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Claim No: SCT 440/2023

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

NOHUN

Claimant/Defendant by Counterclaim

and

NETIP

Defendant/Claimant by Counterclaim

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JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI

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UPON the claim having been filed on 7 November 2023 and amended on 6 December 2023 (the “Claim”)

AND UPON the Defendant’s defence dated 14 November 2023 and amended defence and counterclaim dated 15 December 2023 (the “Counterclaim”)

AND UPON the Claimant’s reply to the Counterclaim dated 4 January 2024 (the “Claimant’s Reply”)

AND UPON the Defendant’s response to the Claimant’s Reply dated 12 January 2024

AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 11 January 2024, 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 163,228.56.

2. The Defendant’s Counterclaim shall be dismissed.

3. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 3,264.57.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 19 January 2024
At: 2pm

THE REASONS

Parties

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

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

The Claim

3. The Claimant is seeking her end of service entitlements which comprise of payment of her 3 months’ notice period, gratuity payment and payment in lieu of annual leave following her resignation on 28 September 2023 in the position of GP Aesthetic Doctor.

4. The Claimant is also seeking termination of her employment contract dated 29 November 2021 (the “Employment Contract”), medical license, compensation for psychological and mental distress, and audit on commission which she had been receiving as she is of the view that it does not correlate with the revenue generated in the total amount of AED 499,493.

5. Pursuant to the Employment Contract, the Claimant’s monthly remuneration was set out to be AED 35,000 in addition to commission which would be calculated in accordance with the generated revenue. The calculation of such is covered in the Memorandum of Amendment dated 29 November 2021.

6. The Claimant concedes that she was placed on garden leave during her notice period with a guarantee that all her dues will be paid out to her on time.

7. The Claimant submits that she helped establish the reputation of the clinic due to her expertise as an internationally certified aesthetic/laser therapist/IV therapy expert, and helped in generating considerable profit and new clients for the Defendant. Additionally, she used to give training courses to doctors within the clinic and outside in the field of aesthetic and IV therapy.

8. The Claimant confirms that any sort of publication like media coverage, social media and google advertisement was never targeted at her personally, rather it was an advertisement for the benefit of the clinic in general and she rejects the Defendant’s assertion otherwise.

9. The Claimant argues that due to her presence on social media, she was approached by a prospective client who wanted to avail her filler technique, so she referred her to a different clinic that uses her same technique and at the same time advised her to see any other doctor available in the Defendant’s clinic. The Claimant confirms that she advised the client that she could not perform the service as she was on her notice period.

10. Following this, the Defendant contacted the Claimant on 25 October 2023 to inform her that it would be withholding her payment while considering pursuing legal action against her with MOHRE and DHA for medical malpractice on the basis that she allegedly had been working for a competitive clinic during her notice period.

11. The Claimant rejects the Defendant’s Counterclaim in full and reiterates that she was behind the Defendant’s success in terms of growing their aesthetic department and opening new branches.

12. Therefore, the Claimant is requesting for compensation for time and financial loss due to not receiving her end of service entitlements. The Claimant contends that she was prohibited from attending a course held by “Nir” on the basis of failure to pay the associated fees as she could not afford it.

The Defence and Counterclaim

13. The Defendant submits that the Claimant has breached her Employment Contract and various statutory provisions by referring a client to a competitive clinic rather than referring her to the clinic straightaway. This is pursuant to clauses 12.2 and 13 of the Employment Contract which reads as follows:

14. Further to the alleged breach, the Defendant requested that the Claimant enter into undertakings to confirm that she would not act in further breach of her obligations to the company. However, the Claimant failed to respond to the Defendant’s request.

15. The Defendant submits that it had allegedly invested a significant amount of time and money to help the Claimant in building her practice as it had contributed to enhancing her skill set for at least 10 different treatments. This includes social media advertising, paid google ads and securing event sponsorships which eased the Claimant’s accessibility to attend various courses and obtaining certified certificates. Thus, adding to the Claimant’s expertise at the Defendant’s expense.

16. The Defendant asserts that initiatives made by them were instrumental in establishing and amplifying the Claimant’s presence in the market, contributing significantly to the recognition and growth of Claimant’s patient base in Dubai. An example of which is her increased Instagram following which illustrates the impact of the marketing efforts.

17. The Defendant contends that the Claimant has never raised a concern with regards to her salary disbursements and commission received. As such, there is no legal justification to conduct an audit at this stage.

18. Moreover, the Defendant submits that the Claimant was treated in a fair manner during her employment and has always had preferential treatment as she never used to work on public holidays and even availed a complimentary expensive service before her departure by 10 days which was worth AED 10,000.

19. With regards to the compensation for mental distress, the Defendant submits that the Claimant failed to demonstrate or provide reports to support such a claim and dismisses it in its entirety.

20. Therefore, the Defendant is counterclaiming from the Claimant the amount of AED 998,792 which it paid in respect of marketing and advertising in favour of the Claimant as well as legal fees incurred due to the present situation.

21. At the Hearing, I directed the Defendant to provide a copy of the Employment Contract and an excel sheet of the Claimant’s payroll and revenue generated for the last six months. However, it came to my attention that the Defendant also sought to file new evidence on 12 January 2024 which will not be accepted by the Court as it was not filed within the timeframe allowed.

22. Therefore, the Court will not take into consideration the new document/evidence submitted on 12 January 2024 as the Claimant has not had a chance to view and respond to it.

Applicable law

23. This dispute is governed by the Employment Law Amendment Law DIFC Law No. 4 of 2021 (the “DIFC Employment Law”) in conjunction with the Employment Contract.

Discussion

24. Given that the Counterclaim amount exceeds the Small Claims Tribunal (“SCT”) threshold of AED 500,000, the SCT Registry sought the parties’ agreement in writing that the Counterclaim be heard and determined in the SCT pursuant to RDC 53.2(2).

25. The parties’ agreement was duly provided and therefore the SCT has jurisdiction to hear and determine the Claim and the Counterclaim.

Did the Claimant breach the Employment Contract?

26. If the answer to the above question is yes, does this mean that the Defendant has the right to refrain from paying the Claimant her outstanding dues?

27. The Employment Contract sets out the Claimant’s rights and obligations towards the Defendant. It is agreed within the Employment Contract that the Defendant has the right to ask the Claimant not to perform any duties during her notice period and the duration of which is set out to be three months, in compliance with Article 62(3) and (5) of the DIFC Employment Law which stipulates that the employer and employee may agree to a longer notice period.

28. Therefore, I find that the Defendant’s action in requesting the Claimant to continue her notice period of three months at home is permissible.

29. The focal point in this case is whether the Claimant is in breach of her Employment Contract as a result of referring a client to a competitive clinic.

30. As per the WhatsApp conversation submitted by the parties, the Claimant referred the client to a different clinic under the name of “Nehin” rather than Netip. However, the Claimant also advised the client:

31. The Defendant failed to provide any evidence to the Court that the Claimant indeed worked for the competitive clinic as the submitted evidence only demonstrates that the Claimant “referred” a client rather than demonstrating that she was working for that clinic.

32. Accordingly, I shall reject the Defendant’s assertation that the Claimant has breached her Employment Contract by working with a competitor clinic being Nehin.

33. Clause 5.6 of the Employment Contract reads as below:

34. The Defendant relies on the above clause to demonstrate that the Claimant had been consulting with another party by referring a client to a different clinic, as no written permission was sought by the Claimant before the referral. However, I am of the view that the Claimant’s action is not to be construed as her having interest or consulting in any other business, rather it was a mere suggestion.

35. Even though I find that the Claimant should not have referred a client to a different clinic while working for the Defendant, I am of the view that this does not amount to a breach of the Employment Contract as it was not done in bad faith and certainly does not give the Defendant the right to withhold payment.

36. That being said, the act committed by the Claimant does not equate or justify the repercussion taken by the Defendant.

37. In any event, breach of the Employment Contract does not entail withholding payment.

38. With regards to the course fees that were not paid by the Claimant on 14 November 2023, the Claimant failed to provide an invoice of the same. As such, the compensation for this shall be rejected.

Can the Defendant withhold payment?

39. As I have found that the Claimant has not breached her Employment Contract, she is therefore entitled to receive her outstanding dues.

40. As to the payment in lieu of the notice period, I find that the Claimant is entitled to receive the amount of AED 105,000 which represents payment of 3 months.

41. With respect to the gratuity payment, the Defendant failed to provide any evidence to suggest that the Claimant had been registered into the qualifying scheme.

42. Payment into a qualifying scheme is encompassed in Article 66 of the DIFC Employment Law, which reads as follows:

43. 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.

44. 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.

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 two years, one month and 6 days. The Claimant would generally be entitled to contributions for the period between 1 December 2021 to 7 January 204. This is to be calculated as follows:

Between 1 December 2021 to 1 January 2024

The Claimant’s monthly basic wage is AED 21,000 x 5.83% (being the minimum contribution amount defined by the DIFC Employment Law) = AED 1,224.3 per month x 25 months = AED 30,607.5.

Between 2 January 2024 – 7 January 2024

The Claimant’s daily wage is AED 969.23 x 5.83% = 565.06 x 6 days = AED 3,390.36.

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 33,997.86.

48. As the Claimant is no longer an employee of the Defendant and has served her notice period, I hereby order the Defendant to proceed to cancel the Claimant’s employment visa and medical license.

49. Furthermore, the Claimant is seeking her payment in lieu of her accrued but untaken vacation leaves of 15 days.

50. The Defendant failed to provide the Court with any record of the dates taken by the Claimant as it is its duty to keep a record of the vacation dates taken pursuant to Article 16(g) of the DIFC Employment Law. Therefore, I shall rely on the Claimant’s evidence and award her the amount of AED 24,230.7.

(AED 35,000 x 12/260= AED 1,615.38 x 15 days = AED 24,230.7.

51. At the Hearing, I asked the Claimant whether she had anything in writing to show that she had attempted to raise concerns with regards to her commission payment and she confirmed that such conversation was only made verbally.

52. The Claimant was unable to determine the exact commission amount she should be receiving at the end of each month because no pay slips were shared with her. As such, I directed the Defendant to provide a detailed payroll of the Claimant’s salaries for the past six months (the “Document”).

53. The Document included the total revenue of the clinic, material costs, credit card charges, the calculation of the commission, and how the Defendant arrived at the commission percentage figure during the Claimant’s employment.

54. Having reviewed the Document and the calculation stipulated within, I am satisfied that the Defendant has paid the Claimant her commission in line with the Memorandum of Amendment and the Employment Contract. Therefore, I shall dismiss the Claimant’s claim for reimbursement of the commissions.

55. As to the Claimant’s remaining claim for compensation for mental distress, there is no independent evidence of the Claimant’s degree of distress, or of any medical condition or symptom which she has suffered, or of any impediment to her other employment. Accordingly, I shall dismiss the Claimant’s claim for compensation for mental distress for lack of evidence and failure to substantiate the claim.

Was the social media advertising targeted at the Claimant only?

56. With regards to the Counterclaim, the Defendant failed to substantiate its claim and failed to file any form of invoice with regards to the amount it is claiming. As such, the Court is unable to assess on what basis the Defendant is counterclaiming an amount of almost AED one million.

57. Moreover, the Defendant failed to demonstrate to what extent the said advertisement was targeted for the sole benefit of the Claimant only.

58. In its Counterclaim, the Defendant argues that it attributed to the growth of the Claimant’s Instagram following and submitted a screenshot of her current Instagram page. However, this is insufficient evidence as there is no link to suggest that the Claimant gained followers due to the social media ads proposed by the Defendant. Additionally, I am unable to make an assessment because there is no information provided about the previous status of the Claimant’s Instagram page. Therefore, a mere screenshot is insufficient to suggest that it was the result of the Defendant’s paid advertisement.

59. The Defendant also failed to provide to the Court with any example of an advertisement that it has made in the past in favour of the Claimant. Accordingly, I shall dismiss this for lack of evidence.

60. As to the procedure received by the Claimant in the amount of AED 10,000, it is evident based on the WhatsApp conversations that such a procedure was intended to be a gift by Mr Niwip, which took place 10 days prior to the Claimant’s resignation.

61. The DIFC Employment Law is silent on such matters which gives the judge discretion. Based on the above conversation, I find it is clear that the procedure was intended to be a gift by Mr Niwip to award the Claimant for her performance and therefore the Claimant is not required to reimburse the Defendant the expenses for such procedure as there is nothing in the Employment Contract that would suggest otherwise.

62. Due to the ongoing dispute between the Claimant and the Defendant, the latter decided to retain a law firm in order to consider its options of whether to pursue a legal claim against the Claimant, and the law firm charged the Defendant the amount of AED 31,500 as shown in the tax invoice submitted by the Defendant.

63. Consequently, I find that the Defendant should not be reimbursed this amount as the Defendant was unsuccessful in its Counterclaim.

Findings

64. For the above cited reasons, I hereby order the Defendant to pay the Claimant the amount of AED 163,228.56.

65. The Defendant ‘s Counterclaim shall be dismissed.

66. The Defendant shall pay the Claimant the DIFC Courts’ filing fee proportionate to the judgment sum in the amount of AED 3,264.57.