Novia v Nysa [2024] DIFC SCT 010 (10 June 2024)

Claim No: SCT 010/2024

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
BEFORE SCT JUDGE MAITHA ALSHEHHI

BETWEEN

NOVIA

Claimant

and

NYSA

Defendant

Hearing :	3 June 2024
Judgment :	10 June 2024

JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI

UPON the claim having been filed on 4 January 2024 (the “Claim”)

AND UPON the Claimant’s further submissions dated 23 May 2024

AND UPON the Defendant’s defence dated 30 May 2024

AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 3 June 2024 with the Claimant and the Defendant’s representative in attendance (the “Hearing”)

AND UPON reviewing the documents and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

1. The Defendant shall pay the Claimant the amount ofAED 43,577.33.

2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount ofAED 871.54.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 10 June 2024
At: 10am

THE REASONS

Parties

1. The Claimant is Novia (the “Claimant”), an individual filing a claim against his former employer.

2. The Defendant is Nysa (the “Defendant”), a company registered in the DIFC, Dubai, the UAE.

3. For the sake of completeness, I order that the Second Defendant be removed from the proceedings as Nysa is named as both the First Defendant and Second Defendant.

The Claim

4. The Claimant is seeking his end of service entitlements following his resignation from the Defendant company in the amount of AED 54,327.

5. The Claimant commenced his employment with the Defendant company on 22 July 2023 until 14 December 2023 for a monthly salary of AED 18,365 pursuant to the terms of the offer letter dated 1 July 2023 (the “Offer Letter”).

6. The Claimant asserts that he submitted his resignation on 14 December 2023 due to the Claimant’s failure to pay his salary for the months of October, November and 14 days in December 2023. The Claimant adds that September’s salary was only paid to him in December in the amount of AED 14,000.

7. The Claimant submits that the Defendant withheld his passport for over a month without any legal justification for doing so which caused him emotional stress.

8. The Claimant contends that the Defendant denied him access to his apartment which led to him staying in the reception area of the building and his colleagues offering a space for him within their apartments.

9. The Claimant argues that he had no choice but to submit his resignation as he had not been paid for so long and could not stay in that situation any longer as there was no certainty and trust.

10. Therefore, the Claimant is seeking his unpaid salaries for the months of October, November and 14 days in December as well as payment in lieu of accrued but untaken vacation leave of 8 days in the amount of AED 54,327.

The Defence

11. The Defendant submits that the Claimant stopped showing up to work and failed to notify them in writing about his resignation and did not serve his notice period. Therefore, the Defendant submits that the resignation was defective as it contravenes the terms of the Offer Letter.

12. The Defendant asserts that the company had gone through hardships where it could not afford to pay its employees, however, the Claimant was made aware of the situation and should have given them more time to sort out their issues. The Defendant also emphasizes that the Claimant’s resignation without serving his notice period is unjustifiable.

13. The Defendant disputes the Defendant’s entitlement to 8 days of accrued but untaken leave on the basis that the Claimant resigned unofficially during his probationary period and without serving his notice period as mandated by the Offer Letter.

14. The Defendant takes the view that although it admits that it owes the Claimant his salary payments for the months of October, November and 10 days in December in the amount of AED 34,308.52, this amount must be deducted against the amounts owed to them by the Claimant as per the below:

(a) Training costs in the amount of AED 10,000;

(b) Notice period deduction of 14 days in the amount of AED 8,570.33;

(d) Vehicle fines and salik in the amount of AED 600;

(e) Utilities in the amount of AED 1,252.30;

(f) Rent for accommodation 1 extra month in the amount of AED 7,163; and

(g) Car repair in the amount of AED 3,500.

15. After offsetting the above-mentioned amounts against the Claimant’s salaries, the Defendant asserts that the Claimant is only entitled to receive the amount of AED 4,347.89.

16. The Defendant submits that it had to perform an - inspection within the Claimant’s accommodation and found DJ equipment which does not belong to him which is why the Claimant was denied access to the accommodation.

17. The Defendant argues that the Claimant did not take good care of the company’s car and he allowed someone else to drive it which led to a car crash, in breach of the undertaking signed by the Claimant dated 1 August 2023 (the “Undertaking”) that states that he is not allowed to share the car with anyone.

18. To support its defence, the Defendant relies on paragraphs 1, 9, 12 and 13 of the Undertaking which reads as follows:

“ 1. The employee is not entitled to assign his rights and obligations under this undertaking to lend or let someone use the vehicle on his behalf.

…

9. the employee understands that he/she is financially responsible for the vehicles’ fine, salik, petrol and any damage to the said vehicle from acceptance of the vehicle to the time it is officially handed back to the Nash Group. Upon return of the vehicle all outstanding payables shall be cleared, and the fuel should be the same level as it was when the vehicle was first used by the employee. To cover the general cost of maintenance (general usage, wear and tear etc) the employee will be required to pay the sum of AED 1,000 per month. To cover the Insurance Annually, Renewal of Registrations, Service Maintenance for breaks, oil change, wheels and tires. This will be deducted from the employee’s salary at the end of each month. Pro rata amount will be used certain where a car is issued-mid month.

…

12. the employee accepts in the event of failure to adhere to maintenance during specific KM/time, the employee will be fined AED 3,500 to cover loss and expenses that would result to such actions.

13. the employee acknowledges to indemnify the company for any liability, loss or damage to the vehicle assigned to the employee.”

Applicable Law

19. This dispute is governed by DIFC Employment Law No. 4 of 2021 (the “DIFC Employment Law”) in conjunction with the Offer Letter.

Discussion

Was the Claimant’s resignation lawful?

20. With regards to the Claimant’s resignation and failing to serve his notice period for nonpayment of wages, I find that his immediate resignation was valid and in line with Article 63 of the DIFC Employment Law for termination for cause which reads as follows:

“Termination for cause

(1) An Employer or an Employee may terminate an Employee’s employment with immediate effect for cause in circumstances where the conduct of one (1) party warrants termination and where a reasonable Employer or Employee would have terminated the employment as a consequence thereof.

(2) If an Employee terminates their employment for cause pursuant to Article 63(1), the Employee shall be entitled to:

(a) a payment of Wages in lieu of their notice period;

(b) a Gratuity Payment calculated to include the notice period the Employee would have been required to give to terminate their employment in accordance with Article 62(2); and

(c) a payment in lieu of the Employee's accrued untaken Vacation Leave calculated to include the notice period the Employee would have been required to give to terminate their employment in accordance with Article 62(2). “

21. Regardless of the Defendant’s circumstances for not paying its employees, the fact remains that the Defendant was in breach and failed to adhere to the terms of the Offer Letter and the DIFC Employment Law.

22. The Claimant did not receive his salary for several months and under the DIFC Employment Law, all remuneration must be paid out within 7 days of the end of the pay period in accordance with Article 18(1) of the DIFC Employment Law. Therefore, I find that the Claimant terminated his employment for cause, which warrants immediate termination of employment and he is entitled to receive his salary payment including the notice period and leave in accordance with Article 63 of the DIFC Employment Law.

23. As the salary calculation provided in the final settlement for the months of October and November is not disputed by the Claimant, I hereby order that the Defendant pay the Claimant the amount of AED 32,484.33 which represents the Claimant’s salary for 28 days in October and 25 days in November 2023.

24. As to the December salary, and in line with Article 63(2)(a) of the DIFC Employment Law, I find that the Claimant must be paid his full salary as opposed to 10 days only, as such, I hereby order the Defendant to pay the Claimant the amount of AED 18,365.

Is the Defendant permitted to deduct from the Claimant’s final settlement?

25. I set out Article 20 of the DIFC Employment Law in respect of deductions which reads as follows:

“20. Deductions

(1) An Employer shall not deduct from an Employee’s Remuneration or accept payment from an Employee, unless:

(a) the deduction or payment is permitted under this Law, or agreed to in an Employment Contract not in contravention of this Law;

(b) the prior written agreement of the Employee has been obtained in respect of the deduction or payment, provided that such deduction or payment is not prohibited under this Law;

(c) the deduction or payment is a reimbursement for an overpayment of any Remuneration or expenses, or to recoup benefits utilised by an Employee in excess of their accrued entitlement under their Employment Contract; or

……”

26. Further to the above, the Court must first determine whether the deductions were permitted under the Offer Letter or in writing and, if so, whether they contravene with the provisions of the DIFC Employment Law or not.

27. The Defendant argues that as the resignation date was within a period of six (6) months from the employee's date of commencement of employment, the employer may recoup from the employee such reasonable costs or expenses specified in the Offer Letter as payable by the employee to the employer in such circumstances.

28. The Offer Letter makes reference to the training costs of AED 10,000 under “breach of contract” which states that the employer has the right to retain this amount if the employee resigned without a valid reason and of their own violation.

29. I asked the Defendant’s representative at the Hearing to illustrate the kind of training the Claimant was provided and she confirmed that no training was conducted for the Claimant in respect of his role. However, she added that the value for early termination encompasses costs incurred during engagement and the expenses incurred by the employer in the course of recruiting the employee in a new restaurant and requiring him to handle expensive DJ equipment. As such, the Defendant’s representative submitted that the Defendant should be entitled for the full amount as per the Offer Letter which was agreed by the Claimant.

30. Although the Claimant did not complete two years and resigned during his probationary period, I have already arrived at the decision that the Claimant terminated his employment with cause in accordance with Article 63, therefore, he had a valid reason to resign, and the breach of contract clause is not applicable in this situation and is deemed void.

31. In any event, due to the Defendant’s confirmation that no training was conducted, I find that the Defendant is not permitted to deduct AED 10,000 for training costs from the Claimant’s final settlement.

32. It follows that the Defendant is not permitted to deduct the amount of AED 8,570.33 in respect of the notice period reduction as the Claimant is entitled to receive payment in lieu of his notice period as per Article 63(2)(a) of the DIFC Employment Law.

33. With respect to the fines levied on the company’s car and in accordance with the Policy, the Claimant is responsible for any fines or damages to the car and, as such, I find that the amount of AED 600 can be deducted from the Claimant’s final settlement as it has already been agreed with the Claimant in writing and does not contravene with the DIFC Employment Law.

34. The Claimant is also obligated to make a monthly payment of AED 1,000 to the Defendant in respect of general maintenance of the car pursuant to the Policy and, as such, I find that the amount of AED 3,000 can be deducted from the Claimant’s final settlement in respect of the months of October, November and December 2023 as it has already been agreed with the Claimant in writing and does not contravene with the DIFC Employment Law.

35. Additionally, the Policy refers to the Claimant’s liability to indemnify the Defendant in case of any damage to the car as it was his responsibility to take care of it and given that there has been an incident, I find that the amount of AED 3,500 as mentioned in the Policy and agreed by the Claimant can be deducted from the Claimant’s final settlement.

36. The Defendant submitted evidence to demonstrate that the Claimant had been staying at the accommodation offered by them and thus, not using the housing allowance which is within his salary package and decided to deduct the amount for the duration from 15 December 2023 to 15 January 2024. However, the Claimant asserts that after he was denied access to the apartment, he used to stay in his co-worker’s apartment instead of his own accommodation.

37. Given that I have determined that the Claimant is entitled to all his benefits during his notice period, then I find that the Defendant can only deduct the rent accommodation for half the duration from 1 January to 15 January 2024 in the amount of AED 3,581.5 (AED 7,163/2).

38. As the Claimant has been receiving his housing allowance, I am of the view that the utilities shall be borne by him and the Defendant is permitted to deduct the amount of AED 1,252.30 form the Claimant’s final settlement.

39. As to the Claimant’s claim for payment in lieu of 8 days of accrued but untaken annual leave on the basis that he is entitled to 30 days as per the Offer Letter, the Defendant submits that he is not entitled to this claim because he resigned during his probation.

40. At the Hearing, the Claimant agreed with the Defendant’s statement that he worked for 28 days in October and 25 days in November 2023. As such, this means that the Defendant availed 7 days of annual leave.

41. Further to the above and given that the Defendant failed to submit a record to demonstrate the Claimant’s annual leave dates in accordance with Article 16(1)(g) of the DIFC Employment Law, I am of the view that the Claimant is entitled to a pro rata amount and has accrued 5.5 days (12.5 days – 7 days) and is entitled to the amount of AED 4,661.8 as per the calculation below:

AED 18,365 x 12/260 = AED 847.6 daily wage x 5.5 days = AED 4,661.8.

42. To summarise the amounts above, the Claimant is entitled to receive AED 32,484.33 + AED 18,365 + AED 4,661.8 = AED 55,511.13 (the “Amount”).

43. The Amount is to be offset against the amounts due to the Defendant as per the below:

AED 55,511.13 – AED 600 – AED 3,000 – AED 3,500 – AED 3,581.5 – AED 1,252.30 = AED 43,577.33.

Findings

44. In light of the aforementioned, the Defendant shall pay the Claimant the amount of AED 43,577.33.

45. The Defendant shall pay the Claimant the DIFC Courts’ filing fee proportionate to the judgment sum in the amount of AED 871.54.

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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Novia v Nysa [2024] DIFC SCT 010 (10 June 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_010.html Cite as: [2024] DIFC SCT 10, [2024] DIFC SCT 010

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Novia v Nysa [2024] DIFC SCT 010