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 24 November 2020

Decision of the

Dispute Resolution Chamber

Passed on 24 November 2020,

regarding an employment-related dispute concerning the player Jose Perales Najera

COMPOSITION:

Omar Ongaro (Italy), Deputy Chairman Roy Vermeer (Netherlands), member José Luis Andrade (Portugal), member

CLAIMANT / COUNTER-RESPONDENT:

JOSE PERALES NAJERA, Spain

Represented by Asociación de Futbolistas Españoles

RESPONDENT / COUNTER-CLAIMANT:

FC DINAMO TBILISI, Georgia

INTERVENING PARTY:

SAN FERNANDO CD ISLEÑO, Spain

I.

I. FACTS OF THE CASEFACTS OF THE CASE

1. On 15 January 2019, the Spanish player, Jose Perales Najera (hereinafter: the player) and the Georgian club, FC Dinamo Tbilisi (hereinafter: the club) concluded a first employment contract valid as from the same date until 31 December 2019 (hereinafter: the first employment contract).

2. Clause 4 par. 13 of the first employment contract provided that the club should pay to the player a monthly salary amounting to EUR 2,600 and a bonus of USD 10,000 in case the team won the 2019 edition of the Georgian national championship.

3. On 1 February 2020, the player and the club concluded a new employment contract (hereinafter: the contract) valid as from the same date until 31 December 2020.

4. Clause 4 par. 13 of the contract provided that the club should pay the player a monthly salary amounting to EUR 3,000 until the 15th day of the next calendar month.

5. On 1 February 2020, the parties concluded a “mutual agreement” by means of which the club undertook to pay to the player an accommodation allowance amounting to USD 300.

6. On 23 April 2020, the club sent a communication to the player informing that his monthly salary would be reduced by 70% due to the suspension of the local championship in light of the COVID-19 outbreak.

7. On 6 May 2020, the club insisted with the reduction of 70% of the player’s salary and warned the latter to come back to Georgia before the restart of the local competitions.

8. On 13 May 2020, the player sent a first default notice to the club requesting the payment of USD 10,000 as bonus for winning the national league 2019, granting 10 days for the club to remedy the default.

9. On 18 June 2020, the player sent a second default notice to the club granting 15 days for the latter to pay the following amounts:

- USD 10,000 as bonus for winning the national league 2019 (cf. the first contract);

- EUR 6,000 as monthly salaries of April and May 2020, and

- USD 1,200 as accommodation allowances corresponding to the months from February until May 2020.

10. On 23 June 2020, the player informed the club that the Spanish authorities were evaluating the possibility to re-open international flights to Georgia. Moreover, the player stated that in the meantime he would continue with his training plan.

11. On 24 June 2020, the club replied to the player referring to the FIFA COVID-19 Guidelines, recognising to owe the bonus for the 2019 season and stated that it would pay the amount due on 31 December 2020. Moreover, the club informed the player the possibility to return to Georgia on 1 July 2020; however, the Georgian authorities later cancelled the relevant flight.

12. On 25 June 2020, the player replied to the club’s letter stating that the FIFA COVID-19 Guidelines are recommendations, with the goal that the parties reached an agreement. In addition, the player rejected the club’s offer and reiterated his request for outstanding remuneration.

13. On 1 July 2020, the club replied to the player’s letter accepting to owe the outstanding remuneration sought (bonus, salaries and accommodation allowances).

14. On 7 July 2020, the player sent a final default notice to the club requesting the abovementioned outstanding remuneration, granting the club with 3 days to remedy the default, and stating that in case of non-payment he would initiate legal action including the termination of the contract with just cause for serious breach of the contract by the club.

15. On 13 July 2020, the player terminated the contract in writing.

16. On 17 August 2020, the player and the Spanish club, San Fernando Isleño, signed an employment agreement valid as from 17 August 2020 until 30 June 2022. According to such contract, the player is entitled to a monthly salary of EUR 8,100.

II.

II. PROCEEDINGS PROCEEDINGS BEFORE FIFABEFORE FIFA

17. On 28 July 2020, the player filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a. The claim of the player

18. The Claimant lodged the present claim against the club requesting the following amounts:

- USD 10,000 as bonus for winning the national league 2019;

- EUR 9,000 (USD 3,000 x 3) as monthly salaries of April, May and June 2020;

- USD 1,500 (USD 300 x 5) as accommodation corresponding to the months from February until June 2020;

- 5% annual interest over each of the remuneration as from due date until the date of effective payment;

- EUR 18,000 (USD 3,000 x 6) as compensation equivalent to the residual value of the contract (July to December 2020) based on the termination by the player with just cause;

- 5% annual interest over the compensation as from 13 July 2020 date in which the damage was triggered until the date of effective payment.

19. The Claimant argued that from the beginning of the contract, the club paid his salaries with delay; for example, February 2020 was paid only on 5 April 2020.

20. The Claimant explained that the local championship was suspended due to the COVID-19 and that the club authorized the player to return to his home country (Spain) and paid him the flight ticket to do so.

21. The Claimant added that on 23 April 2020, during the suspension of the competition due to Covid-19, the club reduced 70% of his salary. The player explained that at that moment, the club owed him two monthly salaries, i.e. February and March 2020. He furthermore submitted that he had sent a message via WhatsApp to the club rejecting the reduction. In continuation, he submitted that he as well as another team player who did not accept the reduction did not receive the monthly salary of May 2020.

22. Moreover, the player stated that he always fulfilled his contractual obligations. In this respect, the player enclosed evidence of his training in Spain and interviews given on behalf of the club. The player is of the position that he had just cause to terminate the contract.

b. Reply and counterclaim of the club

23. The club rejected the player’s claim and filed a counterclaim against him.

24. The club firstly argued that the COVID-19 pandemic constitutes a case of force majeure and explained that on 11 March 2020 the local competitions were suspended due to the pandemic. The club furthermore argued that the Bureau of the FIFA Council considered COVID-19 a case of force majeure. Furthermore, the club referred to the FIFA COVID Regulatory Issues Frequently Asked Questions on the matter of agreements that cannot be performed as the parties originally anticipated, and explained that the matter pertains to a change in contract situation. The club advance the following argumentation:

“This article is presented in the Civil Code of Georgia and not in the Labor Code of Georgia, as this article applies not only to labor contracts, but in general to all types of contracts, the parties to which may face a change in the terms of the contract during its term due lo circumstances.

Paragraph 2 of Article l of the Labor Code of Georgia allows us to use this article in labor contracts.

Paragraph 1 of Article 398 stipulates that if there is a circumstance that has changed the grounds for concluding an agreement between the parties, is possible to adapt the agreement to the changed circumstances, taking into account the creation of these circumstances. If one of the parties to the contract did not take into account these circumstances and refused to adapt to the changed circumstances of the contract, he has no right to demand the other party to fulfill (sic) the original obligation of the contract. This article exempts the club from fulfilling its obligation to the player during the period of force majeure, as he did not take this situation into account and rejected all offers from the club in order to change the contract due to force majeure. Also, according to Article 401 of the Civil Code of Georgia and despite its precise content, the club has fulfilled the obligation in part, even though the impossibility of fulfilling the obligation has arisen independently of it”.

25. In support of its argumentation, the club filed a certified short translation of article 1 part 2 and article 398 of the Civil Code of Georgia. The original document provided by the club consists of a typed in, one-page sheet in Georgian.

26. In continuation, the club explained that it negotiated with its players a salary reduction, but due to the lack of a concrete response by the player, it unilaterally amended his remuneration of March, April and May 2020 on account of the club’s “interest to maintain the employment contract”. The club explained that such unilateral amendment was done in regards to all staff and not just the player.

27. As to the player, the club acknowledged that it owed him USD 10,000 pertaining to his first employment contract, but claimed that such amount was not disputed by the parties, and the player never sought such amount, even having signed a new contract with the club. The club also submitted that it made all reasonable efforts to the player to return to Georgia once it allowed him to go to Spain in good faith, and was in constant communication with him. The club was also of the position that it paid the reduced salary of the player.

28. The club furthermore acknowledged having signed an addendum referring to the USD 300 payable as apartment rent, but argued that it was exempted from such payment for the months of March, April and May on account of the fact that the player left Georgia on 12 March 2020.

29. Concerning the counterclaim, the club explained that the player “has not fulfilled his obligation under the employment contract after the abolition of the force majeure, while the club informed about the renewal of the Georgian Championship and about the full payment of the salary as from July 2020 until the end of contract”. The club submitted that the local league resumed on 25 June 2020 and that it told the player to return on 1 July 2020, offering him to pay 50% of his salary for June 2020.

30. The club submitted that the player terminated the contract without just cause and therefore requested compensation of EUR 20,000. The club finally requested that the claim of the player be rejected.

c. Position of San Fernando Isleño

31. San Fernando Isleño did not provide FIFA with its position in spite having been invited to do so.

III.

III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBERCONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

a. Competence and applicable legal framework

32. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was presented to FIFA on 28 July 2020 and submitted for decision on 24 November 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.

33. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and observed that in accordance with art. 24 par. 1 in combination with art. 22 lit. a) and b) of the Regulations on the Status and Transfer of Players (edition October 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 a Spanish player, a Spanish club and a Georgian club.

34. Subsequently, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Player (edition October 2020), and considering that the present claim was lodged on 28 July 2020, the June 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

35. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. Likewise, it stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed by the parties.

36. In this respect, the DRC also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.

c. Merits of the dispute

37. The competence and the applicable regulations having been established, and entering into the substance of the matter, the DRC started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the DRC 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.

i. Main legal discussion and considerations

38. The foregoing having been established, the Chamber moved to the substance of the matter, and took note of the fact that the parties strongly dispute whether the termination of the contract by the player took place with our without just cause. To this end, the DRC took further note of the circumstances involving the COVID-19 pandemic and the reduction of the player’s salaries by the club in a unilateral fashion.

39. In this context, the Chamber firstly wished to highlight that FIFA issued a set of guidelines, the COVID-19 Guidelines, which aim at providing appropriate guidance and recommendations to member associations and their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19 and ensure that any response is harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an additional document, referred to as FIFA COVID-19 FAQ, which provides clarifications on the most relevant questions in connection with the regulatory consequences of the COVID-19 outbreak and identifies solutions for new regulatory matters.

40. The DRC also wished to refer to the fact that said guidelines – as per the explicit wording of FAQ no. 16, as well as pages 6 and 7 of the FIFA COVID-19 Guidelines – are only applicable to “unilateral variations to existing employment agreements”. Therefore, except where a termination of a contract occurred following a unilateral variation made as a result of COVID-19 (in which case the validity of the variation must first be assessed under the guidelines), said guidelines do not apply to assess unilateral terminations of existing employment agreements. The Chamber further noted that for the assessment of disputes that are presented before the FIFA judicial bodies concerning the unilateral termination of a contract, the FIFA Regulations as well as the established jurisprudence of the Chamber shall apply.

41. What is more, the DRC highlighted that pursuant to FAQ no. 1, the Bureau of the FIFA Council did not determine that the COVID-19 outbreak was a force majeure situation in any specific country or territory, or that any specific employment or transfer agreement was impacted by the concept of force majeure. In fact, pursuant to the cited FAQ no. 1, whether or not a force majeure situation (or its equivalent) exists in the country or territory of a member association is a matter of law and fact, which must be addressed on a case-by- case basis vis-à-vis the relevant laws that are applicable to any specific employment or transfer agreement.

42. Having in mind the above and the aforementioned principle of the burden of proof, the DRC turned to the evidence on file and concluded that the club has failed to discharge its burden of proof regarding the unilateral variation of the contract, as well as payment of the amounts allegedly paid to the player.

43. In this respect, the Chamber observed that that there is no copy on file demonstrating that any amounts were paid to the player for the months of April, May and June 2020 – be those reduced by 70% or not. For the sake of completeness, the DRC underlined both that (i) while the club has argued that it in good faith tried to negotiate with a the player a salary reduction, it has provided no evidence of such allegation; and (b) that some of the amounts sought by the player give respect to remuneration that fell due before the pandemic had started.

44. Additionally, the DRC was firm to observe that the club did not adequately provide evidence regarding its force majeure argumentation insofar as the cited excerpts of Georgian legislation, in spite of having a certified translation, consisted of a one-page sheet in Georgian, which does not seem to be part of a specific code but rather a text typed in a new blank document. Accordingly, the DRC confirmed that such documentation falls short of complying with the principle of the burden of proof that, in the matter at hand, is of the club as per art. 12 par. 3 of the Procedural Rules.

45. Consequently, as the club has failed to meet its burden of proof concerning either the unilateral variation of the contract or payment of any amounts to the player between April and July, coupled with the fact that the club admittedly owed USD 10,000 to the player as bonuses, the DRC decided to set aside the argumentation raised by the club and reject its counterclaim.

46. In continuation, the DRC arrived at the conclusion that when the player terminated the contract, more than two salaries were due despite the fact that he had validly provided the club with 15 days to remedy the default on 18 June 2020. Accordingly, the Chamber decided that the player had just cause to terminate the contract on 13 July 2020 based on art. 14bis par. 1 of the Regulations. The club hence is to be held liable for the respective consequences.

ii. Consequences

47. Having stated the above, the Chamber turned its attention to the question of the consequences of such unjustified breach of contract committed by the club.

48. The Chamber observed that the outstanding remuneration at the time of termination, coupled with the specific requests for relief of the player, is equivalent to the remuneration under the contract, as follows:

- EUR 9,000 as salaries between April and June 2020;

- USD 1,500 as accommodation allowances between February and June 2020;

- USD 10,000 as bonus for the 2019 season.

49. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amounts which were outstanding under the contract at the moment of the termination, i.e. USD 11,500 and EUR 9,000.

50. In addition, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest at the rate of 5% p.a. on the outstanding amounts as from their due dates until the date of effective payment.

51. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club in the case at stake. In doing so, 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 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.

52. 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.

53. As a consequence, the members of the Chamber 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 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.

54. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract and side letter until its term. Consequently, the Chamber concluded that the amount of EUR 18,000 (i.e. July to December 2020 à EUR 3,000 each month) serves as the basis for the determination of the amount of compensation for breach of contract.

55. In continuation, the Chamber 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 enabled to reduce his loss of income. According to the constant practice of the DRC as well as art. 17 par. 1 lit. ii) of the Regulations, 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.

56. Indeed, the player found employment with San Fernando Isleño. In accordance with the pertinent employment contract, the player was entitled to a monthly salary of EUR 8,100. Therefore, the Chamber concluded that the player mitigated his damages in the total amount of EUR 36,450, that is, 4.5 months à EUR 8,100 each month.

57. In line with the well-established practice of the DRC, the player’s mitigated compensation corresponds therefore to the period of time during which he was unemployed, totalling EUR 3,000 (i.e. from 13 July 2020 to 17 August 2020).

58. Subsequently, the Chamber referred to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an amount corresponding to three monthly salaries as additional compensation should the termination of the employment contract at stake be due to overdue payables. In the case at hand, the Chamber confirmed that the contract termination took place due to said reason i.e. overdue payables by the club, and therefore decided that the player shall receive additional compensation.

59. In this respect, the DRC decided to award the amount of additional compensation of EUR 9,000, i.e. three times EUR 3,000 as the monthly salary of the player.

60. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 12,000 to the player (i.e. EUR 3,000 plus EUR 9,000), which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

61. Lastly, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest on said compensation at the rate of 5% p.a. as of the date of claim until the date of effective payment.

iii. Compliance with monetary decisions

62. Finally, taking into account the applicable Regulations, the Chamber 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.

63. In this regard, the DRC highlighted 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.

64. Therefore, bearing in mind the above, the DRC 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 communicates the relevant bank details to the club, provided that the decision is final and binding, 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.

65. The DRC recalled that the above-mentioned bans 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.

66. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties.

d. Costs

67. The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC proceedings relating to disputes between clubs and players in relation to the maintenance of contractual stability as well as international employment related disputes between a club and a player are free of charge”. Accordingly, the Chamber decided that no procedural costs were to be imposed on the parties.

68. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.

IV.

IV. DECISION OF THE DECISION OF THE DISPUTE RESOLUTION CHAMBERDISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant/Counter-Respondent, JOSE PERALES NAJERA, is partially accepted.

2. The counterclaim of the Respondent/Counter-Claimant, FC DINAMO TBILISI, is rejected.

3. The Respondent/Counter-Claimant has to pay to the Claimant/Counter-Respondent the following amounts:

- USD 10,000 as outstanding remuneration plus 5% interest p.a. as from 1 January 2020 until the date of effective payment;

- USD 300 as outstanding remuneration plus 5% interest p.a. as from 1 March 2020 until the date of effective payment;

- USD 300 as outstanding remuneration plus 5% interest p.a. as from 1 April 2020 until the date of effective payment;

- USD 300 as outstanding remuneration plus 5% interest p.a. as from 1 May 2020 until the date of effective payment;

- USD 300 as outstanding remuneration plus 5% interest p.a. as from 1 June 2020 until the date of effective payment;

- USD 300 as outstanding remuneration plus 5% interest p.a. as from 1 July 2020 until the date of effective payment;

- EUR 3,000 as outstanding remuneration plus 5% interest p.a. as from 16 May 2020 until the date of effective payment;

- EUR 3,000 as outstanding remuneration plus 5% interest p.a. as from 16 June 2020 until the date of effective payment;

- EUR 3,000 as outstanding remuneration plus 5% interest p.a. as from 16 July 2020 until the date of effective payment;

- EUR 12,000 as compensation for breach of contract without just cause plus 5% interest p.a. as from 28 July 2020 until the date of effective payment.

4. Any further claims of the Claimant/Counter-Respondent are rejected.

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

6. The Respondent/Counter-Claimant 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/Counter-Claimant within 45 days, as from the notification by the Claimant/Counter-Respondent of the relevant bank details to the Respondent/Counter-Claimant, the following consequences shall arise:

 1.

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. 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.

8. The decision is rendered free of costs.

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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