Labour Disputes
Texto da decisão
Decis ion of the
Dis pute Res olution Cham ber
passed in Zurich, Switzerland, on 31 August 2017,
in the following composition:
Geoff Thom ps on (England), Chairman
Theo v an S eggelen (Netherlands), member
Takuy a Yam azaki (Japan), member
Wouter Lam brecht (Belgium ), member
Todd Durbin (US A), member
on the claim presented by the player,
Play er A, Country B
as Claimant
against the club,
Club C, Country D
as Respondent
regarding an employment-related dispute arisen between the parties
I.
Facts of the cas e
1.
On 9 December 2013, the player from Country B, Player A (hereinafter: Claimant) and
the club from Country D, Club C (hereinafter: Respondent), concluded an employment
contract, which was to run until 30 June 2014 with the possibility for prolongation
until 30 June 2015 (hereinafter: contract).
2.
Clause 7 of the contract determined the following:
“1.Financial disputes, issuing herefrom, shall be subject to the competences of the
Football Amicable Court.
2. Any disputes resulting from the execution hereof on the validity, existence or
termination of this contract shall be settled by appropriate organs of the
Football Association from Country D”.
3.
On 6 March 2015, the Claimant lodged a claim before FIFA against the Respondent
for breach of contract.
4.
The Claimant stated that FIFA’s Dispute Resolution Chamber (hereinafter: DRC) is the
deciding body competent to hear the present dispute. He referred to clause 7 of the
contract and held that, although the relevant clause refers to a national dispute
resolution chamber, its wording is unclear, without specifying the deciding body, and
thus, it is not applicable. Moreover, the Claimant highlighted that, even in the case
the relevant clause was to be considered applicable, there is no deciding body within
the Football Association from Country D that complies with the requirements of the
FIFA Regulations.
5.
The Respondent replied to the claim, challenging the competence of the DRC to hear
the present dispute. In this respect, the Respondent held that the parties had agreed
in writing that any dispute should be decided by an independent arbitration tribunal
within the framework of the Football Association from Country D, which allegedly
has been duly established. In particular, the Respondent invoked clause 7 of the
contract and stated that the “Football Amicable Court” (hereinafter: FAC) is a
permanent and independent tribunal within the Football Association from Country D,
which guarantees equal treatment and fair proceedings.
6.
In this respect, the Respondent submitted a declaration dated 15 April 2015, issued by
the Football Association from Country D stating inter alia the following:
- the Football Association from Country D has an independent, permanent
arbitrage court, functioning under the name of “Football Association from
Country D”;
- in accordance with art. 47 of the Football Association from Country D Statutes,
the FAC has been appointed to consider any financial disputes or disputes for
property rights, that can be subject of a reconciliation;
- the FAC is composed of three arbitrators and each party choses one arbitrator;
- the Regulations of the FAC guarantees “dispute settlement which is just and
on equal rights”;
Player A, Country B / Club C, Country D
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- the decisions of the FAC are subject to an appeal to “an increased court,
consisting of 5 people”.
7.
Moreover, the Respondent held that the “Football Arbitration Court” of the Football
Association from Country D is an independent tribunal that guarantees fair
proceedings and respects the principle of equal representation of players and clubs. In
particular, the Respondent made reference to different articles of the “Rules of the
Football Arbitration Court of the Football Association from Country D” (hereinafter:
regulations of the Football Arbitration Court). In particular, according to the
regulations of the Football Arbitration Court:
- art. 11 par. 1: “the Football Arbitration Court is composed of 25 to 27
arbitrators appointed by the Management Board of the Football Association
from Country D”.
- art. 15 par. 1: “the Chairman, the Deputy Chairman of and Secretary to the
Arbitration Court are appointed and dismissed by the Management Board of
the Football Association from Country D, from among the arbitrators of the
Football Arbitration Court”.
8.
Furthermore, the Respondent held that the DRC is also not competent taking into
account the Claimant’s claim relating to amounts based upon provisions of Country D
tax law, making it advisable that the national arbitration tribunal settles the dispute.
9.
The Claimant insisted on the DRC’s competence and held that the arbitration clause is
not applicable, since clause 7 par. 2 of the contract does not establish a clear and
exclusive jurisdiction in favour of any national body. Therefore, it is not even
necessary to analyze whether or not the Football Association from Country D Football
Arbitration Court fulfils the minimum requirements.
10.
Moreover, the Claimant stated that the Football Arbitration Court does not meet the
principle of equal representation, since the players have no influence on the
appointment of the arbitrators.
As to the substance of the matter:
11.
The contract was valid as from 1 January 2014 until 30 June 2014 “with a possibility to
prolong it on the rules, specified in articles 3 and 4 herebelow”. In particular, clause
1.3 of the contract established that “If the [Respondent] is promoted to the Extra
Class after the 2013/2014 season, the Parties amicably declare, that the present
contract shall be prolonged until 30/06/2015. In such case, the [Claimant] shall be
entitled to the remuneration on the rules, specified in article 4, item 2, 2.2_”.
12.
Moreover, the contract established that it was signed by and between the
Respondent and “Player A, born on 17th February 1998, a citizen of Country B,
residing in [no entry], … ul. [no entry] running his business under the firm of [no
entry] and registered in the Business Register run by [no entry] under the number
Player A, Country B / Club C, Country D
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6617, REGON [no entry] and the NIP number [no entry] who declares, that he is using
manager services of Mr. P and hereinafter referred to as the Player”.
13.
According to clause 4 of the contract, the Claimant was entitled to inter alia the
following remuneration:
- (4.2.2.1.) the basic net salary of 23,000 in the currency of Country D, for the
period between 1 January 2014 and 30 June 2014, “plus the due VAT tax.
Except March and June 2014, for which the [Claimant] will receive 35,000 plus
the due VAT tax”.
- (4.2.2.2.) the basic net salary of 28,000, for the period between 1 July 2014 and
30 June 2015, “plus the due VAT tax”.
- (4.3.) “Regardless the remuneration specified in item 2, the [Respondent] shall
pay the [Claimant] the additional benefit for the participation in the sports
results, achieved in a football season, on the rules, specified in the
[Respondent]’s internal regulations”, payable at the end of every round.
- (4.4.) 51,000, plus due VAT, as additional benefit, (a) in case the Respondent is
promoted to the Extra Class after the season 2013/2014 and (b) if the
Respondent stays in the Extra Class after the season 2014/2015.
14.
Clause 4.5 of the contract established, inter alia, that “Basic salary, specified in item 2
shall be paid by a bank transfer at the bank account, specified by the [Claimant] until
the tenth day of each month for the previous month on the basis of a correctly issued
VAT invoice, submitted beforehand. The additional benefit and the remuneration
specified in item 3 shall be payable by a bank transfer at the end of every round. The
remuneration, specified in item 4 letter a) shall be payable by a bank transfer in two
equal instalments of 25,500 plus the due VAT tax until 30th September 2014 and 30th
November 2014.”
15.
On 5 December 2014, the Claimant, via his legal representative, put the Respondent
in default of payment of the bonus for the promotion to the Extra Class after the
2013/2014 season in the amount of 51,000. Moreover, the Claimant expressed his
dissatisfaction with his removal to the second team and requested to be reintegrated
into the first team and to be provided with instructions for training sessions, since the
second team went on vacation as of that date.
16.
On 8 December 2014, the Claimant contacted the Respondent in writing, protesting
for being hindered from training with the first team without a valid reason and
asking for a clarification of his sporting and legal situation within 48 hours.
17.
On 9 December 2014, the Claimant sent another letter to the Respondent asking once
more to be reintegrated into the first team and requesting the payment of the
outstanding remuneration until 12 December 2014 or it would be interpreted as an
indication that the Respondent is no longer interested in pursuing the employment
relationship with him.
18.
On 5 January 2015, the Claimant sent a final warning to the Respondent, emphasizing
that he was not allowed to join the first team’s training after holidays, which he
Player A, Country B / Club C, Country D
Page 4 of 19
deemed to be a breach of the contract, and again requesting the payment of 51,000,
establishing a deadline until 10 January 2015.
19.
On 19 January 2015, the Respondent sent the Claimant a letter via email stating that
“On behalf of the Club C I declare that, in case that Player A, born on Feb. 17th 1988
finds any club that can be interested in hire the player, Club C will agree to terminate,
within the period to Jan. 31st 2015, the binding both parts contract by mutual
agreement”.
20.
On 20 January 2015, the Respondent sent the Claimant a draft of a termination
agreement, acknowledging a debt towards the Claimant and offering to pay 28,000
regarding the salary of January 2015 and 51,000 as promotion bonus after 2013/2014
season; 23,000 as promotion bonus for the season 2013/2014 as per the Respondent’s
internal regulations; and 6,500 as premium for achieving sports results in the first part
of the 2014/2015 season.
21.
On 20 January 2015, the Claimant rejected the Respondent’s proposal and established
his terms for the termination of the contract. Moreover, the Claimant put the
Respondent once again in default, establishing a deadline until 22 January 2015 for
payment or acceptance of the termination agreement on his terms.
22.
On 22 January 2015, the Claimant notified the Respondent that, considering that the
Respondent had not replied to any of his previous letters and that the Respondent
only paid the salary for December 2014 without reinstating him to the first team, he
granted the Respondent a final deadline until 23 January 2015 at 12:00 to pay all the
outstanding remuneration and reinstate him to the first team.
23.
On 23 January 2015, in the afternoon, the Claimant terminated the contract in
writing invoking just cause. In particular, with respect to the reasons for the
termination the Claimant referred to the Respondent’s breach of his rights to
personality and effective occupation, the non-payment of his bonuses for a
considerable period of time and the remittance of the unsolicited draft of a mutual
termination agreement.
24.
On 23 February 2015, the Respondent paid the following amounts to the Claimant:
40,800 as bonus for promotion after the 2013/2014 season in accordance with
the contract;
18,400 as bonus for promotion as per the Respondent’s regulations;
5,200 as premium for sports results in the first part of the 2014/2015 season.
25.
On 5 March 2015, the Claimant concluded an employment contract with the club
from Country B, Club E, valid until 30 November 2016, according to which the
Claimant was entitled to a monthly remuneration of EUR 2,058.
Player A, Country B / Club C, Country D
Page 5 of 19
26.
On 6 March 2015, the Claimant lodged a claim before FIFA against the Respondent
maintaining that he had just cause to terminate the contract and requesting to be
awarded the following in relation to the Respondent’s breach of contract:
a)
56,747 as outstanding remuneration plus interest of 5% p.a. as from 23
January 2015, composed as follows:
40,647 as taxes allegedly paid by the Claimant to the tax authorities of Country
D, which should be paid by the Respondent as per clause 4.2 of the contract;
10,200 as the remaining balance (51,000 – 40,800) of the bonus for promotion
after the 2013/2014 season as per the contract;
4,600 as the remaining balance (23,000 – 18,400) for “the bonus for promotion
after 2013/2014 season based on club’s internal regulations”;
1,300 as the remaining balance (6,500 – 5,200) for sports results in the first part
of the 2014/2015 season.
b)
168,000 as compensation for breach of contract corresponding to the
remaining salaries from January until June 2015 (6 x 28,000) plus interest of
5% p.a. as from 23 January 2015;
c)
All payments on a net basis, free of any taxation, the Respondent “being
responsible for the filling and payment of all taxes relating to these payments
due to” the Claimant;
d)
A ban to be imposed on the Respondent.
27.
According to the Claimant, at the end of the 2013/2014 season, the Respondent was
promoted to the Extra Class and thus, the contract was automatically extended with
another season.
28.
However, in November 2014, he was removed from the first team and had to train
with the second team, which participates in the amateur league, without any
explanation from the Respondent. The Claimant affirmed having protested against
this situation, informing the Respondent in writing on different occasions that he
considered this as a breach of contract. However, the Respondent neither replied to
such letters nor reintegrated him into the team.
29.
Moreover, the Claimant added that, after the winter holidays - from 13 December
2014 until 5 January 2015 - he was no longer allowed to train with the Respondent at
all, being denied access to the dressing room and training sessions. In particular, the
Claimant alleged that he was verbally instructed to train individually, which he could
not accept.
30.
The Claimant held that by excluding him from training between 5 and 23 January
2015, the Respondent was in breach of its contractual obligations for a significant
period of time. Considering that this period was the preparation period for the
second half of the season, it showed that the Respondent was not counting on him
for the remaining part of the season.
31.
The Claimant further pointed out that the Respondent, by submitting an unsolicited
written statement that it was ready to terminate the contract by mutual consent as
Player A, Country B / Club C, Country D
Page 6 of 19
well as a draft of a mutual termination agreement, also clearly demonstrated that it
was no longer interested in his services.
32.
In addition, the Claimant highlighted that the Respondent failed to pay him several
bonuses, as clearly acknowledged by the Respondent in the termination agreement
proposal. Moreover, the Respondent delayed the payment of the salary for December
2014, which was only paid after the Respondent was put in default on 20 January
2015.
33.
The Claimant stated that all salaries and bonuses in accordance with the contract and
the Respondent’s regulations were net amounts and thus, free of any taxation.
34.
In this regard, the Claimant held having paid the relevant taxes regarding the basic
salary from January until December 2014 in the total amount of 40,647. In this
respect, the Claimant submitted a list of monthly payments allegedly made to the tax
office from January 2014 until December 2014 together with 12 bank transactions in
the total amount of 40,647.
35.
The Respondent replied as to the substance of the matter stating that the Claimant
did not have a just cause to unilaterally terminate the contract.
36.
The Respondent confirmed having assigned the Claimant to train with the second
team and explained that it was temporary only and for justified reasons. According to
the Respondent, the first team’s coach took such decision for two reasons: (i) due to
health problems, the Claimant had appeared only a few times on the pitch during the
season 2013/2014; (ii) the coach noticed a constant decrease in the Claimant’s
performance and a lack of effort from his part to improve it. Therefore, his
assignment to the second team was intended to enable him to build up and improve
his performance. In this respect, the Respondent provided written statements from
the coaches of the first and second team, dated 15 January 2015 and 27 January 2015,
respectively.
37.
Moreover, the Respondent confirmed having assigned individual trainings for the
Claimant in addition to the second team’s training, but denied having refused access
to the stadium and training facilities. The Respondent further stated that the
Claimant, instead of fighting for a place back in the first team and trying to improve
his performance, he used it as an excuse to unilaterally terminate the contract.
38.
Regarding the Claimant’s letters, the Respondent stated that the letters were
submitted by a representative without a power of attorney, reason why the
Respondent did not consider he was authorized to act on behalf of the Claimant. In
particular, the Respondent held that the power of attorney was only submitted with
the last letter informing about the termination of the contract.
39.
As to the Claimant’s remuneration, the Respondent held that the Claimant had
concluded the contract as an entrepreneur, since he allegedly conducted individual
business activity in Country D, reason why the remuneration in the contract would be
Player A, Country B / Club C, Country D
Page 7 of 19
made in the specified net amount increased by VAT. For this, the Claimant had to
issue VAT invoices to the Respondent for the gross amount and the Respondent paid
the Claimant the whole gross amount. However, according to the Respondent, the
Claimant informed the Respondent’s accountant via phone that he would no longer
issue any VAT invoices because he ceased to conduct business activity in Country D.
40.
In addition, the Respondent alleged that without the VAT invoices, it had no grounds
and entitlement to pay the Claimant the remuneration. In this regard, the
Respondent held that the last invoice provided by the Claimant was in December
2014, submitting a copy of the invoice dated 31 December 2014, issued by the
Claimant, indicating 28,000 as value excluding taxes, 6,400 as tax value and 34,440 as
value of goods (services) including taxes.
41.
The Respondent stated that, despite the above, it decided to pay the Claimant his
remuneration anyway, but due to the lack of the relevant invoices the Respondent
“was forced to change the rules of financial settlements with the Player and settle
such payments not in a way applicable in case of entrepreneurs, but in case of persons
who does not conduct business activity”. In conclusion, the Respondent affirmed that
considering that the delay was caused by the Claimant’s fault, it cannot be considered
as a valid reason for the termination of the contract.
42.
Regarding the Claimant’s demand for outstanding remuneration, the Respondent
stated that, considering that the Claimant allegedly concluded the contract as an
entrepreneur, in accordance with the Country D tax regulations, the Claimant was
obliged to settle on his own the relevant inland revenue, both VAT and income tax,
which rate depended on the Claimant’s total income, i.e. including income related to
business activity. For this reason, the Respondent stated that it cannot be obliged to
reimburse the Claimant the amount of 40,647 allegedly paid by the Claimant to the
Country D Inland Revenue from the income gained by the Claimant within the
individual business activity he conducted. In particular, the Respondent pointed out
that the contractual clause mentioning the net amount is simply the amount without
VAT and is not related to settlements concerning income tax.
43.
Regarding the request for 16,100 concerning bonuses, the Respondent recalled that
the Claimant’s last invoice was issued on 31 December 2014. Therefore, the
Respondent could no longer make financial settlements according to the current
rules.
44.
In particular, the Respondent detailed that it could not increase the amount
determined in the contract by VAT, because the Claimant was no longer a VAT payer.
Moreover, the amount of the Claimant’s net remuneration agreed in the contract had
to be decreased by the advance payment for income tax. According to the
Respondent, it was not allowed to pay the Claimant the full amount established in
the contract as a net amount because, according to the applicable law in Country D,
in the event of payment of remuneration made in favour of the employee, who does
not conduct individual business activity, the employer is the tax payer and is obliged
by law to deduct the relevant advance payment for income tax from the
remuneration due. Therefore, the Claimant’s request to receive the full net amount
Player A, Country B / Club C, Country D
Page 8 of 19
without issuing VAT invoices would cause an increase of costs to be borne by the
Respondent.
45.
In this context, the Respondent stated having made the following payments to the
Claimant deducting advance payments for income tax:
-
40,800 as bonus for promotion after the 2013/2014 season as per the contact
(51,000 – 10,200);
18,400 as bonus for promotion after the 2013/2014 season as per the
Respondent’s regulations (23,000 – 4,600);
5,200 as premium for achieving sports results in the first part of the 2014/2015
season (6,500 – 1,300).
46.
Finally, the Respondent affirmed that no compensation is due, since the termination
of the contract by the Claimant was groundless. Moreover, in any case, the amount of
compensation requested is unfair and unjust, since the Claimant should find a new
employer.
47.
The Claimant submitted his replica, insisting on his claim. In this respect, the Claimant
highlighted that even if the Respondent denied that the Claimant’s exclusion from
the first team was caused by the lack of will of the Respondent to continue the
contractual relationship, the Respondent did not deny having emailed the Claimant a
termination agreement, showing the Respondent’s intention to terminate the
contract.
48.
Moreover, the Claimant recalled having put the Respondent in default on several
occasions and requested to be reintegrated into the first team, while the Respondent
did not react to his notices. In particular, the Claimant rebutted the Respondent’s
argument that it did not reply to the default notices due to a lack of a power of
attorney, submitting a fax report of three pages, stating that he sent the letters
together with a power of attorney. However, the Claimant affirmed that, in any case,
the Respondent should have reacted to the letters asking for a power of attorney in
case it did not receive it.
49.
In addition, the Claimant stated that he was never told that his assignment to the
second team was temporary. Also the Respondent did not submit proof of his alleged
poor performance or health problems that would have explained his demotion to the
second team, only submitting letters issued by the head coaches, who cannot be
considered as impartial witnesses. However, the Claimant highlighted that even the
head coach of the first team in its letter states having moved the Claimant
permanently to the second team.
50.
The Claimant further held that the Respondent never raised any of these issues
during the contractual relationship as well as that all the circumstances, in particular
the letter proposing the termination, indicated that the Respondent was no longer
interested in his services.
Player A, Country B / Club C, Country D
Page 9 of 19
51.
In continuation and with respect to the outstanding bonuses, the Claimant held that
clause 4 par. 5 of the contract invoked by the Respondent is related to the basic salary
and thus, there was no contractual obligation to issue VAT invoices for additional
benefits set forth in clause 4 par. 2.2.2, par. 3 and par. 4 lit a) of the contract.
52.
Therefore, the Claimant held that no invoices were due to be issued to the
Respondent, since the basic salary was paid. In any case, the Claimant stated that the
issuance of invoices for the receipt of the basic salary was only a formal and
administrative aspect, which was always complied with by the Claimant. Moreover,
the Respondent could have reacted to the default notices asking for the issuance of
the invoices if it deemed they were also needed for the payment of benefits.
53.
Regarding the claim for 40,647, the Claimant explained that it is related to VAT and
in this regard, he reverted to clause 4 paras. 2.2.1 and 2.2.2 of the contract and stated
that the Respondent undertook to pay the basic net salary plus the due VAT to him.
However, the Respondent, contrary to said clause, paid the Claimant only the basic
net salary from January until December 2014, withholding the payment of VAT
without justification. As a consequence, the Claimant had to pay the tax authorities
the total amount of 40,647 at his own expense, which amount should be paid by the
Respondent to him.
54.
Finally, regarding the claim for 16,100 as additional benefits, the Claimant held that it
is undisputed that the bonuses requested were due. In this respect, the Claimant
recalled that VAT invoices were not a requirement for the payment of additional
benefits, which also did not hinder the Respondent to pay bonuses on other
occasions.
55.
In particular, the Claimant denies having informed the Respondent via phone that he
would no longer issue any VAT invoices because he ceased to conduct business
activity in Country D.
56.
Moreover, the Claimant indicated that, since the contract does not establish whether
the amounts of additional benefits are gross or net, it has to be considered as net.
57.
Finally, the Claimant rejected the Respondent’s argument that Country D law should
apply. In any case, the Respondent needs to prove the percentage allegedly
deductible from the additional benefits as well as that it did pay the relevant
amounts to the tax authorities.
58.
The Respondent submitted its duplica, stating that it maintains its previous stance set
out in its response, emphasizing that the arguments related to the amount of 40,647
on account of VAT results from the Country D tax law.
II.
Cons iderations of the Dis pute Res olution Cham ber
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 matter at hand. In this
Player A, Country B / Club C, Country D
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2.
respect, it took note that the present matter was submitted to FIFA on 6 March 2015.
Consequently, the Rules Governing the Procedures of the Players’ Status Committee
and the Dispute Resolution Chamber (edition 2014; hereinafter: Procedural Rules) are
applicable to the matter at hand (cf. art. 21 of the Procedural Rules).
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural
Rules and acknowledged 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 would, in principle, be 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.
However, the Chamber acknowledged that the Respondent contested the
competence of the DRC on the basis of clause 7 of the contract, alleging that the
parties had agreed that any dispute should be decided by an independent arbitration
tribunal within the framework of the Football Association from Country D. In
particular, the Respondent held that the “Football Amicable Court” is an
independent tribunal within the Football Association from Country D which
guarantees equal treatment and fair proceedings, submitting a declaration of the
Football Association from Country D dated 15 April 2015.
4.
Moreover, the Respondent stated that the “Football Arbitration Court” of the
Football Association from Country D is an independent tribunal that guarantees fair
proceedings and equal representation of clubs and players, submitting a copy of the
Rules of the Football Arbitration Court of the Football Association from Country D.
5.
The Chamber noted that the Claimant, for his part, highlighted in his claim, inter alia,
that the DRC is the deciding body competent to hear the present dispute and that the
wording of clause 7 of the contract is unclear and thus, not applicable. Moreover, the
DRC took note that the Claimant insisted on the competence of the FIFA DRC to
adjudicate on the present matter and, in particular, affirmed that the “Football
Arbitration Court” of the Football Association from Country D does not meet the
minimum requirements set by FIFA with respect to national dispute resolution
chambers.
6.
Taking into account all 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. Equally, the members of the Chamber referred to the principles
contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard
Regulations, which came into force on 1 January 2008.
Player A, Country B / Club C, Country D
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7.
In relation to the above, the Chamber also deemed it vital to outline that one of the
basic conditions that needs to be met in order to establish that another organ than
the DRC is competence to settle an employment-related dispute between a club and a
player of an international dimension is that the jurisdiction of the relevant national
arbitration tribunal derives from a clear reference in the employment contract.
8.
Therefore, while analysing whether it was competent to hear the present matter, the
Dispute Resolution Chamber considered that it should, first and foremost, analyse
whether the employment contract at the basis of the present dispute contained a
clear jurisdiction clause.
9.
Having said this, the members of the Chamber turned their attention to clause 7 of
the contract, invoked by the Respondent as the basis to reject the DRC’s competence
to deal with the present case.
10.
In this respect, the DRC took note that clause 7.1 of the contract refers to an amicable
court for financial disputes, while clause 7.2 of the contract establishes that any
dispute regarding the termination of the contract shall be settled by the “appropriate
organs of the Football Association from Country D”.
11.
Having examined the relevant provision, the Chamber came to the conclusion that
clause 7 of the contract does not constitute an explicit and exclusive jurisdiction
clause in favour of one specific national dispute resolution chamber in the sense of
art. 22 lit. b) of the aforementioned Regulations. Moreover, considering that the
present matter is related to the termination of the employment contract, the DRC
highlighted that clause 7 of the contract simply indicates that the dispute shall be
settled by the appropriate organs of the Football Association from Country D,
without, however, specifying which would be the deciding-body.
12.
The members of the DRC stated that the foregoing conclusion is even supported by
the Respondent’s statements which itself refers both to the “Football Amicable
Court” and to the ”Football Arbitration Court” of the Football Association from
Country D.
13.
Therefore, the members of the Chamber deemed that clause 7 of the contract could
not serve as the basis on which the “Football Amicable Court” or the ”Football
Arbitration Court” of the Football Association from Country D should be declared the
arbitration tribunal competent to decide on the present dispute.
14.
Having established that the first criterion for the recognition of the competence of a
national decision-making body is not fulfilled in the present matter, the Chamber
deemed unnecessary to examine any further elements in relation with the national
deciding bodies referred to by the Respondent, which would need to be assessed
before concluding to the competence of a national deciding body if the first criterion
would have been met.
15.
In view of all of the above, the Chamber established that the Respondent’s objection
to the competence of the DRC to deal with the present matter had to be rejected and
Player A, Country B / Club C, Country D
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that the DRC 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.
16.
In this context, the DRC referred to the Respondent’s argument that the DRC would
not be competent to hear the Claimant’s claim related to taxes and emphasised that
based on art. 22 lit. b) of said Regulations, the DRC is competent to also deal with the
Claimant’s claim related to taxes. Indeed, the claim of the Claimant for
reimbursement of VAT is directly related to contractual obligations undertaken by the
parties in accordance with the employment contract and thus falls within the scope of
the aforementioned art. 22 lit. b). Consequently, the DRC considered that the
Respondent’s argument in this regard cannot be upheld.
17.
In continuation, 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 par. 2 of the Regulations on the Status and Transfer of Players (edition
2016), and considering that the present claim was lodged on 6 March 2015, the 2014
edition of said regulations (hereinafter: Regulations) is applicable to the matter at
hand as to the substance.
18.
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.
19.
First of all, the Chamber took note that the parties concluded an employment
contract valid from 1 January 2014 until 30 June 2014, with the possibility of a
prolongation until 30 June 2015. Moreover, the DRC took note that it remained
undisputed that the contract had been extended until 30 June 2015.
20.
In continuation, the DRC noted that the Claimant terminated the contract in writing
on 23 January 2015, invoking just cause, alleging that the Respondent had removed
him from the first team as from November 2014 without providing him with any
explanation or clarification and that the Respondent failed to pay him various
bonuses established in the contract. In addition, according to the Claimant, the
Respondent had not reacted to the several default notices he sent to the Respondent.
According to the Claimant, the behaviour of the Respondent clearly indicated that
the Respondent was no longer interested in or counting on his services for the
remainder of the season.
21.
Moreover, the Claimant held that he immediately protested against this situation,
requesting to be reintegrated to the first team and stating that he considered his
exclusion from the first team as a breach of the contract.
Player A, Country B / Club C, Country D
Page 13 of 19
22.
In addition, the Claimant affirmed that his exclusion from the first team persisted
through January 2015 after the holiday period and in spite of his default notices.
23.
Subsequently, the DRC took note that the Respondent, for its part, argued inter alia
that the Claimant did not have just cause to terminate the contract, considering that
his exclusion from the first team was only temporary and due to justified reasons
linked to the Claimant’s health and alleged constant decrease in his performance.
24.
Considering the diverging position of the parties, the Chamber concluded that the
underlying issue in this dispute was to determine as to whether the employment
contract had been unilaterally terminated with or without just cause by the Claimant
and to determine the consequences thereof.
25.
In this context, the DRC recalled that, in accordance with the principle of the burden
of proof set out in art. 12 par. 3 of the Procedural Rules, the party claiming a right on
the basis of an alleged fact shall carry the burden of proof.
26.
In this respect, the members of the DRC considered that the Claimant had provided
substantial documentary evidence demonstrating that he had opposed in writing to
his exclusion from the first team, asking the Respondent for explanations as well to
be reinstated to the first team. In particular, the members of the DRC noted that the
Claimant sent six default notices to the Respondent during the period between 5
December 2014 and 22 January 2015, specifically also requesting to be reintegrated to
the first team, before terminating the contract.
27.
In continuation, the DRC took into account that the Respondent, for its part, failed to
demonstrate with corroborating documentation that it has ever informed the
Claimant of the reasons and the duration of his exclusion from the first team. In this
respect, the Chamber added that the Respondent did not submit sufficient evidence
in relation to the reasons invoked by the Respondent for the Claimant’s exclusion
from the first team. Indeed, the members of the DRC deemed that the statements
issued by the coaches of the Respondent cannot be considered objective and
sufficient evidence corroborating the Respondent’s allegations. Nonetheless, the
Chamber observed that, as to the alleged temporary nature of the Claimant’s
exclusion from the first team invoked by the Respondent, the statement issued by the
Respondent’s coach on 15 January 2015 actually indicates that the Claimant had been
permanently removed to the second team.
28.
In addition, the members of the DRC emphasized that the Respondent had not
reacted to the several default notices sent to it by the Claimant. In this regard, the
DRC concurred that the Respondent’s argument that it did not react to the default
notices sent by the player’s representative due to the alleged lack of a power of
attorney could not be sustained. Additionally, even if such argument would be
considered valid, the DRC noted that the Claimant provided proof of remittance of all
the default notices including the remittance of the power of attorney.
Player A, Country B / Club C, Country D
Page 14 of 19
29.
Moreover, the Chamber acknowledged that it remained undisputed by the
Respondent that, on 19 January 2015, it had sent the Claimant an unsolicited letter in
which the Respondent declared that should the Claimant find another club interested
in hiring him, it would agree to terminate the contract with him within the period of
up to 31 January 2015.
30.
Considering all the above, the DRC recapped that the Claimant had terminated the
contract a) after having been excluded from the first team for a period of almost two
months without having been made aware by the Respondent of the reasons as well
as of the duration of such exclusion and b) after having put the Respondent in
default on several occasions without the Respondent replying to his default notices.
31.
Moreover, it also remained undisputed that at the moment of the termination of the
contract by the Claimant various bonuses were still outstanding, in spite of the fact
that the Claimant had put the Respondent in default of payment.
32.
On account of all of the above considerations and circumstances surrounding the
matter at hand, the Chamber decided that the Claimant had just cause to terminate
the contract on 23 January 2015 and that the Respondent is to be held liable for the
early termination of the contract with just cause by the Claimant.
33.
Bearing in mind the previous considerations, the DRC went on to deal with the
consequences of the early termination of the employment contract with just cause by
the Claimant.
34.
First of all, the members of the Chamber concurred that the Respondent must fulfill
its obligations as per employment contract up until the date of termination of the
contract in accordance with the general legal principle of “pacta sunt servanda”. The
DRC reverted to the Claimant’s request regarding outstanding bonuses and noted
that the Respondent did not contest that the Claimant was entitled to receive the
contractual bonuses, but merely held that taxes were deductible from the bonus
payments. In this respect, the DRC took into account that, after the termination of
the contract, the Respondent made partial payments regarding the relevant bonuses
due to the Claimant, deducting amounts allegedly related to taxes.
35.
In this regard, the Chamber recalled that, according to the Respondent, it had to
deduct taxes from the bonus payments, considering that the Claimant was allegedly
no longer a “VAT payer” and that, as a result, the Respondent was allegedly
responsible to deduct the income tax to be paid by it to the authorities.
36.
In this respect, the DRC analysed the contract and concluded that there was no
contractual basis for the deduction of any amount, including taxes, from the
contractual bonus payments. Moreover, the Chamber recalled the principle of the
burden of proof and took into account that the Respondent, in any case, did not
corroborate its allegations with respect to the deduction of income tax with
documentary evidence, nor did it prove having paid any amounts to the tax
authorities of Country D in relation thereto. Therefore, the DRC had to reject the
Player A, Country B / Club C, Country D
Page 15 of 19
Respondent’s argumentation and concluded that the Respondent has to pay the
unpaid portion of the bonuses to the Claimant.
37.
As a consequence, and in accordance with the general legal principle of pacta sunt
servanda, the Chamber decided that the Respondent is liable to pay to the Claimant
the remaining amount of 16,100 as bonuses.
38.
In addition, taking into account the Claimant’s request, the Chamber decided to
award the Claimant interest at the rate of 5% p.a. on the amount of 16,100 as of the
date of termination of the contract, i.e. 23 January 2015.
39.
In continuation, the Chamber reverted to the Claimant’s claim related to
reimbursement of taxes in the amount of 40,647 allegedly paid to the Country D
authorities in relation to the monthly salaries as from January until December 2014,
which claim was rejected by the Respondent.
40.
In this regard, the members of the DRC first emphasized that it remained undisputed
that the Respondent had paid to the Claimant all the net monthly salaries for the
period between January and December 2014. However, according to the Claimant,
the Respondent had failed to pay him the amounts related to VAT, as established in
the contract. Therefore, the Claimant affirmed having paid the total amount of
40,467 to the tax authorities regarding the relevant monthly salaries.
41.
The members of the DRC recalled that according to the contract the Claimant was
entitled to receive a monthly net salary “plus the due VAT tax”.
42.
In this respect, the DRC noted that the documents presented by the Claimant in
support of such claim all indicate as beneficiary “Tax Office” and that the various
money transfers range from the amount of 1,809 up to 6,152 without reference to
the type of taxes concerned. The Chamber further took into account that the monthly
salaries were of a fix amount, whereas the amounts paid to the tax office in
accordance with the documents presented greatly vary. Consequently, the members
of the DRC considered that, although the Claimant did provide evidence of several
payments made to the Country D authorities in the total amount of 40,647, the
Claimant did not submit sufficient evidence substantiating that the amounts he paid
to the tax authorities of Country D were indeed all related to VAT.
43.
Therefore, the DRC decided to reject the Claimant’s claim relating to tax
reimbursement.
44.
In continuation, having established that the Respondent is to be held liable for the
early termination of the employment contract with just cause by the Claimant, the
Chamber decided that, in accordance with art. 17 par. 1 of the Regulations, the
Respondent is liable to pay compensation to the Claimant.
45.
The members of the Chamber recalled 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
Player A, Country B / Club C, Country D
Page 16 of 19
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.
46.
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.
The members of the Chamber assured themselves that no such compensation clause
was included in the employment contract at the basis of the matter at stake.
47.
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. In this regard, the Dispute Resolution Chamber
emphasized beforehand that each request for compensation for contractual breach
has to be assessed by the Chamber on a case-by-case basis taking into account all
specific circumstances of the respective matter.
48.
In order to determine the amount of compensation due to the Claimant, the
members of the Chamber first turned their attention to the remuneration and other
benefits due to the Claimant under the existing contract and/or the new contract,
which criterion was considered by the Chamber to be essential. The members of the
Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the
Regulations allows the Chamber to take into account both the existing contract and
the new contract in the calculation of the amount of compensation.
49.
In accordance with the contract signed by the Claimant and the Respondent, which
was to run until 30 June 2015, the Claimant was entitled to receive the total amount
of 168,000, corresponding to his salaries as from January 2015 until June 2015, which
amount serves as the basis for the final determination of the amount of
compensation for breach of contract.
50.
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 able 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.
Player A, Country B / Club C, Country D
Page 17 of 19
51.
In this respect, the Chamber took note that the Claimant signed an employment
contract with the club from Country B, Club E, valid as from 5 March 2015 until 30
November 2016, in accordance with the Claimant was entitled to receive a monthly
salary of EUR 2,058, i.e. the amount of EUR 8,232 during the relevant period of time.
52.
Taking into account all the aforementioned elements as well as the specificities in the
matter at hand, the Dispute Resolution Chamber decided that the Respondent must
pay the amount of 135,000 to the Claimant as compensation for breach of contract.
53.
In addition, taking into account the Claimant’s request as well as its constant
practice, the Chamber decided to award the Claimant interest at the rate of 5% p.a.
on the amount of 135,000 as of the date of receipt of the claim, i.e. 6 March 2015,
until the date of effective payment.
54.
The Dispute Resolution Chamber concluded its deliberations on the present matter by
establishing that any further request filed by the Claimant is rejected.
III.
Decision of the Dis pute Res olution Cham ber
1.
The claim of the Claimant, Player A, is admissible.
2.
The claim of the Claimant is partially accepted.
3.
The Respondent, Club C, has to pay to the Claimant, w ithin 30 day s as from the date
of notification of this decision, outstanding remuneration in the amount of 16,100
plus 5% interest p.a. as from 23 January 2015 until the date of effective payment.
4.
The Respondent has to pay to the Claimant, w ithin 30 day s as from the date of
notification of this decision, compensation for breach of contract in the amount of
135,000 plus 5% interest p.a. as from 6 March 2015 until the date of effective
payment.
5.
In the event that the amounts due to the Claimant in accordance with the abovementioned numbers 2. and 3. are not paid within the stated time limits, the present
matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for
consideration and a formal decision.
6.
Any further claim lodged by the Claimant is rejected.
Player A, Country B / Club C, Country D
Page 18 of 19
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 m otiv ated decision (legal remedy):
According to article 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
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:
Omar Ongaro
Football Regulatory Director
Encl. CAS directives
Player A, Country B / Club C, Country D
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