November 27, 2016 Judgments,SCT - Judgments and Orders
Claim No. SCT 086/2016
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 NATASHA BAKIRCI
BETWEEN
GEORGE
and
GLORIA BEAUTY LOUNGE LLC (FORMERLY KNOWN AS GAYLE BEAUTY LOUNGE LLC )
Hearing: 26 September 2016
Judgment: 27 November 2016
JUDGMENT OF SCT JUDGE NATASHA BAKIRCI
UPON this claim having been called on 18 July 2016 for a Consultation before SCT Officer Mahika Hart;
UPON the parties not having reached settlement;
UPON a Hearing having been held before me on 26 September 2016, with the Claimant’s representatives and the Defendant’s representatives attending;
AND UPON reading the documents submitted in the Court file and hearing the parties’ arguments at the Hearing;
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant AED 41,410 as damages for failure to lift the Absconding Case against him;
2. The Defendant shall pay the Claimant AED 30,500 as a penalty under Article 18(2) of the DIFC Employment Law;
3. The Claimant’s claims as to unpaid notice period, interest and additional damages are dismissed; and
4. The parties shall bear their own costs.
THE REASONS
Parties
5. The Claimant, George, is a Jordanian national who was employed as a hairdresser by the Defendant company.
6. The Defendant, Gloria LLC (formerly known as Gayle LLC), is a DIFC registered company operating a beauty and salon facility located in the DIFC, individually owned and represented by Glenn, Ms Gauri.
7. On 21 July 2016, the Defendant sought the permission of the SCT Judge to appoint legal Counsel to represent her in this matter, pursuant to Rule 53.52 of the Rules of the DIFC Courts (RDC). I granted such permission via an Order of 31 July 2016 and additionally granted the Claimant permission to appoint legal Counsel in the interest of fairness.
8. The Defendant appointed Defendant Law Firm LLP as legal Counsel as of 31 July 2016 and was thereafter legally represented by Defendant Lawyers.
9. The Claimant then appointed Law Firm LLP as legal Counsel as of 8 August 2016 and was thereafter legally represented by Lawyer 1 and Lawyer 2. Lawyer 3 of Law Firm LLP also participated in the representation.
Background
10. The Claimant and Defendant entered into an Employment Contract on 24 August 2015 which listed the Claimant’s employment to commence on 5 December 2015. The Claimant began working as a senior hairdresser for the Defendant on 1 October 2015 for AED 15,000 per month salary. The Employment Contract states, in relevant part, that the Claimant shall be employed as a hairdresser for a total compensation of AED 15,000 per month to include a basic salary of AED 7,000 per month, housing allowance of AED 4,000 per month and “allowances” of AED 4,000 per month. Clause 2 of the Employment Contract details that “employment will commence on 5th December 2015,” although both parties agree that the Claimant began working for the Defendant on 1 October 2015.
11. Clause 7 of the Employment Contract, entitled “Term and Termination” states that employment shall “remain in force . . . until one party delivers to the other party three (3) month’s written notice of termination or without notice in the case of your serious misconduct or certain cases.”
12. There is reference in the Employment Contract to a six-month probation period but as both parties agree that the Claimant began work on 1 October 2015 and left work on 9 June 2016, this six-month period had already expired and is not relevant to the claim.
13. It is agreed between the parties that there was an incident between the Claimant and another employee in late May 2016, although the details of that incident are contested. Due to this incident, the Claimant was issued with a Letter of Warning on 9 June 2016 by Gisella which the Claimant was expected to sign as acknowledgment of the details of the aforementioned alleged incident occurring in the salon premises in late May 2016.
14. The Letter of Warning states “[p]lease take this letter of warning as serious notice against your emplacement in Gloria LLC and repeating such behaviour will lead to immoderate [sic] termination as misconduct.” The Claimant refused to sign the Letter of Warning and was allegedly told that failure to sign this letter would result in termination.
15. A Termination Letter was drawn up and allegedly given to the Claimant that same day. The Termination Letter states that “by refusing to sign the warning letter you shall be terminated for this reason and consider 30days [sic] of notice period as pro actively [sic] from 1st June 2016.” The Defendant has indicated that reference to 1 June 2016 in the Termination Letter should read 9 June 2016 and that the notice period should be three months as per the Employment Contract but this was not clarified to the Claimant at the time the Termination Letter was presented.
16. The Claimant also did not sign this Termination Letter and instead gathered his belongings, left the salon premises and did not return for work.
17. On 14 June 2016, having called the Claimant upon his failure to attend work for several days, the Defendant filed an Absconding Application with DIFC Government Services Office (hereafter, the “Absconding Case”).
18. On 21 June 2016, the Claimant filed a Claim Form in the DIFC Courts Small Claims Tribunal (SCT) seeking unpaid salary, notice period payment, end of service benefits, annual leave and an airline ticket amounting to AED 76,846 (equivalent to USD $ 20,910). This initial claim was then amended on two separate occasions as detailed below.
19. The Defendant initially responded to the Claim Form on 29 June 2016 indicating its intent to defend against all of the claim. The parties attended a Consultation on 18 July 2016 but were unable to reach a settlement. On 26 September 2016, I heard the parties’ arguments as presented by their legal representatives at a Hearing.
20. After the Hearing, I issued an Order requiring the Defendant to withdraw the Absconding Case against the Claimant and begin the visa cancellation process. Although not completed in the time required by the Order due to alleged difficulty in obtaining the Claimant’s passport, the parties confirmed that the Absconding Case had been lifted and the visa was cancelled on 25 October 2016.
The Claim
21. The Claimant initially sought AED 76,844.25 as payment for unpaid salary, notice period, end of service, annual leave and airline ticket as detailed in the Initial Claim Form dated 21 June 2016. The Claimant then submitted the First Amended Claim Form on 26 July 2016, removing his claim for an airline ticket and adding a claim for damages in the amount of AED 91,875 (equivalent to USD $ 25,000) “for unfair dismissal and false absconding claim.” The total claimed amount in the First Amended Claim Form was AED 159,166.01 (equivalent to USD $ 43,310.48).
22. The Claimant then filed his Second Amended Claim Form and attached Statement of Case on 31 August 2016 including the First Witness Statement of Gerald and the First Witness Statement of the Claimant, George. The Claimant articulated the total claim value to be “not less than AED 94,250” as of 30 August 2016.
23. In the Statement of Case, the Claimant alleges that the Defendant had breached its obligations under the Employment Contract, making specific reference to allegations about requiring the Claimant to work before obtaining a valid visa, failure to obtain medical insurance, being required to perform overtime work, missed breaks, excessive work during Ramadan, requiring the Claimant to charge clients for toner when not used, requiring junior employees to monitor the Claimant, failing to investigate incidents between employees and threats from the Defendant’s manager (See Statement of Case, Paragraphs 66-68).
24. The Claimant continued that such “anticipatory and/or repudiatory breaches of the Employment Contract . . . were accepted by the Claimant by leaving his place of employment and not returning. This constituted a constructive dismissal of the Claimant by the Defendant. Accordingly, the Employment Contract was terminated with immediate effect on 9 June 2016.”
25. Furthermore, the Claimant claims unpaid entitlements under the Employment Contract and DIFC Law No. 4 of 2005, as amended (the DIFC Employment Law), specifically AED 4,500 for unpaid salary and AED 7,750 for accrued but untaken leave. As the Claimant alleges that termination was effective on 9 June 2016, the Claimant argues that the penalty due under Article 18(2) of the DIFC Employment Law should begin to accrue as of fourteen days from that date.
26. The Claimant contended that he “is entitled to a payment of AED 45,000 representing 3 months’ salary in lieu of his notice period as the sum to which the Claimant would have been paid but for the breaches of the Employment Contract.” (See Statement of Case, Paragraph 72). The Claimant argued that he was never terminated for cause “on or shortly after 10 June 2016” as “no written notice of termination for cause was ever received.” (Statement of the Case, Paragraph 51).
27. In the Statement of Case, the Claimant accepted that he is not entitled to end of service gratuity, court fees or an annual air ticket and withdraws those claims.
28. The Claimant further argued, in addition to or in the alternative of the above, that the Defendant breached its duty of care as required under Article 18 and/or Article 20 of DIFC Law No. 5 of 2005 (the DIFC Law of Obligations) by unreasonably taking out and maintaining an Absconding Case against the Claimant, thereby causing the Claimant significant damage in his inability to seek alternative employment.
29. The Claimant also contended, in addition or in the alternative to the above, that the Defendant is liable to the Claimant for damages for misrepresentation pursuant to Article 29 of the DIFC Law of Obligations. The Claimant further claimed interest as the SCT deems fit, pursuant to Article 18 and/or 32 of DIFC Law No. 7 of 2005 (the DIFC Law of Damages and Remedies), and claims additional damages pursuant to Article 40(2) of the DIFC Law of Damages and Remedies.
30. The Second Amended Claim Form and attached Statement of Case detailed the Claimant’s total claims as follows:
“(1) An Order requiring the Defendant to immediately . . . withdraw the Absconding Order;
(2) An Order requiring the Defendant to pay the following sums to the Claimant:
(a) AED 45,000 representing 3 months’ salary in lieu of notice;
(b) AED 4,500 representing the Claimant’s outstanding wages in respect of the period 1 – 9 June;
(c) AED 7,750 as payment in lieu of the Claimant’s accrued but untaken leave; and
(d) An amount not less than AED 34,000, representing the statutory penalty payable at a daily rate of AED 500 pursuant to Article 18(2) of the Employment Law from 24 June 2016 until the date of judgment;
(3) A declaration that the statutory penalty payable pursuant to Article 18(2) of the Employment Law shall continue to accrue at a daily rate of AED 500 from the date of judgment until payment in full of the amounts at paragraphs (2)(a), (2)(b) and (2)(c) above;
(4) Damages against the Defendant for breach of contract and/or a duty of care and/or misrepresentation in such amounts as the Tribunal shall think fit;
(5) Additional damages against the Defendant in such amounts as the Tribunal shall think fit, pursuant to Article 40(2) of the DIFC Law of Damages and Remedies;
(6) Compound interest on all sums awarded at such rate for such period as the Tribunal shall think fit;
(7) Further or other relief; and
(8) An Order that the parties shall bear their own costs in respect of these proceedings.”
31. The Claimant also submitted three additional documents on 25 September 2016, one day in advance of the scheduled Hearing, in response to the Defendant’s Reply to the Statement of Case (see summary below) including a letter from Griffin salon, the First Witness Statement of Gage Salon representative and the First Witness Statement of Salon representative . The Defendant objected to these late submissions and provided reasoning. As mentioned during the Hearing, under Part 4 of the Rules of the DIFC Courts, I have allowed these late submissions for consideration along with the Defendant’s responses.
The Defence
32. The Defendant provided its initial defence on 11 July 2016, indicating its intention to defend against all the claims made in the Initial Claim Form. In the submission, the Defendant alleged that there was no choice but to terminate the Claimant for “misconduct” and that the Claimant had not returned to work since 9 June 2016. The Defendant further denied the Claimant’s claims in the Initial Claim Form and alleged a loss of AED 2,000 per day for the Claimant’s unauthorised absence from work, although the Defendant did not file an official counterclaim. The Defendant also submitted the First Witness Statement of Gary Salon Representative and the First Witness Statement of Gordon Salon Representative in support of its initial defence.
33. The Defendant provided a further “Defence” of 2 August 2016, responding to the Claimant’s Initial Claim Form and First Amended Claim Form in detail and providing several annexures. The Defence included numerous allegations of factual inaccuracies in the Claimant’s Initial Claim and Amended Claim Form including allegations of overtime work during regular and Ramadan hours. The Defendant instead alleged that the Claimant had the habit of behaving inappropriately and of giving his personal clients free services including application of toner.
34. The Defence of 2 August 2016 detailed at Section 4.9.3 that the “Defendant did not terminate the Claimant immediately and for the avoidance of doubt did not terminate his employment pursuant to Article 59A of the DIFC Employment Law.” The Defendant conceded that the Termination Letter should have been dated 9 June 2016 and should have included the contractually agreed three-month notice period. The Defence goes on to state that once the Claimant failed to attend work during the notice period, this qualified as a “repudiatory breach” and “falls within the ambit of Article 59A of the DIFC Employment Law,” rendering the notice period “null and void.” (Defence, Paragraph 4.13.2).
35. The Defendant’s 2 August 2016 Defence provided admission regarding outstanding payment for 9 days’ salary for the month of June 2016 using AED 500 as the daily wage and for accrued annual leave entitlements but denies the claims for notice period payments, end of service gratuity (later removed from the claim), and the annual air ticket allowance (also removed from the claim).
36. The Defendant also denied any damages for obtaining and holding an Absconding Case against the Claimant, stating that the Claimant failed to attend work during the notice period and thus absconded. The Defendant alleged that even once the SCT Claim had been initiated, it had been advised to maintain the absconding case and felt it necessary due to the Claimant’s alleged “illegal freelancing work.” The Defendant stated that it was “not in a position to remove the abscondment claim until the Claimant’s claims have been settled by the Court and the Claimant agrees to cancel his residency visa.” (Defence, Paragraph 5.1.10).
37. Finally, the Defendant addressed the Claimant’s previous claim for unfair dismissal, but this claim has subsequently been withdrawn from the case.
38. On 18 September 2016, the Defendant provided its “Reply to Statement of Case” in response to the Claimant’s Second Amended Claim Form and Statement of Case which was to be read in conjunction with the earlier Defence of 2 August 2016. This submission included several annexures including the First Witness Statements of additional lawyers.
39. The Defendant first emphasised that the Claimant has changed his arguments and claims three times and has contradicted himself within those claims, casting doubt on his credibility and motivations. The Defendant alleges that it has, in contrast, remained consistent throughout the case.
40. The Defendant conceded that the Claimant began working at the Defendant salon on 1 October 2016, rather than 26 October as previously stated, but only at the insistence of the Claimant and the Claimant was paid for the full month of October. The Defendant contended that the Claimant insisted on working before his visa was valid, demonstrating his disregard for such rules and requirements.
41. The Defendant goes on to contest most of the Claimant’s description of events occurring in the Defendant salon, including his claims regarding medical insurance, the Claimant’s behaviour and sales, Ramadan and work hours, toner charging practice, supervision by colleagues and the alleged incidents occurring on 28 May 2016 until 14 June 2016.
42. The Defendant alleged that the Termination Letter provided on 9 June 2016 was not intended to be an Article 59A “for cause” termination, and in fact, the contractually agreed three-month notice period began to run from 9 June 2016. Thus, as the effective termination date would be 9 September 2016 according to the Defendant’s proposition, the Defendant’s payment of unpaid salary and accrued but untaken leave on 15 September 2016 was within the 14-day period provided for under Article 18(1) of the DIFC Employment Law such that Article 18(2) penalties would not appropriately be applied in this case.
43. Notwithstanding, the Defendant argued that it “has no legal obligation to provide any formal written notice as suggested [by the Claimant in paragraph 51 of the Statement of the Case]. The Claimant’s conduct was sufficient to demonstrate that he had breached his contractual obligations by not returning to work. Put another way, the Claimant’s conduct implies that he has breached the Employment Contract which would fall under the guise of Article 59A of the Employment Law.” This allegedly caused the three-month notice period that began running from 9 June 2016 to become “null and void,” excusing the Defendant of paying the Claimant for this time.
44. The Defendant further denied all claims regarding breach of duty and misrepresentation as relate to the Absconding Case, stating that the application for such an Absconding Case was appropriate under the circumstances and that such claim would be lifted upon the Claimant agreeing to cancel his visa.
Hearing
45. At the Hearing, the parties elaborated on their claims. The Claimant was represented by Law Firm LLC, specifically Lawyers. The Defendant was represented by Law Firm Middle East, specifically by Lawyers.
46. The Claimant posited that he had been either terminated with immediate implementation on 9 June 2016 or terminated for failure to attend shortly thereafter. Either way, the Claimant understood his effective termination date to be 9 June 2016 or shortly thereafter. Furthermore, no valid termination letter with the contractually required 3-months’ notice period was offered nor was any termination letter “for cause” pursuant to Article 59A provided.
47. The Claimant contends that the Absconding Case was filed by the Defendant on 14 June 2016, just one day after the Claimant attended the police station in response to the Defendant’s police case against him. Therefore, the Defendant knew the Claimant had not left Dubai and filed the Absconding Case inappropriately. The Claimant made repeated reference to the First Witness Statement detailing communication with the DIFC Government Services Office, but this Witness Statement has not been signed by the Government Service officer Witness. The Claimant made many suggestions for the SCT to contact the Government Service officer witness to provide evidence but did not offer him as a witness.
48. The Claimant explained further their specific claims, largely reiterating the arguments made in the Statement of Case. The Claimant asserted that he was subject to such an abusive employment relationship that he could not bear to come back to work after 9 June 2016 or, in the alternative, he had understood that he was to leave and not come back to work as of 9 June 2016. The Claimant continued that he was scared to return to work due to phone call threats allegedly made by the Defendant’s manager after 9 June 2016. The Claimant maintained that, if he could have returned to work to get paid, he would have but he did not feel safe or believed himself to have been terminated with immediate effect.
49. Furthermore, the Claimant asserted that, due to mistakes admittedly made in the Termination Letter, and the Claimant’s refusal to sign the Termination Letter, there was effectively no valid termination given with notice. Thus, the termination must have been for cause.
50. During the Hearing, the Defendant reiterated the arguments made in its Defence and Reply to Statement of Case. The Defendant averred that the grounds for filing an Absconding Case were met in this case, as set out in the DIFC Government Services Handbook. The Defendant went on to claim that it had not lifted the Absconding Case as it had been advised not to by several authorities as protection against the Claimant filing a claim against the Defendant for falsely filing an Absconding Case, even though the Defendant believed such a case would be meritless.
51. The Defendant also clarified its argument that by failing to return to work after 9 June 2016, the Claimant had effectively been terminated as per Article 59A of the DIFC Employment Law. It explained that this does not serve to speed up the effective date of termination but rather this failure served to make the notice period as provided for by the Employment Contract “null and void” such that the effective termination date remained 9 September 2016 however no payment was owed for the time beyond 9 June 2016.
Discussion
52. The DIFC Courts and the Small Claims Tribunal have jurisdiction over this case as it concerns employment within the DIFC and the amount in question is less than AED 500,000.
53. This dispute is governed by the DIFC Law No. 4 of 2005, as amended by DIFC Law No. 3 of 2012 (the DIFC Employment Law) in conjunction with the relevant Employment Contract. As pleaded by the Claimant, there may also be some applicability of the DIFC Law No. 6 of 2004 (the DIFC Contract Law), DIFC Law No. 5 of 2005 (the DIFC Law of Obligations) and DIFC Law No. 7 of 2005 (the DIFC Law of Damages and Remedies).
54. While there have been several submissions provided in this case, I will rely heavily on the Claimant’s Second Amended Claim Form and Statement of Case and the Defendant’s Reply to Statement of Case (with reference to the Defendant’s Defence of 2 August 2016) as the most recent and complete filings from the parties. I have reviewed the remaining submissions but will not address arguments and points that are not relevant to the issues at stake in the case.
55. As per the Second Amended Claim Form, the Claimant seeks an amount “not less than AED 94,250” in respect of wages, annual leave, Article 18 penalties, notice period payment, damages for the absconding order, additional damages and interest. Any previous claims for an airline ticket, end of service gratuity or damages for unfair dismissal have been dropped by the Claimant as per the Second Amended Claim Form.
56. As to the overdue wages and annual leave claims in this case, the Defendant has admitted those two individual claims and the parties agree that payment of those claims was made in full on 15 September 2016 in the amount of AED 12,250 and thus these claims are no longer at issue, except as relevant to the assessment of the Claimant’s Article 18 claim.
57. Thus, what remains at issue in this case hinges on the answers to the following four questions, as was agreed between the parties at the Hearing:
a. Did the Defendant terminate the Claimant “for cause”?
b. What was the Claimant’s effective termination date?
c. Was the Claimant justified in failing to attend work after receiving the Termination Letter?
d. Was the Defendant justified in failing to lift the Absconding Case against the Claimant?
58. I will address each of these main issues in order to determine the final amount owed to the Claimant, if any, responding to the Defendant’s arguments in turn. I will also address the parties’ remaining claims, including as to costs, at the end of the discussion section.
A. Did the Defendant terminate the Claimant “for cause”?
59. Article 59A of the DIFC Employment Law, entitled “Termination for Cause,” provides that: “An employer or an employee may terminate the employee’s employment for cause in circumstances where the conduct of one party warrants termination and where a reasonable employer or employee would have terminated the employment.” The practical effect of use of Article 59A is that an employee terminated under Article 59A will not be entitled to the default notice provisions of Article 59(2), pursuant to Article 59(5), and will not be entitled to end of service gratuity pursuant to Article 62(4).
60. In this case, the Defendant initially terminated the Claimant pursuant to the Termination Letter of 9 June 2016. The Claimant argues that use of the word “misconduct” implies that the Termination Letter was meant to fall under Article 59A. Although this letter contained errors, as admitted by the Defendant, it states that termination shall be effective as of “30days [sic] . . . as pro actively [sic] from 1st June 2016.” As the Defendant argues, this reference to a notice period implies that the termination was not for cause and did not have immediate effect as of 9 June 2016.
61. I agree with the Defendant’s argument that the Termination Letter of 9 June 2016 did not purport to terminate the Claimant pursuant to Article 59A. Firstly, the wording of the letter to include a notice period implies otherwise. Secondly, the Termination Letter states that “by refusing to sign the warning letter you shall be terminated for this reason.” As mentioned above, the standard for properly terminating an employee for cause, pursuant to Article 59A, requires “circumstances” warranting termination, “where a reasonable employer . . . would have terminated the employment.” The stated reason of “refusing to sign the warning letter” would not likely qualify under this standard, although it is unnecessary to determine this as other evidence shows that this was not a “for cause” termination.
62. Therefore, I find that the Claimant was not terminated “for cause” pursuant to Article 59A of the DIFC Employment Law and thus, at least initially, the Claimant would have been terminated “with notice.”
B. What is the Claimant’s effective termination date?
63. The Claimant was not initially terminated for cause, as determined above. However, the circumstances of his termination and the ensuing events make it difficult to pin down an exact effective termination date. “Effective date of termination” is defined in Schedule 1, Section 3 of the DIFC Employment Law, as follows:
“(a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or by the employee, means the date on which the notice expires;
(b) in relation to an employee whose contract of employment is terminated without notice, it means the date on which the termination takes effect . . .”
64. First, as established above, the Claimant was not initially terminated for cause and was instead “terminated by notice” and thus his effective date of termination would be “the date on which the notice expires.” However, there are conflicting notice periods potentially applicable in this case.
65. The Employment Contract between the parties states in Clause 7, entitled “Term and Termination,” that the employment shall “remain in force . . . until one party delivers to the other party three (3) month’s written notice of termination.” The Defendant acknowledges that this was the contractually required notice period agreed between the parties.
66. The Termination Letter, by contrast, stated that the Claimant had “30days [sic] of notice period as pro actively from 1st June 2016.” The Defendant claims that this was an error and should have read three months’ notice, pursuant to the Employment Contract. The Defendant admits another error in the Termination Letter, claiming it should read 9 June 2016 and not 1 June 2016.
67. It is important to note that Article 59(3) of the DIFC Employment Law provides that employers and employees are not prevented “from agreeing to a longer or shorter period of notice” nor are they prevented “from waiving notice or from accepting a payment in lieu of notice.”
68. Although the Defendant states on numerous occasions that the Termination Letter should have included a three-month notice period and should have stated 9 June 2016 instead of 1 June 2016 as the start of the notice period, it is undisputed that the Termination Letter as provided to the Claimant did include these mistakes in writing. Furthermore, it seems no attempt was made to provide the Claimant with a corrected termination letter. Therefore, I find that, in providing the Claimant with a Termination Letter that listed a 30-day notice period effective from 1 June 2016, the Defendant was effectively waiving its right to the three-month notice period agreed in the Employment Contract, pursuant to Article 59(3) of the DIFC Employment Law. Thus, the Defendant was offering the Claimant an “effective date of termination” of 1 July 2016, 30 days from the 1 June 2016 date listed in the Termination Letter.
69. Thus, as per the Termination Letter, the Claimant’s effective date of termination is 1 July 2016. This means that, pursuant to Article 18(1) of the DIFC Employment Law, the Defendant was required to pay to the Claimant “all wages and any other amount owing . . . within fourteen (14) days after the employer or employee terminated the employment.” Fourteen days after the effective date of termination of 1 July 2016 is 15 July 2016 and thus, from 16 July 2016 the “employer shall pay the employee a penalty equivalent to the last daily wage for each day the employer is in arrears,” pursuant to Article 18(2) of the DIFC Employment Law.
70. It is agreed between the parties that the Claimant’s daily wage was AED 500 and that the Defendant paid the Claimant the amounts owed for unpaid salary and untaken vacation time on 15 September 2016. Thus, it is essentially admitted by the Defendant that payment was not made for these amounts until 15 September 2016 and therefore, the Defendant was in arrears from 16 July 2016 until 15 September 2016. This is 61 days in arrears and at AED 500 per day, amounts to AED 30,500 as of 14 September 2016.
71. Thus, the Defendant owes the Claimant at least AED 30,500 in Article 18(2) penalties, although the question of whether Article 18(2) penalties continued to run past 14 September 2016 will depend on whether the Claimant was justified in failing to attend work during the notice period and whether he is thus owed payment for that time.
C. Was the Claimant justified in failing to attend work after receiving the Termination Letter?
72. The parties agree that the Claimant did not return to work after 9 June 2016. As mentioned above, both employer and employee may waive notice pursuant to Article 59(3), and typically an employee’s failure to attend work during the notice period would be considered his or her waiver of that notice period. The employer, when an employee unilaterally waives the notice period may or may not have valid claims against that employee for losses due to breach of contract or may choose to also waive the notice period.
73. In this case, the Claimant argues that even though he did not work during the notice period, he should nonetheless be paid for this time as he was justified in not attending or, in the alternative, he did not believe he was expected to attend. Additionally, the Claimant maintains under his anticipatory breach and constructive dismissal argument that his termination took immediate effect but that he is entitled to payment for the notice period as damages for this breach. Each of these arguments would serve to affect the issue of payment during the notice period and I will address them in turn.
74. First, the Claimant contends that he was justified in failing to attend work during the notice period as he was scared and threatened by the Defendant. This argument was relied on primarily at the Hearing and is not explicitly elaborated upon in the Statement of Case. The Claimant does refer to threats allegedly made by the Defendant via telephone after his termination such that he may have been fearful to return to work. However, the Claimant has not proven this claim and places more reliance on the argument that he believed that he did not have to return to work and on the alternative arguments that he accepted the Defendant’s breach of the Employment Contract with immediate effect. I find the Claimant’s argument regarding his fear and justification for failing to return to work after 9 June 2016 to be unparticularised and unproven.
75. Second, the Claimant contends that in the alternative, he believed that he was not expected to return to work during the notice period or that his termination was with immediate effect. The Claimant argues that the Defendant’s manager told him to leave and not return and additionally that his lack of understanding of English prevented him from understanding the Termination Letter at the time he received it. Furthermore, the Warning Letter stated that “repeating such behavior will lead to immoderate [sic] termination as misconduct.”
76. However, the Defendant’s post-9 June calls to the Claimant and the Claimant’s subsequent efforts to gain clarification regarding the contents of the Termination Letter should have informed him that some notice period was required, as was explicitly detailed in the Termination Letter, and that he should return to work. The language in the Warning Letter is unclear and is unlikely to be understood as immediate termination in conjunction with the Termination Letter and subsequent calls from the Defendant. Failure to return to work after a few days’ time, which was perhaps required to make the circumstances clear to the Claimant, amounts to a waiver of the notice period by the Claimant and thus there is no entitlement to payment during this time.
77. Finally, the Claimant contends that as he accepted the Defendant’s constructive dismissal with immediate effect on 9 June 2016, he was not required to attend work during the notice period and instead, payment during the notice period is owed to him as damages for the anticipatory breach. The Claimant may have a high burden of proof to show why he should be paid for a period during which he did not work, and he attempts to meet this burden of proof with numerous details about his ongoing employment relationship with the Defendant.
78. The Claimant’s arguments as to anticipatory and/or repudiatory breach with immediate effect are not convincing. Without making comment as to whether such an argument could apply to an employment contract, the Claimant has not sufficiently met his burden of proof on this argument such that the Defendant’s behaviour and working conditions amount to constructive dismissal with immediate effect. The DIFC Employment Law is meant to limit parties’ otherwise unencumbered ability to contract as regards employment contracts. The DIFC Employment Law therefore intends to create a balance of rights between employer and employee that promotes “the fair treatment of” both, including provisions, such as Article 59A, for termination of the relationship for cause. Thus, the burden of proof to show a breach of contract that amounts to constructive dismissal and termination of the employment contract outside of the provisions of the DIFC Employment Contract will be quite high.
79. While the Claimant has provided witness statements and otherwise attempted to prove that his treatment at the Defendant’s salon was such that it amounted to constructive dismissal, he has not been successful. Certainly, his arguments could justify his terminating the relationship and waiving his notice period, but he fails to show why he should also be paid for a period during which he did not work.
80. The Claimant’s argument could be interpreted to fall under an employee’s potential use of Article 59A to terminate the employment relationship “for cause” and without notice but this would require that any reasonable employee would have terminated the employment based on the conduct of the employer. I do not believe that the Claimant has met the burden to show this, such that he should not only be excused from working during the notice period but also paid for this time.
81. The Defendant argues that by failing to return to work on 10 June 2016 and thereafter, the Claimant breached the contract such that the termination became for cause, but the effective termination date remained the same, allegedly 9 September 2016.
82. Ultimately, the Claimant failed to attend work during the notice period and provides no valid justification for having done so. Thus, the Claimant’s failure to attend work amounts to his waiver of the notice period and as the Defendant did not agree to payment in lieu of notice, the Claimant is not owed any payment for the notice period.
83. In light of the above finding that the Claimant was not owed any payment for the notice period, the Defendant also does not owe any additional penalty pursuant to Article 18(2) other than the AED 30,500 already determined above.
D. Was the Defendant justified in filing an absconding case against the Claimant and maintaining it throughout these proceedings?
84. The Claimant makes two arguments regarding the Absconding Case filed against him by the Defendant. First, he argues that filing and maintaining the Absconding Case was a breach of the Defendant’s duty of care under Articles 18 and 20 of the DIFC Law of Obligations. The Claimant argues alternatively or in addition that the Defendant is liable to the Claimant for damages for misrepresentation pursuant to Article 29 of the DIFC Law of Obligations.
85. I will address both arguments starting first with the argument regarding Article 29 of the DIFC Law of Obligations, which provides in relevant part:
“(1) There is a misrepresentation if:
(a) There is an incorrect statement of fact, past or present, or a statement of opinion falling within Article 29(3);
(b) The representor or his agent makes the statement, or has notice that the statement is made; and
(c) The statement is made in order to induce, and does induce, a person to enter into a contract. . . .
(3) A statement of opinion can only be a misrepresentation if it is accompanied by a further incorrect representation, whether express and implied, such that the representee (or his agent, acting in his capacity as such) has reasonable grounds for believing that the opinion is true.”
86. Article 30 of the DIFC Law of Obligations states in relevant part:
“A person is liable for misrepresentation to a representee if:
(a) He is the representor in relation to a misrepresentation;
(b) The representee has entered into a contract after the misrepresentation has been made;
(c) The misrepresentation influences the representeee to enter into a contract or affects the terms upon which he agrees to enter into it; and
(d) The representee suffers a loss as a result of entering into the contract.”
87. The Claimant articulates that the Defendant represented to the Claimant, at the time of entering into the Employment Contract, that it would be a reasonable employer and deal honestly and in good faith with the DIFC Government Services Office; such representation induced the Claimant to enter into the Employment Contract. Subsequently, the Defendant allegedly misled the DIFC Government Services Office and induced them to incorrectly approve an Absconding Case against the Claimant, showing that its initial representation of dealing in good faith was, in fact, a misrepresentation and thus the Defendant should be liable under the Article 29 of the DIFC Law of Obligations.
88. I find that the Claimant has not particularised this claim fully and in any event, has not shown, pursuant to Article 30(d) of the DIFC Law of Obligations, how he has suffered a loss as a result of entering into the Employment Contract. The alleged loss relevant to the Absconding Case is quite tenuously connected to the Claimant’s entering into the Employment Contract and is instead articulated as the Claimant’s loss of income due to the Absconding Case, not the Employment Contract. Thus, the Claimant’s claim under Article 29 of the DIFC Law of Obligations is dismissed.
89. The Claimant also argues that filing and maintaining the Absconding Case was a breach of the Defendant’s duty of care under Articles 18 and 20 of the DIFC Law of Obligations. The DIFC Law of Obligations states in relevant part:
“CHAPTER 2: NEGLIGENCE
17. Liability
(1) A defendant is liable in negligence to a claimant if and to the extent:
(a) the defendant owes a duty of care to the claimant;
(b) the defendant breaches his duty of care to the claimant; and
(c) the defendant’s acts or omissions in breach of his duty of care to the claimant case loss to the claimant.
(2) The defendant’s liability provided in Article 17(1) shall be reduced by the extent to which the claimant’s negligent acts or omissions contributed to his loss.
(1) Subject to Articles 18(2) and (3), a defendant owes a duty of care to a claimant where:
(a) it is reasonably foreseeably that the defendant’s acts or omissions could cause loss to the claimant;
(b) the relationship between the defendant and the claimant is sufficiently proximate for a duty of care to exist; and
(c) it is fair, just and reasonable in the circumstances that the defendant should owe the claimant a duty of care.
. . .
20. Economic loss
(1) Where a claimant has suffered only pure economic loss as a result of the defendant’s conduct, the defendant only owes a duty of care to the claimant if:
(a) the requirements of Article 17 are met;
(b) the defendant assumes a responsibility to the claimant;
(c) the claimant relies on the defendant; and
(d) it is reasonable for the claimant to rely on the defendant.
. . .
21. Standard of care
(1) In order to establish a breach of duty of care a claimant must show that a defendant failed to exercise reasonable care to avoid causing loss to the claimant, having regard to the probability and the likely seriousness, of the loss.
(2) “Reasonable care” means the care which a person of ordinary care and skills, engaged in the type of activity in which the defendant was engaged, would have exercised.
(3) A professional person exercises reasonably care if he shows the standard of care of an ordinary skilled person exercising and professing to have the special skill in question.
(4) Where there are different views within a profession about what constitutes reasonable care, a professional shows reasonable care when he takes an approach endorsed or followed by a responsible body of professional opinion.”
90. The above cited provisions from the DIFC Law of Obligations set out common law negligence. The general elements of a claim under negligence, as articulated in Articles 17-21 of the DIFC Law of Obligations above, require the Claimant to show that the Defendant owed him a duty of care, that the Defendant breached that duty of care and that such breach caused the Claimant loss. If that loss is purely economic, there are additional requirements for the Claimant under Article 20 of the DIFC Law of Obligations.
91. It is well established that an employer owes a duty of care to an employee just as an employee shall owe a duty of care to an employer. The question remains whether the Defendant’s behaviour as regards the Absconding Case constituted a breach of that duty and secondly, whether the Claimant has sufficiently proved his loss as a result.
92. When the Defendant initially filed the Absconding Case, it was justified as the parties agree that the Claimant failed to attend work after receiving the Termination Letter. The Claimant contends that even the initial filing of the Absconding Case was unreasonable based on the DIFC Government Services Handbook description of an Absconding Case and based on the alleged evidence of Representative from the DIFC Government Services Office (GSO). However, Representative from GSO has not testified nor signed his alleged witness statement.
93. Furthermore, the DIFC Government Services Handbook states, at page 49, that an employer can “declare an absent employee as an absconder.” The Handbook goes on to state that “If the employee is out of UAE, company can declare the individual only after 3 months from the date of exit. Reporting the employee as an absconder is subject for the verification of the DIFC GSO.”
94. The Claimant’s argument that the absconding procedure should only be used “If the employee is out of the UAE,” is nonsensical and ignores the first sentence. The Handbook provides an additional requirement for filing absconding claims when the employee has left the UAE but does not otherwise limit them to those cases. Furthermore, the DIFC GSO provides verification of absconding claims. Rather, the employer may file an absconding claim against an “absent employee”.
95. While it is possible that the Defendant provided false information when filing the Absconding Case, such a claim has not been proven by the Claimant. It was not unreasonable for the Defendant to file an absconding case against the Claimant upon his failure to return to work; both parties agree that the Claimant was absent from work following 9 June 2016. Thus, the initial filing of the Absconding Case does not represent a breach of the Defendant’s duty of care.
96. However, it is undisputed that the Absconding Case against the Claimant remained in effect from 14 June 2016 when filed until 25 October 2016, when finally lifted along with the cancellation of the Claimant’s visa following an Order from this Court to do so. Thus, the question remains whether the Defendant breached its duty of care by retaining the Absconding Case against the Claimant even after it became apparent that he had filed an employment dispute against her and was present and responding to that case.
97. In order to make out his claim for damages under negligence pursuant to Article 21 of the DIFC Law of Obligations, the Claimant “must show that a defendant failed to exercise reasonable care to avoid causing loss to the claimant, having regard to the probability and the likely seriousness, of the loss.”
98. The Defendant insisted upon keeping the Absconding Case open even after the Defendant filed a case against it and even after the effective termination date of the Claimant had passed. The Defendant states that it “upheld the absconding claim against the Claimant because the Claimant failed to report to the Defendant and to date has not reported to the Defendant. Furthermore, it became apparent that the Defendant was illegally working at other establishments whilst on the Defendant’s visa.” (Reply to the Statement of Case, Paragraph 69).
99. Certainly, the Defendant knew that maintaining an Absconding Case against the Claimant and thus failing to cancel his employment visa prevented him from legally working at another establishment, causing him a loss of earnings. In fact, one of the stated reasons the Defendant gives for failing to lift the Absconding Case was that he was allegedly already working at other establishments illegally. Thus, the Defendant certainly knew of the probability and seriousness of the loss that would likely result to the Claimant for being unable to obtain employment.
100. Once the case was filed against the Defendant and it was clear that the Claimant was attending to the case and still present in Dubai and the DIFC, it was unreasonable for the Defendant to refuse to lift the Absconding Case. There are mechanisms in place from DIFC Government Services Office to enable parties to cancel visas with claims still pending, as would have been appropriate in this case. The Defendant’s statement that the Claimant continued to fail to report to work, made in the Reply to the Statement of Case, filed on 18 September 2016, is wholly unreasonable as a claim had been pending between the parties in the DIFC Courts’ Small Claims Tribunal since 21 June 2016. The SCT claim made clear that the Claimant believed himself terminated and thus, the employment relationship between the parties should be concluded. Furthermore, as established above, the Claimant’s effective date of termination was 1 July 2016, after which time he would have been free to work for other establishments, provided the visa was cancelled, as was his desire.
101. By failing to lift the Absconding Case against the Claimant, the Defendant knowingly prevented the Claimant from finding new work, even beyond the period when he was meant to be working at the Defendant company. While the Defendant makes allegations that the Claimant was working illegally under its employment visa, those claims have not been sufficiently substantiated. Furthermore, the Claimant has proven that he would have been able to obtain alternative work by providing a letter articulating a job offer from Gaby salon with a salary of AED 12,500 per month.
102. The Claimant’s claimed losses are purely economic as he does not list any other loss relevant to this particular claim. Thus, he is required to meet the requirements of Article 20 of the DIFC Law of Obligations as listed above. The requirements of Article 17 of the DIFC Law of Obligations are met in this case: the Defendant owed a duty of care to the Claimant as his employer, the Defendant breached that duty by unreasonably refusing to lift the Absconding Case and this breach caused the Claimant to be unable to find subsequent employment during this period of time, at an economic loss to himself. I find that the Claimant’s own negligent acts or omissions have not contributed to his losses as regards the Absconding Case.
103. The remaining requirements of Article 20 of the DIFC Law of Obligations are also met. The Defendant has assumed some responsibility to the Claimant by entering into an employment relationship and contract and by obtaining an employment visa under its sponsorship. Furthermore, the Claimant relies on the Defendant for any and all actions related to the obtaining, maintenance and cancellation of his employment visa, which is under the Defendant’s authority. Thus, it is reasonable for the Claimant to rely on the Defendant regarding action on his visa; in fact, he has little choice but to do so unless he wants to refrain from working. Therefore, the Claimant’s claim for a purely economic loss of lost income is valid under the DIFC Law of Obligations.
104. The Defendant shall thus be required to pay to the Claimant damages for each day that the Absconding Case was not lifted unreasonably and the visa not appropriately cancelled. It is unreasonable to think that the Claimant could have had his visa cancelled and begun alternative work before his effective date of termination, as determined above, passed. Thus, until 1 July 2016, the Defendant was not in breach of its duty of care by failing to lift the Absconding Case. After this time, the Defendant was in breach of its duty of care to the Claimant as an employee or former-employee by failing to lift the Absconding Case although the Claimant was responding to a claim against the Defendant and although the Claimant was no longer contractually obligated to return to work, based on the 1 July 2016 effective date of termination.
105. While the Defendant was operating under the assumption that the Claimant’s effective termination date was 9 September 2016, this proved to be an incorrect conclusion and certainly by 1 July 2016 the Defendant was aware of the mistakes in the Termination Letter and was aware that the employment relationship between the parties was terminated with pending claims in the Small Claims Tribunal.
106. Considering that it was the Defendant’s request to have legal representation that considerably delayed adjudication of this claim in the Small Claims Tribunal and considering that it is wholly unreasonable to assume that a claimant/employee would remain unemployed for the entire length of an employment dispute, no matter the length of that dispute, it was not reasonable for the Defendant to maintain the Absconding Case.
107. As the effective termination date was 1 July 2016, it would have been appropriate and possible to lift the Absconding Case and cancel the visa at this time. As is acknowledged by the 14-day grace period provided in Article 18(2) of the DIFC Employment Law, it is not always reasonable to assume that such actions as providing end of service settlements and visa cancellations will occur immediately upon effective termination. Thus, I consider it fitting to apply this same 14-day grace period to the time at which it was reasonable and therefore, required, for the Defendant to lift the Absconding Case and cancel the Claimant’s visa.
108. Thus, damages, measured at the rate at which the Claimant could have found alternative employment, namely at AED 12,500 per month based on the offer letter submitted to the Court, will begin to run from 16 July 2016. These damages run until the Absconding Case was lifted and the visa cancelled.
109. Since the Hearing, there has been some communication from the parties regarding lifting the Absconding Case and cancelling the visa. I understand that there was some delay on this matter due to the Defendant’s police case open against the Claimant, which prevented the parties from providing the DIFC Government Services Office with the Claimant’s original passport, which was required in order to lift the Absconding Case and cancel the visa.
110. While this delay is unfortunate, it does not relieve the Defendant from responsibility to pay damages for the failure to lift the Absconding Case as the Defendant should have lifted this Claim much earlier. Lifting the Absconding Case earlier, while perhaps not avoiding the delay regarding cancelling the visa, would have allowed the Claimant to seek transfer of his visa or otherwise seek action on his visa, even if further delay had occurred due to the police case.
111. Therefore, I find it appropriate to award the Claimant damages in respect of his claim that the Defendant breached its duty of care owed to him as an employer by unreasonably failing to lift the Absconding Case against him and causing him real economic loss in the form of lost wages. This amount shall be measured from 16 July 2016 until the Absconding Case was confirmed as lifted and the visa cancelled on 25 October 2016, not to include 25 October 2016. At a monthly salary of AED 12,500, the Claimant would have earned AED 410 per day multiplied by 101 days from and including 16 July 2016 until 24 October 2016. This comes to AED 41,410 payable by the Defendant to the Claimant for unreasonably failing to lift the Absconding Case.
E. Other Claims
112. The Claimant makes several additional claims not addressed above. First, the Claimant contends that he is entitled to claim “interest on such sums as may be found due to him, at such rate and for such period as the Tribunal may think fit, pursuant to Articles 18 and/or 32 of the DIFC Law of Damages and Remedies.” Second, the Claimant contends that he is “entitled to and does claim additional damages pursuant to Article 40(2) of the DIFC Law of Damages and Remedies.” Finally, the Claimant makes claim to “Further or other relief.”
113. All three of these claims are not sufficiently particularised and are therefore dismissed as the Claimant has failed to meet his burden of proof on these claims.
F. Costs
114.The Defendant has argued that, although this case has been filed in the SCT, I should nonetheless consider awarding costs given the multiple amended claims and contradictory arguments made by the Claimant. However, the Defendant has also altered its claims and provided contradictory statements. Furthermore, the Defendant has been found owing to the Claimant in significant sums, implying that any cost award may be found against the Defendant.
115. RDC 53.70(1) allows that the SCT Judge may shift the court fees when considered appropriate. In this case I do not find it appropriate to shift the court fees from the Claimant to the Defendant as the Claimant has specifically disclaimed his right to claim the Court Fees in his Statement of Case at Paragraph 73(b).
116. RDC 53.70(2) addresses the award of any other costs in the Small Claims Tribunal, including legal costs, and limits further costs awards to circumstances where a party has behaved unreasonably. While the Defendant is essentially arguing that the Claimant has acted unreasonably by changing his claims and filing contradictory arguments, given that this case was initially filed without legal representatives and then continued with the benefit of legal representatives, I do not find this unreasonable. Furthermore, both parties have made contradicting filings. I find that in this case, neither party has behaved unreasonably insofar as RDC 53.70(2) is concerned and thus no further costs award will be granted.
G. Conclusion
117. Based on the above findings, it is clear that although the Defendant was not justified in terminating the Claimant “for cause” pursuant to Article 59A of the DIFC Employment Law, the Claimant was also not justified in failing to attend work during the ensuing notice period. The parties did not agree to payment in lieu of the notice period, pursuant to Article 59(3) of the DIFC Employment Law and thus the Claimant, being unjustified in failing to attend work as detailed above, is not entitled to any payment during the notice period.
118. As discussed above, the Claimant’s termination date is effective on 1 July 2016 pursuant to the Termination Letter, although the Claimant’s last day of work was 9 June 2016. As such, the Claimant’s final settlement payments were due within 14 days of the effective termination date, pursuant to Article 18(1) of the DIFC Employment Law. The parties are in agreement that the Claimant received payment for accrued leave and unpaid salary on 15 September 2016. This was significantly after the required 14-day period and thus penalties as provided for under Article 18(2) of the DIFC Employment Law are owed by the Defendant to the Claimant in the amount of AED 30,500.
119. Finally, as detailed above, the Defendant was not justified in maintaining the Absconding Case against the Claimant beyond 1 July 2016, when it had notice that the Claimant was still present in Dubai, it was aware that he was responding to a claim against it regarding his employment, and it should have been aware that the Claimant’s employment was effectively terminated as of the date mentioned in its own Termination Letter. Still, the Defendant persisted in continuing the Absconding Case against the Claimant, effectively eliminating his ability to take on other work and earn a salary.
120. Although the Defendant became unjustified in maintaining the Absconding Case as of 1 July 2016, the Claimant would not likely have had his visa cancelled and been free to work elsewhere for a reasonable period of 14 days beyond the effective termination date. Therefore, the Defendant shall be responsible to pay the Claimant daily damages in the amount of his expected salary of AED 12,500 per month from 16 July 2016 until the Absconding Case was lifted and the visa cancelled on 25 October 2016 in the amount of AED 41,410.
Findings
121. The Defendant shall pay the Claimant AED 41,410 as damages for failure to lift the Absconding Case against him.
122. The Defendant shall pay the Claimant AED 30,500 as a penalty under Article 18(2) of the DIFC Employment Law.
123. The Claimant’s remaining claims are dismissed.
124. The parties shall bear their own costs.
Issued by:
Natasha Bakirci
SCT Judge
Date of issue: 27 November 2016
At: 4 pm
