s agent. In this context, the Respondent pointed out that it was “open to break this contract in good conditions for both parts”.

12. On 22 April 2019, the Claimant sent a new letter informing the Respondent that he was willing to terminate the contract in an amicable way, requesting an amount of USD 120,000 and granting a deadline until 29 April 2019 to remedy the default.

13. On 1 May 2019, with reference to his previous default notices, the Claimant terminated the employment contract in writing. In his termination letter, the Claimant inter alia maintained that the Respondent had not paid him the amount of USD 33,000, corresponding to the salaries of January, February and March 2019.

14. On 21 June 2019, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract requesting the total amount of USD 165,000, plus 5% interest p.a. as from the respective due dates until the date of effective payment, corresponding to the following:

a) USD 33,000, as outstanding remuneration, corresponding to the monthly salaries of January, February and March 2019;

b) USD 96,000, as compensation for breach of contract, corresponding to the residual value of the contract;

c) USD 36,000, as “additional compensation for breach of the contract without just cause by the Club”.

15. In his claim, the Claimant stated that the Respondent never replied to his correspondence dated 22 April 2019. Therefore, as per the Claimant, “following the [Respondent’s] continued, persistent and material breach of the Contract for not paying the [Claimant] the Outstanding Amounts, the [Claimant] was left with no option but to terminate the Contract for just cause on the Termination Date”.

16. In reply to the Claimant’s claim, the Respondent indicated that the Claimant did not participate in the training sessions of 5, 6, 7 and 8 April 2019. The Respondent further argued that the player showed up directly at the match’s venue (i.e. Estadio Ramón Tahuchi Aguilera), one hour before the match between Royal Pari and the Respondent.

17. In this context, the Respondent referred to a document, dated 9 April 2019 and signed by the Respondent, by means of which the Claimant was informed of a sanction imposed on him for being absent during the training sessions of 5, 6, 7 and 8 April 2019.

18. In addition, the Respondent referred to clause 6 of the 1st contract (cf. I.4), which holds that the Claimant, inter alia, has the obligation to attend all the official matches, training sessions, concentrations and classes.

19. Given the above, given that the Claimant was allegedly absent from training, the Respondent further held that clause 11 f) of the 2nd contract was applicable. In this regard, as the Claimant had allegedly missed its trainings more than three days without just cause, the Respondent underlined its right to terminate the contract with just cause.

20. Furthermore, the Respondent pointed out that it had already paid a bonus to the Claimant for the total amount of USD 20,000, corresponding to his participation in the 2019 Bolivian Football League.

21. The Respondent then referred to clause 15 of the 2nd contract and held that the Claimant’s “address was Santa Cruz de la Sierra del Estado Plurinacional de Bolivia”. As per the Respondent, since the Claimant was “out of country”, it could not notify him as regards the termination of the contract.

22. In his replica, with regard to his absence, the Claimant firstly held that he “was authorized to leave the country between 5 and 8 April 2019”. In support of his statements, the Claimant provided a copy of the messages exchanged via WhatsApp with the Head Coach.

23. As per the Claimant, regardless of whether the Head Coach was authorized to release the Claimant for travelling or not, he pointed out that “at the time of the Claimant’s travel to Brazil, the Respondent already had outstanding debts towards him of at least USD 33,000 and therefore was already in breach of the Contract, a breach that was never cured after all”.

24. In this context, the Claimant argued that “the Respondent was already in breach of the Contract and had been put in default more than once to cure its defaults”.

25. In reference to the payment allegedly performed by the Respondent (cf. I.20), the Claimant held that the Respondent made “the payment of USD 20,000 directly to [his agent] as commission fees for the first year of the Claimant’s signing the Contract, that is, it does not correspond to any of the [Claimant’s] payments to be received and requested in the Claim”.

26. In addition, with regard to the alleged attempts to deliver the termination of the contract letter, the Claimant explained that he “was training with the Respondent except for those couple of days in April where he had permission to travel to Brazil. Hence, the Respondent has personal access to the Claimant to delivery whatever document it deemed applicable”. Furthermore, the Claimant held that the Respondent “was informed of [the Claimant’s] email address […]; notwithstanding the above, no other document was ever sent”.

27. In its duplica, the Respondent confirmed its previous arguments and requested the rejection of the claim.

28. On 14 February 2020, the Claimant informed FIFA that on 23 July 2019, he signed an employment contract with FC Drita (Kosovo), valid as from 1 August 2019 until 30 June 2020. According to said employment contract, the Claimant was entitled, inter alia, to a monthly salary of EUR 1,500 “for each month [until] the end of the contract”.

29. Moreover, according to article 5 of the abovementioned contract, “in case FC Drita will win Champion of Kosovo and the [Claimant] is active in more than 51% of matches, bonus will be EUR 7000”.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Chamber pointed out that the Deputy Chairman Clifford Hendel could not participate in the deliberations in the case at hand, due to unforeseen personal circumstances and that thus, the Dispute Resolution Chamber adjudicated the case in presence of two 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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 21 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 aforementioned edition of the Procedural Rules is applicable to the matter at hand.

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 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Brazilian player and a Bolivian club.

4. 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 and considering that the present claim was lodged on 21 June 2019, the 2019 edition of the said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

5. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts and arguments as well as the documentation on file. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand. In this respect, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.

6. In this respect, the Chamber recalled that the Claimant and the Respondent agreed on an employment relationship which was valid as from as from 14 January 2019 until 31 December 2019. The Chamber acknowledged that, in accordance with both the 1st contract and the 2nd contract, the Respondent was obliged to pay to the Claimant a total remuneration of USD 132,000 for the 2019 season, payable in 11 equal instalments of USD 12,000. The DRC further took into consideration that, according to the Claimant, he unilaterally terminated the employment relationship on 1 May 2019, maintaining that he had just cause to do so.

7. In continuation, the DRC recalled that the Claimant lodged a claim before FIFA for breach of contract, requesting to be awarded total amount of USD 165,000, corresponding to both outstanding remuneration corresponding to the monthly salaries of “January, February and March 2019”, as well as compensation for breach of contract.

8. In light of the above, the Chamber established that the primary issue at stake is determining as to whether the Claimant had a just cause to terminate the employment relationship with the Respondent on 1 May 2019 and to determine the consequences thereof. In this respect, the Chamber deemed it essential to make a brief recollection of the facts as well as the parties’ main arguments and the documentation on file.

9. Having said, the DRC firstly deemed it essential to determine the relationship between the 1st and the 2nd employment contract signed between the parties. In this context, the Chamber particularly emphasized the fact the Claimant only provided the 1st contract. Moreover, the DRC noted that, the Respondent uploaded the 1st contract into the TMS vis-à-vis the registration of the Claimant. Furthermore, the DRC took into account that the remuneration to the Claimant was the same in both contracts, i.e. the total amount USD 132,000 for the 2019 season, payable in 11 equal instalments of USD 12,000. In this light, the Chamber determined that it remained undisputed that the Claimant was entitled to receive this amount only once. Finally, the DRC recalled that in its submissions, the Respondent never argued that the 2nd contract superseded the 1st contract. Given all of the above, the Chamber concluded that the 2nd contract merely complemented the 1st contract.

10. In continuation, the DRC recalled that, according to the Claimant, on the date of contract termination (i.e. 1 May 2019) Respondent had not paid him the amount of USD 33,000 which, as per the Claimant, corresponded to part of the January 2019 salary, as well as the full salaries corresponding to the months of February and March 2019. In this context, the Chamber took particular note of the fact that 12 April 2019 and 22 April 2019, the Claimant had put the Respondent in default, requesting the payment of outstanding remuneration.

11. Moreover, the DRC deduced that the Respondent, for its part, primarily argued that it had paid the Claimant the amount of USD 20,000 corresponding to his participation in the 2019 Bolivian Football League. In addition, the Chamber noted that the Respondent argued that the Claimant had been absent from training for four days in April 2019, and that on 9 April 2019 it attempted to sanction the Claimant for his alleged absence. In this regard, the Chamber further took into account that according to the Respondent, it could not notify him as regards his sanction, because he was “out of the country”.

12. First of all, as regards the Respondent’s allegation that the Claimant had been absent from training on 5, 6, 7 and 8 April 2019, the DRC turned to the Claimant’s position, who had argued that the coach had authorized his absence, while providing evidence in this regard. In continuation, the Chamber recalled that, in its final comments, the Respondent did not put into dispute that the Claimant was absent following the coach’s authorization.

13. Secondly, with regard to the Claimant’s allegation that almost three monthly salaries were outstanding on the date of termination, the Chamber analysed the documentation on file, including the two default letters sent by the Claimant, and understood that on the date of contract termination, the Claimant had only received the amount of USD 3,000 (cf. I.8), when he should have received USD 36,000.

14. In this light, and with regard to the alleged payment in the amount of USD 20,000 allegedly corresponding to his participation in the 2019 Bolivian Football League, the DRC recalled that, as per the Claimant, said payment was made directly to his agent “as commission fees for the first year of the Claimant’s signing the Contract”. Having said this, the Chamber further noted that in its final comments, the Respondent did not deny that the payment was made to the Claimant’s agent, as the Claimant had argued.

15. Thus, the DRC unanimously agreed that the amount of USD 20,000 was paid to the Claimant’s agent and not to the Claimant himself. Therefore, the Chamber decided not to take into account the amount of USD 20,000 when determining whether there were outstanding salaries to the Claimant. Consequently, and given the above, the DRC concluded that on the date of contract termination, the Claimant had only obtained a total amount of USD 3,000, when he should have obtained USD 36,000.

16. On account of the aforementioned, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant, until 1 May 2019, the date on which the Claimant terminated the contract, the total amount of USD 33,000. Consequently, and considering that the Respondent had repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 1 May 2019 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

17. In continuation, 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 Chamber focused its attention on the consequences of such termination.

18. First of all, the members of the Chamber concurred that the Respondent must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant the remuneration that was outstanding at the time of the termination, i.e. the amount of USD 33,000.

19. Furthermore, considering the Claimant’s claim for interest and also taking into account the Chamber’s longstanding jurisprudence, the Chamber ruled that the Respondent must pay 5% interest p.a. on the amount of USD 33,000 as from the respective due dates.

20. Subsequently, 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 any outstanding salaries on the basis of the relevant employment contract.

21. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the respondent 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.

22. 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.

23. 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.

24. Bearing in mind the foregoing as well as the claim of the Claimant, the Chamber proceeded with the calculation of the compensation and in this regard, it pointed out that the Claimant determined the residual value of the contract in the amount of USD USD 96,000. In line with the above request, the Chamber decided to take into account said amount, when calculating the amount of compensation.

25. Consequently, the Chamber concluded that the amount of USD 96,000, as per the Claimant’s claim, serves as the basis for the determination of the amount of compensation for breach of contract.

26. Hence, 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 Claimant’s general obligation to mitigate his damages.

27. The Chamber recalled that, on 23 July 2019, the Claimant concluded an employment contract with FC Drita, for the period from 1 August 2019 to 30 June 2019. The Chamber then established that between 1 August 2019 and 31 December 2019 (i.e. the expiry date of the employment contract with the Respondent), the Claimant would have received a total amount of approx. USD 9,339. Consequently, the Chamber determined that the amount of compensation due to the Claimant after mitigation is USD 86,661.

28. Moreover, 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 Claimant is entitled to an amount corresponding to three monthly salaries.

29. In this context, the Chamber recalled that, according to the employment contract, the Claimant was entitled to a monthly salary in the amount of USD 12,000. Therefore, the Chamber calculated that the corresponding amount as established in the previous paragraph is equal to USD 36,000.

30. Consequently, bearing in mind on the one hand that the Claimant had been able to mitigate his damages for USD 9,339 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 USD 96,000.

31. On account of all the above mentioned 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 USD 96,000 to the Claimant as compensation for breach of contract.

32. In addition, taking into account the Claimant’s request as well as its longstanding jurisprudence, 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. 21 June 2019, until the date of effective payment.

33. In continuation, the Chamber focused its attention on the further consequences of the breach of contract in question and, in this respect, addressed the question of sporting sanctions in accordance with art. 17 par. 4 of the Regulations. The cited provision stipulates inter alia that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on a club found to be in breach of contract during the protected period.

34. Subsequently, the members of the Chamber referred to item 7 of the “Definitions” section of the Regulations, which stipulates, inter alia, that the protected period shall last “for three entire seasons or three years, whichever comes first, following the entry into force of a contract, where such contract is concluded prior to the 28th birthday of the professional, or two entire seasons or two years, whichever comes first, following the entry into force of a contract, where such contract is concluded after the 28th birthday of the professional”. In this respect, the Chamber took note that the breach of the employment contract by the Respondent, and the termination of the contract by the Claimant, had occurred on 1 May 2019. Therefore, the Chamber concluded that, irrespective of the Claimant’s age, such breach of contract by the Respondent had occurred within the protected period.

35. As a result, by virtue of art. 17 par. 4 of the Regulations and considering that the Claimant terminated the contract with the Respondent with just cause and, consequently, the Respondent was to be held liable for the early termination of the employment contract, the Chamber decided that the Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision. In this regard, the Chamber emphasised that apart from the Respondent having clearly acted in breach of the contract within the protected period in the present matter, the Respondent had also on several occasions in the recent past been held liable by the Chamber for the early termination of the employment contracts with the players Ortega Medina (case. ref. nr. 18-01173; decided on 7 March 2019), Sanchez Capdevila (case ref. nr. 18-01355; decided on 14 September 2018) and Iriberri (case ref. nr. 18-02011; decided on 12 December 2018).

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

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Mr Gilberto Valdenesio Fortunato, is partially accepted.

2. The Respondent, Sport Boys Warnes, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 33,000, plus interest calculated as follows:

a) 5% interest p.a. on the amount of USD 9,000 as from 1 March 2019 until the date of effective payment;

b) 5% interest p.a. on the amount of USD 12,000 as from 1 April 2019 until the date of effective payment;

c) 5% interest p.a. on the amount of USD 12,000 as from 1 May 2019 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 USD 96,000, plus 5% interest p.a. on said amount as of 21 June 2019 until the date of effective payment.

4. In the event that the amounts plus interest due to the Claimant in accordance with the above-mentioned points III.2 and III.3 are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

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

6. 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.

7. The Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present 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