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The Semedo Case: Does a Players’ Arrest Authorize Clubs to Terminate their Employment Contracts with Just Cause?

By Alessandro Mosca Lawyer, Ruiz-Huerta & Crespo Sports Lawyers Valencia - Spain

➔➔ National Law – Criminal Law – Player contract – Breach of contract – Just cause

On 14 July 2017, Villarreal CF transferred-in the Portuguese player Ruben Semedo (Semedo) from Sporting CP paying EUR 15 million. Afterwards, Semedo was firstly accused of aggression in October 2017, was detained for a few hours for threats in November 2017 and, following a third episode occurred on 22 February 2018, he was detained, being accused of attempted murder, injury, kidnapping, criminal possession of weapons and robbery.

Ruben Semedo, Aleksandr Kokorin, On the one hand, during the of their pretrial custody. If they Pavel Mamaev, Arda Turan and players’ pretrial custody the had not done so, the impossibility Nicklas Bendtner represent the impossibility for the players to to perform their work will be most recent examples of football perform their work is justified considered as unjustified and clubs players facing criminal charges. and therefore clubs may impose will have the right to terminate fines and suspend employment said employment contracts with Besides the criminal repercussions contracts, which cannot be, in just cause. connected with these crimes, any case, terminated with just football players could face cause. In this sense, Article 45.1.g) As a general rule, clubs do not additional employment-related of the Spanish Workers’ Statutes have the power to terminate consequences. In this sense, does states that “The employment employment contracts with a players’ arrest authorize clubs contract could be suspended for just cause as a consequence of to terminate their employment the following reasons … g) The players’ crimes or misconducts contracts with just cause? worker’s privation of liberty, while which are not directly related to no condemn exists […].” the working activity or committed First of all, it should be noted that during the working time. This is every national law is different. If/once the pretrial custody without prejudice to those crimes Therefore, Villarreal CF, Zenit terminates, Article 48.1 of the that indirectly affect the players’ Saint Petersburg, Başakşehir, and Spanish Workers’ Statutes performance or the clubs’ image Rosenborg BK could come to grants players the right to be (clubs’ internal regulations and different decisions in accordance reincorporated in their working players’ employment contracts with the respective national place. At the opposite, in case play an important role in legislations. clubs decided to terminate players’ determining which the punishable employment contracts it would conducts are). With reference to Spanish Law, represent a termination without a distinction should be made just cause, in accordance with the On the other hand, if and once between pretrial custody and final above Article 45.1.g). players were sentenced to prison prison sentence. by a final decision, Article 54.2.a) As a necessary requisite, players of the Spanish Workers’ Statutes shall have previously notified clubs regulates the termination of

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employment contracts for therefore in accordance with the windows.5 Therefore, if Villarreal disciplinary reasons, sanctioning abovementioned Article 45.1.g) of fired Semedo outside the transfer the “Repeated offences, and the Spanish Workers’ Statutes. windows, it would be prevented unjustified absences or lack of from registering a substitute. punctuality at work.” In this sense, Following more than 140 days Moreover, terminating the Semedo’s the decision dated 24 April 2018 of under pretrial custody and two employment contract would entail the Spanish Supreme Court, Social rejected requests of release, on 13 economic and financial negative Chamber1, confirmed that when July 2018, the judge granted Semedo consequences, where Villarreal workers are sentenced to prison the conditional release on bail. On CF would lose the chance to by a final decision, the absence the same day, Villarreal CF decided count on or transfer a player from work allows employers to close the employment-related paid EUR 15 million in July 2017, to terminate employment internal disciplinary proceedings but having the possibility to file a contracts for disciplinary reasons. by imposing a fine against the claim requesting compensation for Furthermore, said absence may also player. Five days later, Semedo was damage, as explained above. be considered as tacit dismissal2, transferred on a yearly loan to in accordance with Article 49.1.d) SD Huesca, where he is regularly In view of the foregoing, of the Spanish Workers’ Statutes, performing his duty while waiting Villarreal CF could terminate which justifies the employers’ for the sentence. In case Semedo Semedo’s employment contract if/ absence of compensation. At were sentenced to prison by a once he is sentenced to prison by a the opposite, clubs can request final decision, Villarreal CF would final decision and said employment compensation for damage due have the option of terminating contract will still be in force at to the termination of the working his employment contract with that time. However, Villarreal CF relationship attributable to players, just cause, in accordance with the should take into consideration in accordance with Article 15.2 of the abovementioned Article 54.2.a) of also the sporting and financial Spanish Royal Decree 1006/1985. the Spanish Workers’ Statutes. consequences of such termination.

Analyzing a concrete case, Nevertheless, when the final on 14 July 2017, Villarreal CF decision will be rendered, Semedo’s transferred-in the Portuguese employment contract with player Ruben Semedo from Villarreal CF could be naturally Sporting CP paying EUR 15 million. expired4, or he could be definitely Afterwards, Semedo was firstly transferred to another club, accused of aggression in October which both options rendering 2017, was detained for a few hours Villarreal CF’s termination with for threats in November 2017 just cause impossible (which and, following a third episode would be valid for the purchasing occurred on 22 February 2018, club). At the opposite, if the final he was detained, being accused decision imposed Semedo to serve of attempted murder, injury, a period in jail and at that time he kidnapping, criminal possession of will still be contractually bound to weapons and robbery. Villarreal CF, the latter would have the opportunity of terminating On 23 February 2018, Villarreal CF said working relationship with just “decided to suspend the player's cause. employment and salary until a definitive resolution has been However, Villarreal CF should take reached for the disciplinary several factors into consideration inquiry that is in process”3, if/when terminating said employment contract. Indeed, such decision should consider

1 www.poderjudicial.es that the rules of the Spanish 2 It is considered as a tacit dismissal also Football Association do not allow 5 The only two exceptions are represented when workers had simply notified the final by free agent players (Article 124.2 of the decision and his arrest because, as the the possibility of registering General Regulations of the Spanish Football Spanish Supreme Court established, the new players out of the transfer Association) and substitutes of players working relationship cannot be based on a injured for more than five months, when mere notification, which does not justify the an ITC shall not be requested (Article 124.3 workers’ absence. of the General Regulations of the Spanish 3 www.villarrealcf.es 4 It will naturally expire on 30 June 2022. Football Association).

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Did the IOC lie about the denial of Kosovan athletes’ that country competed under the visas in Spain? flag and the anthem of the Kosovar Olympic Committee, almost equal to those of the country. By Agustín Amoros Martínez Lawyer, Ruiz-Huerta & Crespo Sports Lawyers It was Pere Miró, Deputy Director Valencia – Spain of the International Olympic Committee, who stated that in the Karate World Championships, the

➔➔ Foreign players – Nationality – Visas Kosovar karateka had to ask for a visa to France, a country that does recognize its independence, because Spain did not grant it. Pere Miró (picture), Deputy Director of the International Olympic Committee, declared that “Spain is the only country with which there is no solution on Pere Miró, also declared that “Spain Kosovo. We have two years and two different governments with this. (…) If is the only country with which the Spanish Government is not in the conditions to guarantee the access not there is no solution on Kosovo. We only to Kosovo but to every athlete to compete, we should warn all IFs that, have two years and two different until this is solved, they should not hold international competitions there.” governments with this. But the World Karate the truth that is the straw that broke the camel’s back. In a joint statement on 14 November always in accordance with the If the Spanish Government is not 20186, the International Olympic Olympic chart and allowing the in the conditions to guarantee Committee (IOC) and the use of its symbols, flags and the access not only to Kosovo but Spanish Olympic Committee hymns according to the Olympic to every athlete to compete, we “publicly expressed their deepest protocol.” should warn all IFs that, until this satisfaction” with a commitment is solved, they should not hold from Spain’s foreign affairs It also ensures that, in the future, international competitions there.” minister Josep Borrell to allow they will continue with this athletes from Kosovo to use their “without prejudice” scheme for Mr Miró’s reaction, who put himself national symbols, anthem, and flag their political position not to forward for Convergència i Unió while participating in international recognize “the independence of (the Puigdemont’s Catalan party) at sporting events being held in the Kosovo.” the local elections in 1987, seems country. a bit histrionic. An IOC General The point that most annoys the Director should be more prudent However, hours later through a Foreign Ministry is that of granting and less passionate about politics. press release, the Spanish Minister visas: “We deny the reiterated of Foreign Affairs, Josep Borrell, statements by a senior official Kosovo, which declared its said that the Spanish Government of the International Olympic independence from Serbia in 2008, will raise a formal complaint to Committee, according to which was recognized as a member of the the IOC to denounce what he Spain would have denied the International Olympic Committee considers “false information granting of visas to the Kosovars (IOC) in 2014, receiving the right to coming from a high-level IOC who participated in the World participate in international sports position”, which is groundless, “and Karate, given that they did not events as an independent state, will transfer them” the profound request visas from the Spanish but is not yet a member of the malaise that these statements authorities.” United Nations. have caused to the Spanish executive. In its statement, the The problem emerged at the The present situation will not be Spanish government states that World Karate Championships in rectified until Kosovo and Serbia, “Spain has allowed and facilitated Madrid, held at the beginning of the core republic of former the participation of Kosovar November 2018, a competition Yugoslavia, defy apparently athletes in these competitions, in which the Kosovo team insurmountable differences and granting visas when requested, participated in under the banner come to a settlement aided of the International Federation, by the United Nations Interim

6 Joint statement of the IOC and the Spanish unlike the Mediterranean Games in Administration Mission in Kosovo Olympic Committee, 14 November 2018 Tarragona, where the athletes of (UNMIK). www.olympic.org

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To date, 110 countries of the The IOC has its own skeletons in Brundage remained IOC President 193 United Nations members the closet, as discussed below. until 11 September 1972 and was recognize Kosovo as an appointed Life Honorary President independent country. However, of By the time the Olympics kicked until his death in 1975. the ten most populous countries in off in October 1968 in Mexico City, the world, seven did not recognize Dr Martin Luther King Jr. had been An official document about the unilateral declaration of gunned down in April, setting off Brundage at the IOC website independence of the southern riots and halting the Civil Rights (Historical Archives-Olympic Serbian province, including powers Movement in its tracks. On the Studies Centre) only says about the such as China, India, Indonesia, morning of 16 October, US athlete above-mentioned facts: “Several Brazil, Nigeria, Russia, and Mexico. Tommie Smith won the 200-meter people criticised Brundage for race with a world-record time of being somewhat intransigent On 18 February 2008, Spanish 19.83 seconds and the US’s John in his positions and in his way Foreign Minister Miguel Ángel Carlos won third place with a time of leading the IOC during these Moratinos said that Spain would of 20.10 seconds. They took their crises. However, everyone agrees not recognize Kosovo because the first and third-placed podiums that he was always faithful to his declaration of independence did barefoot and, during the playing convictions and to defending not respect international law. He of the US national anthem, raised the two major Olympic ideals, also said that the independence a single black glove while bowing i.e. amateurism and the non- of Kosovo would only be legal if their heads. politicisation of sport.” it was the result of an agreement by all sides involved or if there The then IOC President Avery Let’s go further in time. In its press had been a UNSC resolution. Brundage had supported the release of 28 February 2017, the This position seems to be quite inclusion of apartheid-era South IOC communicated that, as part respectful to international law and Africa in the Olympics and had of the implementation of Olympic UN resolutions. fought against proposed boycotts Agenda 2020, it is making specific of Hitler’s 1936 Games. But after changes to the 2024 Host City The argument that “the creation Carlos and Smith raised their fists, Contract with regard to human of States is a matter in principle it was the black American athletes, rights, anti-corruption and governed by international law not the IOC President, who faced sustainable development. On this and not left to the discretion of serious consequences. occasion, IOC President Thomas individual States” may be widely Bach stated that “this latest step accepted in international legal They were banned from further is another reflection of the IOC’s circles. The radical divergence Olympic activities by the IOC commitment to embedding the of third States in terms of and the U.S. Olympic Committee. fundamental values of Olympism their reactions to the Kosovo Brundage ordered Smith and Carlos in all aspects of the Olympic Declaration would be explained as be suspended from the US team Games”. the result of a deliberate decision and banned from the Olympic of a considerable number of States Village. When the US Olympic For the moment, the IOC has made to simply ignore its principles and Committee refused, Brundage no objections regarding 2022 rules, without suffering any kind of threatened to ban the entire US World Cup in Qatar. sanction as a result. track team. This threat led to the expulsion of the two athletes from The abuses in Qatar amount Politics and political banishment the Games. to modern-day slavery, with in the Olympics date back to its almost one Nepalese immigrant ancient Greek version. The city- Brundage, who was president of the dying each day during the state of Elis, which controlled the United States Olympic Committee summer of 2018 constructing the ancient games, remained neutral in in 1936, had made no objections infrastructure for the 2022 World disputes and wars. But during the against Nazi salutes during the Cup. The International Trade Union Peloponnesian War in 424 B.C., Berlin Olympics. He argued that Confederation (ITUC) has claimed Elis sided with Athens and banned the Nazi salute, being a national that Qatar’s construction frenzy Athens’s rival, Sparta, from salute at the time, was acceptable ahead of the 2022 World Cup is on competing in the 89th Olympiad. in a competition of nations, while course to cost the lives of at least Given that history, it may be the athletes’ salute was not of a 4,000 migrant workers before a that there never was hope of an nation and therefore unacceptable. ball is kicked. Olympic Games devoid of politics.

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FIFA is “taking the matter Former Real Madrid President Sentenced to 3 years seriously” but has yet to reveal its in Prison over Tax Fraud own plans to monitor the issue. So far it seems its biggest concern By Alejandro Pascual has been the logistical nightmare Lawyer, Ruiz-Huerta & Crespo of shifting to a winter schedule Sports Lawyers to avoid Qatar’s searing summer Valencia - Spain temperatures, a trivial matter in comparison to the human lives exploited in the preparation for ➔➔ National Law – Tax Law – Tax Fraud – Criminal Law – National courts the event.

This matter seems a little more Audiencia Provincial de Madrid, section 5, 29 October 2018 serious than the controversial recognition of a country unilaterally separated from another; Mr Miró, Mr Lorenzo Sanz (9 August 1943, the damage caused towards the you have the floor… Madrid), Real Madrid’s former Spanish tax authorities.” However, president from 1995 to 2000 the magistrates in question after losing the elections against recognized that, although Mr Sanz Mr Florentino Perez, has been admitted the facts and his fault, sentenced to three years in prison such fact could not be taken as and the payment of a fine of a mitigating circumstance since EUR 1,250,000 for deceiving the “a late confession used as a Spanish Tax Agency (Agencia strategical argument of defense in Estatal de la Administración order to mitigate a judgment, shall Tributaria - AEAT) by failing not be taken into consideration.” to declare part of his earnings in his Personal Income Tax Ms Durán was also considered corresponding to the years 2008 as directly responsible for the and 2009. fraud committed by her husband, which is why the court ordered The national courts in Madrid her to bear in equal shares the recently issued, on 29 October compensation of EUR 1,250,000 2018, a decision considering that that Mr Sanz must pay to the Mr Sanz “intentionally” failed Spanish Tax Agency. The court to declare an income of almost concluded that Ms Durán, being EUR 6,000,000 in his declaration married to Mr Sanz under a profit on the Personal Income Tax in the regime, was directly benefitted said two years "to obtain an illicit from her husband’s fraud, although tax benefit." she was only condemned to the payment of the economic penalty The criminal acts proven by the without imprisonment, since the Spanish Court reveal that Sanz magistrates discarded her being and his wife, Ms María Luz Durán unaware of the defrauding attitude Muñoz, hid more than EUR 465,000 of her husband as well as her in labor income, EUR 5,300,000 not having any decision-making in profits obtained from its capacity in the tax declarations of assets and over EUR 250,000 that the years 2008 and 2009. entered into his bank accounts and was never justified. Mr Sanz and his wife have been facing a tough process, which began on The Spanish courts mitigated the 20 June 2014 and where the State’s sentence due the fact that Mr Sanz, Attorney and the Prosecutor where by establishing mortgages over the requesting sentences of four and assets of his sons and daughters, over five years of imprisonment, “tried its best efforts to repair respectively.

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As a final remark, it is worth of the referees in the context to consider the referees as the recalling that another procedure of their relationship with the employees is not controversial and has been opened against Mr Sanz correspondent sports association is answered without doubts. for an alleged crime of insolvency but rather from the point of view punishable as well under the of the application of the law on the Spanish courts. It appears that income tax to their remuneration the Unit of Economic and Fiscal and benefits in kind. Crime of the National Police (Udef) is investigating Mr Sanz Thus, the Tax Authorities state for an alleged crime of money that the Article 17.1 of the laundering, after detecting Law no. 35/2006, of 28 November deviations of money to tax havens 2006, on the Income Tax of of more than EUR 13,000,000. natural persons defines the income from employment as "all remuneration or income, whatever its denomination or nature is, monetary or in kind, that The Spanish Tax derives, directly or indirectly, from authorities consider the personal work or from the labour referees as employees or statutory relationship and does not have the nature of the income By Iván Bykovskyi from economic activities." Lawyer, Ruiz-Huerta & Crespo Sports Lawyers Valencia - Spain The Tax Authorities note that, on the other hand, the Article 27.1 of the same Law conceptualizes the ➔➔ National Law – Tax Law – Referee income from economic activities as "the income that comes from combined personal work and capital, or from only one of these factors, and supposes from the taxpayer the correspondent orders on his own account of means of production and human resources or any of them, with the purpose of intervening in the production or

distribution of goods or services."

According to both legal definitions, The Spanish Tax Authorities have the Tax Authorities qualify, again recently issued a document in the only for the purposes of the form of a consultation7 where it Personal Income Tax, as income responded to whether the football from employment the remuneration referees should be considered earned by the referees of the as employees or self-employed corresponding sports federations persons. The debates over this for the realization of their issue are ongoing in the Spanish functions, since the organization legal society, however, the answer on their own account does not was given only for the purposes of exist. The same applies for the the income tax of the referees. means of production and human resources, or one of both, as the It should be noted that the Tax factor creating the income based Authorities did not consider the on the economic activities. question of the employment Thus, at least in the eyes of the Tax authorities of Spain, the question 7 https://petete.minhafp.gob.es

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