Labour Disputes
Texto da decisão
Decis ion of the S ingle Judge
of the Play ers ’ S tatus Com m ittee
passed in Zurich, Switzerland, on 22 January 2020,
by
Roy Verm eer (The Netherlands)
Single Judge of the Players’ Status Committee,
on the claim presented by the coach
Tonci Gabric, Croatia,
represented by Davor Radic
as “Claimant”
against the club
Ittihad FC, Saudi Arabia,
represented by Jan Kleiner
as “Respondent”
regarding a contractual dispute arisen between the parties.
I.
Facts of the cas e
1.
On 27 September 2018, the Croatian coach, Tonci Gabric (hereinafter: the coach
or the Claimant), concluded an employment contract (hereinafter: the contract)
with the Saudi Arabian club, Ittihad FC (hereinafter: the Respondent or the club)
(hereinafter jointly referred to as the parties), as an assistant coach of the head
coach, Slaven Bilic. The contract was valid as from the date of signature until 30
May 2021.
2.
By means of Item 4 of the contract, the coach was entitled to the following
remuneration:
i.
USD 172,000 for the 2018/2019 season, as follows:
- USD 51,600 within 7 working days after the date of signature;
- 10 instalments of USD 12,040 payable as from the end of October 2018
until the end of July 2019.
ii.
USD 172,000 for the 2019/2020 season;
iii.
USD 172,000 for the 2020/2021 season.
3.
As per Item 10.1 of the contract, “no unilateral termination may be issued by
either party during the sporting season 2018/2019”.
4.
Item 10.2 stipulates that if “the club terminates the contract in the seasons
2019/2020 and 2020/2021 [it] pays the amount of the total net remuneration per
one year in the amount of net USD 172,000. No further damages or
compensation shall apply and this total amount […] shall be the only
compensation payable, determined as just and fair compensation in exchange
for the early termination of contract”.
5.
Item 10.3 stipulates that the coach “may terminate this contract at any time on
condition that the [coach] pays the club the amount of the total net
remuneration per one year in the amount of net USD 172,000. No further
damages or compensation shall apply and this total amount […] shall be the
only compensation payable, determined as just and fair compensation in
exchange for the early termination of contract”.
6.
On 24 February 2019, the club inter alia announced on its official Twitter
account that it has decided to “terminate the contract” of the head coach and
his staff.
7.
On 28 February 2019, the club informed the head coach in writing that it had
proposed to him the function of sporting director and that his financial situation
“would remain unaffected”. However, as per the club, now that the head coach
refused this offer, the club expressed its “sincere wish […] to find an amicable
solution”.
8.
On 3 March 2019, the head coach responded to the club’s letter of 28 February
2018 inviting the club to “immediately settle all the payments of receivables up
to now for the [head] coach and staff members”.
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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9.
On 5 March 2019, the head coach informed the club in writing that if he does
not receive the club’s written proposals for him and his staff “within a time
frame of 7-10 days”, he will submit the matter to FIFA.
10.
According to the coach, on 7 April 2019 the club sent a draft Settlement
Agreement “subject to agreement” dated 2 April 2019 to the head coach and
his staff. According to clause 1.1. of the Settlement Agreement, the club would
commit itself to pay to the head coach USD 14,020,000.
11.
Clause 1.2 of the Settlement Agreement provided the following: “the payments
[…] shall be made [to the head coach] and it shall be the responsibility of the
[head coach] to distribute the respective amounts to the […] staff, as separately
agreed between the coach and the […] staff”.
12.
On 14 April 2019, the coach informed the club that, “in order […] to accept [the
club’s] proposal, we suggest that […] after the payment of the outstanding
debts […] individual agreements be made for each party as it was the case with
employment contracts”.
13.
On 2 July 2019, the coach wrote a letter to the club requesting “in 10 days
following the sending of this letter, you deliver to us the individual agreements
on termination of contract. […] In the event that you do not do so, you will force
us to use our legal rights”.
14.
On 22 July 2019, the club informed the coach in writing that “despite the
genuine efforts made by both parties, no solution could yet be found […] As
you know, this process was delayed due to changes in management of [the club]
and due to pending approvals from governmental authorities […] We trust that
this process can now be swiftly finished and we will find a solution very fast”.
15.
On 2 August 2019, the club again wrote to the coach, arguing that “any possible
settlement offers need to be formalized and discussed with the competent
authorities in Saudi Arabia”. In this context, the club referred to the fact that
the head coach signed a new employment contract in England, and held that “a
new contract also has an impact on a possible settlement offer, because – from
a legal perspective- this is relevant for the “mitigation of damages” […] We
therefore […] ask you for a few more days until we can formally revert to you”.
16.
Finally, on 14 August 2019, the club informed the coach in writing that
“unfortunately, no solution could be found so far. A particular reason for this is
[…] the issue of “mitigation of damages”.
17.
The coach lodged a claim against the club for breach of contract requesting the
following:
i.
USD 10,320 as outstanding remuneration plus 5% interest p.a. as from 25
February 2019;
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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ii.
USD 404,202 as compensation for breach of contract plus 5% interest p.a.
as from 25 February 2019.
18.
According to the coach, the decision of the club to terminate the employment
contract on 24 February 2019 did not comply with the ultima ratio principle. In
this context, the coach argued that the reasons stated by the club in its
announcement of 24 February 2019 do “not have reached serious levels that
would justify the termination of the [contract]”.
19.
Thus, as per the coach, the club terminated the employment contract without
just cause.
20.
In continuation, the coach referred to Item 10 of the employment contract, and
stated that the parties had not agreed upon a “liquidated damages clause for
the first season of the employment contract”.
21.
Thus, as per the coach, he was entitled to compensation in the amount equal to
the residual value of the contract, i.e. USD 404,202.
22.
With regard to the request for outstanding remuneration, the coach
highlighted that he had received his salaries up until January 2019, but that the
club had not paid him “the part of remuneration for February 2019 which is
equivalent net USD 10,320”.
23.
In reply to the coach’s claim, the club firstly explained that “in the course of
February 2019, [it] was confronted with a difficult sporting situation, which
made a reorganization of the coaching staff necessary”. As per the club, it tried
to “maintain the contractual relationship and assign new duties to the entire
coaching staff. This was unfortunately not possible, which is why the
employment contracts of the entire coaching staff was terminated”.
24.
In continuation, the club argued that, in an attempt to reach an amicable
settlement, it was “met by unfair, unjustified and disproportionately high
financial requests” from the coach.
25.
Moreover, the club referred to Item 10 of the contract and held that the parties
had agreed “that the contract had an initial “guaranteed” period of one
sporting season, and that as from the second sporting season, the contract could
be terminated at all times against payment of a pre-determined amount”.
26.
In light of this, the club acknowledged that a financial compensation for the
termination of the contract is due, but that “anything that [coach] can claim
can, at maximum, relate to the remainder of the initial contractual period (until
30 May 2019), plus any compensation that was agreed subsequently as
liquidated damages”.
27.
In other words, as per the club, “the maximum amount that the [coach] could
request is USD 220,160” as follows:
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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i.
ii.
“USD 48,160 for the remainder of the season 2018/2019;
USD 172,000 as liquidated damages that would be due afterwards, i.e. as
from the season 2019/2020”.
28.
In continuation, the club argued that the coach has the “obligation to duly
mitigate his damages”.
29.
Thus, the club concluded that “a very substantial reduction should be made to
the claim of [the coach], i.e. a reduction of no less than 50%. In other words, the
maximum amount that [the coach] could request […] can be USD 110,080”.
30.
On 19 January 2020, the coach informed FIFA that on 27 September 2019 he
signed an employment contract with the Croatian club, Hajduk Split, valid as
from the date of signature until 31 December 2019. In accordance with said
employment contract, the coach was entitled to a total amount of Croatian
Kuna (HRK) 8,000 “gross” (approx. USD 1,191).
II.
Cons iderations of the S ingle Judge of the Play ers ’ S tatus Com m ittee
1.
First of all, the Single Judge of the Players’ Status Committee (hereinafter also
referred to as: the Single Judge) analysed whether he was competent to deal
with the matter at hand. In this respect, he took note that the present matter
was submitted to FIFA on 18 September 2019. Consequently, the Single Judge
concluded that the 2018 edition of the Procedural Rules is applicable to the
matter at hand (cf. art. 21 of the Procedural Rules).
2.
Subsequently, the Single Judge referred to art. 3 par. 1 and 2 of the Procedural
Rules and confirmed that in accordance with art. 23 par. 1 and 4 in combination
with art. 22 lit. c) of the 2020 edition of the Regulations on the Status and
Transfer of Players, he is competent to deal with the matter at stake which
concerns an employment-related dispute of an international dimension
between a Croatian coach and a Saudi Arabian club.
3.
Furthermore, the Single Judge analysed which edition of the Regulations on the
Status and Transfer of Players should be applicable to the matter. In this respect,
he referred, on the one hand, to art. 26 par. 1 and 2 of the 2020 edition of the
Regulations on the Status and Transfer of Players, and on the other hand, to the
fact that the present claim was lodged with FIFA on 18 September 2019. In view
of the foregoing, the Single Judge concluded that the June 2019 edition of the
Regulations on the Status and Transfer of Players (hereinafter: the Regulations)
is applicable to the case at hand (cf. art. 26 par. 1 and 2 of the Regulations).
4.
His competence and the applicable regulations having been established, and
entering into the substance of the matter, the Single Judge started his analysis
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by acknowledging the facts of the case and the arguments of the parties as well
as the documents contained in the file. However, the Single Judge emphasized
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.
5.
In this respect, the Single Judge acknowledged that, on 27 September 2018, the
coach and the club had concluded an employment contract valid until 30 May
2021 which provided for the coach to work as assistant to the head coach against
a seasonal remuneration of USD 172,000 for the 2018/2019, 2019/2020 and
2020/2021 seasons, the first season’s remuneration being subdivided in a single
payment of USD 51,600 payable within the first week as of the date of signature,
and in 10 monthly instalments of USD 12,040 each, payable as of the end of
October 2018 until the end of July 2019.
6.
In continuation, the Single Judge remarked that, in his claim to FIFA, the
Claimant had accused the Respondent of having terminated their contractual
relationship without just cause on 24 February 2019 invoking “the modest
results of [the club] in the past period which did not rise to expectations”, which
in the coaches’ opinion, did not comply with the ultima ratio principle as, in its
statement, the club did “not have reached serious levels that would justify the
termination of the [contract]”.
7.
The Single Judge also noted that, as such, the Claimant deemed inter alia being
entitled to claim from the Respondent the payment of outstanding
remuneration in the amount of USD 10,320, together with 5% interest p.a. as
from 25 February 2019, and of compensation for breach of contract in the sum
of USD 404,202 corresponding to the residual value of the contract, together
with 5% interest p.a. as from 25 February 2019. In this respect, the Single Judge
also noted that the coach referred to item 10 of the employment contract and
held that no liquidated damages clause had been agreed between the parties
for the first season.
8.
In addition, the Single Judge noticed that, for its part, the Respondent, had
rejected the claim of the Claimant arguing that due to a difficult sporting
season, in the course of February 2019, it had to reorganize the coaching staff
and subsequently tried to amicably settle the situation with the entire coaching
staff, among which the coach, however to no avail.
9.
Moreover, the Single Judge also took note of the Respondent’s arguments as to
the possible application of item 10 to the present case and, as well, that in case
the coaches’ claim should be accepted, the requested amounts for compensation
should be revised downwards.
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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10.
After having thoroughly analysed the submissions of the parties as well as the
documentation at his disposal, the Single Judge deemed that the first question
to be addressed in the present matter was whether the Respondent had
terminated the contract with or without just cause on 24 February 2019.
11.
In this regard, the Single Judge recalled that the Respondent considered having
rightfully terminated the contract as it needed to reorganize the coaching staff
due to the results of the club which it considered as modest.
12.
In this context, the Single Judge acknowledged that it had to examine whether
the reason put forward by the Respondent could justify the termination of the
contract in the present matter.
13.
In this respect, the Single Judge referred to his well-established jurisprudence
and emphasised that, as a general rule, only a breach or misconduct which is of
a certain severity justifies the termination of a contract without notice. In other
words, only when there are objective criteria which do not reasonably permit to
expect a continuation of the employment relationship between the parties, a
contract may be terminated prematurely. Hence, if there are more lenient
measures which can be taken in order for an employer to ensure the employee’s
fulfilment of his contractual duties, such measures must be taken before
terminating an employment contract. A premature termination of an
employment contract can only ever be an ultima ratio measure.
14.
In addition, the Single Judge also recalled that, still in accordance to its
longstanding jurisprudence, sporting results cannot be retained as a valid reason
to justify an early termination of an employment contract.
15.
As a consequence and considering the above, the Single Judge held that, despite
the club’s explanations referring to its attempts to settle the issue financially
with the coach once the termination occurred, the reason put forward by it on
24 February 2019, i.e. the reorganization of the coaching staff, cannot be
considered as a valid reason for unilateral contract termination.
16.
In view of all the aforementioned, the Single Judge was of the firm opinion that
the club did not have just cause to prematurely terminate the employment
contract with the coach.
17.
After having established the foregoing, the Single Judge went on analysing the
consequences of the termination of contract without just cause committed by
the club.
18.
Nevertheless, before entering the analysis of the consequences of the unjust
termination of contract on the part of the club, the Single Judge deemed it
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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appropriate to first assess whether any outstanding remuneration was still due
by the club to the coach.
19.
In this regard, the Single Judge underlined that the coach had requested from
the club the payment of USD 10,320 as the part of remuneration for February
2019 corresponding to 24 worked days, with an interest of 5% per year as from
25 February 2019. However, the Single Judge noted that, in accordance with the
contract, the due date of payment of the monthly salary being the last day of
the month, i.e. 28 February 2019, said amount should be considered as part of
the compensation due to him instead of outstanding remuneration.
20.
As a consequence, and having established the aforementioned, the Single Judge
turned his attention to the compensation payable to the coach by the club
following the termination without just cause of contract by the latter.
21.
In this respect, the Single Judge 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.
22.
In this sense, the Single Judge recalled the arguments of the parties as to the
relevant provisions of the contract and observed that item 10.2 of the contract
provides for a compensation clause in case the club terminates during the
seasons 2019/2020 and 2020/2021. However, the Single Judge took note that the
club terminated during the season 2018/2019. Consequently, the Single Judge
held that the compensation clause is not applicable to the case at hand, and,
therefore, compensation can be assessed on the basis of the residual value of
the contract in line with the jurisprudence of the Players’ Status Committee.
23.
Bearing in mind the foregoing, the Single Judge proceeded with the calculation
of the monies payable to the coach under the terms of the employment contract
as from the date of termination without just cause by the Respondent until its
natural expiration. Bearing this in mind, the Single Judge deemed that he would
have received in total USD 416,240 as remuneration for the period as from
February 2019 until 30 May 2021, said amount consisting of 6 monthly salaries
of USD 12,040 for the 2018/2019 season, including the salary for the month of
February 2019, originally requested as outstanding remuneration, USD 172,000
for the 2019/2020 season and USD 172,000 for the 2020/2021 season.
Consequently, the Single Judge concluded that the amount of USD 416,240
serves as the basis for the final determination of the amount of compensation
for breach of contract in the case at hand.
24.
Equally, the Single Judge verified as to whether the coach had signed a new
employment contract after having been dismissed by the club on 24 February
2019 by means of which he would have been enabled to reduce his loss of
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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income. According to his constant practice, such remuneration under a new
employment contract would be taken into account in the calculation of the
amount of compensation for breach of contract in connection with the coach’s
general obligation to mitigate his damages.
25.
The Single Judge recalled that, after termination of the contract, the coach was
able to partially mitigate his damages by signing a new employment contract
with the Croatian club Hajduk Split according to which he would earn approx.
USD 1,191 over the course of the relevant period. As a consequence, the Single
Judge recalled that said amount should be deducted from the aforementioned
residual value of the contract, i.e. USD 416,240.
26.
At this point, the Single Judge noted that granting compensation in the amount
of USD 415,049 would be ultra petita, given that the coach requested USD
414,522 in total.
27.
Consequently, the Single Judge concluded that the amount of USD 414,522 is to
be paid by the club to the coach as compensation for breach of contract.
28.
Equally and with regard to the coach’s request for interest, the Single Judge, in
accordance with his well-established jurisprudence, decided that the club has to
pay to the coach 5% interest p.a. on the amount of USD 414,522 as from 18
September 2019 until the date of effective payment.
29.
In addition, the Single Judge established that any other request of the coach
had to be rejected.
30.
Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations in
combination with art. 18 par. 1 of the Procedural Rules, according to which in
the proceedings before the Players’ Status Committee and the Single Judge,
costs in the maximum amount of CHF 25,000 are levied. The costs are to be borne
in consideration of the parties’ degree of success in the proceedings and are
normally to be paid by the unsuccessful party.
31.
In this respect, the Single Judge reiterated that the claim of the coach is partially
accepted and that the club is at fault. Therefore, the Single Judge decided that
the club has to bear the costs of the current proceedings in front of FIFA.
32.
Furthermore and according to Annexe A of the Procedural Rules, the costs of
the proceedings are to be levied on the basis of the amount in dispute.
Consequently and taking into account that the total amount at dispute in the
present matter is higher than CHF 200,001, the Single Judge concluded that the
maximum amount of costs of the proceedings corresponds to CHF 25,000.
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33.
In conclusion and in view of the invalidity of the reason advanced by the club
for the early termination of the contract occurred without just cause, the Single
Judge determined the costs of the current proceedings to the amount of CHF
25,000.
34.
Consequently, the Single Judge determined that the club has to pay the amount
of CHF 25,000 in order to cover the costs of the present proceedings.
III.
Decis ion of the S ingle Judge of the Play ers ’ S tatus Com m ittee
1.
The claim of the Claimant, Tonci Gabric, is partially accepted.
2.
The Respondent, Ittihad FC, has to pay to the Claimant w ithin 30 day s as from
the date of notification of the present decision, compensation for breach of
contract in the amount of USD 414,522, plus 5% interest p.a. on the said amount
as from 18 September 2019 until the date of effective payment.
3.
If the aforementioned sum, plus interest as established above, is not paid within
the aforementioned deadline, the present matter shall be submitted, upon
request, to FIFA’s Disciplinary Committee for consideration and a formal decision.
4.
Any further claim lodged by the Claimant is rejected.
5.
The final costs of the proceedings in the amount of CHF 25,000 are to be paid by
the Respondent, Ittihad FC, as follows:
5.1 The amount of CHF 20,000 has to be paid to FIFA to the following bank
account with reference to case nr. 19-01842/osv:
UBS Zurich
Account number 366.677.01U (FIFA Players’ Status)
Clearing number 230
IBAN: CH27 0023 0230 3666 7701U
SWIFT: UBSWCHZH80A
5.2 The amount of CHF 5,000 has to be paid directly to the Claimant.
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6.
The Claimant is directed to inform the Respondent immediately and directly of
the account number to which the remittances under point 2, and 5.2 above are
to be made and to notify the Players’ Status Committee of every payment
received.
*****
Note related to the publication:
The FIFA administration may publish decisions issued by the Players’ Status Committee
or the DRC. Where such decisions contain confidential information, 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 Rules Governing
the Procedures of the Players’ Status Committee and the Dispute Resolution
Chamber).
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). The statement of appeal must
be sent to the CAS directly within 21 days of receipt of notification of this decision
and shall contain all the elements in accordance with point 2 of the directives issued
by the CAS. Within another 10 days following the expiry of the time limit for filing
the statement of appeal, the appellant shall file a brief stating the facts and legal
arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00
Fax: +41 21 613 50 01
e-mail: [email protected]
www.tas-cas.org
For the Single Judge of
the Players’ Status Committee:
Emilio García Silvero
Chief Legal & Compliance Officer
Coach Tonci Gabric, Croatia / Ittihad FC, Saudi Arabia
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