Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 30 August 2013,
in the following composition:
Geoff Thompson (England), Chairman
Jon Newman (USA), member
Damir Vrbanovic (Croatia), member
on the claim presented by the player,
Player O, from country B
as Claimant
against the club,
Club G, from country I
as Respondent
regarding an employment-related dispute
arisen between the parties
I.
Facts of the case
1.
In January 2010, Club G, from country I (hereinafter: the Respondent), Club N,
from country P (hereinafter: Club N), and the country B player, Player O
(hereinafter: the Claimant), signed a “Preliminary Transfer Agreement”
(hereinafter: the transfer agreement), for the transfer of the Claimant with
effects 1 July 2010.
2.
Clause 1 of the transfer agreement states that “the Player’s [the Claimant]
sports rights are definitely transferred to Club G [the Respondent], which
commits to duly register him by applying to the competent country I Football
Federation organs”.
3.
Consequently, on 18 May 2010, the Claimant and the Respondent concluded a
“preliminary employment contract” (hereinafter: the contract) valid as of 1
July 2010 until 30 June 2015, i.e. 5 seasons.
4.
According to the contract, the Claimant was entitled to receive EUR 500,000
net for each season as remuneration. In addition, according to the contract,
the Claimant was also entitled, for each sporting season, to the following
bonuses:
- EUR 50,000 net “at the fifteenth game appearance for at least 45
minutes in official matches of the senior men’s first team of Club G in
the national league championship of series “A””;
- EUR 50,000 net “at the twenty-fifth game appearance for at least 45
minutes in official matches of the senior men’s first team of Club G in
the national league championship of series “A””;
- EUR 50,000 net “at the thirtieth game appearance for at least 45
minutes in official matches of the senior men’s first team of Club G in
the national league championship of series “A””.
5.
Clause 3 of the contract provides that “the parties, by executing this
employment contract, acknowledge and undertake to abide by all the
regulations set forth in the Collective Bargaining Agreement in force (its
content and relevant attachments), among which, (…) art 3.1.-3.3. (duty to
deposit the Contract and the other Agreements); art. 3.4 and 3.6. (necessity of
the approval of the Contract and of the other Agreements; effects and
indemnity in the absence) […]”.
6.
Clause 4 of the contract states that “all claims concerning the interpretation,
performance or termination of this Contract or of the other agreements, as
well as any other dispute arising out of the employment relationship between
the Player and the Club will be submitted to the Arbitration Panel, that will
issue its decision according to the modalities, deadlines and provisions of the
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relevant Regulations, which constitute annex to the Collective Bargaining
Agreement”.
7.
Clause 5 stipulates: “By executing this contract, the parties undertake: (…)
–to abide by the rules of the Statutes and of the Football Association;
–to accept the full and definitive effect of any decision issued by the country I
Football Federation, its Bodies and delegated entities (…) as well as the
decisions rendered by the Arbitration Panel, by declaring in particular that
they accept without limitations the arbitration clause set forth under art. 30 of
the country I Football Federation Statutes”.
8.
On 6 August 2010, the Claimant lodged a claim against the Respondent in
front of FIFA alleging the failure of the Respondent to deposit the contract in
the country I Football League and so breaching its contractual obligations.
According to the Claimant, this failure of the Respondent resulted in the
impossibility for him to be duly registered with the Respondent along with the
consequent concerns for the Claimant.
9.
Based on the previous considerations, the Claimant requested to be awarded
with the following:
- EUR 3,250,000 for the whole value of the contract (salaries in the
amount of EUR 2,500,000 plus bonuses in the amount of EUR 750,000);
- EUR 1,000,000 as moral damages;
- legal costs.
10.
The Claimant declared that since the signing of the contract, he himself and his
representatives, repeatedly asked the Respondent for confirmation of the
proper registration of the contract in the country I Football League, however,
the Respondent never replied concerning this issue. In addition, the Claimant
informed FIFA that during a meeting held between his agents and
representatives and the Respondent, the latter acknowledged their breach of
contract.
11.
The Respondent, in its response, first challenged FIFA’s competence to deal
with this matter on the basis of clause 4 of the contract and alleging that the
Court of Arbitration of the country I Football Federation had the exclusive
jurisdiction over this matter. Upon FIFA’s request to the Respondent to send all
the pertinent regulations of the country I NDRC, the Respondent only provided
the translation to English of the Collective Bargaining Agreement concluded
on 1 July 2005 (hereinafter: the CBA), together with a document named
“Arbitration Committee Regulations” of which only art. 1 was translated. After
another request of FIFA to provide all the pertinent regulations including the
original versions, the Respondent submitted again only the translation of the
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CBA as well as the English translation of the “Arbitration Committee
Regulations”.
12.
According to the abovementioned regulations, the LNP and the AIC provide
the Committee’s secretary with a list of arbitrators appointed by the clubs, a
list of arbitrators appointed by the players and an approved list of presidents.
When an arbitration procedure is lodged before this Committee, the parties to
the procedure appoint the arbitrators from the abovementioned lists. The
appointed arbitrators then choose the president also from the approved list.
13.
Article 10 of the regulations states that the decision will be approved by the
majority of the Committee. However, the regulations do not establish a clear
appeal procedure, once the decision is passed. Article 10.8 states “whenever a
challenge is requested” but does not specify in front of which body.
14.
The Respondent stressed that the CBA covers all the matters involving the
labour contract, “including a possible lack of the relevant deposit.” This is,
according to the Respondent, confirmed by the aforementioned regulations
which establish that these regulations apply to all the disputes relevant to the
contract concluded in the scope of the CBA, also the “deposit of the
preliminary contracts” which is provided for under the CBA.
15.
As to the substance, the Respondent alleged that, according to article 3.2 of
the CBA, if the Respondent does not register the contract under the relevant
body within five days following its signing, the Claimant can do it directly
within sixty days following the date of its signing. According to the
Respondent, the Claimant had to be aware of this possibility.
16.
Furthermore, the Respondent provided a statement from the legal director of
the LNP assuring that every “employment-related disputes pursuant contracts
stipulated until June 30, 2010, even in case they arose after such date” are
subject to be dealt with by the abovementioned Arbitration Committee.
17.
Finally, the Respondent argued that the transfer agreement only gave them an
option right on the Claimant, and that the Respondent decided not to exercise
such option. According to the Respondent, the employment contract between
the Claimant and Club N was still valid when the club decided not to exercise
its option over the Claimant, therefore the employment relationship between
the Claimant and Club N was never interrupted.
18.
In his replica, the Claimant insisted on the competence of FIFA to deal with the
matter arguing that (i) due to the lack of registration with the LNP, the
contract “is null, and void and has no effect, hence, the player is not entitled
to seek redress before the Arbitration Committee, and that (ii) the CBA, which
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integrates the regulations of the Arbitration Committee, expired on 30 June
2010 and was not renewed, so “the Collegio Arbitrale is only dealing with the
disputes concerning employment relationships which were already existing
prior to the above date”.
19.
In addition, the Claimant remitted a further submission by means of which he
stressed that the CBA establishes the obligation for clubs to register and
deposit the contract, while for players it is a mere faculty. In this respect, the
Claimant indicated that the Respondent’s attitude demonstrates a “blatant
breach” of its contractual obligations and of the principle of good faith and,
hence, deemed he should be awarded with the relevant compensation.
20.
In response to the above-mentioned Claimant’s statements, the Respondent
reiterated its previous arguments and referred to its previous statements.
Moreover, the Respondent insisted on the competence of the relevant bodies
under the Italian Football Federation.
21.
Upon request of FIFA, the Claimant confirmed that he signed a new
employment contract with the Club E, from country E, on 11 August 2010. The
Claimant was first loaned by Club N to Club E, after which the latter later on
executed the purchase option. According to the execution of the purchase
option by the country T club, the contract was valid as from 11 August 2010
until 31 May 2013 and later on extended until 31 May 2017. In accordance with
the relevant employment contracts, the Claimant would receive as
remuneration for the period between 11 August 2010 and 30 June 2015, the
amount of EUR 3,800,000 (EUR 600,000 per season through seasons 2010-2011,
2011-2012 and 2012-2013 and EUR 1,000,000 per season through seasons 20132014 and 2014-2015).
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, it took note that the present matter was submitted to
FIFA on 6 August 2010. Consequently, the 2008 edition of the Rules Governing
the Procedures of the Players’ Status Committee and the Dispute Resolution
Chamber (hereinafter: the Procedural Rules) is applicable to the matter at
hand (cf. art. 21 of the 2008 and 2012 editions 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 shall
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adjudicate on employment-related disputes between a club and a player that
have an international dimension.
3.
As a consequence, the Dispute Resolution Chamber would, in principle, be
competent to decide on the present litigation involving a country B player and
an country I club regarding an alleged breach of the employment contract
concluded between the aforementioned parties.
4.
However, the Chamber acknowledged that the Respondent contested the
competence of FIFA’s deciding bodies on the basis of clause 4 of the
employment contract and alleging that the Arbitration Committee of the
country I Football Federation had the exclusive jurisdiction over this matter. In
particular, the Chamber took note that the Respondent argued that the
Collective Bargaining Agreement concluded on 1 July 2005 is applicable and, in
consequence, the Arbitration Committee of the country I Football Federation
should be the competent body to hear the matter at stake.
5.
In this regard, the Chamber acknowledged that the Claimant insisted on the
fact that FIFA has jurisdiction to deal with the present matter.
6.
Taking into account the above, the Chamber emphasised that in accordance
with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is
competent to deal with a matter such as the one at hand, unless an
independent arbitration tribunal, guaranteeing fair proceedings and
respecting the principle of equal representation of players and clubs, has been
established at national level within the framework of the association and/or a
collective bargaining agreement. With regard to the standards to be imposed
on an independent arbitration tribunal guaranteeing fair proceedings, the
Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. 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.
7.
While analysing whether it was competent to decide on the present matter,
the Chamber first referred to the fact that the Claimant had never been
registered with the country I Football Federation. The Chamber held that, as a
consequence of the fact that the player had never been registered with the
country I Football Federation, the player had evidently also never fallen under
the jurisdiction of the country I Football Federation. The foregoing fact was, in
the Chamber’s view, the first basis on which it could be established that the
relevant arbitration bodies in country I were not competent to adjudicate on
the matter between the Claimant and Respondent.
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8.
What is more, the Chamber referred to the abovementioned Collective
Bargaining Agreement, which was concluded on 1 July 2005 by and between
the country I Football Federation, the country I Football League and the
country I Footballer’s Association and, in particular, the Chamber focused its
attention on article 23 of such agreement provided by the Respondent, which
reads: “This agreement shall run from 1 July 2005 until 30 June 2006 and is not
tacitly renewable or extendable”. Hence, considering that the employment
contract at the basis of the dispute was signed on 18 May 2010 and that it
would start to run as from 1 July 2010, that the relevant claim was lodged on 6
August 2010 by the Claimant in front of FIFA and that the version of the
Collective Bargaining Agreement provided by the Respondent had already
expired on 30 June 2006, the Chamber determined that such version of the
pertinent regulations did not correspond in time with the event giving rise to
the dispute, and, therefore, said edition could not be applicable, in any case,
to the matter at stake. Likewise, even if, as mentioned by the legal director of
the LNP, the Collective Bargaining Agreement would run until 30 June 2010,
which was however not supported by the provided set of rules by the
Respondent, then still the Collective Bargaining Agreement would not be
applicable, considering that the relevant employment contract would start
running as from 1 July 2010 only.
9.
As a result, and taking into consideration the above circumstances, the Dispute
Resolution Chamber concluded that the Respondent’s objection to the
competence of FIFA to hear the present dispute has to be rejected, and that
the Dispute Resolution Chamber is therefore competent, on the basis of art. 22
b) of the Regulations on the Status and Transfer of Players, to consider the
present matter as to the substance.
10.
In continuation, the Chamber analysed which edition of the Regulations on
the Status and Transfer of Players should be applicable as to the substance of
the matter. In this respect, the Chamber referred, on the one hand, to art. 26
par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions
2009, 2010 and 2012) and, on the other hand, to the fact that the present
claim was lodged in front of FIFA on 6 August 2010. The Dispute Resolution
Chamber concluded that the 2009 edition of the Regulations for the Status
and Transfer of Players (hereinafter: the Regulations) is applicable to the
matter at hand as to the substance.
11.
The competence of the Chamber and the applicable regulations having been
established, the Chamber entered into the substance of the matter. In doing
so, the members of the Chamber started by acknowledging that the parties to
the dispute had signed an employment contract on 18 May 2010 in accordance
with which the Respondent would pay the Claimant a salary in the amount of
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EUR 500,000 net per season, as well as several bonuses conditioned to the
appearance of the Claimant in the pertinent football games.
12.
In continuation, the Chamber noted that the Claimant lodged a claim against
the Respondent maintaining that the Respondent had breached the
employment contract by failing to register such contract in the country I
Football League, with the consequent damages for the Claimant.
13.
Thereafter, the members of the Chamber took note of the reply of the
Respondent, which acknowledged that the employment contract had not been
registered with the country I Football League but that, conversely and
according to article 3.2 of the Collective Bargaining Agreement, the Claimant
could have proceeded with the registration within sixty days following the
date of its signing in case that the Respondent did not register it.
14.
In this context, the Chamber considered relevant to recall its jurisprudence in
accordance with which the validity of an employment contract cannot be
made conditional upon the execution of (administrative) formalities, such as,
but not limited to, the registration procedure in connection with the
international transfer of a player, which is the sole responsibility of a club and
on which a player has no influence. As regards the matter at stake, the
Respondent acknowledged that it did not proceed to the registration of the
contract and asserted that the Claimant could have done it himself. In this
regard, the Chamber emphasized that, in accordance with art. 2 par. 1 of
Annexe 3 of the Regulations, an application to register a professional shall be
accompanied by a copy of the contract between the new club and the
professional. For these reasons and whilst emphasizing once more that it is the
responsibility of the club to register a player’s contract with its national
association, the members of the Chamber decided to reject the Respondent’s
arguments in this regard.
15.
On account of the above, in particular, by not carrying out the relevant steps
for the registration procedure of the employment contract although this being
the responsibility of the Respondent, the Chamber established that the
Respondent had refused to accept the Claimant’s services without any valid
reason. Such conduct constitutes, in the Chamber’s view, a clear breach of
contract without just cause. Accordingly, the Chamber concurred that the
Respondent is to be held liable for the early termination of the employment
contact without just cause.
16.
Having established that the Respondent is to be held liable for the early
termination of the employment contract without just cause, the Chamber
focussed its attention on the consequences of such termination. Taking into
consideration art. 17 par. 1 of the Regulations, the Chamber decided that the
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Claimant would, in principle, be entitled to receive from the Respondent an
amount of money as compensation for breach of contract.
17.
Subsequently, 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 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.
18.
In application of the relevant provision, the Chamber held that it first of all
had to clarify as to whether the pertinent employment contract contains 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.
19.
Bearing in mind the foregoing, the Chamber proceeded with the calculation of
the monies payable to the player under the terms of the employment contract
until 30 June 2015 and concluded that the Claimant would have received a
total remuneration of EUR 2,500,000 plus potential bonuses in the maximum
amount of EUR 750,000 had the contract been executed until its expiry date.
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 11 August 2010, the Claimant found employment with Club E, from
country T. In accordance with the pertinent employment contracts, which have
been made available by the Claimant, valid until 31 May 2017, the Claimant
was entitled to receive a salary in the amount of EUR 600,000 per season for
the first three seasons and in the sum of EUR 1,000,000 per season for the
seasons 2013-2014 and 2014-2015. Consequently, the Chamber established that
the value of the new employment contract concluded between the Claimant
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and the new club for the period as from August 2010 until and including June
2015 amounted to EUR 3,800,000.
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.
Consequently, on account of all of the above-mentioned considerations and
the specificities of the case at hand, the Dispute Resolution Chamber decided
that, even though the Respondent is considered liable for the breach of the
relevant employment contract, the Claimant did not suffer any financial loss
from the violation of the contractual obligations by the Respondent and,
therefore, the Chamber decided that there is no amount that should be
awarded to the Claimant as compensation for breach of contract in the matter
at hand.
24.
Subsequently, the DRC analysed the request of the Claimant corresponding to
compensation for moral damages in the amount of EUR 1,000,000. In this
regard, the Chamber deemed it appropriate to point out that the request for
said compensation presented by the Claimant had no legal or regulatory basis
and pointed out that no corroborating evidence had been submitted that
demonstrated the damage suffered or its quantity. In this regard, the members
of the Chamber reiterated their previous consideration and outlined that the
Claimant had not suffered any financial loss from the early termination of the
employment contract. Therefore, the Chamber decided that the request for
compensation related to moral damages shall be rejected.
25.
Finally, the Dispute Resolution Chamber held that the Claimant’s claim for
legal costs is rejected in accordance with art. 18 par. 4 of the Procedural Rules
and the Chamber’s respective longstanding jurisprudence.
*****
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III.
Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Player O, is admissible.
2.
The claim of the Claimant is rejected.
*****
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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