Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 18 March 2010,
in the following composition:
Slim Aloulou (Tunisia), Chairman
Carlos Soto (Chile), member
Philippe Diallo (France), member
on the claim presented by the player,
D,
as Claimant/Counter-Respondent
against the club,
B,
as Respondent/Counter-Claimant
regarding an employment-related dispute
between the parties
I.
Facts of the case
1.
On 16 June 2006, the player D (hereinafter: “Claimant/Counter-Respondent” or
“player”) and the club B (hereinafter: “Respondent/Counter-Claimant” or
“club”) signed an employment contract valid as from 1 July 2006 until 30 June
2010.
2.
“Annexe 3” of the employment contract stipulates, inter alia, that the player is
entitled to receive a basic gross annual salary of 240,000.
3.
According to “Annexe 3/1” of the employment contract, the player was to
receive, inter alia, a net signing-on fee of 620,000 falling due at the signature
of the employment contract and a special net bonus of EUR 287,000 per season
if the player played 75% or more of all the minutes of the matches contested
by the first team.
4.
Art. 4 of “Annexe 3/1” of the employment contract contains a clause referring
to (in English translation):
“Contractual reserve”
“Given the results of the medical tests, the player is capable of working to
100% capacity. However, if it should transpire at a later point in time that the
spinal cord injury that was operated upon in the city M is preventing him from
working to 100% capacity, the employment contract concluded by the parties
may be cancelled without any financial consequences for the club B. The player
shall reimburse the signing-on fee that has already been paid in proportion to
the number of games played.”
5.
On 25 October 2006, the Claimant/Counter-Respondent terminated the
employment contract, because the Respondent/Counter-Claimant failed to pay
the signing-on fee after having put the club in default of such payment.
6.
On 3 November 2006, the club informed the player by letter that it accepted
the termination of the employment contract as of 31 October 2006 and that
both parties are released from their contractual obligations, however, it did not
agree with the reasons given by the player for the termination of the
employment contract. The club further explained in its letter that it withheld
the payment of the signing-on fee in the amount of 620,000 due to art. 4 of
“Annexe 3/1” of the employment contract.
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7.
On 5 March 2007, the player filed a claim with FIFA against the club, stating
that the club breached the employment contract without just cause and
demanded that the club be ordered to pay the total sum of 2,875,145
composed as follows:
- 620,000 for the signing-on fee;
- 1,375,145, corresponding to annual special bonuses;
- 880,000, corresponding to the monthly salaries due until the end of the
employment contract on 30 June 2010.
8.
The Claimant/Counter-Respondent alleged that the payment of the signing-on
fee had not been subject to any conditions other than the signature of the
employment contract. Furthermore, the Claimant/Counter-Respondent noted
that even the employment contract stipulated that he was capable of working
to 100% capacity. In addition, the Respondent/Counter-Claimant had first of all
tried to pay the signing-on fee in an “irregular” manner and had then asked
the Claimant/Counter-Respondent to re-take the medical tests on 24 October
2006, which he had refused to do.
9.
The parties tried to reach an amicable settlement in a meeting with the B
Football League on 17 January 2007, whereby they agreed that if they were
unable to reach an agreement by 30 January 2007, the player would be free to
sign for another club. Therefore, on 31 January 2007, the player’s agent sent a
letter to the club to invite the latter to propose a solution, to which the club
did not reply.
10.
The player then started negotiations and signed an employment contract on 29
January 2007 with the club A that was valid until 30 June 2007. Under the terms
of this contract, the player was to receive a total salary of EUR 8,000, payable in
four monthly payments of EUR 2,000 until 31 May 2007. The parties prolonged
the employment contract until 30 June 2008, according to which the player
received EUR 65,000, payable in ten equal instalments of EUR 6,500 each.
11.
On 1 July 2008, the player signed an employment contract with the club, T,
valid until 30 June 2009, in accordance with which the player would receive the
amount of EUR 111,440 for the whole contractual period.
12.
According to the player, the B Football League refused to issue the
International Transfer Certificate (ITC), because the club was refusing to release
him as the two parties were involved in a contractual dispute.
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13.
The player presented a letter from the club, which he received on 7 February
2007, in which the club asked him to withdraw his financial demands so that he
would be free to play for another club.
14.
On 29 November 2007, the club rejected the player’s claim and filed a
counterclaim.
15.
In its arguments, the club confirmed that the medical tests that had been
performed prior to the player signing his employment contract had not
indicated that he would not be able to perform to full capacity. However, in
the light of the injuries that the player had previously sustained, the club had
had reservations as to his endurance over the longer term. Furthermore, the
club stated that the player had not played in many official matches for his
previous club, O, after the operation on his back. This was why art. 4 had been
inserted in “Annexe 3/1” of the contract.
16.
With regard to the signing-on fee, which had been negotiated on the basis of
the employment contract being valid for four years, the club stressed that this
had always been subject to the condition that the employment contract could
be terminated for the said medical reasons.
17.
The club confirmed that it had had a misunderstanding with the player in
relation to the signing-on fee and whether it had to be paid as gross or net of
tax and social contributions. The club explained that the player had been of the
opinion that the club should pay the B tax on the signing-on fee. Since then,
the club had tried to find a solution to this issue and had proposed optimising
the tax system, an offer that the player had rejected. The club denied the
allegation that it had wanted to pay the player’s salary in an “irregular”
manner.
18.
With regard to the player’s allegation that the club had unfairly asked him to
re-take the medical tests, the club stressed that the issue of the player’s ability
to perform had always been a crucial one, and that the player had often made
comments that had cast doubts upon his ability to perform.
19.
In a letter dated 24 October 2006, the club informed the player that he would
have to have his back examined and that the signing-on fee would be paid
once he had passed this medical test. The club denied looking for an excuse to
avoid paying the signing-on fee.
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20.
The club pointed out that it was surprised by the player’s reaction to the club’s
request to contact a doctor by terminating the employment contract. The club
also explained that the player had violated one of the terms of his employment
contract by refusing to take a medical test and added that the club had actually
had the right to terminate the employment contract in the light of this
violation.
21.
The club claimed that it had not merely had the right to ask the player to
retake the medical tests, but rather the club management had had an
obligation to do so given the player’s condition.
22.
Furthermore, the club explained that the player terminated the employment
contract in a letter dated 25 October 2006 without having just cause to do so.
The club also stressed that it had never denied that it owed the player money,
but that the player could have instigated the payment by taking the additional
medical test.
23.
The player had therefore terminated the contract without just cause and he
should therefore be held liable for any damages caused.
24.
In its counterclaim, the club demanded that the player be ordered to pay
compensation amounting to 2,200,000.
25.
The club stated that it had always met its contractual obligations towards the
player. Furthermore, the club noted that the diverging position of the parties in
relation to the signing-on fee and the delay in its payment had not been a
sufficient reason for terminating the contract with just cause.
26.
The club claimed that, at the very most, the player would have the right to a
pro-rata payment of the signing-on fee for the period of time in which the
contract had been valid, which in the club’s opinion was 4,5 months, for which
the following calculation should apply 620,000 : 48 (12,916.66) x 45 = 58,124.99.
27.
Furthermore, according to the club, it should be taken into account that the
player had signed a new employment contract with a monthly salary of EUR
2,000. The club stated that it was hard to believe that the salary was so low
given the quality of the player.
28.
As the basis for calculating the sum demanded for contractual termination
(2,200,000), the club stressed that it was necessary to take into account the
signing-on fee (620,000) and the residual value of the contract (860,000)
multiplied by a factor of 1.5, which was in line with the jurisprudence of the
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Dispute Resolution Chamber in relation to a player terminating a contract
without just cause.
29.
In response, the player rejected the club’s counterclaim and stated that the club
had violated its contractual obligations and wanted to benefit from its
improper conduct.
II.
Considerations of the Dispute 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 case
at hand. In this respect, it took note that the present matter was submitted to
FIFA on 5 March 2007. Consequently, the 2005 edition of the Rules Governing
the Procedures of the Players’ Status Committee and the Dispute Resolution
Chamber (hereinafter: Procedural Rules) is applicable to the matter at hand (cf.
article 21 par. 2 and 3 of the Procedural Rules, edition 2008, in combination
with art. 18 par. 2 and 3 of the Procedural Rules).
2.
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the
Procedural Rules and confirmed that in accordance with art. 24 par. 1 and 2 in
combination with art. 22 lit. b) of the Regulations on the Status and Transfer of
Players (edition 2009) 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 and a club.
3.
In this respect, the Chamber was eager to emphasize that contrary to the
information contained in FIFA’s letter dated 12 March 2010 by means of which
the parties were informed of the composition of the Chamber, the member
Joaquim Evangelista and the member Damir Vrbanovic refrained from
participating in the deliberations in the case at hand, due to the fact that the
member Joaquim Evangelista has the same nationality as the Claimant/CounterRespondent and that, in order to comply with the prerequisite of equal
representation of club and player representatives, also the member Damir
Vrbanovic refrained from participating and thus the Dispute Resolution
Chamber adjudicated the case in presence of three members in accordance with
art. 24 par. 2 of the Regulations.
4.
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 2 of the Regulations on the Status and
Transfer of Players (editions 2008 and 2009) and considering that the present
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claim was lodged on 5 March 2007, the 2005 edition of the said regulations
(hereinafter: Regulations) is applicable to the matter at hand as to the
substance.
5.
The competence of the Chamber and the applicable regulations having been
established, the Chamber entered into the substance of the matter. The
members of the Chamber started by acknowledging the above-mentioned facts
and all further documentation contained in the file. In particular, they took
note that on, 16 June 2006, an employment contract was concluded between
the player and the club for the period from 1 July 2006 until 30 June 2010 and
that the Claimant/Counter-Respondent had terminated the employment
contract on 25 October 2006. Furthermore, the Chamber acknowledged that
the parties had agreed, inter alia, on remuneration consisting of a net signingon fee of 620,000 and a basic gross annual salary of 240,000.
6.
In this respect, the members of the DRC took note of the fact that the player
claims that the club breached the employment contract without just cause,
since the club failed to pay the signing-on fee and that he asks to be awarded
payment of the total amount of 2,875,145, made up of 620,000 relating to the
signing-on fee and 2,255,145 as compensation for breach of contract
corresponding to annual special bonuses and monthly salaries until the date of
expiry of the employment contract.
7.
The Chamber acknowledged that the club, on the other hand, considers that
the player had terminated the employment contract without just cause, since
he refused to retake the medical test on 24 October 2006 even though art. 4 of
“Annexe 3/1” had been inserted in the employment contract in the light of the
player’s previous injury. Therefore, the club lodged a counterclaim against the
player and demands payment of 2,200,000 as compensation for breach of
contract without just cause.
8.
The Chamber highlighted that the underlying issue in this dispute, considering
the claim and the counterclaim of the parties, was to determine whether the
employment contract had been unilaterally terminated with or without just
cause and which party was responsible for the early termination of the
contractual relationship in question. The Chamber also underlined that
subsequently, if it were found that the employment contract was terminated
without just cause, it would be necessary to determine the financial and/or
sporting consequences for the party that is to be held liable for such
termination of the relevant employment contract.
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9.
In this respect, the members of the DRC turned their attention to the argument
of the player that the club breached the employment contract without just
cause, because the player had not received the signing-on fee in the amount of
620,000, payment of which the club had made subject to the positive outcome
of an additional medical examination.
10.
The club, for its part, submitted that the signing-on fee was negotiated on the
basis of a contractual duration of four years and that it had always been subject
to the condition that the employment contract could be terminated for medical
reasons in the light of the player’s previous injury.
11.
The Chamber noted that in its letter dated 24 October 2006 addressed to the
player, the club had confirmed that the signing-on fee would be paid to the
player once he had successfully passed the additional medical test.
12.
Consequently, it is evident that the club withheld the payment of the signingon fee for reasons linked to the result of a medical examination in the context
of art. 4 of “Annexe 3/1” of the employment contract.
13.
In this respect, first and foremost, the members of the Chamber highlighted
that according to “Annexe 3/1” of the employment contract the relevant
signing-on fee was payable by the club to the player at the signature of the
employment contract. In this respect, the Chamber recalled that the
employment contract was signed by and between the parties on 16 June 2006.
Consequently, the signing-on fee was payable on or about 16 June 2006.
Furthermore, the Chamber deemed that art. 4 of “Annexe 3/1” of the
employment contract does, in fact, not stipulate that the payment of the
signing-on fee was subject to the result of medical tests, but merely refers to a
possibility to terminate the employment contract without any financial
consequences for the Respondent/Counter-Claimant should the player’s health
condition in connection with a previous spinal cord injury prevent him from
working to 100% capacity. What is more, said article stipulates that the player
shall, in such event, reimburse the signing-on fee “that has already been paid”
(emphasis added) in proportion to the number of games played.
14.
After careful study of the relevant employment contract, the Chamber
concluded that it does not include any contractual clause on the basis of which
the Respondent/Counter-Claimant could validly have withheld the payment of
the signing-on fee that fell due at the signature of the employment contract.
15.
Reverting to the club’s arguments related to the undisputed non-payment of
the signing-on fee, i.e. the successful outcome of the additional medical
examination of the player in connection with the contractual reserve in art. 4 of
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“Annexe 3/1” of the employment contract and the player’s alleged refusal to
undergo such examination, the Chamber held that such argument is invalid,
even in the event of the inclusion of a contractual clause to that effect.
16.
Indeed, in this context, the members of the Chamber referred to art. 18 par. 4
of the Regulations which stipulates that “the validity of a contract may not be
made subject to a positive medical examination and/or the granting of a work
permit”, highlighting that the contents of art. 18 par. 4 of the Regulations are
of mandatory nature and cannot be contractually amended or circumvented.
17.
The members of the Chamber agreed that whereas a club may ask a player to
undergo medical examination during the course of a contract, in particular with
a view to preserve the player’s health, the execution of a contractual clause,
though, may not be made subject to the outcome of such medical examination.
18.
In view of the aforementioned, the Chamber rejected the arguments of the
Respondent/Counter-Claimant and concluded that the non-payment of the
signing-on fee by the Respondent/Counter-Claimant constitutes a breach of the
employment contract without just cause. Furthermore, the Chamber agreed
that, in light of the above, the Claimant/Counter-Respondent had just cause to
terminate the employment contract on 25 October 2006.
19.
Having established that the Respondent/Counter-Claimant is to be held liable
for breach of contract without just cause, the Chamber decided that the
Respondent/Counter-Claimant is liable to pay compensation to the Claimant for
breach of contract in accordance with art. 17. par. 1 of the Regulations.
20.
In continuation, the members of the Chamber considered that a careful reading
of the applicable provision, i.e. art. 17 par. 1 of the Regulations provides the
key to assess the amount of compensation due by the Respondent/CounterClaimant to the player.
21.
The Chamber clarified that the criteria listed therein are, however, not
exhaustive and that each request for compensation for breach of contract has
to be assessed on a case-by-case basis.
22.
According to art. 17 par. 1 of the Regulations, the amount of compensation
shall be calculated, in particular and unless otherwise provided for in the
contract at the basis of the dispute, with due consideration for the law of the
country concerned, the specificity of sport and further objective criteria,
including, in particular, the remuneration and other benefits due to the
Claimant/Counter-Respondent under the existing contract and/or the new
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contract, the time remaining on the existing contract up to a maximum of five
years, and depending on whether the contractual breach falls within the
protected period.
23.
In application of the relevant provision, the Chamber held that it first of all had
to clarify as to whether the pertinent employment contract contains a provision
by means of which the parties had beforehand agreed upon an amount of
compensation payable by the contractual parties in the event of breach of
contract. The Chamber established that no such compensation clause was
included in the employment contract at the basis of the matter at stake.
24.
As a consequence, the members of the Chamber determined that the amount
of compensation payable by the Respondent/Counter-Claimant to the
Claimant/Counter-Respondent had to be assessed in application of the other
parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled
that the 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.
25.
On this basis, the members of the Chamber once more highlighted that the
early termination of the employment contract occurred shortly after the entry
into force of such employment contract. The Chamber deemed that it should
consider this fact in determining the amount of compensation to be paid by the
Respondent/Counter-Claimant.
26.
Equally, and in order to evaluate the compensation to be paid by the
Respondent/Counter-Claimant, the members of the Chamber took into account
inter alia, in line with art. 17 par. 1 of the Regulations, the remuneration due to
the Claimant in accordance with the employment contract as well as the time
remaining on the employment contract, as well as the professional situation of
the Claimant/Counter-Respondent after the early termination occurred.
27.
As regards the remuneration payable to the Claimant/Counter-Respondent
under the employment contract, the Chamber emphasized that in accordance
with its well-established jurisprudence, bonuses that are subject to a player’s
participation in future matches, i.e. after the termination of the employment
contract, shall not be taken into consideration.
28.
Bearing in mind the foregoing, the Chamber proceeded with the calculation of
the monies payable to the Claimant/Counter-Respondent under the terms of
the employment contract until 30 June 2010. Consequently, the Chamber
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concluded that the amount of 1,500,000 (i.e. the signing-on fee of 620,000 and
salaries totaling 880,000, i.e. 44 monthly instalments of 20,000) serves as the
basis for the final determination of the amount of compensation for breach of
contract.
29.
Indeed, on 29 January 2007 the player found employment with the club, A. In
accordance with the pertinent employment contracts, which have been made
available by the player, valid until 30 June 2008, the Claimant/CounterRespondent was entitled to receive the total amount of EUR 73,000.
30.
In addition, on 1 July 2008 the Claimant/Counter-Respondent signed an
employment contract with the club, T, valid until 30 June 2009. According to
the pertinent employment contract, the Claimant/Counter-Respondent had the
right to receive the total amount of EUR 111,440.
31.
Consequently, in accordance with the constant practice of the Dispute
Resolution Chamber and the general obligation of the Claimant/CounterRespondent to mitigate his damages, such remuneration under the new
employment contracts shall be taken into account in the calculation of the
amount of compensation for breach of contract.
32.
Furthermore, the Chamber took into account that apart from the signing-on
fee, which constitutes a considerable part of the remuneration of the
Claimant/Counter-Respondent, the Respondent/Counter-Claimant appears to
have remitted the Claimant/Counter-Respondent’s receivables in a timely
manner. The Chamber deemed that it should consider this fact as a mitigating
factor when determining the amount of compensation to be paid by the
Respondent/Counter-Claimant.
33.
Taking into account the aforementioned considerations, the Chamber
concluded that the amount of compensation for breach of contract without just
cause to be paid by the Respondent/Counter-Claimant to the Claimant/CounterRespondent is 1,000,000, which was considered reasonable and justified as
compensation for breach of contract taking into consideration the specificities
of the case at hand.
34.
On account of all the above-mentioned considerations, the Chamber decided to
partially accept the claim of the Claimant/Counter-Respondent and that the
Respondent/Counter-Claimant is liable pay the amount of 1,000,000 to the
Claimant/Counter Respondent as compensation for breach of contract.
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35.
In addition, the Dispute Resolution Chamber decided that that any further
claims lodged by the Claimant/Counter-Respondent are rejected.
36.
In the light of the above, the Chamber concluded its deliberations in the
present matter by establishing
that the counterclaim of the
Respondent/Counter-Claimant is rejected.
III. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant/Counter-Respondent, D, is partially accepted.
2.
The Respondent/Counter-Claimant, the club C, has to pay to the
Claimant/Counter-Respondent, D, the amount of 1’000’000 within 30 days as
from the date of notification of this decision.
3.
If the aforementioned sum is not paid within the above-mentioned deadline,
interest at the rate of 5% per year will apply as of expiry of the stipulated time
limit and the present matter shall be submitted, upon request, to FIFA’s
Disciplinary Committee for its consideration and a formal decision.
4.
Any further request filed by the Claimant/Counter-Respondent is rejected.
5.
The
Claimant/Counter-Respondent,
D
is
directed
to
inform
the
Respondent/Counter-Claimant, the club B, immediately and directly of the bank
account number to which the remittance is to be made and to notify the Dispute
Resolution Chamber of every payment received.
6.
The counterclaim of the Respondent/Counter-Claimant, the club B, is rejected.
*****
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Note relating to the motivated decision (legal remedy):
According to art. 63 par. 1 of the FIFA Statutes, this decision may be appealed
against before the Court of Arbitration for Sport (CAS). The statement of appeal
must be sent to the CAS directly within 21 days of receipt of notification of this
decision and shall contain all the elements in accordance with point 2 of the
directives issued by the CAS, a copy of which we enclose hereto. Within another 10
days following the expiry of the time limit for filing the statement of appeal, the
appellant shall file a brief stating the facts and legal arguments giving rise to the
appeal with the CAS (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00
Fax: +41 21 613 50 01
e-mail: [email protected]
www.tas-cas.org
For the Dispute Resolution Chamber:
Jérôme Valcke
Secretary General
Encl. CAS directives
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