December 08, 2016 Judgments,SCT - Judgments and Orders
Claim No. xxxx
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
GRIET
and
GUIDO LLC
Hearing: 27 November 2016
Judgment: 7 December 2016
JUDGMENT OF SCT JUDGE NATASHA BAKIRCI
UPON this Claim having been called on 8 November 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 27 November 2016, with the Claimant and the Defendant’s representative 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 Claimant’s claim as to unfair dismissal is dismissed.
2. The Claimant’s claim as to compensation for sick leave is dismissed.
3. The Claimant’s claim as to relief from the Non-Compete Clause is dismissed
4. The parties shall bear their own costs.
THE REASONS
Parties
5.The Claimant, Griet, is a Jordanian national who was employed as a “Senior Relationship Manager” by the Defendant company.
6.The Defendant, Guido LLC, operates a branch office in the DIFC, where the Claimant worked.
Background
7. The Claimant and Defendant entered into an Employment Contract on 5 March 2014 which states the Claimant’s employment as commencing on 1 June 2014. The Claimant began working as a Senior Relationship Manager for the Defendant with a basic salary of AED 85,000 per month. Although this contract was initially issued and signed in one format (attached to the Claimant’s supplemental submission) it was agreed between the parties at the Hearing that the correct version was submitted as attached to the Defendant’s initial defence. This version shall be referred to as the “Employment Contract” throughout this Judgment.
8. The Employment Contract states, in relevant part:
“4. Duration of Contract
4.1 The employment will be of unlimited duration, and may be terminated at any time by either Party giving to the other not less than 3-month prior notice in writing.
4.2 In the case of termination by the Company, the Company may exercise the option of making payment in lieu of notice, or putting the Employee on garden leave for all or part of the notice period, during which time the Employee will remain an employee of the Company but will not be required to attend work unless specifically requested by the Company to do so.. . .
13. Sick Leave
Sick leave shall be granted in accordance with the provisions of the DIFC Employment Law, subject to production of a medical certificate from a hospital, clinic or general practitioner approved by the Company where sick leave exceeds two consecutive working days.
. . .
18 Non-Competition/Solicitation
18.1 The Employee expressly undertakes that he will not for a period of twelve (12) months following the termination of this Employment Contract for whatever reason without first receiving permission from the Company:
18.2.1 take up employment with or be involved directly or indirectly in any other company or business within the DIFC or UAE which competes with the business of the Company; or
18.2.2 contract or solicit business from any person or entity (natural or juridical) who was a client or customer of the Company at any time during the period of the Employment Contract; or
18.2.3 take any action which is prejudicial to the name and/or trading of the Company which would or could cause damage to the Company or any employee of the Company.
. . .
22. Governing Law
This Employment Contract is governed by the DIFC Employment Law No. 4 of 2005 as amended.”
9. The Claimant asserts that he sustained a serious injury to his leg on 2 June 2016 which rendered him incapable of attending work. On 5 June 2016 he allegedly contacted his office regarding this injury and medical reports reflecting this injury were subsequently sent to the Defendant company.
10. It is agreed between the parties that the Claimant was terminated from his position at the Defendant company on 19 June 2016. He was provided with three months of notice period, as per the Employment Contract, and was placed on “garden leave” for that period of time, pursuant to Clause 4.2 of the Employment Contract. His effective termination date was 18 September 2016 and the parties agree that he was paid throughout the notice period and paid his other end of service entitlements. I do note that the Claimant contended during the Hearing that his pension has not yet been paid out but admitted this not to be relevant to his claims in this case.
11. On 23 October 2016, the Claimant filed a Claim Form in the DIFC Courts Small Claims Tribunal (SCT). The Defendant initially responded to the Claim Form on 3 November 2016 indicating its intent to defend against all of the claim. The parties attended a Consultation on 8 November 2016 but were unable to reach a settlement. On 27 November 2016, I heard the parties’ arguments at a Hearing.
The Claim
12. The Claim Form indicated that the Claimant was seeking compensation for unfair dismissal and compensation for sick leave amounting to AED 500,000. The Claimant also sought a waiver of the restrictions in Clause 18 of his Employment Contract (hereafter referred to as the “Non-Compete Clause”). The Claimant also made some reference to not receiving sufficient documentation of the reason for his dismissal, pursuant to Article 60 of DIFC Law No. 4 of 2005 as amended (the “DIFC Employment Law”), which requires that:
“Upon the request of an employee who has been continuously employed for a period of not less than (1) year on the date of termination of employment, an employer shall provide the employee with a written statement of the reasons for the employee’s dismissal.”
13. The Claimant elaborated on his claims, stating that “The termination of my employment was unfair, they informed me during my sick leave, I claim a 3 months [sic] unfair dismissal.” He further argues that “Due to the nature of my sudden termination, I further claims [sic] a three (3) months sick leave. I believe that given my performance has not been called into question nor have I been terminated for cause under Article 59A of the DIFC Employment Law, a severance package ought to be considered by the Bank, which is general market practice in such circumstances.”
14. As for the Non-Compete Clause, the Claimant states that Clause 18 of the Employment Contract is “completely prohibitive and should not be enforced by the Bank, as it will restrict me from seeking alternative employment for the next twelve (12) months in the UAE.” Finally, the Claimant argued that “the Bank has a duty to our [sic] me to ensure that my reputation is not tarnished in any way and more importantly that the Bank does not divulge any misleading or false information pertaining to my self [sic] and employment with the bank.”
15. The Claimant provided a Supplemental Submission in advance of the Hearing, submitted on 12 November 2016 including a statement and several annexures. He subsequently requested permission to withdraw Annex 2 of that submission, a request that I granted at the Hearing and therefore I have not taken Annex 2 into consideration.
16. The Claimant’s Supplemental Submission generally reiterates his previous arguments and highlights his contribution to the Defendant company during his time working there. The Claimant adds that he “was discriminated by the bank by terminating me while I am on sick leave.” He elaborated on the sequence of events surrounding his termination and his sick leave approval.
The Defence
17. The Defendant provided its initial Defence on 3 November 2016, indicating its intention to defend against all the claims made in the Claim Form. In the submission, the Defendant maintained that it has provided sufficient reason for termination, pursuant to Article 60 of the DIFC Employment Law both verbally at the meeting between the Claimant and the Defendant’s Head of Wealth Management, on 19 June 2016 and in writing by letter to the Claimant on 11 July 2016.
18. The Defendant argued that the Claimant was terminated in accordance with his Employment Contract and the DIFC Employment Law and thus, the Defendant is not liable to pay any damages for “unfair dismissal or otherwise.” The Defendant pointed to DIFC Courts precedent establishing that the DIFC Employment Law does not provide for claims of unfair dismissal.
19. The Defendant argued that there is no justification for the Claimant’s claim for compensation for three months of sick leave. Furthermore, there is nothing to prevent an employer from terminating an employee during his or her sick leave. The Defendant states that the Claimant was on “garden leave” during his notice period and that “he continued to receive his normal remuneration during that time. The Fact that Griet may have been on sick leave for all or part of the Garden Leave Period does not entitle him to claim additional sick leave pay.”
20. As regards the Non-Compete Clause, the Defendant argued that the Clause was agreed between the parties and is a reasonable provision. The Defendant cites some English Court precedent purportedly upholding 12-month non-compete clauses as “industry standard” in the financial services sector.
21. Finally, as regards the Claimant’s contention that the Defendant has a duty not to “divulge misleading or false information” about the Claimant, the Defendant stated that it has no intention to do so and has never done so.
22. The Defendant seeks a declaration that it has complied with the obligations of Article 60 of the DIFC Employment Law, a declaration that the non-compete clause in the Employment Contract is valid, a declaration requiring the Claimant to cancel his “UAE residence visa” and the dismissal of all other claims. However, the Defendant has not filed any formal counterclaim in the case.
23. The Defendant provided a further “Supplemental Statement of Defence” on 20 November 2016 generally reiterating its arguments.
Hearing
24. At the Hearing, the parties generally repeated their written arguments. The Claimant alleged conflict between the reasoning given for his termination in the letter addressed to him on 11 July 2016, which made reference to the Claimant’s “disappointing” commercial results, and a company-wide message sent to all staff at the Defendant’s DIFC branch office, which identified the Claimant as an employee leaving the company due to “internal re-organisation”. He believes that his claim for “unfair dismissal” is valid as no reason was given in his initial termination meeting. He made reference to his belief that he was discriminated against because he was on sick leave. This was the extent of the Claimant’s oral submissions regarding his claim for unfair dismissal. The Defendant, by contrast, claimed that verbal and written reasons for the Claimant’s termination were provided in a timely fashion.
25. As to the claim for sick leave, the Claimant contended that the Defendant should have waited until his sick leave was over to terminate him, then giving him his three-months’ notice period to seek alternative employment. He maintained that although he did not have a legal argument to support this contention as such, he believed it unfair to terminate an employee while they are already on sick leave as he was unable to seek alternative employment due to his injury.
26. There was some disagreement between the parties as to when the Claimant provided the Defendant with confirmation via a medical report that he would need to take three months of sick leave. The Claimant contended that both his local office in DIFC and the main office were aware of his extended sick leave due to the nature of his injury, but he did not provide medical reports as to the length of his recovery and required sick leave until 30 June 2016.
27. The Claimant argued that he had informed his local CEO of the nature of his injury on 5 June 2016 and that he did not know the exact length of his required sick leave at that time. He also claimed that he had requested his secretary to inform the main office of his need for an extended sick leave based on the nature of his injury. He contended that based on the nature of his injury, the Defendant must have known that he would need extended sick leave and thus, they were aware of his being on sick leave when they called him for a meeting on 19 June 2016 to terminate him.
28. The Defendant contended that the manager who had informed the Claimant of his termination on 19 June 2016 was not fully aware of the extent of the Claimant’s sick leave, although it does not dispute that the Claimant was injured as claimed. Instead, the Defendant contended that an official medical report for three months of sick leave had not yet been submitted by the Claimant and that, in any event, there is nothing in the Employment Contract or the DIFC Employment Law to prevent the Defendant from terminating the Claimant while on sick leave.
29. Finally, the Claimant made mention of his claim regarding the Non-Compete Clause stating that it is unfair and will prohibit his continued employment in his field and location. By the Claimant’s own admission, he has not found another job yet and if and when he does, it is open to him to seek the Defendant’s approval, as provided at part 18.1 of the Non-Compete Clause.
30. It is noted that there was a brief discussion regarding settlement at the end of the Hearing, with the Defendant making an offer as to the Non-Compete Clause. The parties did not reach an agreement and nothing in that discussion will serve to prejudice my judgment.
Discussion
31. 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 does not exceed AED 500,000.
32. 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.
33. As the Claimant has not made any specific claims connected to his statements regarding the Defendant’s duty not to “divulge misleading or false information” about him, I will not address this argument individually. Thus, there are essentially three Claims to be considered in this dispute:
a. Is the Claimant entitled to compensation for “unfair dismissal”?
b. Is the Claimant entitled to reimbursement for his sick leave?
c. Is the Claimant entitled to relief from the Non-Compete Clause in his Employment Contract?
34. I will address each of these main issues responding to the Defendant’s arguments in turn.
A. Is the Claimant entitled to compensation for “unfair dismissal”?
35. The Claimant maintains that he was unfairly dismissed and should receive three months’ compensation for this unfair dismissal. He claims that unfair dismissal was evidenced by the Defendant’s failure to give him reasons for his termination in compliance with Article 60 of the DIFC Employment Law. At the Hearing the Claimant did not make much reference to his claim for unfair dismissal other than his general contention that termination during sick leave is unfair. The Claimant acknowledged that the Defendant provided reasons for termination in writing on 11 July 2016 but pointed out that such reasons conflicted with the reasons given in an internal company-wide memo.
36. While there is inconsistency between the 11 July 2016 letter citing disappointing performance as the reason for the Claimant’s termination and the company-wide memo indicating that a number of employees had been terminated due to restructuring, I do not find this relevant to the dispute at hand. There is nothing to suggest that either of these communications supports allegations of unfair dismissal as it is quite reasonable for a company to make terminations due to restructuring and to further chose the terminated employees based on any number of performance factors, pay scales or other relevant reasons. The Defendant has complied with the provisions of Article 60 of the DIFC Employment Law by providing the Claimant with specific reasons for termination on 11 July 2016, well before his effective termination date.
37. The Employment Contract between the parties, which is not in dispute, states at Clause 4.1 that the Employment Contract “may be terminated at any time by either Party giving to the other not less than 3-month prior notice in writing.” This Clause allows termination at any time for any reason, provided that the employee (the Claimant) is afforded all of his other entitlements under the contract.
38. The DIFC Employment Law does not provide for unfair dismissal, and as the Defendant has pointed out, DIFC Courts’ precedent has found that there is no available remedy for alleged unfair dismissal under the current DIFC Employment Law (See Marwan Lutfi v The Dubai International Financial Centre Authority [2013] DIFC CA 003; Hana Al Herz v The Dubai International Financial Centre Authority [2013] DIFC CA 004; Rasmala Investments Limited v Various Defendants [2009] DIFC CFI 001-006). While these precedents were decided under the original version of the DIFC Employment Law, which was subsequently amended in 2012, I find nothing in the amendments to change the findings in these previous cases. Rather, amendment of the DIFC Employment Law subsequent to these cases and the clear lack of unfair dismissal provisions show that the drafters intended not to create any additional rights as to unfair dismissal beyond the other entitlements reflected in that law.
39. While the DIFC Employment Law does provide, at Article 58, that employers must not discriminate against employees on the basis of “physical disability” among other characteristics, and while the Claimant did make reference to discrimination on the basis of being on sick leave, I find that the Claimant has not met the burden of proof to show that the Defendant terminated him because of his sick leave. In fact, there is reference in the case file to a number of other individuals who were terminated around the same time period with the same given reason of restructuring the company.
40. The Claimant has not submitted any further evidence to show that he was terminated due to his being on sick leave or due to his being physically disabled at the time. He has alleged that the Defendant knew of his injury and his sick leave and still terminated him regardless, but has not supported any allegation that he was terminated due to his disability.
41. Therefore, I find that the Claimant is not entitled to any compensation for “unfair dismissal,” or any compensation for discrimination.
B. Is the Claimant entitled to reimbursement for his sick leave?
42. The Claimant alleges that fairness would dictate that the Defendant allow him to finish his sick leave and then terminate him and provide the required three-months of notice for him to find alternative employment. When asked for the legal grounds for claiming entitlement to reimbursement for his sick leave, he was unable to provide any reference.
43. While I am sympathetic to the Claimant’s concerns that he was at a disadvantage by being injured during his notice period and is now having difficulty finding other employment, there is nothing in the DIFC Employment Law or in the Claimant’s Employment Contract to imply that he could not be terminated while on sick leave, especially as the reason given for termination was not due to his sick leave but instead due to restructuring and performance.
44. The Claimant has not provided any proof that he was terminated due to his being on sick leave nor any proof that the Defendant was not entitled to terminate him. He was paid fully for his notice period and is not entitled to any further compensation for this time. If he were given additional compensation for sick leave, he would essentially be receiving his salary twice during the same period of time.
45. Therefore, I find that the Claimant is not entitled to any compensation for sick leave.
C. Is the Claimant entitled to relief from the Non-Compete Clause in his Employment Contract?
46. There appears to be no dispute that both parties agreed to the terms of the Employment Contract upon entering into it. The Claimant contends that the Non-Compete Clause is unfair and will prevent him from finding work in his field and location. However, the Claimant acknowledged that he has yet to find a job and has yet to seek the permission of the Defendant as open to him under the contested Non-Compete Clause, which provides that the Claimant must first seek “permission from the Company” before taking any job or any action which may violate the other provisions of the Clause.
47. Therefore, at this juncture when the Claimant has not been prevented from seeking alternative employment pursuant to the Non-Compete Clause and has presented no convincing legal argument as to why he should be blanketly excused from the Non-Compete Clause in the future, I find it inappropriate to grant any relief in this connection.
Findings
48. The Claimant’s claim as to unfair dismissal is dismissed.
49. The Claimant’s claim as to compensation for sick leave is dismissed.
50. The Claimant’s claim as to relief from the Non-Compete Clause is dismissed
51. The parties shall bear their own costs.
Issued by:
Natasha Bakirci
SCT Judge
Date of issue: 7 December 2016
At: 10 am
