Claim No. SCT 016/2021
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSER
BETWEEN
MADONNA
Claimant
and
MAEL INVESTMENTS LIMITED
Defendant
| Hearing : | 28 February 2021 |
|---|---|
| Judgment : | 2 March 2021 |
JUDGMENT OF H.E. JUSTICE NASSIR AL NASSER
UPONthe Claim Form being filed on 20 January 2021
AND UPONa Hearing being held before H.E. Justice Nassir Al Nassir on 28 February 2021, with the Claimant and the Defendant’s representatives in attendance.
AND UPONreviewing the documents and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum ofAED 32,178.36.
2. The Defendant shall pay the Claimant a portion of the Court fees in the sum ofAED 643.56.
Issued by:
Nassir Al Nasser
SCT Judge and Registrar
Date of issue: 2 March 2021
At: 2pm
THE REASONS
The Parties
1. The Claimant is Madonna (the “Claimant”), an individual filing a claim against the Defendant regarding his employment at the Defendant company.
2. The Defendant is Mael Investments Limited (the “Defendant”), a company registered in the Dubai International Financial Centre located at the DIFC, Dubai, UAE.
Background and the Preceding History
3. The underlying dispute arises over the employment of the Claimant by the Defendant on 26 April 2020 pursuant to an offer letter (the “Offer Letter”). The Claimant signed the Offer Letter on 27 April 2020. As per the Offer Letter, the Claimant was to commence work on 1 May 2020.
4. On 20 January 2021, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payments of amounts allegedly due pursuant to the Offer Letter in the sum of AED 500,000.
5. On 9 February 2021, the Defendant filed its defence setting out its intention to defend all of the claim.
6. On 14 February 2021, a Consultation was held before SCT Judge Delvin Sumo, however, the parties failed to settle.
The Claim
7. The Claimant’s case is that he commenced employment with the Defendant on 27 April 2020 as per the signed Offer Letter and started work on 28 April 2020 pursuant to an email. Therefore, the Claimant alleges that he started work prior to 1 May 2020 as per the Defendant’s allegation.
8. The Claimant submits that the Defendant has failed to meet the basic obligations and requirements of a written contract set out in Article 14 of the DIFC Employment Law No. 2 of 2019 (the “DIFC Employment Law”), whereby a requirement is set out for a written employment contract to be issued within seven (7) days of commencement of employment. The Claimant adds that an employment contract was not issued to the Claimant during this period. Furthermore, the Claimant submits that the Defendant has failed to set out the following in the Offer Letter:
(a) The Claimant’s entitlement to Vacation leave;
(b) The notice that each of the parties is obliged to give to terminate the employment relationship; and
(c) Any applicable probation periods.
9. The Claimant submits that the Defendant has failed to make payments to the Claimant in the amount of AED 500,000 which consist of the following:
(a) Unpaid salaries for the period of 6 months in the sum of AED 420,000;
(b) Payment in lieu of a one-month notice period in the sum of AED 70,000;
(c) Payment in lieu of accrued but untaken annual leave in the sum of AED 26,856.99;
(d) Payment in lieu of contributions required to be made to a qualifying scheme in accordance with Article 66 of the DIFC Employment Law in the sum of AED 12,243; and
(e) Court fees, penalties and interest to be determined by the Court.
The Defence
10. The Defendant confirms that the parties signed the Offer letter on 26 April 2020. However, the Defendant rejects the various commencement dates alleged by the Claimant and alleges that the commencement date as set out in the Offer Letter was 1 May 2020.
11. The Defendant adds that, in accordance with the DIFC Employment Law, Article 14(2) which details the elements required in an Employment Contract, the details in the Offer Letter satisfy the required elements such as the name of the parties, commencement date, the salary (effective upon meeting the condition within 6 months), and the employee’s job title.
12. The Defendant submits that the Claimant is not entitled to any payments as he failed to meet the conditions set out in the Offer Letter, and therefore, he was terminated on 27 October 2020.
Discussion
13. This dispute is governed by DIFC Law No. 2 of 2019, as amended by DIFC Law No. 4 of 2020 (the “DIFC Employment Law”) in conjunction with the relevant Employment Contract.
14. The parties disagree on the commencement date of employment. The Defendant submits that as per the Offer Letter the Claimant’s commencement date is 1 May 2020 which falls on a Friday, therefore, the next working day which is 3 May 2020 is the actual commencement date.
15. On the other hand, the Claimant submits that he signed the Offer Letter on 26 April 2020 and commenced work on 27 April 2020, the date he signed the Contract.
16. The Claimant also submitted an email sent on 28 April 2020 by the CEO of the Defendant to the Claimant to review a shareholders’ agreement and provide his comments.
17. The email dated 28 April 2020 is sufficient to establish that the Claimant commenced work on 28 April 2020 as it was a task given by the Defendant to the Claimant.
18. The Claimant was terminated on 27 October 2020, which is six months from the commencement date.
19. The Offer Letter states the following:
“Upon accepting this offer, the remunerations will be effective directly after raising a minimum of US$ 3 million out of plan to raise US$ 10 million during six months after signing this offer for MaelInvestments Limited”.
20. It is clear to me that the parties agreed on a six months’ period to fulfil the condition for the Claimant to raise a minimum of USD 3 million out of plan to raise USD 10 million (the “Condition”), and I find that the six months specified is to be considered as a probation period. The Claimant failed to fulfil the Condition set out which resulted in his termination within the six months period.
Non-payment of Salary
21. The Claimant argues that since joining the Defendant company he never received a salary which, he submits, defeats the entire objective of an employer/employee relationship.
22. The Claimant argues that it was never the intention of the Defendant not to pay salary on a monthly basis. If it were, the Claimant would not have asked for his salary throughout his employment with the Defendant. The Claimant argues that he has verbally requested for his salary in which the CEO responded by email on 3 July 2020 that the board refused to pay the salary as the Condition set out in the Offer Letter had not been satisfied.
23. The Claimant accepted the Condition set out in the Offer Letter as per paragraph 19 of this Judgment but failed to meet said Condition. Therefore, I find that the Claimant is not entitled to a monthly salary as it clearly mentioned in the Offer Letter “the remunerations will be effective directly after raising a minimum of US$ 3 million”.
One-month notice period
24. The Claimant argues that the Offer Letter did not include a probation period, therefore, he is entitled to a one month notice as per the DIFC Employment Law as he worked more than 3 months as per Article 62(2)(b) of the DIFC Employment Law:
“subject to Article 62(3), 62(4), 62(6) and 63, the written notice required to be given by an employer or employee to terminate the Employee’s employment shall not be less than: (b) thirty (30) days, if the period of continuous employment of the employee is in excess of three (3) months but less than five (5) years, including any period of secondment”.
25. I have mentioned above that the probation period is the period set out in the Offer Letter for the Claimant to fulfil the Condition within six months, which he failed to do.
26. The Claimant commenced work on 28 April 2020 and was terminated on 27 October 2020 which calculates to six months.
27. Article 62(6)(a) of the DIFC Employment Law, states that Article 62(2) does not apply:
“(a) during any probation period agreed in the Employment Contract”.
28. Therefore, I find that the Claimant is not entitled to a one-month notice period as he was terminated within 6 months of his employment.
Annual Leave
29. The Claimant argues that the Offer Letter fails to mention the annual leave the Claimant would be entitled to during his employment with the Defendant.
30. Article 27(1) of the DIFC Employment Law, states:
“subject to Article 30, an Employee who has been employed for at least ninety (90) days is entitled to paid Vacation leave of twenty (20) work days in each vacation leave year.”
31. Article 27(2) of the DIFC Employment Law, states:
“an Employee is entitled to be paid their daily wage during Vacation Leave”.
32. Article 28(1) of the DIFC Employment Law, states:
“where an employee is terminated, the Employer shall pay the Employee an amount in lieu of Vacation Leave accrued but not taken up to and including the terminated date calculated in accordance with Article 28(3).”
33. Article 28(3) of the DIFC Employment Law, states:
“compensation in lieu of Vacation Leave, or any amount owed by the Employee is respect of excess vacation leave taken, shall be calculated using the Employee’s daily wage at the termination date.”
34. The Claimant has worked for 6 months, which calculates as follows: 20 work days/ 12 months = 1.66 days per month x 6 months = 9.96 days the total annual leave days to which the Claimant entitled to payment in lieu of calculated on the Claimant’s daily wage.
35. The Claimant’s daily wage is calculated as follows pursuant to the DIFC Employment Law. The Claimant’s monthly salary as per the Offer Letter was AED 70,000 per month x 12 months/ 260 working days = AED 3,230.76 x 9.96 days = AED 32,178.36
36. Although the Claimant is not entitled to his salary as he failed to fulfil the Condition under the Offer Letter, he is entitled to annual leave as per Article 27 of the DIFC Employment Law.
37. Therefore, I find that the Claimant is entitled to payment in lieu of annual leave in the sum of AED 32,178.36 as per Article 28(1) and (3) of the DIFC Employment Law.
DEWS
38. In accordance with Article 66(7) of the DIFC Employment Law, the end of Service gratuity regime does not apply to the Claimant as he did not work with the Defendant for a minimum of one year.
39. In addition, the six months period he worked with the Defendant was a probation period as discussed above.
40. Therefore, the Claimant is not entitled to any payments in lieu of contributions to be made by an employer on behalf of an employee to a qualifying scheme.
Visa Cancellation and repatriation
41. At the hearing, the Claimant confirmed that his employment visa with the Defendant was cancelled.
42. In relation to the repatriation ticket, the Claimant submits that he is entitled to a one way economy class ticket to his home country.
43. There is no evidence that the parties agreed that the Defendant will provide the Claimant with one way ticket to his home country upon termination of employment nor does the DIFC Employment stated that it is an employer’s obligation to provide a one way ticket to an employee.
Discrimination
44. The Claimant argues that the Defendant was engaging in discriminatory practices throughout his employment. The Claimant argues that it has come to his attention that all employees within the organisation received a salary except the Claimant despite the fact that a number of these employees have conditions attached to their respective offers.
45. The Claimant failed to provide evidence for this allegation, therefore, I dismiss this claim accordingly.
Penalties under Article 19 of the DIFC Employment Law
46. The Claimant argues that upon termination of an employee’s employment, Article 19(1) – (3) of the DIFC Employment Law provides the following:
“(1) an Employer shall pay to an Employee, within fourteen (14) days after termination date:
a. All remunerations, excluding, where applicable, any additional payments deferred in accordance with Article 18(2);
b. Where applicable, any gratuity payment that accrued prior to the qualifying scheme commencement date under Article 66(1) not transferred to a Qualifying Scheme under Article 66(1);
c. A daily wage for each day of accrued Vacation leave not taken; and
d. All outstanding amounts due in respect of the Employee under Article 66(7) not yet paid to a qualifying scheme.
(2) subject to provisions of Article 19(3) and (4), an employee shall be entitled to and the employer shall pay a penalty equal to an Employee’s daily wage for each days the Employer is in arrears of its payment obligations under Article 19(1).
(3) a penalty pursuant to Article 19(2) may only be awarded to an employee if the amount due and not paid to the Employee in accordance with Article 19(1) is held by a court to be in excess of the Employee’s weekly wage.”
47. The Claimant failed to specify the amount claimed as penalties pursuant to Article 19 of the DIFC Employment Law. Should the Claimant have specified the amount, the claim value sought by the Claimant would have exceeded the financial threshold of the Small Claims Tribunal.
48. In addition, the Claimant failed to add the amount claimed in the claim form. Therefore, I dismiss the Claimant’s claim for penalties under Article 19 of the DIFC Employment Law.
49. The Claimant also seeks damages for breach of Contract, but failed to provide any evidence of damages and that the Defendant has breached the Offer Letter.
50. Therefore, I dismiss the Claimant’s claim for damages accordingly.
Conclusion
51. In light of the aforementioned, I find that the Defendant shall pay the Claimant the sum ofAED 32,178.36in relation to payment in lieu of accrued but untaken annual leave.
52. The Claimant’s other claims shall be dismissed.
53. The Defendant shall pay the Claimant a portion of the Court fees in the sum ofAED 643.56.
Issued by:
Nassir Al Nasser
SCT Judge and Registrar
Date of issue: 2 March 2021
At: 2pm