Nevon v Nader [2024] DIFC SCT 158 (17 July 2024)

Claim No: SCT 158/2024

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

NEVON

Claimant

and

NADER

Defendant

Hearing :	4 July 2024
Judgment :	17 July 2024

JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI

UPON the claim having been filed on 23 April 2024 (the “Claim”)

AND UPON the Defendant’s defence dated 3 June 2024

AND UPON the Claimant’s reply to the defence dated 19 June 2024 (the “Claimant’s Reply”)

AND UPON the Defendant’s response to the Claimant’s Reply dated 27 June 2024

AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 4 July 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 Claim shall be dismissed.

2. Each party shall bear its own costs.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 17 July 2024
At: 2pm

THE REASONS

Parties

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

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

The Claim

3. The Claimant submits that he was employed by the Defendant by virtue of an employment contract dated 24 March 2022 in the position of Premium Client Manager for monthly remuneration of AED 30,000 (the “Employment Contract”).

4. The Claimant asserts that he voluntarily resigned from his position on 15 April 2024, which was acknowledged and accepted by the Defendant by way of email. However, on 19 April 2024, the Claimant asserts that he was surprised to receive a termination letter from the Defendant terminating his employment effective immediately for gross misconduct (“Termination Letter”).

5. The Claimant disputes the termination with cause given that his resignation was already accepted, and the Defendant agreed to pay him his end of service entitlements such as payment in lieu of annual leave, pending salary, and 8 weeks’ notice period.

6. The Claimant confirmed at the Hearing that he received payment in the amount of AED 30,302 on 26 April 2024 from the Defendant, which represents payment in lieu of annual leave and salary, and he confirmed his acceptance of this calculation. Therefore, the Claimant is now only seeking the outstanding 8 weeks’ notice period pay to the amount of AED 72,000 from the original claim amount of 102,366.44.

7. The Claimant states that he was not aware of any investigation due to an alleged misconduct on his behalf, nor was he given an opportunity to defend such allegations as his access to the system was removed immediately. The Claimant further adds that he never received any email about an investigation or red flags raised by the internal compliance team.

8. The Claimant submits that all data (including all WhatsApp messages) have been uploaded to the Defendant’s internal system and denies deleting company information from his work mobile phone. The Claimant further submits that he informed his line manager that his work phone was not functioning properly and submitted an invoice to confirm that.

9. At the Hearing, the Claimant confirmed that he did not proceed to buy a new phone, although his line manager approved the purchase of a new phone.

10. The Claimant adds that he is unable to address all the items in the Compliance Report of the alleged misconduct on the basis that he used to deal with more than 60 clients in a day and he does not have all the information necessary without access to the portal. Therefore, he is unable to respond to the misconduct allegation.

11. Furthermore, the Claimant argues that during his tenure with the Defendant company, he never came across a report like the Compliance Report which was issued assessing his work and led to his termination.

The Defence

12. The Defendant asserts that the Employment Contract operates in conjunction with Nader’s Code of Conduct and ethics, which is contained in the Employee Handbook (“Employee Handbook”).

13. The Defendant submits that due to findings of gross misconduct relating to breaches of the Employee Handbook, Code of Conduct and internal policies and procedures, they took the decision to terminate the Claimant’s employment with immediate effect on 19 April 2024, relying on the provisions in the Employment Contract as well as Article 63 of the DIFC Employment Law.

14. The Defendant asserts that the Claimant received his first warning on 17 July 2023 by way of email regarding the Claimant’s action in not adhering to strict instructions imposed by the Defendant with regards to notifying the clients about the imposition of an administrative fee which ultimately caused the Defendant to incur loss.

15. The Defendant states that it informed the Claimant about its intention to lodge an investigation against him due to the compliance team flagging some instances of workplace breaches. However, it submits that the Claimant proceeded immediately to submit his resignation which they accepted in return.

16. The Defendant takes the view that it is permitted to terminate an employee with cause even if they have already accepted his resignation beforehand, as it is in line with Article 23 of the Employment Contract:

“23. Terminating your Employment without Notice

Despite any other provision contained in this Agreement, Nader may terminate your employment at any time without prior notice if you:

(a) commit any serious or persistent breach of these terms and conditions, or breach a material term of this Agreement;

(b) engage in serious or persistent misconduct (examples of serious misconduct may include, but are not limited to, dishonesty, theft, fraud or assault);

(d) are charged with a criminal or an indictable offence;

(e) are guilty of material breach of faith, grossly negligent, wilful disregard of directions or are otherwise incompetent in the performance of your duties;

(f) commit any serious breach of any of Nader’s policies and procedures;

(g) misuse Nader’s conﬁdential information or intellectual property;

(h) engage in wilful or negligent conduct which poses a serious risk to health and safety;

(i) become bankrupt or make any arrangement or composition with your creditors; or

(j) engage in conduct that causes unacceptable loss to the reputation, business or proﬁtability of Nader;

(k) are found to have provided a false or misleading statement or representation in the course of your employment application or interview.”

17. The Defendant relies on the Compliance Report issued by them internally which indicates six significant events where the Claimant either did not comply with the Defendant’s data management policies, used information technology systems incorrectly in violation of information technology processes, or engaged in inappropriate client communications.

18. The Defendant asserts that the Compliance Report is an internal document that is only used for internal purpose and is not to be distributed to all employees, which is why the Claimant did not have access to it during employment.

19. The Termination Letter sets out the reasons for such an action, which reads as follows:

“This decision is not made lightly and follows a thorough review and consideration of your actions, which included:

1. Repeated and serious breaches of our communication policy: This includes not using a recorded line for calls as mandated, which is a fundamental requirement of your role. Formal warning has already been placed on your file for the same matter on 17th July 2023.

2. Breach of confidentiality and mishandling of personal data: Discussing sensitive information related to an introducing broker (IB) account, which was registered in the name of another individual, with unauthorized parties.

3. Deletion of company data following resignation: After submitting your resignation, you deleted all WhatsApp messages and wiped your work phone, thereby removing information critical to our operations and in direct violation of our data retention policies.”

20. Further to the above, the Defendant shared the nature and date of the incidents and I set out below only a few of these:

“WhatsApp Chat Nader Dubai: 25/03/2024,8:10:47pm

The Claimant shares a CV with a client with no context. The Claimant should not be recommending potential candidates to clients (“CV Shared”).

WhatsApp Chat Nev: 01/11/2023, 12:22:10 PM

A call is explicitly referenced however there is no corresponding call recording in the Nader system (“Call Referenced - No Record”). This would suggest that a call was made from a personal phone number, despite being against Nader’s policies. This was something that the Claimant was previously warned against in the Formal Warning.

20/11/2023, 1:34:59 PM Call Referenced - No Record.

07/12/2023, 1:19:08 PM

The Claimant shared a contact’s details. It is not clear which contact was shared as the chat was not exported with attachments, which is against Nader’s policies and procedures. The contact is shared without any prior conversation. It is not clear why this contact was shared, which could suggest that a non-recorded call has taken place prior to this interaction.

27/12/2023, 6:20:58 PM Call Referenced - No Record.

31/01/2024, 3:55:41 PM Call Referenced - No Record.

Attachments were omitted as the WhatsApp chat was not exported in full, which is against Nader’s policies and procedures (“Incomplete Export”).”

21. The Defendant also submits that the Claimant failed to appropriately log client meetings, either face to face or online, in the internal company system. This would amount to a breach of policy.

22. Therefore, due to the Claimant’s consistent breaches of company policy, the Defendant takes the view that the Claimant is not entitled to the 8 weeks’ notice period pay in line with the above and the DIFC Employment Law.

23. I asked the Defendant at the Hearing to confirm their policy with regards to investigation and the Defendant’s representative confirmed that in the normal cause scenario, an employee would be given an opportunity to respond to the report. However, in the situation at hand, it was decided that there is no need to hear from the Claimant and the Defendant proceeded to issue the Termination Letter accordingly.

Applicable Law

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

Discussion

25. The issue in dispute pertains to whether the Claimant is entitled to receive payment in lieu of his notice period on the premise that he was terminated with cause.

26. Therefore, the Court must determine whether the Claimant’s termination with cause was valid or not.

27. It goes without saying that termination for cause is a severe measure that should not be taken lightly and should only be used in cases of serious misconduct or gross negligence by the employee.

28. In cases where an employee’s employment is terminated for misconduct, employers must follow a fair and reasonable process. In the normal case scenario, this includes providing the employee with written notice of termination, conducting an investigation if necessary, and giving the employee an opportunity to respond to any allegations made against them.

29. However, in order to assess the current situation, the Court shall refer to the procedure as set out in the Employment Contract and the DIFC Employment Law, if available.

30. The DIFC Employment Law gives the right to employers to terminate employees with cause, however, with limitation as read in Article 63:

“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) ….

(3) If an Employer terminates the employment of an Employee for cause pursuant to Article 63(1):

(a) the Employee shall not be entitled to receive any payment of Wages in lieu of their notice period; and

(b) the Employee’s Gratuity Payment and outstanding Vacation Leave shall be calculated up to the Termination Date.”

31. The DIFC Employment Law also gives the employee the right to ask for written statement of reasons for the termination within 30 days after the termination date, if requested by the employee.

32. I must note in this case, the Claimant did not request the Defendant to produce one.

33. The DIFC Employment Law is silent on the dismissal process whether an investigation must be conducted or not, and if so, what processes should be adhered to. As such, the Court shall rely on the provision of the Employment Contract and the Employee Handbook in this case.

34. The dismissal process due to serious misconduct is outlined in page 31 of the Employee Handbook:

“Dismissal

In cases of repeated or serious misconduct, including serious or repeated breaches of this Handbook or any of our other policies, or unrectified poor performance, we may consider terminating your employment. We’ll look to avoid this where possible.

In situations where we’re considering dismissal, you’ll be required to attend a formal meeting. At or before the meeting, you’ll be told:

the reason for your potential dismissal; and
if applicable, the steps we’ve taken to remedy the problem in the past.

You’ll be given the opportunity to respond to the allegations, either at the meeting or in writing, once you’ve had the opportunity to consider the allegations.

We’ll always consider any response you give us prior to making a final decision about the termination of your employment. If we do decide to terminate your employment, we’ll let you know and give you written confirmation together with details of any final payments.”

35. I asked the Defendant’s representative to confirm whether the process should have involved the Claimant’s response to the allegations made against him in the Compliance Report, and she confirmed that in the normal situation this would apply. Nevertheless, the company decided to terminate the Claimant’s employment immediately without giving the Claimant the opportunity to respond, which they have the right to do in accordance with the Employee Handbook.

36. Although the Claimant was not afforded the chance to defend any of the allegations made against him in the investigation report upon termination, I am of the view that the Claimant should have taken this opportunity and provide his defence points before the Court in order for the Court to ascertain whether the termination was made in compliance with the law. However, the Claimant failed to do so.

37. The Claimant’s stance was that he could not respond to each point without having access to the portal, however, he is of the opinion that his work was up to standard and that all of the calls and WhatsApp conversations were uploaded into the system.

38. The Claimant also relies on the fact that his work phone was old and not working properly which may have resulted in this situation at hand. In any event, the Claimant submits that he informed his manager on 28 October 2023 who in return advised him to purchase a new phone.

39. The Claimant asserts that he did not proceed to buy one as the compliance process would allegedly take a long time to approve, so he just kept using it.

40. Having reviewed the Employee Handbook, particularly page 30, the Defendant does have the right to terminate the Claimant without notice and to circumvent some of the steps in the dismissal process on a discretionary basis, as read below:

“Disciplinary action will be considered on a case-by case basis. Not all performance or misconduct issues will require each ‘stage’ of the disciplinary process to be completed. For example, some circumstances may justify dismissal even in the absence of prior warnings. We can, in our sole discretion, deviate from the process outlined below if we think the situation is appropriate.”

41. Taking into consideration that the Claimant did receive a warning in respect of the same matter which led to the termination, and having reviewed the Compliance Report and supporting documents such as the storage of the deleted texts, I am of the view that the Defendant’s action is valid.

42. Therefore, I am of the view that the Defendant had the right to send the Termination Letter after the acceptance of the resignation and find that the termination with cause was lawful in line with the DIFC Employment Law, the Employment Contract and the Employee Handbook.

43. Although, as I mentioned above, this matter is not to be taken lightly, I find that the Defendant acted within the perimeter of the law and therefore the Claimant is not eligible to receive payment in lieu of notice period.

44. Given that the DIFC Employment Law does not impose any obligation on an employer to conduct any investigation nor to give the employee a chance to respond to the investigation outcome or accept it, as a result, it does not sound right to declare the termination as void for this particular reason.

45. It follows that the Claim for payment in lieu of notice period in the amount of AED 72,000 shall be dismissed as the Claimant already received his other entitlements from the Defendant on 26 April 2024.

Findings

46. The Claim shall be dismissed.

47. Each party shall bear its own costs.

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Nevon v Nader [2024] DIFC SCT 158