Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 30 July 2014,
in the following composition:
Thomas Grimm (Switzerland), Deputy Chairman
Johan van Gaalen (South Africa), member
Theodore Giannikos (Greece), member
on the claim presented by the player,
Player K, from country U
as Claimant
against the club,
Club O, from country T
as Respondent
regarding an employment-related dispute arisen between the parties
I.
Facts of the case
1.
On 12 July 2013, Player K, from country U (hereinafter: the Claimant) and Club O,
from country T (hereinafter: the Respondent) concluded an employment contract
(hereinafter: the contract) which provides for a duration of two seasons as from
the date of signature until 31 May 2015. The contract states that “if Club O does
not get promoted to Super Lig at the end of 2013-2014, the players contract will
be cancelled automatically”. Conversely, it also stipulates that “if Club O gets
promoted Super League at the end of 2013-2014 season, the players contract will
be renewed automatically for 1 year with a total salary of 475,000 USD net per
year”.
2.
According to said contract, the Claimant would receive the following net amounts:
- For the season 2013-14:
USD 65,000 due on 22 July 2013;
USD 90,000 payable in ten equal monthly instalments, the first instalment
due on 1 August 2013.
- For the season 2014-15:
USD 175,000 due on 1 July 2014;
USD 300,000 payable in ten equal monthly instalments, the first instalment
due on 1 August 2014.
3.
According to article 3 of the contract, “in case the Club would not pay the signing
fee of 65,000 USD on 22 July 2013, then the Player will be free to terminate this
contract unilaterally without sending any warning and without being obliged to
pay any kind of compensation. In the event of non-payment of the stated date,
the Club shall be obliged to pay a penalty of 32,500 USD in addition to the
monetary obligations stemming from this Contract.”
4.
On 28 July 2013, the Claimant put the Respondent in default for the payment of
the sign-on fee due on 22 July 2013.
5.
On 31 July 2013, the Respondent wrote to the Claimant’s agent expressing its
intention to discuss the termination of the contract.
6.
On 1 August 2013, the Claimant replied stating that he would consider the mutual
termination as soon as the payment of the sign-on fee would be made.
7.
On 6 August 2013, with reference to the outstanding sign-on fee and salary due
on 1 August 2013 as well as article 3 of the contract, the Claimant terminated the
employment contract in writing.
8.
On 7 August 2013, the Claimant filed a claim against the Respondent before FIFA
requesting the payment of the amount of USD 712,500, broken down as follows:
Player K, from country U / Club O, from country T
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- USD 74,000 corresponding to the outstanding sign-on fee and one monthly
salary (due on 1 August 2013);
- USD 32,500 as penalty stipulated in article 3 of the contract;
- USD 556,000 as compensation:
USD 81,000 for the rest of 2013-14 season (nine monthly salaries);
USD 475,000 for the 2014-15 season.
9.
In its response, the Respondent stresses that “although the sides made a contract,
Player K had not good condition to make such contract” and therefore that “the
contract conditions was not occurred”. The Respondent alleges that this bad shape
was the reason why they proposed on 31 July 2013 to terminate the employment
contract mutually.
10.
Besides, the Respondent states that, should the Dispute Resolution Chamber hold
it liable for breach of contract, the salary for the 2014-15 season should not be
taken into account since the extension to this second season was subject to the
promotion to the country T Super Lig.
11.
On 10 February 2014, the Claimant and the Club N, from country U signed an
employment contract valid as from the date of signature until 10 February 2015,
according to which the Claimant was entitled to a monthly salary of currency of
country U 5,000,000 (USD 2,270).
12.
At the end of the 2013-14 season, the Respondent failed to gain promotion to the
country T Super Lig.
II.
Considerations of the Dispute Resolution Chamber
1.
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 submitted to FIFA
on 7 August 2013. Consequently, the 2012 edition of the Rules Governing the
Procedures of the Players’ Status Committee and the Dispute Resolution Chamber
(hereinafter: Procedural Rules) are applicable to the matter at stake (cf. art. 21 par.
2 and 3 of the 2012 edition 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 and par. 2 in
combination with art. 22 lit. b) of the Regulations on the Status and Transfer of
Players (edition 2012), the Dispute Resolution Chamber is competent to deal with
the matter at stake, which concerns an employment-related dispute with an
international dimension between an country U player and a country T club.
Player K, from country U / Club O, from country T
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3.
Furthermore, 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 Players
(edition 2012), and considering that the present claim was lodged on 7 August
2013, the 2012 edition of said regulations (hereinafter: Regulations) is applicable
to the matter at hand as to the substance.
4.
The competence of the Chamber and the applicable regulations having been
established, the Chamber entered into the substance of the matter. In this respect,
the Chamber started by acknowledging all the above-mentioned facts as well as
the arguments and the documentation submitted by the parties. 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.
5.
In this respect, the Chamber acknowledged that, on 12 July 2013, the parties had
signed an employment contract which provides for a remuneration of USD 155,000
for the 2013-14 season and, as per the wording of the contract, “if Club O gets
promoted Super League at the end of 2013-2014 season, the players contract will
be renewed automatically for 1 year with a total salary of 475,000 USD net per
year” and that “if Club O does not get promoted to Super Lig at the end of 20132014, the players contract will be cancelled automatically”.
6.
In continuation, the members of the Chamber noted that the Claimant lodged a
claim against the Respondent maintaining that he had terminated the
employment contract with just cause on 6 August 2013, after previously having put
the Respondent in default. In particular, the Claimant deemed to have had a just
cause to terminate the contract since the Respondent allegedly failed to pay the
Claimant’s remuneration, consisting of a sign-on fee of USD 65,000 as well as one
monthly salary. Consequently, the Claimant asks to be awarded his outstanding
dues as well as the payment of compensation for breach of the employment
contract.
7.
The Chamber further took note that the Respondent did not contest not having
paid the claimed amounts to the Claimant. However, the DRC noted that the
Respondent argues that it did not do so because, after the signature of the
contract, it realised that the Claimant was in bad shape. From the latter fact, the
Respondent deduced that the conditions of the contract were not fulfilled and
that therefore said contract was null and void.
8.
In this context, the members of the Chamber referred to art. 18 par. 4 of the
Regulations which stipulates that “the validity of a contract may not be made subject
to a positive medical examination and/or the granting of a work permit”.
9.
Thereto, the Chamber pointed out that the responsibility to conduct the necessary
medical examinations prior to the signing of the employment contract is
Player K, from country U / Club O, from country T
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incumbent on the Respondent and that therefore, the argument of the
Respondent had to be rejected.
10.
In light of the above, the Dispute Resolution Chamber concluded that by failing to
pay the Claimant the sign-on fee, which represents more than two thirds of the
Claimant’s annual salary, as well as one monthly salary – despite being put in
default – the Respondent breached the contract and therefore the Claimant had
just cause to unilaterally terminate the contractual relationship.
11.
Having established that the Respondent is to be held liable for the early
termination of the employment contract, the Chamber focused its attention on the
consequences of such termination. Taking into consideration art. 17 par. 1 of the
Regulations, the Chamber decided that the Claimant is entitled to receive from the
Respondent an amount of money as compensation for breach of contract in
addition to any outstanding payments on the basis of the relevant employment
contract.
12.
First of all, the Chamber reverted to the Claimant’s financial claim, which includes
outstanding amounts of USD 74,000 corresponding to the sign-on fee and a
monthly salary as well as USD 32,500 relating to the amount stipulated in article 3
of the contract.
13.
In this regard, the DRC recalled that it is uncontested that the amount of USD
74,000 was outstanding at the time of the termination. As to amount stipulated in
article 3 of the contract, the members of the Chamber observed that the parties
contractually agreed that “in the event of non-payment of the stated date, the Club
shall be obliged to pay a penalty of 32,500 USD in addition to the monetary
obligations stemming from this Contract”. On this basis, the Chamber considered
that the parties had agreed that the amount of USD 32,500 would have to be paid
as a penalty by the Respondent in the event it would be in delay for the payment
of the sign-on fee. Consequently, and in accordance with the principle pacta sunt
servanda, the Dispute Resolution Chamber concluded that at the time of the
termination, the Claimant was entitled to receive the penalty of USD 32,500, which
had fallen due as of the Respondent’s failure to pay the sign-on fee. Accordingly,
the Chamber held that the amount of USD 32,500 is to be considered as an
outstanding amount.
14.
In light of the foregoing, the Dispute Resolution Chamber decided that the
Respondent is liable to pay the Claimant the amount of USD 106,500 as
outstanding remuneration.
15.
In continuation, the Chamber focused its attention on the calculation of the
amount of compensation for breach of contract in the case at stake. In doing so,
the members of 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
Player K, from country U / Club O, from country T
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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.
16.
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 pointed out that clause 3 of the contract is
not clear and does not set a fixed amount in case of termination of the contract
without just cause by either of the parties. Accordingly, the DRC was of the
opinion that the clause rather constitutes a penalty clause as previously outlined
(cf. points II. 12 and II.13) than a compensation clause.
17.
As a consequence, the members of the Chamber determined that the amount of
compensation payable by the Respondent to the Claimant 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.
18.
Bearing in mind the foregoing as well as the claim of the Claimant, the Chamber
proceeded with the calculation of the monies payable to the Claimant under the
terms of the employment contract until the end of the contractual relationship.
19.
In order to do so, the DRC focused its attention on the above-mentioned
stipulations related to the duration of the contract (cf. points I.1 and II.5). In this
regard, the members of the Chamber emphasised that the conditions set for the
contract to be renewed, i.e. the Respondent’s promotion to the country T Super
Lig, are totally independent from the will of any of the parties. Consequently, and
considering their lack of potestative nature, the Chamber held that the
aforementioned stipulations had to be deemed valid. In light of the foregoing
conclusion, the DRC pointed out that at the time of the termination of the
contract, the Claimant and the Respondent were only bound by a contract until
the end of the 2013-14 season as the following season depended on a further
condition as stated above. On account thereof and the fact that the Respondent
failed to gain promotion at the end of the 2013-14 season, the Dispute Resolution
Chamber decided that only the remuneration provided for the 2013-14 season had
to be taken into consideration and concluded that the amount of USD 81,000, i.e.
nine monthly salaries amounting to USD 9,000 each, served as the basis for the
determination of the amount of compensation for breach of contract.
Player K, from country U / Club O, from country T
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20.
In continuation, the Chamber verified as to whether the Claimant had signed an
employment contract with another club during the relevant period of time, by
means of which he would have been enabled to reduce his loss of income.
According to the constant practice of the DRC, 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.
21.
Indeed, on 10 February 2014, the Claimant concluded an employment contract
with the Club N, from country U, valid as of the date of signature until 10 February
2015, according to which the Claimant is entitled to a monthly salary of currency
of country U 5,000,000 (USD 2,270). Consequently, the Chamber established that
the value of the new employment contract concluded between the Claimant and
the new club for the period as from the date of termination of the contract until
31 May 2014 amounted to USD 9,080.
22.
In accordance with the constant practice of the Dispute Resolution Chamber and
the general obligation of the player to mitigate his damages, such remuneration
under the new employment contract shall be taken into account in the calculation
of the amount of compensation for breach of contract.
23.
In view of all of the above, the DRC decided that the Respondent must pay the
amount of USD 71,920 to the Claimant, which is considered by the DRC to be a
reasonable and justified amount as compensation for breach of contract.
24.
The Dispute Resolution Chamber concluded its deliberations in the present matter
by establishing that any further claim filed by the Respondent / Counter-Claimant
is rejected.
*****
III.
Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Player K, is partially accepted.
2.
The Respondent, Club O, has to pay to the Claimant, within 30 days as from the
date of notification of this decision, outstanding remuneration in the amount of
USD 106,500.
3.
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
USD 71,920.
4.
In the event that the amounts due to the Claimant in accordance with the abovementioned numbers 2. and 3. are not paid by the Respondent within the stated
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time limits, interest at the rate of 5% p.a. will fall due as of expiry of the
aforementioned time limits and the present matter shall be submitted, upon
request, to the FIFA Disciplinary Committee for consideration and a formal
decision.
5.
Any further claim lodged by the Claimant is rejected.
6.
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
Player K, from country U / Club O, from country T
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