February 07, 2018 SCT - Judgments and Orders
Claim No: SCT 337/2017
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE SCT JUDGE MAHA AL MEHAIRI
BETWEEN
HARIPA
and
HARPITH FZ LLC
Hearing: 27 December 2017
Further submissions: 4 January 2018
Judgment: 7 February 2018
JUDGMENT OF SCT JUDGE MAHA AL MEHAIRI
UPON this claim having been called on 13 December 2017 for a Consultation before SCT Judge Ayesha Bin Kalban
AND UPON the parties not having reached a settlement
AND UPON a Hearing having been held before SCT Judge Maha Al Mehairi on 27 December 2017, with the Claimant and the Defendant’s respresentative attending
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1.The Defendant shall pay the Claimant AED 30,963 as annual commission for the year of 2017.
2. The Defendant shall pay the Claimant AED 43,166.42 as penalties under Article 18(2) of the DIFC Employment Law and an additional AED 583.33 per day from the issuance of this Judgment until payment is made.
3. The remainder of the Claimant’s claims are dismissed.
4. The parties shall bear their own costs.
Issued by:
Nassir Al Nasser
SCT Judge and Registrar
Date of issue: 7 February 2018
At: 2pm
THE REASONS
Parties
1.Haripa (hereafter the “Claimant”) is an individual formerly employed as a Business Development Executive at the Defendant company.
2. Harpith FZ LLC (hereafter the “Defendant”) is a company registered and operating in the DIFC, providing publication services.
Background/Procedural History
3. The Claimant joined the Defendant company in December 2015 as Business Development Manager in their Commercial Department, and was responsible for achieving annual targets set by the company in the form of advertising sales and content projects.
4. Prior to the Claimant joining the Defendant’s Commercial Department, the Department’s tasks were typically handled by two people, with a group target set by the Defendant. As per the targets agreed between employees and the Defendant, each individual in the Defendant’s Commercial Department was supposed to achieve personal targets and a group target in order to be entitled for the individual commission of 1.5% of the total individual amount achieved from advertising revenue per issue.
5. It is uncontested that in 2016, althought the Claimant did not reach her individual target, she was awarded a 1.5% commission on her individual revenue. These commission payments were meant to be paid 45-days from the issue release, however commissions were not usually paid within this timeframe. In 2016, the Claimant followed-up on numerous occasions to receive her commission payments.
6. In 2017, although the Claimant still failed to meet her individual target, she was under the impression from various verbal and email communications that the same would be true for 2017. The Claimant began to follow-up on her expected commission payments in April 2017 and received several emails confirming that commissions would be paid.
7. The Claimant was informed on 11 October 2017 that she would be terminated with a last working day of 11 November 2017. Upon leaving the Defendant company, the Claimant continued to follow-up on her expected commission payments, as well as end of service payments. While the end of service payment was made with minimal disagreement, the commission payments were not receieved. In fact, starting on 22 November 2017, the Defendant company informed the Claimant that no commission would be paid to her for 2017 because she did not meet her individual targets for the year.
8. The parties continued discussions to settle the dispute and arrange for visa cancellation. While the Defendant sought to have the Claimant cancel her visa immediately, the Claimant refused to proceed with the cancellation while the commission dispute remained outstanding.
9. On 28 November 2017, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking commission payments of AED 30,963, end of service amounts of AED 5,758.59, visa cancellation, and penalty as per Article 18(1) of the DIFC Employment Law. However, the Claimant failed to particuarlise her Article 18 claim in her Claim Form.
10. The Defendant filed an Acknoweldgement of Service and Defence on 4 December 2017, articulating a defence that the Claimant had not earned her commission for 2017 and that the end of service provided was in compliance with DIFC Law. The Defendant additionally claimed that it had not cause any delay with the Claimant’s visa cancellation.
11. The parties attended a Consultation before SCT Judge Ayesha Bin Kalban on 13 December 2017 however the parties failed to reach a settlement. Thus, the parties were called for a Hearing before me on 27 December 2017.
12. At the Hearing, several issues were brought to my attention including the failure of both parties to cancel the Claimant’s visa. I directed that the parties cooperate to cancel the visa that day, which was acheieved. The Claimant also articulated her desire to make a particularised Article 18 claim and was directed that any amendment to her Claim would need to be made that same day.
13. The Claimant then filed an additional SCT case, SCT-364-2017, in order to particularise her additional claims, claiming AED 26,832 in total for the Defendant’s failure to pay her commission and cancel her visa through 27 December 2017.
14. I directed via an Order of 28 December 2017 that SCT-364-2017 be consolidated with this case, SCT-337-2017, and allowed the Defendant to make written submissions in response to the amended claims. The Defendant provided the same on 4 January 2018, at which time the case was reserved for Judgment.
The Claim
15. In sum, the Claimant has claimed the following:
(a) AED 30,963 for 2017 commission payments;
(b) AED 5,758.59 for additional end of service;
(c) Visa cancellation;
(d) AED 26,832 as penalty for late payment (Article 18(1) of the DIFC Employment Law).
16. The Claimant ultimately dropped her claims for visa cancellation and additional end of service payment and thus those claims will not be addressed herein. As for the commission payments, the Claimant detailed that she was left to perform the work of the whole Commercial Department, which was meant to operate as a group, by herself for most of her time at the Defendant company. She reminds that although she did not meet the indvidiual targets agreed for 2016, she still received the commission payments through written and verbal confirmations from Defendant company representatives.
17. She also claimed that she had no choice in the matter when agreeing to the yearly targets as reflected in the target letters signed by both herself and a company representative. While she was responsible for 30% of the group target in 2016, she was made to be responsible for 50% in 2017. She argued that as happened in 2016, she was told that she would be receiving the commission payments although she had not met the targets. Therefore, she came to expect these payments as amounts due to her.
18. The Claimant submitted a number of email confirmations from the Defendant company about her commission payments from Hamim (Finance), and Hamer (HR and Finance).
(a) 9 May 2017 – Email from Hamim stating that “Due to cash-flow reason, we are not able to process your commission current payment run. it will be released in the next month payment batch on 15th of June.” [sic].
(b) 29 October 2017 – Email from Hamim, copying Hendy (Finance) and Heind (owner of Defendant company) stating “As Discussed, We will release you commission for January – September on 15th of November. The commission for November- December will be due 60days from publishing date. We will issue an official letter stating the payment date of November – December commission.” [sic].
(c) 14 November 2017 – Email from Hamer copying Hamim and Heind stating “Also the commission for January – October and the Milan business trip expense will be paid along with your EOS which will be transferred to your bank account registered with Harpith.”
19. Any late payment of the above-mentioned commission payments was not surprising to the Claimant after the 2016 commission payments were paid well beyond the contractual 45-day payment period. Thus, while she continued to follow-up in 2017 for her commission payments, she did not consider that she would not be paid these amountds.
20. As for the claim for Article 18(1) penalties, pursuant to the DIFC Employment Law, the Claimant first makes this claim in her original Claim Form of 28 November 2017 where she states “I would like to ask DIFC courts to consider the penalty for late cancellation as per the section 18.1 of DIFC law [sic].” The Claimant did not further particularise this claim nor did she provide a claim amount.
21. In her second Claim Form of 28 December 2017, the Claimant monitises this claim at AED 26,832, stating that it should be paid to her as “Financial compensation for delayed Visa Cancelation, due to due payments.”
The Defence
22. The Defendant submits that the Claimant had no entitlement to a commission for 2017 since she had failed to achieve her key performance indicators and sales targets. It contended that the Claimant’s ineligibility for a commission was repeatedly communicated to her in person by senior management. The Defendant argued that despite being advised repeatedly by management that she had no commission entitlement, the Claimant sent many emails requesting payment of a commission.
23. The Defendant acknowledges that, whilst the owner of the company was initially desirous of providing the Claimant with a discretionary bonus, after examining her results, he deemed that it would be inappropriate to reward an employee who had failed to meet her targets to the detriment of the financial interests of the company.
24. In response to the claim for penalty for late payment and failure to cancel the visa, the Defendant maintains that nothing was owing to the Claimant and therefore she caused the delayed visa cancellation by failing to cooperate at an earlier stage. The Defendant submitted numerous emails showing that it asked the Claimant to proceed with the visa cancellation and reiterated that all dues had been paid to her.
25. The Defendant concluded that the Claimant’s claim should be dismissed on the basis that the complaint is spurious and without merit.
Hearing
26. The parties reiterated and expanded on their arguments at the Hearing.
27. The Claimant reiterated the facts and arguments detailed above and alleged that she received verbal and written confirmations from Defendant company representatives that her commissions would be paid for 2017. She referenced the email from Hamer from 14 November 2017, after she left the company, confirming that her commissions would be paid.
28. The Claimant confirmed that she is only claiming her commissions and a penalty for late payment and late visa cancellation. She dropped the other claims articulated in her Claim Form. The Claimant was informed that her penalty claims had not been properly particularised and she was invited to make an amendment to her Claim no later than the same day of the Hearing. This was done as per the above-mentioned second Claim Form.
29. In response, the Defendant confirmed that the 2016 commission was paid without the Claimant meeting the target, but mentioned that this was only because it was the Claimant’s first year at the company. The target letter for 2017 was signed by management and by Claimant, detailing the targets required to earn a commission for 2017 and the company intended to honour to that arrangement. Based on that letter for 2017, Claimant has not met the target and did not earn commission.
30. When asked to address the emails that the Claimant did receive from Defendant company representatives confirming that 2017 commissions would be paid, the Defendant’s Representative claimed that these messages were only sent beause of constant “frustration” with the Claimant seeking commission payments. The Defendant’s Representative stated that there was discussion of whether the commission should be paid to the Claimant however these messages and verbal confirmations were not made by the decision-maker in the company and therefore were not valid confirmations. When the decision-maker reviewed the circumstances, the commission was refused and this was communicated to the Claimant.
31. While the Defendant also reiterated that it did not contribute to any visa cancellation delay and was ready at all times to cancel the Claimant’s visa, it became clear at the Hearing that the Defendant had been seeking for the Claimant to sign a cancellation form indicating that she had no pending issues with the Defendant. The Claimant indicated that she was not comfortable to sign for cancellation under these terms until the commission dispute was resolved.
32. At the Hearing, it being clear that both parties sought cancellation of the Claimant’s visa, I directed the parties to complete the cancellation immediately.
Discussion
33. 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. 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 and other agreements between the parties.
34. In sum, there are two remaining issues at stake in this claim. First is the question of whether the Claimant is owed commission from the Defendant against her 2017 sales. Second is the question of whether the Claimant is owed any penalties for the failure of the Defendant to pay her commission, pursuant to Article 18 of the DIFC Employment Law. The other claims regarding end of service and visa cancellation have been dropped.
Commission
35. As confirmed by both the Claimant and Defendant at the Hearing, the commission structure is not contained in the Claimant’s Employment Contract. Instead, the Defendant and Claimant agree to a yearly commission structure in a separate agreement. The 2017 commission structure, dated 30 January 2017, was signed by both parties and reflected that the Claimant would be responsible for 50% of a AED 5 million team target. The target agreement includes additional terms that state that “Targets are subject to reassessment on a quarterly basis depending on development of role and responsibilities.”
36. As per the above target, the Defendant seems to have been within its right to refuse to pay the Claimant’s commission seeing as she achieved total sales of AED 2.18 million rather than the AED 2.5 million required. Neither party contests these sales numbers.
37. However, it is clear from email correspondence that Defendant company representatives confirmed to the Claimant that she would receive her commission in 2017 as early as 9 May 2017 and as late as 14 November 2017, after she had left the company. While the Defendant claimed at the Hearing that these confirmations were not official, there is nothing to indicate this in the messages. In fact, these messages came from multiple company officials in the HR and Finance teams. These confirmations, in conjunction with the fact that the commission was paid out in 2016 although targets were not met, gave the Claimant a clear confirmation that she would again be paid her commission in 2017 even though the targets had not been met. This confirmation was given in writing and constitutes an ameded agreement between the parties.
38. For these reasons, it is clear that the Defendant company agreed to pay the Claimant her commission for 2017 and thus the Defendant is required to pay her AED 30,963 to satisfy this amount. Had the Defendant consistently refused to grant the commission payments for 2017, no additional agreement between the parties would have been formed and the amounts would not have been owing due to the Claimant’s failure to meet the agreed targets. However, this is not the circumstance at hand. Instead, the Defendant company confirmed that commissions would be paid, similarly to in the past, and thus now must pay out those commissions.
Article 18 Penalty
39. Article 18 of the DIFC Employment Law states:
“18. Payment where the employment is terminated
(a) An employee shall pay all wages and any other amount owing to an employee within fourteen (14) days after the employer or employee terminates the employment.
(b) If an employer fails to pay wages or any other amount owing to an employee in accordance with Article 18(1), the employer shall pay the employee a penalty equivalent to the last dayily wage for each day the employer is in arrears.”
40. While the Defendant objects that anything has been left owing to the Claimant, I have decided above that commission is owed to the Claimant in the amount of AED 30,963. While commission payments would not typically fall with “wages” as articulated in Article 18, commission payments owed fall squarely within “any other amount owing,” and thus, failure to pay commission payments constitutes a failure under Article 18(1) of the DIFC Employment Law.
41. The Defendant has not shown any proof of an attempt to pay the Claimant this amount found owing within 14 days of termination. Therefore, in accordance with Article 18 of the DIFC Employment law and DIFC Courts’ precedent, the Claimant is entitled to Article 18 penalties running from 14 days after her official date of termination until the date payment is made.
42. For the purposes of Article 18, the Claimant’s date of termination is 11 November 2017. Therefore, the penalty begins to run from 26 November 2017 in the amount of AED 583.33 (the Claimant’s daily wage as listed on the End of Service calculation provided by the Defendant). Thus, as of the date of this Judgment, the penalty owed is 74 days from and including 26 November 2017 until 7 February 2018, totaling AED 43,166.42 with a daily penalty of AED 583.33 continuing to run starting on 8 February 2018 until the day of payment.
Costs
43. The parties shall bear their own costs.
Conclusion
44. In sum, the Defendant shall pay the Claimant AED 74,129.42 including AED 30,963 for 2017 commission and AED 43,166.42 for Article 18 penalties. For each day beyond 7 February 2018 for which they fail to pay, an additional AED 583.33 will be owed to the Defendant until payment is made. The parties are to bear their own costs. All remaining claims of the Claimant are dismissed.
Issued by:
Nassir Al Nasser
SCT Judge and Registrar
Date of issue: 7 February 2018
At: 2pm
