F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2020-2021) – fifa.com – atto non ufficiale – Decision 9 December 2020

Decision of the

DRC Judge

passed on 9 December 2020,

regarding an employment-related dispute concerning the player Borislav Aleksandrov Tsonev

COMPOSITION:

Daan de Jong (Netherlands), DRC Judge

CLAIMANT:

Player Borislav Aleksandrov Tsonev, Bulgaria

Represented by Mr. Radostin Vassilev

RESPONDENT:

CLUB NK Inter Zapresic, Croatia

I. FACTS OF THE CASE

1. On 14 February 2019, the Parties entered into an employment contract, valid from the date of signature until 30 June 2021 (hereinafter: “the contract”).

2. Art. 9 of the contract provides that the Respondent shall pay to the Claimant for the services provided as follows:

a) The monthly salary for the period from 14 February 2019 to 29 February 2020 is amounting to EUR 7200 net, payable in Croatian Kuna (HRK) at the average exchange rate of the Croatian National Bank on the date of payment;

b) The monthly salary for the period from 1 March 2020 to 15 June 2021 is amounting to EUR 8000 net, payable in Croatian Kuna (HRK) at the average exchange rate of the Croatian National Bank on the date of payment;

The single payment for signing the present Contract amounts to 10000 Euro net, payable in Croatian Kuna (HRK) at the average exchange rate of the Croatian National Bank on the date of payment within 48 hours from the Player’s registration with NK Inter-Zaprešić;

c) In case that in season 2018/2019 the Club retains its status as a member of the First Croatian Football League, the Player shall receive a single remuneration in the amount of 4000 Euro net, payable in Croatian Kuna (HRK);[….]

e) The Parties agree that no VAT has been charged on the monthly or on the additional remunerations payable by the Club referred in points a) and b) of this Article, and the Club undertakes to pay the VAT;

f) The Player is obliged to issue invoices for the specified monthly salaries, plus VAT, if the Player is in the VAT system. The Club undertakes to pay the invoice within 15 days from the date of its issue”.

3. According to art. 14 of the contract: “The Player and the Club has the right to terminate the Contract in case that the other Party fails to fulfils its contractual obligations, for which purpose there is a procedure in the CFF’s Regulations on the Status and transfer of players and other relevant regulations of FIFA and CFF.”

4. On 19 June 2020, the Claimant put the Respondent in default of payment granting the latter a 15 days’ deadline to remedy the default, requesting payments of his salaries as follows:

- partial payment of the December 2019 salary and

- the following full salaries: for January 2020, February 2020, March 2020, April 2020 and for May 2020.

5. The deadline to make payment was apparently not respected by the Respondent.

6. On 07 July 2020, the Claimant sent a notice of termination of contract to the Respondent invoking non-payment of salaries as the reason for contract termination.

7. On 3 September 2020, almost two months after the Claimant unilaterally terminated the contract with the Respondent, he concluded an employment contract with the Bulgarian club PFC Levski Sofia valid from the date of its signature until 30 June 2021. The Claimant’s monthly salary was EUR 1,000 net for the entire period of the contract.

8. On 24 September 2020, the Claimant lodged a claim against the Respondent before FIFA requesting the following:

-The Respondent has to pay to the Claimant, the amount of EUR 54,901.43 as outstanding salaries plus interest of 5% p.a. as follows:

 EUR 6,695.01 as partial monthly salary for December 2019, payable until 31 December 2019;

 EUR 7,200 as monthly salary for January 2020, payable until 31 January 2020;

 EUR 7,200 as monthly salary for February 2020, payable until 29 February 2020;

 EUR 8,000 as monthly salary for March 2020, payable until 31 March 2020;

 EUR 8,000 as monthly salary for April 2020, payable until 30 April 2020;

 EUR 8,000 as monthly salary for May 2020, payable until 31 May 2020;

 EUR 8,000 as monthly salary for June 2020, payable until 30 June 2020;

 EUR 1806.02 as monthly salary from 1 July 2020 until and including 7 July 2020, payable immediately upon the termination of the Contract, i.e. 7 July 2020;

-The Respondent has to pay to the Claimant the amount of EUR 118,193.44 as compensation for breach of contract, as well as, an interest of 5% p.a. accrued since 8 July 2020 until the date of the effective payment.

-All the payments above shall be made on a net basis, free of any taxation, the Respondent being responsible for the filing and payment of all taxes relating to these payments due to the Claimant.

-The Respondent’s unjustified breach of the Contract fell during the Protected Period and the course of a Season (cf. art. 16 of the FIFA Regulations on the Status and Transfer of Players [RSTP]), therefore the imposition of sporting sanctions on the Respondent is mandatory, in order to serve as deterrent in the future in accordance with art. 17 par. 1 of the RSTP.

9. In support of his claim, the Claimant stated that the Respondent failed to pay him more than two monthly salaries on their due dates and that he put the Respondent in default and granted a deadline of 15 days for the Respondent to fully comply with its financial obligations, but no avail.

10. In view of the above, the Claimant deemed that the provisions of art. 14bis par.1 of the RSTP, gave him the right to terminate with just cause his contractual relations with the Respondent.

11. The Claimant added that pursuant to the DRC jurisprudence, the employer’s payment obligation is his main obligation towards the employee. As a general rule, the club’s persistent non-compliance with its financial obligations towards a player without just cause is to be considered as an unjustified breach of an employment contract by the club.

12. Generally, the Claimant stated that from the signing of the contract on 14 February 2019 until 30 June 2020, he had to receive the global amount of EUR 121,857.10 as detailed below:

12. However, the Claimant stated that for the period from 14 February 2019 to 30 June 2020, the Respondent paid only the amount of EUR 68,762.09 and that for the same period of time, the global amount of EUR 53,095.01, remained payable to the Claimant as detailed below:

-EUR 6,695.01 as partial monthly salary for December 2019, payable until 31 December 2019;

-EUR 7,200 monthly salary for January 2020, payable until 31 January 2020;

-EUR 7,200 monthly salary for February 2020, payable until 29 February 2020;

-EUR 8,000 monthly salary for March 2020, payable until 31 March 2020;

-EUR 8,000 monthly salary for April 2020, payable until 30 April 2020;

-EUR 8,000 monthly salary for May 2020, payable until 31 May 2020;

-EUR 8,000 monthly salary for June 2020, payable until 30 June 2020.

13. However, the Claimant added that the exact date of the payment of the monthly salary was not set in the contract and that therefore, the date of the payment shall be until the end of the month for which the salary is due.

14. According to the Claimant, up to the date of the official termination of the contract (i.e. 7 July 2020), the Respondent had raised no objections whatsoever regarding the contract or the services rendered

Period for which the remuneration is due

Amount (net) in EUR

14 February 2019- 29 February 2019

3,857.10

A single payment pursuant to Art.9 lit. b) of the contract

10,000

Monthly salary for March 2019

7,200

Monthly salary for April 2019

7,200

Monthly salary for May 2019

7,200

Monthly salary for June 2019

7,200

A single remuneration pursuant to Art. 9 lit. c) of the contract

4,000

Monthly salary for July 2019

7,200

Monthly salary for August 2019

7,200

Monthly salary for September 2019

7,200

Monthly salary for October 2019

7,200

Monthly salary for November 2019

7,200

Monthly salary for December 2019

7,200

Monthly salary for January 2020

7,200

Monthly salary for February 2020

7,200

Monthly salary for March 2020 (Pursuant to art. 9 lit. b) of the contract

8,000

Monthly salary for April 2020

8,000

Monthly salary for June 2020

8,000

TOTAL

121,857.10

by the Claimant or both. The Claimant stated that there are no circumstances that he is aware of that would allow the Respondent to withhold the outstanding payments.

15. In conclusion, the Claimant deems that the Respondent’s persistent non-compliance with the financial terms of the Contract caused him to lose the trust and confidence he had in the future performance of the contract by the Respondent, which gave him just cause for termination of the contract with immediate effect.

16. The Claimant added that there is no valid reason allowing the Respondent to withhold the payment of his outstanding salaries. In particular, he stated that the Respondent had never informed him about the opening of disciplinary proceedings against him. Therefore, according to the Claimant, all the conditions required for late or non-payment to be considered “just cause” for termination of the Contract were duly fulfilled by the Claimant as provided in art. 14bis of the RSTP.

17. In view of the above, the Claimant stated that the main effect of terminating an employment contract with just cause is that the party in breach is required to pay all outstanding monies and compensation to the injured party, as foreseen in art.17 par. 1 of the RSTP.

18. As a result, in accordance with art.17 par. 1 of the RSTP, the Claimant requested compensation for breach of contract in the amount of EUR 94,193.44 (EUR 6,193.44 for July 2020 and EUR 88,000 for 11 months, from 1 August 2020 to 30 June 2021).

19. In addition, the Claimant stated that he terminated the contract with the Respondent due to outstanding salaries and pursuant to art. 17 par.1 of the RSTP. The Claimant therefore requested that the DRC should grant an additional compensation equivalent to three-monthly salaries, i.e. EUR 24, 000.

20. In view of the above, the Claimant requested a total amount of EUR 118,193.44 as compensation plus the additional compensation (3 monthly salaries).

21. Furthermore, the Claimant requested the DRC to take into account that all payments of salaries due to the Claimant under clause 9 of the contract were net amounts, i.e. free of any taxation.

22. The Claimant added that the Respondent’s clear breach of the contract felt during the protected period, given that the Claimant unilaterally terminated the contract for a valid reason. The Claimant argued that in such circumstances, the damage is greater and so compensation should be greater, and the normal measure should not be reduced. Therefore, this fact is a gross aggravating circumstance to be taken into account by the DRC.

23. In spite of having been invited to do so, the Respondent did not reply to the claim.

II. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

1. First of all, the Dispute Resolution Chamber (DRC) Judge (hereinafter also referred to as “the DRC Judge”) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the player’s claim was lodged on 24 September 2020. Taking into account the wording of art. 21 of the June 2020 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.

2. Subsequently, the DRC judge referred to art.3 par. 2 and par. 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in conjunction with art.22 lit. b of the Regulations on the Status and Transfer of Players (edition October 2020) he is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Bulgarian player and a Croatian club.

3. Furthermore, the DRC judge analyzed 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 par. 2 of the Regulations on the Status and Transfer of Players (edition October 2020), and considering that the present claim was lodged on 24 September 2020, the August 2020 edition of said regulations (hereinafter: “the Regulations”) is applicable to the matter at hand as to the substance.

4. The competence of the DRC judge and the applicable regulations having been established, the DRC judge entered into the substance of the matter. Subsequently, the DRC judge continued 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 emphasized 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.

5. To start with, the DRC judge acknowledged that the parties to the dispute had signed the contract valid from 14 February 2019 until 30 June 2021 pursuant to which the Respondent undertook to pay the Claimant a monthly salary of EUR 7,200 from 14 February 2019 to 29 February 2020, EUR 8000 from 1 March 2020 to 15 June 2021, EUR 10,000 as a single payment for signing the present Contract and EUR 4,000 for 2018/2019 if the Club retains its status as a member of the First Croatian Football League.

6. Moreover, the DRC Judge took note that on 07 July 2020, the Claimant put the Respondent in default of payment and granted it 15 days to remedy the default, to no avail.

7. Having recalled the above, the DRC Judge observed that, the Claimant lodged the present claim alleging having terminated the contract with just cause requesting EUR 54,901.43 as outstanding remuneration and EUR 94,193.44 as compensation.

8. In continuation, the DRC judge took note that despite having been invited to do so, the Respondent, for its part, failed to present its response to the claim of the Claimant. By not presenting its position to the claim, the DRC judge was of the opinion that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

9. Furthermore, as a consequence of the aforementioned consideration, the DRC judge concurred that in accordance with art. 9 par. 3 of the Procedural Rules, he shall take a decision upon the basis of the documentation already on file, in other words, upon the statements and documents presented by the Claimant.

10. The DRC Judge further considered the documentation on file and decided that, since the Claimant terminated the contract when more than 2 salaries where outstanding, and given that the Claimant had put the Respondent in default of payment, granting the latter a 15 days’ deadline to remedy the default, and the Respondent failed to remedy the default, the Claimant terminated the contract with just cause on 7 July 2020.

11. In continuation, prior to entering into the issue of the consequences of the early termination of the contract with just cause by the Claimant, the DRC Judge firstly proceeded to determine the amount of outstanding remuneration, if any, still due to the Claimant by the Respondent to this day.

12. In this respect, the DRC Judge took note that in accordance with art. 9 of the contract, the Claimant was entitled to a monthly salary of EUR 7,200 from 14 February 2019 to 29 February 2020 and EUR 8,000 from 1 March 2020 to 15 June 2021.

13. In this regard, the DRC Judge recalled that, as per the Claimant, the following remuneration was outstanding:

-EUR 6,695.01 as partial monthly salary for December 2019, payable until 31 December 2019;

-EUR 7,200 monthly salary for January 2020, payable until 31 January 2020;

-EUR 7,200 monthly salary for February 2020, payable until 29 February 2020;

-EUR 8,000 monthly salary for March 2020, payable until 31 March 2020;

-EUR 8,000 monthly salary for April 2020, payable until 30 April 2020;

-EUR 8,000 monthly salary for May 2020, payable until 31 May 2020;

-EUR 8,000 monthly salary for June 2020, payable until 30 June 2020;

-EUR 1,806.02 monthly salary from 1 July 2020 until and including 7 July 2020, payable immediately upon the termination of the Contract, i.e. 7 July 2020 plus 5% interest p.a from 8 July 2020 until the date of effective payment

14. In this context, the DRC Judge reiterated that the Respondent did not provide any evidence of payment of the amounts requested by the player. Thus, the DRC Judge concluded that the aforementioned remuneration was still outstanding.

15. On account of the aforementioned considerations, the DRC Judge decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of EUR 54,901.43 corresponding to eight monthly salaries in the amount of EUR 6,695.01 as partial salary for December 2019; EUR 14,400 for January and February 2020, EUR 32,000 for March 2020 to June 2020 and EUR 1,806.02 as partial salary for July 2020.

16. In addition, taking into consideration the request of the Claimant and the standard practice of the DRC, the DRC Judge decided to award the Claimant interest at the rate of 5% p.a. on the aforementioned amounts as from the relevant due dates (i.e. day after the last working day of the relevant month) until the date of effective payment.

17. In continuation, and taking into consideration art. 17 par. 1 of the Regulations, the DRC Judge decided that the player is entitled to receive compensation for breach of contract from the club.

18. In continuation, the DRC Judge focused its attention on the calculation of the amount of compensation for breach of contract payable by the club to the player in the case at stake. In doing so, the DRC Judge first 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.

19. In application of the relevant provision, the DRC Judge held that it first of all had to clarify as to whether the 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 DRC Judge established that no such compensation clause was included in the contract at the basis of the matter at stake.

20. 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. In this regard, the DRC Judge emphasized beforehand that each request for compensation for contractual breach has to be assessed on a case-by-case basis taking into account all specific circumstances of the respective matter.

21. In order to estimate the amount of compensation due to the player in the present case, the DRC Judge first turned its attention to the remuneration and other benefits due to him under the existing contract and/or the new contract(s), which criterion was considered to be essential. The DRC Judge deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows it 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, the DRC Judge proceeded with the calculation of the monies payable to the player under the terms of the contract as from its date of termination with just cause by the player, i.e. 7 July 2020, until 30 June 2021, and concluded that the player would have received EUR 94,193.44 in total as remuneration had the contract been executed until its expiry date. Consequently, the DRC Judge concluded that the amount of EUR 94,193.44 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

23. In continuation, the DRC Judge verified as to whether the player had signed an employment contract with another club during the relevant period of time, by means of which he would have been able 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 termination of contract with just cause in connection with the player’s general obligation to mitigate his damages.

24. In respect of the above, the DRC Judge noted, that the player informed having signed a new employment contract with the Bulgarian club, PFC Levski Sofia valid from 03 September 2020 until 30 June 2021 and determined that the player was able to mitigate his damages in the amount of EUR 10,000.

25. In view of the above, the DRC Judge noted that the player would in principle be entitled to a mitigated compensation amounting to EUR 84’193’44 (i.e. the residual value of the contract mitigated by the total value of the new contract of EUR 10’000).

26. Additionally and taking into account art. 17.1 lit ii of the Regulations and the fact that the player terminated the contract due to overdue payables, the DRC Judge noted that the Claimant is in principle entitled to be awarded an additional compensation equal to 3 monthly salaries of EUR 8’000 each.

27. In this context, the DRC Judge recalled the content of art. 17.1 lit ii of the Regulations which states that “(…) the overall compensation may never exceed the rest value of the prematurely terminated contract”.

28. In this regard, the DRC Judge noted that the mitigated compensation of EUR 84,193.44 plus the additional compensation of 3 salaries, i.e. EUR 24,000 would amount to EUR 108,193.44 and that this amount would exceed the residual value of the contract.

29. In view of the above, the DRC Judge decided that the Claimant should be awarded a compensation for breach of contract in the total amount of EUR 94,193.44, as residual value of the contract –in accordance with art. 17.1 lit ii, last sentence of the Regulations including an additional compensation of EUR 10,000.

30. Additionally, the DRC Judge decided that taking into account the Claimant´s request and the well-established jurisprudence of the DRC, the Respondent should also pay 5% interest p.a. on the compensation amount as from the date on which the claim was lodged, i.e. 24 September 2020, until the date of effective payment.

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

32. 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.

33. Therefore, bearing in mind the above, the DRC Judge decided that, in the event that the club does not pay the amounts due to the player within 45 days as from the moment in which the player, following the notification of the present decision, communicates the relevant bank details to the club, 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 club in accordance with art. 24bis par. 2 and 4 of the Regulations.

34. Finally, 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.

35. The DRC Judge concluded his deliberations in the present matter by establishing that the claim of the Claimant is partially accepted.

III. DECISION OF THE DISPUTE RESOLUTION CHAMBER (DRC) JUDGE

1. The claim of the Claimant, Borislav Aleksandrov Tsonev, is partially accepted.

2. The Respondent, NK Inter Zapresic, has to pay to the Claimant the total amount of EUR 54,901.43 as outstanding remuneration plus 5% annual interest as follows:

-on the amount of EUR 6,695.01 from 1 January 2020 until the date of effective payment;

-on the amount of EUR 7,200 from 1 February 2020 until the date of effective payment;

-on the amount of EUR 7,200 from 1 March 2020 until the date of effective payment;

-on the amount of EUR 8,000 from 1 April 2020 until the date of effective payment;

-on the amount of EUR 8,000 from 1 May 2020 until the date of effective payment;

-on the amount of EUR 8,000 from 1 June 2020 until the date of effective payment;

-on the amount of EUR 8,000 from 1 July 2020 until the date of effective payment;

-on the amount of EUR 1,806.02 from 8 July 2020 until the date of effective payment.

3. The Respondent has to pay to the Claimant an amount of EUR 94,193.44 as compensation for breach of contract plus 5% annual interest from 24 September 2020 until the date of effective payment.

4. Any further claims of the Claimant are rejected.

5. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

6. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amount due, plus interest as established above is not paid by the Respondent within 45 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:

 1.

The Respondent 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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players).

2.

In the event that the payable amount as per in this decision 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 the FIFA Disciplinary Committee.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

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) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, 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 Procedural Rules).

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