Labour Disputes
Texto da decisão
REF 20-01579
Decision of the
Dispute Resolution Chamber
Passed on 20 January 2021,
regarding an employment-related dispute concerning the player Alexey Schumskikh
COMPOSITION:
Omar Ongaro (Italy), Deputy Chairman
Tomislav Kasalo (Croatia), member
José Luis Andrade (Portugal), member
CLAIMANT:
ALEXEY SCHUMSKIKH, Russia
Represented by Mr. Arthur Egiyan
RESPONDENT:
FC KAYSAR, Kazakhstan
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I.
FACTS OF THE CASE
1.
On 31 December 2019, the Russian player Alexey Schumskikh (hereinafter: the player or
the Claimant) and the Kazakh club, FC Kaysar (hereinafter: the club or the Respondent)
concluded an employment contract valid as from 5 January 2020 until 13 November 2020
(hereinafter: the contract).
2.
According to the contract, the Respondent undertook to pay the Claimant a monthly salary
of Kazakhstan Tenge (KZT) 6,000,000, payable “no later than the 10th day of the following
month”.
3.
According to clause 2.1.18 of the contract (quoted verbatim): “The employee has the right
to apply for resolution of an individual labor dispute to the legal authorities in the following
order: (Dispute Resolution Chamber and Appeal Committee) Association of Legal Entities
«Association «Kazakhstan Football Federation» (hereinafter referred to as the «KFF»), court
of his choice”.
4.
According to clause 2.5.1 of the contract (quoted verbatim): “to amend, to supplement, to
dissolve and to terminate the present employment contract in the procedure and on the
grounds established by the Code”.
5.
According to clause 4.2 and 4.2.4 of the contract (quoted verbatim):
“4.2. If the Employee commits a disciplinary misconduct, the Employer has the right to
impose the following types of disciplinary sanctions:
4.2.1. a rebuke;
4.2.2. a reprimand;
4.2.3. a severe reprimand;
4.2.4. termination of the Employment Contract at the initiative of the Employer on the
grounds provided for by the Code.
The imposition of disciplinary sanctions not envisaged in this employment contract is not
permitted”.
6.
According to clause 7.1.3 of the contract (quoted verbatim): “The grounds for termination
of the employment contract are: 7.1.3 termination at the initiative of the Employer on the
grounds and in the procedure prescribed by the Labor Code of the Republic of Kazakhstan,
if the employment contract is terminated at the initiative of the Employer, the Employee is
paid the compensation for the unused leave in accordance with the Labor Code of the
Republic of Kazakhstan”.
7.
According to clause 11.2 of the contract (quoted verbatim): “This employment contract (as
well as a collective contract, if it is concluded) is the only agreement governing labor
relations between the Parties”
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8.
According to clause 12.3 of the contract (quoted verbatim): “All relations between the
Parties that are not settled by the present employment contract are regulated by the Code,
the governing documents of the FFK, the PFLK, FIFA and UEFA”.
9.
On 27 May 2020, the Respondent terminated the contract due to the fact that the player
refused to “continue employment relations), in connection with the employee's refusal to
continue employment relations because of alterations in the employment conditions”. In
said correspondence, the Respondent referred to Kazakh labour law. The player signed the
notice of termination served by the club but stated both that he did not agree with the
termination and that such termination was made at the initiative of the club.
10.
On 24 August 2020, the Claimant sent a notice to the Respondent, arguing that he had
not been notified by the club about any alterations in the contract, and that he did not
refuse to continue to work. Accordingly, the player requested inter alia the following:
“1.1. The debt on monthly salary for May 2020 in the amount of 6 000 000 (six million five
hundred thousand) tenge net.
1.2. The debt on leave allowance (compensation for unused leave) in the amount of 5 600
000 five million six hundred thousand) tenge net.
1.3. The debt on compensation for early termination of the Employment Contract in the
amount of 36 000 000 (thirty-six million) tenge net.
1.4. The debt on additional compensation in connection with the early termination of the
Employment Contract, provided for by Art. 337c of the Swiss Code of Obligations, in the
amount of 36 000 000 (thirty-six million) tenge net.
1.5. The penalty fee established by Article 113 of the Labor Code of the Republic of
Kazakhstan for violation of the terms of payment of monthly salary, leave allowance
(compensation for unused leave), compensation for early termination of the Employment
Contract, additional compensation in connection with termination of the Employment
Contract, calculated from the moment when payments should have been made to the date
of actual repayment of debt by the Employer inclusive.
1.6. Monetary funds on account of repayment of other debts owed to the Employee”.
11.
On 7 September 2020, the club replied to said notice and inter alia referred to the COVID
19 pandemic and Kazakh Law, stating that the club had decided “to alter the employment
conditions”, having notified its employees that “all the salaries would be decreased from 1
May 2020”. The club stated in such letter that a copy of the notification was attached. The
club further argued that the player must observe the local Law and that as such the
employment contract was terminated in accordance with the Labour Code of Kazakhstan.
Additionally, the club argued that such termination was made with just cause under art. 14
(1) of the FIFA Regulations on the Status and Transfer of Players (RSTP).
12.
According to the Transfer Matching System (TMS), on 15 June 2020 the player and the
Russian club, FC Nizhny Novgorod, signed an employment agreement valid as from the
same date until 5 July 2021, pursuant to which the player is entitled to a salary of Russian
Rubles (RUB) 240,000 per month plus RUB 105,000 as monthly guaranteed bonuses.
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II.
PROCEEDINGS BEFORE FIFA
13.
On 23 October 2020, the Claimant filed the claim at hand before FIFA. A brief summary of
the position of the parties is detailed in continuation.
a.
The claim of the Claimant
14.
The player argued that FIFA is competent to hear the claim on account of the fact that the
Kazakh National dispute Resolution Chamber is not functioning, nor respects FIFA Circular
1010.
15.
In his claim, the player maintained that the Respondent had no just cause to terminate the
contract either under the RSTP or Kazakh Law.
16.
As a consequence, the Claimant requested payment of his salary of May 2020 and
compensation for breach of contract, broken downs as follows:
a) The monthly salary for May 2020 in the amount of KZT 6,000,000 net;
b) The compensation for the unused leave (payment for leave) in the amount of KZT
5,600,000 net, referring in this respect to the local law;
c) The compensation for the damages caused by the early termination of the contract
without just cause in the amount of KZT 36,774,193.55 net.
d) The additional compensation for the early termination of the contract without just cause
with immediate effect in accordance with paragraph 3 of Article 337c of the Swiss Code
of Obligations in the amount of KZT 36,000,000 net.
e) Interest in the amount of 11.88% per annum for violation of the terms of payment of
the monetary amounts due to Mr. Alexey Shumskikh for the period from 30 May 2020 to
the date of actual repayment of the debts.
17.
With regards to the interest, the player explained that ”The Respondent must pay interest
in the amount of the refinancing rate established by the National Bank of the Republic of
Kazakhstan, multiplied by 1.25 for violation of the terms of payment of the monetary
amounts due to the Claimant”. Moreover, he stated that “As of the date of the Claimant’s
dismissal (27 May 2020), the refinancing rate of 9.5% per annum was in effect in the
Republic of Kazakhstan, which is confirmed by the information taken from the official
website of the National Bank of the Republic of Kazakhstan”. Consequently the player
arrived at the amount of 11.88% (1.25 x 9.5%).
18.
The player nonetheless argued as follows: “If the FIFA DRC considers that the legislation of
the Republic of Kazakhstan is inapplicable, the interest will be collected at the rate of 5%
per annum in accordance with the jurisprudence of the FIFA DRC. However, the Claimant
respectfully asks the FIFA DRC to take into account that the Claimant's salary is established
not in the US dollars or Euros, but in tenge, which is a less stable currency. According to
the information from the official website of the National Bank of the Republic of
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Kazakhstan, the rate of inflation for the tenge is 7% per annum (Attachment № 10). If the
interest is collected from the Respondent less than the rate of inflation, then it will be more
profitable for the Respondent not to pay the debts to the Claimant, and the Claimant will
not be compensated for the damages from the violation of the terms of payment of the
debts owed to him”.
b.
Position of the Respondent
19.
The club explained that the local government declared a “state of emergency” due to the
COVID pandemic. The club also explained that the pandemic cause all competitions to be
suspended.
20.
The club furthermore argued that since the player is bound by Kazakh Law and refused to
accept a change in the working conditions, the club terminated the contract. The club
deems to be entitled to do so under the Labour Code of Kazakhstan, and deems that such
entitlement is just cause under art. 14 (1) of the RSTP for the termination of the contract.
21.
Lastly, the club argued that due to the pandemic it sustained an income loss due to budget
reduction by the club’s ownership, allegedly the City Administration of the Kyzylorda
region.
22.
The Respondent further argued that the all players and coaching staff “have shown
understanding and signed an Additional Agreement to reduce wages”.
23.
The club requested that the claim be rejected.
III.
CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
a.
Competence and applicable legal framework
24.
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 23 October 2020 and submitted
for decision on 20 January 2021. 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.
25.
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules
and observed that in accordance with art. 24 par. 1 in combination with art. 22 lit. a) and
b) of the Regulations on the Status and Transfer of Players (edition January 2021), 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 Russian player
and a Kazakh club.
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26.
Subsequently, the Chamber analysed which regulations should be applicable as to the
substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par.
1 and 2 of the Regulations on the Status and Transfer of Player (edition January 2021), and
considering that the present claim was lodged on 23 October 2020, the October 2020
edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand
as to the substance.
b.
Burden of proof
27.
The Chamber recalled the basic principle of burden of proof, as stipulated in art. 12
par. 3 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 DRC stressed the
wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the parties.
28.
In this respect, the Chamber also recalled that in accordance with art. 6 par. 3 of Annexe 3
of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings
pertaining to the application of the Regulations, any documentation or evidence generated
or contained in TMS.
c.
29.
Merits of the dispute
The competence of the DRC and the applicable regulations having been established, the
DRC entered into the merits of the dispute. In this respect, the DRC started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the DRC 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
30.
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 whether the player had just
cause.
31.
In this context, the Chamber firstly wished to highlight that FIFA issued a set of guidelines,
the COVID-19 Guidelines, which aim at providing appropriate guidance and
recommendations to member associations and their stakeholders, to both mitigate the
consequences of disruptions caused by COVID-19 and ensure that any response is
harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an
additional document, referred to as FIFA COVID-19 FAQ, which provides clarifications on
the most relevant questions in connection with the regulatory consequences of the COVID19 outbreak and identifies solutions for new regulatory matters.
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32.
The DRC also wished to refer to the fact that said guidelines – as per the explicit wording
of FAQ no. 16, as well as pages 6 and 7 of the FIFA COVID-19 Guidelines – are only
applicable to “unilateral variations to existing employment agreements”. Therefore, except
where a termination of a contract occurred following a unilateral variation made as a result
of COVID-19 (in which case the validity of the variation must first be assessed under the
guidelines), said guidelines do not apply to assess unilateral terminations of existing
employment agreements. The Chamber further noted that for the assessment of disputes
that are presented before the FIFA judicial bodies concerning the unilateral termination of
a contract, the FIFA Regulations as well as the established jurisprudence of the Chamber
shall apply.
33.
Having stated the above, the DRC took note of the fact that it stood undisputed that the
club at first tried to reduce the player’s salary, which was not accepted by the latter, and
that the club then terminated the contract.
34.
In light of the particular circumstances of the case and taking into special consideration the
fact that the club presented the player with an amendment to the contract, the DRC came
to the conclusion that it cannot be considered that a unilateral variation took place;
otherwise the club would not have asked for the player’s consent. In fact, the DRC
determined that the special constellation described above amounted to an attempt to reach
an agreement, albeit a rather aggressive and forced one. The DRC found nonetheless that
is clear that this attempt was not successful, since the player adamantly refused it.
35.
Consequently, the DRC established that that was no unilateral termination of a contract
following a unilateral variation of the contract, for which the Chamber confirmed that the
FIFA COVID FAQ and the FIFA COVID Guidelines shall not apply, only the Regulations and
the jurisprudence of the Chamber.
36.
With the aforementioned considerations in mind, the Chamber wished to recall that when
deciding a dispute before the DRC, FIFA’s regulations prevail over any national law chosen
by the parties. In this regard, the Chamber emphasised that the main objective of the FIFA
regulations is to create a standard set of rules to which all the actors within the football
community are subject to and can rely on. This objective would not be achievable if the
DRC would have to apply the national law of a specific party on every dispute brought to
it. This should apply, in particular, also to the termination of a contract. In this respect, the
DRC wished to point out that it is in the interest of football that the termination of a contract
is based on uniform criteria rather than on provisions of national law that may vary
considerable from country to country. Therefore, the Chamber deemed that it is not
appropriate to apply in the case at hand the principles of a particular national law to the
termination of the contract but rather the Regulations, general principles of law and, where
existing, the Chamber’s well-established jurisprudence.
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37.
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.
38.
Accordingly, the issue that remains is only the unilateral termination of the contract by the
club, which the Chamber firmly established to have taken place without just cause as per
the longstanding jurisprudence of the DRC. To this end, the DRC noted firstly that the player
did not refuse to continue his employment relation but rather rejected an offer of a sheer
reduction in his remuneration and, secondly, that the position of the club cannot be upheld
both from substance and evidence points of view since the Respondent has not provided
any concrete evidence in support of its allegations.
ii. Consequences
39.
Having stated the above, the Chamber turned its attention to the question of the
consequences of such unjustified breach of contract committed by the club.
40.
The Chamber observed that the outstanding remuneration at the time of termination, is
equivalent to KZT 6,000,000 corresponding to the salary of May 2020. As a consequence,
and in accordance with the general legal principle of pacta sunt servanda, the Chamber
decided that the club is liable to pay to the player such amount.
41.
In addition, taking into consideration the player’s request as well as the constant practice
of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player
interest at the rate of 5% p.a. on the outstanding amounts as from the due date until the
date of effective payment.
42.
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.
43.
In application of the relevant provision, the Chamber held that it first of all had to clarify as
to whether the pertinent employment contract contained a provision by means of which
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the parties had beforehand agreed upon an amount of compensation payable by the
contractual parties in the event of breach of contract. In this regard, the Chamber
established that no such compensation clause was included in the employment contract at
the basis of the matter at stake.
44.
As a consequence, the members of the Chamber determined that the amount of
compensation payable by the club to the player had to be assessed in application of the
other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that
said provision provides for a non-exhaustive enumeration of criteria to be taken into
consideration when calculating the amount of compensation payable.
45.
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
until its term. Consequently, the Chamber concluded that the amount of KZT 32,600,000
(i.e. 5 months à KZT 6,000,000 each plus the pro-rata month of November 2020 amounting
to KZT 2,600,000) serves as the basis for the determination of the amount of compensation
for breach of contract.
46.
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.
47.
Indeed, the player found new employment. In accordance with the pertinent employment
contract, the player was entitled to RUB 240,000 per month plus RUB 105,000 as monthly
guaranteed bonuses. Therefore, the Chamber concluded that the player mitigated his
damages in the total amount of KZT 9,956,400 between the period of 15 June 2020 to 11
November 2020.
48.
Subsequently, the Chamber referred to art. 17 par. 1 lit. ii) of the Regulations, according to
which a player is entitled to an amount corresponding to three monthly salaries as additional
compensation should the termination of the employment contract at stake be due to
overdue payables. In the case at hand, the Chamber confirmed that the contract
termination did not take place due to said reason i.e. overdue payables by the club, and
therefore decided that the player is not entitled to additional compensation.
49.
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 KZT
26,044,000 to the player (i.e. KZT 32,600,000 minus KZT 9,956,40), which was to be
considered a reasonable and justified amount of compensation for breach of contract in
the present matter.
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50.
Taking into consideration the player’s request as well as the constant practice of the Dispute
Resolution Chamber in this regard, coupled with the absence of any contractual stipulation
to the contrary, the Chamber decided to award the player interest on said compensation at
the rate of 5% p.a. as of the date of claim until the date of effective payment.
51.
Lastly, the DRC turned to the amount sought by the player as unused leave and decided, in
line with the reasoning outlined above, to reject such claim due to a lack of a contractual
basis in this respect.
iii. Compliance with monetary decisions
52.
Finally, taking into account the applicable Regulations, the 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.
53.
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 and for the maximum
duration of three entire and consecutive registration periods.
54.
Therefore, bearing in mind the above, the DRC decided that, in the event that the club does
not pay the amounts due to the player within 45 days as from the moment in which the
player communicates the relevant bank details to the club, provided that the decision is
final and binding, 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 club in accordance with art. 24bis par. 2 and 4 of the
Regulations.
55.
The DRC recalled that the above-mentioned bans 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.
56.
Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the parties.
d.
57.
Costs
The Chamber referred to article 18 par. 2 of the Procedural Rules, 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”. Accordingly, the Chamber decided that no procedural
costs were to be imposed on the parties.
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58.
Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18
par. 4 of the Procedural Rules, and decided that no procedural compensation shall be
awarded in these proceedings.
IV.
DECISION OF THE DISPUTE RESOLUTION CHAMBER
1.
The claim of the Claimant, ALEXEY SCHUMSKIKH, is partially accepted.
2.
The Respondent, FC KAYSAR, has to pay to the Claimant the following amounts:
- KZT 6,000,000 as outstanding remuneration plus 5% interest p.a. as from 1 June 2020 until
the date of effective payment;
- KZT 26,044,000 as compensation for breach of contract without just cause plus 5% interest
p.a. as from 23 October 2020 until the date of effective payment.
3.
Any further claims of the Claimant are rejected.
4.
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.
5.
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).
6.
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.
7. The decision is rendered free of 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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