August 02, 2024 SCT - JUDGMENTS AND ORDERS
Claim No: SCT 010/2024
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE
BETWEEN
NOVIA
Claimant/Respondent
and
NYSA
Defendant/Applicant
ORDER WITH REASONS OF JUSTICE RENE LE MIERE
UPON reviewing the Judgment of SCT Judge Maitha Alshehhi (the “Judge”) dated 11 June 2024 (the “Judgment”)
AND UPON reviewing the Defendant’s Appeal Notice dated 24 June 2024 seeking permission to appeal the Judgment (the “Application”)
AND UPON considering the documents and submissions filed by both parties and recorded on the case file
AND UPON hearing and considering the oral submissions of the Defendant/Applicant and the Claimant/Respondent made at a hearing held on 1 August 2024 (the “Hearing”)
IT IS HEREBY ORDERED THAT:
1. The Application is refused.
2. Each party shall bear their own costs of the Application.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of Issue: 2 August 2024
At: 2pm
SCHEDULE OF REASONS
Summary
1. The Claimant was employed by the Defendant from 22 July 2023 until he resigned on 14 December 2023 because the Defendant had not paid his salary for the months of October, November and 14 days in December.
2. The Claimant claimed payment of his unpaid end of service entitlements.
3. There was a hearing before SCT Judge Maitha AlShehhi on 3 June 2024, with the Claimant and the Defendant’s representative in attendance.
4. On 11 June 2024 the Judge delivered reasons for her decision and the Court ordered the Defendant to pay the Claimant the amount of AED 43,577.33 and the DIFC Courts’ filing fee in the amount of AED 871.54 (“the Order”).
5. By appeal notice issued on 24 June 2024, the Defendant seeks permission to appeal against the Order.
6. There was a hearing before the Court of First Instance (“CFI”) on 1 August 2024, with the Claimant and the Defendant’s representative in attendance.
7. For the reasons that follow the Defendant’s application for permission to appeal will be dismissed.
The Claim
8. The Claimant submitted he resigned because the Defendant had repeatedly failed to pay his salary.
9. The Defendant’s offer of employment letter (“the Offer Letter”) provided that the Defendant’s:
“monthly lump sums all-inclusive remuneration shall be AED 18,365 (5,000 USD), the said lump sum remuneration shall be inclusive of all allowances and compensations of whatsoever nature, these details are set out below and will be clarified further with your employment contract.
Total salary package:
| Basic salary per month | AED 9,182.50 |
| Housing allowance per month | AED 7,162.35 |
| Other allowances per month | AED 2,020.15. |
| Total salary | AED 18,365 (5,000 USD) |
| Start date | 22 July 2023” |
10. The Claimant and the Defendant did not make any further employment contract. The Defendant submits and the Claimant does not dispute that the Offer Letter constitutes the Claimant’s contact of employment.
11. The Claimant claimed end of service entitlements in the amount of AED 54,327.
The Defence
12. The Defendant claimed that the Claimant had wrongfully terminated his employment without notice.
13. The Defendant admitted it owed the Claimant his salary for the months of October, November and 14 days in December in the amount of AED 34,308.52 but claimed that amount must be set off against amounts owed to it by the Claimant in respect of training costs, a notice period deduction, vehicle retention fees, vehicle fines and salik, utilities, car repairs, and rent accommodation.
The Judgment
14. The Judge found that the dispute is governed by DIFC Employment Law No. 4 of 2021 (the “Employment Law”) in conjunction with the Offer Letter.
15. The Judge found that the Claimant terminated his employment for cause, which warrants immediate termination of employment, and he is entitled to receive his salary payment including the notice period and leave in accordance with Article 63 of the DIFC Employment Law.
16. The Judge found that the Defendant must pay the Claimant the amount of AED 55,511.13 for unpaid salary and leave entitlements. The Judge found that the Defendant was entitled to deduct AED 11,933.80 for the deductions claimed by the Defendant, which included rent accommodation for half the duration from 1 January to 15 January 2024 in the amount of AED 3,581.5.
Grounds of Appeal
17. The grounds of appeal relate to the non-deduction of amounts for rental accommodation provided by the Defendant to the Claimant other than for 1 to 15 January 2024. The Defendant claims the Judge failed to consider its claim to deduct for rental accommodation provided to the Claimant between 22 July and 14 December 2023 of AED 35,815, that is 5 months at AED 7,162.35 per month.
18. The Defendant submits that without this being deducted the Claimant is receiving a double payment since he receives an accommodation fee according to his employment contract of AED 7,162.35. The Defendant says the allowance should be paid towards the accommodation that was provided by the Defendant.
Claimant’s Response
19. The Claimant submitted that the Offer Letter was provided to him by a friend who was a close friend of the owner of the Defendant. The Claimant says that the friend informed him that when he first commenced employment the Defendant would provide him with temporary accommodation. Further, the Claimant says that he paid for the utilities whilst he was receiving temporary accommodation from the Defendant.
20. The Defendant’s representative submitted that the friend was not a close friend of the Defendant and was not authorised to make any promises on behalf of the Defendant.
Decision
21. It is not necessary to resolve the factual disputes. As a matter of law, the Defendant is not entitled to deduct the amount of the housing allowance from the Claimant’s lump sum remuneration.
22. The Offer Letter provides that the Claimant’s monthly lump sums wholly inclusive remuneration shall be AED 18,365, inclusive of all allowances and compensation. The total salary package describes the amount for the housing allowance per month is AED 7,162.35.
23. Where an employee’s salary package includes a housing allowance, he is entitled to the full amount of the allowance irrespective of how much he spends on accommodation or if the employer provides him with accommodation unless the employment contract provides otherwise. The employment contract does not provide otherwise.
24. The Defendant may have a claim against the Claimant for the cost of accommodation provided to the Claimant. The Defendant would have to prove an express or implied agreement that the Claimant will pay the Defendant the costs of the accommodation.
25. Further, the Defendant must prove that it is authorised to deduct the cost of accommodation from the Claimant’s salary. The Judge referred to Article 20 of the Employment Law in respect of deductions which reads relevantly as follows:
“(1) An Employer shall not deduct from an Employee’s Remuneration or accept payment from an Employee, unless:
(a) the deduction or payment is permitted under this Law, or agreed to in an Employment Contract not in contravention of this Law;
(b) the prior written agreement of the Employee has been obtained in respect of the deduction or payment, provided that such deduction or payment is not prohibited under this Law;
(c) the deduction or payment is a reimbursement for an overpayment of any Remuneration or expenses, or to recoup benefits utilised by an Employee in excess of their accrued entitlement under their Employment Contract; or
(d) ……”
26. The deduction of the housing allowance or cost of accommodation is not permitted under the Employment Law. The deduction is not agreed to in the employment contract constituted by the Offer Letter.
27. The Claimant has not agreed in writing to the deduction. The deduction is not a reimbursement for an overpayment or to recoup benefits utilised by the Claimant in excess of his accrued entitlement under his employment contract
28. Therefore, the Defendant is not entitled to deduct the amount of the housing allowance from the Claimant’s remuneration.
29. RDC 53.91 provides that permission to appeal may be given only where the Court considers that the appeal would have a real prospect of success or there is some other compelling reason why the appeal should be heard.
30. The appeal would not have a real prospect of success and there is no other compelling reason why the appeal should be heard.
31. The application for permission to appeal must be dismissed.
