Labour Disputes
Texto da decisão
REF 20-00959 / FPSD-58
Decision of the
Dispute Resolution Chamber
passed on 25 February 2021
regarding an employment-related dispute concerning the player Nestor Jesús Gordillo Benítez
COMPOSITION:
Geoff Thompson (England), Chairman
Stefano Sartori (Italy), member
Joseph Antoine Bell (Cameroon), member
CLAIMANT:
Nestor Jesús Gordillo Benítez, Spain
RESPONDENT:
Hyderabad FC, India
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I.
Facts
1.
On the 1st of September 2019, the Claimant signed a Contract with the Respondent for a
term of two seasons, i.e. until 30 April 2021.
2.
According to the Schedule 1, the player was entitled to the following remuneration:
“1. Fee:
2019·20 Season:
Player Fee and Other Facilities The club shall pay to the player a total fee (net of
Withholding tax) of USD 110,000/· [US Dollars One Hundred and Ten Thousand] (the
"Fee") for the 2019-20 season which shall be paid in equal monthly instalments starting
from September 2019 to May 2020 on the last day of every month.
2020-21 Season;
The club shall pay to the player a total fee (net of Withholding tax) of USD 145,000/· [US
Dollars One Hundred and Forty Five Thousand] (the "Fee") for the 2020-21 season which
shall be paid in equal monthly instalments starting from August 2020 to May 2020 on the
last day of every month.”
3.
Schedule 2 to the contract stipulated the following:
“7.1 This Agreement shall be governed by, and construed in accordance with Indian law.
7.2 In the event a dispute arises between the Club and the Player regarding any other
issue than termination, both parties agree to seek to resolve the dispute in good faith
through a process of good faith negotiations and discussions.
7.3 If a dispute between the Club and the Player is not resolved within 10 days, of the
process contemplated in paragraph 7.2 then the dispute will be referred for solution to
mediation under the relevant procedure set out in the League Rules (which form part of
the Regulations). If a solution is not achieved within another 10 days of it being referred
for mediation, the dispute shall be submitted to the FIFA Player Status Committee for
adjudication.
7.4 All disputes relating to termination shall be referred to the FIFA Player Status
Committee for adjudication directly without undergoing the process of the good faith
negotiations and mediation referred to in paragraphs 7.2 and 7.3 unless both the Player
and the Club mutually decide otherwise.
7.5 At any stage of the good faith negotiation process or the mediation process referred
to in paragraphs 7.2 and 7.3 both the Player and Club can mutually agree to refer the
matter to the FIFA Player Status Committee for an urgent decision and, in such
circumstances the requirement for the 10 day windows for good faith negotiations and
mediation under paragraphs 7.2 and 7.3 will not apply.
7.6 If is the dispute is not within the jurisdiction or scope of the FIFA Player Status
Committee then it shall be referred to arbitration under a sole arbitrator appointed by
mutual consent under the provisions of the Arbitration and Conciliation Act 1996 or any
modification thereof then in effect. The Arbitration shall be in English and the seat and
venue of Arbitration shall be Mumbai. Subject to the above, the Courts at Mumbai shall
have sole and exclusive jurisdiction in respect of all matters_ addressed under this
paragraph 7.6.”
4.
Clause 5.7 of the schedule 2 to the contract stipulated the following:
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“5.7. The Club and the Player agree that there is 5% an agency commissions fee for any
such similar payment whatsoever that the Club shall make to the Player or his Agent as a
part of this transaction over and above the Fee mentioned in Schedule 1 of the
Agreement”
5.
On 11 May 2020, the Respondent sent a letter to the player, requesting him to accept,
due to the COVID-19 pandemic, “an offer of 30 % of the total amount due for April and
May 2020”
6.
On 24 June 2020, the Claimant sent a default notice to the Respondent.
7.
On 20 May 2020, the Respondent sent a notice to the Claimant indicating, inter alia, the
following:
“a. As you are aware that, following the rapid outbreak of respiratory illness caused by
COVID-19 that was first reported in Wuhan, China at the end of 2019, the World Health
Organization declared COVID-19 a “Public Health Emergency of International Concern”
i.e. to be a pandemic on March 11, 2020.
(…)
3. In view of the force majeure event from 24.03.2020, Hyderabad FC will not be in a
position to pay you your entire fees as intended under our Agreement originally termed
till April 2021 as the club is unable to operate any business or generate revenues during
these months of global and national emergency and a complete lockdown of business for
reasons beyond our control (…)
(…)
5. Considering Force Majeure event due to COVID 19 with effect from 24 March 2020 we
offer to put to rest all our impending dues and obligations:
a. Dues till March 2020 – Your balance amount for the month of February 2020 and March
2020 amounting to a total of USD 24,444 will be paid to you within 10 working days from
the last date of the lockdown i.e. 31.05.2020 unless and otherwise extended by the GOI
or the state of Telangana.
b. For the 2020 - 21 season – We would be giving you 30 % i.e. USD 43,500 only, of the
total amount of USD 1,45,000 as full and final settlement payable to you by 31 August
2020.
6. Kindly also treat the current notice as a Termination Notice of the said Agreement
w.e.f. 23.03.2020.”
8.
On 1 June 2020, the AIFF Players’ Status Department sent a letter to the club, noting that
it had outstanding payments towards the player for the total value of USD 48,888,
detailed as follows:
“$12222 Salary for February 2020
$12222 Salary for March 2020
$12222 Salary for April 2020
$12222 Salary for May 2020”
9.
On 24 June 2020, the legal representative of the player sent a correspondence to the club
indicating the following:
“Your Club terminated the employment contract without just cause and made a
ridiculous proposal to the Player in respect of his outstanding salaries and due
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compensation. Said good faith negotiations should be held prior to any termination
whatsoever, not subsequently. No such continuous attempts from your end have existed.”
10. On 14 July 2020, the player’s agent sent a message via “WhatsApp messenger” enquiring
about the player’s outstanding salaries.
11. On 22 July 2020, the club sent a letter to the player indicating that “[it] have processed
your salaries for the month of February, March, April and May 2020” and that his
“pending salariesshall be credited in your account by 31 July 2020”
12. On 6 November 2020, the legal representative of the player sent an email to FIFA and the
club indicating the following:
“that the only settlement that has taken place between the parties is in accordance
with the email dated 29.09.2020, the Club has fulfilled its obligations and the
Employment Contract of the Player signed between the Parties on the 20th of August
2019 is still valid and binding in its original form as part of the settlement between
the parties. Both the parties are bound by the terms and conditions of the Player
Agreement dated 20th of August 2019. In view of the same the Player hereby
withdraws the claim and decision against the Club.”
13. On 11 November 2020, the legal representative of the player sent a correspondence
indicating that no settlement agreement was concluded and that the player “was misled
by the Respondent”.
14. On 19 January 2021, the player sent a correspondence to the club, noting the following:
“even if the prior Settlement Agreement you referred to in the FIFA proceedings is
considered as valid - quod non, please note that as you are already well-aware, the Player
has been forced by your Club’s attitude to leave India and consider the employment
contract as terminated with just cause from his end.”
15. The player remained unemployed following the termination of the contract.
16. On 7 July 2020, the Claimant lodged a claim before FIFA and requested the payment of
the following amounts, plus 5% interest p.a. as from the due dates:
- USD 48,888 as outstanding remuneration at the time of termination of the
contract, for his salaries from February 2020 until May 2020 (i.e. 12,222*4);
- USD 226,025 as compensation, further detailed as follows:
USD 145,500 as the residual value of the Contract;
USD 80,526 “as six monthly salaries under the specificity of sport due to the
most abusive and discriminatory attitude displayed by the Club causing an
irreparable harm to the Player”
17. In its reply to the claim, the Respondent contested the competence of FIFA and considered
that the Arbitration Tribunal of the AIFF shall be competent.
18. As to the substance, referred to the COVID-19 pandemic.
19. In this respect, the Respondent explained that it “had been unable to get necessary
signatories to sign on relevant documentations, submit remittance forms to the banks
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specially required for international remittances on account of both the heavily
impacting issues the Club had to deal with during the tough global times.”
20. In relation to the termination notice, the Respondent explained that it was superseded
and hence null and void due to continuing discussions between the player’s agent and
the club.
21. In sum, the club requested to dismiss the claim without any costs and/or sanctions.
22. The club further expressed that it “intends to continue its attempt to arrive at an amicable
solution with the Player for the 2021 season which yet has to commence.”
23. On 26 November 2020, the Claimant sent a correspondence amending his claim.
24. In particular, the Claimant noted that it received the following amounts:
- USD 48,888, corresponding to all the outstanding amounts
- USD 29,900, which shall be deducted from the payable compensation. As a result,
the player considered that the residual value of the contract is USD 116,500.
- In addition, the player requested the payment of 5% over the full employment
contract in accordance with clause 5.7, i.e. USD 12,750 (5% of USD 255,000).
- The player insisted to be paid with USD 80,526 net corresponding to six additional
salaries under the specificity of sport.
25. In addition, the Claimant requested to be provided with the relevant tax certificates
attesting the payment of all taxes to the competent tax authorities in relation to all his
financial entitlements already paid and payable in accordance with the Employment
Contract.
26. As to the alleged settlement, the Claimant argued that no any settlement agreement was
signed by the Player and that the correspondence sent in this respect “was not sent
wilfully on behalf of the Player but only under coercion and deceit and therefore is fully
null and void and all attempts from the Respondent to rely on it are reprehensible to say
the least, highly deceitful.”
II. Decision of the Dispute Resolution Chamber
1. 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.
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.
2. Subsequently, the Dispute Resolution Chamber referred to art. 3 par. 1 of the Procedural
Rules and emphasised 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, the Dispute Resolution
Chamber is competent to deal with matters which concern employment-related disputes
with an international dimension between players and clubs. As a result, the DRC would
be, in principle, competent to deal with the present matter, which concerns a Spanish
player and an Indian club.
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3. However, the Chamber acknowledged that the Respondent contested the competence of
FIFA’s deciding bodies as, according to the Respondent, the present matter shall be
adjudicated by the Arbitration Tribunal of the AIFF.
4. With the aforementioned considerations in mind, and prior to entering into the analysis
of its competence, the Chamber wished to recall that in accordance with art. 22 lit. b) of
the Regulations on the Status and Transfer of Players, without prejudice to the right of
any player or club to seek redress before a civil court for employment-related disputes, it
is competent to deal with a matter such as the one at hand, unless an independent
arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal
representation of players and clubs, has been established at national level within the
framework of the association and/or a collective bargaining agreement.
5. In relation to the above, the Chamber also deemed it vital to outline that one of the basic
conditions that needs to be met in order to establish that another organ than the DRC
can settle an employment-related dispute between a club and a player of an international
dimension, is that the competence of the relevant arbitration tribunal, respectively
national court, derives from a clear reference in, inter alia, the employment contract at
the basis of the dispute.
6. Therefore, while analysing whether it was competent to adjudicate the present matter,
the Dispute Resolution Chamber considered that it should, first and foremost, analyse
whether the employment contract at the basis of the present dispute actually contained
a clear and exclusive jurisdiction clause in favour of the Arbitration Tribunal of the AIFF.
7. In this respect, the Chamber noted that the contract that is at the basis of the present
dispute, stipulated the following:
“7.3 If a dispute between the Club and the Player is not resolved within 10 days, of the
process contemplated in paragraph 7.2 then the dispute will be referred for solution to
mediation under the relevant procedure set out in the League Rules (which form part of
the Regulations). If a solution is not achieved within another 10 days of it being referred
for mediation, the dispute shall be submitted to the FIFA Player Status Committee for
adjudication.
7.4 All disputes relating to termination shall be referred to the FIFA Player Status
Committee for adjudication directly without undergoing the process of the good faith
negotiations and mediation referred to in paragraphs 7.2 and 7.3 unless both the Player
and the Club mutually decide otherwise. “
8. After carefully examining the aforementioned clauses, the Chamber concluded that,
undoubtedly, the parties agreed beforehand that the disputes arising from the
aforementioned contract shall be settled before FIFA. As a result, the Chamber rejected
the argument of the Respondent in this regard and confirmed that it is competent to deal
with the present matter.
9. Subsequently, and for the sake of completeness, the Chamber further turned its attention
to a series of events occurred during the proceedings, which may have consequences in
relation to its competence.
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10. In particular, the Chamber noted that, on 6 November 2020, the legal representative of
the player sent a confusing correspondence to FIFA, referring to a settlement agreement.
The Chamber noted, however, that said possible settlement agreement was not provided.
11. In this respect, the Chamber noted that, on 11 November 2020, the legal representative
of the player went back on his words and denied the existence of any settlement, arguing
that it was “misled”.
12. In relation to the aforementioned sequence of events, the Chamber acknowledged that,
indeed, the Claimant acted in a confusing manner. However, considering that no
documentary evidence was provided concerning a possible settlement, the Chamber
understood that there is no legal basis to assume that the claim was withdrawn.
Consequently, the Chamber reiterated that is competent to deal with the matter at stake.
13. In continuation, the Dispute Resolution Chamber analysed which edition of the
Regulations of the Status and Transfer of Players should be applicable to the present
matter. In this respect, the Dispute Resolution Chamber confirmed that in accordance
with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and
considering the date when the claim was lodged, the January 2020 edition of the
aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at
hand.
14. With the above having been established, the Dispute Resolution Chamber entered into
the substance of the matter. In doing so, it started to acknowledge the facts of the case
as well as the documents contained in the file. However, the Dispute Resolution Chamber
emphasized that in the following considerations it will refer only to facts, arguments and
documentary evidence which it considered pertinent for the assessment of the matter at
hand.
15. In this respect, the Chamber noted that, on 1 September 2019, the Claimant signed a
contract with the Respondent, valid until 30 of April 2021.
16. Subsequently, the Chamber observed that the player lodged a claim before FIFA against
the club for breach of contract without just cause, noting that the club terminated the
contract on 20 May 2020 (with retroactive effect as of 23 March 2020) via a “Termination
Notice”.
17. Conversely, the Chamber took note of the Respondent’s position, according to which the
aforementioned notice was “superseded”.
18. The foregoing being established, the Chamber understood that, at this point, the main
legal issue at stake is to determine whether the contract was terminated via said notice,
and as from which date, without prejudice of the legal consequences that may arise
thereof.
19. However, after duly examining the evidence gathered during the course of the
investigation, the Chamber concluded that, de facto, it appears that the player never
returned to the club after the notice of 20 May 2020. Hence, the Chamber considered
that the contract was terminated as of said date, regardless of its presumed retroactive
effects.
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20. This being established, the Chamber went on to examine whether the Respondent would
have had a just cause to terminate the contract as of 20 May 2020.
21. In this respect, the Chamber was eager to emphasise that only a breach or misconduct
which is of a certain severity justifies the termination of a contract. 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.
22. In relation to said principle, the Chamber analyzed the contents of the letter of 20 May
2020, and noted that the Respondent fundamentally grounded its decision on the basis
of force majeure and the outbreak of the COVID-19 pandemic.
23. However, in relation to said letter, the Chamber first of all observed that the Respondent
had unilaterally terminated the contract on 20 May 2020, without any prior indication or
warning towards the player. What is more, the Respondent did not undertake any
attempt to find an amicable solution with the player, and rather unilaterally terminated
the contract with the player form the one day to the other.
24. Furthermore, regardless of the question whether the Claimant or the Respondent was to
be held responsible for the effects of the COVID-19 pandemic on the contract, the
Chamber was of the firm opinion that the Respondent, since such circumstance, in this
particular situation could not legitimately be considered as being severe enough to justify
the termination of the contract. The Chamber was of the opinion that there would have
been more lenient measures to be taken (for instance, among others, a temporary
amendment of the salary and/or a temporary suspension of the contract, in order to find
a solution for the circumstances occurred as from March 2020.
25. On account of all the abovementioned considerations, the Chamber decided that the
Respondent had no just cause to unilaterally terminate the employment relationship
between the Claimant and the Respondent and, therefore, concluded that the
Respondent had terminated the employment contract without just cause on 20 May 2020.
Consequently, the Respondent is to be held liable for the early termination of the
employment contact without just cause.
26. Bearing in mind the previous considerations, the Chamber went on to deal with the
consequences of the early termination of the employment contract without just cause by
the Respondent.
27. First of all, the members of the Chamber observed that the Claimant acknowledged that
he received his remuneration until the termination of the contract.
28. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the
Regulations, the Claimant is entitled to receive from the Respondent compensation for
breach of contract in addition to any outstanding remuneration on the basis of the
relevant employment contract.
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29. In this context, the Chamber outlined that, in accordance with said provision, the amount
of compensation shall be calculated, in particular and unless otherwise provided for in
the contract at the basis of the dispute, with due consideration for the law of the country
concerned, the specificity of sport and further objective criteria, including, in particular,
the remuneration and other benefits due to the Claimant under the existing contract
and/or the new contract, the time remaining on the existing contract up to a maximum
of five years, and depending on whether the contractual breach falls within the protected
period.
30. In application of the relevant provision, the Chamber held that it first of all had to clarify
whether the pertinent employment contract contained any clause, by means of which the
parties had beforehand agreed upon a compensation payable by the contractual parties
in the event of breach of contract. In this regard, the Chamber established that no such
compensation clause was included in the employment contract at the basis of the matter
at stake.
31. Subsequently, and in order to evaluate the compensation to be paid by the Respondent,
the members of the Chamber took into account the remuneration due to the Claimant in
accordance with the employment contract as well as the time remaining on the same
contract, along with the professional situation of the Claimant after the early termination
occurred. In this respect, the Chamber pointed out that at the time of the termination of
the employment contract on 20 May 2020, the contract would run until 30 April
2021. Consequently, taking into account the financial terms of the contract, the Chamber
concluded that the remaining value of the contract as from its early termination by the
Respondent until the regular expiry of the contract amounts to USD 145,000 (season
2020-2021, cf. point I.2 above) and that such amount shall serve as the basis for the final
determination of the amount of compensation for breach of contract.
32. In continuation, the Chamber remarked that following the early termination of the
employment contract at the basis of the present dispute, the Claimant was not able to
find new employment. As a result, no further amounts will be deducted from the
compensation the player would be entitled to.
33. Nevertheless, the Chamber noted that the player acknowledged that the Respondent
subsequently paid him the amounts of USD 29,900.
34. In view of all of the above, the Chamber decided that the Respondent must pay the
amount of USD 115,100 (i.e. 145,000-29,900) to the Claimant as compensation for breach
of contract without just case, which is considered by the Chamber to be a reasonable and
justified amount as compensation.
35. In addition, taking into account the Claimant’s claim and the longstanding jurisprudence
of the Chamber in this respect, the Chamber decided to award the Claimant interest of
5% p.a. as of the date of the claim.
36. Furthermore, the Chamber examined the Claimant’s request, to be awarded with 5% over
the full employment contract in accordance with clause 5.7 of the schedule 2, i.e. USD
12,750.
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37. However, after duly examining the aforementioned contract, the Chamber considered
that said amount was not due to the player, and consequently decided to reject this part
of the claim.
38. Besides, the Chamber also took note of the Claimant’s request to be provided with his
tax certificate. In this regard, the Chamber noted that art. 7 par (b) of the contract
stipulated that the club shall “ provide the Player with copies of all the Regulations (…)
and any other rules/regulations which affect the Player and of the terms and conditions
of any policy of insurance in respect of or in relation to the Player with which the Player
is expected to comply”
39. Hence, in accordance with the aforementioned stipulation, the Chamber established that
the Respondent shall provide the player with his tax certificate.
40. The Dispute Resolution Chamber concluded its deliberations in the present matter by
rejecting any further claim lodged by the Claimant. In conclusion, the Claimant’s claim is
admissible and partially accepted.
41. As to the requested legal fees, the Chamber referred to art. 18 pars. 2 and 4, 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” and “no procedural
compensation shall be awarded in proceedings of the Players’ Status Committee and the
DRC.”
42. Furthermore, taking into account the previous considerations, the Dispute Resolution
Chamber referred to par. 1 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.
43. In this regard, the Dispute Resolution Chamber pointed out 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 and for the maximum duration of three entire and consecutive
registration periods.
44. Therefore, bearing in mind the above, the Dispute Resolution Chamber decided that, in
the event that the Respondent does not pay the amounts due to the Claimant within 45
days as from the moment in which the Claimant, following the notification of the present
decision, communicates the relevant bank details to the Respondent, a ban from
registering any new players, either nationally or internationally, for the maximum
duration of three entire and consecutive registration periods shall become effective on
the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.
45. Finally, the Dispute Resolution Chamber 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. 3 of the Regulations.
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III. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Nestor Jesús Gordillo Benítez, is admissible.
2.
The claim of the Claimant is partially accepted.
3.
The Respondent, Hyderabad FC, has to pay to the Claimant, the following amount:
- USD 115,100 as compensation for breach of contract without just cause, plus 5%
interest p.a. as from 7 July 2020 until the date of effective payment.
4.
The Respondent shall provide a tax certificate to the Claimant.
5.
Any further claims of the Claimant are rejected.
6.
The Claimant is directed to immediately and directly inform the Respondent of the
relevant bank account to which the Respondent must pay the due amount.
7.
The Respondent shall provide evidence of payment of the due amount in accordance with
this decision to [email protected], duly translated, if applicable, into one of the official
FIFA languages (English, French, German, Spanish).
8.
In the event that the amount due, plus interest as established above is not paid by the
Respondent within 45 days, as from the notification by the Claimant of the relevant
bank details to the Respondent, the following consequences shall arise:
1. The Respondent shall be banned from registering any new players, either nationally
or internationally, up until the due amount is paid and for the maximum duration
of three entire and consecutive registration periods. The aforementioned ban
mentioned will be lifted immediately and prior to its complete serving, once the
due amount is paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players).
2. In the event that the payable amount as per in this decision is still not paid by the
end of the ban of three entire and consecutive registration periods, the present
matter shall be submitted, upon request, to the FIFA Disciplinary Committee.
9. This decision is rendered without costs.
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
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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:
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FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
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