December 05, 2023 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 383/2023
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
MERUT
Claimant/Defendant in Counterclaim
and
MUSORT
Defendant/Claimant in Counterclaim
| Hearing : | 28 November 2023 |
|---|---|
| Judgment : | 5 December 2023 |
JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI
UPON the claim having been filed on 4 October 2023 and amended on 3 November 2023
AND UPON the Defendant’s defence dated 9 October 2023 and 13 November 2023
AND UPON reading the Claimant’s reply to defence dated 24 October 2023
AND UPON the Defendant’s counterclaim dated 20 November 20223 (the “Counterclaim”)
AND UPON the Claimant’s reply to the Counterclaim dated 22 November 2023 (the “Claimant’s Reply”)
AND UPON the Defendant’s response to the Claimant’s Reply dated 27 November 2023
AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 20 and 28 November 2023, with the Claimant and the Defendant’s representative in attendance (the “Hearing”)
AND UPON reviewing the documents and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the amount of AED 42,000 in respect of her September revenue and notice period revenue payment.
2. The Defendant shall pay the Claimant’s DEWS contributions in the amount of AED 10,870.70 (the “Amount”) which is the amount that would have been paid into the qualifying scheme had it complied with the requirements of the DIFC Employment Law. However, in the event the Defendant has already contributed the Amount to the scheme, there is no need for the Defendant to pay it again to the Claimant, rather it should be paid out directly by the scheme.
3. The Claimant’s other claims shall be dismissed.
4. The Defendant’s Counterclaim shall be dismissed.
5. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 1,321.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 5 December 2023
At: 11am
THE REASONS
Parties
1. The Claimant is Merut (the “Claimant”), an individual filing a claim regarding her employment at the Defendant company.
2. The Defendant is Musort (the “Defendant”), a company registered in the DIFC, Dubai, UAE.
The Claim
3. There is no dispute that the Claimant joined the Defendant company in June 2021 commencing full-time employment with a basic salary and revenue scheme. The parties entered into a renewed employment agreement dated 12 July 2023 which is a part time commission-based agreement that provides for AED 1,000 as basic salary and 55% as revenue share to be paid out to the Claimant as commission based on her appointments (the “Renewed Agreement”).
4. Following her resignation from the Defendant company on 2 October 2023, the Claimant was immediately placed on garden leave. As such, she was unable to work during her notice period and avail the commission for the appointments which had already been scheduled for two weeks in October.
5. The Claimant alleges that she was the only employee from the Defendant company who was placed on garden leave.
6. The Claimant is seeking her end of service entitlements pursuant to the Renewed Agreement in the amount of AED 90,724.38. This amount comprises of her September revenue in the amount of AED 30,000, two months’ notice period in the amount of AED 39,746, DEWS contributions in the amount of AED 10,891.63, payment in lieu of a flight ticket in the amount of AED 3,200 and reimbursement of the amount she paid in respect of medical insurance in the sum of AED 6,886.75.
7. The Claimant submits that upon placing her on garden leave, the Defendant first informed the patients that she was on “long leave” which prompted the patients to contact the Claimant seeking clarification.
8. The Claimant submits that she did not initiate contact with the patients to inform them about her resignation, rather she responded to the patients’ queries that she resigned and was placed on garden leave.
9. The Claimant submits that informing her previous patients about her being placed on garden leave is not breach of confidentiality.
The Defence and Counterclaim
10. The Defendant submits that the Claimant attempted to resign in April 2023, however, instead the parties entered into the Renewed Agreement wherein the Defendant agreed, based on the Claimant’s request, to give her more flexibility and higher commission while working less hours to enable her to pursue her studies.
11. The Defendant concedes that it placed the Claimant on garden leave during her notice period and paid her salary in line with the Renewed Agreement. The reason for doing so was to protect its business and maintain its clients.
12. The Defendant submits that it has already paid the Claimant’s October salary in the amount of AED 1,000, as her notice period is for the period of 30 days and not 60 days, and therefore she is not entitled to receive any revenue for October.
13. The Defendant maintains its position that the Claimant is only eligible for AED 30,000 in respect of her September revenue and is not eligible to claim payment in lieu of a flight ticket nor reimbursement of the medical insurance in accordance with the terms of the Renewed Agreement.
14. The Defendant submits that the DEWS contributions have already been paid directly to the DIFC Employee Workplace Saving Plan.
15. The Defendant is seeking compensation from the Claimant for defamation and breach of contract in the amount of AED 30,000 on the basis that the Claimant has made negative remarks on social media regarding the company, eluding that it terminated her and acted unprofessionally towards her.
16. The Defendant submits that the Claimant contacted the Defendant company’s clients after her resignation while she was explicitly instructed not to do so and thus breached confidentiality of the Renewed Agreement.
Applicable law
17. This dispute is governed by the DIFC Law No. 4 of 2021 Employment Law Amendment Law (the “DIFC Employment Law”) in conjunction with the Renewed Agreement.
Discussion
18. At the Hearing, the Defendant agreed that the Claimant is entitled to her September revenue in the amount of AED 30,000. On this basis, I do not propose on going through this claim in more detail. Therefore, I hereby order the Defendant to pay the Claimant the amount of AED 30,000 in respect of her September revenue.
19. I must note that the Claimant submitted to the court an unsigned version of the Renewed Agreement and the Defendant submitted a signed version. As such, I shall base my findings upon the signed version of the Renewed Agreement.
20. The Claimant submits that she is entitled to receive payment in lieu of a flight ticket in the amount of AED 3,200 while the Defendant contests that this claim is not covered by the Renewed Agreement.
21. The DIFC Employment Law is silent on an employee’s entitlement to an air fare in the form of an allowance. Such benefit is common in employment relationships, and the general practice in this Court is to proceed with what is agreed upon by the parties in the employment contract they have entered into.
22. The Claimant’s benefits are set out in Part 2 of the Renewed Agreement which reads as below:
“(a) Airfare Entitlement: Not eligible for this benefit”
23. Pursuant to the above, I find that the Claimant is not entitled to receive the flight ticket as it is not covered by the Renewed Agreement nor the DIFC Employment Law.
24. There are a number of issues at dispute in respect of the notice period. The first is whether the notice period is 30 days or 60 days, and the second is whether the Claimant is entitled to receive her basic salary only or her salary in addition to revenue, and finally whether the Defendant can place the Claimant on garden leave during her notice period.
25. I shall arrive at my decision based on the terms of the Renewed Agreement and the DIFC Employment Law.
26. Article 62 of the DIFC Employment Law sets the minimum notice period for an employee who has worked for more than 3 months and less than 5 years to be 30 days which is applicable to the Claimant’s situation.
27. The duration of the notice period is set out in part 3 of the signed Renewed Agreement and reads as follows:
“D) Notice Period: Written notice of 30 Calendar Days”
28. Therefore, in accordance with the Renewed Agreement and the DIFC Employment Law, I find that the Claimant’s notice period is 30 days and not 60 days.
29. With respect to the legitimacy of placing the Claimant on garden leave, I shall set out below the relevant provision from the DIFC Employment Law which pertains to garden leave:
“Article 62(5)
An Employer may require an Employee not to attend work or undertake their duties during all or part of the Employee's notice period.”
30. In addition, paragraph 13 of the Renewed Agreement gives the Defendant the right to place the Claimant on garden leave as stated below:
“The Company reserves the right to make payment in lieu of any notice period or place you on Garden Leave (as defined below).
Garden leave: Following confirmation of notice to terminate your employment by either party, the Company may require you not to perform any services (or to perform only specified services) for the Company during the notice period.”
31. Therefore, I find the Defendant’s actions of placing the Claimant on garden leave is permissible as it is in line with the Renewed Agreement and is permitted by the DIFC Employment Law.
32. I understand the Claimant’s argument that she was the only employee who was placed on garden leave and thus, did not avail the commission during her notice period. However, the Renewed Agreement expressly gives the Defendant the right to invoke its right to place her on garden leave and the Claimant agreed to this by signing the Renewed Agreement.
33. The issue remains whether the Claimant is entitled to her revenue during this period or only her basic salary.
34. Although the Defendant has the right to place the Claimant on garden leave, I am of the view that the Defendant ought to have paid the Claimant the sums that she would have incurred during the first two weeks of October had she worked.
35. Garden leave is not to be treated as punishment to an employee, rather it is a right that can be invoked by the employer as and when needed. I find that had the Claimant not been put on garden leave, she would have received her payments in respect of the month of October during her notice period.
36. Furthermore, given that the Renewed Agreement is commission based, the Defendant should have addressed this issue upon termination, however, it failed to do so.
37. The Claimant estimated her revenue to be in the amount of AED 39,746 for two months. The Defendant submitted a document which exhibits that the Claimant usually sees 40-60 patients in a month for a session worth AED 600. Taking into account the two weeks which have already been booked with the Claimant, I shall award the Claimant the amount of AED 12,000 which is an average estimate of the revenue she would have accrued for seeing 20 patients.
38. Health insurance is mentioned in Article 56 of the DIFC Employment Law which reads as follows:
“An Employer is required to obtain and maintain health insurance cover for each of its Employees as may be required pursuant to the Regulations, Federal Law or Dubai Law.”
39. Further to the above, I find it evident that the Defendant ought to have provided the Claimant with medical coverage. However, the Law does not go as far to state the level of coverage that an employer must obtain for its employees or that such coverage must be fully covered by the employer as opposed to the wording used in Article 57 with regards to visa wherein it states “at the Employer’s own costs”.
40. Therefore, I find that the Defendant has obtained and maintained health insurance for the Claimant and is not required to pay the remaining fee as it was mutually agreed within the Renewed Agreement, and there is nothing in the DIFC Employment Law that suggests that all payment must be incurred by the Employer/Defendant.
41. Payment into a qualifying scheme is encompassed in Article 66 of the DIFC Employment Law, which reads as follows:
“(1) An Employee who is registered with the GPSSA under Article 65(`), and who completes continuous employment of at least one (1) year with their employer, before or after the Qualifying Scheme Commencement Date is entitled to a Gratuity Payment for any period of service prior to the Qualifying Scheme Commencement Date on the termination of their employment. …
(2) An Employee’s Gratuity Payment shall be calculated as follows:
(a) an amount equal to twenty one (21) days of the Employee’s Basic Wage for each year of the first five (5) years of service prior to the Qualifying Scheme Commencement Date; and
(b) an amount equal to thirty (30) days for the Employee’s Basic Wage for each additional year of service prior to the Qualifying Scheme Commencement Date. …
(7) From the Qualifying Scheme Commencement Date an Employer shall, on a monthly basis, pay to a Qualifying Scheme, for the benefit of each Employee who is not an Exempted Employee, an amount equal to as least the Core Benefits, which shall be calculated as follows:
(a) five point eight three percent (5.83%) of an Employee’s Monthly Basic Wage for the first (5) years of an Employee’s service, inclusive of any period of employment of Secondment served to prior to the Qualifying Scheme Commencement Date; and
(b) eight point three three percent (8.33%) of an Employee’s Monthly Basic Wage for each additional year of service…”
42. The abovementioned clauses provide that an employer is required to pay to an employee, within 14 days of the employee’s termination date, a gratuity payment, in addition to amounts equal to the core benefits set out by the DIFC Employment Law, such amounts to be paid into a Qualifying Scheme.
43. Pursuant to Article 66(7) of the DIFC Law No. 4 of 2020 Employment Law Amendment Law, as of 1 February 2020, an employer is required, on a monthly basis, to pay to an employee with a registered qualifying scheme’s account, contributions in amounts set out within the scheme.
44. At the Hearing, the Defendant confirmed that it had paid the owed sums into the qualifying scheme but failed to provide evidence to support it.
45. In light of this, I hereby order the Defendant to pay the Claimant an amount equal to the minimum benefits set out by the DIFC Employment Law, which would reflect the contributions that the Defendant would have paid into the qualifying scheme had it complied with the requirements of the DIFC Employment Law.
46. The Claimant’s full employment with the Defendant was for the period of 2 years and 3 months. The Claimant would generally be entitled to contributions for the period between 1 July 2021 to 2 October 2023. This is to be calculated as follows:
Between 1 July 2021 to 1 July 2023:
The Claimant’s monthly basic wage is AED 7,500 x 5.83% (being the minimum contribution amount defined by the DIFC Employment Law) = AED 437.25 per month x 24 months = AED 10,494.
Between 1 July 2023 - 11 July 2023
The Claimant’s daily wage is AED 346.15 x 5.83% = 20.18 x 10 days = AED 201.80.
Between 12 July 2023 to 2 October 2023:
The Claimant’s monthly basic wage is AED 1,000 x 5.83% (being the minimum contribution amount defined by the DIFC Employment Law) = AED 58.3 per month x 3 months = AED 174.90.
47. Therefore, in accordance with the above, the Claimant’s entitlement regarding contributions that should have been made by the Defendant to a qualifying scheme is set out to be AED 10,870.70. which is to be paid out directly through the scheme in the event the Defendant has already paid through the scheme.
48. Given that the Claimant is no longer an employee of the Defendant and has served her notice period, the Defendant must proceed to cancel the Claimant’s Renewed Agreement.
49. As to the Counterclaim, the Defendant submits that the Claimant has quite a large audience following her public social media account and the manner in which she announced her departure from the company was emotional and, the Defendant claims, made the company look bad when in fact itis the Claimant that resigned herself. Thus, the Defendant claims that is has suffered reputational damage following the Claimant’ actions.
50. The Defendant is of the opinion that the Claimant’s actions towards her own resignation and her Instagram post resulted in the company receiving negative feedback from certain clients. The Defendant submits that the clients have demonstrated their disappointment due to the Claimant’s departure by providing comments such as “you have made an immense mistake in letting her go…… you should have tried to keep her or attempted to provide better work environment for her to continue”.
51. There is no proof to suggest that the Claimant initiated any communication with the clients and I find that the clients’ messages submitted by the Defendant is insufficient evidence to reach that assumption.
52. The Defendant submitted to the Court a list of the Claimant’s patients to demonstrate how many patients the Claimant used to oversee and the revenue loss they have or will incur due to her actions.
53. I am of the view that the Defendant failed to show actual loss of revenue. Therefore, I shall dismiss the Defendant’s Counterclaim for lack of evidence.
Findings
54. For the above cited reasons, I hereby order the Defendant to pay the Claimant the amount of AED 42,000 in respect of the September revenue and notice period payment.
55. The Defendant shall pay the Claimant’s DEWS contributions in the amount of AED 10,870.7 (the “Amount”) which is the sum that would have been paid into the qualifying scheme had it complied with the requirements of the DIFC Employment Law. However, in the event the Defendant has already contributed the Amount to the scheme, there is no need for the Defendant to pay it again to the Claimant, rather it should be paid out directly by the scheme.
56. The Claimant’s other claims shall be dismissed.
57. The Defendant’s Counterclaim shall be dismissed.
58. As the Claimant has been successful in some of her claims, she is entitled to recover some of the court fee applicable to the filing of this case. The Defendant shall therefore pay to the Claimant the amount of AED 1,321.
