Labour Disputes
Texto da decisão
REF FPSD-3004
Decision of the
Dispute Resolution Chamber
passed on 25 November 2021
regarding an employment-related dispute concerning the player Fredrik
Ulvestad
COMPOSITION:
Frans de Weger (the Netherlands), Chairperson
Mario Flores Chemor (Mexico), member
Stefano Sartori (Italy), member
CLAIMANT:
Fredrik Ulvestad, Norway
Represented by SILA International Lawyers
RESPONDENT:
Qingdao FC, China
Represented by Giandonato Marino and Tomas Pereda
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I.
Facts of the case
1.
On 2 January 2021, the Norwegian player, Fredrik Ulvestad (hereinafter: the Claimant), and
the Chinese club, Qingdao FC (hereinafter: the Respondent) signed an employment contract
(hereinafter: the Contract) valid as from the same date until 31 December 2022.
2.
According to Art. 6 par. 2 of the Contract, the Respondent undertook to pay the Claimant
10 monthly salaries in the amount of EUR 110,000 net, namely from February 2021 to
November 2021, with due date on the 18th day of each following month.
3.
On 20 June 2021, the Claimant sent a notice to the Respondent by means of which the latter
was put in default of overdue payables corresponding to three monthly salaries (i.e. March,
April and May 2021), contextually granting a deadline of 15 days in order to remedy the
alleged breach.
4.
On 21 June 2021, the Claimant received an answer from the Respondent, in which the latter
advised the Claimant to contact its legal representatives. Moreover, the Club stated that: “On
behalf of Qingdao Football Club (“Club”) we hereby refer to your correspondence dated 20
June 2021, whereas you provided the Club with a deadline of 15 days in order to comply
with the alleged overdue payables to date, which content is fully noted.”
5.
On 4 July 2021, the Claimant sent a reminder letter to the Respondent, expressing the wish
for a swift and amicable solution.
6.
By means of letter dated 6 July 2021 (the “Termination Notice”), the Claimant terminated the
Contract.
7.
In the same document, the Claimant acknowledged to have received the payment of one
monthly salary from the Respondent, hence he contextually stated that the latter’s debt
towards the Claimant would amount to two monthly salaries, i.e. EUR 220,000 net.
8.
Accordingly, by means of the Termination Notice the Claimant requested the Respondent to
pay the following amounts:
EUR 330,000 net as outstanding salaries from April to June 2021;
EUR 1,980,000 net as compensation for breach of the Contract
EUR 330,000 net as additional compensation.
9.
In reply to the Claimant’s Termination Notice, on the same date the Respondent sent a letter
to the Claimant, stating as follows:
“Due to a network delay, your notice has been received by the club now. The club will solve
the problem of your back salary as soon as possible. Please perform your work contract
normally and thanks for your patience and support to the club.
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The details of unpaid salary are as follows:
April 2021: EUR 110000 (net)
May 2021: EUR 110000 (net)
Total: EUR 220000 (net).”
10. On 4 August 2021, the Respondent paid the sum of EUR 220,000 to the Claimant,
corresponding to the outstanding remuneration due for the months of April and May 2021.
11. On 7 September 2021, the Claimant entered a new employment contract with the Turkish
club Sivasspor, valid until 31 May 2023. In accordance with the pertinent employment
contract, the Claimant was entitled to approximately EUR 10,000 per month.
II. Proceedings before FIFA
12. On 8 July 2021, the Claimant filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a. Position of the Claimant
13. According to the Claimant, the Respondent failed to comply with its financial obligations in
such an irreparable manner to leave the Claimant with no other options but to terminate the
employment contract prematurely.
14. In particular, the Claimant alleged that, initially, the Respondent did not pay the monthly
remuneration due in connections with the salaries of March, April and May 2021, and that
after the default notice dated 20 June 2021 only the equivalent of one month salary was paid
by the Chinese club, fact that eventually led to the termination notice on 6 July 2021.
15. In this context, the Claimant was of the opinion to have had just cause to terminate the
Contract, namely as the Respondent had allegedly failed to pay at least two monthly salaries
at the time of the termination and in spite of the Claimant’s default notice granting 15 days
to remedy the breach.
16. Furthermore, and as a consequence of the termination with just cause, the Claimant
demanded that a full compensation shall be awarded to him as comprehensive of the entire
residual value of the employment contract prematurely terminated, plus an additional
compensation because of the termination having been due to overdue payables.
17. The requests for relief of the Claimant, accordingly, were the following:
EUR 330,000 as outstanding remuneration plus 5% interest as of the respective due
dates
EUR 1,980,000 as compensation plus 5% interest as of 6 July 2021
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EUR 330,000 as additional compensation
b. Position of the Respondent
18. In its reply, the Respondent did not contest the existence of a debt towards the Claimant at
the moment of termination of the Contract, but argued that said termination did not
represent the sole available solution for the Claimant at the time, namely in consideration of
the two following facts:
The Respondent had proven financial difficulties connected with the Covid19
outbreak in China; and
The Respondent had paid one monthly salary during the period of grace granted by
the Claimant, whereas such payment, as further acknowledged by the latter, would
attest, in the Respondent’s view, the latter’s good faith and desire to remedy its
breach.
19. In view of the above, the Respondent is of the opinion that the Claimant had no just cause
to terminate the employment contract on 6 July 2021 because the same Respondent had
shown its honest will to find an amicable solution in spite of the financial difficulties ascribable
to the Covid19 pandemic, namely by paying one of the outstanding salaries even before the
termination of the Contract by the Claimant.
20. Subsidiarily, the Respondent requested that if any amount is to be awarded to the Claimant
as compensation this shall be reduced to the sum of EUR 1,760,000, since as per art. 6 of the
Contract the remaining number of monthly salaries (i.e. until December 2022) would be 16
and not 18 as alleged by the Claimant.
21. Furthermore, the Respondent stated that the salary of June 2021 became due only after the
termination of the Contract, hence said amount shall be included in the compensation.
22. Accordingly, the Respondent requested that also the additional compensation shall be
reduced to EUR 274,999, namely due the yearly basis adopted for the calculation (EUR
1,100,000 ÷ 12).
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
23. 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 08 July 2021 and submitted for decision on
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25 November 2021. Taking into account the wording of art. 34 of the October 2021 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.
24. 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 (August 2021 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 Norwegian player
and a Chinese club.
25. 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 (August 2021 edition), and
considering that the present claim was lodged on 8 July 2021, the February 2021 edition of
said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the
substance.
b. Burden of proof
26. 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
27. 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
28. 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 if the early termination of the
contract by the Claimant was made with just cause or not, based on the alleged non-payment
of certain financial obligations by the Respondent as per the contract, in accordance with art.
14bis of the Regulations.
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29. In this context, the Chamber acknowledged that its task was to determine, based on the
evidence presented by the parties, whether the claimed amounts had in fact remained unpaid
by the Respondent and, if so, whether the formal pre-requisites of art. 14bis of the
Regulations had in fact been fulfilled, and consequently the consequences thereto.
30. The Chamber then referred to the wording of art. 14bis par. 1 of the Regulations, in
accordance with which, if a club unlawfully fails to pay a player at least two monthly salaries
on their due dates, the player will be deemed to have a just cause to terminate his contract,
provided that he has put the debtor club in default in writing and has granted a deadline of
at least 15 days for the debtor club to fully comply with its financial obligation(s).
31. The Chamber noted that the Claimant claims not having received his remuneration
corresponding to EUR 220,000, in connection with the months of April and May 2021.
Furthermore, the Chamber noted that the Claimant has provided written evidence of having
put the Respondent in default on 20 June 2021, i.e. at least 15 days before unilaterally
terminating the contract on 6 July 2021.
32. The Chamber also noted that in the case at hand the Respondent bore the burden of proving
that it indeed complied with the financial terms of the contract concluded between the
parties. Nonetheless, the evidence provided by the Respondent clearly shows that the latter
proceeded to the payment of the Claimant’s outstanding remuneration only after the
termination of the Contract, namely on 4 August 2021.
33. Thus, the Chamber concluded that on 6 July 2021 the Claimant had a just cause to unilaterally
terminate the contract, based on art. 14bis of the Regulations.
ii. Consequences
34. With the above in mind, the members of the Chamber turned their attention to the question
of the consequences of such unjustified breach of contract committed by the Respondent.
35. Accordingly, the Chamber observed that the outstanding remuneration at the time of
termination, coupled with the specific requests for relief of the Claimant, were equivalent to
2 salaries under the contract, amounting to EUR 220,000, and that only on 4 August 2021
the Respondent remedied said default.
36. Therefore, in accordance with the general legal principle of pacta sunt servanda and 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
outstanding amounts as from their respective dates until the date of effective payment,
namely on 4 August 2021.
37. Having stated the above, the Chamber turned to the calculation of the amount of
compensation payable to the Claimant by the Respondent in the case at stake. In doing so,
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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.
38. 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 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.
39. As a consequence, the members of the Chamber determined that the amount of
compensation payable by the Respondent to the Claimant 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.
40. Bearing in mind the foregoing as well as the demand of the Claimant, the Chamber
proceeded with the calculation of the monies payable to the Claimant 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 1,760,000 (i.e. the residual value of the contract
until 31 December 2022) serves as the basis for the determination of the amount of
compensation for breach of contract.
41. In continuation, the Chamber verified as to whether the Claimant 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.
42. Indeed, on 7 September 2021 the Claimant entered a new employment contract with the
Turkish club Sivasspor, to be valid until 31 May 2023.
43. In accordance with the pertinent employment contract, the Claimant was entitled to
approximately EUR 10,000 per month. Therefore, the Chamber concluded that the Claimant
mitigated his damages in the total amount of EUR 140,000, that is, 14 times EUR 10,000.
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44. 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 took
place due to said reason i.e. overdue payables by the club, and therefore decided that the
Claimant shall receive additional compensation.
45. In this respect, the DRC decided that the Claimant is in principle to be awarded the amount
of additional compensation of EUR 330,000, i.e. three times the monthly remuneration of
the Claimant. However, the Chamber highlighted that art. 17 of the Regulations is clear to
establish that the maximum compensation that can be awarded (including any potential
additional compensation) is capped at the residual value of the (terminated) contract. As such,
the DRC decided that the maximum amount of compensation that could be awarded was
EUR 1,760,000 and that therefore the additional compensation of the player had to be
capped at EUR 140,000.
46. Consequently, on account of all of the above-mentioned considerations and the specificities
of the case at hand, the Chamber decided that the Respondent must pay the amount of EUR
1,760,000 to the Claimant (i.e. EUR 1,760,000 minus EUR 140,000 plus EUR 140,000), which
was to be considered a reasonable and justified amount of compensation for breach of
contract in the present matter.
47. Lastly, 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 on said
compensation at the rate of 5% p.a. as of 6 July 2021 until the date of effective payment.
iii. Compliance with monetary decisions
48. Finally, taking into account the applicable Regulations, the Chamber referred to art. 24bis
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.
49. 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.
50. 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
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three entire and consecutive registration periods shall become immediately effective on the
Respondent in accordance with art. 24bis 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 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. 24bis 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 DRC 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, Fredrik Ulvestad, is partially accepted.
2.
The Respondent, Qingdao FC, has to pay to the Claimant, the following amount:
EUR 1,760,000 as compensation plus 5% interest p.a. as from 6 July 2021 until the date
of effective payment.
5% interest p.a. on the delayed amount of EUR 110,000 as from 18 May 2021 until 4
August 2021.
5% interest p.a. on the delayed amount of EUR 110,000 as from 18 June 2021 until 4
August 2021.
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. 24bis 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 the ban shall
be of 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. 24bis par. 7 and 8 and art. 24ter 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).
CONTACT INFORMATION
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