Labour Disputes
Texto da decisão
REF FPSD-3238
Decision of the
Dispute Resolution Chamber
passed on 14 October 2021
regarding an employment-related dispute concerning the player Leonardo
Carrilho Baptistão
COMPOSITION:
Frans de Weger (the Netherlands), Chairperson
José Luis Andrade (Portugal), Member
Roy Vermeer (the Netherlands), Member
CLAIMANT:
Leonardo Carrilho Baptistao, Brazil
Represented by Rocío Sáez Cánovas
RESPONDENT:
Wuhan FC, China PR
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REF FPSD-3238
I.
Facts of the case
1.
On 31 January 2019, the Brazilian player, Mr Leonardo Carrilho Baptistão (hereinafter: the
player or the Claimant), and the Chinese club, Wuhan FC (hereinafter: the club or the
Respondent), signed an employment contract valid as from the date of signature until 31
December 2021 (hereinafter: the employment contract).
2.
In accordance with clause 7 of the employment contract, the club undertook to pay the
player, inter alia, the amount of EUR 3,300,000 net per year, payable in 12 monthly
instalments (i.e. EUR 275,000 each) due by the 15th day of the following month.
3.
On 26 March 2020, the Chinese government announced the temporary suspension of the
entry of foreigners in the country due to the effects of the COVID-19 outbreak.
4.
On 27 January 2021, the club sent the player an invitation letter in order “to apply for a visa
at the Consulate General of China in São Paulo”. A second letter with the same content was
sent by the club to the player dated 2 April 2021.
5.
On 6 July 2021, the player put the club in default and granted it with a 15 days’ deadline in
order to proceed the payment of his outstanding salaries as from January 2021, to no avail.
6.
On 23 July 2021, the player notified the club the termination of the employment contract
due to overdue payables. In this opportunity, the player informed that he had only received
one salary after his previous notice.
7.
On 18 August 2021, the player started a new employment relationship with the Brazilian
club, Santos Futebol Clube (hereinafter: Santos FC). In this context:
a. the player and Santos FC signed an employment agreement valid as from 17 August 2021
until 30 April 2022. Accordingly, Santos FC undertook to pay the player a monthly salary
of BRL 192,000 during the overlapping period (i.e. between 17 August 2021 and 31
December 2021); and
b. Santos FC, the player and the company LB–Holding Ltda. also signed an image rights
agreement valid as from 17 August 2021 until 30 April 2022. Accordingly, Santos FC
undertook to pay the player a monthly remuneration of BRL 128,000 during the
overlapping period (i.e. between 17 August 2021 and 31 December 2021).
II. Proceedings before FIFA
8.
On 28 July 2021, the player filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
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a. Position of the player
9.
In his claim, the player held that the club failed to meet its financial duties, entailing that he
had just cause to terminate the employment contract. In this regard, the player referred, inter
alia, to the jurisprudence of the Court of Arbitration for Sport (CAS), to the principle of pacta
sunt servanda and to the wording of art. 14bis of the FIFA Regulations on the Status and
Transfer of Players (RSTP).
10. In light of the above, the player maintained that he should be entitled to the outstanding
remuneration and compensation for breach of contract, as follows:
a. EUR 1,576,667 as outstanding remuneration, plus the relevant interest until the date
of the effective payment, as follows:
(i)
EUR 275,000 net as the salary of February 2021, plus 5% interest p.a. as from
15 March 2021;
(ii)
EUR 275,000 net as the salary of March 2021, plus 5% interest p.a. as from 15
April 2021;
(iii)
EUR 275,000 net as the salary of April 2021, plus 5% interest p.a. as from 15
May 2021;
(iv)
EUR 275,000 net as the salary of May 2021, plus 5% interest p.a. as from 15
June 2021;
(v)
EUR 275,000 net as the salary of June 2021, plus 5% interest p.a. as from 15
July 2021;
(vi)
EUR 201,667 net as the pro rata salary of July 2021 (i.e. 22 days), plus 5%
interest p.a. as from 22 July 2021.
b. EUR 1,448,333 net as compensation for breach of contract, corresponding to the
residual value of the employment contract; and
c. EUR 825,000 net as additional compensation of three monthly salaries in accordance
with art. 17 of the RSTP.
b. Amendment to the claim of the player
11. On 10 August 2021, the player acknowledged receipt of a partial payment made by the club
for EUR 550,000.
c. Position of the Respondent
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12. In its reply, the club first of all referred to the partial payment of EUR 550,000, previously
made to the player on 10 August 2021 and maintained that it should be considered in the
calculations.
13. Subsequently, the club informed that the player was absent from training, matches and other
activities from January to May 2021, “due to some reasons not attributed to the club”. In this
respect, it claimed that three monthly salaries (i.e. EUR 825,000) should be deducted from
the outstanding remuneration claimed by the player.
14. In addition, the club referred to the COVID-19 pandemic and to the several financial problems
faced after its outbreak. In particular, the club stated that it “has tried the best to help the
player to return during the period when most of countries tighten their immigration policies”.
Equally, the club referred to the invitations letters sent to the player in January and April 2021,
and clarified that on 28 March 2020, China decided to temporarily suspend the entry of
foreigners in the country, so that the player was not able to get his residence permit and/or
to go back to the city of Wuhan.
15. Having established the above, the club confirmed that the player was entitled to
compensation for breach of contract, however that the residual value of the employment
contract amounted to EUR 1,448,333 net. Moreover, the club stressed that the compensation
should be mitigated considering the new employment relationship initiated with Santos FC.
Furthermore, the club held that no additional compensation should be paid to the player.
16. Finally, the club also stressed that no sporting sanction should be imposed in the case at stake.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
17. 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 5 August 2021 and submitted for decision
on 14 October 2021. Taking into account the wording of art. 34 of the October 2021 edition
of the Procedural Rules Governing the Football Tribunal (hereinafter: the Procedural Rules),
the aforementioned edition of the Procedural Rules is applicable to the matter at hand.
18. Subsequently, the members of the Chamber referred to art. 2 par. 1 of the Procedural Rules
and observed that in accordance with art. 23 par. 1 in combination with art. 22 lit. b) of the
Regulations on the Status and Transfer of Players (August 2021 edition), the Dispute
Resolution Chamber is competent to deal with the matter at stake, which concerns an
employment-related dispute with an international dimension between a Brazilian player and
a Chinese club.
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19. 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 (August 2021 edition), and
considering that the present claim was lodged on 05 August 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
20. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 13 par. 5 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 Chamber stressed the wording
of art. 13 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed
by the parties, including without limitation the evidence generated by or within the Transfer
Matching System (TMS).
c. Merits of the dispute
21. Its competence and the applicable regulations having been established, the Chamber entered
into the merits of the dispute. In this respect, the Chamber started by acknowledging all the
above-mentioned facts as well as the arguments and the documentation on file. However,
the Chamber emphasised that in the following considerations it will refer only to the facts,
arguments and documentary evidence, which it considered pertinent for the assessment of
the matter at hand.
i. Main legal discussion and considerations
22. The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that it pertains a claim for outstanding remuneration and
compensation for breach of contract.
23. In this context, the Chamber initially acknowledged that it remained undisputed by the club
that the employment contract was terminated by the player on 23 July 2021, due to overdue
payables. Furthermore, the DRC observed that the player put the club in default and granted
it a reasonable deadline (i.e. 15 days) in order to fulfil its obligations, to no avail. Likewise,
the Chamber was also mindful that the club concurred with player’s argumentation that he
should be entitled to compensation for breach of contract.
24. Consequently, the DRC was satisfied with the conclusion that the termination was made with
just cause by the player, in accordance with art. 14bis of the Regulations. As such, the
Chamber determined that the club shall be liable to the consequences that follow.
ii. Consequences
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25. 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.
26. At this point, the Chamber started by analysing the outstanding remuneration sought by the
player and noted that he requested payment of his salaries from February to June 2021.
27. On the other hand, the DRC was mindful that the club, on its part: (i) referred to the COVID
pandemic in order to justify that it acted in good faith, but was not able to honour its financial
duties; and (ii) claimed that the three salaries from February, March and April 2021 were not
due because the player was absent and did not perform his contractual duties.
28. In light of the above, the DRC 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 with the regulatory consequences of the COVID-19 outbreak and identifies
solutions for new regulatory matters.
29. The DRC also wished to refer to the fact, based on the contents of the FIFA COVID-19
Guidelines and the FIFA COVID-19 FAQ, FIFA did not declare that the COVID-19 outbreak
was a force majeure situation in any specific country or territory, or that any specific
employment or transfer agreement was impacted by the concept of force majeure. In other
words, in any given dispute, it is for a party invoking force majeure to establish the existence
of said event under the applicable law/rules as well as the consequences that derive in
connection thereto. The analysis of whether a situation of force majeure existed has to be
considered on a case-by-case basis, taking into account all the relevant circumstances.
30. Following these general observations, the DRC highlighted that the club did not provide any
evidence capable of demonstrating a legal situation of force majeure in China, in line with
the COVID Guidelines issued by FIFA. Furthermore, the club has not demonstrated that the
national law does not address the issue of force majeure.
31. Therefore, the Chamber unanimously concluded that the club’s allegations in this respect
should be set aside.
32. In continuation, the DRC went on analysing the club’s argumentation as to the player’s
absence in training sessions, pre-season and matches. In this respect, the Chamber
acknowledged that the club: (i) confessed that it was aware of the restrictions imposed by
the Chinese government to entry the country and was in contact with the player in order to
remedy the situation; (ii) has never requested the player to avail himself for a specific event /
date nor has put him in default for breach of contract; (iii) has never informed the player that
he would not be entitled to part of his remuneration; (iv) has never granted the player a
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deadline to cure any eventual breach; and (v) has not provided any answer of remark to the
player’s notice dated 6 and 23 July 2021.
33. In doing so, the Chamber once again concluded that the club did not meet its burden of
proof in order to demonstrate that any of the player’s remuneration under the employment
contract should not be delivered (cf. art. 13, par. 5 of the Procedural Rules).
34. Notwithstanding the above, the DRC outlined that the club made a partial payment to the
player during the course of these proceedings (i.e. on 10 August 2021), and considered that
it cancelled two of the outstanding monthly salaries – i.e. the salaries from February and
March 2021.
35. Based on the aforementioned considerations and in accordance with the general legal
principle of pacta sunt servanda, the members of the DRC unanimously decided to award the
player the total amount of EUR 1,100,000 net as outstanding remuneration, corresponding
to the salaries of April, May, June and July 2021 (i.e. EUR 275,000 each).
36. In addition, taking into consideration the player’s request as well as the constant practice of
the Chamber in this regard, the latter decided to award the player interest at the rate of 5%
p.a. on the outstanding amounts as from the date in which each instalment fell due until the
date of effective payment.
37. 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.
38. In application of the relevant provision, the Chamber held that it first of all 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 no
such compensation clause was included in the employment contract at the basis of the matter
at stake.
39. 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.
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40. 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 contract from
the date of its unilateral termination until its end date. Consequently, the Chamber concluded
that the amount of EUR 1,375,000 net (i.e. the residual value of the contract comprising the
player’s salaries from August to December 2021 of EUR 275,000 each) serves as the basis for
the determination of the amount of compensation for breach of contract.
41. 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.
42. Indeed, the player found employment with Santos FC. In accordance with the pertinent
agreements signed between the parties, the Chamber concluded that the player mitigated
his damages in the total amount of approximately EUR 229,033.71 (i.e. EUR 137,420.10 for
the employment agreement and EUR 91,613.61 for the image rights agreement).
43. 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.
44. In this respect, the DRC decided to award the amount of additional compensation of EUR
825,000 net, i.e. three times the monthly remuneration of the player. However, the Chamber
recalled that as per the clear wording of art. 17 of the Regulations, the amount of
compensation (including any additional compensation) cannot exceed the residual value of
the contract.
45. As a consequence, the Chamber decided to award the amount of additional compensation
of EUR 229,033.71 to the player.
46. 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 EUR 1,375,000 net to the
player (i.e. EUR 1,375,000 minus EUR 229,033.71 plus EUR 229,033.71), which was to be
considered a reasonable and justified amount of compensation for breach of contract in the
present matter.
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47. Lastly, taking into consideration the player’s request as well as the constant practice of the
Chamber in this regard, the latter decided to award the player interest on said compensation
at the rate of 5% p.a. as of the date of the claim (i.e. 5 August 2021) until the date of effective
payment.
iii. Compliance with monetary decisions
48. Finally, taking into account the applicable Regulations, the Chamber referred to art. 24bis
par. 1 and 2 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.
49. 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.
50. 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.
51. The Respondent 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.
52. 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
53. The Chamber referred to art. 25 par. 1 of the Procedural Rules, according to which
“Procedures are free of charge where at least one of the parties is a player, coach, football
agent, or match agent”. Accordingly, the Chamber decided that no procedural costs were to
be imposed on the parties.
54. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 25 par.
8 of the Procedural Rules, and decided that no procedural compensation shall be awarded in
these proceedings.
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55. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by
any of the parties.
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IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Leonardo Carrilho Baptistão, is partially accepted.
2.
The Respondent, Wuhan FC, has to pay to the Claimant, the following amounts:
-
EUR 275,000 net as outstanding remuneration plus 5% interest p.a. as from 16 May 2021
until the date of effective payment;
-
EUR 275,000 net as outstanding remuneration plus 5% interest p.a. as from 16 June 2021
until the date of effective payment;
-
EUR 275,000 net as outstanding remuneration plus 5% interest p.a. as from 16 July
2021until the date of effective payment;
-
EUR 275,000 net as outstanding remuneration plus 5% interest p.a. as from 5 August
2021 until the date of effective payment; and
-
EUR 1,375,000 net as compensation for breach of contract plus 5% interest p.a. as from
5 August 2021 until the date of effective payment.
3.
Any further claims of the Claimant are rejected.
4.
Full payment (including all applicable interest) shall be made to the bank account indicated in
the enclosed Bank Account Registration Form.
5.
Pursuant to art. 24bis of the Regulations on the Status and Transfer of Players if full payment
(including all applicable interest) is not made within 45 days of notification of this decision,
the following consequences shall apply:
1. The Respondent 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
made by the end of the three entire and consecutive registration periods.
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6. The consequences shall only be enforced at the request of the Claimant in accordance
with art. 24bis par. 7 and 8 and art. 24ter of the Regulations on the Status and Transfer of
Players.
7. This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
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NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 57 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 17 of the Procedural Rules).
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