Labour Disputes
Texto da decisão
Decis ion of the petz
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
Wouter Lam brecht (Belgium), member
Todd Durbin (USA), member
Takuy a Yam azaki (Japan), 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 September 2013, the Player of Country B, Player A (hereinafter: the player or
Claimant) and the Club of Country D, Club C (hereinafter: the club or Respondent)
signed an employment contract, valid as from an unspecified date until the end of
the season 2013/2014 as well as the end of the Continental Cup (one season)
(hereinafter: the first contract).
2.
According to article 1 of the first contract, the player was entitled to receive a total
amount of USD 100,000, ‘with a monthly salary of 1,250,000’ in the currency of
Country D, payable as follows:
50% ‘upon signing of the contract’;
25% ‘at the start of the second phase’;
25% ‘at the end of the league’.
3.
On 15 September 2014, the player and the club signed another document, valid as
from an unspecified date until the end of the season 2014/2015 as well as the end
of the Continental Cup (one season) (hereinafter: the second contract).
4.
According to article 1 of the second contract, the player was entitled to receive a
total amount of USD 105,000, ‘with a monthly salary of 1,250,000’ in the currency
of Country D’, payable as follows:
5.
50% ‘upon signing of the contract’;
25% ‘at the start of the second phase’;
25% ‘at the end of the league’.
On 14 July 2016, the player lodged a claim before FIFA against the club, claiming
compensation for breach of contract in the total amount of USD 230,768 to be
paid by the club, broken down as follows:
Residual value of the first contract in the total amount of USD 112,884, specified as
follows:
the sign-on fee in the amount of USD 100,000;
the outstanding monthly salaries in the amount of 1,250,000 each, or
according to the player amounting to USD 1,736, in the total amount of “USD
12,884”.
Residual value of the second contract in the total amount of USD 117,884, specified
as follows:
the sign-on fee in the amount of USD 105,000;
Player A, Country B / Club C, Country D
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the outstanding monthly salaries in the amount of 1,250,000 each, or
according to the player amounting to USD 1,736, in the total amount of “USD
12,884”.
In addition, the player asked for sanctions ‘pursuant to article 12bis (par)s 2, 3, 4
and 5’ to be applied on the club.
6.
In his claim, the player explains that during the seasons 2013/2014 and 2014/2015,
he was under contract with the club. Furthermore, the player holds that on 22 May
and 29 June 2016, he put the club in default for the payment of the amount of
USD 230,768 (cf. point 5. above), as he allegedly did not receive any of the
amounts payable under the first and second contract. The player holds that the
club did not reply to these default letters.
7.
In its reply, the club denies the player’s allegations and states that the two
contracts are separate documents and holds that ‘the second contract was not an
extension to the first contract nor there is any link joining the two contracts’.
Furthermore, the club explains that the first contract was valid as from the date of
signature, i.e. 9 September 2013 (cf. point 1. above) until the end of the season
2013-2014, according to the club 15 June 2014. In addition, the club states that the
second contract was valid as from the date of signature, i.e. 15 September 2014 (cf.
point 3. above) until the end of the season 2014-2015, according to the club 15
June 2015. Moreover, the club argues that in the period between 15 June and 15
September 2014, the player was not employed by the club, and ‘rather was free to
sign with any team of his choice’.
8.
Subsequently, the club argues that all claims related to the first contract must be
considered time-barred, as the events giving rise to the dispute occurred on 15
June 2014 and the claim was only lodged on 14 July 2016. What is more, the club
points out that ‘if one were to agree with the claimant’s claim that none of his
remuneration for the season 2013-2014 was paid, one fails to understand why he
signed a new contract with the Respondent for the following season (i.e. season
2014-2015) and why no reference to said unpaid remuneration was mentioned in
the second contract’.
9.
In addition, the club holds that the monthly salary of 1,250,000 amounts to USD
1,000, and not to USD 1,736 as stated by the player, as well as that the player is
only entitled to 9 monthly salaries and a sign-on fee of USD 100,000. As a result,
the total value of the first contract is USD 109,000.
10.
Further, the club points out that ‘due to the international sanctions imposed
against Country B which bans money transfer to Country B through the banking
channels’, it could only pay the player ‘his values in form of cash’, and that this was
done on the first business day of the month. For the sign-on fee, the club explains
that it paid this amount in instalments.
Player A, Country B / Club C, Country D
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11.
Moreover, the club argues that during the season 2013-2014, it paid all the
monthly salaries of the player, as well as the amount of USD 76,520 in relation to
the sign-on fee.
12.
In addition, the club holds that the Income Tax Law of Country D applies to the
first contract, and that based on article 2 of said law, the income of the player is
taxable at 15%, and that based on article 28 par. 4 of said law, an additional 10%
can be deducted by the club, which can only be released to the player ‘when he
obtains a certificate of clearance from income tax’ and submits this document to
the club. The club further explains that the player did not file his income tax
declaration related to the 2013-2014 season, and that as a result, he cannot
provide the club with the mentioned certificate of clearance.
13.
As a result of the foregoing, the amounts of USD 16,350 (15%), as well as USD
10,900 were deducted from the total value of the first contract of USD 109,000,
resulting in a total payable amount of USD 81,750. As the club had paid already
the amount of USD 76,520 to the player, it concludes that the remaining
outstanding remuneration in relation to the first contract can only be USD “5,300”.
In conclusion, the club states that once the player has filed his income tax
declaration, which he is obliged to do based on the Income Tax Law of Country D,
it will immediately release the amounts of USD 5,300 and USD 10,900 to the player
related to the first contract.
14.
In relation to the 2014-2015 season, the club argues that all claims related to the
second contract cannot be dealt with by FIFA, as this matter ‘is not pertaining to an
employment related issue but in fact it is relating to an income tax matter’. The
club further alleges that this matter could only be decided by FIFA if the player
‘had fully discharged the obligations imposed on him by the Tax Law’ or if the
player ‘had submitted evidence establishing that the Respondent had promised to
pay his income tax instead of him’.
15.
In addition, the club states that the monthly salary of 1,250,000 amounts to USD
1,000, and not to USD 1,736 as stated by the player, as well as that the player is
only entitled to 9 monthly salaries and a sign-on fee of USD 105,000. As a result,
the total value of the first contract is USD 114,000.
16.
Moreover, the club argues that during the season 2014-2015, it paid all the
monthly salaries of the player, which is also acknowledged by the player (cf. point
19. below). In addition, the club holds that the player refused to receive his sign-on
fee for the season 2014-2015, ‘save no taxes were to be deducted from it’. The club
further states that on 14 October 2014, its financial department explained to the
player that based on the Country D Tax Law, taxes had to be deducted from the
sign-on fee.
Player A, Country B / Club C, Country D
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17.
In addition, the club argues that since the player also did not file his tax income
declaration in relation to the 2014-2015 season, it could validly deduct (cf. point
13. above), a percentage of 15% (USD 17,100) and a percentage of 10% (USD
11,400) from the total value of the contract in the amount of USD 114,000. Further,
because the player did not file his tax declaration for two consecutive seasons, the
club holds that it could validly deduct another 30% (USD 34,200) from the
receivables of the player. As a result, the club concludes that the remaining
outstanding part of sign-on fee in relation to the second contract, is USD 42,300
(i.e. USD 114,000 minus USD 17,000 minus USD 11,400 minus USD 34,300 minus
USD 9,000 as salary).
18.
In conclusion, the club explains that the player has two options:
To file his income tax declaration for the years 2013-2014 and 2014-2015, as a
result of which he can present a certificate of clearance to the club, based on
which he will receive from the club – in addition to his right to receive tax
refund - the total amount of USD 61,800:
USD 10,900 (cf. point 13. above);
USD 5,300 (cf. point 13. above);
USD 11,400 (cf. point 17. above);
USD 34,200 (cf. point 17. above).
To not file his income tax declaration for the years 2013-2014 and 2014-2015.
The club states that based on this option, the player is only entitled to USD
42,300 (cf. point 17. above), and maybe ‘if the financial authority of Country D
did not discover such failure to file his income tax returns at the expiry of the
five years statutes of limitation’, the same amount of USD 61,800 as
mentioned above.
19.
In his replica, the player confirms that he received all his monthly salaries for the
seasons 2013-2014 and 2014-2015. Further, the player states that USD 34,300 of the
sign-on fee of USD 100,000 related to the 2013-2014 remained outstanding, as well
as USD 105,000 as sign-on fee related to the season 2014-2015.
20.
Further, the player alleges that his ITC remained at the club as from the start of the
2013-2014 season until the end of the 2014-2015 season and that he ‘was on
service with the Respondent two seasons’, as well as ‘in the between months’.
Based on this ‘continuous employment service […] during the in between months’,
the player argues that the claimed amounts as per the first contract cannot be
time-barred.
21.
In addition, the player argues that the terms of both contracts did not mention
that he ‘has to pay for the local authority any taxes including the income tax’.
Moreover, the player states that if this income tax needs to be paid, it should have
been deducted ‘from the employee income’ by the club, which according to the
Player A, Country B / Club C, Country D
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player follows from article 17 and 18 of the ‘Income Tax Law 113 1982’. The player
holds that despite the club’s responsibility to pay these taxes, it never did so.
22.
In conclusion, the player amends his claim and holds that the club is liable for the
payment of the total outstanding amount of USD 139,300 (i.e. USD 34,300 plus
USD 105,000, cf. point 19. above).
23.
In its duplica, the club states that the player falsely and deliberately claimed the
amount of USD 230,768, only later amending his claim to the amount of USD
139,300. Furthermore, the club states that it was not aware ‘of any regulations that
require a club to immediately release the player’s ITC the moment his contract had
expired, and if so, to whom his ITC shall be released’. Moreover, the club points out
that the player remained unemployed in the three months between the first and
the second contract.
24.
Finally, the club draws the attention to the fact that it is the player’s responsibility
to seek legal advice, when signing a contract with a foreign club and being advised
about possible responsibilities to pay taxes. In conclusion, the club holds that the
law of Country D is applicable to the contract and that the club is prohibited to
disclose any information related to income taxes to third parties. In conclusion, the
club argues that the player is not entitled to receive the amounts deducted as
income tax, as these taxes belong ‘to Country D’.
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 respect, it took note that present matter was submitted to FIFA on 14
July 2016. Consequently, the Rules governing the procedures of the Players’ Status
Committee and the Dispute Resolution Chamber (edition 2015; hereinafter:
Procedural Rules) are applicable to the matter at hand (cf. art. 21 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 would, in principle, be
competent to deal with the matter at stake, which concerns an employmentrelated dispute with an international dimension between a Player of Country B
and an Club of Country D.
3.
What is more, the DRC duly noted that – in view of the date of the player’s claim
and the club’s allegations regarding its supposed prescription, and before
addressing the substance of the matter, it should first examine if the present claim,
Player A, Country B / Club C, Country D
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or any part of it, could possibly be time-barred. In this respect, the Chamber noted
that the first employment contract at the basis of the dispute was concluded on 9
September 2013. The Chamber further noted that the player lodged his claim
before FIFA on 14 July 2016, claiming allegedly outstanding salaries as from the
month of September 2013.
4.
In this respect, the members of the Chamber referred to art. 25 par. 5 of the
Regulations, which, in completion to the general procedural terms outlined in the
Procedural Rules, clearly establishes that the decision-making bodies of FIFA shall
not hear any dispute if more than two years have elapsed since the event giving
rise to the dispute arose and that the application of this time limit shall be
examined ex officio in each individual case.
5.
Bearing in mind the foregoing, the DRC referred to the claim of the player, based
on which he requested inter alia the payment of USD 34,300, as outstanding part
of the sign-on fee of USD 100,000 for the 2013-2014 season. In this respect, the
DRC noted that the last part of said sign-on fee, 25% (cf. point I./4. above), was
due at the latest ‘at the end of the league’. From the information in the Transfer
Matching System (TMS), it can be established that the League of Country D for the
2013/2014 season ended on 21 June 2014 at the latest. Furthermore, the DRC also
noted that the player equally claimed the payment of allegedly outstanding
salaries pertaining to the first contract. In this respect, the DRC pointed out that
the first contract was valid until the end of the season 2013/2014, which according
to the information contained in the TMS ended on 21 June 2014 at the latest.
6.
As a consequence, recalling that the present claim was lodged on 14 July 2016, the
DRC concluded that the time limit of two years had elapsed for claiming any
payments due under the first contract. Therefore, this part of the player’s claim is
to be considered time-barred and consequently inadmissible. The Chamber
concluded its reasoning by stating that the player’s other requests, i.e. the amounts
claimed under the second contract, were made within the 2 years’ time limit and,
therefore will be further analysed as to their substance.
7.
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.
8.
The members of the Chamber first acknowledged that the parties were
contractually bound by means of an employment contract referred to as the
second contract, signed on 15 September 2014 and valid as from an unspecified
date until ‘the end of the season 2014/2015 as well as the end of the Continental
Player A, Country B / Club C, Country D
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Cup (one season)’ and that the player inter alia was entitled to receive a sign-on
fee of USD 105,000.
9.
Furthermore, the DRC noted that the player, on the one hand, maintained that the
club failed to pay him said sign-on fee of USD 105,000. The club, on the other
hand, rejected the claim put forward by the player and stated that he failed to
fulfil his fiscal obligations in Country D, as a result of which it had to deduct several
amounts from the total value of the sign-on fee, which resulted according to the
club to an outstanding amount of only USD 42,300. Further, the club argued that
the player will receive said amount if he complies with his obligation to file his tax
declaration in Country D for the 2014-2015 season.
10.
In continuation, the Chamber took into account that the player fully rejected the
club’s allegations and indicated that it was the club’s responsibility to deduct the
relevant taxes from his salary and/or to pay these taxes to the national authorities
in Country D, as well as that the club in its final reply pointed out that it is the
responsibility of the player to be aware of the legal and fiscal consequences when
signing a contract.
11.
In view of the aforementioned considerations, the members of the Chamber
highlighted that the underlying issue in this dispute, considering the diverging
position of the parties, was to determine whether the club had fulfilled all its
obligations towards the player as per the second contract or whether it had a valid
reason not to have done so.
12.
Before entering into the analysis of the above-posed question, the members of the
Chamber recalled the basic principle of burden of proof, as stipulated in art. 12
par. 3 of the Procedural Rules, according to which a party claiming a right on the
basis of an alleged fact shall carry the respective burden of proof.
13.
Entering into the substance of the matter at hand, the members of the Chamber
focused their attention on the contents of the second contract that was signed
between the parties and their intention, when signing said contract.
14.
In this respect, the members of the Chamber noted that the second contract did
not contain a specific clause, aiming at determining whether taxes should be
deducted from the amounts the player was entitled to receive, or which party was
responsible for the payment of these taxes.
15.
Moreover, the Chamber observed that the second contract inter alia establishes a
sign-on fee payable to the player the amount of USD 105,000, without making any
reference as to whether such amount should be considered net or gross. In order
to preserve the good faith of the player when signing the second contract, and in
the absence of any evidence to the contrary, the Chamber concluded that the
amount therein established is to be considered as net, as well as that the player
Player A, Country B / Club C, Country D
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could validly believe that such amount should be paid out to him in its entirety. In
view of this specific point, the members of the Chamber agreed that in principle, a
party signing a document of legal importance without knowledge of its precise
legal effects, as a general rule, does so on its own responsibility. According to the
Chamber, said responsibility is however limited. In situations in which the wording
of specific clauses is insufficiently clear, in general, it would be the employer, as the
stronger party in the employment relationship, to bear the consequences of the
lack of clarity in specific parts of the contract.
16.
Furthermore, the Chamber noted that the club did not provide consistent evidence
that it was obliged to withhold any percentage of the remuneration of the player
in order to guarantee the payment of income taxes or that it actually paid those
taxes on behalf of the player to the relevant authorities. Consequently, the DRC
concluded that the club did not meet its burden of proving that the amounts due
to the player as per the contract were paid or that it had a valid reason not to pay
him these amount sin their entirety.
17.
Based on the foregoing circumstances, the members of the Chamber established
that the club did not sufficiently substantiate its defence, as it did not present any
evidence that the player was responsible for the payment of the taxes as per the
second contract, or that it paid these taxes directly to the relevant national
authority In Country D.
18.
As a result, and by reiterating the contents of art. 12 par. 3 of the Procedural Rules,
the members of the Chamber concurred that the club could not prove that it
fulfilled all its obligations as per the second contract. Moreover, in accordance with
the general legal principle of “pacta sunt servanda”, it must fulfil its obligations as
per the second contract and, consequently, is to be held liable to pay the sign-on
fee in the amount of USD 105,000 to the player.
19.
Consequently, on account of all of the above-mentioned considerations and the
specificities of the case at hand, the Chamber decided that the club must pay the
amount of USD 105,000 to the player.
20.
The Chamber concluded its deliberations in the present matter by accepting the
player’s claim, insofar it is considered admissible.
III.
Decis ion of the Dis pute Res olution Cham ber
1.
The claim of the Claimant, Player A, is accepted insofar it is admissible.
2.
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
USD 105,000.
Player A, Country B / Club C, Country D
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3.
In the event that the aforementioned sum is not paid by the Respondent within
the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the
aforementioned time limit and the present matter shall be submitted, upon
request, to FIFA’s Disciplinary Committee for consideration and a formal decision.
4.
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 decis ion (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
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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