February 02, 2024 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 233/2023
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
NOAH
Claimant/Respondent
and
NEVEAH LLC (DIFC)
Defendant/Applicant
ORDER WITH REASONS OF JUSTICE MICHAEL BLACK
UPON reviewing the Judgment of SCT Judge Maitha Al Shehhi (the “Judge”) dated 11 December 2023 (the “Judgment”)
AND UPON reviewing the Defendant’s Appeal Notice dated 26 December 2023 seeking permission to appeal (the “Defendant’s Application” or “Application”)
AND UPON considering the documents and submissions filed by both parties and recorded on the case file.
IT IS HEREBY ORDERED THAT:
1. The Application is dismissed.
2. Each party shall bear their own costs of the Application.
Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 2 February 2024
At: 2pm
SCHEDULE OF REASONS
1. On 11 December 2023, SCT Judge Maitha AlShehhi (the “Judge”) gave judgment in favour of the Claimant against the Defendant in the sum of AED 150,000 plus the DIFC Court’s filing fee in the sum of AED 2,999.99 following a hearing that took place on 5 December 2023 (the “Hearing”).
2. Prior to that Hearing, there had been a previous hearing on 12 October 2023, at which both parties were represented, before SCT Judge and Assistant Registrar Hayley Norton (the “Assistant Registrar”) when the Defendant had challenged the jurisdiction of the Court on the basis that it had never entered into an employment relationship with the Claimant and that the correct Defendant to the claim was Neveah LLC a non-DIFC registered entity. In a fully-reasoned judgment, the Assistant Registrar held that an employment relationship existed between the Claimant and the Defendant (i.e. a DIFC Establishment), which in turn was sufficient to engage the jurisdictional gateway under Article 5(A)(1)(a) of the Judicial Authority Law and, therefore it followed that the DIFC Courts had jurisdiction to hear and determine this Claim.
3. At the Hearing before the Judge, the Claimant confirmed that she was seeking her end-of-service entitlements in the amount of AED 150,000 following her termination from the Defendant company. The Defendant maintained that the Claimant was not an employee of the Defendant company in the DIFC, and that she worked for different branches as a freelancer not an employee.
4. The Judge noted that at the Hearing the Defendant was still seeking to argue that the DIFC Courts lacked jurisdiction; however, by virtue of the 19 October Order, it was concluded that an employment relationship existed between the Claimant and the Defendant and the DIFC Courts had territorial jurisdiction to hear and determine the claim. Accordingly, she did not address the issue further.
5. The Judge held that given that the Claimant is a UAE national, Article 65(1) of the DIFC Employment Law applied obliging the Employer to ensure that the Employee is registered with the GPSSA (General Pension and Social Security Authority) and to make the necessary pension contributions in accordance with Federal Law. Given that the Defendant failed to register the Claimant with the GPSSA, the Judge awarded her an amount equivalent to what she would have been entitled to receive had she been registered. The Judge calculated her entitlement at AED 183,000 but awarded her AED 150,000 because that was the sum claimed by the Claimant.
6. On 26 December 2023, the Defendant sought permission to appeal on the following grounds:
(a) The jurisdiction assumed by the Small Claims Tribunal of the DIFC Courts in this case was fundamentally misplaced as the absence of a formal Employment Contract between the Claimant and Neveah DIFC falls outside the ambit of the defined employment relationship and the Claimant's multiple freelance engagements with entities beyond the DIFC jurisdiction further attest to a non-traditional employment arrangement, not governed by the DIFC Employment Law;
(b) The Dubai Court determined that the Claimant had no employment agreement or substantial evidence of an employment relationship with Neveah LLC;
(c) The Claimant’s bank statements, which included screenshots showing income from various entities, suggest that she was engaged in multiple business activities, inconsistent with the status of a full-time employee;
(d) The bank statements provided as evidence by the Claimant revealed that the transfers made by Neveah were from Neveah Mainland LLC, not Neveah DIFC;
(e) The nature of these transactions and their diversity strongly indicate that the Claimant was not a full-time employee, as full-time employment typically precludes working for other entities in this manner;
(f) The DIFC Courts do not possess jurisdiction over transactions or employment relationships involving mainland companies;
(g) The only piece of evidence submitted by the Claimant pertaining directly to Neveah DIFC was an outdated job offer, dating back 10 years. This document does not establish an ongoing employment relationship within the jurisdictional purview of the DIFC Courts. The offer letter pertained exclusively to Neveah LLC DIFC, suggesting a limited scope of employment, not extending to the broader DIFC entity. Under DIFC employment law, an offer letter alone, without subsequent execution of formal employment activities, does not constitute an employment contract;
(h) The termination letter originates from a separate entity, challenging the claim of an employment relationship with the DIFC entity. Typical attributes of an employment relationship, such as a consistent workplace, work permit, or labour card specific to the DIFC entity, were absent. The health insurance that was provided under specific conditions tied to the visa of Neveah LLC DIFC, was not indicative of a general employment relationship. The conditional nature of health insurance provision aligned more with a contractual or limited engagement rather than full employment;
(i) There was a lack of conclusive and comprehensive documentation and the Claimant had been working as a freelancer for multiple entities outside the DIFC, providing services in areas such as immigration, human resources, and the Dubai Economic Department. This engagement was indicative of a non-exclusive, freelance relationship rather than a full-time employment contract.
7. The Defendant also raised a new defence. It asserted that according to the provisions under 'Limitation Period', a Court shall not consider a claim under this Law unless it is presented either during an employee’s employment or not later than six (6) months following the employee's termination date, as per Article 20(2) and Article 61(2) of the DIFC Employment Law. In the context of the present case, the offer letter referenced by the Claimant and associated with a DIFC entity dates back 10 years, significantly exceeding the prescribed limitation period. Furthermore, the termination letter, which ostensibly marks the last working day as 31/12/2022, was issued by an entity outside the DIFC's jurisdiction. Therefore, even if one were to concede the existence of an employment relationship for the sake of argument, the application of the DIFC Employment Law would necessitate the dismissal of this case due to non-compliance with the specified limitation period.
8. The Defendant referred to the decision of the Court of Appeal in Abdelsalam v Expresso Telecom Group Ltd [2021] DIFC CA 011. The Defendant stated that the Court of Appeal concluded that the 2019 Employment Law did not have retrospective effect, particularly concerning limitation periods. They clarified that claims brought under the 2005 Law, which did not specify a limitation period, should be considered within the six-year general limitation period as per the DIFC Court Law 2004. However, any claims that had not been initiated within six months of termination at the time the 2019 Employment Law came into effect would be time-barred.
9. On 9 January 2024, the Claimant filed written submissions in opposition to the application for permission to appeal in accordance with Rule 44.14 of the Rules of the DIFC Courts (the “RDC”). She submitted that:
(a) The Defendant was repeating the same points made before the Assistant Registrar and after the Dubai Courts had determined that the case fell under the jurisdiction of the DIFC Courts;
(b) The bank statement was merely produced to evidence the payments over the last 10 years from Neveah Middle East;
(c) The employer was, according to the offer letter, the Defendant as corroborated by the provision of a DIFC access card, insurance card and regular salary;
(d) It was the decision of the company where the employee worked;
(e) The Claimant would like to request to get the full right amount of AED 183,000 due to her miscalculation and non-understanding of exact rights.
10. RDC 53.87 provides that the Court will allow an appeal where the decision was:
(a) Wrong;
(b) Unjust because of a serious procedural or other irregularity in the proceedings; or
(c) Wrong in relation to any other matter provided for or under any law.
11. Under RDC 53.91 permission to appeal may be given only (my emphasis) where (1) the Court considers that the appeal would have a real prospect of success; or (2) there is some other compelling reason why the appeal should be heard. It is well established that “a real prospect of success” means one that is more than fanciful.
12. Three issues arise out of the parties’ submissions:
(a) Should the Defendant be given permission to appeal the finding that there was an employment relationship with the Claimant and therefore the DIFC Courts had jurisdiction over the claim;
(b) Should the Defendant be permitted to raise a new defence that the Claimant’s claim was time-barred;
(c) Should the Claimant be permitted to claim a greater sum than was originally claimed.
13. The second and third issues are not matters that can be raised by way of appeal. There is no suggestion that Judge was wrong or that there was any irregularity in the proceedings. As to the former, the Judge could not be wrong in relation to a matter that was not raised for her decision. As to latter, any error was that of the Claimant not the Judge.
14. The first issue is properly the subject of an application for permission to appeal since it was a matter that formed part of the Judge’s judgment. The application, however, has no prospect of success. The Judge was unarguably right to find that the parties were bound by the decision of the Assistant Registrar on the employment relationship and jurisdiction. It unquestionably amounted to a res judicata. The Defendant failed to attempt to appeal that decision and it therefore stands. The Defendant cannot attempt to challenge it in the context of the later decision based upon it.
15. Accordingly, the Defendant’s Application is refused and the Court declines to amend the judgment to increase the sum awarded.
