Football law: outstanding salaries and penalty clauses

Sadly not all professional football clubs pay their players’ salaries in time. This is – of course – a big problem for players. To make things worse, clubs often (wrongfully) impose penalties on players who claim their outstanding salaries.

Is this happening to you? Keep reading this article to find out how FIFA deals with disputes likes this!

If the dispute has an international dimension (player and club are from different countries), you may lodge a claim against your (former) club before FIFA’s Dispute Resolution Chamber (DRC). If there is no international dimension the DRC probably won’t be competent to deal with the matter at stake and you’ll be forced to lodge your claim before another court. This article is (only) about disputes with an international dimension.

Disputes regarding outstanding salaries

FIFA’s Dispute Resolution Chamber (DRC) is competent to deal with employment related matters with an international dimension. As a sports lawyer and as an editor at DRC Database I often come across cases about outstanding salaries. In the cases where the player claims these outstanding salaries clubs – in their defence – often state the player is not entitled to any outstanding salaries because the player is obliged to pay a fine according to a penalty clause  in his employment contract. A penalty clause is a provision in a contract providing for a form of punishment, such as a fine, for not fulfilling the contractual obligations.

How does FIFA deal with this kind of “defence”?

Luckily the jurisprudence of FIFA’s DRC is quite clear on the validity of penalty clauses.

First of all FIFA will have to establish the player actually failed to fulfil his (or her) obligations under the employment contract. It’s up to a club to prove this is the case, which often appears to be rather difficult. But even if a breach of contract can be established a penalty clause must be proportionate in order to be valid.

FIFA’s DRC learned us that amount of the fine should be proportionate in relation to the players’ salary. The higher the salary of a player, the higher a fine may be. This also means that a club cannot use an outstanding fine as an excuse for not having to respect the employment contract itself.

Appeal procedures before CAS

If you’re not happy with the outcome of the procedure before FIFA’s Dispute Resolution Chamber you could appeal before the Court of Arbitration for Sports (CAS). CAS may decide to actually take into account a disproportionate penalty clause. However, if CAS does so, it may reduce the fine.

Be wise!

Do you want to terminate the employment contract because your club fails to pay your salary? Or do you just want to get your salary? Both could be an option!

When you – as a professional football player – are having a dispute with your (former) club regarding outstanding salaries, it’s always wise to hire a specialized lawyer. This lawyer can tell you what your options are from a legal point of view, can reduce (financial) risks and knows what legal procedures to follow!

Do you have questions in regard to (international) football law? Is your club failing to pay your salaries or is the club imposing a penalty on you based on a penalty clause in your contract? Feel free to contact me through e-mail (n.poggenklaas@vandiepen.com) or by phone (+3172 512 1300) Van Diepen Van de Kroef Advocaten Alkmaar.