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 28 February 2020

Decision of the

Dispute Resolution Chamber (DRC) judge

passed on 28 February 2020,

by

John Newman (USA)

on the claim presented by the player,

Radovic Balsa, Montenegro,

represented by Mr Mr Hrvoje Raic

as Claimant

against the club,

KS Luftetari, Albania,

represented by Mr Konstantinos Zemberis

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 15 August 2018, the Montenegrin player Radovic Balsa (hereinafter: the Claimant or the player) and the Albanian club KS Luftetari (hereinafter: the Respondent or the club) concluded an employment contract (hereinafter: the contract), valid as from 15 August 2018 until 30 June 2019.

2. According to clauses 3 and 4 of the contract, the player, inter alia, was entitled to receive a remuneration scheduled as follows:

- EUR 1,000 “at the moment of signing”;

- EUR 1,000 as monthly salary payable “for the first six months of the (…) contract” at the 10th day of the month at the latest;

- EUR 3,000 monthly salary payable “for the remaining time” of the contract.

3. According to clause 17 of the contract, “the player and the club agree to respect the rules, regulations and by-laws of Albanian Football Association and FIFA. In the event of a dispute regarding the execution of the terms of the present contract, the applicable law will be the FSHF regulation and the applicable court will be the court of Albanian Football Association exclusively”.

4. On 7 January 2019, the player put the club in default in the amount of EUR 4,000 corresponding to the overdue signing-on fee as well as the salaries of October, November and December 2018. The player gave a deadline of 15 days for the club to comply.

5. On 23 January 2019, the player unilaterally terminated his contract on the basis that the club failed to pay him the signing-on fee along with the salaries of October 2018, November 2018, December 2018 and January 2019.

6. On 18 April 2019, the player lodged a claim for breach of contract without just cause and requested the payment of the following amounts, plus 5% interest p.a. as from the due dates:

- EUR 1,000 as the signing-on fee that fell due on 15 August 2018;

- EUR 4,000 corresponding to the monthly salaries of October 2018, October 2018, November 2018, December 2018 and January 2019 that fell due on the 10th of each month;

- EUR 14,000 corresponding to the residual value of the contract at the date of termination plus interests as from 24 January 2019.

7. The player further requested the imposition of sporting sanctions against the club.

8. In his claim, the player explained that the club failed to respect the terms of the contract by not paying the signing-on fee along with 4 monthly salaries at the date of termination.

9. As such, the player argued that he had just cause to terminate the contract.

10. In its reply, the club contested FIFA’s competence in favour of that of the Albanian NDRC.

11. In particular, the club argued that in line with clause 17 of the contract, FIFA has no jurisdiction over the matter, as the parties agreed that the only competent court to hear any contractual dispute between them is the FSHF court (hereinafter: the Albanian NDRC). In support of its argument, the club provided a translated copy of the statues of the Albanian NDRC, according to which said court comply with the requirements of art. 22b of the FIFA RSTP. Thus, the club claims that the player’s claim should be considered inadmissible.

12. In his replica, the player stated that although the Albanian NDRC rules foresee that an equal number of players’ and clubs’ representatives shall be elected, these member are “elected from a voting session organised by the Albanian Football Association, which means that the football association is actually influencing on voting the players’ representative”. As per the player, these proceedings are against the FIFA NDRC standards set out in FIFA circular 1010 according to which players’ representatives must be chosen upon proposal of the players’ union affiliated to FIFPro or upon a pool selected by FIFA and FIFPro when no such organisation exists.

13. In it duplica, the club rejected the player’s allegation regarding the rejection of the competence of the Albanian NDRC, stating that its representatives “are elected from a group of players constituted by the captain and the oldest player of all professional clubs, following a voting organized by the Albanian Football Association.”

14. Finally, the club pointed out that the FIFA NDRC requirements were “at the end of the day, recommendations and it is possible for an association to deviate from such regulations provided that the main principles of independence and fair proceedings are respected and protected.”

15. Upon FIFA’s request, the player indicated that he is currently unemployed and plays as an amateur in Albania.

II. Considerations of the Dispute Resolution Chamber (DRC) judge

1. First of all, the Dispute Resolution Chamber judge (hereinafter: the DRC Judge) analyzed whether he was competent to deal with the case at hand. In this respect, he referred to 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) as well as to the fact that the present matter was submitted to FIFA on 23 January 2019 and decided on 28 February 2020. Therefore, the DRC Judge concluded that the 2019 edition of the Procedural Rules is applicable to the matter at hand.

2. Furthermore, the DRC Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he 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 23 January 2019, the June 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

3. Subsequently, the DRC Judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 and 2 in combination with art. 22 lit. b of the Regulations, he is principle competent to adjudicate on the present employment-related dispute between a Montenegrin player and an Albanian club.

4. However, the DRC Judge acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of art. 17 of the contract, which stipulated the following: “the player and the club agree to respect the rules, regulations and by-laws of Albanian Football Association and FIFA. In the event of a dispute regarding the execution of the terms of the present contract, the applicable law will be the FSHF regulation and the applicable court will be the court of Albanian Football Association exclusively”.

5. On the other hand, the DRC Judge noted that the Claimant insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the Respondent.

6. Taking into account all the above, the DRC Judge emphasized that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players he 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 DRC Judge referred to the FIFA Circular no. 1010 dated 20 December 2005. Equally, the DRC Judge referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

7. Considering the aforementioned criteria, the DRC Judge observed the documentation provided by the Respondent in relation to the Albanian NDRC, and noted that it provided a copy of the “Regulations of AFA’s National Dispute Resolution Chamber”.

8. In relation to said document, the DRC Judge noted that its art. 4 established that the aforementioned Chamber is composed as follows:

2. The Chamber shall be composed of:

a) The Chairman and two deputy Chairman unilaterally elected by the members of the dispute resolution chamber, based on the proposals of the Clubs and player’s assembly for the Chairman and the Deputy Chairman;

b) Five members, player representatives elected from a voting session organized by AFA, with the participation of two players for each professional team, one of which should be the captain of the team and the other one should be the oldest player. Player representatives also review coaches' disputes.

c) Five members, club representatives which are elected or appointed on the proposal of the clubs of the Albanian Superliga, First Division and Second Division.

5. The Chamber shall meet with a minimum number of 3 members, including the Chairman or the deputy Chairmen. In all cases, the number of the club representative members shall be equal to the number of player representative members. The members of the trial shall be elected by Iottery.”

9. Concerning the above, and more specifically in relation to the “voting session” mentioned in art. 4 par 2 b) of the “Regulations of AFA’s National Dispute Resolution Chamber”, the DRC Judge further noted that the club explained that the representatives of the Albanian NDRC “are elected from a group of players constituted by the captain and the oldest player of all professional clubs, following a voting organized by the Albanian Football Association” and that “at the end of the day, recommendations and it is possible for an association to deviate from such regulations provided that the main principles of independence and fair proceedings are respected and protected.”

16. In addition, the DRC Judge also took note of the player’s allegations, who stated that it cannot be established that the Albanian NDRC guarantees for equal representation of players and clubs. In particular, the Claimant stated that the players’ representatives must be chosen upon proposal of the players’ union affiliated to FIFPro or upon a pool selected by FIFA and FIFPro when no such organisation exists, which is not the case in the Albanian NDRC.

10. Given the aforementioned arguments and evidence provided by the parties, the DRC Judge referred to art. 12 par. 3 of the Procedural Rules, which establish that “any party claiming a right on the basis of an alleged fact shall carry the burden of proof”.

11. In application of the aforementioned provision, the DRC Judge understood that, in the matter at stake, it is up to the Respondent to prove that the Albanian NDRC effectively guarantees fair proceedings and respects the principle of equal representation of players and clubs.

12. In this respect, and after observing the evidence provided by the parties, the DRC Judge noted that the Respondent did not provide any evidence on the effective and actual composition of the Albanian NDRC, or that said body is operative.

13. In addition, the DRC Judge further noted that the player argued that no player’s union was involved in the election of the NDRC members.

14. In this respect, the DRC Judge recalled the contents of art. 3 b) of the NDRC Standard Regulations, according to which the NDRC shall be composed, from the side of the player’s representative side, by a number of representatives who are elected or appointed either on the 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.

15. As a result, the DRC Judge considered in this respect that the existence of an organized labor association of professional football players is a fundamental pillar for the effective functioning of the principle of equal representation of players and clubs.

16. However, the DRC Judge observed in this respect that no evidence was provided as to the existence of an organized association of professional football players operating within the scope of the Albanian NDRC and/or The Football Association of Albania. Moreover, the DRC Judge further noted that the Respondent did not allege nor prove (in the sense of art. 3 b) of the NDRC Standard Regulations that, in the absence of said association, the player’s representatives are appointed on the basis of a selection process agreed by FIFA and FIFPro.

17. In view of the above, the DRC Judge arrived to the conclusion that it cannot be established that the player’s representation rights could be effectively safeguarded within the scope of the Albanian NDRC. In particular, the DRC Judge understood that, from the evidence on file that was gathered within the course of the present investigation, it cannot be established that the Albanian NDRC respects the principle of equal representation of players and clubs in the sense of art. 22 lit. b) of the Regulations and other supplementary rules, such as the NDRC Standard Regulations. Thus, the Respondent’s objection to FIFA’s competence cannot be upheld and the claim of the player is admissible.

18. His competence and the applicable regulations having been established, the DRC Judge entered into the substance of the matter, by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. However, the DRC Judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence which he considered pertinent for the assessment of the matter at hand.

19. In this respect, the DRC Judge recalled that the player and the club concluded an employment contract valid as from 15 August 2018 until 30 June 2019, according to which the player was entitled to a sign on fee of EUR 1,000, a monthly salary in the amount of EUR 1,000 for the first 6 months of contract and of EUR 3,000 for the remaining duration of the contract.

20. Subsequently, the DRC Judge noted that the player, after having put the club in default of payment of the sign on fee and 3 monthly salaries on 7 January 2019, unilaterally terminated the contract on 23 January 2019 and lodged a claim against the club for breach of contract, claiming outstanding monies and compensation.

21. On the other hand, the DRC Judge noted that the club only contests FIFA’s competence of deal with the present dispute, but does not dispute the substance of the case.

22. At this point, the DRC Judge deemed it appropriate to refer to the principle of burden of proof, as reflected in art. 12 par. 3 of the Procedural Rules, according to which “any party claiming a right on the basis of an alleged fact shall carry the burden of proof”.

23. Furthermore, the DRC Judge referred to the wording of art. 14bis par. 1 of the Regulations in accordance with which “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)”.

24. Bearing in mind the foregoing, the DRC Judge noted that it remained undisputed by the Respondent that the Claimant had put it in default of payment of the sign on fee and 3 monthly salaries on 7 January 2019, granting it 15 days to remedy the default, and that in view of the lack of payment of the claimed amounts, the player unilaterally terminated the contract on 23 January 2019. The DRC Judge observed that the present situation meets all the formal requirements of art. 14bis and therefore concluded that the player terminated the contact with just cause on 23 January 2019, on the basis of the aforementioned article, and that the club is to be held liable for the early termination of the contract with just cause by the player.

25. In continuation, having established that the Respondent is to be held liable for the termination of the contract with just cause by the Claimant, the DRC Judge decided that, in accordance with art. 17 par. 1 of the Regulations, the club is liable to pay compensation to the player.

26. However, before entering into the calculation of the payable compensation, the DRC Judge underlined that the player is also entitled to his outstanding remuneration.

27. In particular, and as established above, the DRC Judge observed that, on the date of termination of the contract, the club had an outstanding debt towards the player in the amount of EUR 5,000, corresponding to the sign on fee of EUR 1,000 and 4 outstanding salaries for October 2018 to January 2019 in the amount of EUR 1,000 each, payable on the 10th day of each month.

28. In view of the above, and in accordance with the principle of pacta sunt servanda, the DRC Judge unanimously established that the club has to pay to the player the total amount of EUR 5,000 as outstanding remuneration.

29. In addition, taking into account the Claimant’s request as well as the constant practice of the DRC Judge in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount as of the date on which each relevant amount became outstanding.

30. In continuation, the DRC Judge focused his attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the DRC Judge 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.

31. In application of the relevant provision, the DRC Judge held that he 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 DRC Judge established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

32. As a consequence, the DRC Judge determined that the amount of compensation payable by the club to the player had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The DRC Judge 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.

33. The DRC Judge then turned his attention to the remuneration and other benefits due to the player under the existing contract and/or the new contract, which criterion was considered by the DRC Judge to be essential. The DRC Judge deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the DRC Judge to take into account both the existing contract and the new contract in the calculation of the amount of compensation.

34. Bearing in mind the foregoing, the DRC Judge proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from its date of termination with just cause, i.e. 23 January 2019 until 30 June 2019, and concluded that the Claimant would have received in total EUR 15,000 considering the monthly salary of EUR 3,000 for the second half of the contract, but limited his request to EUR 14,000. Consequently, the DRC Judge concluded that the amount of EUR 14,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

35. In continuation, the DRC Judge 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 Judge, 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.

36. In this respect, the Chamber observed that the player informed FIFA that after the termination of the contract he only played as an amateur and is currently unemployed.

37. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC Judge decided to partially accept the player’s claim and that the club must pay the amount of EUR 14,000 as compensation for breach of contract in the case at hand.

38. In addition, taking into account the Claimant’s request as well as his constant practice in this regard, the DRC Judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount as of the date of the claim.

39. Furthermore, taking into account the consideration under number II./2. above, the DRC Judge 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.

40. In this regard, the DRC Judge 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.

41. Therefore, bearing in mind the above, the DRC Judge 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.

42. The DRC Judge 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.

43. The DRC Judge concluded his deliberations in the present matter by establishing that any further claims lodged by the player are rejected.

***

III. Decision of the Dispute Resolution Chamber (DRC) Judge

1. The claim of the Claimant, Radovic Balsa, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, KS Luftetari, has to pay to the Claimant the amount of EUR 5,000, plus interest as follows:

a. 5% interest p.a. on the amount of EUR 1,000 as from 16 August 2018 until the date of effective payment;

b. 5% interest p.a. on the amount of EUR 1,000 as from 11 October 2018 until the date of effective payment;

c. 5% interest p.a. on the amount of EUR 1,000 as from 11 November 2018 until the date of effective payment;

d. 5% interest p.a. on the amount of EUR 1,000 as from 11 December 2018 until the date of effective payment;

e. 5% interest p.a. on the amount of EUR 1,000 as from 11 January 2019 until the date of effective payment;

4. The Respondent has to pay to the Claimant compensation for breach of contract in the amount of EUR 14,000, plus 5% interest p.a. as from 18 April 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 address 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 points 3. and 4. above.

7. The Respondent shall provide evidence of payment of the due amounts plus interest in accordance with points 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 points 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 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 plus interest are paid.

10. In the event that the aforementioned amounts 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 Dispute Resolution Chamber. 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 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, a copy of which we enclose hereto. 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 (DRC) Judge:

Emilio García Silvero

Chief Legal & Compliance Officer