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Claim No: SCT 337/2022

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL
BEFORE SCT JUDGE MAITHA ALSHEHHI

BETWEEN

LUFATH

Claimant

and

LICT

Defendant

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JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI

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UPON this claim having been filed on 12 September 2022 and amended on 26 September 2022

AND UPON a hearing having been held before SCT Judge Maitha AlShehhi on 7 October 2022, with the Claimant and the Defendant’s representative in attendance

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

IT IS HEREBY ORDERED THAT:

1. The Defendant shall pay the Claimant the amount of AED 64,530.

2. The Defendant shall pay the Claimant the DIFC Courts filing fee in the amount of AED 1,889.47.

3. The Defendant shall pay the overstay fines imposed upon the Claimant directly to the relevant Government department.

Issued by:
Hayley Norton
SCT Judge
Date of issue: 18 October 2022
At: 8am

THE REASONS

The Parties

1. The Claimant is Lufath (the “Claimant”), an individual filing a claim against the Defendant regarding his employment at the Defendant company.

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

Background and the Preceding History

3. The underlying dispute arises over the employment of the Claimant by the Defendant pursuant to an offer letter dated 10 October 2021 (the “Offer Letter”). The Claimant’s salary as per the Offer letter is USD 120,000 annually.

4. The Offer Letter provided for a commencement date of 1 November 2021 in the position of Managing Director.

5. The Claimant terminated his employment and submitted his resignation letter by way of email on 12 September 2022 (the “Resignation Letter”) relying on Article 63(1) of the Employment Law DIFC Law No. 2 of 2019 (the “DIFC Employment Law”).

6. On 12 September 2022, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking damages and compensation in the amount of AED 94,472.60 for breach of contract pursuant to Articles 56 and 57(1) of the DIFC Employment Law as well as the Court filing fee. On 7 October 2022, the Claimant filed further submissions with the Court providing a breakdown of his various claims and confirmed that the total claimed sum had been amended to the value of AED 90,351.88. I set out below a breakdown of the Claimant’s various claims:

7. The Claimant filed all of the supporting documents on 12 September 2022 and provided a copy of the Resignation Letter on 4 October 2022.

8. On 19 September 2022, the Defendant filed its defence to the claim alongside the Acknowledgement of Service form.

9. On 5 October 2022, the Defendant filed further submissions with the Court setting out a more comprehensive reply to the Claim and providing its own calculations for sums that it believes fall due and owing to the Claimant.

10. The parties attended two consultations before SCT Judge Hayley Norton on 22 September 2022 and 27 September 2022, however, they were unable to reach a settlement.

11. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held on 7 October 2022 (the “Hearing”).

The Claim

12. The Claimant’s case is that he was employed with the Defendant in the position of Managing Director from 1 November 2021 pursuant to the Offer Letter. On 12 September 2022, the Claimant terminated his employment due to an alleged repudiatory breach of contract and submitted the Resignation Letter to the CEO.

13. The Claimant relies upon Article 63(1) of the DIFC Employment Law as the basis for his resignation, which states as follows:

14. The Claimant, in filing his claim, seeks payment in the amount AED 90,351.88 (a breakdown of which I have provided at paragraph 6 of this Judgment). The Claimant also pleads that the Defendant failed to provide him with an employment contact, an employment visa, and health insurance. Hence, the Claimant submits that the Defendant has not fulfilled its obligations as mandated under Article 56 and Article 57(1) of the DIFC Employment Law.

15. During the Hearing, the Claimant stated that there was a prior agreement between the parties that the Claimant would remain on his previous visa in an effort to reduce costs on the Defendant. However, he then requested to be provided with an employment visa and was faced with repeated setbacks by the Defendant.

16. The Claimant contends that he was asked to send the required visa documents to the Defendant by 28 April 2022, but was informed that there was an error with the DIFC service system. During the course of his employment, the Claimant had to travel which incurred costs upon him, and the Defendant confirmed that such expenses would be paid by them upon his return. The Defendant furnished the Claimant with the full list of required documents by 17 May 2022, and he also sent the full suite of documents again on 3 June 2022. Despite repeated follow ups, the Claimant has still not received any update with regards to the visa, therefore, on 12 September 2022 he decided to submit his resignation for breach of contract due to the Defendant’s failure to provide a visa, health insurance and employment contract.

The Defence

17. The Defendant acknowledges that the Claimant is eligible for the September salary which is calculated on a pro rata basis in the amount of AED 7,859.18, being from the period of 1 September 2022 to 9 September 2022 (7 working days). The Defendant alleges that the Claimant was overpaid in the amount of AED 3,000 based on the currency conversion of USD to AED within the period of 1 November 2021 to 1 September 2022 (10,859.18 - 3,000 = 7,859.18).

18. The Defendant submits that the Claimant’s resignation is ineffective on the basis that he did not go through the proper means and tendered his resignation verbally on 12 September 2022, without providing written notice as required by the DIFC Employment Law. During the Hearing, the Defendant asserted that the resignation letter was sent from the Claimant’s personal email which is why he had not received it and it went to the spam email folder.

19. Based on the above, the Defendant is not in a position to make payment in lieu of the one month notice period as it deems the resignation defective.

20. Furthermore, the Defendant asserts that payment in lieu of accrued untaken vacation leave and any amounts that the Claimant would have accrued under the DIFC Employee Workplace Savings Plan are not applicable in these circumstances in line with the invalid resignation and owing to the fact that the Claimant has not completed one year of service.

21. The Defendant submits that it had followed up several times with the Claimant regarding the missing documents to be submitted to process the visa application and claims that the delay is primarily due to the Claimant’s request to maintain his old visa which is linked to his father’s company.

22. The Defendant claims that on 28 April 2022 the Claimant made his first request for an employment visa to be issued, and it tried to initiate the process but there were some issues with the DIFC services system and as a result, the visa application process could not be completed. The Defendant submits that the Claimant still provided an incomplete list of documents by 3 June 2022, and it had instructed the Claimant to rectify this, however, he resigned on 12 September 2022. Therefore, the Defendant states that it should not be liable to pay the visa expenses and the overstay immigration fines and requests that the case be dismissed.

Discussion

23. This dispute is governed by the DIFC Employment Law in conjunction with the relevant Offer Letter.

24. I shall set out below each of the Claimant’s claims, the Defendant’s defence to each claim, and accordingly, the Court’s reasoning and finding.

Outstanding wages

25. The Claimant has calculated the outstanding wages in the amount of AED 13,283.45 taking into account 11 calendar days from 1 September 2022 – 11 September 2022.

26. The Defendant has not contested that there is an outstanding salary payment for September but estimates it to include 7 working days rather than 11 calendar days and is willing to pay the Claimant the amount of AED 7,859.18 (AED 10,859.18 – 3,000 = AED 7,859.18).

27. I agree with the Defendant’s analysis only in relation to the working days as it is in accordance with the DIFC Employment Law, however, I have reached a different calculation. The Claimant is entitled to the amount of AED 11,865 (USD 120,000/260 = USD 461.54 x 7 = USD 3,230.78 x 3.6725 = AED 11,865) subject to the currency conversion reduction. As confirmed by the parties, the salary had been paid in AED rather than USD (USD 10,000) which resulted in the Claimant receiving more during his employment. As such, the Claimant’s monthly salary is actually AED 36,725 as opposed to what he had been paid previously which is AED 37,000 (AED 37,000 - 36,725 = 275 x 10 = AED 2,750). I hereby order that the Claimant’s entitlement of the September salary on a pro-rata basis is calculated to be AED 9,115 (AED 11,865 – 2,750 = AED 9,115).

Employment Contract

28. The Claimant’s main concern is that 10 months have lapsed from his commencement date, and he is yet to be in possession of an employment contract which triggered him to file such a claim with the DIFC Courts.

29. The Defendant’s position is that the claim should be dismissed according to the fact that the resignation is invalid. During the Hearing, the Defendant confirmed that an employment contract could not have been provided absent the visa and I will explore the visa issues in the paragraphs to follow below.

30. In my view, there are mandatory requirements that an employer must adhere to regardless of the circumstances and providing an employment contract is one of them. As the employment contract is a fundamental right owed to the employee as expressly mentioned in Article 14 of the DIFC Employment Law, which states as follows:

31. As indicated above, the employment contract is to be provided by an employer to an employee within 7 days of the commencement date and I see no justification from the documents provided to me for the considerable delay in this case. That being said, I agree with the Claimant that there has been a breach and it is the Defendant’s duty to comply with the law at all times to avoid such consequences.

32. I now turn to the defence made by the Defendant that the resignation is invalid for failure to provide a written notice in line with Article 62 of the DIFC Employment Law, which sets out the minimum notice periods to terminate an employment without cause. From the courts record, I can see that the Resignation Letter was indeed sent from the Claimant’s personal email to the Defendant’s CEO (Mr. Lintu) on 12 September 2022. The Defendant then alleges that the Resignation Letter was only received into the spam folder. Given that the Resignation Letter was sent by email, and it clearly stated that the resignation is for cause pursuant to Article 63 of the DIFC Employment Law, I declare that the Claimant has duly notified the Defendant and the resignation is therefore deemed valid.

Visa and Health Insurance

33. The Claimant repeatedly requested the Defendant to initiate the visa process and started following up with the Defendant from 28 April 2022 as he had already incurred overstay fines by then. The Claimant incurred a number of fines due to his travels which the Defendant agreed to compensate.

34. In the Defendant’s defence, it explains that the Claimant had failed to provide the required documents for the visa application despite continuous reminders which prevented it from completing the process. The Defendant further states that there was an issue with the DIFC service system, and the Claimant was informed of this.

35. During the Hearing, the parties confirmed that there was an initial agreement wherein the Claimant agreed to retain his old visa until February in an effort to reduce costs on the Defendant.

36. In my view, the Defendant should not have accepted such a proposal and subsequently this does not exempt the Defendant from his obligation and duty to obtain, at its own cost, a visa for any of its employees notwithstanding any sort of agreement they may have. This is made clear in Article 57 of the DIFC Employment Law which is stated below:

37. In my view, the above is a clear indication that such obligations are not to be tampered with and an employer should always satisfy such requirement.

38. As with the visa, the Claimant also mentions that the Defendant has failed to provide health insurance coverage which resulted in the Claimant incurring unnecessary costs.

39. The Defendant alleges that the health insurance could not be obtained absent a valid visa, which was incomplete due to the Claimant’s failure to provide all the documents.

40. It is unimaginable for someone who had resided in this country for so long to be kept without medical insurance or an employment visa despite securing a reputable job. The Claimant ought to have been given his basic right as an employee which is health care as set out in Article 56 of the DIFC Employment Law mentioned below:

41. In accordance with Articles 56 and Article 57 of the DIFC Employment Law, I hereby order that the Defendant shall pay the Claimant the immigration fines and health insurance incurred in the amount of AED 1,266.

Payment in lieu of a notice period

42. Following the Claimant’s termination of his employment with the Defendant for cause and, in accordance with the DIFC Employment Law, the Claimant is also claiming payment in lieu of a notice period for one month, in the amount of AED 36,725.

43. The Defendant contests this claim because it believes the resignation is invalid and submits that the Claimant was not permitted to resign with cause and in addition, the Claimant stopped coming to work as of 12 September 2022.

44. Considering the above, I grant the Claimant’s request for the payment in lieu of a notice period in the amount of AED 36,725.

Payment in lieu of untaken vacation leave

45. The Claimant is seeking payment in lieu of 10.28 days of accrued and untaken vacation leave in the amount of AED 17,423.56.

46. The Defendant stands by its submissions that the claim is to be dismissed on the basis that the resignation is invalid and refutes that any payment in respect of the untaken vacation days is owing to the Claimant.

47. Given that the employment tenure is less than one year, pursuant to Article 30(2) of the DIFC Employment Law, the Claimant is only eligible for annual leave calculated on a monthly basis and not the full financial year.

48. On 13 October 2022, the Claimant provided a detailed breakdown of his claim for payment in lieu of annual leave and confirmed that he has already utilised 7 days of his entitled allocation.

49. The Defendant failed to provide a record of the Claimant’s taken leave and the remaining balance of accrued days which it has an obligation to maintain under Article 16(1)(g) of the DIFC Employment Law, which states as follows:

50. Therefore, I grant the Claimant’s claim in relation to vacation days in the amount of AED 17,424.

Gratuity payment

51. The Claimant is seeking gratuity payment in the amount of AED 24,340.61 based on his employment tenure with the company.

52. The Defendant submits that such payment is not permissible on the basis that the Defendant has not completed one year of employment in accordance with Article 66 of the DIFC Employment Law which states as follows:

53. Further to the above, I agree with the Defendant’s interpretation of Article 66. Accordingly, I find that the Claimant’s claim for gratuity for the period from November 2021 to September 2022 shall be dismissed on the basis that the Claimant has not completed one year of service to be qualified for gratuity payment.

Conclusion

54. In light of the aforementioned, I find that the Defendant shall pay the Claimant the amount of AED 64,530 in respect of his employment entitlements.

55. The Defendant shall pay the Claimant of the DIFC Courts filing fee in the amount of AED 1,889.47.

56. The Defendant shall pay the overstay fines imposed on the Claimant directly to the relevant Government department.