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 4 June 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 4 June 2020,

in the following composition:

Clifford Hendel (USA/France), Deputy Chairman

Elvis Chetty (Seychelles), member

Tomislav Kasalo (Croatia), member

on the claim presented by the player,

Osama Malik, Australia,

represented by Professional Footballers Australia

as Claimant / Counter-Respondent I

against the club,

Al-Batin Sports Club, Saudi Arabia,

represented by Mr Nasr El-din Azzam

as Respondent / Counter-Claimant

with the club,

Perth Glory FC, Australia,

as Counter-Respondent II

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 20 January 2019, the Australian player, Osama Malik (hereinafter: the player), and the Saudi club, Al-Batin Sports Club, entered into an employment contract (hereinafter: the contract), valid as from the date of its signature until 19 July 2020.

2. In accordance with clause 4 of the contract, the player was entitled to receive from the club, inter alia, the amount of USD 600,000, as follows:

“The [club] shall pay to the [player] the amount of (USD 600,000) six hundred thousand dollars net and free of taxes as the total amount of the contract divided as following:

 The [club] shall pay to the [player] the amount of (USD 250,000) two hundred fifty thousand dollars as the player advance.

 The [club] shall pay to the [player] the amount of (USD 350,000) three hundred fifty thousand dollars as the player salary like (19,444 x 18 months) nineteen thousand and for hundred forty four dollars”.

3. Furthermore, the said clause also stipulated that the player would be entitled to the following benefits:

“Other benefits:

1- Housing allowance: secure.

2- Transportation: the [club] shall provide a car for the [player].

3- The [club] shall provide the [player] one economy ticket from Australia to Saudi Arabia and vice versa.

Annual vacation is agreed by the parties.

Insurance covering injury, medical treatment, sickness disability or death during the terms of his contract with the [player], provided that it shall include insurance coverage for the cases whose effects extend after the end of the contract.

To allow the player chosen within the national team to join playing or training immediately when requested by the association concerned in accordance with the regulations”.

4. On 18 October 2019, the player lodged a claim against the club before FIFA, requesting from the latter outstanding remuneration and compensation for breach of contract in the amount of USD 307,428, plus interest on said amount as from 16 June 2019 until the date of effective payment; as well as AED 5,270, calculated by the player as follows:

“Calculation of compensation

Outstanding salary as at the date of termination (3 x months at USD 19,444)

USD 58,332

Mitigated Compensation

(14 x months at USD 19,444, i.e. USD 272,216)

(less mitigation from Perth Contract, i.e. USD 81,452)

USD 190,764

Additional Compensation

(3 x months at USD 19,444)

USD 58,332

Return flight to Australia

AED 5,270

Total Amount of Compensation Due to the Player

USD 307,428 8NET)

AED 5,270

5. In his claim, the player explained that he put the club in default of payment on several occasions, inter alia, on 30 April, 19 May, 21 May and 25 May 2019, by means of which the player informed the club that he had only received the payment of one monthly salary on 5 March 2019. In the said correspondence, the player also asked the club on which dates he could leave on annual vacation.

6. In his claim, the player explained that, thereto, the club firstly replied on 18 May 2019, informing the player about the intention of the club to terminate the contract with the player by signing a mutual termination agreement and the player would receive his outstanding salaries until April 2019 and could leave on vacation. In his claim, the player explained that he refused to sign such an agreement and, as a consequence, the club denied his request to leave on vacation and also convoked the player to train at the club headquarters twice a day, at 13h and 22:30h, every day.

7. Thereafter, on 31 May 2019, the player put the club in default of payment of 3 monthly salaries (corresponding to the monthly salaries due on 19 March, 19 April and 19 May 2019), granting the club a 15 days’ deadline to remedy the default.

8. Later, on 14 June 2019, in reply to a further correspondence from the player dated 7 June 2019, the club maintained that it was going through a difficult financial situation upon its relegation to the second division.

9. In reply thereto, the player sent another correspondence dated 15 June 2019, where the player highlighted the main issues at stake: 1.) the outstanding salaries due; 2.) the abusive conduct of the club, obliging the player to comply with an “abusive training regime”; 3.) the denial of the club to grant the player his annual vacations; 4.) the club’s failure to grant the player his work permit; however, to no avail.

10. In this context, the player explained that despite him complying with his contractual obligations, the club failed to comply with its financial obligations towards him and even adopted an abusive conduct towards the player. Therefore, -explained the player- after all the correspondence exchanged with the club, he had no alternative but to terminate the contract in view of the constant breaches committed by the club. In his claim, the player also deemed that he terminated the contract with just cause, since at the date of termination 3 monthly salaries were outstanding and since the player had previously put the club in default of payment, granting the latter 15 days in order to remedy its default; hence, in compliance with art. 14bis of the Regulations.

11. The Respondent contested the Player’s claim and lodged a counterclaim against the Claimant and his new club.

12. In his counterclaim, the Respondent requests the following:

“1. To fully reject the Player’s claim.

2. To establish that the Club shall not pay any compensation of whatsoever kind related to the Player’s claim.

3. As consequence of the above, to fully accept the present counterclaim and declare that the Player, Osama, has unilaterally terminated the Employment Contract, and as a result has caused considerable damage to the Counter-Claimant, Al Batin Club.

4. As a result of said breach, to order the claimant to pay to the respondent as a refund base on Pro rata basis an amount of (USD 119,556) and;

5. To consider that the Counter-Respondent shall compensate the Counter-Claimant by paying to it at least the following amounts:

 Remuneration pending until the expiration of the Employment Contract: USD 272,216 (Two Hundred Seventy Two Thousand Two Hundred and Sixteen US Dollars);

 Loss of the Player’s services and replacement value: USD 400,000 (Four Hundred Thousand US Dollars);

 Specificity of sport: USD 116,664 (One Hundred Sixteen Thousand Six Hundred Sixty-Four US Dollars).

6. That the Counter-Claimant’s new club, Perth Glory, is found jointly and severally liable for any and all compensation to be awarded in accordance with the FIFA RSTP.

7. Sporting sanctions shall be imposed on the player and his new club.

8. The Player’s new club is given sporting sanctions in accordance with Article 17.4 of the FIFA RSTP.

9. As per all the above, the Claimant/Counter-Respondent shall borne any and all costs of the present proceedings.

10. That the Counter-Respondent pays an additional 5% annual interest on the amount due to the Counter-Claimant from the due date in which the breach occurred in accordance with Swiss law and until the date of effective payment”.

13. The Player and Perth Glory FC executed on 5 August 2019 an employment agreement valid from 1 August 2019 to 31 May 2022 (2019-20, 2020-21, and 2021-22 (as per TMS, the season in Australia runs from October to May), for the following considerations:

a. Season 2019/2020: salaries of AUD 16,000 each (= USD 10,170);

b. Season 2020/2021: salaries of AUD 20,000 each (= USD 12,713);

c. Season 2021/2022: salaries of AUD 21,666.67 each (= USD 13,773).

II. Considerations of the Dispute Resolution Chamber

1. First, the Dispute Resolution Chamber (hereinafter also referred to as the DRC or the Chamber) analysed whether it was competent to deal with the matter at stake. In this respect, it took note that the present matter was submitted to FIFA on 18 October 2019. Consequently, 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).

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 (editions October 2019 and March 2020), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between an Australian player, a Saudi club and an Australian club.

3. In continuation, the Chamber 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 Chamber confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions October 2019 and March 2020), and considering that the Claimant’s claim was lodged on 18 October 2019, the October 2019 edition of the aforementioned regulations (hereinafter: the 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, and entering into the substance of the matter, the Chamber started by acknowledging the above-mentioned facts 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.

5. In so doing, the members of the Chamber first noted that the player and the club concluded an employment contract valid as from 20 January 2019 until 19 July 2020, whereby the player was entitled to a total remuneration of USD 600,000.

6. Subsequently, the Chamber acknowledged that, on several occasions, inter alia, on 30 April, 19 May, 21 May, 25 May 2019 and 31 May 2019, the player put the club in default of payment, granting the club, in the latter of his default notices, a deadline of 15 days to remedy the default, since the player had only received one monthly salary; and that, thereby, the player further requested the club to confirm on which date he could leave on annual holidays.

7. In this context, the DRC further noted the argumentation of the player, who held that, insofar the club failed to comply with its financial obligations towards him, adopted an abusive conduct regarding his training regime, refused to grant the player his annual holidays and failed to provide the player with his work permit, the player unilaterally terminated the contract, in writing, on 16 June 2019.

8. The members of the Chamber took note that, conversely, the club was of the opinion that the player had terminated the contract without just cause, insofar the club offered to pay to the player all his financial entitlements on 13 June 2019 and the player refused to receive his moneys and unilaterally terminated his contract on 16 June 2019. In this context, the Chamber acknowledged the argument brought forward by the club in connection with the lack of payment of the player’s financial entitlements throughout the term of the contract, i.e. the financial difficulties the club was going through upon its relegation to the second division. Based on the foregoing, the club deemed that the intention of the player was to terminate his contract regardless of whether the club was willing to pay all of his outstanding entitlements and, consequently, lodged a counterclaim against him and his new club.

9. On account of all the above, the Chamber highlighted that the underlying dispute in the present matter, considering the conflicting positions of the parties, was to determine whether the employment contract had been prematurely terminated with or without just cause, by which party and on which date. In so doing, 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.

10. The members of the Chamber equally deemed appropriate to remark the general principle that contracts ought to be respected, as otherwise, consequences have to be assumed by the relevant party. Further, the DRC took into consideration the content of para. 1 of art. 14bis of the Regulations, which provides that “In the case of a club unlawfully failing to pay a player at least two monthly salaries on their due dates, the player will be deemed to have a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted a deadline of at least 15 days for the debtor club to fully comply with its financial obligation(s). Alternative provisions in contracts existing at the time of this provision coming into force may be considered”.

11. Bearing in mind the foregoing, the Chamber noted that the Claimant/Counter-Respondent I correctly followed the proceedings established in art. 14bis of the Regulations and therefore, in the absence of any valid justification presented by the club, on 16 June 2019 he terminated the contract with just cause, based on the non-payment of 3 monthly salaries.

12. In this context, the DRC deemed it important to highlight two main aspects: 1.) that the financial difficulties a club is undergoing –albeit inconvenient– is not a valid reason to justify the non-payment of a player’s financial entitlements; 2.) that the employer club has the responsibility to duly proceed with the payment of the player’s entitlements, not being enough to offer to pay the player’s entitlements, since the employer club must assure that the player effectively receives the amounts he is contractually entitled to receive.

13. As a result, the Chamber unanimously concluded that the Respondent/Counter-Claimant is to be held liable for the early termination of the employment contact with just cause by the Claimant/Counter-Respondent I.

14. In continuation, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant/Counter-Respondent I is entitled to receive from the Respondent/Counter-Claimant an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

15. In this regard, the DRC first addressed the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant/Counter-Respondent I and decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent/Counter-Claimant is liable to pay to the Claimant/Counter-Respondent I outstanding remuneration in the total amount of USD 58,332, corresponding to the monthly salaries payable on 19 March, 19 April and 19 May 2019 in the amount of USD 19,444 each.

16. In addition, taking into consideration the Claimant/Counter-Respondent I’s claim, the DRC decided to award him interest at the rate of 5% p.a. on the amount of USD 58,332 as outstanding salaries, as from the date on which the claim was lodged, i.e. 18 October 2019, until the date of effective payment.

17. In continuation, having established that the Respondent/Counter-Claimant is to be held liable for the early termination of the employment contract with just cause by the Claimant/Counter-Respondent I, the DRC focussed its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC decided that the Claimant/Counter-Respondent I is entitled to receive an amount of money from the Respondent/Counter-Claimant as compensation for the termination of the contract with just cause in addition to any outstanding payments on the basis of the relevant employment contract.

18. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant/Counter-Respondent I by the Respondent/Counter-Claimant 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/Counter-Respondent I 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.

19. 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.

20. As a consequence, 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.

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

22. Bearing in mind the foregoing as well as the claim of the Claimant/Counter-Respondent I, the Chamber proceeded with the calculation of the monies payable to the Claimant/Counter-Respondent I under the terms of the employment contract from its date of termination with just cause by the Claimant/Counter-Respondent I, i.e. as of May 2019 until July 2020, and concluded that the Claimant/Counter-Respondent I would have received in total USD 272,216 as remuneration had the contract been executed until its expiry date. Consequently, the Chamber concluded that the amount of USD 272,216 serves as the basis for the determination of the amount of compensation for breach of contract.

23. In continuation, the Chamber verified whether the Claimant/Counter-Respondent I 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. 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.

24. The Chamber noted that on 5 August 2019 the Claimant/Counter-Respondent I signed a new employment contract with the Counter-Respondent II, Perth Glory,

valid as from 1 August 2019 until 31 May 2022, as a consequence of which he was able to mitigate his damages in the amount of USD 142,804. Therefore, the mitigated compensation amounts to USD 129,412.

25. Subsequently, the Chamber referred to art. 17 par. 1 point ii. and established that, since the termination was due to overdue payables, and given that the player was excluded from the team and forced to train alone, events that the Chamber acknowledged as facts, insofar the Respondent/Counter-Claimant failed to provide any evidence to proof otherwise, the Chamber deemed that the player should also be entitled to additional compensation in the amount of 6 monthly salaries, amounting in total to USD 116,664.

26. In addition, taking into account the Claimant/Counter-Respondent I’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC decided that the Respondent/Counter-Claimant must pay to the Claimant/Counter-Respondent I interest of 5% p.a. on the amount of compensation as of the date of the claim, i.e. 18 October 2019, until the date of effective payment.

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

28. In this regard, the DRC 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/Counter-Claimat does not pay the amounts due to the Claimant/Counter-Respondent I within 45 days as from the moment in which the Claimant/Counter-Respondent I, following the notification of the present decision, communicates the relevant bank details to the Respondent/Counter-Claimant, 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/Counter-Claimant in accordance with art. 24bis par. 2 and 4 of the Regulations.

30. Finally, the DRC recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

31. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant/Counter-Respondent I is rejected and by establishing that the claim of the Respondent/Counter-Claimant is rejected.

***

Decision of the Dispute Resolution Chamber

1. The claim of the Claimant/Counter-Respondent I, Osama Malik, is partially accepted.

2. The counterclaim of the Respondent/Counter-Claimant, Al-Batin Sports Club, is rejected.

3. The Respondent/Counter-Claimant has to pay the Claimant/Counter-Respondent I USD 304,408 plus AED 5,270, plus interest at the rate of 5% p.a. as from 18 October 2019 until the date of effective payment.

4. Any other requests for relief from the parties are rejected.

5. The Claimant/Counter-Respondent I is directed to inform the Respondent/Counter-Claimant, 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 3. above.

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

7. In the event that the amounts plus interest due in accordance with point 3. above are not paid by the Respondent/Counter-Claimant within 45 days as from the notification by the Claimant/Counter-Respondent I of the relevant bank details to the Respondent/Counter-Claimant, the Respondent/Counter-Claimant shall be banned from registering any new players, either nationally or internationally, up until the due amount is 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 is 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 findings of the decision (art. 15 and 18 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber):

A request for the grounds of the decision must be received, in writing, within 10 days of receipt of notification of the findings of the decision. Failure to do so within the stated deadline will result in the decision becoming final and binding and the parties being deemed to have waived their rights to file an appeal.

For the Dispute Resolution Chamber:

______________________________________

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives