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,

Cleiton Augusto Oliveira Silva, Brazil

represented by Mr Rafael Queiroz Botelho

as Claimant

against the club,

Suphanburi FC, Thailand

represented by Mr Menno Teunissen

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 8 January 2019, the Brazilian player, Cleiton Augusto Oliveira Silva (hereinafter: the Claimant or the player), and the Thai club, Suphanburi Football Club (hereinafter: the Respondent or the club) (hereinafter jointly referred to as the parties), concluded an employment contract (hereinafter: the contract) valid as from the date of signature until 30 December 2019.

2. Article 3. of the contract provided, inter alia, the following remuneration :

“3.1. The salary will be paid in monthly instalments by way of salary, adding up to 12 (Twelve) monthly salaries of USD 40,000 (…) net after tax due each month on the last business day”.

3. Moreover, article 4. of the contract stipulated that the player would be entitled, inter alia, to the following “Special Bonuses” :

“4.1. Should the Player score more than 10 goals for the Club in Thai League 1 Season 2019, the Player shall receive a special bonus of USD 60,000 (…)

4.2. Should the Player score more than 20 goals for the Club in Thai League 1 Season 2019, the Player shall receive a special bonus of USD 50,000 (…)

4.3. Should the Player played more than 15 games for the Club in Thai League 1 Season 2019, the Player shall receive a special bonus of USD 50,000 (…)”.

4. Furthermore, article 16. of the contract stipulated that “This Contract will terminate without liability for either party if the Club’s senior men’s first team is relegated from the Thai League 1 for ordinary sporting reasons. On such relegation, this Contract will terminate with effect from the end of the month in which the Club’s senior men’s played its last match”.

5. In accordance with the information available in the Transfer Matching System (TMS), the 2019 season in Thailand ended on 3 November 2019.

6. On 27 October 2019, the Respondent terminated the contract alleging its relegation form the Thai League 1 and informing the Claimant that he would be paid his October 2019 salary in accordance with article 16. of the contract.

7. On 7 November 2019, following an exchange of correspondence between the parties subsequent to the early termination, the parties agreed upon the payment of the salary for October 2019 amounting to USD 40,000 and bonuses amounting to USD 110,000, i.e. “a once-only gross sum of 150.000,00 USD in full and final settlement”.

8. On 11 December 2019, the player acknowledged a cash payment in the amount of Thai Baht (THB) 3,003,660 (approx. USD 100,000 on said date), corresponding to the player’s bonuses in accordance with art. 4.1 and 4.3 of the contract.

9. On 2 January 2020, the Claimant put the Respondent in default of payment of USD 10,000, corresponding to the residual value of his bonuses, setting a 10 days’ time limit in order to remedy the default.

10. In continuation, on 3 January 2020, the Respondent appeared to have informed the Claimant that it withheld USD 10,000 as “taxes”.

11. On 11 February 2020, the Claimant lodged a claim against the Respondent in front of FIFA and requested the payment of USD 10,000, corresponding to the residual value of his bonuses resulting from art. 4.1 and 4.3 of the contract, i.e. USD 110,000, plus 5% interest as from 31 October 2019.

12. In addition, the Claimant requested that the Respondent be imposed sportive and/or financial sanctions “in connection with the provisions of article 12bis par. 4 of FIFA Regulations” and that it be held liable “to support all procedural costs before the DRC”.

13. In his claim, the Claimant requested the payment of the residual value of his bonuses and held in this regard having fulfilled the requirements of the relevant bonus clauses, i.e. having played more than 15 games and scored more than 10 goals during the relevant season. In the Claimant’s opinion, said facts were acknowledged by the Respondent in its letter dated 7 November 2019.

14. In reply to the claim, the Respondent contested FIFA’s competence to adjudicate in the present case on the substance and referred to the fact that the disputed amount of USD 10,000 was linked to its obligations of payment towards the tax authorities of Thailand, not to its contractual obligations towards the Claimant.

15. Therefore, the Respondent held that “any objections with respect to the payment of the relevant amounts to the tax authorities should have been raised with said tax authorities”.

16. Moreover, as to the merits, the Respondent held that the contract clearly mentioned that the salary was payable “net after tax” in opposition to the section of the bonuses which did not provide such specification. Therefore, in its opinion, such bonuses were payable as amounts “before tax”. In this respect, the Respondent referred to national tax law according to which the Claimant was to be considered as a local “tax resident”, reason why the contract provided the aforementioned net/gross specification. For that reason, it held that “juristic partnership or other juristic person paying assessable income to any person who is subject to income tax [(i.e. the player)], must withhold specific amounts depending on the type of income category”.

17. In addition, the Respondent deemed that by signing the payment receipt on 11 December 2019, the Claimant accepted the relevant amount as the final outstanding amount from the Respondent.

18. Consequently, the Respondent further referred to national tax law on withholding tax provisions and held that, in combination with the contract, it had duly applied the relevant deductions and invited the player to provide proof that it had already paid such amounts, any dispute in this sense being of the competence of the national tax authorities.

19. As such, the Respondent requested the DRC to pronounce itself not competent to hear the present matter, to entirely dismiss the claim of the player, to confirm that the payment receipt signed by the player on 11 December 2019 constituted the full and final settlement amount of bonus, to entirely dismiss any demand of sportive sanctions, to impose the legal fees and costs of the present incurred by it on the Claimant and, subsequently, to suspend the current procedure in order to provide further evidence from the tax authorities as the Respondent held that it was not in a position to do so in such a short time span.

20. Finally, following the above, the Respondent provided, in an additional reply to the claim, however received late, an alleged proof of payment amounting to THB 187,590 (approx. USD 5,700) made to the tax authorities on 13 January 2020 and apparently linked to the present proceedings.

21. In a subsequent unsolicited correspondence received from the Claimant, he rejected the aforementioned allegations from the Respondent.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 11 February 2020. Consequently, the 2019 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 (March 2020 edition) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a player and a club that have an international dimension.

3. As a consequence, the Dispute Resolution Chamber would, in principle, be competent to decide on the present litigation which involves a Brazilian player and a Thai club regarding an employment-related dispute.

4. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies referring to the fact that the disputed amount of USD 10,000 was linked to its obligations of payment towards the tax authorities of Thailand and not to its contractual obligations towards the Claimant. As such, the Respondent considered that any issue in this sense should have been raised with said tax authorities.

5. On the other hand, the Chamber noted that the Claimant referred to the competence of the FIFA DRC to adjudicate in and on the claim lodged by him against the Respondent.

6. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the March 2020 edition 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 the FIFA Circular no. 1010 dated 20 December 2005. Equally, the members of the Chamber referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

7. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC is competent to settle an employment-related dispute between a club and a player of an international dimension, is that the jurisdiction of the relevant national arbitration tribunal or national court derives from a clear reference in the employment contract.

8. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute contained a clear jurisdiction clause.

9. In this respect, the Chamber recalled that the contract did not contain such clause referring to the jurisdiction of a relevant national arbitration tribunal, a national court, or any other organ than the DRC, such as a tax authority in Thailand, being competent to assess and settle the present matter.

10. In addition, the Chamber also noted that, to the contrary of what argued by the Respondent, the amount in dispute appeared to be the consequence of an obligation arising from the contract which had been concluded between the parties.

11. As such, on account of all the above, the Chamber established that the Respondent’s objection towards 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.

12. In continuation, the Chamber analyzed 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 referred, on the one hand, to art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (March 2020 edition) and, on the other hand, to the fact that the present claim was lodged on 11 February 2020. Therefore, the Dispute Resolution Chamber concluded that the January 2020 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

13. The competence of the Chamber and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, 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.

14. Having said this, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well as 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.

15. In this respect, the DRC recalled that the parties concluded an employment contract valid as from 8 January 2019 until 30 December 2019, according to which the player was entitled, inter alia, to USD 40,000 “net after tax” as a monthly salary, as well as to “Special Bonuses” as described in point I./3.

16. Moreover, the DRC took note that, following the early termination of the contract, the parties had agreed, on 7 November 2019, upon the payment by the Respondent to the Claimant of the salary for October 2019, i.e. USD 40,000 and bonuses, i.e. USD 110,000, amounting to “a once-only gross sum of 150.000,00 USD in full and final settlement”.

17. Following this, the DRC recalled that the player acknowledged on 11 December 2019 having received the payment in cash of (THB) 3,003,660 (approx. USD 100,000) which corresponded to the bonuses as provided in art. 4. of the contract.

18. Subsequently, the DRC observed that, despite having put the Respondent in default on 2 January 2020, the Claimant lodged a claim against the Respondent requesting the residual value of his bonuses resulting from article 4. of the contract amounting to USD 10,000, plus 5 % interest as from 31 October 2019. In this respect, the DRC took note that the player held having duly fulfilled the requirements of the relevant bonus clauses, i.e. having played more than 15 games and scored more than 10 goals during the relevant season, this, in his opinion, having been acknowledged as well by the Respondent in its letter dated 7 November 2019.

19. Equally, the DRC took note that the Respondent, for its part, maintained that, in accordance with the contract, the salary being payable “net after tax” in opposition to the bonuses which did not provide such specification, such bonuses were payable as amounts “before tax”. As such, the DRC further noted that for the Respondent, the Claimant being considered as a local “tax resident”, it had duly applied the relevant deductions, fulfilled the required local tax obligations and it emphasised that by signing the payment receipt on 11 December 2019, the Claimant accepted the relevant amount as the total outstanding remuneration to be paid by the Respondent.

20. Finally, the DRC also took note that both parties provided further arguments on top of the above in subsequent unsolicited correspondences.

21. With due consideration to the above, the DRC highlighted that the underlying issue in this dispute was to determine whether the financial entitlements of the player as to the bonuses were payable net or gross.

22. However, the members of the Chamber deemed it fit to first address the issue of the aforementioned unsolicited position received from the Respondent by means of which it provided alleged evidence referring to a payment made to the tax authorities in accordance with its above described position. In this regard, after having duly taken note of the exchange of correspondence and documents between the parties, the Chamber concluded that the Respondent’s right to be heard had been duly respected on the basis of and after one exchange of correspondence only and as such that it had failed to remit the aforementioned unsolicited correspondence in due time (cf. art. 9 par. 3 of the Procedural Rules). Consequently, the Chamber agreed that it could not assess nor back the Respondent’s arguments provided in said correspondence.

23. As such, the DRC decided that on basis of the elements on file, the Respondent failed to provide evidence on the alleged payment / allocation of the disputed amount to the competent tax authorities.

24. In continuation, the DRC pointed out that the contract established an amount of conditional remuneration in its art. 4., which was payable to the Claimant, without making any reference as to whether such amount should be considered net or gross. As such and in accordance with its practice, if the contract does not specify gross amounts, it is assumed that said amounts are to be considered as net amounts. Consequently, despite the salaries being paid explicitly as net amounts, the members of the Chamber concluded that the bonuses did not have any contractual specification “net/gross” for their part and should therefore be understood as net amounts.

25. On account of the above, the DRC established that the Respondent’s explanations, as regards the gross amount of the Claimant’s remuneration as to the bonuses contained in art. 4. of the contract, should not be upheld.

26. Consequently, the DRC established that the Respondent failed to remit the Claimant’s remuneration in the total amount of USD 10,000 corresponding to the residual value of his bonuses resulting from art. 4.1 and 4.3 of the contract.

27. In view of the above, and in accordance with the principle of pacta sunt servanda, the DRC determined that the club has to pay to the player the total amount of USD 10,000 as outstanding remuneration.

28. In addition, taking into account the Claimant’s request as well as the constant practice of the DRC in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount, until the date of effective payment, as from 4 November 2019, i.e. one day after the date set for the end of the 2019 sporting season in Thailand, being 3 November 2019.

29. The DRC concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

30. Furthermore, taking into account the consideration under number II./12. 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 amount of outstanding remuneration.

31. 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 amount is paid and for the maximum duration of three entire and consecutive registration periods.

32. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amount 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.

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

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Cleiton Augusto Oliveira Silva, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Suphanburi FC, has to pay to the Claimant outstanding remuneration in the amount of USD 10,000, plus interest at the rate of 5% p.a. as from 4 November 2019 until the date of effective payment.

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

5. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail 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 above.

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

7. In the event that the amounts due plus interest in accordance with point 3 above are not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts 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).

8. The ban mentioned in point 7 above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

9. In the event that the aforementioned sums plus interest are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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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 article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer