Dispute Resolution Chamber
Texto da decisão
REF 20-01162
Decision of the
Dispute Resolution Chamber
passed on 28 April 2021
regarding an employment-related dispute concerning the player Celso BORGES MORA
COMPOSITION:
Omar Ongaro (Italy), Deputy Chairman
Roy Vermeer (Netherlands), member
Pavel Pivovarov (Russia), member
CLAIMANT / COUNTER-RESPONDENT 1:
BORGES MORA Celso, Costa Rica
Represented by Mr David Sanz García, ESQUAD Abogados S.L.P.
RESPONDENT / COUNTER-CLAIMANT:
Göztepe AS, Turkey
Represented by Mr Ludovic Deléchat
COUNTER-RESPONDENT 2:
RC Deportivo de la Coruña, Spain
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I.
FACTS OF THE CASE
1.
On 15 August 2018, the Costa Rican player, Celso Borges Mora (hereinafter: player or
Claimant / Counter-Respondent 1), and the Turkish club, Götzepe AS (hereinafter: club or
Respondent / Counter-Claimant) entered into an employment contract (hereinafter:
contract) valid as from the date of the signature until 31 May 2021, this is, for three sporting
seasons.
2.
According to clause 3 of the contract, the player was entitled to a salary of EUR 950,000
net per season, payable in ten instalments of EUR 95,000 each, from August to May of each
season, on the last day of the month.
3.
Furthermore, the club would provide the player, per season, a car and two round-trip
economy flight tickets, as well as EUR 1,500 net per month as accommodation allowance.
4.
According to the player, with respect to the usage of a car, the Club had undertook to pay
him a monthly amount of 3,500 Turkish Lira as compensation for such usage. In fact, the
club did pay such amount “with the exception of the months of April and May”.
5.
On 13 November 2019, the player sent a formal communication to the club asking for the
payment of the overdue salaries corresponding to August, September and October 2019,
amounting to EUR 285,000 net.
6.
Although the club did make the payments of the above-mentioned salaries, on 15 April
2020, the player sent another formal communication to the club asking for the payment of
the overdue monthly instalments corresponding to February and March 2020.
7.
On 21 April 2020, the club sent an official letter to all its players to inform them of the
effects of the COVID-19 pandemic on Turkey, football and the club and suspension of the
payments.
8.
On 27 May 2020, the club sent a proposed amendment to the contract, whereby it was
proposed to reduce the total yearly salary to 20% of the total value.
9.
On 28 May 2020, the player rejected the club’s proposal and added that “we are still waiting
for a response from you regarding the contract termination proposal that we have already
submitted. As we told you, we understand the current situation and we are open to give
you facilities in the payment”.
10.
On 8 June 2020, the player required the club to make the payment of the overdue monthly
instalments corresponding to February, March, April and May 2020, as well as the payments
concerning the player’s accommodation and vehicle.
11.
The player confirmed that the club paid the player’s salary for February 2020 in two
instalments on 25 June 2020 and 17 July 2020.
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12.
On 30 June 2020, the player sent a final reminder to the club with respect to his overdue
salaries and granted the latter 72 hours to remedy the default.
13.
On 2 July 2020, the Respondent answered back by email to the aforementioned
communication dated 30 June 2020, referring to the Covid-19 outbreak as a reason for the
non-payment of the overdue salaries. Furthermore, the club stated as follows:
“Therefore, our current circumstances compelled us to ask for certain revisions in an attempt
to reflect on the current contracts not the whole but only a portion of the losses we suffer.
Such revisions of the current contracts as well as the wages reflect the
recommendations provided by FIFA and TFF and will be applied even handedly on all
players, technical crew, administrative employees, and directors of the club. We can inform
you that we have reached agreements with some of the players who showed total
understanding towards the current delicate situation. We would be extremely grateful to
have you also agreeing on some terms to help the club in this difficult time. Even though
all financial chaos and loss of income, we’ re doing our best in order to make payments to
our players. For the sake of completeness, we are planning to have a definitive assessment
of the club's total financial loss following the COVID-19 pandemic at the end of the current
season, i.e. at the end of July 2020. Also broadcasting firm is asking for reduction for this
season and it seems that our loss at the end of this season will be higher than our
expectations. We therefore would like to temporarily suspend 20% of the current value of
your contract (min) and finalize a potential agreement at the end of the current season, if
at all. That would allow us to overcome the financial crisis and still allow us to find a fair
agreement with you. We are confident we could reach an amicable agreement with you
for the good of everyone.”
14.
On 17 July 2020, the player responded to the club’s letter of 2 July 2020, underlining that
he had been extremely understanding with the club and that he needed to have his financial
situation solved immediately.
15.
On the same day, 17 July 2020, the club’s legal representative sent the following email to
the player:
“We are disappointed with the letters you have been sending despite the explanations made
by our club and our sincere care shown towards our club’s players as we have repeatedly
stated in our previous correspondence.
As Göztepe Club worked on a loss assessment report in order to treat all of our players fairly
and equally under the circumstances and then we started negotiations with them to reflect
only a portion of such estimated loss on their contracts; but then postponed such meetings
to a date after the football season’s ending so that we could be more equitable in handling
the matter. Due to the fact that the broadcasting entity of the games asked us for a
significant discount due to COVID-19 Pandemics, our loss calculation figures are now
seriously skewed and went off the charts, which means our loss figures will be more than
the estimated, and more importantly, we are currently not getting paid at all.
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However, please rest assured that the players will get paid today, despite the above
described unfavorable facts (…)”
16.
On 17 July 2020, the player responded to the club’s letter of 2 July 2020, underlining that
he had been extremely understanding with the club and that he needed to have his financial
situation solved immediately.
17.
On 21 July 2020, the club sent another communication to the player in order to initiate
one-on-one negotiations for a salary reduction agreement based on the impact of COVID19.
18.
On 23 July 2020, the player sent a new formal communication to the club putting the
Respondent, once again, in default and requesting the payment of the overdue salaries
within 15 days, which amounted to EUR 286,500 net plus 10.500 Turkish Lira, including
the overdue salaries corresponding to March, April and May 2020 and certain monthly
accommodation and monthly payments for the car. The player reserved his right to
terminate the contract should the club not remedy the default.
19.
On 31 July 2020, the club sent yet another email to the player with the following content:
“(…)
Under these exceptional and unpredictable circumstances, based on the heavy financial
losses that our club has suffered and keep suffering, we started a process to find a mutual
agreement with our esteemed players in order to reduce the player salary costs, which is
the most critical cost point in our budget.
We are delighted to inform you that a significant number of our players have agreed to the
initially suggested reduction rate that we have diligently elaborated, which we believed was
a fair compromise for all the parties involved at that point.
As you have been already informed, these days we are starting a second round of
negotiations with the players who didn't agree to the initially proposed salary reductions.
Unfortunately we have to inform you that, after the review of the ongoing financial
damages, and in consideration of the further cuts on TV payments demanded by the
broadcaster for the completed and next season due to COVID-19, our losses become even
higher and respectively the reduction rate, proposed on player salaries needs to be
readjusted over %20.
Contrary to your allegations, the salaries are not outstanding, but only "suspended" until
the end of the season in accordance with our previous correspondence.
Our upmost intention is to pay the balances due, as soon as we find an agreement with
you. However in order to show our goodwill, we will pay the amount above %20.
Please be informed that our current losses require a reduction rate on player salaries that is
well above %20. Hence we preserve our right to cut the overdue amounts from the next
years contract if it is still required.
Having said that, we appreciate your intentions to resolve this issue amicably and would
like to suggest to have a meeting in the upcoming days to find a fair agreement.
(…)”
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20.
After receiving a partial payment in the amount of EUR 51,962 on 4 August 2020, the
following day, the player sent a final reminder to the club to pay all overdue payables, failing
which he would have no other option than to terminate the contract.
21.
On 17 August 2020, having received no further payments from the club, the player
terminated the contract invoking just cause in accordance with art. 14bis of the Regulations
on the Status and Transfer of Players.
II.
PROCEEDINGS BEFORE FIFA
22.
On 17 August 2020, the Claimant / Counter-Respondent 1 filed a claim for outstanding
remuneration and compensation for breach of contract against the Respondent / CounterClaimant at hand before FIFA. Furthermore, the Respondent / Counter-Claimant filed a
counter-claim against the player and Deportivo La Coruña for compensation for breach ofc
contract. A summary of the position of the parties is detailed below.
a.
The claim of the Claimant / Counter-Respondent 1
23.
According to the player, since the start of the employment relationship, he had been
struggling to receive his salary in accordance with the contractual terms. In this respect, the
player referred to the above-mentioned default notice letters. Indeed, his salaries were
always paid with a delay ranging from a few weeks to a few months.
24.
With regard to the season 2019/2020, the player provided the following table of payments:
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25.
In this regard, the club referred to the Covid-19 outbreak as a reason for the non-payment
of the player’s salaries.
26.
The player underlined that he had been extremely understanding with regard to the club’s
multiple contractual breaches up until the moment of filing his claim.
27.
Furthermore, the player held the view that the supposed willingness to pay the balances
due was neither a real commitment, nor a genuine statement from the club. On the
contrary, it was clearly a pressure measure since it was directly conditioned to the player
accepting the imposition of a salary reduction of at least 20% of the salary agreed for this
season.
28.
Likewise, the player alleged that he was mistreated and harassed by the club since he
formally requested the payment of the overdue salaries. Indeed, the player was allegedly
the only player of the club´s first team that did not receive the match bonus in the amount
of approximately 27,770 Turkish Lira awarded to the club’s roster for the last game of the
season against Sivasspor, which took place on 25 July 2020.
29.
The player summarised that, at the date of filing the claim, the club owed him a total of
EUR 237,538 net in salaries and accommodation allowance plus TRL 7,000 regarding the
monthly car allowance as well as TRL 27,770 corresponding to the collective bonus agreed
between the club and the members of the first team in relation to the game played against
Sivasspor on 25 July 2020, plus interests. According to the player, this clearly entails a
serious and manifest breach of the club’s financial obligations.
30.
Specifically, the player held that the remuneration owed to him represents a sum which
exceeds 25% of his total annual remuneration in the season 2019/2020 and, in turn,
evidences that it exceeds 2.5 monthly salaries.
31.
The player further held that, since the club made partial payments, it is not possible for him
to know to which months correspond each of the payments made. The player understands
that the overdue monthly payments correspond to the instalments of March (partially
unpaid), April and May 2020.
32.
With respect to the car allowance, the player stated that the club had paid him a monthly
allowance of TRL 3,500 with the exception of April and May 2020.
33.
In light of the above-mentioned circumstances, the player deems that he terminated the
contract with just cause in accordance with art. 14bis of the Regulations.
34.
The requests for relief of the Claimant / Counter-Respondent 1, were the following:
outstanding remuneration:
EUR 43,038 as partial salary of March 2020,
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EUR 95,000 as salary of April 2020,
EUR 95,000 as salary of May 2020,
EUR 53,833.33 as partial salary of August 2020 (17 days)
EUR 4,500 as accommodation allowance for the months of March, April and May 2020,
TRL 7,000 as car allowance in accordance with clause 3. a) of the contract and the
agreements reached between the parties,
TRL 27,770 as collective bonus agreed between the club and the members of the first team
in relation to the game played against Sivasspor on 25 July 2020,
5% interest p.a. on all amounts as of the respective due dates.
compensation for breach of contract:
EUR 911,116.677 as residual value of the contract as from 17 August 2020 until 30 June
2021 plus 5% interest p.a. as from the date of the decision,
EUR 285,000 as additional compensation corresponding to 3 months’ salary (note: no
interest claimed on the additional compensation)
b.
Position of the Respondent / Counter-Claimant
35.
In reply to the player’s claim, the club rejected it entirely and lodged a counter-claim against
him as well as the club Deportivo La Coruña.
36.
In support of its position, the club held that, contrary to the player’s allegations, it had in
fact always complied with its financial obligations towards the player. The club emphasised
that there is no substantiated evidence on file attesting that the club had failed to honour
its contractual obligations towards the player throughout the contractual relationship. In
this regard, the club stated that the player’s alleged bank details are in Turkish language
and unclear.
37.
In continuation, the club referred to the Covid-19 outbreak and held that the pandemic not
only had direct and indirect adverse effects on the club’s revenues but also caused a
significant rise in its operational costs, the combination of which critically endangered the
club’s financial sustainability.
38.
Following the suspension of the Turkish League on 19 March 2020, the club decided to
negotiate with all the players of the team to find a fair and adequate solution in this very
delicate period.
39.
On 21 April 2020, the club sent an official letter to all its players to inform them of the
situation in connection with COVID-19 and its effects on Turkey, football and the club as
well as regarding the suspension of the payments.
40.
On 22 April 2020, the club sent a letter to the player to inform of the necessity to
renegotiate the contracts of all its members, including players.
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41.
These letters were followed by a meeting by videoconference with all players including the
player, where the situation was again outlined to all players.
42.
Throughout the month of May 2020, the parties were in discussions about a possible salary
reduction.
43.
On 27 May 2020, the club made a proposal to the player to reduce his salary by 20% of
the total value, offer which the player rejected on the following day, whilst referring to a
draft of termination agreement.
44.
The club strongly believes that Deportivo La Coruña was the reason behind this unexpected
move of the player. Indeed, already on 22 January 2020, Deportivo La Coruña had
contacted the club officially to transfer the player back.
45.
Throughout the month of June and July 2020, the parties were in regular contact and the
club tried to reach an agreement with the player regarding the reduction of his salary.
Furthermore, the club assured the player that his remuneration would be paid.
46.
On 28 and on 31 July 2020 respectively, the club informed the players, including the player,
about the next steps in the process of finding a proportionate compromise following the
COVID-19 outbreak.
47.
With respect to the player’s default notice dated 5 August 2020, the club emphasised that
such letter was sent while negotiating the reduction of his annual salary following the
COVID-19 outbreak and while his team was not playing any games and the club suffering
a big financial hardship and losing its main sponsors.
48.
After having recalled the above-mentioned facts, the club wished to emphasise that it has
“never had legal issues and cases at FIFA/CAS level for the last decade. The Club is FIFA
compliant and does respect the rules”.
49.
In continuation, the club referred to the FIFA Covid-19 guidelines and in particular to the
“five factors to apply when determining any dispute arising out of unilateral variation of
employment contracts”.
50.
In this regard, the club first held that it made multiple attempts to reach an agreement with
the player.
51.
The club also contacted FIFA to make sure it was complying with the COVID-19 FIFA
guidelines and received an official reply. FIFA approved the general approach of the Club in
its letter and recommended to “address the situation, where the variations are made in
good faith, are reasonable and proportionate”. According to the club, it understood from
the FIFA letter that it was having the appropriate approach towards all its employees,
including in particular the player concerned.
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52.
Furthermore, the club emphasised that, to date, it had reached agreements with almost all
his employees reducing the annual salaries for the 2019-2020 season.
53.
With regard to its economic situation, the club referred to its internal report, which the
club believes it self-explanatory and confirms that the reduction of the all the
employees’/players’ salaries was mandatory in order for the Club to continue its activities
and avoid the bankruptcy.
54.
With respect to the reduction of the player’s salary, the club held that the offer to amend
the player’s contract of 20% of the 2019-2020 remuneration was fair and proportionate.
55.
Equally, the club outlined that applying a 20% reduction on the 2019-2020 remuneration
leads to a total amount of EUR 760,000 (instead of EUR 950,000) annual wage. If you
consider the effective loss of the club, one could clearly note that such reduction, although
being significant to help the club to maintain its activities, does not affect the well-being of
the player.
56.
With respect to the player’s contractual termination, the club held that it was without just
cause since, de facto, the club did not have any overdue payables towards the player. The
club explained that the total remuneration for the season 2019-2020, less the proportionate
20% reduction due to the COVID-19 pandemic was duly paid to the player.
57.
The club alleged that the player took the Covid-19 pandemic as an excuse to leave the club
and join Deportivo La Coruña. The club once again highlighted that it was in contact with
Deportivo La Coruña in January 2020, and that it is obvious that the player was negotiating
with the said club while under contract with the club.
58.
The club concludes that “the player therefore acted in bad faith in clear violation of the
contractual stability and good faith”.
59.
As to compensation for breach of contract, the club highlighted that the contract does not
contain a compensation clause, therefore the other criteria of art. 17 of the Regulations on
the Status and Transfer of Players shall apply.
60.
In this regard, the club held that it paid Deportivo La Coruña a transfer fee of EUR
1,300,000.
61.
Furthermore, at the time of the termination, there was still one year of contract. In this
regard, the club deems that it lost a chance to transfer the player against payment.
According to the website www.transfermarkt.com, the player apparently happens to
possess a mercantile value of EUR 500,000 at the time he signed with Deportivo La Coruña.
62.
Therefore, the club deems having suffered a damage amounting to EUR 500,000 in this
respect. Moreover, the amortized transfer fee was amounting to EUR 433,333 (1/3 of the
total transfer fee).
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63.
In addition, the club held that it is very difficult to quantify the replacement costs for the
player; for this reason, the DRC shall take in consideration the residual value of the
employment contract. Since the player unilaterally terminated the employment contract
without just cause on 5 August 2020, the residual value amounts to EUR 950,000.
64.
The club further held that Deportivo La Coruña clearly induced the player to breach the
contract.
65.
The requests for relief of the Respondent / Counter-Claimant were the following:
c.
Compensation for breach of contract: EUR 1,833,333 plus 5% interest p.a. as of 5
August 2020, for which Deportivo La Coruña shall be held jointly and severally liable,
6 months suspension on the player,
Transfer ban on Deportivo La Coruña.
Player’s reply to the counter-claim
66.
In reply to the counter-claim, the player first categorically denied that the club had fulfilled
all its contractual obligations. In this regard, the player held that the club bears the burden
to prove that it has paid all contractual amounts. The player notes that the club provided
only a list of payments but no bank account statements. The player additionally produced
a translation of his own bank account statements.
67.
The player once again highlighted that, since the start of the employment relationship, the
club had not made one single payment in accordance with the contractual stipulations.
68.
Furthermore, the player equally strongly denied that the club had applied or imposed a
salary reduction. The player stressed that the club had not proven that it had terminated
the contract after the application or imposition of a salary reduction, even less that the
termination was derived from such alleged salary reduction.
69.
The player held that the club merely attempts to apply the FIFA Covid-19 by justify its breach
of contract through an alleged modification of the contract, which in fact never took place.
70.
In support of his position, the player asked the following questions:
i. Why did the club not respond to his multiple default notices by stating that
all salary payments were made and that a 20% salary reduction was applied
?
ii. How, when and on what terms did the club inform the player that his
annual remuneration was to be reduced by 20%, and from when did this
salary reduction became applicable ?
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iii. Why did the club – until the last day on which the parties were contractually
bound – , refer to the alleged negotiations that were meant to take place
at the end of Season 2019-2020 if – as stated in the counterclaim – the club
had already imposed a salary reduction of 20% on the player’s annual
remuneration? What should the parties have negotiated if the unilateral
salary reduction was already effective?
71.
The player referred to the club’s multiple letters wherein the club stated that it was willing
to find a compromise and highlighted the contradiction with the club’s stance that it had
fulfilled all its financial obligations towards the player.
72.
The player concludes that, since no unilateral variation of the contract ever occurred and
the alleged novation of the contract is not recorded in written form, it is clear that the club’s
arguments on the application of the COVID-19 Guidelines issued by FIFA to the unilateral
variation of Employment Contracts cannot be accepted.
73.
In short, since the club has proven the serious, repeated and persistent breach of the
contractual obligations by the club and meeting the requirements of article 14bis of
Regulations on the Status and Transfer of Players, it must be concluded that the player
terminated the contract with just cause.
74.
Furthermore, the player emphasised that the evidentiary effectiveness of the club’s financial
report, which was drawn by the club itself, can be put in question.
75.
With respect to the concept of just cause, the player clarified that, since December 2019,
the monthly remuneration payments have been made partially or incompletely - without
the player being able to find out to which months the partial payments made correspond
to - or, as happens with the accommodation allowance of the last three months prior to
the termination of the employment contract by the Claimant, in which the Respondent has
directly breached the obligation to pay said remuneration.
76.
Furthermore, the player referred to its default notice of 13 November 2019, in which he
stated that his salaries of August, September and October 2019 had not been paid. In this
regard, the player highlighted that he could have already terminated the contract with just
cause 15 days after such letter, considering the amounts already outstanding at the time.
77.
The player then again denied the club’s allegation that a unilateral variation of the contract
took place. In particular, the player highlighted a contradiction in the club’s statements,
when it pretends that the club unilaterally imposed a salary reduction on all its employees
while, on the other hand and simultaneously, claiming that the player acted in bad faith by
terminating the contract while he was negotiating a mutually agreed contractual
modification with the club.
78.
The player further held that the communications between the parties throughout June and
July 2020 rather evidence the fact that i) club had acknowledged its debt towards the
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player, and ii) the club conditioned the payment of such debt to reaching a mutual
agreement for the reduction of his salary in Season 2019/2020. In this context, the player
referred to the club’s letter dated 31 July 2020, wherein the latter stated that “our upmost
intention is to pay the balances due, as soon as we find an agreement with you”. In this
regard, the player highlighted that the FIFA DRC has consistently stated that said guidelines
– as per the explicit wording of FAQ no. 16, as well as pages 6 and 7 of the FIFA COVID-19
Guidelines – are only applicable to “unilateral variations to existing employment
agreements”. Therefore, except where a termination of a contract occurred following a
unilateral variation made as a result of covid-19 (in which case the validity of the variation
must first be assessed under the guidelines), said guidelines do not apply to assess unilateral
terminations of existing employment agreements.
79.
In continuation, the player also denied that the reason behind his termination of the
contract was his desire to join Deportivo La Coruña. Such allegation on the club’s part lacks
evidentiary basis.
80.
As a matter of fact, it was only after the player terminated the contract that his agent started
to negotiate with several clubs of the Second Division “A” in Spain.
81.
When those negotiations failed, the player decided to sign a contract with Deportivo La
Coruña on 3 September 2020.
82.
The player emphasised that his salary for the season 2020/2021 with Deportivo La Coruña
was EUR 120,000 gross, which is substantially less than the EUR 950,000 net he was earning
with the club.
83.
As an additional remark, the player outlined that, despite the club’s alleged difficult
situation, it appeared to have had a successful summer transfer window. Indeed, according
to the website www.transfermarkt.de, the club hired players worth a total of EUR
1,640,000. Thus, the player cannot understand how the club could not pay his outstanding
remuneration.
84.
Furthermore, the player held that the club also had another player, Leo Schwechlen, was
also forced to terminate his contract due to overdue salaries.
85.
Finally, on a subsidiary basis, should the Dispute Resolution Chamber deem that the club
applied a unilateral variation of the contract, the player first stressed that the club did not
even try to justify whether such unilateral variation was allowed under Turkish law. In this
regard, the player referred to art. 22 of the Turkish Labour Code as well as clause 6 of the
contract, according to which any amendment to the contract must be notified, respectively
agreed upon, in writing. The player stated in this regard that the club has never
communicated to him in writing that it had applied a unilateral variation.
86.
In conclusion, the player rejected the club’s counter-claim entirely and adhered it his claim.
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d.
Deportivo La Coruña’s reply to the counter-claim
87.
In its brief statement in reply to the counter-claim, Deportivo La Coruña held that it engaged
the player only after he had already filed a claim against the club on the ground of nonpayment of the agreed salary.
88.
Furthermore, the Spanish club referred to the decision of the Single Judge of the Players’
Status Committee dated 2 October 2020, whereby they were authorised to provisionally
register the player.
III.
CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
a.
Competence and applicable legal framework
89.
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 presented to FIFA on 17 August 2020 and submitted
for decision on 28 April 2021. Taking into account the wording of art. 21 of the 2021
edition of the Rules Governing the Procedures of the Players’ Status Committee and the
Dispute Resolution Chamber (hereinafter: the Procedural Rules), the June 2020 edition of
the Procedural Rules is applicable to the matter at hand.
90.
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules
and observed 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 June 2020), 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 Costa Rican player,
a Turkish club and a Spanish club.
91.
Subsequently, 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 Player (edition February 2021), and
considering that the present claim was lodged on 14 August 2020, the June 2020 edition
of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to
the substance.
b.
Burden of proof
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92.
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. Likewise, the DRC stressed the
wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the parties.
93.
In this respect, the Chamber also recalled that in accordance with art. 6 par. 3 of Annexe 3
of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings
pertaining to the application of the Regulations, any documentation or evidence generated
or contained in TMS.
c.
94.
Merits of the dispute
The competence of the DRC and the applicable regulations having been established, the
DRC entered into the merits of the dispute. In this respect, the DRC started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the DRC 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.
i. Main legal discussion and considerations
95.
The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that the parties strongly dispute whether the player had just cause
to terminate the contract on 17 August 2020.
96.
The parties’ respective positions with respect to the player’s unilateral termination of the
contract can be summarised as follows.
97.
The player, on the on hand, deems that the club had been in constant delay of payment of
his outstanding remuneration and as such, he was under no obligation to accept a salary
reduction following the Covid-19 outbreak. Since the club was in default of more than two
months’ salary at the time he terminated the contract, this, despite the default notice sent
prior to the termination, the player states that he terminated the contract with just cause
in accordance with art. 14bis of the Regulations.
98.
The club, on the other hand, held that the player systematically refused to accept a salary
reduction despite its good faith attempts to find a solution with the player following the
negative impacts which the Covid-10 outbreak had on the club’s financial situation. The
club deems that the player took advantage of the situation to exit the club and return to
Deportivo La Coruña, i.e. the club with which the player was previously registered.
99.
Having duly considered the parties’ respective positions, the Chamber first determined that
the club had indeed been in default of payment already prior to the start of the pandemic,
on multiple occasions.
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100. This being said, the Chamber also noted that, since the start of the pandemic, the club had
made some payments, specifically two payments on 25 June 2020 and 17 July 2020,
covering the salary of February 2020.
101. In addition, there is substantial evidence on file demonstrating that the parties had been in
discussions with respect to the reduction of the player’s salary between May 2020 up until
the player’s termination of the contract. The Chamber noted in this regard that the club
had made several attempts to agree upon a salary reduction of 20% of the total contractual
value, offer which the player systematically refused.
102.
In this context, the Chamber first recalled that, in light of the worldwide Covid-19
outbreak, FIFA issued a set of guidelines, the Covid-19 Football Regulatory Issues, which
aim at providing appropriate guidance and recommendations to member associations and
their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19
and ensure that any response is harmonised in the common interest. Moreover, on 11 June
2020, FIFA issued an additional document, the FIFA Covid-19 FAQ, which provides
clarification about the most relevant questions in connection with the regulatory
consequences of the COVID-19 outbreak and identifies solutions for new regulatory
matters. Those two documents will hereinafter be referred to as “the FIFA Covid-19
guidelines”.
103. In continuation, the Chamber emphasised that the FIFA Covid-19 guidelines aim, in
particular, at tackling the situation regarding agreements which cannot be performed as
the parties originally anticipated. In this regard, the guidelines identify circumstances under
which a unilateral variation of the agreement may be justified. Precisely, the said guidelines
mention the following:
“Unilateral decisions to vary agreements will only be recognised where they are made in
accordance with national law or are permissible within CBA structures or another collective
agreement mechanism.
Where:
a. clubs and employees cannot reach an agreement, and
b. national law does not address the situation or collective agreements with a players’ union
are not an option or not applicable,
Unilateral decisions to vary terms and conditions of contracts will only be recognised by
FIFA’s Dispute Resolution Chamber (DRC) or Players’ Status Committee (PSC) where they
were made in good faith, are reasonable and proportionate.
When assessing whether a decision is reasonable, the DRC or the PSC may consider, without
limitation:
a. whether the club had attempted to reach a mutual agreement with its employee(s);
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b.
c.
d.
e.
the economic situation of the club;
the proportionality of any contract amendment;
the net income of the employee after contract amendment;
whether the decision applied to the entire squad or only specific employees.
Alternatively, all agreements between clubs and employees should be “suspended” during
any suspension of competitions (i.e. suspension of football activities), provided proper
insurance coverage is maintained, and adequate alternative income support arrangements
can be found for employees during the period in question”.
104. Having recalled the aforementioned guidelines, the Chamber reiterated that the club had been
active in searching a compromise with the player, but that the latter had systematically refused.
105. Therefore, the Chamber started its analysis of the justification behind the Respondent’s
wish to apply a unilateral variation of the contract while bearing in mind the
aforementioned guidelines.
106. As a first remark, the Chamber determined that the Respondent had not provided any
evidence that such decision was made in accordance with national law. Equally, it is an
established fact that the parties did not find an agreement with respect to the reduction of
the player’s remuneration. Thus, the Chamber deemed that it must look into whether the
unilateral variation could have been justified on other grounds, in particular but not limited
to, the criteria mentioned in par. 102 above.
107. In this regard, the Chamber first noted that , even if the Respondent did not establish
a situation of force majeure, it stands undisputed that COVID-19 caused a suspension of all
competitive football activity in Turkey and that, consequently, the Respondent was
significantly financially affected by this extraordinary event. The DRC also took note of the
Respondent’s indication that the offer made to the entire squad for salaries to be reduced
was a necessary step to allow the club to continue to operate.
108. Against such background, the Chamber was of the opinion that the Respondent’s offer to
vary the agreement, which was first envisaged with the letter addressed to all players dated
21 April 2020, this is, at a time when the League was suspended, was made in good faith
and with a view to reach a positive outcome in order to fulfil their financial obligations
towards the Claimant. The Chamber underlined in this context that the club had, in fact,
paid the player’s full salary of February 2020, albeit with considerable delay, in June and
July 2020.
109. The Chamber then turned its attention to the specific amount of the reduction of the
Claimant’s salary which the club had intended to carry out by the club, i.e. a salary reduction
of 20% of the total contractual value.
110. In the Chamber’s view, in this specific case, a more reasonable and proportionate reduction
would have been a 20% deduction applied only to the months in which the competitions
were suspended and from the moment the club made the relevant offer to the player, this
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is, as of 21 April 2020, until the League resumed on 12 June 2020. Furthermore, the
Chamber wished to emphasise that a salary reduction can in no way be applied
retroactively; in other words, it could not be applied to any outstanding remuneration due
prior to 21 April 2020, when the club first attempted to enter into negotiations with the
player regarding a possible salary reduction.
111. In view of the above, and bearing in mind the principles of good faith, proportionality and
reasonableness mentioned in the FIFA Covid-19 guidelines as well as the specificities of the
present matter, the Chamber decided that the club could justify a reduction of 20% of the
player’s salaries, limited, however, to those due between 21 April 2020 and 31 May 2020.
112. The aforementioned having been established, the Chamber proceeded to establish which
salaries were outstanding at the time of the unilateral termination of the contract by the
player. First, the Chamber established that, according to the contract, the player should
have received a total amount of EUR 950,000 in salaries during the season 2019/2020.
Furthermore, looking at the extensive evidence provided by both parties with respect to the
payments made by the club in the season 2019/2020, the DRC could determine that the
club had paid the player a total of EUR 716,962. Therefore, a balance of EUR 233,068
remained unpaid, to which should be added the monthly accommodation allowance (3 x
EUR 1,500) and the car allowance (2 x TL 3,500), as well as the month of August 2020.
113. Bearing in mind the above conclusion with respect to the player’s outstanding
remuneration, the Chamber held that the said amounts of salary correspond to
approximately 3.5 months, together with the two allowances, which were also due to the
player.
114. Furthermore, the Chamber duly acknowledged that the player had formally put the club in
default on 23 July 2020 and granted the club 15 days to remedy such default.
115. In view of the above considerations, the Chamber stated that, at the time of terminating
the contract, the player’s confidence as to the continuation of the employment relationship
could have legitimately been lost.
116. In conclusion, the DRC decided that the Claimant had terminated the contract on 17 August
2020 with just cause in accordance with art. 14bis of the Regulations. Consequently, the
club is to held liable for breach of contract.
117. Equally, the Chamber concurred that, in light of the aforementioned conclusion, the
counter-claim lodged by the Respondent / Counter-Claimant is rejected.
118. Prior to assessing the consequences of the early termination of the contract with just cause
by the Claimant, the DRC addressed the latter’s claim for outstanding remuneration. In this
regard, the Chamber held that the outstanding remuneration corresponds to any and all
amounts which the Claimant has not received and were due up until the date on which he
terminated the contract on 17 August 2020.
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119. In this regard, the Chamber referred its considerations mentioned above in points 109 and
110 above and recalled that the club was entitled to apply a 20% salary reduction to salaries
due to the player between 21 April 2020 and 31 May 2020.
120. In view of the above and in accordance with the principle of pacta sunt servanda, the DRC
decided that the player shall receive the following amount as salary, which is considered as
outstanding:
EUR 43,048 as remainder of the salary of March 2020,
EUR 86,767 representing the full salary of 21 first days of April 2020, and 80% of the
9 remaining days of April 2020,
EUR 76,000 representing 80% of May 2020,
EUR 95,000 representing the full salary of August 2020.
121. Furthermore, the Chamber held that the club must also pay the claimed allowances in
accordance with the contract, this is, EUR 4,500 regarding the accommodation allowance
and TRL 7,000 regarding the car allowance.
122. Finally, 5% interest per annum shall apply to the aforementioned outstanding amounts as
of the respective due dates until the effective date of payment.
123. To conclude on the Claimant / Counter-Respondent 1’s request for outstanding
remuneration, the Chamber decided to reject the latter party’s claim for TRL 27,700 as
match bonus due to a lack of contractual and factual evidence that such bonus was due to
him.
124. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the
Regulations, the Claimant is entitled to receive from the Respondent compensation for
breach of contract in addition to any outstanding remuneration on the basis of the relevant
employment contract.
125. In this context, the Chamber outlined that, in accordance with said provision, 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 under the existing contract and/or
the new 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.
126. In application of the relevant provision, the Chamber held that it first of all had to clarify
whether the pertinent employment contract contained any clause, by means of which the
parties had beforehand agreed upon a compensation payable by the contractual parties in
the event of breach of contract. In this regard, the Chamber established that no such
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REF 20-01162
compensation clause was included in the employment contract at the basis of the matter
at stake.
127. Subsequently, and in order to evaluate the compensation to be paid by the Respondent /
Counter-Claimant, the members of the Chamber took into account the remuneration due
to the Claimant / Counter-Respondent 1 in accordance with the employment contract as
well as the time remaining on the same contract, along with the professional situation of
the Claimant after the early termination occurred. In this respect, the Chamber pointed out
that at the time of the termination of the employment contract on 17 August 2020, the
contract would run until 31 May 2021, this is, for another 9 months. Consequently, taking
into account the financial terms of the contract, the Chamber concluded that the remaining
value of the contract as from its early termination by the Claimant / Counter-Respondent 1
until the regular expiry of the contract amounts to EUR 855,000. Such amount shall serve
as the basis for the final determination of the amount of compensation for breach of
contract.
128. In continuation, the Chamber remarked that following the early termination of the
employment contract at the basis of the present dispute, the Claimant / CounterRespondent 1 was able to mitigate his damage by concluding a new employment contract
with the Counter-Respondent 2 valid for the season 2020/2021, according to which the
player earned, for the relevant period, the total amount of EUR 120,000.
129. In accordance with the constant practice of the Dispute Resolution Chamber and the
general obligation of the Claimant 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.
130. In view of the above, the mitigated compensation amounts to EUR 735,000.
131. Furthermore, the DRC emphasised that, pursuant to art. 17 par. 1 lit ii. of the Regulations,
a player, in case of the early termination of the contract being due to overdue payables, in
addition to the mitigated compensation, shall also be entitled to an amount corresponding
to three monthly salaries (i.e. the additional compensation). What is more, in case of
egregious circumstances, the additional compensation may be increased to a maximum of
six monthly salaries. Finally, the overall compensation may never exceed the rest value of
the prematurely terminated contract.
132. Bearing in mind the above, the DRC held that the Claimant / Counter-Respondent 1 would,
on top of the mitigated compensation, in principle be entitled to an additional
compensation equivalent to 3 months of salaries, i.e. 3 x EUR 95,000, thus a total of EUR
285,000.
133. This being said, the Chamber acknowledged that adding the mitigated compensation to
the additional compensation would exceed the residual value under the contract.
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REF 20-01162
134. In view of the above, the Chamber decided to award the Claimant / Counter-Respondent
1 the amount of EUR 855,000, which corresponds to the residual value of the contract.
135. Furthermore, in accordance with the Claimant’s respective claim as well as the constant
practice of the Chamber, 5% interest per annum shall apply on the said amount as from
28 April 2021, date on which the present decision was passed.
ii. Compliance with monetary decisions
136. Finally, taking into account the consideration under number 90. above, the Chamber
referred to par. 1 lit. and 2 of art. 24bis of the Regulations, which stipulate that, with its
decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from
the failure of the concerned party to pay the relevant amounts of outstanding remuneration
and/or compensation in due time.
137. In this regard, the DRC highlighted that, against clubs, the consequence of the failure to
pay the relevant amounts in due time shall consist of a ban from registering any new players,
either nationally or internationally, up until the due amounts are paid. The overall maximum
duration of the registration ban shall be of up to three entire and consecutive registration
periods.
138. Therefore, bearing in mind the above, the DRC decided that the Respondent / CounterClaimant must pay the full amount due (including all applicable interest) to the Claimant
within 45 days of notification of the decision, failing which, at the request of the Claimant,
a ban from registering any new players, either nationally or internationally, for the maximum
duration of three entire and consecutive registration periods shall become immediately
effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.
139. The DRC recalled that the above-mentioned bans will be lifted immediately and prior to its
complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3
of the Regulations.
140. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the parties.
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REF 20-01162
IV.
DECISION OF THE DISPUTE RESOLUTION CHAMBER
1.
The claim of the Claimant / Counter-Respondent 1, Mr Celso BORGES MORA, is partially
accepted.
2.
The Respondent / Counter-Claimant, Göztepe AS, has to pay to the Claimant, the following
amounts:
- EUR 305,305 as outstanding remuneration and accommodation allowance plus 5%
interest p.a. as follows:
o 5% interest p.a. on the amount of EUR 43,038 as from 1 April 2020 until the
date of effective payment,
o 5% interest p.a. on the amount of EUR 1,500 as from 1 April 2020 until the date
of effective payment,
o 5% interest p.a. on the amount of EUR 86,767 as from 1 May 2020 until the date
of effective payment,
o 5% interest p.a. on the amount of EUR 1,500 as from 1 May 2020 until the date
of effective payment,
o 5% interest p.a. on the amount of EUR 76,000 as from 1 June 2020 until the
date of effective payment,
o 5% interest p.a. on the amount of EUR 1,500 as from 1 June 2020 until the date
of effective payment,
o 5% interest p.a. on the amount of EUR 95,000 as from 1 September 2020 until
the date of effective payment,
- Turkish Lira (TRL) 7,000 as car allowance plus 5% interest p.a. as follows:
o 5% interest p.a. on the amount of TRL 3,500 as from 1 May 2020 until the date
of effective payment,
o 5% interest p.a. on the amount of TRL 3,500 as from 1 June 2020 until the date
of effective payment,
- EUR 855,000 as compensation for breach of contract plus 5% interest p.a. as from 28
April 2021 until the date of effective payment.
3.
Any further claims of the Claimant / Counter-Respondent 1 are rejected.
4.
The counter-claim of the Respondent / Counter-Claimant is rejected.
5.
The Claimant / Counter-Respondent 1 is directed to immediately and directly inform the
Respondent / Counter-Claimant of the relevant bank account to which the Respondent
must pay the due amount.
6.
The Respondent / Counter-Respondent shall provide evidence of payment of the due
amount in accordance with this decision to [email protected], duly translated, if applicable,
into one of the official FIFA languages (English, French, German, Spanish).
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REF 20-01162
7.
In the event that the amount due, plus interest as established above is not paid by the
Respondent within 45 days, as from the notification by the Claimant / CounterRespondent 1 of the relevant bank details to the Respondent / Counter-Claiamnt, the
following consequences shall arise:
1. The Respondent / Counter-Claimant shall be banned from registering any new players,
either nationally or internationally, up until the due amount is paid and for the
maximum duration of three entire and consecutive registration periods. The
aforementioned ban mentioned will be lifted immediately and prior to its complete
serving, once the due amount is paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players).
2. In the event that the payable amount as per in this decision is still not paid by the end
of the ban of three entire and consecutive registration periods, the present matter shall
be submitted, upon request, to the FIFA Disciplinary Committee.
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the
Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.
NOTE RELATED TO THE PUBLICATION:
FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party
within five days of the notification of the motivated decision, to publish an anonymised or a redacted
version (cf. article 20 of the Procedural Rules).
CONTACT INFORMATION:
Fédération Internationale de Football Association
FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | [email protected] | T: +41 (0)43 222 7777
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