THE JUDICIAL AUTHORITY OF THE DUBAI INTERNATIONAL FINANCIAL CENTRE
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai
IN THE COURT OF FIRST INSTANCE
BEFORE H.E. JUSTICE ALI AL MADHANI
UPON HEARING the Claimant and the Defendants, their submissions and evidence
IT IS ORDERED that:
The claim is dismissed.
1. The Claimant Abelino is a former employee of the Defendants. He resides in Dubai, United Arab Emirates.
2. The First Defendant, Aapo is a DIFC company owned by (Abbas) the Second Defendant and located in Dubai, United Arab Emirates.
3. The Second Defendant, Abbas is a US company in United States of America.
4. The First and Second Defendants are represented by (ABD).
Back ground and proceeding history
5. On the October 2010 the Claimant brought this claim before the Small Claims Tribunal (SCT) stating that in 2005 he was employed by the Second Defendant in his home country, the United States of America. On November 2007 he entered into an International Assignment Agreement with the Second Defendant by which he agreed to be relocated to the First Defendant company in the Dubai International Financial Centre, Dubai (which is owned by EFG the Second Defendant) as a Business Development Manager. All of his employment dues were transferred to the First Defendant except for his tax payments which were to be paid by Abbas the Second Defendant.
6. On March 2010 the Claimant received a Termination Letter which purported to terminate his employment. This Termination Letter did not give any reasons for the termination of his employment. In the Claimant’s opinion, this Termination Letter was unfair as it did not take into account his excellent hard work during his four-and-a-half years spent with the Defendants.
7. According to the Claimant, the Termination Letter issued by the Second Defendant stated that the Claimant was entitled to expatriate allowances, severance payment, relocation and resettlement allowances.
8. Until the date of the Claim Form submitted to the DIFC Courts, the Second Defendant has not paid the Claimant’s employment entitlements. Therefore, the parties requested a consultation before SCT Judge Omar Al Muhairi.
9. No settlement was reached by the parties and, therefore, the case was sent for trial.
10. At the hearing before this Court, the Claimant confirmed that he had since received all of his employment entitlements except the resettlement allowance of US$15,000.
11. Accordingly, the only issue that this Court needs to decide is whether the Claimant is entitled to a resettlement allowance.
12. In order to support his claim, the Claimant referred to the Termination Letter dated March 2010 signed by the HR Director who mentioned resettlement allowance without referring to repatriation, relocation or any term of any previous agreement between the Claimant and the Second Defendant. The Claimant insists that a resettlement allowance is an unconditional entitlement and should be paid to him as a result of the termination.
13. In order to defend the claim for a resettlement allowance, the Second Defendant submitted a written submission including, amongst other issues, the paragraph that deals specifically with the resettlement allowance. This is set out at paragraph 7.7 of the written submission and is summarised as follows:
With regards to resettlement allowance, in accordance with clause 4.8 of the EAP (Expatriate Assignment Policy), which was signed by the Claimant, this allowance is payable in one lump sum amount upon repatriation to the Claimant’s point of origin. It is not guaranteed and it is at the discretion of the company, the Second Defendant, and must be approved by the applicable Vice President.
14. Under the Expatriate Assignment Policy the Second Defendant may decide not to offer the resettlement allowance if significant expenses are not expected. There were no verbal or written promises made to the Claimant in regard to the resettlement allowance to be paid without repatriation or relocation.
15. Furthermore, the Claimant decided not to move back to his home country and instead decided to stay and work in Dubai. Therefore, he is not entitled to such allowance.
Whether the Claimant entitled to the resettlement allowance or not?
16. As set out above, the Claimant is claiming the resettlement allowance pursuant to the reference to the resettlement allowance in the Termination Letter dated March 2010 while the Second Defendant asserts that the Claimant’s right to the resettlement allowance was stated in the Expatriate Assignment Policy (EAP) signed by the Claimant which gave no right to the Claimant to claim such allowance without going back to his point of origin which is the United States of America.
17. In order to determine such employment rights or entitlements, the Court ought to consider the Terms and Conditions of the employment relationship between the parties.
18. Having reviewed the claim, the defence, the supporting documents and the correspondence between the parties, the Court finds that the Terms and Conditions of the employment relationship are too wide. They are not defined in a single employment contract or agreement but it includes various documents signed by the parties such as an Offer Letter, Expatriate Assignment Policy (EAP), Severance Policy (SP), International Assignment Agreement (IAA) and Dispute Resolution Plan (DRP).
19. The resettlement allowance which is at issue in this case was specifically mentioned in the Expatriate Assignment Policy (EAP) and was not challenged by the Claimant.
20. Article 4.8 of the Expatriate Assignment Policy (EAP) provides the following:
“4.8 Resettlement allowance
A resettlement allowance will be payable in one lump sum amount during the first payroll period following the employee’s payroll transfer to the Host Country assignment or upon repatriation transfer to the employee’s point of origin …”
“The resettlement allowance must be approved by the applicable Vice President and is payable to the employee by the Company after the employee moves into permanent accommodations in the new assignment location … The resettlement allowance is determined as follows:
(a) Expatriate new hires or transfers from home-to-host or host-to-home: Will receive up to a maximum of 1-1/2 month’s base pay.
“The Company may decide not to offer a resettlement allowance if significant resettlement expenses are not expected …”
21. It is clear from Article 4.8 of Expatriate Assignment Policy (EAP) that in order for an employee to be entitled to the resettlement allowance, the employee is to satisfy two conditions. First, the employee must move/return to his point of origin. Secondly, the resettlement allowance must be approved by the applicable Vice President.
22. Since this allowance was mentioned and offered in the Termination Letter, the Court believes that the resettlement allowance should be granted and not be made subject to the discretion of the company. However, the Claimant still has to satisfy the first condition of Article 4.8 of the EAP, in that he needs to demonstrate that he is returning to his point of origin.
23. It is an unarguable fact that the Claimant decided not to go back to his point of origin which is the United States of America. Instead he chose to stay and work in Dubai which renders him not entitled to the resettlement allowance.
24. I hold that the Claimant has failed to convince this Court that he is entitled to the resettlement allowance. Therefore, the case of claiming this particular employment right is dismissed.
H.E. Justice Ali Al Madhani
Date of Issue: December 2010