The case involves a dispute between Galatasaray Sportif Sinai ve Ticari Yatirimlar A.S. (the Club) and Igor Tudor (the Coach) regarding the termination of Tudor's employment contract as head coach. The Club terminated the contract on 21 December 2017, citing poor team performance and other reasons, while Tudor argued the termination was without just cause. The dispute was initially brought before FIFA’s Players’ Status Committee (PSC), which ruled in favor of Tudor, awarding him compensation for the residual value of his contract and a bonus for winning the league. The Club appealed to the Court of Arbitration for Sport (CAS), which upheld the PSC’s decision.
The CAS panel examined the legal principles under Swiss law and FIFA regulations, emphasizing that fixed-term contracts cannot be terminated early without just cause or mutual agreement. Just cause requires circumstances making the continuation of the employment relationship unconscionable, and the burden of proof lies with the terminating party. The panel found that poor sporting results alone did not constitute just cause, as the contract did not explicitly define such performance as grounds for termination. The Club’s additional reasons, including Tudor’s behavior toward fans and media, were deemed insufficient to justify immediate termination under Swiss law.
The panel also addressed the validity of a contractual clause limiting Tudor’s compensation to five months' salary in case of early termination. It ruled this clause invalid under Article 337c of the Swiss Code of Obligations (CO), which mandates compensation equivalent to the residual contract value. Tudor was thus entitled to EUR 541,935 for the remaining five months and ten days of his contract, adjusted to EUR 514,730 after deducting earnings from his subsequent employment with Udinese Calcio. The panel upheld the PSC’s award of a EUR 200,000 bonus for winning the league, reasoning that the Club’s unjust termination prevented Tudor from achieving this bonus.
The CAS rejected the Club’s appeal, confirming Tudor’s entitlement to the compensation and bonus, plus 5% annual interest from the date of his initial claim. The decision underscores the strict interpretation of just cause in employment terminations and the protection of employees’ rights under Swiss law. It also highlights the importance of clear contractual terms and the procedural steps in resolving sports-related disputes through FIFA and CAS. The ruling balances contractual obligations with fairness, ensuring employees are compensated for wrongful termination while accounting for mitigation of damages through alternative employment. The case sets a precedent for similar disputes in professional football, reinforcing the legal safeguards for fixed-term employment contracts.