Labour Disputes
Texto da decisão
REF. FPSD-8179
Decision of the
Dispute Resolution Chamber
passed on 2 March 2023
regarding an employment-related dispute concerning
the player Francisco Javier García Fernandez
BY:
Frans de Weger (The Netherlands), Chairperson
Peter Lukasek (Slovakia), member
Laurel Vaurasi (Fiji), member
CLAIMANT:
Francisco Javier García Fernandez, Spain
Represented by Mr Javier Ferrero Muñoz,
Mr Iñigo de Lacalle Baigorri and
Mr Álvaro Martínez San Segundo
RESPONDENT:
Boavista FC, Portugal
pg. 2
REF. FPSD-8179
I. Facts of the case
1.
On 18 August 2020, the Spanish player, Francisco Javier García Fernández (hereinafter: the
player or the Claimant) and the Portuguese club, Boavista FC (hereinafter: the club or the
Respondent) concluded an employment contract, valid as from the date of its signature
until 30 June 2023 (hereinafter: the contract).
2.
In accordance with clause 3 of the contract, the club undertook to pay the player an annual
net remuneration of EUR 350,000.
3.
On 28 July 2022, the parties signed an agreement terminating the contractual relationship
that bound them since August 2020 (hereinafter: the termination agreement).
4.
In accordance with clauses 1.2.1 and 1.2.2 of the termination agreement, the club
undertook to pay to the player the amount of EUR 200,000 as termination fee, as follows:
-
EUR 35,000 by 15 June 2022;
-
EUR 35,000 by 30 June 2022,
-
EUR 130,000 by 30 July 2022.
5.
Clause 1.2 c.) stipulates the following: “If Boavista SAD fails, totally or partially, to pay any of
the amounts mentioned above within the corresponding deadlines, the other instalments will
automatically fall due, and the Player may claim the entire amount due, plus a penalty of 20%
(twenty percent) on the amounts owed. This penalty may not be reduced by the parties”.
6.
Clause 1.2 d.) reads as follows: “For the purposes of this agreement, the amount to be received
by the Player shall be net of any tax, withholding tax, contribution or fee payable in Portugal.
Therefore, Boavista SAD shall calculate the gross amount due, in order to ensure that the Player
receives the agreed net amounts, considering the maximum tax rates applicable in Portugal,
including all taxes or contributions that may be applicable in Portugal. In this sense, the Club,
in order to arrive at the gross amount, will have to consider not only the maximum withholding
tax rate, but also the maximum annual/final tax rate that may be applicable in Portugal”.
7.
Moreover, clause 1.2 e.) of the termination agreement states the following: “If any
competent tax authority in Portugal claim from the Player any amount that should have been
withheld or any amount that should have been paid in respect of a tax return to be submitted
in Portugal, as well as any other amount (including but not limited to any interest, penalty,
surcharge or any liability), this amount shall be paid by Boavista SAD, within a maximum period
of 5 (five) days after demanded by the Player, making the respective "gross up" according to the
criteria mentioned in the previous paragraphs, in order to ensure that the Player receives the
necessary net amounts to be able to support the amounts claimed”.
pg. 3
REF. FPSD-8179
8.
By means of his letter dated 30 September 2022, the Claimant put the Respondent in
default of payment in the amount of EUR 624,268, corresponding to reimbursement of
taxes, the termination fee and a penalty, granting the club a deadline of 10 days to remedy
the default.
II. Proceedings before FIFA
a. Position of the Claimant
9.
On 11 November 2022, the player lodged a claim against the club before the Football
Tribunal, requesting to be awarded EUR 639,731 gross (EUR 341,907 net), plus 5% interest
p.a. as from the respective due dates, broken down by the Claimant as follows:
Outstanding remuneration as per the termination agreement: EUR 240,000 net or EUR
442,721 gross
-
EUR 200,000 corresponding to the termination fee, which -to date- remains fully
unpaid and EUR 40,000 cf. clause 1.2 c.) of the termination agreement, i.e. 20% of the
termination fee. In this regard, the Claimant argues that, upon the non-payment of
the termination fee, the penalty of EUR 40,000 automatically fell due. In this context,
the Claimant maintained that the amount of EUR 240,000 net equals EUR 442,721
gross.
Reimbursement of taxes concerning the fiscal year 2021: EUR 93,866 net or EUR 181,547
gross
-
In this respect, the Claimant argues that the player has had to pay the said amount
as Personal Income Tax in front of the Portuguese Tax Authorities in relation to the
fiscal year 2021 (note: no supporting document on file as to any order from the
relevant tax authorities urging the player to pay the requested amount). Moreover,
the player held that, insofar as the player shall -as per the contract- receive the said
amount net, the club would need to pay a “gross up” amount of EUR 181,547 in order
for the player to receive EUR 93,866 net - the player is applying a tax rate of 48% on
the taxable income (the player provides a tax report explaining the calculation
method).
Estimation of taxes due for the fiscal year 2023: EUR 8,041 net or EUR 15,463 gross
-
EUR 8,041 net or EUR 15,463 gross as estimation of the “additional taxes to be paid
by the player in the FY2023” (the player provides the referred tax report explaining
the calculation of this amount eventually due in the future).
pg. 4
REF. FPSD-8179
10. In his claim, the player argued that the club failed to comply with the payment of the
termination fee in the amount of EUR 200,000 net, which also triggered the payment of the
penalty in the amount of EUR 40,000 net (which equals 20% of EUR 200,000) cf. clause 1.2
c.) of the termination agreement.
11. In addition, the Claimant held that -in connection with the income that the player received
during the fiscal year 2021- he faced the obligation to pay EUR 93,866 net in front of the
relevant tax authorities. In this regard, while referring to the club’s contractual obligation
to pay all taxes derived from the payment of his remuneration, the Claimant also specifies
that, in order for him to receive the said amount net, the club shall pay him the amount of
EUR 181,547, since such a monetary transaction will also be subject to tax deductions.
12. As evidence of having performed the relevant payment in front of the Portuguese Tax
Authorities, the player provides a document in Portuguese displaying a payment of EUR
140,731 performed on 25 August 2022.
13. As for the amount of EUR 8,041 net or EUR 15,463 gross, the Claimant advances that it is
an estimation in relation to the taxes that the player will -allegedly- have to make
concerning his income of the fiscal year 2023.
b. Position of the Respondent
14. In its reply, the club firstly stressed that the claim of the Claimant is inadmissible, insofar
as the DRC is not competent to deal with disputes involving coaches and clubs. In this
respect and despite acknowledging having concluded the contract and the subsequent
termination agreement, the club stressed that the Claimant is currently an “assistant coach”
at the Portuguese club, Sport Lisboa e Benfica.
15. Subsidiary – as to the substance – the Respondent explained that, following the Covid-19
pandemic, it has undergone a situation of financial distress that led the club to initiate a
revitalization process since the club has losses of more than 12 million euros, which made
it impossible for the club to comply with its financial obligations (note: document on file).
16. The above being said, the Respondent held that the amount requested by the Claimant as
estimation of taxes due for the fiscal year 2023 “is not due to the Claimant, since the tax
authority have not requested him any payment, according to clause 1.2 e.) of the termination
agreement (…)”.
17. In this context, the club requested the claim of the player be considered inadmissible or,
subsidiary, rejected.
pg. 5
REF. FPSD-8179
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
18. 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 11 November 2022 and
submitted for decision on 2 March 2023. Taking into account the wording of art. 34 of the
October 2022 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.
19. 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 October 2022 edition), 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 a
Spanish player and a Portuguese club.
20. However, the Respondent disputed the competence of the Football Tribunal to entertain
the present matter, on the grounds that the Claimant is no longer a professional football
player, but – allegedly – an assistant coach employed by the Portuguese club, Benfica. In
this respect, the DRC underscored that the present dispute emanates from the contractual
relationship that bound the parties at stake, i.e. the Claimant and the Respondent, the
former being employed by the latter as a professional football player, as stated in both: the
contract and the termination agreement. Therefore, regardless of the current position of
the Claimant, the Chamber stated that the status of the Claimant that links him with the
Respondent – the status of professional player, in casu – is what needs to be analysed by
the Football Tribunal.
21. In this context, the DRC determined that it is crystal clear – as per the contract, the
termination agreement, the information contained in the Transfer Matching System and
the information that is at public disposal – that the Claimant was employed as a
professional football player with the Respondent and that the present disputes originates
from such a contractual relationship. Therefore, the the DRC concluded that the Football
Tribunal has jurisdiction to entertain the present dispute.
22. 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 Players (October 2022 edition) and
considering that the present claim was lodged on 11 November 2022, the July 2022 edition
of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to
the substance.
pg. 6
REF. FPSD-8179
b. Burden of proof
23. 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
24. 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
25. The foregoing having been established, the Chamber moved to the substance of the matter
and formulated the following questions, which it considered of vital importance:
A.) Has the player met his burden of proof concerning his entitlement to receive from the
Respondent a reimbursement of taxes in connection with the Personal Income Taxes due in
front of the Portuguese Tax Authorities for the fiscal year 2021?
26. In this respect, the Chamber stressed that, as pointed out by the Claimant, the contract is
clear when establishing that the amounts due to the player (inter alia, during the year 2021)
were net, meaning that the club bore the obligation to pay any taxes in connection with the
player’s contractual remuneration. However, noted the DRC, the Claimant intends to
support his entitlement to receive EUR 442,721 gross (EUR 240,000 net) as reimbursement
of the taxes paid in front of the said authorities on 2 different documents: 1.) a tax report
issued by the law firm “Abreu advogados”; and 2.) a payment of EUR 140,731 performed on
25 August 2022.
27. As for the first of the documents, the Chamber determined that even though such report
is of informative use, it does not constitute any valid title for the Claimant to support its
claim to be awarded the said reimbursement, as it is a mere report provided ex parte which,
irrespective of its legal accuracy, does not serve as valid evidence of neither the tax-related
payment obligation nor of the performance of the related payment.
pg. 7
REF. FPSD-8179
28. As to the second of the documents, the Chamber noted that it: is not translated into one
of the FIFA official languages, does not contain the names of the payer and the payee but
only the name of the legal entity advising the Claimant on tax-related matters, holds no
consideration as to the nature of the payment performed and there is no explanation
therein contained as to why the amount paid (EUR 140,731) does not coincide with the
amount allegedly due (EUR 93,866).
29. Thus, the Chamber decided that said document cannot discharge the Claimant from its
burden to prove that he has been either urged to proceed with the payment of the taxes
that he is now claiming as reimbursement nor of his burden to prove that he has actually
performed such payment.
30. Therefore, the DRC concluded that the Claimant’s claim to be awarded EUR 93,866 net or
EUR 181,547 gross as reimbursement of taxes concerning the fiscal year 2021 needs to be
rejected.
B. Is the player entitled to receive from the Respondent the requested taxes in connection with
the income to be received by the Claimant during the fiscal year 2023?
31. In this respect, underscored the Chamber, as pointed out by the Respondent, the amount
requested would only eventually be due in the future, since it would only be due upon
receipt by the Claimant of amounts that have not yet been paid by the Respondent.
Therefore, the argument of the Claimant that his request is being made for reasons of
procedural economy needs to be rejected.
32. As the Claimant himself states, the amount requested is an estimation and does not
correspond to any amount yet due, reason why the Chamber determined this petitum of
the Claimant is premature and, therefore, shall be considered inadmissible.
C. Is the Claimant entitled to receive the termination fee and the penalty requested?
33. On this note, the Chamber noted that it remained uncontested by the Respondent that it
has failed to pay the termination fee to the Claimant.
34. Furthermore, the Chamber observed that the Respondent simply referred to the situation
of financial distress that the club is undergoing and to the revitalization process that the
club initiated in view of the losses suffered by the latter.
35. In this respect, the Chamber highlighted that – albeit inconvenient – the existence of a
situation of financial distress cannot be used as an argument for a debtor not to comply
with its financial obligations towards their creditors.
pg. 8
REF. FPSD-8179
36. Moreover, even if the said situation had been caused by a force majeure event (like the
Covid-19 pandemic, should the relevant party sufficiently prove that Covid-19 has led to a
situation of force majeure in the respective territory, quad non), the Respondent, in casu,
provides documentation pertaining to the losses suffered by the club during the years 2020
and 2021, which could not – in any case – be considered as a valid argument, since the club
– which was or should have been aware of its financial situation – agreed, in July 2022, to
enter into the termination agreement, thereby committing to perform payments in favour
of the Claimant.
37. As to the revitalization proceedings, the Chamber was of the opinion that the club has not
provided sufficient evidence as to neither the sort of proceedings that the club initiated nor
of the current status of its financial state, the club only providing documentation issued in
November 2021 that prevents the Chamber from even assessing if the club is currently
subject to an insolvency-related event pursuant to the relevant national law and is legally
unable to comply with an order.
38. Thus, the DRC decided that the argumentation of the Respondent in this regard needs to
be rejected.
39. The above being said, and in application of the legal principle pacta sunt servanda, the
Chamber determined that the Claimant is entitled to receive from the Respondent the
outstanding remuneration due to him as per the termination agreement, i.e. the
termination fee, whose lack of payment of its first instalment accelerated its full payment,
also leading to the Claimant being entitled to the requested contractual penalty, which is,
in accordance with the jurisprudence of the Football Tribunal, reasonable and
proportionate, insofar as it represents 20% of the principal amount due.
ii. Consequences
40. 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
Respondent.
41. The Chamber observed that, on the abovementioned grounds and by virtue of the legal
principle pacta sunt servanda, the outstanding remuneration due to the player by the club
amounts to EUR 240,000 net (the termination fee in the amount of EUR 200,000 net and
the penalty of EUR 40,000 net).
42. In addition, taking into consideration the Claimant’s request as well as the constant practice
of the Chamber in this regard, the latter decided to award the Claimant interest at the rate
of 5% p.a. on the termination fee, i.e. on the amount of EUR 200,000 net as from 16 June
2022 until the date of effective payment cf. clause 1.2 c.) of the termination agreement,
which is not only a penalty clause, but also an acceleration clause, which triggered the
premature payment of the full termination fee.
pg. 9
REF. FPSD-8179
43. In addition, the Chamber wished to clarify that no default interest shall be awarded in
connection with the penalty of EUR 40,000 net, in order not to contravene the legal
principle ne bis in idem.
iii. Compliance with monetary decisions
44. Finally, taking into account the applicable Regulations, the Chamber referred to art. 24 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.
45. 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.
46. Therefore, bearing in mind the above, the DRC decided that the Respondent must pay the
full amount due (including all applicable interest) to the Claimant within 45 days of
notification of the decision, failing which, at the request of the Claimant, a ban from
registering any new players, either nationally or internationally, for the maximum duration
of three entire and consecutive registration periods shall become immediately effective on
the Respondent in accordance with art. 24 par. 2, 4, and 7 of the Regulations.
47. The Respondent shall make full payment (including all applicable interest) to the bank
account provided by the Claimant in the Bank Account Registration Form, which is attached
to the present decision.
48. 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. 24 par. 8 of
the Regulations.
d. Costs
49. 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”.
50. Accordingly, the Chamber decided that no procedural costs were to be imposed on the
parties.
pg. 10
REF. FPSD-8179
51. 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. Lastly, the DRC concluded its deliberations by rejecting any
other requests for relief made by any of the parties.
IV. Decision of the Dispute Resolution Chamber
1.
The Football Tribunal has jurisdiction to hear the claim of the Claimant, Francisco Javier
García Fernandez.
2.
The claim of the Claimant to be awarded a certain amount as taxes to be paid in connection
with the income to be received by the Claimant during the fiscal year 2023 is premature
and, therefore, inadmissible.
3.
The claim of the Claimant is partially accepted insofar as it is admissible.
4.
The Respondent, Boavista FC, has to pay to the Claimant the following amounts:
- EUR 200,000 net as outstanding remuneration plus 5% interest p.a. as from 16 June
2022 until the date of effective payment;
- EUR 40,000 net as contractual penalty.
5.
Any further claims of the Claimant 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 art. 24 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 of the ban shall
be of up to 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.
pg. 11
REF. FPSD-8179
8.
The consequences shall only be enforced at the request of the Claimant in accordance
with art. 24 par. 7 and 8 and art. 25 of the Regulations on the Status and Transfer of Players.
9.
This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
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 Governing the Football
Tribunal).
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
pg. 12