Labour Disputes
Texto da decisão
REF. FPSD-8320
Decision of the
Dispute Resolution Chamber
passed on 7 March 2023
regarding an employment-related dispute concerning
the player Stefan Mihajlovic
BY:
Clifford J. HENDEL (USA & France), Deputy Chairperson
Angela COLLINS (Australia), member
Mario FLORES CHEMOR (Mexico), member
CLAIMANT:
Stefan Mihajlovic, Serbia
Represented by Sindikat Profesionalnih Fudbalera Nezavisnost
RESPONDENT:
Cangzhou Mighty Lions FC
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I. Facts of the case
1.
On 27 April 2022, the Serbian Player Stefan Mihajlovic (hereinafter: the Player or the
Claimant) and the Chinese Club Cangzhou Mighty Lions FC (hereinafter: the Club or the
Respondent) concluded an employment contract (hereinafter: the contract) valid as from 1
May 2022 until 31 December 2022.
2.
In accordance with the contract, the Respondent undertook to pay to the Claimant inter
alia a total salary of EUR 280,000 net.
3.
In accordance with clause 4 of the contract, inter-alia:
“4.2 Any transportation and accommodation expenses incurred by [the Claimant] due to
participation in matches, trainings and other activities arranged by [the Respondent]
outside Cangzhou (city) shall be borne by [the Respondent]. During the period of such
activities, [the Claimant] enjoys the same transportation, accommodation, and dining
conditions as other team members of [the Respondent][the Respondent]. Without [the
Respondent][the Respondent] ‘s prior written consent, [the Claimant] shall remain with
the team (…)
4.5 [The Respondent] shall provide [the Claimant] with 1 round-trip economy class flight
tickets and 0 round-trip business class flight tickets from China to Serbia for each
contractual year (every 12 months from the signing date of this Contract constitutes a
contractual year). The above-mentioned flight tickets are provided on a contractual year
basis only and thus will not be cumulative upon the entire duration of this Contract (i.e.
no additional tickets will be provided in the new contractual year in the event [the
Claimant] does not use all of the airline tickets provided during the previous contractual
year, and the unused tickets shall be deemed automatically void, nor shall [the Claimant]
be compensated in any form as a substitute compensation for the unused airline tickets.).
The Parties agree that the flight tickets can only be used by [the Claimant], [the
Claimant]‘s spouse and children.”
4.
In accordance with clause 9 of the contract:
“Termination of the Contract:
1. This contract may be terminated by mutual agreement between the Parties.
2. Either Party shall be entitled to terminate this Contract with just cause, pursuant to the
FIFA Regulations on the Status and Transfer of Players (“FIFA RSTP”)
3. If [the Claimant] is unable to perform this Contract in person for more than [30] days due
to health (non-work related causes) or other personal reasons; or [the Claimant] loses the
ability to work due to health (non-work related causes) or other personal reasons
according to assessment by competent institutions approved by the Parties, [the
Respondent] has the right to unilaterally terminate this Contract by giving written notice
to [the Claimant] without paying any compensation or indemnification to [the Claimant].
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REF. FPSD-8320
4.
Force majeure: If this Contract is suspended or cannot be performed for at least 3
consecutive months due to events beyond the reasonable control of the Parties (including
but not limited to natural disasters, earthquakes, fires, floods, civil or military
disturbances, epidemics/infectious diseases, FIFA sanctions and strikes), either Party is
entitled to terminate this Contract by giving written notice to the other Party without paying
any compensation or indemnification to the other Party.
5.
[The Respondent] has the right to terminate this Contract by notifying [the Claimant] in
writing and claim against [the Claimant] for default liability if any of the following events
occurs:
5.1 [the Claimant] commits material breach of this Contract;
5.2 [the Claimant] commits violation against code of ethics or sportsmanship which
causes serious damage to Party A, LMC or CFA's interest and reputation;
5.3 [the Claimant] materially violates the regulations or match disciplines of [the
Respondent];
5.4 [the Claimant] is prosecuted for criminal liabilities or claimed against for other
liabilities which affect the performance of this Contract, regardless of the time it takes
to come to a resolution or the magnitude of impact on [the Claimant]’s ability to
perform this Contract
5.5 During the contractual period, if [the Claimant] cancel or terminate the contract by
himself without the permission of [the Respondent], [the Claimant] shall pay [the
Respondent] 5,000,000 EURO (FIVE MILLION EURO) as compensation. During the
contractual period, if any other club wish to sign [the Claimant], the transfer shall
strictly comply with all relevant rules and regulations stipulated by FIFA.
5.6 Throughout the Contractual Period, [the Respondent] want to terminate the
Employment Contract unilaterally, [the Respondent] must pay to [the Claimant]
one month's Basic Salary as compensation.
[The Claimant] has the right to terminate this Contract by notifying [the Respondent] in
writing if any of the following events occurs:
6.1 [The Respondent] fails to pay salary to [the Claimant] for two (2) months and fails
to remedy such default within 15 (fifteen) days upon receipt of [the Claimant]’s written
notification. [the Respondent][the Respondent] cheats and/or forces [the Claimant]
to participate in any illegal or unfair training or matches, or influences training or
matches in an illegal manner or other activities in violation of the law and/or applicable
regulations”.
6.
5.
By correspondence dated 9 August 2022, the Claimant requested the Respondent to
“immediately allow the Player training with the team and stop breaching the contract without
just cause and confirm in writing within the next 3 days that [the Claimant] is a member of the
first team and that the Club counts on his services for the remainder of the Contract”. The
Claimant also mentioned in said correspondence, that the Respondent informed him on
the same date, 9 August 2022, to leave the training camp and hotel in which the Club is
currently located and that was orally informed that the Club is no longer counting on his
services.
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6.
On the same date on 9 August 2022, the Respondent informed the Claimant the following
“this is to inform [the Claimant] that [the Respondent] has decided to terminate the contract
with you. The club will terminate the contract with you according to the Termination Agreement”.
A proposal of a Termination agreement was attached to this correspondence.
7.
By correspondence dated 11 August 2022, the Claimant indicated the Respondent that
after he refused to sign the termination agreement, the Club discriminated and bullied the
Player, banning him from training. The Claimant requested to be immediately reinstated in
the first team of the Club and requested it to confirm in writing within the next 3 days that
the Claimant is a member of the first team and that the Club counts on his services for the
remainder of the contract.
8.
By correspondence dated 13 August 2022, the Claimant indicated to the Respondent that
he had been banned to travel with the Respondent. The Claimant requested the
Respondent to “immediately reinstate [the Claimant] in the first team of the Club and confirm
in writing within the next 3 days that [the Claimant] is a member of the first team and that the
Club counts on his services for the remainder of the contract. Also, please immediately organise
the Player's accommodation and his travel to join the team”.
9.
By correspondence dated 22 August 2022, named “last warning before termination”, the
Player wrote to the Club and indicated that: (1) since 9 August 2022 the Player had not had
any training as he was banned by the Club, (2) the Club left the city of Haikou on 13 August
2022 and “the Club banned the Player to travel with the Club without explanation and the Player
stayed alone on the island without any logistical support from the Club”, and (3) the club
removed the Player from the team’s WhatsApp messaging group. The Player requested the
Respondent to “immediately reinstate Mr Mihajlovic in the first team of the Club and confirm
in writing within the next 3 days that Mr Mihajlovic is a member of the first team and that the
Club counts on his services for the remainder of the contract. Also, please immediately organise
the Player's accommodation and his travel to join the team”.
10. On 31 August 2022, the Respondent sent a termination letter to the Claimant on the basis
of clause 5.6 of the contract. The Respondent also stated that it shall pay 3 salaries from
July 2022 to September 2022.
11. On an unspecified date, the Claimant signed an employment contract with the Serbian club
Radnički valid as from 15 September 2022 until 20 May 2023, including a monthly salary of
EUR 300 net.
II. Proceedings before FIFA
12. On 22 November 2022, the Claimant 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 Claimant
13. The Claimant lodged a claim against the Respondent for overdue payables and breach of
contract. According to the Claimant, the Respondent terminated the contract without just
cause.
14. The Claimant requested the following request for relief:
- To uphold that the contract was unilaterally breached and terminated by the
Respondent without just cause, due to persistent noncompliance with the
financial and training terms, which violates FIFA RSTP. Art. 14.
- To uphold the Claimant’s right to receive the outstanding salaries and damage
compensation for the unilateral breach from the Respondent as follows:
a. July salary in the amount of EUR 35,000 net with 5% interest p.a. from 15
August 2022, until the date of effective payment.
b. August salary in the amount of EUR 35,000 net with 5% interest p.a. from 15
September 2022, until the date of effective payment.
c. The amount of CNY 3,000 for accommodation costs, with 5% interest p.a. from
16 August 2022, until the date of effective payment.
d. EUR 138,950 net as compensation with 5% interest p.a. from 31 August 2022
namely:
4 salaries per EUR 35,000 for period 31 August 2022 – 31 December 2022
(total EUR 140,000), according to the Contract for Professional Football
Player, Article 3 - deduct EUR 1,050 = which the Claimant contracted with
FK Radnicki Nis from Serbia for the period 15/09/2022 until 31/12/2022.
e. The amount of CNY 20,746 for unpaid flight ticket, with 5% interest p.a. from
4 September 2022, until the date of effective payment.
b. Position of the Respondent
15. The Respondent in its reply stated that:
-
The allegations raised by the Claimant in the correspondences sent were erroneous
since the Club started an early termination according to the Contract.
The Player could not travel and train as the Player did not have the PCR test result.
The Player was not discriminated nor bullied by the Club.
At the moment of the termination the Club had duly paid all salaries until July 2022.
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16. On the account of the foregoing, the Respondent concluded that it terminated the contract
based on clause 9.5.6 in the Contract, which both the Respondent and the Claimant agreed
when signing the Contract.
17. Alternatively, the Respondent submitted that in the event the FIFA determines that the Club
breached the contract, the relevant compensation, if any, shall be reduced to EUR 35,000
net as mutually agreed by the Parties in Article 9 of the Contract.
18. The Respondent further indicated that throughout the season, the Claimant only played
for 168 minutes with no goals or assists. Moreover, the Respondent was facing the
demotion difficulty. Therefore, the Respondent decided to terminate the contract under
clause 9.5.6 of the Contract.
19. The Respondent requested the following relief:
-
-
Rule that the present submissions are admissible.
Issue a finding that the Respondent terminated the Contract with just cause and
that therefore, it shall pay the remaining salaries and compensation to the
Claimant for an amount equal to EUR 80,500 net.
Rule that the compensation to be paid by the Claimant is net of taxes.
Confirm that the Respondent shall not pay any travel, medical, accommodation
or other expenses claimed by the Claimant.
To the extent that any costs of these proceedings are to be paid by the parties,
rule that Claimant shall be responsible for payment of such costs.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
20. First of all, the Dispute Resolution Chamber (hereinafter also referred as the Chamber)
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 22 November 2022 and submitted
for decision on 7 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.
21. Subsequently, 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 competent to deal with the matter at stake, which concerns an employment-related
dispute with an international dimension between a Serbian player and a Chinese club.
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22. Finally, 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 (October 2022 edition), and considering
that the present claim was lodged on 22 November 2022, the October 2022 edition of said
regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the
substance.
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 took note of the fact that the parties strongly dispute the justice of the early
termination of the contract by the Respondent.
26. In this context, the Chamber took note of the club’s argument, according to which it was
allowed to unilaterally terminate the contract in line with clause 9.5.6 of the contract. The
aforementioned clause stipulates the following: “Throughout the Contractual Period, [the
Respondent] want to terminate the Employment Contract unilaterally, [the Respondent] must
pay to [the Claimant] one month's Basic Salary as compensation”. Moreover, the Chamber
also noted that the Respondent justified the termination on the basis that “the Player only
played for 168 minutes with no goals or assists. And the Club was facing the demotion difficulty”.
27. At this point and before analysing the validity of the aforementioned clause, the Chamber
was eager to emphasise that, in accordance with the well-established jurisprudence of the
Football Tribunal, 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
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REF. FPSD-8320
not reasonably permit to expect the 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 to ensure the fulfilment of the contractual duties by
the counterparty, 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.
28. Furthermore, the Chamber recalled in line with its long-standing jurisprudence, that a
player’s unsatisfactory performance cannot be a valid reason for an employer to cease
paying due salaries or terminate an employment contract, as this is a purely unilateral and
subjective evaluation by the club.
29. Subsequently, the Chamber referred to its jurisprudence related to potestative clauses, i.e.,
clauses dependent on an event which can only be triggered by one of the contractual
parties and upon the latter’s wish. Such potestative clauses can in general not be applied,
as they limit the rights of the contractual counterparty in an excessive manner and lead to
an unjustified disadvantage of the latter.
30. Bearing in mind the foregoing and analysing the particular circumstances of the present
case, the Chamber concluded that clause 9.5.6 of the contract is of a clearly potestative
nature as it leaves the decision of terminating the employment contract at the sole
discretion of the club.
31. In spite of the fact that the aforementioned clause is included in a valid employment
contract voluntarily signed by both parties, the Chamber acknowledges the usual
imbalance in the bargaining power of the employer and of the employee and therefore
decided that such clause has a clearly abusive nature and shall not have any legal effect in
the relevant employment relationship.
32. On account of the aforementioned considerations, the Chamber decided that the club had
unlawfully terminated the employment contract with the player and should be held liable
for such breach.
ii. Consequences
33. Having stated the above, the Chamber turned their attention to the question of the
consequences of such unjustified breach of contract committed by the Respondent.
34. The Chamber observed that the outstanding remuneration at the time of termination,
coupled with the specific requests for relief of the player, are equivalent to 2 salaries under
the contract, amounting to EUR 70,000 net. The Chamber also observed that no evidence
was provided by the Respondent in order prove that said amounts were paid.
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35. As a consequence, and in accordance with the general legal principle of pacta sunt servanda,
the Chamber decided that the Respondent is liable to pay to the Claimant the amounts
which were outstanding under the contract at the moment of the termination, i.e., EUR
70,000 net.
36. 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 EUR 35,000 as from 16 August 2022 until the date of effective payment;
on EUR 35,000 as from 16 September 2022 until the date of effective payment.
37. As to the accommodation costs, the Chamber decided not to award said amount
considering that the evidence provided on file is not named and does not provide a reason
of payment. As such, and with reference to art. 13 par. 5 of the Procedural Rules, the
Chamber concluded that said evidence does not prove a comfort satisfaction degree that
the amount paid was related to the accommodation costs.
38. 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.
39. In application of the relevant provision, the Chamber held that it first of all had to clarify
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.
40. In this regard, the Chamber took note of the wording of clause 9.5.6 of the contract. After
analysing the content of the clause, the Chamber concluded that it did not fulfil the criteria
of reciprocity, in line with the longstanding jurisprudence of the Football Tribunal, and
therefore could not be taken into account for establishing the amount of compensation
payable to the Claimant.
41. As a consequence, the Chamber determined that the amount of compensation payable by
the Claimant to the Respondent 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
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provides for a non-exhaustive enumeration of criteria to be taken into consideration when
calculating the amount of compensation payable.
42. 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 140,000 (i.e., 4 times the EUR 35,000) serves as the basis
for the determination of the amount of compensation for breach of contract.
43. 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.
44. Indeed, the player found employment with the Serbian club Radnički. In accordance with
the pertinent employment contract, the Player was entitled to EUR 300 per month.
Therefore, the Chamber concluded that the player mitigated his damages in the total
amount of EUR 1,050.
45. Consequently, on account of all of the above-mentioned considerations and the
specificities of the case at hand, the Chamber decided that the club must pay the amount
of EUR 138,950 to the player (i.e., EUR 140,000 minus EUR 1,050), which was to be
considered a reasonable and justified amount of compensation for breach of contract in
the present matter.
46. 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 31 August 2022 until the date of effective
payment.
47. As to the reimbursement of the flight ticket, the Chamber decided to award the amount of
CNY 20,746 considering that it was contractually stipulated (clause 4.5 of the contract) and
evidence was provided on this matter. The Chamber also decided to award interest on said
amount at the rate of 5% p.a. as of 4 September 2022 until the date of effective payment.
iii. Compliance with monetary decisions
48. 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
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concerned party to pay the relevant amounts of outstanding remuneration and/or
compensation in due time.
49. In this regard, the Chamber 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 Chamber 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.
51. 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.
52. The 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. 24 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.
55. Lastly, the Chamber 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, Stefan Mihajlovic, is partially accepted.
2.
The Respondent, Cangzhou Mighty Lions FC, has to pay to the Claimant, the following
amounts:
-
EUR 35,000 net as outstanding remuneration plus 5% interest p.a. as from 16
August 2022 until the date of effective payment.
EUR 35,000 net as outstanding remuneration plus 5% interest p.a. as from 16
September 2022 until the date of effective payment.
EUR 138,950 net as compensation for breach of contract without just cause plus
5% interest p.a. as from 31 August 2022 until the date of effective payment.
CNY 20,746 as compensation for breach of contract without just cause plus 5%
interest p.a. as from 4 September 2022 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. 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.
6.
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.
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 Governing the Football
Tribunal).
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