Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 23 January 2013,
in the following composition:
Geoff Thompson (England), Chairman
Jon Newman (USA), member
Johan van Gaalen (South Africa), member
Todd Durbin (USA), member
Damir Vrbanovic (Croatia), member
on the claim presented by the player,
Player C, from country S
as Claimant
against the club,
Club A, from country G
as Respondent
regarding an employment-related dispute between the parties
I.
Facts of the case
1.
On 6 January 2011, Player C, from country S (hereinafter: Claimant or player), and
Club A, from country G (hereinafter: Respondent or club), signed an employment
contract valid as from the date of signature until 30 June 2013.
2.
According to art. 4.4 of the contract, the player was entitled to receive the total net
amount of EUR 375,000, to be paid as follows:
-
3.
EUR 10,000 on 31 January 2011,
EUR 30,000 on 31 March 2011,
EUR 35,000 on 30 June 2011,
EUR 30,000 on 31 October 2011,
EUR 45,000 on 31 January 2012,
EUR 75,000 on 30 June 2012,
EUR 30,000 on 31 October 2012,
EUR 45,000 on 31 January 2013,
EUR 75,000 on 31 March 2013.
Art. 4.11 of the contract indicates that if the club prematurely terminates the
contract with the player during the protective period, the latter will be entitled to a
compensation of EUR 300,000 whereas, according to art. 5.5 of the contract, if the
opposite occurs, the club will be thereby entitled to a compensation of EUR 500,000:
- art. 4.11: “De común acuerdo, en el caso de rescisión del contrato por parte
del FC, con la reserva de los previstos en el párrafo 2 del articulo 17 del
Reglamento, en especial y como mínimo, la indemnización que el jugador
recibirá es de: a) durante la temporada protegida 300,000 Euros (…)”
- art. 5.5: “De común acuerdo, en el caso de rescisión del contrato por parte del
jugador, con la reserva de los previstos en el párrafo 3 del artículo 17 del
Reglamento, en especial y como mínimo, la indemnización que el FC recibirá es
de: a) durante la temporada protegida 500,000 Euros (…)”
4.
Furthermore, art. 10 of the contract stipulates that all disputes between the parties
are settled by the Committee for the Resolution of Financial Disputes (PEEOD) at
first instance, and the Court of Arbitration of the country G Football Federation at
second instance :
- art. 10: “Cada controversia entre las partes será resuelta por la Camera de
Primer Grado de Resolución de Disputas Económicas y en Segundo grado por el
Tribunal Arbitral de la country S Football Federation.”
Player C, from country S / C A, from country G
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5.
On 19 January 2012, the player lodged a claim against the club in front of FIFA
claiming that on 3 January 2012, he was left with no other option but to unilaterally
terminate the employment contract with just cause.
6.
According to the player, the club had been continuously and unjustifiably failing to
comply with its contractual obligations; it had failed to pay the player its due
amounts, whilst also excluding the player, without any reason, from training and
team related activities. The player claims to have only received from the club the
total amount of EUR 30,500, which were paid in five partial installments, the last
one having been paid out in September 2011.
7.
In this respect, the player claims to have contacted the club on several occasions but
to no avail; reason why on 27 December 2011, the player formally notified the club
of his discontent, requesting to be reinstated in the dynamic of the team’s activities
whilst also requesting the payment of his outstanding salary, amounting to EUR
74,500. This formal notification was an ultimatum to the club.
8.
On 3 January 2012, as a result of the club´s apparent failure to address the issues
exposed in the aforementioned letter, the player formally notified the club of its
decision to unilaterally terminate the contract with just cause.
9.
On the basis of the above-mentioned facts, the player requests the payment of the
following amounts:
1) Outstanding salary:
EUR 119,500 corresponding to the outstanding salaries as from 31 January 2011
until 31 January 2012 (150,000 – 30,500) or in case the DRC deems that the amount
falling due on 31 January 2012 is not to be considered as outstanding
remuneration as the contract was terminated on 3 January 2012, subsidiarily EUR
74,500 net (105,000 – 30,500) plus 5% interest p.a. to be applied.
2) Compensation:
EUR 300,000 in connection with the compensation amount contractually agreed
between the parties upon the signing of the contract.
10.
In its reply, the club claims that according to art. 10 of the contract, the sole
competent and qualified organs to resolve the dispute at hand should be the
relevant decision-making bodies of the country G Football Federation. The club
avers that the Committee for the Resolution of Financial Disputes (PEEOD)
(hereinafter: the Committee) and the Court of Arbitration of the country G Football
Federation (hereinafter: the Court of Arbitration), in their current form, are
independent arbitration tribunals guaranteeing fair proceedings and respecting the
Player C, from country S / C A, from country G
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principle of equal representation of players and clubs. In this respect, the club
deemed that the player was obliged to file his claim before the country G bodies,
which according to the agreement of the parties, should be considered the only
competent bodies to hear the present dispute.
11.
Upon request of FIFA, the country G Football Federation provided FIFA with a copy
of the Statutes (edition 2010) and the Procedural Rules of the Dispute Resolution
Committees of the country G Football Federation (edition 2009).
In particular, the mentioned regulations stated the following:
a. with regard to the jurisdiction of the Committee:
Art. 41 G. 5. of the Statutes of the country G Football Federation stipulates that
the Committee is competent to resolve financial disputes between players and
professional clubs.
Art. 41 G. 2b. of the Statutes of the country G Football Federation states that the
Appeals Arbitration Division of the Court of Arbitration is competent to “resolve
at second degree the disputes settled by the Dispute Resolution Committee
between player or coaches and Professional Football Clubs (…)”.
b. with regard to the composition:
According to art. 41 G. 5. of the Statutes of the country G Football Federation
and art. 4 of the Procedural Rules of the country G Football Federation, the
Committee is composed of five members. In this respect, said article of the
Statutes specified the composition as follows: a chairman, which is a “active
higher judiciary”, two members appointed by the Board of Directors of the
country G Professional Players Association and two members appointed from the
Board of Directors of the Professional Associations.
Art. 41 G. 1. of the Statutes of the country G Football Federation stipulates that
the Court of Arbitration is composed of three members: the president, which has
to be a “supreme active judiciary”, two members, which are “appointed each by
each party”.
c. with regard to the possibility of an appeal:
Art. 53 par. 1 of the Procedural Rules of the country G Football Federation
stipulates that “As a last recourse, the decisions of the Committee may be
challenged before the Court of Arbitration of the country G Football
Federation”.
d. with regard to the adoption and enforcement:
The Procedural Rules of the country G Football Federation entered into force on
13 June 2009.
The Statutes of the country G Football Federation are dated 5 June 2010.
12.
Notwithstanding the claim of lack of competence of the DRC, the club also
submitted a statement on the substance of the dispute. According to the club, the
Player C, from country S / C A, from country G
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outstanding amount that was due to the player up to the day of the termination of
the contract on 3 January 2012 was in fact equivalent to only EUR 69,500 net,
claiming that the player had received the total amount of EUR 35,500 net and not
EUR 30,500 as mentioned in his claim, since on 21 October 2011, it had made
another payment to the player of EUR 5,000.
13.
Furthermore, and since the contract was terminated on 3 January 2012, the club
deems that the installment due on 31 January 2012 amounting to EUR 45,000 had
not yet matured and thus, was not yet outstanding and due on the day of the
termination of the contract.
14.
Moreover, and while the club acknowledges that there is an outstanding amount of
EUR 69,500 due the player, it firmly objects to the player´s compensation request of
EUR 300,000. According to the club, as the player terminated the contract without
filing the relevant claim before the country G bodies, he is now therefore not
entitled to request such compensation, “since the said provision of art 4.11 (a) refers
to article 17 par. 2 of the country G Football Federation´s Regulations and is only
applicable when the case is brought before the competent bodies of the country G
Football Federation and only when the aforementioned Regulations of the country
G Football Federation are applicable”.
15.
Indeed, the club states that if the DRC declares itself competent to adjudicate on
the matter at hand, the maximum compensation that the player could be awarded
is the residual value of his contract minus any amount that the player will earn or
fail to earn until 30 June 2012. However, the club argues that the player should not
be entitled to this compensation, as such a decision would be “ultra petita” since
the player did not request for it, but instead requested compensation for the
amount stipulated in art. 4.11 of the contract, which as previously stated, cannot be
applicable to the present case.
16.
Finally, the player as well as dismissing the competence of the country G Football
Federation, informed FIFA that on 26 October 2012, he concluded an employment
contract with the country S club, Club B, valid as from the date of signature until 30
June 2013, in accordance with which he was entitled to receive a gross monthly
salary of EUR 1,272.26.
*****
Player C, from country S / C A, from country G
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II.
Considerations of the Dispute Resolution Chamber
1.
First of all, the Dispute Resolution Chamber (hereinafter referred to as the DRC or
the Chamber) analysed whether it was competent to deal with the matter at stake.
In this respect, the Chamber referred to art. 21 par. 1 and 2 of the Rules Governing
the Procedures of the Players’ Status Committee and the Dispute Resolution
Chamber (edition 2008; hereinafter: Procedural Rules). The present matter was
submitted to FIFA on 19 January 2012, thus, after the aforementioned Rules entered
into force on 1 July 2008. Consequently, the Chamber concluded that the 2008
edition of the Procedural Rules is applicable to the matter at hand.
2.
With regard to the competence of the Dispute Resolution Chamber, art. 3 par. 1 of
the Procedural Rules states that the Dispute Resolution Chamber shall examine its
jurisdiction in the light of art. 22 to 24 of the Regulations on the Status and
Transfer of Players (edition 2012). In accordance with art. 24 par. 1 in combination
with art. 22 lit. b) of the aforementioned Regulations, the Dispute Resolution
Chamber would, in principle, be competent to deal with the matter at stake, which
concerns an employment-related dispute with an international dimension between
a country S player and a country G club.
3.
However, the Chamber acknowledged that the Respondent contested the
competence of FIFA’s deciding bodies on the basis of art. 10 of the employment
contract according to which “[all] disputes between the parties are settled by the
Appeals Committee for the Resolution of Financial Disputes (PEEOD) at first
instance, and the Court of Arbitration of the country G Football Federation at
second instance” (informal translation).
4.
In this regard, the Chamber noted that the Claimant rejected such position and
insisted on the fact that FIFA has jurisdiction to deal with the present matter.
5.
Taking into account the above, the Chamber emphasised that in accordance with
art. 22 lit. b) of the 2012 edition of the Regulations on the Status and Transfer of
Players it is competent to deal with a matter such as the one in 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
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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. In this regard, the
members of the Chamber further referred to the principles contained in the FIFA
National Dispute Resolution Chamber (NDRC) Standard Regulations, which came
into force on 1 January 2008.
6.
While analysing whether it was competent to hear the present matter, the Dispute
Resolution Chamber turned to art. 10 of the employment contract, on the basis of
which the Respondent contested FIFA’s jurisdiction. The Chamber recalled once
more that said art. 10 stipulates that “all disputes between the parties are settled by
the Committee for the Resolution of Financial Disputes (PEEOD) at first instance,
and the Court of Arbitration of the country G Football Federation at second
instance”.
7.
In this respect and in view of the aforementioned jurisdiction clause, the DRC had
primarily to examine, based on the documents provided, whether or not the
Committee and the Court of Arbitration of the country G Football Federation meet
the minimum procedural standards for independent arbitration tribunals as laid
down in art. 22 lit. b) of the Regulations on the Status and Transfer of Players, in the
FIFA Circular no. 1010 as well as in the FIFA National Dispute Resolution Chamber
(NDRC) Standard Regulations.
8.
In this regard, the DRC, after a careful study of the documents on file, referred to
art. 41 G. 5. of the country G Football Federation Statutes and art. 4 of the
Procedural Rules of the country F Football Federation, which, in relation to the
composition of the Committee, stipulate that the Committee is composed of five
members. Furthermore, the relevant article of the Procedural Rules of the country G
Football Federation stipulates that the Committee shall be composed of a chairman
and a substitute chairman who will be active higher judiciaries; two representatives
of the players and two representatives of the clubs. The relevant article of the
country F Football Federation Statutes provides that “the Chairman of the
Committee and his substitute being active higher judiciaries. In the event that an
active judiciary is not able to participate, then a non-active judiciary is appointed.
Two (2) members are appointed from the Board of Directors of the country G
Professional Players Association and two (2) from the Board of Directors of the
Professional Associations.”
9.
In this context, the Chamber observed that there was no indication in said rules and
statutes how the chairman of the relevant country G decision-making bodies is
appointed, i.e. it remains unknown whether the chairman is appointed by consensus
by the player and club representatives, nor does it become clear who exactly the
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chairman is. As a result, the Chamber decided that the aforementioned provisions of
the rules and statutes of the country G Football Federation do not comply with art.
3 of the NDRC Standard Regulations, which, inter alia, requires that a chairman and
deputy chairman are chosen by consensus by the player and club representatives.
10.
Likewise, the Chamber referred to art. 41 G. 1. of the country G Football Federation
Statutes and noted that the Court of Arbitration is composed of three members,
consisting of its President and his substitute who are “supreme active judiciaries”
and two members, which are appointed “each by each party”. Equally, the Chamber
came to the conclusion that the provisions governing the composition of the Court
of Arbitration do not demonstrate how exactly the President and his substitute are
appointed and thus fail to clarify whether the President and his substitute are
chosen by consensus by the player and club representatives.
11.
In conclusion, the Chamber decided that the Respondent could not prove that both
national bodies, i.e. the Committee and the Court of Arbitration, comply with the
minimal procedural standards in order to be recognised as an independent
arbitration tribunal, as established in art. 22 lit. b) of the FIFA Regulations as well as
in the FIFA Circular no. 1010. In particular, said bodies do not respect the principle
of equal representation of players and clubs, which is a fundamental principle to
meet. Consequently, as established by the DRC on previous occasions, the Chamber
considered that neither the Committee nor the Court of Arbitration can be
recognised.
12.
In view 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.
13.
In continuation, the Chamber analysed which edition of the FIFA Regulations on the
Status and Transfer of Players should be applicable as to the substance of the
matter. In this respect, the Chamber confirmed that, in accordance with art. 26 par.
1 and 2 of the Regulations on the Status and Transfer of Players (editions 2010 and
2012) and considering that the present claim was lodged on 19 January 2012, the
2010 edition of said Regulations is applicable to the matter at hand as to the
substance.
14.
The competence of the Dispute Resolution Chamber and the applicable regulations
having been established, the Chamber acknowledged that it was undisputed by the
parties that they had signed an employment contract on 6 January 2011 valid as of
Player C, from country S / C A, from country G
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the date of signature until 30 June 2013, in accordance with which the player was
entitled to receive, inter alia, the total amount of EUR 375,000 for the period of
time between 31 January 2011 and 31 March 2013.
15.
Subsequently, the Chamber also took note that it is uncontested by the Respondent
that the contractual relationship between the parties to the present dispute was
terminated by the Claimant on 3 January 2012, at the moment when the Claimant
had submitted its termination letter to the Respondent.
16.
The Claimant maintains that he had just cause to terminate the employment
contract on 3 January 2012, as the Respondent had only paid him EUR 30,500 out of
the EUR 105,000 which were, according to the Claimant, due at the time of the
unilateral termination. In this respect, the Chamber recalled that, on 27 December
2011, the player had formally notified the club of his discontent, providing the
latter with an ultimatum as to comply with its contractual obligations, i.e. payment
of his outstanding salaries amounting to EUR 74,500.
17.
The Respondent, for its part, does not contest to have been in delay with the
payments due to the Claimant, but it does however contest the exact amount
claimed by the latter. According to the Respondent, the outstanding amount that
was due to the player up to the day of the termination of the contract on 3 January
2012 was in fact equivalent to EUR 69,500 and not 74,500 as requested by the
Claimant. The Respondent sustains to have paid the player an extra EUR 5,000 on 21
October 2011, which it justifies by providing a dated bank account statement.
18.
In this respect, the members of the Chamber deemed it important to highlight that
the Claimant had not contested the Respondent´s allegation regarding the extra
payment of EUR 5,000 on 21 October 2011.
19.
Having said this, and in view of the abovementioned facts, in particular, that the
Respondent admitted that EUR 69,500 remained unpaid at the moment of the early
termination of the contract by the Claimant, the Chamber concurred that the
Respondent had evidently failed, without any valid reason, to pay the Claimant´s
remuneration in accordance with its contractual obligations and that it had, thus, as
a result seriously neglected its obligations under the employment contract.
20.
At this juncture, the members of the Chamber also wished to emphasise that,
according to its long-standing jurisprudence, the non-payment or late payment of
remuneration by an employer does in principle – and particularly if repeated as in
the present case – constitute “just cause” for termination of the contract, since the
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employer’s payment obligation is his main obligation towards the employee. The
Chamber wished to underline in this respect that, once the employer repeatedly
fails with this obligation, the employee can no longer be expected to continue in
the employment relationship.
21.
On account of the preceding considerations, the Chamber stated that it was obvious
that the Respondent had seriously neglected its contractual obligations towards the
Claimant by failing to pay the Claimant several of his salary payments, even though
having been formally notified by the Claimant of its arrears. Therefore, the
Chamber considered that the Respondent was found to be in breach of the contract
and that, in line with the Chamber’s long-standing and well-established
jurisprudence, the breach was of such seriousness that the Claimant had a just cause
to unilaterally terminate the contractual relationship with the Respondent on 3
January 2012.
22.
On account of the above, the Chamber established that the Claimant had
terminated the employment contract with just cause on 3 January 2012 and that the
Respondent is to be held liable for the early termination of the employment contact
with just cause by the Claimant.
23.
Bearing in mind the previous considerations, the Chamber went on to deal with the
consequences of the early termination of the employment contract with just cause
by the Claimant.
24.
First of all, the members of the Chamber concurred that the Respondent must fulfil
its obligations as per the employment contract in accordance with the general legal
principle of “pacta sunt servanda”. Consequently, and taking into account that the
Claimant never contested that it had received the extra EUR 5,000, the Chamber
decided that the Respondent is liable to pay to the Claimant the remuneration that
was outstanding at the time of the termination in the amount of EUR 69,500.
25.
In addition, taking into consideration the player’s claim, the Chamber decided to
award him interest at the rate of 5% p.a. over said amount as of 19 January 2012
until the date of effective payment.
26.
Furthermore, having established that the Respondent is to be held responsible for
the early termination of the employment contract with just cause by the Claimant,
the Chamber decided that, taking into consideration art. 17 par. 1 of the
Regulations, the Claimant is entitled to receive from the Respondent compensation
for breach of contract in addition to any outstanding salaries on the basis of the
relevant employment contract.
Player C, from country S / C A, from country G
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27.
In this context, the Chamber outlined that, in accordance with said provision, the
amount of compensation shall be calculated, in particular and unless otherwise
provided for in the contract at the basis of the dispute, with due consideration for
the law of the country concerned, the specificity of sport and further objective
criteria, including, in particular, the remuneration and other benefits due to the
Claimant 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.
28.
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.
Upon careful examination of the employment contract concluded between the
Claimant and the Respondent, the members of the Chamber took note that art. 4.11
of the contract indicates that if the club prematurely terminates the contract with
the player during the protective period, the latter will be entitled to a
compensation of EUR 300,000 whereas, according to art. 5.5 of the contract, if the
opposite occurred, the club will be thereby entitled to a compensation of EUR
500,000.
29.
The Chamber duly analysed the contents of said clause and acknowledged that both
parties had duly signed the employment contract and thus had mutually agreed on
said clause. The Chamber further acknowledged that the aforementioned clause
provides for the amount of compensation payable in the event of the termination
of the employment contract by one of the parties. Having said this, the members of
the Chamber considered said clause to be reciprocal, not disproportional, and
outlined that such clauses are recognised by art. 17 par. 1 and 2 of the Regulations.
In relation to the argument raised by the Respondent in this respect, the Chamber
underlined that the relevant clause did not, contrary to what the Respondent
sustained, refer to the Regulations of the country G Football Federation and that,
therefore, the Respondent’s argumentation could not be followed.
30.
On account of the above, the parties having contractually agreed on the
compensation payable in the event of breach of contract and such compensation
not being disproportionate, the Dispute Resolution Chamber concluded that the
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provision contained under art. 4.11 of the employment contract has to be
considered as valid and fully effective, i.e. the amount of compensation provided in
said article shall be awarded to the Claimant. Furthermore, for these reasons, the
Chamber concurred that any remuneration under the new employment is irrelevant
in the case at hand.
31.
Consequently, the members of the Chamber decided that the Respondent has to
pay to the Claimant the total amount of EUR 300,000 as compensation for breach of
contract.
32.
Finally and for all the above reasons, the Chamber decided to partially accept the
Claimant´s claim and that the Respondent must pay to the Claimant the amount of
EUR 69,500 as outstanding remuneration, plus 5% interest p.a. on said amount as of
19 January 2012 and EUR 300,000 as compensation for breach of contract.
33.
The Dispute Resolution Chamber concluded its deliberations in the present matter
by establishing that any further claim filed by the Claimant is rejected.
*****
III.
Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Player C, is admissible.
2.
The claim of the Claimant is partially accepted.
3.
The Respondent, Club A, has to pay to the Claimant, within 30 days as from the date
of notification of this decision, outstanding remuneration in the amount of EUR
69,500 plus 5% interest p.a. as on said amount as of 19 January 2012 until the date
of effective payment.
4.
The Respondent has to pay to the Claimant, within 30 days as from the date of
notification of this decision, compensation for breach of contract amounting to EUR
300,000.
5.
In the event that the amounts due to the Claimant in accordance with the abovementioned numbers 3. and 4. are not paid by the Respondent within the stated
time limits, the present matter shall be submitted, upon request, to the FIFA
Disciplinary Committee for consideration and a formal decision.
Player C, from country S / C A, from country G
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6.
Any further claim lodged by the Claimant is rejected.
7.
The Claimant is directed to inform the Respondent immediately and directly of the
account number to which the remittances are to be made and to notify the Dispute
Resolution Chamber of every payment received.
*****
Note relating to the motivated decision (legal remedy):
According to art. 67 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
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00 / Fax: +41 21 613 50 01
e-mail: [email protected]
www.tas-cas.org
For the Dispute Resolution Chamber:
Jérôme Valcke
Secretary General
Encl. CAS directives
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