Labour Disputes
Texto da decisão
Decision of the Dispute Resolution Chamber
passed in Zurich, Switzerland, on 28 March 2008,
in the following composition:
Slim Aloulou (Tunisia), Chairman
Mick McGuire (England), member
Rinaldo Martorelli (Brazil), member
Mario Gallavotti (Italy), member
Essa M. Saleh Al-Housani (United Arab Emirates), member
on the claim presented by the player,
X,
represented by Mrs M, lawyer
as Claimant
against the club,
Y,
as Respondent
regarding an employment-related contractual dispute between the player and the
club.
I.
Facts of the case
1.
The player, X, and the club, Y, signed an employment contract and a “Football
Player’s Contract Schedule” (hereinafter: Schedule), none of which bears a date
of signature, in accordance with which the player is entitled to receive the
total net amount of EUR 550,000 as follows: a signing-on fee of EUR 137,500
and 12 monthly salaries of EUR 34,375 as from July 2006 until June 2007.
2.
In addition, according to the Schedule the player is entitled to performance
related bonuses, accommodation (not specified), a car (not specified) and six
business class return air tickets for the player and his family.
3.
The employment contract refers to the Schedule as an attachment in its article
4 par. 1 dealing with the club’s obligations relating to the player’s
remuneration.
4.
Article 9 of the employment contract stipulates that the contract begins on 1
July 2006 and terminates on 30 June 2007.
5.
Lit. d) of the Schedule stipulates that the contract is for a period of 2 years
starting from the 2006/07 season to the 2007/08 season at the same level of
remuneration. It further stipulates that “But if the Player’s performance level is
not satisfactory by the end of the first year, the Club reserves the right to
terminate the contract without continuing the contract for a second year,
without having to pay the Player any compensation for the same”.
6.
Article 10 par. 3 of the employment contract reads as follows: “When the
termination of the Contract is not due to a just cause or a mutual agreement
between the Parties concerned, the Club or the Player shall be entitled to
receive from the other party in breach of the Contract a compensation for an
amount of EUR 68,750 (US Dollars Sixty Eight Thousand Seven Hundred Fifty
Only)”.
7.
By letter dated 30 November 2006, Y notified the player in writing of the
immediate termination of the employment contract in accordance with its
article 10 par. 3 pointing out that the player will be paid the EUR 68,750
compensation. In this letter, Y emphasises that according to article 54 of
nationl labour law no compensation at all shall be payable to the player and
that given the player’s five match suspension by the Football Association of Y
the club is entitled to sanction the player with the expulsion from the club
without paying any compensation (referring to article 5 par. 1 lit c) of the
employment contract).
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8.
On 2 February 2007, the player signed an employment contract with the club Z
valid from 1 February 2007 until 31 May 2008, a copy of which was submitted
to FIFA.
9.
On 7 February 2007, the player lodged a formal claim against Y in front of the
Dispute Resolution Chamber maintaining that the club acted in breach of the
employment contract without just cause during the course of the season and
within the protected period. He maintains that, therefore, the damage that he
suffered is higher than the 2 months salary compensation contained in the
employment contract. Consequently, X claims compensation for breach of
contract amounting to 17 months’ salary (until the expiry of his contract on the
basis of a two years’ validity), i.e. EUR 584,375, and asks that the club be
sanctioned in accordance with article 17 par. 4 of the Regulations for the
Status and Transfer of Players.
10.
According to the player, as of 11 December 2006, the club had prevented him
from training and banned him from the club’s infrastructure, which actions
constitute a breach of the club’s contractual obligations set out in article 5 of
the employment contract.
11.
X asserts that after having put the club in default of its contractual obligations
with respect to his December 2006 salary and ban from the club on 9 January
2007, he was informed by the club that a written notice of termination of the
employment contract had been sent to him which remained at the post office
in Doha. X asserts that he picked up the (above-mentioned) letter dated 30
November 2006 on 9 January 2007.
12.
With respect to the club’s reasons to terminate the employment contract, the
player affirms that an alleged lack of performance or an alleged 5 match
suspension are no valid reasons to terminate an employment contract. In this
regard, the player highlights that even the club might have considered that
such reasons do not constitute a just cause, given that it invokes article 10 par.
3 of the employment contract.
13.
The player points out that the club terminated the contract during the course
of the season and refers to article 16 of FIFA Regulations for the Status and
Transfer of Players (edition 2005) (hereinafter: Regulations). He also refers to
article 17 of the Regulations relating to contractual stability and compensation
for breach of contract, pointing out that the amount of compensation of two
months’ salary, i.e. EUR 68,750, contained in the employment contract is in
contradiction with the spirit of the rules relating to contractual stability.
Therefore, he maintains that the compensation amount included in the
employment contract shall be disregarded.
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14.
X claims that in accordance with the Schedule the relevant contract was
concluded for a two years’ period of time.
15.
In reply to the claim, referring to article 9 of the employment contract, the
club first of all rejects the player’s position on the period of validity of the
employment contract asserting that it was valid until 30 June 2007 as set out in
the employment contract. Y acknowledges that the Schedule refers to a
validity also for the 2007/08 season, but points out that according to lit. d) of
the Schedule the club could terminate the contract if the player’s performance
would not be satisfactory by the end of the first year 2006/07 “without having
to pay the player any compensation”.
16.
Y maintains that it decided to terminate the employment contract after X had
been sanctioned twice by the Football Association of Y (YFA) for a total of 5
matches. It asserts having sent the relevant notification of contract termination
to the player by registered mail after the player refused to receive it by hand.
17.
Y further maintains having terminated the employment contract on the basis
of its article 10 par. 3 pointing out that this article, which establishes
compensation for the early termination of the employment contract in the
amount of EUR 68,750, is fully reciprocal granting the same rights to both
contractual parties.
18.
With respect to the validity of this compensation clause, the club invokes the
decision passed by the Dispute Resolution Chamber in the matter of the player,
S vs Y, article 17 par. 1 of the Regulations which establishes that compensation
for breach of contract shall be calculated with due consideration for certain
factors and criteria “unless otherwise provided for in the contract”, and the
Commentary on the Regulations issued by FIFA pointing out that the “buyout” clause in the employment contract at the basis of the present dispute is
also in favour of the club to give more legal validity to its provision.
19.
Y acknowledges that it obviously did not pay the player’s salary for December
2006 and asserts that it has paid the aforementioned compensation of EUR
68,750 to the player.
20.
Nonetheless, the club is of the opinion that according to article 54 of national
labour law, which national law it considers to be applicable to the case at
hand, the player was not entitled to receive any financial compensation, as he
provided his services to the club for five months only.
21.
The club further refers to the player’s contractual obligations contained in
article 2 par. 1 and par. 2 of the employment contract, in accordance with
which the player “pledges .. to refrain from doing anything which could
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generally be detrimental to the club, in particular, before and during events in
which the club participates”. Furthermore, “… the player is subject to the
following specific obligations …; h) To behave in a sporting manner towards
anyone involved in a match or training session, and, in particular, to accept the
decisions taken by the referee or assistant referees during a match without
protest.”
22.
Y also refers to article 5 par. 1 lit c) of the employment contract which
stipulates that the player may be expulsed by the club in the event of a
violation by the player of any of his contractual obligations.
23.
On account of the above, Y asks that both the player’s financial and sportive
claims be dismissed.
24.
X insists that the relevant contract had a 2 years’ validity starting from the
2006/07 season referring to the relevant clause in the annex to the contract
(Schedule). It was only in the event of unsatisfying performance by the player
that the club had the possibility to put an end to the employment contract.
The validity of that clause is anyhow questioned by the player.
25.
Furthermore, the contract was terminated by the club during the protected
period and during the sportive season. The player rejects that the club was
entitled to terminate the contract at any time in the light of the contractual
compensation clause. The inclusion of a compensation clause in an
employment contract cannot prevent the provisions of the FIFA Regulations
from being applied, especially relating to the protected period and the
interdiction to terminate a contract during the sportive season (cf. article 16 of
the Regulations). The termination of the contract by the club during the
season has caused a prejudice to the player which is much higher than the
contractual compensation clause corresponding to 2 months’ salary.
26.
The club, for its part, insists that article 9 of the employment contract clearly
establishes that the contract is valid from 1 July 2006 until 30 June 2007. It
explains that the parties agreed upon the Schedule attached to the
employment contract to only govern the financial aspects of the labour
relationship and not any other contractual conditions such as contractual
duration.
27.
The club further states that in accordance with article 10 par. 3 of the
employment contract it was entitled to terminate the employment contract
paying the player compensation of EUR 68,750. The club draws the attention
to the fact that the player already received the amount of EUR 137,500 as a
signing-on fee in addition to the monthly salaries until November 2006.
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28.
Y once more refers to article 54 of national labour law and maintains that
according to article 17 of the Regulations compensation for breach of contract
shall be calculated with due consideration first of all for the law of the country
concerned, i.e. national law.
29.
Should the club’s position not be considered valid then Y draws the attention
to the fact that the player signed on with another club as a result of which he
was earning an income only 2 months after the termination of his contract
with Y and refers to the jurisprudence of FIFA and the Court of Arbitration for
Sport (CAS) in the light of article 337c of the Swiss Code of Obligation.
II.
Considerations of the Dispute Resolution Chamber
1.
First of all, the Dispute Resolution Chamber analysed whether it was
competent to deal with the case at hand. In this respect, it took note that the
present matter was submitted to FIFA on 7 February 2007. Consequently, the
Rules Governing the Procedures of the Players’ Status Committee and the
Dispute Resolution Chamber, edition 2005 (hereinafter: Procedural Rules) are
applicable to the matter at hand (cf. article 18 par. 2 and 3 of the Procedural
Rules).
2.
Subsequently, the members of the Chamber referred to article 3 par. 1 of the
Procedural Rules and confirmed that in accordance with article 24 par. 1 in
combination with article 22 lit. b of the Regulations on the Status and Transfer
of Players (edition 2008) 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.
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 article 26 par. 1 and 2 of the Regulations on the Status and Transfer of
Players (edition 2008) and considering that the present claim was submitted on
7 February 2007 and the contract at the basis of the dispute was signed in
summer 2006, the previous version of the regulations (edition 2005;
hereinafter: Regulations) is applicable to the matter at hand as to the
substance.
4.
Once its competence and the applicable Regulations were thus established, the
Dispute Resolution Chamber went on to deal with the substance of the case.
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The members of the Chamber duly noted that the Claimant and the
Respondent had signed an employment contract, which, according to the
Claimant, was breached by the Respondent without just cause during the
protected period. Therefore, X maintains that the damage that he suffered is
higher than the 2 months’ salary compensation contained in article 10 par. 3 of
the employment contract. The Claimant deems that the compensation
contained in the said article 10 par. 3 of the employment contract shall be
disregarded, since, so the Claimant, it goes against the spirit of the FIFA rules
relating to contractual stability. The Respondent, for its part, does not deny
that it unilaterally terminated the pertinent employment contract, but insists
inter alia that the said contractual clause 10 par. 3 is valid and should find
application.
5.
Taking into account these essential circumstances and, in particular, the
parties’ conflicting position on the application and contents of the said article
10 par. 3 of the pertinent employment contract, the members of the Chamber
agreed to firstly focus their attention on such contractual clause.
6.
The members recalled that article 10 par. 3 of the employment contract reads
as follows: “When the termination of the Contract is not due to a just cause or
a mutual agreement between the Parties concerned, the Club or the Player
shall be entitled to receive from the other party in breach of the Contract a
compensation for an amount of EUR 68,750 (US Dollars Sixty Eight Thousand
Seven Hundred Fifty Only)”.
7.
The Chamber acknowledged that the said article does not appear to include
any right to terminate the contractual relationship between the parties,
however, the aforementioned clause clearly provides for the consequences in
the event of the termination of the employment contract without just cause by
either of the parties, i.e., it determines the amount of compensation payable
by the party in breach of the contract to the other party. In addition, the
Chamber established that the pertinent clause is fully reciprocal granting the
same rights to the contractual parties. Moreover, the inclusion of a
compensation clause relating to breach of contract in an employment contract
in principle does not violate the Regulations. On the contrary, article 17 par. 1
of the Regulations explicitly allows the parties to an employment contract
concluded between a professional player and a club to provide for the amount
of compensation to be paid by the party breaching the contract without just
cause to the other party.
8.
On account of the above, the Dispute Resolution Chamber concluded that the
clause 10 par. 3 of the relevant employment contract has to be considered as
valid and with full effect.
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9.
In continuation, the deciding body turned to the Respondent’s position,
according to which it was actually entitled to terminate the contract with the
player without having to pay any compensation, since the player had not
respected his contractual obligations. In this respect, the club refers to article 5
par. 1 lit. c) of the employment contract and article 54 of national labour law.
Yet, on the other hand, the club accepted to pay the compensation provided
for in the employment contract for cases of unjustified breach of contract to
the player.
10.
In view of this contradictory position, the Chamber deemed that no just cause
for the early termination of the employment contract by the club was
sufficiently specified. In particular, the deciding body was eager to emphasise
that by its acceptance to pay compensation and referring in its letter of 30
November 2006 to article 10 par. 3 of the employment contract, the club had
implicitly recognised that it did not have any just cause to terminate the
employment contract.
11.
On account of the above-mentioned facts, the Chamber concluded that the
Respondent had terminated the relevant employment contract on 30
November 2006 without just cause, the consequences of which have validly
been agreed upon between the parties in article 10 par. 3 of the pertinent
employment contract.
12.
In the light of the Chamber’s conclusion that the pertinent clause 10 par. 3 of
the employment contract is valid and finds full application, the members of the
Chamber agreed that there was no need to enter into the parties’ conflicting
positions as regards the duration of the pertinent employment contract. Yet, it
was deemed appropriate to recall that an unsatisfactory level of performance
is, as a general rule, no just cause to terminate an employment contract.
Therefore, any such clause contained in a contract between a professional
player and a club can, in principle, not be acceptable since it is to be
considered as being potestative.
13.
Reverting to the player’s statement that the prejudice that he suffered from
the termination of the employment contract by the club was much greater
than the contractual two months’ salary compensation, for the sake of good
order only, the Chamber deemed it fit to point out that the Claimant had
found new employment as of 1 February 2007 and the Claimant had been in
receipt of the entire signing-on fee from Y.
14.
Moreover, and referring to the player’s arguments pertaining to article 16 of
the Regulations, the deciding body clarified that the relevant clause always
needs to be seen in connection with two particular situations provided for by
the Regulations. First, the termination of a contract for sporting just cause and,
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second, the termination of a contract after the protected period by a player.
Since none of these circumstances apply to the matter at stake, also article 16
of the Regulations does not need to be further taken into account.
15.
On account of all of the above and bearing in mind that the player had not
denied having received the contractual compensation of EUR 68,750, the
Chamber decided to reject the player’s claim.
*****
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III. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, the player, X, is rejected.
*****
Note relating to the motivated decision (legal remedy):
According to article 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:
Markus Kattner
Deputy Secretary General
Encl. CAS directives
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