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Claim No. SCT 243/2023

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 OF DIFC COURTS
BEFORE H.E. DEPUTY CHIEF JUSTICE AL MADHANI

BETWEEN

MITBA

Claimant

and

MEWAT

Defendant

JUDGMENT OF H.E. DEPUTY CHIEF JUSTICE ALI AL MADHANI

UPON reviewing the Claimants’ Claim Form dated 3 July 2023 and its Particulars of Claim dated 3 July 2023 and Amended 4 July 2023

AND UPON reviewing the Defendant’s statement of defence dated 2 August 2023

AND UPON reading the submissions and evidence filed and recorded on the Court file

AND UPON hearing the parties at the hearing held before me on 21 August 2023 with the Claimant in attendance and the Defendant’s representative, Mufto appearing on behalf of the Defendant (the “Hearing”)

IT IS HEREBY ORDERED THAT:

1. The Claim is denied in its entirety.

2. The Claimant’s oral application to amend its statement of case to include a penalty claim is denied (the “Penalty Claim”).

3. Should the Defendant make a Penalty Claim application following this Judgment, the Registry shall place the application before me for determination.

Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 8 September 2023
At: 2pm

SCHEDULE OF REASONS

1. This is an employment dispute arising out of alleged unpaid annual leave entitlement owed to the Claimant. The underlying issue is one related to whether the Defendant had been in breach of the Employment Law for failing to expressly set out the Claimant’s paid entitlement holidays, in the original offer letter dated 8 November 2020 (the “Application”). As such, the only issue this Court will determine, is whether the Claimant is entitled to payments pursuant to unpaid annual leave and if so, the amount that could be awarded. The Defendant says that there can be doubt that the Claimant was entitled to paid annual leave and this matter was clarified when he joined the firm, thereby this Application should be dismissed in its entirety and the Court should reject all claims sought by the Claimant.

2. The Claimant requested to adjourn the hearing scheduled before me on 21 August 2023 to amend his statement of case to include a penalty claim (the under Article 19(2) of the Employment Law, being a penalty payment equal to his daily wage for each day the Defendant has been in arrears of its payment obligations under Article 19(1), thereby an additional remedy including his statutory entitlements. The Claimant contended that, at the time of submitting his statement of case, he anticipated that the recovery of any remedial claims arising out of Article 19(2) do not have to be expressly claimed, as generally, it would be within the Court’s discretion to exercise if the Claimant is entitled to a penalty payment when determining any employment dispute. Undoubtably, the request of adjournment had been resisted by the Defendant on the grounds that this matter was considered at the consultation hearing scheduled on 24 July 2023, in which the Claimant was advised that to be permitted to plead an additional remedy, his original statement of case would need to be amended accordingly and the requisite legal fees ought to be satisfied before proceeding with the Penalty Claim against the Defendant. As such, the Claimant had a clear understanding of the required steps that needed to be satisfied prior to this Hearing and he should not be permitted to proceed with the Penalty Claim.

Preceding History

3. I will briefly set out the chronology of this case and the competing contentious arguments deployed by both parties during the Hearing and based on their submissions.

4. On 1 November 2020, the Claimant was employed as a partner with the Defendant’s firm. The offer letter that he received from the Defendant was silent on annual leave entitlement. On 31 December 2022, the Claimant’s employment was terminated by way of a mutual agreement (the “Termination Date”).

5. The Claimant submits that as a result of the uncertainty surrounding the issue of annual leave entitlement, he assumed that the minimum entitlement of twenty working days (20) would apply to his employment with the Defendant. However, this ambiguity was clarified following the Claimant’s correspondence with the Defendant’s Human Resources Department (“HR”), in which HR explained that all partners (including the Claimant) have unlimited annual leave entitlement. However, there was no formal leave booking scheme allocated for partners of the firm based on the notion that the Defendant acknowledges that more often partners worked throughout their annual leave.

6. Prior to the Termination Date, on 23 December 2022, the Claimant reviewed the calculations for any end of services payments prepared by HR and allegedly noticed payment in lieu of untaken vacation had disappeared from the system. As a result, the Claimant emailed HR for the accrued leave to be paid out.

7. On 26 December 2022, the Claimant emailed HR for the accrued leave to be paid out. HR reiterated the first email to the Claimant, that there is no leave booking system for partners as partners tend to work on leave whilst on annual leave.

8. Following the Termination Date, the Claimant received all outstanding salary and business expenses within 14 days of the Termination Date, as such the Defendant was acted in accordance with the DIFC Law No.2 of 2019 (the “Employment Law”).

9. The Defendant puts forward that annual leave entitlements of all senior staff including the Claimant, are not capped to a fixed number of paid holidays, rather the vacation policy was designed to grant all senior staff (including the Claimant) a degree of flexibility when exercising their holiday entitlements. In addition, the unlimited paid holidays were unregulated by the Defendant, meaning that there was no input from senior management or HR as to how much holiday the Claimant or senior staff were taking out of work, in the context that, there was no obligation or a procedure in it required the Claimant to record any of his taken annual leave. As such, it was entirely within the Claimant’s discretion as to the number of paid holiday days he utilised in a year; which assumingly would be contingent on various factors such as business needs, overlapping time off, and workload of the senior staff.

10. The Defendant further contends that even if the Court was faced with the question as to whether or not the Claimant took enough holiday to comply with the Employment Law, the Court would nonetheless rule in favour of the Defendant because the Claimant did not record or have any chargeable client work for the last three months prior to his Termination Date. Therefore, given the fact that the Defendant acted expeditiously in paying all outstanding fees to the Claimant, the Defendant is of the view that the Claimant should not be entitled to any additional statutory pay. In support of the Defendant’s submission, they rely on the Claimant’s time recording of the last three months prior to his Termination Date in which it evidently demonstrates that the Claimant was not doing any chargeable client work.

11. In response, the Claimant refuted the Defendant’s assertions arguing that he was advised that partners at the firm do not have paid annual leave and admittedly this had not been negotiated or addressed earlier by the Claimant. Further, at the Hearing, the Claimant said that it was, in fact, the Defendant’s responsibility, particularly HR, to have checked with the Claimant the number of annual leave that had been utilised since his joining date with the firm to calculate his entitlement accordingly. The Claimant submits that in the absence of any policy or guidance from the Defendant to demonstrate the appropriate procedures applicable to partners when taking annual leave indicated to him that his statutory entitlement of twenty days under the Employment Law would have applied to his employment with the Defendant. At the same time, the Claimant admitted that he was under clear and strict instructions from a former senior partner, not to record his vacation or annual leave.

12. The Claimant first suggested that there was no clear policy or procedure on how to record annual leave taken by partners, however, he later stipulated that he was instructed by the head of his department not to record his vacation time because it would “blow up the budget”.

13. The Defendant explained very clearly that there is no limit to paid holiday at the firm. The Claimant submitted that he had no entitlement to any holiday, yet he also accepted that he took annual leave in August 2021 and 2022, sometimes for 10 days at a time, without there being any negative consequences to his employment at the firm for doing so. The bizarre element of this case being before me is that I discovered at the Hearing, that the Defendant paid in full the Claimant’s annual leave which he claimed in his original claim form, in order to bring an end to the matter and to avoid this Hearing. Despite having been paid that money, the Claimant has nonetheless pursued the claim to the Hearing and did not apply prior to the Hearing to amend his particulars of claim to invoke the Penalty Claim.

Discussion and analysis

14. Before dealing with the pertinent issue in this case, I will address the fact that I am satisfied that this claim was issued within the relevant time period as set out under Article 10 of the Employment Law, the claim was issued by the Claimant on the last day of the six months limitation period starting from his Termination Date.

15. At the Hearing, the Claimant indicated that he became aware of the no-annual leave policy at the time of joining the firm, yet he decided not to negotiate or address this issue in order to avoid causing any controversy particularly when he was a new employee at the firm. I find it surprising that the Claimant would not have at least attempted to negotiate this matter with the Defendant at the time of joining to clarify any ambiguity and to find a suitable arrangement concerning annual leave. Nevertheless, I find it unlikely that an international law firm based in the Dubai International Financial Centre would have in place an arbitrary policy that is in breach of employment law and that this would have been communicated to him at the joining date.

16. I find it contradictory for the Claimant to assert that there was no entitlement to paid holiday for partners and senior staff and that this was “a culture shock”, whilst simultaneously taking annual leave for 10 working days at a time to travel to the United Kingdom. Surely, if his assertions are correct that he, and other partners, were not permitted to take annual leave, then the decision to take such periods as leave would be contrary to the Defendant’s policy and there would be consequences for him, such as that holiday being recorded as unpaid leave.

17. Further, I do not accept that it was for the Defendant to monitor the number of days that had been utilised by the Claimant as annual leave, or his holiday entitlement prior to his departure, those questions that were raised by the Claimant during the Hearing should have been flagged and queried with the Defendant, such as the amount or method of requesting annual leave. The Claimant is a senior employee in a capacity of a finance partner who would have had ample opportunities to question this issue during the course of his employment. It was therefore circumspect that the suggestion of statutory pay and Penalty Claims were made nearly six months later of his Termination Date.

Conclusion

18. I find it a mystery that this case ended up before me since the Claimant has been paid his claim and employment entitlement since his joining date in full.

19. Given the above, I can deal with this matter very swiftly.

20. I conclude that in the circumstances of this case, the Claimant was entitled to (and in fact took) paid leave by the Defendant, based on the unlimited holiday entitlement afforded to all partners and senior staff at the firm and the fact that the Claimant was expected to be in control of managing his own annual leave. The Claimant was not subject to any capped or fixed days (i.e., 25 days annual leave) otherwise this would have been evident in his offer letter. I assume that the lenient approach adopted by the Defendant was based on the notion that partners in international law firms often work long hours, and given the nature of the work, they have the opportunity to exercise and manage their work and holiday accordingly.

21. As far as the evidence is concerned, it is my opinion that the Defendant entrusted the Claimant to utilise and record all annual leave in the best interest of the firm and in accordance with the business’s commercial interest and client needs, particularly towards the end of his employment at the firm where it was evident that the Claimant was not conducting any profitable business or billable work. Despite the Claimant’s submission that he had been working during the last three months of his notice period carrying out business activities for the firm albeit non-billable, he failed to record, track, and detail how his time was spent. It is not clear, and in fact, is quite confusing the extent of the work that had been undertaken, in a sense when one reviews his time-recording sheet it is not abundantly clear if the Claimant had been working during those three months or otherwise. As such, I am of the view that the Claimant failed to act in the best interest of the firm.

22. As the Claimant was not denied annual leave as claimed, and bearing in mind he has been paid the sum sought, I now dismiss this claim.

23. Finally, even though there is no formal application which has been made by the Claimant for a Penalty Claim under Article 19(2), the Claimant raised this issue during the Hearing. I see no circumstances in which there could be any merits to that application for the reasons set out above.