Waivers from payments: their validity before FIFA and CAS

Waivers from payments: their validity before FIFA and CAS

16.02.2024

 

In the past, it was very common in European football for clubs to complete payments to Players in cash, and not through wire transfers and bank deposits. Nowadays, this is a practice that has significantly decreased. Nevertheless, there is still a number of clubs that adopt this approach. It has been noted that, in cases of payments in cash, it is a common phenomenon for clubs to ask their employees (athletes and coaches) to sign waivers from payments, instead of a proof of payment with specific details about the payment.

Nonetheless, these waivers from payments do not constitute valid and binding proof of payment under Swiss Law and the jurisprudence of FIFA and CAS. Since some national club licensing authorities usually accept such waivers, there exists confusion and legal insecurity about their validity in a financial dispute for claims of the footballer/coach, which in some cases, may entail financial risks for clubs and footballers.

 

Waiver of Salaries under Swiss Law

As regards football employment disputes with an international dimension, the judicial bodies of FIFA (FIFA DRC and PSC) have default jurisdiction to hear these disputes, apart from the cases in which the parties have opted for the jurisdiction of regular courts or of a National Dispute Resolution Body which complies with the requirements of FIFA NDRC Regulation.

If the FIFA judicial bodies find themselves competent to hear the dispute, they will examine the merits of the dispute in accordance with the FIFA Regulations, and subsidiarity they will consider the provisions of Swiss Law (since FIFA is a non-profit organisation established and seated in Switzerland).

Specifically regarding the waivers from payments to employees, including footballers and coaches, Swiss Law stipulates that during the period of the employment relationship and for one month after its termination, the employee may not waive claims in relation to salaries and other kinds of payments related to work and services already provided (or to be provided) by the Player/Coach.

“ART. 341 SCO

For the period of the employment relationship and for one month after its end, the employee may not waive claims arising from mandatory provisions of law or the mandatory provisions of a collective employment contract.

Waivers that concern salaries/incomes regarding entitlements deriving from work already performed and work to be performed are considered immoral, as per the combined implementation of articles 341, 361, 362 and 20(1) SCO would render the waiver immoral.

 

The jurisprudence of FIFA and CAS 

The bodies of FIFA and CAS have confirmed in multiple instances the nullity of such waivers when they concern payments for work already performed by players and/or coaches.

On the one hand, there is the principle of pacta sund servanda, in accordance with which the parties shall abide by their agreement. On the other hand though, due to the mandatory character of articles 341, 361, 362, and 20 SCO, such waivers are not covered by this principle in order to protect the interests of the weaker party to the employment relationship, i.e. the employee.

In this case, the party that invokes a waiver of payments carries the burden of proof that such a waiver was not a “blank” waiver of payments but it was rather a proof of payment of the relevant amount. In other words, the Club must prove that it really paid the waived amount to the player/coach.

In multiple instances, such agreements – without the proof of payment of the amount – were considered null and void: 

“The Panel further notes that even if the signature and the alleged statement “I confirm receipt and accept for termination” were to be interpreted as an agreement (which was denied by the Player), the termination agreement would be deemed null and void: according to Article 341 [SCO] pursuant to which an employee may not validly waive any claims arising from mandatory law during and for 30 days after termination of the employment agreement. Considering the terms mentioned in the letter, the Panel notes that a termination without any financial obligation must be deemed unbalanced. The Player may not waive his right for compensation. Therefore, even if the letter qualified as mutual agreement, it would be null and void in terms of Article 341 [SCO]. Considering this outcome, the Panel deems it obsolete to examine the validity of adding the handwritten sentence “I confirm receipt and accept for termination”” (CAS 2016/A/4582, para. 67 of the abstract published on the CAS website).

It has also been determined that the same applies to waivers from bonus payments of non-discretionary character, which were payable for contractually agreed targets already accomplished (by the employee or the club).

The same conclusion arises from the jurisprudence of the FIFA dispute resolution bodies.

Since the FIFA RSTP does not contain any specific provisions about waivers of entitlements, the FIFA Football Tribunal relies on the provisions of the Swiss Code of Obligations, and specifically articles 341, 361, 362 and 20 SCO. Therefore, it is now standard jurisprudence of the FIFA DRC and the FIFA PSC that “the waiving of salary for work already performed cannot be considered as validly made.”

 

SETTLEMENT AGREEMENTS

As an exception to the above, waivers from salaries and other payments for work already performed by a player/coach can be accepted as valid and binding when they concern a settlement between the parties and not a unilateral, one-sided waiver by the player/coach.

In particular, it has been determined that:

“art. 341 para. 1 CO does not preclude a possible settlement on the terms of the termination of the employment relationship, provided that there is an appropriate equivalence of reciprocal concessions, i.e. that the claims waived by each party are of comparable value. A discharge for the balance of any account by which an employee, unilaterally, i.e., without reciprocal concessions – waives a claim protected by art. 341 SCO is thus devoid of any legal effect.”

The dispute resolution bodies of FIFA have followed the same rationale, and have accepted that a waiver of salaries for work already performed can be valid and binding in the context of a settlement with equivalent concessions.

In particular, the FIFA DRC has determined that:

“…if the player indirectly waives payment of wages for work already done / outstanding salaries by way of a remission of debt, this waiver is null and void unless it is part of a genuine transaction involving concessions of comparable importance on the part of each party.

…To assess whether such a transaction is permissible under art. 341 SCO, the court/deciding body is required to conduct a balancing of interests, checking whether the mutual claims waived by each party are of comparable value. Put it another way, whether there is an appropriate equivalence between the parties’ reciprocal concessions.”

 

CONCLUSIONS

For many years now, the dispute resolution bodies in football have drawn a red line regarding the non-acceptance of unilateral waivers from outstanding payments, in order to protect the employees of clubs.

A waiver is not necessarily considered as such when the player/coach declares that “he/she waives” an amount. Even a general statement in the form of “I do not have overdue payables from the Contract” or “I have received everything” cannot stand as evidence for the full payment of contractual salaries. The Club must still present the corresponding proof of payment before FIFA and CAS.

This is true, especially regarding termination agreements and the suspension of contracts before a loan transfer.

Therefore, Clubs shall be extremely diligent when they want to secure the validity of a waiver from payments signed by a player/coach.

On the other hand, employees must be cautious of the documents they sign, especially in cases where they terminate or suspend their contracts with Clubs, and they shall be aware that waivers potentially provided in the past do not mean that they will not be in a position to claim the outstanding payments in the future.