Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 18 August 2016,
in the following composition:
Thomas Grimm (Switzerland), Deputy Chairman
Joaquim Evangelista (Portugal), member
Johan van Gaalen (South Africa), member
Todd Durbin (USA), member
Zola Majavu (South Africa), member
on the matter between the player,
Player A, country B
as Claimant
and the club,
Club C, country D
as Respondent
regarding an employment-related dispute
arisen between the parties
I. Facts of the case
1. On 19 July 2014, the player from country B, Player A (hereinafter: the Claimant),
concluded an employment contract (hereinafter: the contract) with the club from
country D, Club C (hereinafter: the Respondent), valid as from 15 July 2014 until 14
June 2016.
2. According to the second clause of the contract, the Claimant was entitled to
receive the total amount of USD 900,000, payable as follows:
- USD 150,000, on 1 September 2014;
- USD 150,000, on 1 October 2014;
- USD 250,000, for the season 2014/2015, “distributed monthly” in the amount of
USD 22,727 each (i.e. eleven instalments) ;
- USD 350,000, for the season 2015/2016, “distributed monthly” in the amount of
USD 35,000 each (i.e. ten instalments).
3. In addition, the fifth clause of the contract stipulated the following:
“1-1- The [Claimant] is subject to technical evaluation of the [Respondent].
The [Respondent] shall have the right to terminate this contract based on the
technical report at any time by notice in writing. Then, [the Respondent] shall pay
compensation for cancellation of the contract equal to only two month salary of
the remaining salaries from the contract value.”
4. On 27 February 2015, the Claimant lodged a claim before FIFA against the
Respondent for breach of contract without just cause, and requested the payment
of the following amounts:
- USD 20,454.29 corresponding to the outstanding portion of the salary of
December 2014, plus 5% interest as from 28 December 2014;
- USD 415,664.18, as compensation for breach of contract without just cause,
calculated as follows:
A Residual value - USD 3,030.27, corresponding to the four last days of
of the contract: December 2014;
- USD 113,635, corresponding to five remaining monthly
salaries for the 2014/2015 season (i.e. USD 22,272 for
each instalment);
- USD 350,000, for the entire 2015/2016 season.
Total:
USD 466,665.27
B
Mitigation
(from
January
14
2015
20,000, equivalent according to the Claimant, to USD
6,955.48
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Player A, country B / Club C, country D
2
until
30 USD 6,955.48*10 + USD 4,173.29 (corresponding to 18
November
days of January 2015)=
2015, cf. point
Total:
I. 8 below)
USD 73,728.08
C
Subtotal
(residual value
– mitigation)
D
-
USD 392,937.19
Compensation
for the ITC
refusal
(specificity of
sport, cf. point
I. 8 below)
USD 22,727.00
TOTAL (C+D)
“USD 415,664.18”
EUR 570,000, corresponding to “additional compensation” for damages and
equivalent to six months of salary.
5. Furthermore, “ad cautelam” and “ad argumentandum”, the Claimant requested,
in the event that the fifth clause of the contract is considered as valid, to be
awarded with the amount of USD 68,181 as compensation (i.e. two months of
salaries + compensation for the refusal of the ITC).
6. According to the Claimant, the Respondent terminated the contract on 28
December 2014 by means of a termination letter dated 27 December 2014. In
particular, and following the contents of said letter, the Respondent terminated
the contract in accordance with the fifth clause of the contract (cf. point I.3 above)
and due to the Claimant’s failure “to demonstrate [his] abilities to catch up with
colleagues first team”.
7. In this regard, the Claimant was of the opinion that the Respondent had no just
cause for the termination of the contract, and quoted jurisprudence both from the
DRC and the Court of Arbitration for Sport (CAS) in support of his arguments.
8. Subsequently, the Claimant explained that he concluded a contract with the club
from country B, Club E, valid as from 14 January 2015 until 30 November 2015. In
this regard, the Claimant stated that, initially, on 1 February 2015, the Football
Association of country D declined to issue his International Transfer Certificate
(ITC) due to the “non-expiration of the contract with the previous club”.
9. In connection with the aforementioned statement, the Claimant considered that
the Respondent was “trying to fabricate (…) unlawful excuses (…) by stating that
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Player A, country B / Club C, country D
3
the [Claimant] abandoned the [Respondent] without [its] previous consent and
entered into an agreement with another club without [its] authorization”. In
particular, the Claimant insisted that the contract with the Respondent was
already terminated on 28 December 2014.
10. In its reply, the Respondent confirmed that the contract was terminated on 27
December 2014 on the basis of the fifth clause of the contract. In particular, the
Respondent explained that, on 23 October 2014, it warned the Claimant about his
“low performance” and that it granted him two months in order to improve his
level. In particular, the Respondent considered that, following the terms of the
contract, it was entitled to unilaterally terminate the contract and that it is “usual”
in the country D to terminate a contract due to a player’s poor performance, which
is considered as an “insult” towards a club. Moreover, the Respondent considered
that it was entitled to receive compensation from the Claimant.
11. Notwithstanding the above, the Respondent considered that the Claimant was not
entitled to receive his ITC since he left the Respondent without its permission after
the termination of the contract.
12. In sum, the Respondent offered to pay two months of salaries to the Claimant as
compensation for the termination of the contract, but requested the latter to
“apologize”.
13. In his replica, the Claimant noted the “very confusing” nature of the Respondent’s
reply, and confirmed his initial statement and insisted that the Respondent
unilaterally terminated the contract without just cause on 27 December 2014. In
particular, the Claimant considered that the fifth clause of the contract should be
deemed as invalid.
14. In reference to the amount due as compensation, the Claimant considered that,
even though the second clause of the contract stipulated two months of
compensation, said clause is “immoral” and abusive since it grants
disproportionate rights to the Respondent.
15. Moreover, the Claimant explained that, as a statement of good will, on 11
February 2015, he offered to the Respondent to settle the matter in an amicable
manner for the total amount of USD 73,075. However, the Claimant considered
that the Respondent continued to act in bad faith by not assisting him in the
delivery of the ITC.
16. In addition, the Claimant considered that, following the termination of the
contract, he was not bound by it anymore and that, consequently, he was free to
leave the country D at any moment.
17. As final comments, the Respondent confirmed its previous views on the
termination of the contract, and insisted that, as stipulated in the contract, the
Claimant is entitled to only two months of salary as compensation. In addition, the
Respondent explained that, following the termination of the contract on 27
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Player A, country B / Club C, country D
4
December 2014, the Claimant left the country D without trying to reach an
amicable settlement and “without written authorization from the Respondent”.
18. Finally, the Claimant informed FIFA about his subsequent employment situation, as
follows:
- From 14 January 2015 until 30 November 2015, he was employed by the club
from country B, Club E, for a monthly salary of 20,000;
- From 1 December 2015 until 31 January 2016, the Claimant declared that he
remained unemployed;
- From 1 February 2016 until 29 February 2016, the Claimant stated that he was
employed by the club from country B, Club F, for a monthly salary of 11,000;
- From 1 March 2016 until 14 June 2016, the Claimant declared that he remained
unemployed.
II. Considerations of the Dispute Resolution Chamber
1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or
Chamber) 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 27 February
2015. Consequently, the 2014 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 2014 and
2015 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 in
combination with art. 22 lit. b of the Regulations on the Status and Transfer of
Players, (edition 2016), 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 player from country B and a club from country
D.
3. The competence of the Chamber having been established, 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, it confirmed that, in
accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer
of Players (editions 2014, 2015 and 2016), and considering that the present matter
was submitted to FIFA on 27 February 2015, the 2014 edition of the
aforementioned regulations (hereinafter: the Regulations) is applicable to the
matter at hand as to the substance.
4. Having established the foregoing, and entering into the substance of the matter,
the Chamber continued by acknowledging the above-mentioned facts as well as
the documentation contained in the file in relation to the substance of the matter.
However, the Chamber emphasised that in the following considerations it will
refer only to the facts, arguments and documentary evidence which it considered
for the assessment of the matter at hand.
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Player A, country B / Club C, country D
5
5. In this respect, the Chamber acknowledged that the parties to the dispute had
signed an employment contract on 19 July 2014, valid as from 15 July 2014 until 14
June 2016.
6. Subsequently, the Chamber noted that the Claimant lodged a claim against the
Respondent, maintaining that the latter had unilaterally terminated the
employment contract on 28 December 2014 by means of a termination letter
dated 27 December 2014, in accordance with the fifth clause of the contract (cf.
point I.3 above) and due to the Claimant’s alleged failure “to demonstrate [his]
abilities to catch up with colleagues first team”. Consequently, the Claimant asks
to be awarded his outstanding dues as well as the payment of compensation for
breach of the employment contract.
7. In this respect, the members of the Chamber took note of the Respondent’s
position, which confirmed that it terminated the contract on 27 December 2014
for alleged low performance in accordance with the stipulations contained in its
fifth clause.
8. Having established the foregoing, the Chamber turned its attention to the
question as to whether the contract had been terminated by the Respondent with
or without just cause.
9. In this context, the Chamber turned its attention to the fifth clause of the
employment contract, which was invoked by the Respondent in the termination
letter as well as in its defence.
10. As stated above, according to the fifth clause of the employment contract “The
[Respondent] shall have the right to terminate this contract based on the technical
report at any time by notice in writing. Then, [the Respondent] shall pay
compensation for cancellation of the contract equal to only two month salary of
the remaining salaries from the contract value.”
11. In this respect, the Chamber held that it could not accept said article as being valid,
as it provides for a unilateral termination right that is based on a purely one-sided
and subjective evaluation allegedly made by the Respondent.
12. In addition to the unilateral character of said clause, the Chamber pointed out
that, in accordance with its longstanding jurisprudence and as a general principle,
a player cannot be dismissed for alleged poor performance. Thus, the Chamber
emphasised that poor or unsatisfactory performance cannot be considered as a just
cause to terminate a contract. Hence, the Chamber considered that by terminating
the contract based on poor performance, the Respondent acted in an abusive
manner and without just cause.
13. In view of the aforementioned, the Chamber stated that the unilateral termination
of the employment contract on 27 December 2014 by the Respondent constitutes a
breach of contract without just cause.
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Player A, country B / Club C, country D
6
14. In this respect, the DRC took into consideration that according to the Claimant, the
Respondent had failed to pay his remuneration in the total amount of USD
20,454.29, corresponding to the unpaid portion of his salary of December 2014.
Consequently, the Claimant requested to be awarded with the payment of the
total amount of USD 20,454.29.
15. In this regard, the members of the Chamber observed that, at the date of the
termination of the contract, i.e. 27 December 2014, and in the absence of any
other specific stipulation, said monthly salary had not yet fallen due.
Consequently, the members of the Chamber unanimously decided to reject the
Claimant’s request in this respect, notwithstanding its possible consideration as
compensation.
16. Subsequently, the Chamber observed 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 the outstanding salaries on the
basis of the relevant employment contract.
17. In continuation, 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.
19. In application of the relevant provision, the Chamber held that it first of all had to
clarify whether the pertinent employment contract contained any clause, by means
of which the parties had beforehand agreed upon a compensation payable by the
contractual parties in the event of breach of contract. In this regard, the members
of the Chamber noted that, indeed, the fifth clause of the contract stipulated a
compensation clause, which was drafted as follows:
“The [Respondent] shall have the right to terminate this contract based on the
technical report at any time by notice in writing. Then, [the Respondent] shall pay
compensation for cancellation of the contract equal to only two month salary of
the remaining salaries from the contract value.”
20. In this regard, the members of the Chamber observed that said clause established a
compensation in favour of the Claimant only for the specific cause of termination
drafted in said clause, i.e. a termination based on the Claimant’s alleged poor
performance. In particular, the members of the Chamber wished to emphasize the
use of the word “then” in the aforementioned clause, which clearly established a
connection between the termination of the contract on the grounds of the
Claimant’s alleged poor performance and the compensation payable by the
Respondent.
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Player A, country B / Club C, country D
7
21. However, as previously observed, said cause for termination cannot be considered
as valid. Therefore, the members of the Chamber unanimously agreed that, as a
logical consequence, any related form of compensation that may derive from it
should also be disregarded. Therefore, the members of the Chamber unanimously
agreed that said clause cannot be taken into consideration in the determination of
the amount of compensation.
22. 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. Therefore, other objective criteria may be taken into
account at the discretion of the deciding body.
23. 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 14 June 2016 (i.e. the original date of
termination of the contract). In this regard, the members of the Chamber
observed, as detailed above, that under the contract, the Respondent agreed to
pay to the Claimant the total amount of USD 250,000, for the season 2014/2015,
“distributed monthly” in the amount of USD 22,727 each (i.e. eleven instalments),
as well as the amount of USD 350,000, for the season 2015/2016, “distributed
monthly” in the amount of USD 35,000 each (i.e. ten instalments).
24. Consequently, the Chamber concluded that the amount of USD 486,362 (i.e.
remuneration as from 1 December 2014 until 14 June 2016, incl. the unpaid salary
of December 2014) serves as the basis for the determination of the amount of
compensation for breach of contract.
25. 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 Claimant’s general
obligation to mitigate his damages.
26. In this regard, the DRC remarked that, following the termination of the contract
by the Respondent, the Claimant had concluded a new employment with the clubs
from country B, Club E and Club F, which respectively ran from 14 January 2015
until 30 November 2015 and from 1 February 2016 until 29 February 2016. In this
respect, the members of the DRC established that, accordingly, the Claimant would
have earned from said contracts the amount of USD 85,000.
27. As a result of the difference between the above-mentioned amounts, the members
of the Chamber highlighted that the amount due by the Respondent as
compensation corresponds to approximately USD 400,000.
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Player A, country B / Club C, country D
8
28. In conclusion, for all the above reasons, the Chamber decided to partially accept
the Claimant’s request and that the Respondent must pay to the Claimant the
amount of USD 400,000 as compensation for breach of contract without just cause,
which is considered by the Chamber to be a reasonable and justified amount as
compensation.
29. In addition, taking into account the Claimant’s request, the Chamber decided that
the Respondent must pay to the Claimant interest of 5% p.a. on the amount of
compensation as of the date on which the claim was lodged, i.e. 27 February 2015,
until the date of effective payment.
30. Furthermore, the Chamber noted that the Claimant requested the payment for the
amount of USD 22,727.00 as “Compensation for the ITC refusal” (cf. point I. 8) and
as “specificity of sport”, as well as the amount of EUR 570,000, corresponding to
“additional compensation”. In this regard, the Chamber unanimously decided to
reject said requests due to a lack of legal and contractual basis.
31. The Dispute Resolution Chamber concluded its deliberations in the present matter
by establishing that any further claims lodged by the Claimant are rejected.
III. Decision of the Dispute Resolution Chamber
1. The claim of the Claimant, Player A, is partially accepted.
2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the
date of notification of this decision, compensation for breach of contract in the
amount of USD 400,000, plus 5% interest p.a. as from 27 February 2015.
3. In the event that the aforementioned sum plus interest is not paid within the
stated time limit, the present matter shall be submitted, upon request, to the FIFA
Disciplinary Committee for consideration and a formal decision.
4. Any further claim lodged by the Claimant is rejected.
5. The Claimant is directed to inform the Respondent immediately and directly of the
account number to which the remittance under point 2. is to be made and to
notify the Dispute Resolution Chamber of every payment received.
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Player A, country B / Club C, country D
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*****
Note relating to the motivated decision (legal remedy):
According to art. 58 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 (CAS)
Avenue de Beaumont 2
CH-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:
Marco Villiger
Deputy Secretary General
Enclosed: CAS directives
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Player A, country B / Club C, country D
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