Dispute Resolution Chamber
Texto da decisão
REF FPSD-1926
Decision of the
Dispute Resolution Chamber
passed on 15 July 2021
regarding an employment-related dispute concerning the player Jordy Josue
Caicedo Medina
COMPOSITION:
Omar Ongaro (Italy), Deputy Chairman
Stéphane Burchkalter (France), member
MD Abu Nayeem Shohag (Bangladesh), member
CLAIMANT / COUNTER-RESPONDENT 1:
Jordy Josue Caicedo Medina, Ecuador
Represented by Jaime Castillo
RESPONDENT / COUNTER-CLAIMANT:
EC Vitoria, Brazil
Represented by Bichara & Motta Advogados
COUNTER-RESPONDENT 2:
PFC CSKA Sofia, Bulgaria
Represented by Bär & Kerrer
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I.
FACTS OF THE CASE
1.
On 9 July 2019, a draft pre-contact of the employment, stipulating the essential terms of
the future employment relationship between the Ecuadorian player, Jordy Josue Caicedo
Medina (hereinafter: the player or the Claimant/Counter-Respondent 1), and the Brazilian
club, EC Vitória (hereinafter: the club, Vitória or the Respondent/Counter-Claimant) was
prepared, outlining the following conditions (hereinafter: the pre-contract):
a.
b.
c.
d.
e.
f.
Term: 4 years;
Monthly salary of USD 15,000 for the season of 2019/2020;
monthly salary of USD 20,000 for the season of 2020/2021;
monthly salary of USD 25,000 for the season of 2021/2022;
monthly salary of USD 30,000 for the season of 2022/2023;
monthly housing allowance in the amount of BRL 2,000.
2.
It remained undisputed between the parties that the pre-contract was not executed
between the player and the club.
3.
On 25 July 2019, the club and the Ecuadorian club, Universidad Católica, agreed on the
permanent transfer of the player against payment of a transfer fee of USD 830,000
(hereinafter: the transfer agreement).
4.
On 24 July 2019, the player and the club concluded an employment contract (hereinafter:
the labour agreement) valid as from its date of execution until 30 June 2023.
5.
According to clauses 2 and 3 of the labour agreement, the club undertook to pay the player
a gross monthly remuneration comprising of image rights and salary “in obedience to the
proportion foreseen by Brazilian Law 9.615/98)”, as follows:
a. From 24 July 2019 to 30 June 2020: USD 9,000 as salary and USD 6,000 as image
rights;
b. From 1 July 2020 to 30 June 2021: USD 12,000 as salary and USD 8,000 as image
rights;
c. From 1 July 2021 to 30 June 2022: USD 15,000 as salary and USD 10,000 as image
rights; and
d. From 1 July 2022 to 30 June 2023: USD 18,000 as salary and USD 12,000 as image
rights.
6.
The abovementioned amounts were payable in local currency by the 5th business day of
each following month, as well as BRL 2,000 per month as housing allowance for the
contract period.
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7.
The labour agreement established that the image rights consideration would be paid to a
company indicated by the player.
8.
The labour agreement further established the amounts would suffer the corresponding
deductions as per the local legislation, but that at the end of each contractual year parties
would perform a “compensation right” check. More in particular, the clause at stake (clause
5d) stated the following (freely translated to English): “By the end of each contractual year,
the parties will promote a math check, as follows: 1) verification of the total amount due
to the [player]. Without any discount, as per clauses 2 and 3; 2) deductions of amounts
corresponding to Social Security Funding (FGTS), vacation and Christmas bonus (13th salary)
paid to the [player]; 3) checking the balance, if inferior to the amount owed [the club] shall
bay the balance in the next due date, in order for the player to receive exactly the gross
amounts under clauses 2 and 3”. The “math check” balance would be paid using the
exchange rate at the end of each contractual year.
9.
The labour agreement contains a jurisdiction clause referring to FIFA and to the Court of
Arbitration for Sport (CAS) as competent courts, as well the courts of the City of Salvador,
Brazil.
10.
Allegedly on 26 July 2019, Vitória, the player and the Company “Jordy Josue Caicedo
Medina Micro-Empresa” (hereinafter: the Company) concluded a “Licensing agreement for
the use of professional football athlete’s image” (hereinafter: Image Rights agreement),
valid as from the same date until 18 July 2021, with an automatic extension until 18 July
2023 in case the labour agreement was extended.
11.
The Image Rights agreement, in its preamble, states inter alia that the Company was duly
authorized on an exclusive basis to use the player’s image rights.
12.
Clause 4.1.2 of the Image Rights agreement establishes that such contract would be
automatically terminated in case of termination of the labour agreement.
13.
According to clause 5 of the Image Rights agreement, Vitória undertook to pay to the
Company a monthly gross amount of BRL 22,638, “equivalent to USD 6,000 at the
exchange rate of execution of this instrument”. Said clause further established that such
amount would be increased, as follows:
a. As of 26 July 2020 to USD 8,000 at the exchange rate of 26 July 2020;
b. As of 26 July 2021 to USD 10,000 at the exchange rate of 26 July 2021; and
c. As of 26 July 2022 to USD 12,000 at the exchange rate of 26 July 2022.
14.
According to clause 6.1 of the Image Rights agreement, payments to the Company would
be subject to the issuance of the proper invoice by the Company.
15.
According to clause 14 of the Image Rights agreement, the jurisdiction for resolving disputes
refers to the courts on the City of Salvador on an exclusive basis.
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16.
On 27 July 2019, the player and the club concluded an employment contract (hereinafter:
the federative contract) valid as from 27 July 2019 until 18 July 2021 in the standard form
of the Confederação Brasileira de Futebol (CBF).
17.
According to the federative contract, the club undertook to pay the player a monthly salary
of BRL 33,921.90.
18.
Furthermore, the federative contract establishes that in case of breach of contract:
a. By the player without just cause, joining a Brazilian club thereafter, a compensation
of BRL 67,000,000 would be due;
b. By the player without just cause, joining a foreign club thereafter, a compensation
of EUR 30,000,000 would be due;
c. By the club without just cause, a compensation corresponding to the residual value
of the federative contract would be due.
19.
On 11 April 2020, the club presented its player with an unsigned document reducing his
salaries by 25% due the COVID pandemic for the months of May and June 2020, and a full
suspension of any payments relating to the Image Rights agreement. Such document, titled
memorandum, contained an area for the player to sign, which he did not.
20.
On 7 December 2020, the player put the club in default of payment of his remuneration
for March (partially), April, May, June, July, August, September, October and November
2020, in the total amount of USD 152,660.74, granting the club 15 days to cure the breach.
21.
On 24 December 2020, the player wrote to the club and acknowledged having received
BRL 176,962.28 or USD 32,410.67, and requested payment of USD 120,250.07 within 15
days. The player furthermore outlined that he deemed any reduction in his earnings illegal.
22.
On 7 January 2021, the club wrote to the player and highlighted that in line with Brazilian
Law, it was entitled to deduct amounts from the player’s earnings due to the pandemic. It
also indicated the pandemic’s negative effects towards the club as a force majeure situation.
The club hence rejected that it owed the player any amounts.
23.
On 15 January 2021, the player wrote to the club, denying the latter’s assertions and
terminating the employment relationship.
24.
On 5 February 2021, the player and the Bulgarian club, PFC CSKA Sofia (hereinafter: CSKA)
signed an employment contract, according to which the player is entitled to EUR 175,000
as remuneration for the cited period.
25.
On 11 February 2021, the club wrote to the player inter alia objecting to the termination of
the employment relationship.
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26.
Following a dispute regarding the issuance of the player’s International Transfer Certificate
(ITC), the Single Judge of the Players’ Status Committee on 16 February 2021 allowed the
provisional registration of the player with CSKA.
II.
PROCEEDINGS BEFORE FIFA
27.
On 3 March 2021, the player filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a.
The claim of the player
28.
In his claim, the player maintained that he had just cause to terminate the employment
relationship with the clubon the basis of art. 14bis of the FIFA Regulations on the Status
and Transfer of Players (RSTP), and subsidiarily on the basis of art. 14 of the FIFA RSTP.
29.
In this context, the player outlined that the club was frequent in paying his remuneration
late, or not paying at all. He argued that notwithstanding this situation he remained carrying
on with this duties. He clarified in this respect that he could not confirm the authenticity of
the federative contract, but conceded that he might have been forced or lured by the club
to sign such document.
30.
The player explained that in spite of the legal structure regarding his Image Rights
agreement, he never received royalties for the use of his image, in fact he only received his
salary as monthly remuneration. He also noted that he had one bank account only, and that
these amounts were never paid to the Company.
31.
The player in continuation addressed the matter of the reduction of his earnings, and
deemed those illegal. He referred to the FIFA COVID Guidelines in this respect as well as to
the fact that he never agreed to any reduction. More in particular, the player deemed that
by reducing 25% of his salary and the entire image rights payments, the reduction in fact
meant a 55% reduction.
32.
The player also referred to the tax-related deductions made by the club and argued that his
remuneration was net, albeit the “unconventional way to cover said net amounts”. The
player is of the position that “by the time the Player terminated the employment contract
on 15 January 2021 all net amounts accrued to that date must be considered as overdue
remuneration. The Player agreed a fixed net remuneration with the Club and, having
rendered his services to the Club until 15 January 2021, it is quite clear that he earned
his full remuneration up to that date, regardless of the irregular payment conditions
established by Vitoria”.
33.
The player requested payment of USD 569,238 as mitigated compensation, calculated as
follows, as well as additional compensation:
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a. USD 780,000 as residual value of the labour agreement (from January 2021 to June
2023);
b. Minus USD 210,762 as his earnings at CSKA;
c. Plus USD 135,000 (i.e. 6 salaries) as additional compensation, or alternatively no
less than USD 67,500.
34.
The player also requested payment of USD 110,668.15 as overdue remuneration by the
time of the termination. He explained that because the club always paid irregularly, it is
difficult to precise which amounts were due, but that this amount represents a little over
six monthly payments. He clarified also that on 18 January 2021, that is, after the
termination, the club paid USD 13,429.69. He detailed his calculation of the amounts
received as follows: (a) remuneration paid between 3 September 2019 and 30 December
2020 in the total of BRL 715,536.37, and (b) bonus payments between 16 August 2019
and 29 September 2020 in the total of BRL 15,194.62.
35.
The player made the following remarks as to his calculation:
Exchange rates:
- 1 USD = 3.76 BRL, which was the exchange rate on 24 July 2019, for payments
effectively made during the first year of the labour agreement (24 July 2019/30 June
2020, as per articles 2 and 3 of the labour agreement);
- 1 USD = 5.47 BRL, which was the exchange rate on 30 June 2020, for overdue payments
that were to be paid within the five working days following the end of the first year
of the labour agreement to duly complete the net amounts established in the labour
agreement (as per articles 5.d and 5.e of the labour agreement);
- 1 USD = 5.46 BRL, which was the exchange rate on 1 July 2020, for overdue payments
corresponding to the second year of the labour agreement (1 July 2020/31 December
2020, as per articles 2 and 3 of the labour agreement).
Outstanding remuneration:
a. From 24 July 2019 to 30 June 2020:
- Total net amount due for 1st contractual year: USD 168,500 or BRL 633,560;
- Total amount effectively paid after deductions: USD 94,220.89;
- Housing allowances deduction: USD 13,966.78;
- Total amount overdue for 1st contractual year: USD 80,254.11 or BRL 438,989.98.
b. From 1 July 2020 to 31 December 2020:
- Total net amount due the period: USD 120,000 or BRL 655,200;
- Total amount effectively paid after deductions: USD 78,354.27;
- Total amount overdue for period: USD 43,843.73 or BRL 438,989.98.
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Housing allowances:
“It is also important to take into consideration that the amounts pertaining to housing (BRL
2,000.00 monthly) have been lumped together in our total calculations, as this
contribution was in fact paid together with the Player’s salary, and therefore constitutes
part of the Player’s total remuneration. We are taking into account that all housing
payments have been made, and therefore this amount (a total of BRL 34,000.00 for 17
months in which the contribution was effectively paid) also needs to be deducted from the
total payments performed by the Club (i.e. this amount does not constitute salary
and must be subtracted from the total sum paid by the Club during the employment
relationship)”.
36.
Hence, as per the player, the total amount overdue equals to USD 124,097.84, minus USD
13,429.69 paid by Vitoria on 18 January 2021, arriving at USD 110,668.15.
b.
The reply and counterclaim of the club
37.
The club objected as to the competence of FIFA. In particular, it held that FIFA is not
competent to hear any disputes arising from the Image Rights agreement as it does not
pertain to an employment-related dispute and such contract also possesses a clear and
exclusive jurisdiction clause in favour of the local courts.
38.
As to the substance, the club argued that the player has no standing to sue regarding the
Image Rights agreement since the Company and not the player was entitled to receive the
monies under such contract.
39.
The club furthermore submitted that both the Image Rights agreement and the federative
contract superseded the labour agreement, especially in view of the fact that the latter did
not comply with the mandatory requirements of Brazilian law, namely the inclusion of the
penalty clauses in favour of both the player and the club.
40.
The club clarified in this respect that only the federative contract contains such clauses, and
that this contract was validly executed between the parties.
41.
Additionally, the club explained that the Image Rights agreement was signed in accordance
with national law, and based on the foregoing FIFA is not to consider the labour agreement.
42.
The club then turned to the issue of the termination, and argued that the player did not
have just cause to terminate the employment relationship on the following grounds: (a) In
his default notices of December and January 2021, the player never specified which
amounts were due; (b) The club lawfully reduced between April and December 25% of the
player’s remuneration due to COVID.
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43.
As to COVID, the club explained that under Swiss Law the theory of clausula rebus sic
stantibus allows for such unilateral reduction, and that the Brazilian Law (Provisional
Measure No. 936 and Federal Law No. 14.020/2020) also allow it. The club quoted the
following provision:
“Section III
Proportional Reduction of Working Hours and Wages
Art. 7. During the state of public calamity referred to in article 1, the employer may
agree to the proportional reduction in the working hours and salary of its employees,
for up to ninety days, subject to the following requirements:
I –preservation of the number of hourly wages for work;
II –agreement by individual written agreement between employer and employee, which
will be forwarded to the employee at least two calendar days in advance; and
III –reduction of working hours and wages, exclusively, in the following percentages:
a)Twenty-five percent;
b)Fifty per cent; or
c)Seventy percent.
Sole paragraph: The working day and the salary previously paid will be re-established within
two calendar days, counting:
I –from the cessation of the state of public calamity;
II –from the date established in the individual agreement as the end of the period and
reduction agreed upon; or
III –the date of communication by the employer informing the employee of his decision to
anticipate the end of the agreed reduction period.”
44.
The club also argued that this provision is in line with the Brazilian Labour code, as follows:
“Art. 501-Force majeure is understood as all unavoidable events, in relation to the
employer's will, and for the accomplishment of which the employer did not contribute,
directly or indirectly.
§ 1º -The employer's lack of foresight shall exclude the reason of force majeure.
§ 2 -In the occurrence of force majeure that does not substantially affect, nor is likely to
affect, under such conditions, the economic and financial situation of the company, the
restrictions of this Law concerning the provisions of this Chapter shall not apply.(...)
Article 503-It is lawful, in case of force majeure or duly proven losses, the general reduction
of the company’s employees’ salaries, in proportion to their salaries, however, such
reduction cannot be superior to 25% (twenty-five per cent), respected, in any case,
the minimum wage of the region.
Sole paragraph: Once the effects of force majeure have ceased, the restoration of the
reduced wages is guaranteed.”
45.
The club argued that the reduction applied to all of its squad, except the player. The club
deems that the reduction was proportionate.
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46.
The club then proceeded to calculate the player’s entitlement to salaries under the
federative contract and concluded that while the player was entitled to BRL 506,001.68 by
the time of termination, the club only fell short of payment of BRL 41,856.06, that is, a little
over one salary only. The club thus filed a counterclaim against the player and CSKA and
requested the following amounts:
“a) Residual value of the relevant contract:
•As the Employment Contract was due to expire on 18 July 2021, this amount shall
correspond approximately 6 (six) monthly salaries, as follows:BRL33,921.90 x 5 months
(1 January to 30 June 2021) + BRL33,921.90x 18/30 days (July 2021) = BRL189,962.64
(one hundred eighty-nine thousand nine hundred sixty-two Brazilian Reais and sixty-four
cents).
b) Fees and expenses for the acquisition of the Player amortised over the term of the
Contract:
•USD 830,000.00 (eight hundred thirty thousand US Dollars) of the transfer fee
(ExhibitR23).
c) Loss of the Player’s services and replacement value: EUR 675,000”.
c.
The reply to counterclaim by CSKA
47.
As to the admissibility, CSKA rejected the position of Vitória and argued that FIFA is clearly
competent since the payment of “image rights” derives from clause 8 of the labour
agreement. It also advanced the argument that should that not be the case, the image
rights of the player were never exploited by Vitória, entailing that as per the contents of
such agreement the player was only performing his activities as footballer. CSKA concluded
by stating that the Image Rights agreement is nothing more than an addendum or
supplementary agreement.
48.
CSKA argued that the player had just cause to terminate the employment relationship. It
outlined in this respect that Vitória confirmed by its letter dated 7 January 2021 that the
player was entitled to the exact remuneration agreed under the labour agreement, and that
it made no sense that only 3 days after such agreement was signed to replace it by one
with a duration much shorter (i.e. the federative contract).
49.
CSKA then turned to the issue of the player’s signing and argued that it learned about the
player being a free agent via an intermediary only on 18 January 2021, that is, after the
termination of the contract with Vitória. CSKA then added and that only by late January,
after having assessed the player’s situation in depth it came to the conclusion of the
employment contract with the player.
50.
As to the COVID reductions, CSKA is of the opinion that Vitória did not make attempts to
reach an amicable settlement with the player and that there has been no evidence filed
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regarding Vitória’s economic crisis caused by the pandemic. It also argued that the
reductions were not proportional.
51.
CSKA then turned to the calculations and proof of payment filed by Vitória and noted that
in the unlikely scenario that FIFA recognizes the federative contract as the sole valid one,
the COVID reductions were illegal and Vitória only paid BRL 464,145.62 to the player, while
he was entitled to BRL 576,672.30 between 1 August 2019 and 31 December 2020, thus
falling short of BRL 112,526.68, which is more than 3 salaries.
52.
CSKA also argued that the compensation sought by Vitória is excessive and that it did not
induce the player to terminate his contractual relationship with the club.
53.
CSKA requested that the counterclaim be rejected.
d.
The reply to counterclaim by the player
54.
As to the admissibility, the player argued that FIFA is competent and explained that he is
seeking the amounts agreed under the labour agreement and not the image rights one,
since the latter was merely concluded under national law to be more tax-advantageous to
Vitória.
55.
As to the substance, the player reiterated that the labour agreement is valid and enforceable
and contains all the essentialia negotii. As to the image rights, the player outlined that the
Company was only created in 4 November 2019 as per the evidence on file presented by
Vitória, and thus it was impossible that the Image Rights agreement was executed before
that date.
56.
As to the COVID reductions, the player argued that “the unilateral reductions were not
applied in good faith, nor reasonable, nor proportionate. As said in our claim, Vitoria
has clearly acted in bad faith to justify its failure to duly pay the Player’s salary and is
attempting to benefit from the Covid situation to justify a behavior that was actually present
for many months before the Covid pandemic even started. The simple fact that Vitoria
imposed salary deductions on the Player, despite the fact that the Player refused to sign
the “Memorando de Entendimiento” agreement (which established said deductions),
already proves that Vitoria acted in bad faith toward the Player.”
57.
The player reiterated that he had just cause to terminate the contractual relationship and
challenged the amounts sought by Vitória.
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III.
CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
a.
Competence and applicable legal framework
58.
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 3 March 2021 and submitted
for decision on 15 July 2021. Taking into account the wording of art. 21 of the January
2021 edition of the Rules Governing the Procedures of the Players’ Status Committee and
the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned
edition of the Procedural Rules is applicable to the matter at hand.
59.
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 February 2021), the Dispute
Resolution Chamber is in principle competent to deal with the matter at stake, which
concerns an employment-related dispute with an international dimension between an
Ecuadorian player and a Brazilian club with the involvement of a Bulgarian club.
60.
However, the DRC noted that the club objected to the competence of FIFA insofar as the
claim refers to the Image Rights agreement. The club argued in this respect that the labour
agreement had been superseded by the Image Rights Agreement and the federative
contract, in a structure akin to a “pre-contract”.
61.
In this respect, the Chamber noted – conversely to the argumentation of the club – that the
tripartite structure of the contractual relationship between the parties was an intertwined
one. To this end, the Chamber confirmed that in fact the Image Rights agreement and the
federative contract did not supersede the labour agreement, but in fact further detailed the
parties’ relationship. This was inferred by the Chamber from the following:
a. The labour agreement’s “whereas” section clearly states that the player and the club
agreed to sign the contract “at their free will”, the player having passed his medical
examination. In the Chamber’s eyes, such situation denotes that the labour agreement
was not akin to a pre-contract, but in fact a binding employment contract containing
all the essentialia negotii between the parties;
b. Clauses 2 and 3 of the labour agreement denoted how payments would be performed,
and clause 7 further established that the player’s work contract would be registered
before the CBF used the standard form required by such entity. Such situations were
exactly the ones that followed with the execution of the Image Rights agreement and
the federative contract;
c. The jurisdiction clauses in all three agreements are contradictory, the one in the labour
agreement referring to FIFA/CAS and local courts, the one in the Image Rights
agreement to local courts only, and the federative contract being silent.
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62.
It followed from the above that the dispute (irrespective of how payments would be
performed, if to the player or to the Company, especially because both the player and the
Company have the same name, demonstrating that it was all one entire agreement) in an
employment related-one and with an international dimension, and absent a clear and
exclusive jurisdiction clause in favour of the local courts, the DRC is competent to entertain
the claim.
63.
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 3 March 2021, the February 2021 edition
of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to
the substance.
b.
Burden of proof
64.
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.
65.
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.
66.
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
1. Standing to sue of the player
67.
Before entering the substance at the centre of the dispute, the DRC deemed worthy to
recall that the club challenged the standing to sue of the player in light of the structure of
the Image Rights agreement, claiming that the Company was the only one entitled to
receive payments.
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68.
Following the same reasoning outlined in the admissibility section, the Chamber wished to
highlight that the labour agreement outlined the general obligations of the parties while
the Image Rights agreement detailed these obligations only.
69.
The DRC was observant of the fact that it could not be overlooked in this respect that while
in a seemingly valid structure under local law, the remuneration agreed with the player
derives from the labour agreement – and from which the player bases his claim. It follows
that he (and not the company) is the one entitled to receive the amounts indicated therein
as its true beneficiary.
70.
The DRC underlined in this respect that the player himself is a party to the Image Rights
agreement, carrying material obligations and qualified as an intervening party to such
contract. Also noteworthy is the fact that payments have been performed always by the
club to the player himself and never to the Company, as per the receipts filed by the club
itself in support of its allegations.
71.
Lastly, the DRC was mindful of the fact that the club itself has filed evidence, which
demonstrates that the date of creation of the Company is 4 November 2019. This is in the
DRC’s view a strong signal that the Image Rights agreement was a pre-dated one, which
supports the Chamber’s considerations above, entailing that the Image Rights agreement
could be deemed null and void. However, no specific request is made in this respect by the
player, who bases his claim in the labour agreement alone. The Chamber thus deemed it
was not necessary to analyse this question.
72.
It followed that the player has standing to sue.
2. The issue of just cause and its consequences
73.
The foregoing having been established, the Chamber moved to the core of the matter, and
took note of the fact that the parties strongly dispute if the player had just cause to
terminate the employment relationship of the parties.
74.
Having established that the above, the DRC turned to the argumentation of the club that
the only the federative contract is to be taken into account.
75.
The Chamber was firm to conclude that this reasoning cannot be followed. The DRC
clarified that the amount established under the federative contract matches exactly the
salary agreed under the labour agreement at the exchange rate of the date of execution of
the latter, 24 July 2019, therefore further confirming the assessment of the main obligation
set out by the labour agreement.
76.
As such, the DRC once again referred to the remuneration (image rights included) agreed
under the labour agreement in order to determine whether the club had breached the latter
as per the player’s argumentation.
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77.
The player claims he was unpaid USD 110,668.15. The club, in turn, filed several proofs of
payment of remuneration which however amount to BRL 464,145.62 only. The DRC
outlined that this figure does not comprise of the Social Security Amounts (“FGTS” - which
were paid to the corresponding scroll account) and bonuses, both of which do not seem to
be particularly requested by the player.
78.
More in particular, the DRC was observant that the club presented evidence of having paid
the following amounts:
Date
03-09-19
10-10-19
12-11-19
29-11-19
18-12-19
07-02-20
10-03-20
28-04-20
15-06-20
10-07-20
31-07-20
01-09-20
01-10-20
19-11-20
14-12-20
16-12-20
30-12-20
TOTAL
Amount (BRL)
$
4,744.24
$
26,447.05
$
26,797.05
$
26,797.05
$
26,327.05
$
26,976.19
$
26,976.19
$
26,843.49
$
20,695.14
$
20,695.14
$
20,695.14
$
36,950.06
$
36,550.06
$
36,550.06
$
36,452.33
$
26,997.05
$
36,652.33
$
464,145.62
79.
The DRC then turned to the argumentation and evidence presented by the player and duly
observed that every single payment made by the club had been already confirmed by the
player in his statement of claim.
80.
At this point, the Chamber wished to address the matter of the reduction of the player’s
salaries raised by the club.
81.
The Chamber firstly wished to highlight that FIFA issued a set of guidelines, the COVID-19
Guidelines, 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 has issued an additional document, referred to as FIFA
COVID-19 FAQ, which provides clarifications on the most relevant questions in connection
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REF FPSD-1926
with the regulatory consequences of the COVID-19 outbreak and identifies solutions for
new regulatory matters.
82.
The DRC also wished to refer to the fact 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. The Chamber further noted that for the assessment of disputes
that are presented before the FIFA judicial bodies concerning the unilateral termination of
a contract, the FIFA Regulations as well as the established jurisprudence of the Chamber
shall apply.
83.
To this end and in line with the FIFA guidelines, the DRC considered that the club’s decision
to unilaterally reduce the player’s salaries by 25% and his image rights by 100% has to be
considered as a unilateral variation of the employment contract between the parties, which
hence should be examined in accordance with the FIFA Guidelines and FAQ.
84.
In this respect, the DRC recalled that unilateral decisions to vary agreements will only be
recognised where they are made in accordance with national law or are permissible within
collective bargained agreements (CBA) structures or another collective agreement
mechanism.
85.
Turning to the evidence on file as well as the submissions of the parties, the Chamber
observed that the club has not adduced sufficient evidence capable of demonstrating that
the unilateral variation of the player’s remuneration was legally made on the basis of the
national law, or any collective agreement. The club has only filed evidence that it reached
agreements with several players, but the DRC was not persuaded that these agreements
indeed correspond to the entire squad as the sole corroborating evidence in this respect is
a news article published by a Brazilian news outlet.
86.
The DRC also confirmed that there did not seem to be an attempt to amicably negotiate in
good faith any salary reduction, nor an adequate information by the club to the player that
his salary had been reduced. Rather, the club presented an unsigned letter to the player,
determining the reduction of his salaries, which the latter refused to sign, which was found
to be unacceptable by the Chamber for either case.
87.
Furthermore, it was the Chamber’s view the club has not demonstrated that it complied
with national law by reducing the player’s working hours together with his wage (as per
the wording of Provisional Decree filed by the club itself, coupled with the lack of a written
agreement duly sign by the player); and finally the DRC was of the firm opinion that the
reduction proposal outlined in the memorandum corresponded to a few months only, while
the club admits that it reduced the player’s wage between April and December 2020.
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REF FPSD-1926
88.
It shall be highlighted in this respect that the club admits that the competitions in Brazil
were paused in March 2020 and resumed in June 2020, that is, the reduction affected the
player’s earnings for more than 6 months after competitions resumed in the country. The
DRC was adamant to find that such reduction, in any event, cannot be deemed reasonable
nor proportionate.
89.
As a consequence and in light with the DRC’s jurisprudence, the DRC decided that the club
failed to demonstrate that the unilateral variation of the labour agreement was licit,
entailing that on the basis of the principle pacta sunt servanda it should have paid the
player’s agreed remuneration. It has nonetheless failed to demonstrate that such payments
were correctly performed.
90.
Based on the foregoing as well as the unequivocal contents of art. 14bis of the Regulations,
coupled with the undisputed notices sent by the player to the club, the DRC concluded that
the player had just cause to terminate the employment relationship with the club. The club’s
counterclaim is accordingly dismissed entirely and the club is to bear the consequences that
follow.
91.
Having stated the above, the members of the Chamber turned their attention to the
question of the consequences of such unjustified breach of contract committed by the club.
92.
The Chamber observed that the outstanding remuneration at the time of termination,
coupled with the specific requests for relief of the player, have been miscalculated by the
latter. As such, the DRC proceeded to analyse the amounts outstanding to the player by
the time of termination. The DRC observed in this respect that the amounts agreed under
the labour agreement are gross and not net, conversely to the player’s assertion in his
statement of claim.
93.
In line with the player’s assertions and the contents of the labour agreement, the player
was to receive USD 168,500 for the first season and USD 120,000 for the second season.
By the time of termination, the player acknowledged to have been paid USD 94,220.89 for
the first season and USD 78,354.27 for the second season. As such, the amount
outstanding to the player is the following:
a. First season: USD 168,500 minus USD 94,220.89 equals USD 74,279.11 (and not USD
80,254.11 as argued by the player); and
b. Second season: USD 120,000 minus USD 78,354.27 equals USD 41,645.73 (and not
USD 43,843.73 as argued by the player).
94.
Consequently, the DRC confirmed that by the time of termination the club had defaulted
payment of USD 115,924.84. Additionally, after the player had terminated the contractual
relationship with just cause, the club paid (and the player confirmed having received) USD
13,429.96.
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REF FPSD-1926
95.
It followed thus that USD 102,495.15 remained unpaid by the club to the player.
96.
As a consequence, and in accordance with the general legal principle of pacta sunt
servanda, the Chamber decided that the club is liable to pay to the player the amounts
which were outstanding under the labour agreement at the moment of the termination,
i.e. USD 102,495.15.
97.
In addition, taking into consideration the player’s request as well as the constant practice
of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player
interest at the rate of 5% p.a. on the outstanding amounts as from the date of termination
of the labour agreement until the date of effective payment.
98.
Having stated the above, the Chamber turned to the calculation of the amount of
compensation payable to the player by the club in the case at stake. In doing so, the
Chamber firstly recapitulated that, in accordance with 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 player 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.
99.
In application of the relevant provision, the Chamber held that it first had to clarify as to
whether the pertinent employment contract contained 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. In this regard, the Chamber
established that while it appeared that a liquidated damages clause had been inserted in
the federative agreement, the player is not requesting any amounts on that basis, therefore
the Chamber needed not to analyse whether such clause was reasonable and
proportionate.
100. As a consequence, the members of the Chamber determined that the amount of
compensation payable by the club to the player had to be assessed in application of the
other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that
said provision provides for a non-exhaustive enumeration of criteria to be taken into
consideration when calculating the amount of compensation payable.
101. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded
with the calculation of the monies payable to the player under the terms of the labour
agreement until its term. Consequently, the Chamber concluded that the amount of USD
780,000 serves as the basis for the determination of the amount of compensation for
breach of contract.
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REF FPSD-1926
102. In continuation, the Chamber verified as to whether the player had signed an employment
contract with another club during the relevant period of time, by means of which he would
have been enabled to reduce his loss of income. According to the constant practice of the
DRC as well as art. 17 par. 1 lit. ii) of the Regulations, such remuneration under a new
employment contract shall be taken into account in the calculation of the amount of
compensation for breach of contract in connection with the player’s general obligation to
mitigate his damages.
103. Indeed, the player found employment with CSKA. In accordance with the pertinent
employment contract, the player was entitled to approximately USD 210,000 in total.
Therefore, the Chamber concluded that the player mitigated his damages in the total
amount of USD 210,000.
104. Subsequently, the Chamber referred to art. 17 par. 1 lit. ii) of the Regulations, according to
which a player is entitled to an amount corresponding to three monthly salaries as additional
compensation should the termination of the employment contract at stake be due to
overdue payables. In the case at hand, the Chamber confirmed that the contract
termination took place due to said reason i.e. overdue payables by the club, and therefore
decided that the player shall receive additional compensation.
105. In this respect, the DRC decided to award the amount of additional compensation of USD
60,000, i.e. three times USD 20,000 as the monthly remuneration of the player.
106. Consequently, on account of all of the above-mentioned considerations and the specificities
of the case at hand, the Chamber decided that the club must pay the amount of USD
630,000 to the player (i.e. USD 780,000 minus USD 210,000 plus USD 60,000), which was
to be considered a reasonable and justified amount of compensation for breach of contract
in the present matter.
107. Lastly, taking into consideration the player’s request as well as the constant practice of the
Dispute Resolution Chamber in this regard, the Chamber decided to award the player
interest on said compensation at the rate of 5% p.a. as of the date of claim until the date
of effective payment.
ii. Compliance with monetary decisions
108. Finally, taking into account the consideration the applicable Regulations, 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.
109. 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
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REF FPSD-1926
duration of the registration ban shall be of up to three entire and consecutive registration
periods.
110. Therefore, bearing in mind the above, the DRC decided that the club must pay the full
amount due (including all applicable interest) to the player within 45 days of notification of
the decision, failing which, at the request of the player, 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 club in
accordance with art. 24bis par. 2, 4, and 7 of the Regulations.
111. The club shall make full payment (including all applicable interest) to the bank account
provided by the player in the Bank Account Registration Form, which is attached to the
present decision.
112. The DRC recalled that the above-mentioned ban will be lifted immediately and prior to its
complete serving upon payment of the due amounts, in accordance with art. 24bis par. 8
of the Regulations.
d.
Costs
113. The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC
proceedings relating to disputes between clubs and players in relation to the maintenance
of contractual stability as well as international employment related disputes between a club
and a player are free of charge”. Accordingly, the Chamber decided that no procedural
costs were to be imposed on the parties.
114. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18
par. 4 of the Procedural Rules, and decided that no procedural compensation shall be
awarded in these proceedings.
115. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the parties.
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REF FPSD-1926
IV.
DECISION OF THE DISPUTE RESOLUTION CHAMBER
1.
The claim of the Claimant/Counter-Respondent 1, Jordy Josue Caicedo Medina, is
admissible.
2.
The claim of the Claimant/Counter-Respondent 1 is partially accepted.
3.
The counterclaim of the Respondent/Counter-Claimant, EC Vitória, is rejected.
4.
The Respondent/Counter-Claimant has to pay to the Claimant/Counter-Respondent 1 the
following amounts:
- USD 102,495.15 as outstanding remuneration plus 5% interest p.a. as from 15 January
2021 until the date of effective payment;
- USD 630,000 as compensation for breach of contract without just cause plus 5%
interest p.a. as from 3 March 2021 until the date of effective payment.
5.
Any further claims of the Claimant/Counter-Respondent 1 are rejected.
6.
Full payment (including all applicable interest) shall be made to the bank account indicated
in the enclosed Bank Account Registration Form.
7.
Pursuant to article 24bis of the Regulations on the Status and Transfer of Players if full
payment (including all applicable interest) is not paid within 45 days of notification of this
decision, the following consequences shall apply:
1. The Respondent/Counter-Claimant shall be banned from registering any new players,
either nationally or internationally, up until the due amount is paid. The maximum
duration the ban shall be of three entire and consecutive registration periods.
2. The present matter shall be submitted, upon request, to the FIFA Disciplinary
Committee in the event that full payment (including all applicable interest) is still not
paid by the end of the of the three entire and consecutive registration periods.
8.
The consequences shall only be enforced at the request of the Claimant/CounterRespondent 1 in accordance with article 24bis paragraphs 7 and 8 and article 24ter of the
Regulations on the Status and Transfer of Players.
9.
This decision is rendered without costs.
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
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REF FPSD-1926
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
Page 22