The case involves a dispute between Gabriel Fernando Atz, a Brazilian professional football player, and PFC Chernomorets Burgas, a Bulgarian football club, concerning the termination of an employment contract due to unpaid salaries. The dispute was brought before the Court of Arbitration for Sport (CAS) after initial proceedings at FIFA's Dispute Resolution Chamber (DRC). The key issue was whether the player had just cause to terminate his contract under Article 14 of the FIFA Regulations due to the club's failure to pay his salaries. The employment contract, signed in January 2010, stipulated a monthly salary of €12,000, payable by the 30th of the following month. After an injury, the club suspended payments, though the Bulgarian state covered salaries from July to December 2010. Upon recovery, the club resumed payments in January 2011 but allegedly stopped thereafter. By April 2011, the player's counsel notified the club of unpaid salaries for February and March 2011 (€24,000). A follow-up letter in May 2011 cited continued non-payment and declared unilateral termination with just cause under FIFA regulations.
The CAS panel, led by sole arbitrator Manfred Nan, examined whether non-payment constituted just cause for termination. Under Article 14, just cause requires a severe breach undermining the employment relationship, such as repeated non-payment of substantial salaries. The panel confirmed that late or non-payment, especially if repeated, qualifies as just cause, provided the employee issues a prior warning. The player had met this requirement. The panel also considered Article 17(1) of FIFA Regulations, which addresses compensation for premature contract termination, aiming to uphold contractual stability. Compensation is based on the "positive interest" principle, placing the injured party in the position they would have been in had the contract been fulfilled. The panel noted the specificity of sport, requiring decisions to balance legal principles with football's unique context.
The player sought €276,000 (including €48,000 unpaid salaries, €228,000 for remaining contract value), plus interest and sporting sanctions. The club argued the player had not proven non-payment and contested the termination's validity. The CAS panel found the club's non-payment constituted just cause, entitling the player to compensation for unpaid salaries and the remaining contract period, adjusted for the player's subsequent earnings with a Brazilian club. The award emphasized the importance of contractual fidelity in football and the need for fair compensation while considering the sport's specific dynamics. The panel's decision reinforced that clubs must meet financial obligations to avoid unilateral terminations and subsequent liabilities.
The case highlights the complexities of contractual disputes in football, particularly regarding unpaid salaries and the criteria for just cause in contract termination. The proceedings underscore the importance of evidence in such disputes, as well as the role of FIFA and CAS in resolving conflicts between players and clubs. The final outcome hinged on the CAS's evaluation of the DRC's decision and the contractual terms between the parties. The Sole Arbitrator determined that the club failed to prove it had paid the player his salaries for February, March, and April 2011, as the salary slips provided as evidence were deemed unreliable. Consequently, the player was found to have just cause for unilaterally terminating the contract. The arbitrator awarded the player a total of €41,032 in outstanding salaries, comprising €12,000 for each of the unpaid months (February, March, and April) and €5,032 for May 2011, the month of termination, plus 5% annual interest from the respective due dates.
Regarding compensation for breach of contract, the Sole Arbitrator ruled that the club was liable for the early termination, as it had breached its contractual obligations, prompting the player's justified termination. The compensation calculation considered factors such as the remaining contract duration, the player's remuneration, and the principle of contractual stability. The arbitrator emphasized that the purpose of such compensation is to uphold contractual integrity and deter unilateral breaches. The player was awarded €167,539.92 as compensation for breach of contract, with 5% interest from the termination date. The decision aligns with established CAS jurisprudence, which prioritizes the principle of "positive interest," aiming to place the injured party in the position they would have been in had the contract been properly fulfilled. The ruling reinforces the importance of contractual stability in football, ensuring that clubs and players adhere to their agreements.