July 11, 2024 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 068/2024
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 JUSTICE MAHA AL MHEIRI
BETWEEN
NAVEEN
Claimant
and
NED
Defendant
| Hearing : | 9 July 2024 |
|---|---|
| Judgment : | 11 July 2024 |
JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI
UPON this Claim being filed on 9 February 2024
AND UPON a hearing having been listed before H.E. Justice Maha Al Mheiri on 9 July 2024, with the Claimant in attendance and the Defendant absent although served Notice of the Hearing Date
AND PURSUANT to Rule 53.61 of the Rules of the DIFC Courts, it is stated that: “If a defendant does not attend the hearing and the claimant does attend the hearing, the SCT may decide the claim on the basis of the evidence of the claimant only.”
AND UPON reviewing the documents and evidence submitted in the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum of AED 92,815.73.
2. The Defendant shall pay the Claimant a portion of the Court fee in the sum of AED 1,856.31.
3. In addition, pursuant to DIFC Courts Practice Direction 4 of 2017, the Defendant shall pay interest on the judgment sum to the Claimant from the date of this Judgment, until the date of full payment, at the rate of 9% annually.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 11 July 2024
At: 9am
THE REASONS
The Parties
1. The Claimant is Naveen (the “Claimant”), an individual filing a claim regarding his employment at the Defendant company.
2. The Defendant is Ned (the “Defendant”), a company located in the DIFC, Dubai, UAE.
Background and the Procedure History
3. The underlying dispute arises over the employment of the Claimant by the Defendant pursuant to an Employment Contract dated 1 October 2022 (the “Employment Contract”).
4. On 9 January 2024, the Claimant sent a resignation email resigning from his position as Director. The Claimant was willing to serve his notice subject to the Defendant paying his pending employment obligations, which the Defendant failed to meet.
5. On 9 February 2024, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming the sum of AED 93,156.55 with respect to various claims set out as follows:
(a) Unpaid salaries from July 2023 to January 2024 to the amount of AED 45,000;
(b) Payment in lieu of 5.5 of untaken annual leave to the amount of 2,483.47;
(c) End of Service gratuity to the amount of AED 4,023;
(d) Compensation for the absence of medical insurance;
(e) Unpaid commission payment to the amount of AED 33,342.36;
(f) Article 19 penalty in accordance with the DIFC Law No. 2 of 2019;
(g) Interest on the judgment amount as per DIFC Practice Direction No 4 of 2017 from the date of judgment until full payment; and
(h) Court fees.
6. The parties met for a Consultation with SCT Judge Maitha Al Shehhi on 10 June 2024 but were unable to reach a settlement.
7. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a Hearing held on 9 July 2024 (the “Hearing”) with the Claimant in attendance and the Defendant’s representative absent, although served with notice.
8. RDC 53.61 of the Rules of the DIFC Courts stipulates that “if a defendant does not attend the hearing and the claimant does attend the hearing, the SCT may decide the claim on basis of the evidence of the claimant only”.
Discussion
9. This dispute is governed by DIFC Employment Law No. 4 of 2021 (the “DIFC Employment Law”) in conjunction with the relevant Employment Contract.
10. I shall set out below each of the Claimant’s claims. The Defendant failed to provide any defence, so I shall rely on the Claimant’s submission at the hearing and the supporting documents only.
Outstanding salary
11. The Claimant is requesting the remainder of his unpaid salary between July 2023 and January 2024 to the amount of AED 45,000.
12. The Claimant provided a table with the amount he received from the Defendant and the pending amounts for each month. The Defendant failed to provide any evidence to demonstrate that the Claimant had received his salaries during the requested dates.
13. I am of the view that the Claimant is entitled to receive his pending salary payments from July 2023 to January 2024. The Claimant’s claim in respect of outstanding salary shall be paid in the amount of AED 45,000.
Payment in lieu of untaken annual leave
14. The Claimant claims AED 2,483.47 for 5.5 days of untaken annual leave for the year of 2023 to January 2024. The Claimant therefore claims payment in lieu of his 5.5 days of his annual leave.
15. The accrual of annual leave is carried out gradually throughout the year, and upon the resignation or termination of an employment relationship, any amounts owed would be pro-rated against the amount of time passed during the course of that year. The Claimant’s last working day was 9 January 2024.
16. Article 27 of the DIFC Employment Law sets out that:
“Vacation Leave
(a) Subject to Article 30, an Employee who has been employed for at least ninety (90) days is entitled to paid Vacation Leave of twenty (20) Work Days in each Vacation Leave Year.
(b) An Employee is entitled to be paid their Daily Wage during Vacation Leave.
(c) An Employee is entitled to carry forward up to five (5) Work Days of accrued but untaken Vacation Leave into the next Vacation Leave Year for a maximum period of twelve (12) months after which any unused Vacation Leave shall expire.
(d) Vacation Leave is exclusive of Public Holidays to which an Employee is entitled.
(e) Unless otherwise agreed in writing by an Employee, and subject to Article 28(1), an Employee cannot receive payment in lieu of Vacation Leave.
(f) Unless otherwise agreed by an Employer, Vacation Leave cannot be converted to Sick Leave if an Employee is sick during any period of Vacation Leave.
Compensation in lieu of Vacation Leave
(1) Where an Employee's employment is terminated, the Employer shall pay the Employee an amount in lieu of Vacation Leave accrued but not taken up to and including the Termination Date calculated in accordance with Article 28(3).
(2) In the event that the Employee has taken more Vacation Leave than has accrued at the Termination Date, the Employer shall be entitled to deduct an amount calculated in accordance with Article 28(3) from any payments due to the Employee on the Termination Date.
(3) Compensation in lieu of Vacation Leave, or any amount owed by the Employee in respect of excess Vacation Leave taken, shall be calculated using the Employee's Daily Wage at the Termination Date.”
17. I agree with the Claimant’s submission that he is entitled to payment in lieu of accrued and untaken annual leave days. The Claimant is only entitled to carry forward 10 days from 2023. As found above, the Claimant’s last day with the Defendant is 9 January 2024, therefore, any annual leave that he has accrued will be calculated until that day.
18. The Claimant is entitled to 5 days in 2023 and 0.72 days for 2024 in the amount of AED 2,639.95 (AED 10,000 x 12 months/260 = AED 461.53 per day x 29.27 days).
19. As such, I find that the Claimant shall be paid the amount of AED 2,639.95 for his pending 5.72 days of annual leave.
End of service payment
20. Following the Claimant’s resignation, the Claimant is seeking an end of service payment for the years he worked with the Defendant.
21. Article 19 of the DIFC Employment Law stipulates the following:
“(1) An Employer shall pay to an Employee, within fourteen (14) days after the Termination Date:
a. all Remuneration…
b. where applicable, any Gratuity Payment that accrued prior to the Qualifying Scheme Commencement Date under Article 66(1) not transferred to a Qualifying Scheme under Article 66(6)”
22. Article 66 of the DIFC Employment Law states, where relevant, that:
“(1) An Employee who is not required to be 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. …
(3) For the purposes of Article 66(2):
(a) an Employee’s Basic Wage shall not be less than fifty percent (50%) of the Employee’s Annual Wage;
(b) the daily rate of an Employee’s Basic Wage shall be calculated by dividing the Employee’s Basic Wage by three hundred and sixty five (365);
(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…”
23. The abovementioned clauses provide that an employer is required to pay amounts equal to the core benefits set out by the DIFC Employment Law, and that such amounts are to be paid into a Qualifying Scheme. The Qualifying Scheme Commencement Date is defined in the Law to be 1 February 2020.
24. There is no evidence to support that the Claimant was enrolled into a Qualifying Scheme at the beginning of his employment, as such, I will provide calculations for the Claimant’s employment period. This period is between 1 October 2022 to 9 January 2024.
25. In light of this, I order that the Defendant shall 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. This is to be calculated as follows.
26. The Claimant’s basic wage is AED 4,500 according to his salary certificate provided by his employer, but pursuant to Article 66(3)(a) of the DIFC Employment Law as stated above, the basic salary has to be 50 percent of the salary amount, as such I shall calculate his end of service on the amount of AED 5,000.
27. Between 1 October 2022 – 1 January 2024:
Gratuity = AED 5,000 basic wage x 12 months / 365 days = AED 164.38 per day.
The Claimant’s monthly basic wage is AED 5,000 x 5.83% (being the minimum contribution amount defined by the Employment Law) = AED 291.5 per month x 15 months = AED 4,372.5.
28. Between 2 January 2024 – 9 January 2024:
Gratuity = AED 5,000 basic wage x 12 months / 365 days = AED 164.38 per day.
AED 164.38 (being the Claimant’s daily basic wage) x 5.83%= AED 9.58 per day x 8 days = AED 76.64.
29. Therefore, in accordance with the above, the Claimant’s entitlement to contributions that should have been made by the Defendant to a Qualifying Scheme is AED 4,449.14.
Compensation for the absence of medical insurance
30. The Claimant submits that, pursuant to his Employment Contract, he is entitled to medical insurance. The Defendant failed to provide any medical insurance for the whole duration of his employment period. The Claimant is requesting compensation for an unquantified amount for the absence of medical insurance.
31. The Court does agree with the Claimant in relation to the employer’s obligation to provide medical insurance for their employees. The circumstances that have fallen upon the Claimant, while unfortunate, do not meet the burden that he would have to prove in order to demonstrate that he has suffered undue damage at the hands of the Defendant. The Claimant failed to provide any evidence or medical bills that he paid during the course of his employment.
32. As such the Claimant’s claim for compensation is dismissed.
Unpaid commission amount
33. The Claimant alleges that the amount of AED 33,342 is owed by the Defendant. The Claimant states that as he received an email confirming that he is entitled to a commission from the Defendant.
34. The DIFC Employment Law is silent on commission entitlement and how they would be paid out in situations where the employment relationship has been terminated, and therefore the Court’s practice has been to proceed as agreed upon by the parties. In my view, the email from the Defendant confirms the amount owed, with the calculation.
35. Therefore, I find that the Claimant is entitled to the amount of AED 33,342 for the pending commission.
Article 19 penalty in accordance with the DIFC Employment Law
36. The Claimant seeks the accrual of a daily penalty in the amount of his daily wage pursuant to the Defendant’s failure to pay his employment entitlements within 14 days of the Claimant’s last working day. The Claimant submits that he should be entitled to this penalty charge from 23 January 2024, being 14 days from 9 January 2024.
37. Article 19 of the DIFC Employment Law stipulates as follows:
(1) “An Employer shall pay to an Employee all Remuneration (excluding, where applicable, any Additional Payments deferred in accordance with Article 18(2)), the Gratuity Payment and all accrued Vacation Leave not taken, within fourteen (14) days after the Termination Date.
(2) Subject to the provisions of Article 19(3) and 19(4), an Employee shall be entitled to and the Employer shall pay a penalty equal to an Employee’s Daily Wage for each day the Employer is in arrears of its payment obligations under Article 19(1).
(3) A penalty pursuant to Article 19(2) may only be awarded to an Employee if the amount due and not paid to the Employee in accordance with Article 19(1) is held by a Court to be in excess of the Employee's Weekly Wage.
(4) A penalty pursuant to Article 19(2) will be waived by a Court in respect of any period during which:
(a) a dispute is pending in the Court regarding any amount due to the Employee under Article 19(1); or
(b) the Employee's unreasonable conduct is the material cause of the Employee failing to receive the amount due from the Employer.”
38. Pursuant to Article 19 (1) of the DIFC Employment Law, an Employer is required to pay an Employee all remuneration within fourteen (14) days after the termination, and in such instances where payment is not made within the time period, pursuant to Article 19(2) that Employer shall pay a penalty equal to an Employee’s daily wage for each day the Employer is in arrears of its payment obligation under Article 19(1).
39. In review of the Court file, it appears that the Claimant filed his claim on 9 February 2024. I also highlight that Article 19(4)(a) directs that the Court will waive the penalty amount accrued and accruing for the period of time in which a dispute is pending with the Courts. the Claimant is entitled to 16 days of penalty pursuant to Article 19 of the DIFC Employment law.
AED 10,000 x 12/260 = AED 461.54 x 16 = AED 7,384.64.
40. Therefore, I shall grant the Claimant’s claim in respect of the Article 19 in the amount of AED 7,384.64.
Conclusion
41. In light of the aforementioned, I find that the Defendant shall pay the Claimant the sum of AED 92,815.73 to cover the Claimant’s outstanding salary, untaken annual leave, Qualifying Scheme contributions, unpaid commission and Article 19 penalty.
42. I am of the view that, as the Claimant has been unsuccessful on some his claims, he should be entitled to recover a portion of the fee in respect of the claims for which he has been successful. The Defendant shall pay the Claimant the amount of AED 1,856.31 being 2% of the judgment sum owed to the Claimant.
43. The total amount payable to the Claimant is therefore AED 94,672.04.
