Decision of the. Dispute Resolution Chamber

Transcription

1 Decision of the Dispute Resolution Chamber passed in Zurich, Switzerland, on 9 February 2017, in the following composition: Thomas Grimm (Switzerland), Chairman Eirik Monsen (Norway), member Joaquim Evangelista (Portugal), member Taku Nomiya (Japan), member Todd Durbin (USA), member on the claim presented by the player, Player A, Country B as Claimant against the club, Club C, Country D as Respondent regarding an employment-related dispute between the parties

2 I. Facts of the case 1. On 14 July 2015, the Player of Country B, Player A (hereinafter: the player) and the Club of Country D, Club C (hereinafter: the club) concluded an employment agreement (hereinafter: the contract), valid from 14 July 2015 until 31 May Chapter 3 of the contract, referred to as Payments and conditions, contains the relevant clauses regarding the payments the player is entitled to, starting with the words net monthly salary. Further, according to the contents of this chapter, the player was entitled to receive the following amounts: For the 2015/2016 season: a sign-on fee of USD 50,000, in the date of the signature of the employment contract ; 10 monthly payments of USD 20,000 each, to be paid in the period between August 2015 and May 2016, on the 30 th day of the respective month, however the salary for February 2016 being due on 28 February 2016; a payment of USD 60,000, payable on 30 December 2015; a conditional bonus payment in the amount of USD 30,000, if the player plays in a minimum of 25 games in startup (first 11) squad during the official Super league games during the season 2015/2016. For the 2016/2017 season: a down payment of USD 75,000, payable on 30 September 2016; 10 monthly payments of USD 20,000 each, to be paid in the period between August 2016 and May 2017, on the 30 th day of the respective month, however the salary for February 2017 being due on 28 February 2017; a conditional bonus payment in the amount of USD 30,000, if the player plays in a minimum of 25 games in startup (first 11) squad during the official Super league games during the season 2016/2017. For the 2017/2018 season: a down payment of USD 50,000, payable on 30 September 2017; 10 monthly payments of USD 25,000 each, to be paid in the period between August 2017 and May 2018, on the 30 th day of the respective month, however the salary for February 2018 being due on 28 February In addition, clause 2 of the chapter Special Provisions of the contract stipulates the following: In case of non-payment of salaries, benefits and any other monetary obligations of the Club in the amount of at least three consecutive instalments, the Player shall inform the Club officially and in written form. The Player will be entitled to terminate the employment contract with just cause if 2

3 the Club fails to fulfil its obligations within 15 days upon receipt of the formal written notice. 4. Moreover, clause 12 of the chapter Special Provisions of the contract stipulates the following: Victory bonus payments will be determined by the Club s Board of Directors. In any case Club has the discretion to set forth the payments and any player receiving a victory bonus payment does not grant the same right to the Player. 5. On 18 July 2016, the player lodged a claim against the club in front of FIFA, requesting the total amount of USD 915,000, specified as follows: USD 190,000 as outstanding remuneration, consisting of the unpaid salaries for the period between January 2016 and May 2016 in the amount of USD 20,000 each, as well as the unpaid bonus payment of USD 60,000, due on 30 December 2015 and the unpaid match bonuses for playing in 25 official matches in the amount of USD 30,000. USD 575,000 as compensation for breach of contract, specified as follows: - residual value of the contract in the 2016/2017 in the amount of USD 275,000; - residual value of the contract in the 2017/2018 in the amount of USD 300,000; USD 150,000 as additional compensation for the early termination of contract, within the concept of the specificity of sport and since the breach falls inside the protected period. 6. According to the player, in December 2015, the club had failed to pay him the monthly salaries for the months of August, September, October and November After having negotiated with the player, the club settled said debts in January 2016 and paid him all salaries until and including December Furthermore, the player argued that as from January 2016, the club again failed to pay him his monthly salaries, leading to the situation that in June 2016, the total amount of USD 190,000 remained outstanding. Said amount consisted of the salaries for the period between January and May 2016 in the amount of USD 20,000 each, as well as the unpaid payment of USD 60,000 and the unpaid match bonus payment of USD 30,000, related to the 2015/2016 season. 7. According to the player, on 7 and 20 June 2016, he put the club in default for not having paid him the total amount of USD 190,000. In his default letters, the player provided the club in accordance with cause 2 of the employment contract signed between the parties with a deadline of 15 days to pay him said amount, however to no avail. 3

4 8. On 10 July 2016, the player unilaterally terminated the contract with the club, due to the outstanding amount of USD 190, In its reply to the player s claim, the club held that the amounts in the contract do not reflect the net amounts, but that these amounts are the gross amounts and therefore the relevant taxes have to be deducted [ ]. As a result, the club argued that for the 2015/2016 season, it only was obliged to pay USD 286,314 to the player. 10. Subsequently, the club submitted several payment receipts and bank statements and argued that during the contractual relationship, it paid the player the following amounts: Amount Date Conversion 1. USD 10, July 2015 (USD 10,000) 2. USD 15, August 2015 (USD 15,000) 3. XXX 17, August 2015 (USD 5,984) 4. XXX 6, September 2015 (USD 1,996) 5. XXX 14, September 2015 (USD 4,641) 6. USD 20,000 2 October 2015 (USD 20,000) 7. XXX 11, October 2015 (USD 3,727) 8. XXX 15,500 5 November 2015 (USD 5,387) 9. EUR 2, November 2015 (USD 2,455) 10. XXX 4, November 2015 (USD 1,627) 11. XXX 5, December 2015 (USD 1,713) 12. XXX 18, December 2015 (USD 6,417) 13. XXX 6, January 2016 (USD 1,985) 14. USD 105, January 2016 (USD 105,000) 15. USD 8,265 5 February 2016 (USD 8,265) 16. USD 9, March 2016 (USD 9,915) 17. EUR 2, May 2016 (USD 3,304) 18. XXX 48, May 2016 (USD 16,067) Total USD 223, Furthermore, the club stated that it suffered financial problems due to the fact that it did not receive payments related to broadcasting rights, as well as that also political issues happening in Country D and depreciations of the Currency G caused the club severe (financial) problems. 12. Finally, the club argued that the player was eager to terminate his employment contract and leave from Country D and concluded that the termination shall not be the Club s liability without its fault. As a result, the club asked for the rejection of the player s claims. 4

5 13. In his replica, the player denied all the club s allegations and argued that the club acknowledged to have received his default letters from June 2016 and that it clearly confessed the non-payment of salaries and its non-compliance within the deadline granted. 14. In addition, the player argued that the employment contract clearly mentions that all payment due under this contract are net payments. 15. With regard to the alleged payments made by the club, substantiated with payment receipts and bank statements, the player did not deny that these payments were made to him. However, the player explained that the amount of USD 105,000 paid to him on 29 January 2016 was a payment of late salaries of 2015 and part of the down payment. With said payment, the club settled its debts towards the player regarding the sign-on fee and the salaries for the period between August and December Furthermore, the player states that the payments made on 15 July, 21 August and 2 October 2015, were (partial) payments of the sign-on fee of USD 50,000, due upon the signature of the contract. 16. Finally, the player explained that the majority of the amounts the club alleges to have paid him were victory bonuses (payments 3. until 5., payments 7. until 13. and payments 15. until 18., cf point 10. above). Therefore, the player maintained that these payments were not salary payments, which according to the player - also follows from the fact that some of these were made to him in cash. 17. In its duplica, the club held that the contract signed between the parties is in the must format of the Football Federation of Country D and the amounts mentioned in the contract cannot be considered as net amounts, since it clearly meant the amounts to be gross. 18. Moreover, the club argued that on 29 January 2016, the player was entitled to receive the total amount of USD 210,000 gross, which corresponds to USD 176,841 net, however that with the payment made on 29 January 2016, the Club had paid the total amount of USD 185,932. In this respect, the club explained that it paid the player more than it was obliged to, since it also paid part of player s salary for the month of January Subsequently, the club stated that almost all payment receipts in relation the payments it made between 15 July 2015 and 19 May 2016 contain the postscript transfer fee and are therefore been made reckoning to the Player s contractual salaries and the Player did not object this issue while depositing the payments accordingly. Further, the club stated that only 5 payments (respectively made on 15 July 2015, 23 November 2015, 25 December 2015, 11 May 2016 and 19 May 5

6 2016) did not contain a postscript, but that it can be noted that these were also salary payments. In this respect, the club explained that the player in his replica accepted the payment made on 15 July 2015 as a salary payment. Further, the club denied that the payments made on 23 November 2015, 25 December 2015, 11 May 2016 and 19 May 2016 were match victory bonuses, because the club did not win a single match around these payment dates. 20. On 13 July 2016, the player signed an employment contract with the Club of Country E, Club F, valid as from 13 July 2016 until 13 July 2017, according to which the player is entitled to receive a monthly salary of XXX 5,000, corresponding to approximately USD 1,514. II. Considerations 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 matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 18 July Consequently, the Rules Governing the Procedures of the Players Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules). 2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed 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 (edition 2016) 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 Player of Country B and a Club of Country D. 3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged on 18 July 2016, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance. 4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. 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. 6

7 5. In this respect, the Chamber acknowledged that on 14 July 2015, the parties signed an employment contract valid between 14 July 2015 and 31 May In accordance with said contract, the player was entitled to receive, inter alia, the total amount of USD 310,000 for the 2015/2016 season, the total amount of USD 275,000 for the 2016/2017 season and the amount of USD 300,000 for the 2017/2018 season, as well as (conditional) match bonus payments. 6. In this respect, the player maintained that he unilaterally terminated the contract on 10 July 2016 with just cause, as a result of an outstanding amount of USD 190,000. As a result, the player asked to be awarded with his outstanding remuneration as well as compensation for breach of contract. 7. On the other hand, the Chamber noted that the club rejected the claim put forward by the player, by stating that it suffered financial problems, and that the player wanted to leave Country D. Further, the club argued that the amounts mentioned in the contract are gross amounts and not net amounts, and that as a result thereof, during the 2015/2016 season it had to pay the player the amount of EUR 286,341 net. In this respect, the club also asserted that it had paid to the player, by means of 18 separate payments made in the period between 15 July 2015 and 19 May 2016, the total amount of EUR 223, With due consideration to the above, the members of the Chamber further took into account that it remained uncontested between the parties that the player terminated the contract on 10 July Moreover, the Chamber noted that the player did not contest that the club made 18 different payments to him in the period between 15 July 2015 and 19 May 2016, but that he only contested the nature of said payments. 9. In this framework, the members of the Chamber highlighted that the underlying issue in this dispute, considering the diverging position of the parties, was to determine as to whether the player had terminated the contract with just cause on 10 July 2016 and subsequently, to determine the consequences of the early termination of the contractual relationship by the player. In order to do so, the DRC was of the opinion that there were two key questions which it needed to address, these being: i) was the salary of the player net or gross? and ii) which was the outstanding amount, if any, at the moment of termination of the contract? 10. Before entering into the analysis of the above-posed questions, the members of 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. 11. Turning to the discussion between the parties as to whether the amounts agreed upon in the contract were gross or net amounts, the members of the Chamber 7

8 noted that chapter 3 of the contract, referred to as Payments and conditions, clearly and unambiguously mentions the words net monthly salary. Consequently, the Chamber concluded that the amounts in the contract are to be considered as net amounts. In this regard, the DRC established that the extract of two alleged Tax of Country D regulations can by no means be sufficient to deviate from the clear wording of the employment contract. 12. Furthermore, the Chamber went to address the issue of the outstanding amounts and, in this respect, noted that the player in relation to the 18 payments the club alleges to have made to him between 15 July 2015 and 19 May 2016 explicitly confirms that to have received the following payments, up to a total amount of USD 150,000: - a payment of USD 10,000 on 15 July 2015; - a payment of USD 15,000 on 21 August 2015; - a payment of USD 20,000 on 2 October 2015 and; - a payment of USD 105,000 on 29 January Along those lines, the player held that the club, by means of the payments made on 15 July 2015, 21 August 2015 and 2 October 2015, had partially paid the signon fee he was entitled to, in the amount of USD 50,000. The members of the Chamber further noted that the player assessed that the payment of USD 105,000, made to him on 29 January 2016, consisted of the late salary payments up to USD 100,000 related to the period between August 2015 and December 2015, as well as USD 5,000 as remaining part of the sign-on fee of USD 50, In addition, the members of the Chamber turned their attention to the ten payments made by the club to the player in XXX, to the two payments made in EUR of 23 November 2015 and 11 May 2016, and to the two payments made in USD on 5 February 2016 and 11 March As to the player s argument that these payments were related to match bonuses and not to salary payments, the Chamber noted that the player did not substantiate his defence. From the documents on file, it can be established that the player did not present any evidence in support of his position that these payments were not related to salary payments, but match bonuses. In this respect, the Chamber highlighted that the matches on the list of games allegedly played by the club, submitted by the player, cannot be allocated to specific payments of match bonuses for matches the club allegedly won. 14. As a result, the members of the Chamber were of the opinion that the 14 payment receipts for the above-mentioned payments, amounting to respectively XXX 146,500, EUR 5,210 and USD 18,180, in total equal - according to the club - to USD 223,483, are to be regarded as salary payments. Moreover, the Chamber noted that the player did not challenge the conversion of the currency. 8

9 15. What is more, the Chamber noted that the player stated that in the 2015/2016 season, he was entitled to the sign-on fee of USD 50,000, the amount of USD 60,000 due on 30 December 2015 and ten monthly payments of EUR 20,000 each. Moreover, the player claimed that he is also entitled to receive the amount of USD 30,000 as bonus payment, for playing in a minimum of 25 games in the starting 11. As the player submitted evidence to substantiate its allegations, confirming that he was in the starting 11 in 25 matches played in the Super League of Country D, the Chamber concluded that the player was indeed entitled to said bonus payment in the amount of USD 30,000 for the 2015/2016 season as per Chapter 3 of the contract. 16. For the sake of completeness, the Chamber pointed out that, in accordance with the Chamber s well-established and longstanding jurisprudence, the club s argument that it suffered financial problems cannot be considered as a valid reason not to comply with its financial obligations and cannot be held against the player. 17. In view of all the above, the members of the Chamber concluded that the player was entitled to the amount of USD 340,000 in the 2015/2016 season and that the club could prove, at the Chamber s satisfaction, that it paid the player the total amount USD 223, As a result thereof, the Chamber established that, despite the abovementioned payments the club made to the player, at the time of the termination, i.e. on 10 July 2016, the amount of USD 116,517 had fallen due and remained outstanding. Consequently, the Chamber concurred that the club had seriously neglected its financial contractual obligations towards the player. 19. On account of the above and taking into consideration the Chamber s longstanding jurisprudence in this respect, the Chamber decided that the player had just cause to unilaterally terminate the contract on 10 July 2016 and that the club is to be held liable for the early termination of the contract with just cause by the player. 20. Having established that club is to be held liable for the early termination of the employment contract, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the player is entitled to receive from the club an amount of money as compensation for breach of contract, in addition to any outstanding payments on the basis of the relevant employment contract. 21. First of all, the members of the Chamber concurred that the club must fulfill its obligations as per the employment contract up until the date of termination of the contract, in accordance with the general legal principle of pacta sunt servanda. Consequently, taking into account that the contract between the club 9

10 and the player was terminated on 10 July 2016 and with reference to point II.12. to II.19. above, the Chamber decided that the club is liable to pay the player the outstanding remuneration in the total amount of USD 116, In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of 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. 23. 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. 24. 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. 25. Bearing in mind the foregoing as well as the claim of the player and the fact that the player had terminated the contract on 10 July 2016, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract until 31 May Consequently, the Chamber concluded that the amount of USD 575,000 (i.e. the fixed remuneration for the 2016/2017 season and the 2017/2018 season) serves as the basis for the determination of the amount of compensation for breach of contract. 26. 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, such remuneration under a new employment contract shall be taken into account in the calculation of the 10

11 amount of compensation for breach of contract in connection with the player s general obligation to mitigate his damages. 27. In this regard, the Chamber recalled that on 13 July 2016, the player signed an employment contract with the Club of Country E, Club F, valid until as from 13 July 2016 until 13 July 2017, in accordance with which he was entitled to receive a monthly salary of XXX 5,000 or approximately USD 1,514. This employment contract enabled the player therefore to earn an income of USD 18,168 during said period of time. 28. As a result, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided to partially accept the player s claim and decided therefore that the club must pay the amount of USD 556,832 as compensation for breach of contract. 29. Finally, the Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the player is rejected. III. Decision of the Dispute Resolution Chamber 1. The claim of the Claimant, Player A, is partially accepted. 2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 116, The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of USD 556, In the event that the amounts due to the Claimant in accordance with the abovementioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision. 5. Any further claim lodged by the Claimant is rejected. 6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances are to be made and to notify the Dispute Resolution Chamber of every payment received. 11

12 ******* Note relating to the motivated decision (legal remedy): According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following: Court of Arbitration for Sport Avenue de Beaumont Lausanne Switzerland Tel: Fax: info@tas-cas.org For the Dispute Resolution Chamber: Omar Ongaro Football Regulatory Director Encl. CAS directives 12