December 20, 2022 SCT - Judgments and Orders
Claim No: SCT 383/2022
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE SMALL CLAIMS TRIBUNAL
BEFORE H.E. JUSTICE MAHA AL MHEIRI
BETWEEN
LUFTIN
Claimant
and
LAHIRE
Defendant
| Hearing : | 6 December 2022 |
|---|---|
| Further Submissions : | 9 December 2022 |
| Judgment : | 20 December 2022 |
JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI
UPON the Claim Form being filed on 28 October 2022
AND UPON a Hearing being held before H.E. Justice Maha Al Mheiri on 6 December 2022, with the Claimant and the Defendant’s representative in attendance
AND UPON reviewing the documents and evidence submitted to the Court
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum of AED 3,082.12.
2. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the sum of AED 367.50.
3. The Defendant shall cancel the Claimant’s visa.
Issued by:
Delvin Sumo
SCT Judge
Date of issue: 20 December 2022
At: 2:45pm
THE REASONS
Parties
1. The Claimant is Luftin (the “Claimant”), an individual filing a claim against the Defendant regarding his employment at the Defendant company.
2. The Defendant is Lahire (the “Defendant”), a company registered in the DIFC located, DIFC, Dubai.
Background and Hearing
3. The underlying dispute arises – out of the employment of the Claimant by the Defendant pursuant to an employment contract dated 25 May 2021 (the “Employment Contract”). The Claimant was hired for the position of a ‘Chef’ with a monthly salary of AED 3,000. This consisted of the following:
(a) Basic salary in the sum of AED 1,500; and
(b) Accommodation and other allowance in the sum of AED 1,500.
4. In accordance with the Employment Contract, the Claimant is entitled to 24 days leave. The Defendant requires that any employee planning to take annual leave should give 30 days prior notice. The Defendant may adjust the days requested or refuse the request depending on how busy the restaurant is during the period requested.
5. The parties’ disagreement arose out of a request by the Claimant for annual leave. Notwithstanding the disagreement, the parties agreed that the Claimant would take annual leave from 21 September to 7 October 2022.
6. The Claimant failed to report to work on 7 October 2022, which led the Defendant to send him a warning letter for each day he did not attend work. On 14 October 2022, the Defendant emailed the Claimant his termination letter by which the Claimant’s employment was terminated for cause with immediate effect. Following his termination, the parties failed to reach an agreement in relation to the Claimant’s final settlement.
7. On 28 October 2022, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming the following sums:
(a) Salary payment up to 14 October 2022 in the sum of AED 5,000;
(b) Payment for 26 Days of unused annual leave and public holidays in the sum of AED 5,000;
(c) 1 months’ notice period in the sum of AED 5,000;
(d) Failure to pay into the Qualifying Scheme the correct amount based on basic salary in the sum of AED 2,477.75;
(e) Penalty in accordance with Article 19 DIFC Law No. 2 of 2019, accruing on a daily basis.
8. The parties attended a Consultation with SCT Judge Hayley Norton on 17 November 2022 but were unable to reach a settlement.
9. In accordance with the rules and procedures of the SCT, this matter was referred to me for determination. The parties appeared before me at a hearing on 6 December 2022 with the Claimant and the Defendant’s representative in attendance.
Discussion
10. This dispute is governed by DIFC Law No. 4 of 2021 (Employment Law Amendment Law) (hereafter the “DIFC Employment Law”). The Employment Contract is to be considered in accordance with the DIFC Employment Law and in determining this dispute.
11. I shall set out below the Claimant’s claims and the Defendant’s reply to them. In instances where the Defendant has failed to provide evidence in support of their defence, the Court shall determine the matter in accordance with the DIFC Employment Law and the Employment Contract.
Outstanding salary for 8 days in October
12. The Claimant seeks payment for outstanding salary in the sum of AED 5,000 from 7 to 14 October 2022.
13. After reviewing the submissions filed by the parties, I find that the Claimant took unauthorised annual leave from 7 October until the termination date of 14 October 2022. The Court finds that this is to be considered as unpaid leave. Accordingly, the Claimant’s request for salary payments from 7 to 14 October 2022 is dismissed.
1 months’ notice period
14. The Claimant claims the sum of AED 5,000 for 1 months’ notice period. The Claimant submits that he was asked to leave the restaurant following the termination, and that he is entitled to notice due to him being terminated for cause.
15. The Defendant submits that the Claimant was terminated by letter on 14 October 2022 and had received five warning letters during his employment period with the Defendant. The Defendant submitted that the Claimant demonstrated an unacceptable attitude by extending his vacation leave without approval and without informing the Defendant.
16. Article 63 of the DIFC Employment Law states:
“63. Termination for cause
(1) An Employer or an Employee may terminate an Employee’s employment with immediate effect for cause in circumstances where the conduct of one (1) party warrants termination and where a reasonable Employer or Employee would have terminated the employment as a consequence thereof.
(2) If an Employee terminates their employment for cause pursuant to Article 63(1), the Employee shall be entitled to:
(a) a payment of Wages in lieu of their notice period;
(b) a Gratuity Payment calculated to include the notice period the Employee would have been required to give to terminate their employment in accordance with Article 62(2); and
(c) a payment in lieu of the Employee's accrued untaken Vacation Leave calculated to include the notice period the Employee would have been required to give to terminate their employment in accordance with Article 62(2).
(3) If an Employer terminates the employment of an Employee for cause pursuant to Article 63(1):
(a) the Employee shall not be entitled to receive any payment of Wages in lieu of their notice period; and
(b) the Employee’s Gratuity Payment and outstanding Vacation Leave shall be calculated up to the Termination Date.62. Minimum notice periods.”
17. The Court is of the view that the criteria as set out in Article 63 DIFC Employment Law has been met. The Defendant sent several warning letters and the Claimant confirmed that he wanted to extend his annual leave without seeking prior approval from the Defendant.
18. Therefore, I find that the Claimant is not entitled to a notice period as set out in Clause 63(3)(a) having been terminated for cause.
Payment in lieu of unused annual leave
19. The Claimant claims a sum of AED 5,000 as for 26 working days of accrued but unused leave and public holidays. The Claimant claims this pursuant to Clause 10.1 of the Employment Contract:
“10. 1 The Employee shall be entitled to an annual paid vacation leave of twenty four (24) days to be accrued pro rata during the year according to the Labour Law.”
20. The Defendant submits that the Claimant has 16 days of annual leave and 4 public holidays which are pending.
21. Article 27 of the DIFC Employment Law concerns vacation leave:
“Vacation Leave
(1) 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.
(2) An Employee is entitled to be paid their Daily Wage during Vacation Leave.
(3) 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. The amount of accrued but untaken Vacation Leave to be carried forward may be agreed between the Employer and Employee, provided that nothing shall preclude an Employee from rolling over at least five (5) Work Days per Vacation Leave Year.
(4) Vacation Leave is exclusive of Public Holidays to which an Employee is entitled.
(5) Unless otherwise agreed in writing by an Employee, and subject to Article 28(1), an Employee cannot receive payment in lieu of Vacation Leave.
(6) 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.”
22. During the Claimant’s employment period with the Defendant, the Claimant accrued 33.26 days of annual leave, from 25 May 2021 to 14 October 2022. The leave availed by the Claimant was 16 Days from 21 September to 7 October 2022.The remaining unused annual is 17.26 days.
24 Days per year / 12 months = 2 days per month
2 Days x 16 months = 32 days
2 / 30 days = 0.06 x 21 days (6 days in May 2021 and 14 days in October) = 1.26
23. As such, the Claimant is entitled to payment in lieu of 17.4 days for the year 2022, as his last working day was 14 October 2022. As such, I find that the Claimant shall be paid the amount of AED 2,389.82 (AED 138.46 daily wage x 17.26 = AED 2,389.82).
AED 3000 monthly salary x 12 months = AED 36,000/ 260 = AED 138.46
Payment in Lieu of Public Holidays
24. The Claimant submits that he is entitled to payment in lieu of 17 days worked during Public Holidays in 2021 until his last working day. The Claimant specified which public holidays he wishes to claim payment against. They are set out as follows:
2021 public holidays
Arafat Day: 19 July 2021
Eid Al Adha: 20 July 2022 to 22 July 2022
Islamic New Year :12 August 2021
UAE National Day: 1 December and 2 December 2022
2022 Public Holidays
New Year’s Day: 1 January 2022
Eid Al Fitr: 2 May to 4 May 2022
Mourning of Sheikh Khalifa: 16 May 2022
Arafat Day: 8 July 2022
Eid Al Adha: 9 July 2022 and 11 July 2022
Islamic New Years: 30 July 2022
Prophet’s Birthday: 8 July 2022
25. In reply, the Defendant denies that the Claimant is entitled to 17 days for public holidays and states that he has been paid for working on all public holidays except for 4 days in 2022 being Arafat, Eid Al Adha and Islamic New Year, which were added as additional days to his pending vacation of 4 days. The Defendant submits the following:
(a) UAE National Day, December 1, 2 2021 paid as extra days in January.
(b) For New Year’s Day, the Defendant is closed.
(c) Eid Al Fitr Holiday was taken.
(d) Mourning of Shaikh Khalifa was not a Public holiday
(e) Prophet’s Birthday was in October when the Claimant was on vacation leave.
26. It is the employer’s duty to keep a record of their employees’ attendance, as well as days worked, annual leave taken, and public holidays worked. The Defendant provided evidence to fulfil its duty towards the Claimant by keeping such a record.
Article 16(g) of the DIFC Employment Law states the following:
“Payroll Records
(1) An Employer shall keep record of the following information:
…
(f) the dates of Public Holidays taken by the Employee and the Daily wage paid by the Employer in respect thereof”
27. The Court agrees with the Defendant’s submissions in relation to the 4 days and adds to it the Mourning of Shaikh Khalifa as it is a public holiday. I find that the Claimant should be paid for it. Therefore, I find that the Claimant shall be paid the amount of AED 692.3 as payment for the 5 Public holidays worked (AED 138.46 daily wage x 38 = AED 692.3).
End of Service Gratuity and Contributions to the Qualifying Scheme
28. Article 19 of the DIFC Employment Law states:
“(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)”
29. 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. …
…
(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…”
30. The aforementioned 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, as set out by the DIFC Employment Law, and such amounts to be paid into a Qualifying Scheme. The gratuity payment to be paid must be for any period of service prior to the Qualifying Scheme Commencement Date, which is defined in the Law of 1 February 2020.
31. The Defendant confirmed that he has made all payments in relation to the Claimant’s account. The Claimant submits that there were discrepancies in relation to his basic salary, and that it should be AED 2,500 and not AED 1,500, as the Defendant suggests.
32. There was no evidence to demonstrate that the Claimant received AED 5,000 as his monthly salary. All the evidence before me demonstrates that the Claimant received AED 3,000 per month. Therefore, the Claimant’s Claims for end of service shall be dismissed.
Article 19 penalty in accordance with the DIFC Employment Law
33. The Claimant seeks the accrual of a daily penalty in the sum of his daily wage pursuant to the Defendant’s failure to pay his employment entitlements, within 14 days of the termination date.
34. Article 19 of the DIFC Employment Law states:
“i. 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.
ii. 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).
iii. 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.
iv. 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.”
35. Pursuant to Article 19(1) of the DIFC Employment Law, an Employer is required to pay an Employee all remuneration within 14 days of the termination date, and in such instances where payment is not made within the time period, pursuant to Article 19(2), the 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).
36. Having reviewed the Court file, it appears that the Claimant filed his claim on 28 October 2022, 14 days after his termination date. Article 19(4)(a) directs that the Court will waive the penalty amount accrued and accruing for the period of time during which a dispute is pending with the Courts. Therefore, I am of the view that the Claimant is not entitled to a penalty pursuant to Article 19 of the DIFC Employment law and dismiss this claim accordingly.
Conclusion
37. In light of the aforementioned paragraphs, I find that the Defendant shall pay the Claimant the sum of AED 3,082.12.
38. Given the Claimant’s success in relation to some of his claims, he is entitled to recover a portion of the court fee applicable to the filing of this case. The Defendant shall therefore pay to the Claimant the amount of AED 367.50 for the DIFC Courts’ filing fee.
