Labour Disputes
Texto da decisão
Decis ion of the
Dis pute Res olution Cham ber
passed in Zurich, Switzerland, on 24 August 2018,
in the following composition:
Geoff Thom pson (England), Chairman
Johan v an Gaalen (S outh Africa), member
Joaquim Ev angelis ta (Portugal), member
Todd Durbin (US A), member
S tefano La Porta (Italy ), 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
between the parties
I.
Facts of the case
1.
On 31 August 2016, 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) entered into an
employment contract as well as a “supplement to the employment contract”, both valid
as from 31 August 2016 until 30 June 2018. As per the contract, the player was entitled to
a monthly salary of 15,000 in the currency of Country D (approx. EUR 207 on 31 August
2016) and, as per the supplement, to an additional monthly salary of EUR 49,795 and to
an incentive remuneration of EUR 600,000, payable on 30 September 2016.
2.
On 18 August 2017, the parties concluded an “agreement on cancellation of the
employment contract” (hereinafter: the termination agreement).
3.
According to paragraph 1 of the termination agreement, “the Parties have agreed to
terminate the Employment Contract of August 31, 2016, (in edition of all appendices and
additional agreements) by mutual consent between the Parties.”
4.
In paragraph 2, the parties confirmed that “they have no financial or other claims to each
other with regard to performance of the Employment Contract of August 31, 2016 except
for the payments specified in para. 4 hereof.”
5.
Paragraph 4 of the agreement stipulates the following:
“the Club shall pay to the Player a compensation for the early termination of the
employment contract, the sum received on hands after a deduction of all taxes, the
amount of 225,000 […] euro, in the period up to 01 January 2018 (inclusive).
The current debt to the football Player under the employment contract from 31.08.2016,
in the amount of 84,000 […] euro, the sum received on hands after a deduction of all
taxes, that the Club shall pay to the Player up to 01 September 2017 (inclusive)
[…]
In the case of non-payment of any above mentioned sums within the specified period, the
Player is entitled and the Club pays the penalty in the amount of 1,700 […] euros for each
day of delay without any other previous notification.”
6.
Finally, paragraph 6 of the agreement stipulates the following:
“The payment shall be effected in euro in the account specified by the Player: Account E
no: XXX, swift code (BIC) XXX”.
7.
On 8 September 2017, the player put the club in default of payment of the amount of
EUR 84,000, plus a penalty fee in the amount of EUR 11,900, for a delay of payment of 7
days.
Player A, Country B / Club C, Country D
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8.
On 18 September 2017, the player sent another default notice to the club, requesting it to
pay the remaining EUR 21,745.79 and the penalty fee in the amount of EUR 18,700, for a
delay of payment of 11 days.
9.
On 3 October 2017, the player once again contacted the club, confirming the receipt of
the amount of EUR 62,254.21 on 12 September 2018, while denying to have received any
other amounts from the club, allegedly deposited in a bank in Country D. Thus, he insists
that the amount of EUR 40,445,79 remains outstanding, corresponding to the unpaid
balance of EUR 21,745.79 plus the penalty fee of EUR 18,700, “detained from the valid
payment you made on September 12”.
10.
On 11 October 2017, the club sent a letter to the player, alleging it did not manage to pay
the due amounts, since the player had been ignoring its requests to provide the club with
the bank account as well as with his current address, which are “requirements set out by
the Foreign Currency Legislation of Country D”. Consequently, the club alleges to have
had no other option than to pay him the amount of 1,512,678.19 in the currency of
Country D, corresponding to EUR 21,745.79, to his bank account in Country D, used during
the contract.
11.
On 21 December 2017, the player once again wrote to the club, warning it in advance
about the amount due at the latest on 1 January 2018, while pointing out that such
amount must be paid to the bank account indicated in paragraph 6 of the termination
agreement and that a delay in payment would imply the application of the agreed
penalty.
12.
On 1 February 2018, the player sent the club a new default notice, requesting the
payment of “the amount which due date is already exceeded for more than 30 days and
also the penalties up to the day of the execution of the compensation, in amount of 1700
euro for each day of delay starting from 2th of January”.
13.
On 20 March 2018, the player lodged a claim against the club in front of FIFA requesting
the club to pay the following amounts:
- EUR 225,000, corresponding to the compensation as per the termination agreement
due at the latest on 1 January 2018;
- EUR 22,100 (i.e. 13 days x EUR 1,700), corresponding to the penalty for the delayed
payment of the amount of EUR 84,000 due on 1 September 2017, but only received by
the player in full on 14 September 2017;
- Penalties of EUR 1,700 per day for the non-payment of EUR 225,000, “starting from 2th
of January till the effective payment.
14.
In his claim, the player explains that, in spite of his several reminders and of the fact that
the termination agreement clearly specified the bank account to which the due amounts
should be paid, the club delayed without any valid reasons the payment of the amount of
Player A, Country B / Club C, Country D
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EUR 84,000 due on 1 September 2017 and never paid the amount of EUR 225,000 due on
1 January 2018. Thus, the club should be held liable to pay him EUR 225,000 as well as the
penalty fee agreed upon by the parties in the termination agreement. In particular, the
player considers the penalty fee proportionate, as it corresponds roughly to his daily
salary as per the contract (EUR 50,000 / 30 days = EUR 1,666).
15.
In its reply, the club stated that on 24 August 2017, it made the payment towards the
player in the amount of 1,512,678.19 in the currency of Country D, corresponding to EUR
21,745.79, to the account “which was available to the Club, as this account was used for
payments under the Contract”. On 12 September 2017, the club paid the amount of EUR
62,254.21 to the account specified by the player and therefore, according to the club, the
full amount of EUR 84,000 was paid.
16.
The club further argued that due to financial difficulties, it was not able to make the
agreed payment on 1 January 2018. However, after “receiving some money”, the club
confirmed to have made the payment in the amount of EUR 225,000 on 29 May 2018.
17.
The club deemed, that the penalty fee agreed in the agreement is “disproportionate and
abusive and, thus, should be reduced”. In particular, the club claims that a penalty of EUR
1,700 per day for a debt of EUR 225,000 is equivalent to interest of 275,77% p.a. or of
739% p.a. for a debt of EUR 84,000. Consequently, the club argued, that a penalty fee of
“5% per annum is an appropriate amount of penalty which the Club should pay towards
the Player” and agrees to pay the amount of EUR 4,561.64 for the delay in payment of
EUR 225,000 from 2 January to 29 May 2018 and the amount of EUR 93.81 for the delay in
payment of the amount of EUR 62,254.21 from 2 to 12 September 2017.
18.
On 11 June 2018, the player confirmed the payment of the amount of EUR 225,000 by the
club, but insisted on the payment of the penalty fee, as agreed by the parties in the
termination agreement, amounting to EUR 275,400 as the amount of EUR 225,000
remained unpaid for 149 days.
II.
Cons iderations of the Dis pute Resolution Chamber
1.
First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or
DRC) analysed whether it was competent to deal with the matter at hand. In this respect,
it took note that the present matter was submitted to FIFA on 20 March 2018.
Consequently, the Rules Governing the Procedures of the Players’ Status Committee and
the Dispute Resolution Chamber (edition 2018; 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.
Player A, Country B / Club C, Country D
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b) of the Regulations on the Status and Transfer of Players (2018 edition) 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 of
Country B and a club of Country D.
3.
Furthermore, the Chamber analysed which regulations should be applicable as to the
substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1
and 2 of the Regulations on the Status and Transfer of Players (2016 and 2018 editions),
and considering that the present claim was lodged on 20 March 2018, the 2018 edition of
said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the
substance.
4.
The competence of the Chamber and the applicable regulations having been established,
the Chamber entered into the substance of the matter. In this respect, the Chamber
started by acknowledging all the above-mentioned facts as well as the arguments and the
documentation submitted by the parties. However, the Chamber emphasised that in the
following considerations it will refer only to the facts, arguments and documentary
evidence, which it considered pertinent for the assessment of the matter at hand.
5.
The Chamber started with a careful examination of the content of the termination
agreement concluded between the Claimant and the Respondent on 18 August 2017. In
this respect, it noted that said agreement provided for the Claimant to receive from the
Respondent the amount of EUR 84,000 at the latest on 1 September 2017 and EUR
225,000 at the latest on 1 January 2018.
6.
Furthermore, the Chamber observed that in case of non-compliance of the
aforementioned payments within the relevant deadlines, the termination agreement
stipulated in its paragraph 4 in fine that the Respondent would pay to the Claimant the
additional amount of EUR 1,700 “for each day of delay without any other previous
notification“.
7.
In continuation, the Chamber noted that the Claimant, on the one hand, while finally
acknowledging full receipt of the main amounts stipulated in the termination agreement,
namely EUR 84,000 plus EUR 225,000, still requested to be awarded the amounts of EUR
22,100 and EUR 275,400 on the basis of paragraph 4 of the agreement, arguing that the
Respondent had not paid the two instalments of the agreed amount on the respective
due dates.
8.
On the other and, the Chamber noted that the Respondent deems that the daily penalty
for delay stipulated in paragraph 4 of the termination agreement consists in fact of an
excessive and disproportionate interest rate, and therefore should be reduced to 5% p.a..
9.
With the above-mentioned considerations in mind, the Chamber focused its attention on
the content of paragraph 4 in fine of the termination agreement, which literally
Player A, Country B / Club C, Country D
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establishes that: “In the case of non-payment of any above mentioned sums within the
specified period, the Player is entitled and the Club pays the penalty in the amount of
1,700 […] euros for each day of delay without any other previous notification.” .
10.
The Chamber noted that, in spite of the fact that the aforementioned paragraph indeed
mentioned the word “penalty”, the amount of EUR 1,700 added to the debt per day of
delay in payment in fact consists of a hidden interest rate, and not a penalty. In fact, such
daily amount accounts to an interest of 738% p.a. over the first instalment of EUR 84,000
and 275% p.a. over the second instalment of EUR 225,000. These interest rates are clearly
excessive and disproportionate, in accordance with the Chamber’s jurisprudence as well as
with Swiss law.
11.
Bearing in mind the foregoing, the Chamber noted that it was not disputed by the
Respondent that the amounts due as per the termination agreement were in fact paid
late, and that no valid reasons were provided by the Respondent for such delay.
Furthermore, the Chamber also noted that the termination agreement indeed stipulated
the application of interest for late payment, however at excessive rate. Thus, taking into
consideration its well-established jurisprudence as well as Swiss law, the Chamber decided
to reduce such interest to the amount of 18% p.a., over both instalments, as from their
respective due dates until the date when they were actually paid.
12.
In conclusion, the Chamber decided to partially accept the claim of the Claimant and
award him interest of 18% p.a. on the amount of EUR 84,000, as from 2 September 2017
until 12 September 2017, and interest of 18% p.a. on the amount of EUR 225,000, as from
2 January 2018 until 29 May 2018.
*****
III.
Decis ion of the Dispute Resolution Cham ber
1.
The claim of the Claimant, Player A, is partially accepted.
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, interest of 18% p.a. on the amount of EUR 84,000, as from 2
September 2017 until 12 September 2017.
3.
The Respondent has to pay to the Claimant, w ithin 30 day s as from the date of
notification of this decision, interest of 18% p.a. on the amount of EUR 225,000, as from 2
January 2018 until 29 May 2018.
Player A, Country B / Club C, Country D
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4.
In the event that the aforementioned sums are not paid by the Respondent within the
stated time limit, the present matter shall be submitted, upon request, to FIFA’s
Disciplinary Committee for consideration and a formal decision.
5.
The Claimant is directed to inform the Respondent immediately and directly of the
account number to which the remittances in points 2. and 3. above are to be made and to
notify the Dispute Resolution Chamber of every payment received.
*****
Note relating to the motiv 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 (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:
Omar Ongaro
Football Regulatory Director
Encl. CAS directives
Player A, Country B / Club C, Country D
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