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Ahmed Mohamed Abdel Aziz Saleh v Chartis Memsa Insurance Company [2011] DIFC CFI 021

Ahmed Mohamed Abdel Aziz Saleh v Chartis Memsa Insurance Company [2011] DIFC CFI 021

July 5, 2012

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Claim No. CFI 021/2011

IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Ruler of Dubai


IN THE COURT OF FIRST INSTANCE
BEFORE DEPUTY CHIEF JUSTICE SIR ANTHONY COLMAN

BETWEEN

AHMED MOHAMED ABDEL AZIZ SALEH

Claimant/Respondent

and

CHARTIS MEMSA INSURANCE COMPANY

Defendant/Applicant

Hearing: 2 May 2012

Council: Leonora Reisenburg of Galadari & Associates appeared for the Claimant/Respondent

Fiona Campbell of Al Tamimi & C   ompany appeared for the Defendant/Applicant


JUDGMENT


Introduction

1. The claim in these proceedings is for damages and other monetary sums due under a Contract of Employment dated 14 June 2009 of which it is alleged that the Defendant was in breach by its unlawful termination of the Claimant’s employment on 31 January 2011. There is also a claim in tort based on the manner in which the Defendant conducted the Claimant’s employment. On 6 February 2011 the Director of Employment Standards informed the Claimant that the claim was to be referred to the DIFC Courts. The Defendant’s application now before the Court is brought under RDC Rules 4.16 and 24.1 for certain passages in the statement of case to be struck out and/or for judgment against the Claimant on particular issues.

2. The Claim Form states that the claim arises out of the Defendant’s “unlawful” termination of the Claimant’s employment on 31 January 2011 in violation of laws and company procedure. It further states that his base salary was AED 263,580.00 per annum, plus AED 147,000 housing allowance and AED 38,000 transportation allowance and up for annual review on 1 July 2011. It is stated that the Claimant “has worked unsocial hours in highly stressful conditions detrimental to his health and is diagnosed with anxiety/depression and acute adjustment disorder”. The Claimant identifies the remedies sought as follows:

(i) Payment in lieu of one month’s notice in the amount of AED 37,415.00;

(ii) Payment in lieu of 24 days of unspent leave in the amount of AED 44,898.00;

(iii) End of service gratuity in the amount of AED 38,428.75;

(iv) Overtime for worked average 85 hour weeks in the amount of AED 1,336,433.50 at increasing hourly rates;

(v) Payment for 70 worked weekend days at double pay in an amount to be assessed;

(vi) Payment for nine worked national holidays at double pay in the amount of AED 32,465.60;

(vii) Payment of out of pocket expenses, including but not limited to, yearly tickets for the Claimant and his family, spousal residency visa fees, out of hours travel expenses, professional membership fees, in the amount of AED 30,000;

(viii) Compensation for actual and future loss of wages (nine months) in the amount of AED 336,735.00;

(ix) Medical costs to be assessed;

(x) Pain, loss and suffering to be assessed;

(xi) Interest;

(xii) Legal fees, costs and expenses.

3. In the Particulars of Claim it is pleaded as follows. The employment as Professional Services and Oxley Manager at the DIFC Office commenced on 28 June 2009. The Claimant reported directly to one Philip Sibley, the Defendant’s Deputy Financial Controller. Under clause 9 of the Employment Contract the Defendant’s standard working hours were stated to be “Sunday to Thursday from 08:30 to 17:30”. The Claimant pleads that he worked an average 85 hour week.

4. It is further pleaded that as the only Arabic speaker in the Financial Department of the Defendant’s DIFC office of the required seniority, the Claimant was often deployed to neighbouring Arabic-speaking countries and that on a number of occasions he was made to do work outside the scope of his employment, in particular:

(i) in September 2010 the Claimant was required to travel to Doha to carry out compliance and anti-money laundering work with a sister company which was not what he was employed to do;
(ii) in June 2010 the Claimant travelled to Cairo to carry out a pre-internal audit for a sister office and while there he was required to carry out a real audit, similar to an official internal audit which was outside the scope of his employment;
(iii) in about March-April 2010 he travelled to Istanbul where he was required to carry out a real audit, similar to an official internal audit which likewise was outside the scope of his employment.

Further, paragraph 15 of the Particulars of Claim includes eight further examples of other work said to be outside the scope of the Claimant’s employment.

5. In the case of the second quarter of 2010 Philip Sibley was promoted to Financial Controller but his former post of Deputy Financial Controller was not filled and it is pleaded that the Claimant was required to carry out the Deputy Financial Controller’s work as well as his own work but for no increased salary or other remuneration for additional efforts.

6. In paragraphs 18 to 26 of the Particulars of Claim the Claimant describes the circumstances of his dismissal on 31 January 2011. At a meeting with Asif Iqbal (in-house legal counsel) and Pam Sacree (Human Resources Manager), the Claimant was informed that he was being dismissed for “misbehaving with Jenny”. No further explanation was given to him. He was handed a letter of termination. The Claimant was requested to surrender his work pass, which he agreed to do in exchange for an acknowledgement of receipt.

7. Following the meeting, the Claimant was treated in a humiliating manner by being escorted to his desk station in an open plan office where his personal belongings had already been bagged up in three plastic bags which he was then required to carry from level 8 to level 11 under supervision. At level 11 he was handed a piece of scrap paper with an acknowledgement for receipt of his work pass “scribbled” on it. He alleges that the acknowledgement was “a sham” and failed to meet the “necessary form”.

8. The Claimant further pleads that the Defendant had failed to explain the alleged “misbehaviour” or provide any adequate reason for dismissal. The Defendant was guilty of “extreme bad faith and wrong doing”. He had, therefore, been “treated with gross unfairness and procedural impropriety”.

9. The Defendant had failed “as fairness and reasonableness would demand” to hold a fact finding interview or prior consultation with the Claimant. In the event of serious accusations being made “it (was) industry practice to first suspend employment pending further enquiry”.

10. By failing to conduct an exit interview with Minutes to be signed by the employee, the Defendant was “in violation of international best practices and sound corporate policy”.

11. The Claimant had been deprived of payment for 34 days of unspent leave.

12. The Claimant had not been compensated for working 85 hours a week, his skill and dedication having been exploited so as to avoid appointing a successor to Philip Sibley. Nor had he been compensated for nine worked national holidays or for 70 worked weekend days or for additional travel costs incurred in attending work during non-working days (a cost in addition to his travel allowance).

13. By failing to take any reasonable measures to ensure that the Claimant did not work excessive hours, or hours detrimental to his health or safety, the Defendant was in violation of its duties under DIFC Employment Law.

14. Overwork had caused medical consequences, in particular persistent severe headaches, neck pains, dizziness and weakness of hands and upper limbs associated with acute adjustment disorder and stress reaction. His condition in March 2011 evidenced musculoskeletal pathological symptoms dating back to early 2010. In May 2011 the Claimant was prescribed anti-depressants and anti-anxiety medication but was unable to afford continuing treatment for the time being. He could not at present quantify his loss due to the need to undergo further treatment when he could afford it.

15. Although the Claimant had taken all reasonable steps to mitigate his loss, he had been unable to find any appropriate alternative employment, the relevant period of loss being nine months.

16. In paragraph 60 of the Particulars of Claim the Claimant identifies four heads of general damages including general compensation for losses attributable to lack of financial resources following loss of his employment. Thus claims are made for loss of a deposit on rented accommodation, late payment charges “for missed banking payments”, compensation “for lost jewellery and assets” and any other consequential loss.

17. The prayer to the Particulars of Claim includes:

“(i) Declaratory relief that the dismissal was unfair and/or wrongful;
(ii) Court Order to impose such monetary fine on the Respondent as the Court deems fit and appropriate in the circumstances of the contravention.”

18. The Defence and Counterclaim includes a detailed refutation of the Claimant’s allegations in relation to the circumstances surrounding the termination of his employment. It is unnecessary to set that out in detail. However, it can be sufficiently summarised by stating that the Defendant terminated the Claimant’s employment because it was of the opinion that the Claimant’s conduct in the course of 31 January 2011 amounted to “misbehaviour” under the DIFC Employment Law. That expression is defined in Article 60(4) of the Employment Law as follows:

“(4) An employee is not entitled to a gratuity payment where the employee has been terminated for misbehaviour. A termination for such case exists in circumstances where the employee’s conduct warrants termination and where a reasonable employer would have terminated the employee. An employer may dismiss an employee without notice in such circumstances.”
Article 57, which lays down minimum notice periods to be given by an employer to an employee prior to termination of employment, provides:
“(3) This Article does not affect the right of either party to terminate employment without notice where there is cause.
(4) The circumstances constituting cause are set forth in Article 60(4).”
The Defendant’s case is that the Claimant’s conduct on 31 January 2011 was so serious that it warranted termination of the employment and that a reasonable employer would have terminated the Claimant’s employment in those circumstances.

Submissions

19. The Defendant’s application is confined to striking out or giving judgment against the following paragraphs of the Particulars of Claim.

58.4 compensation for worked overtime during working days, in the adjusted amount of AED 1,169,871.53 or as otherwise assessed by the Court;

58.5 compensation for worked weekend days at double pay. Normal pay rates have been factored into the claim for overtime and it follows that the amount of AED 125,449.90 is due; save as otherwise assessed by the Court;

58.6 compensation for worked national holidays (9 days) at double pay, amounting to AED 32,466.00 or as otherwise assessed by the Court;

58.7 compensation for out-of-pocket expenses, including but not limited to yearly tickets for the Claimant and his family, spousal residency visa fees, out-of-hours travel expenses and professional memberships, in the estimated amount of AED 34,700.00; and
58.8 compensation for loss of bonus as per ledger, amounting to AED 30,000.00.
60. The Claimant further requests for payment by way of compensation by way of general damages, to include:-
60.1 compensation for actual and future loss of wages (9 calendar months), amounting to AED 336,735.00;
60.2 compensation for medical costs and expenses, in an amount to be assessed;
60.3 compensation for pain, loss and suffering, in an amount to be assessed; and
60.4 general compensation in an amount to be assessed, to include loss of deposit in the amount of AED 10,000,00 late payment chargers for missed banking payments (to be assessed), compensation for lost jewellery and assets, and any other incidental or consequential losses or other losses as may have been suffered as a result of loss of earning or otherwise as may be assessed at a later date.and the equivalent parts of the Claim Form:
The application is further to strike out parts of the prayer to the Particulars of Claim, in particular the following passages which are underlined, together with the equivalent wording in the Claim Form:
(1) Declaratory relief that the dismissal was unfair and/or wrongful;
(2) Court order to impose such monetary fine on the Respondent as the Court deems fit and appropriate in the circumstances of the contravention;
(3) Order requiring the Respondent to pay the Claimant AED 1,510,734.85 as part of its employment and contractual entitlements;
(4) Order requiring the Respondent to pay general damages in the sums to be assessed by the Court or otherwise;\
20. The Defendant submits as follows.
21. Whereas it is conceded that there is a triable issue as to whether there were grounds for terminating the Claimant’s employment without notice (which would have been one month), it is submitted that the declaration as to unfair dismissal claimed in the prayer to the Particulars of Claim, paragraph (1), should be struck out on the grounds that it is wrong in law and irrelevant.

22. The substance of this submission is that under the DIFC Employment Law, there is no principle of unfair dismissal. There is either termination of employment on notice as provided for in Article 57 of the Employment Law or there is peremptory dismissal for misbehaviour, as envisaged by Articles 57(3) and 60(4). Moreover, the DIFC Employment Law does not require any particular procedure to be adopted prior to peremptory dismissal. Accordingly, no cause of action could be founded on unfair dismissal under DIFC Law. The Particulars of Claim did not specify precisely what legal consequences flowed from the “unfair” dismissal or in what respect those consequences were different from “wrongful” dismissal.

23. With regard to the claim that the Courts should impose on the Defendant a fine, by reason of the Defendant’s contravention of the law of employment, the Defendant submits that the DIFC Courts have no power to administer a fine. The primary responsibility for administration of compliance with the DIFC Employment Law rests on the Director of Employment Standards who, by Article 65 of the DIFC Employment Law, has power to hear and determine complaints and under Article 71 to enforce the Employment Law by fining a non-compliant party. However, the Director also has power to “refer a matter to the Court” of the DIFC “for disposition” under Article 70(2). The Director did refer the claim in this case to the Courts but the Courts did not thereby acquire the power to impose a fine under Article 79 of the Employment Law. That was reserved to the Director and did not extend to the Courts in those cases where the Director referred a claim to the Court in exercise of his powers under Article 70(2).

24. As to the claim for overtime under paragraphs 58.4 to 58.6 of the Particulars of Claim, which subdivides into overtime undertaken during working days based upon a pro rata hourly rate, compensation for worked weekend days and national holidays at double pay, it is denied that any of the claimed extra time was worked and, relevantly to the present application, that, even if that extra time had been worked, there would have been no legal or contractual basis for claiming any additional payment. The Contract of Employment provided by clause 5 for a “remuneration package” payable per month of AED 35,000, composed of Basic Salary AED 19,550, Housing Allowance AED 12,250 and Transportation Allowance AED 3,200. Clause 9 of that Contract provided as follows:

9. Working Hours Currently the working hours at the Company are Sunday through Thursday from 08:30 to 17:30. However, your hours of work will be dependent on the extent of your workload at any particular time and the need to meet deadlines, etc. From time to time, it might be necessary, given the nature of your duties, for you to make your services available over weekends or even public holidays, and this offer is made on this understanding.
The Defendant contends that the express provisions of these clauses leave no room for any obligation on the Defendant to pay overtime, weekend pay or public holiday pay. Nor is there any such requirement in the DIFC Employment Law to that effect. Contrary to the Claimant’s case, there was no provision of the DIFC Contract Law No.6 of 2004 or the DIFC Damages Law No.7 of 2005 which could find such a claim. In particular, a claim in restitution would not lie alongside the Contract of Employment, there having been no total failure. Consequently, the Claimant could not be entitled to such overtime payments, however much additional time he had worked.

25. The Defendant disputes the claim advanced for out of pocket expenses. According to the Claimant’s Response to the Defendant’s RFI, this claim breaks down into:

AED 15,000 in respect of an annual air ticket for the Claimant, his wife and child;
AED 6,000 for spousal residence fees;
AED 2,500 for maintenance of professional memberships;
AED 12,200 for travel expenses incurred during weekend working days.

26. As to the annual air ticket payment, the Claimant refers to clause 13 of the Contract of Employment which provides:

13. Annual Ticket During the period of your employment, the Company will provide you and your family (spouse and maximum two children up to the age of 18), if resident in the UAE, with the cash equivalent of one full fare economy return air-ticket from Dubai to London once every year in accordance with AIG’s policy and its provisions.
It is submitted that “once every year in accordance with AIG’s policy and its provisions” means that the first such ticket payment could be made on completion of one year’s employment and the subsequent payments at the end of each subsequent completed year. The Claimant having started his employment in June 2009 and received his first such payment in June 2010, he would not have been entitled to any further repayment until June 2011 when he would have completed two years employment.

27. As to spousal residence fees, maintenance of professional memberships and travel expenses during weekend working days, the Defendant submits that only if, which the Claimant does not plead or establish, the spousal residence fees would have been payable to the effect that this loss had been caused by any wrongful dismissal would they be recoverable. The Defendant takes a similar point in respect of the claim for loss of maintenance of professional memberships.

28. With regard to the claim for travel expenses during weekend working days, the Defendant submits that these could not be recoverable under the terms of the contract unless the Claimant’s travel expenses were specifically approved by the Defendant which was neither pleaded nor established.

29. The Defendant submits that the claim for AED 30,000 by way of bonus is untenable having regard in particular to clause 6 of the Contract of Employment by which it was provided:

6. Performance Bonus
The Company is under no obligation to pay you any Bonus whatsoever. However the Company may decide to pay any of its employees an Ex-Gratia amount as a reward for superior performance in any Calendar year.

30. The Defendant’s case with regard to the claim for actual and future loss of wages (said to be for nine calendar months and to amount to AED 336,735.00) is that under clause 4 of the Contract of Employment it was provided as follows:

4. Termination of Employment
After successful completion of the probation period, employment can be terminated by either party by giving one month’s notice in writing.

31. As for the claim for special damages in respect of medical costs in an amount to be assessed and for general damages for pain and suffering, the Defendant submits that such claim is incoherent because it does not plead that the medical condition referred to in paragraphs 44-50 of the Particulars of Claim was caused by any specific breach of duty by the Defendant. Although the Defendant had served a RFI requesting the basis for each had of claim, the Claimant’s response had merely referred to reliance on Part 2 and Part 3 of the DIFC Damages Law which left the Defendant in the position that it was impossible to tell precisely what case in respect of personal injury was put against it.

32. The Defendant further submits that the claims for consequential losses pleaded in paragraph 60.4 of the Particulars of Claim are irrecoverable because each is too remote, these all being losses which arose from the Claimant’s lack of financial resources after he had been dismissed rather than from any conduct by the Defendant.

The Claimant’s Submissions

33. With regard to the allegation of unfair and/or wrongful dismissal, the Claimant relies on “industry custom and practice” in the UAE and Dubai “and in particular as may be prevalent and applied by like establishments operating in and out of the DIFC” (see Reply to RFI dated 29 January 2012). The same explanation is pleaded for reliance on the Defendants’ violation of international best practice and/or corporate policy with regard to dismissal procedures and in particular the failure to hold a fact finding or exit interview or prior consultation before deciding upon dismissal.

34. It is submitted that the circumstances of peremptory dismissal of the Claimant were contrary to Part 10 of the DIFC Employment Laws. In conjunction with this allegation considerable weight is attached in the Reply and Defence to Counterclaim, paragraph 95, to the principles of unfair dismissal developed in the decisions of the English Courts. The case advanced by the Claimant is encapsulated in paragraph 98 of the Reply:

98. The Respondents’ decision to dismiss the Claimant was harsh and perverse. The dismissal is manifestly unreasonable and unfair. We remind this Court that the complaint the Respondent would have the Court believe is of ’cause’ is essentially one relating to select ‘heated exchanges’ and ‘harmless physical protest’ in the Respondent’s office; a complaint that senior employees of the Respondent should have been trained to deal with calmly and professionally without fear or consternation. We forcefully maintain that the alleged cause is not made out. Further and in the alternative, it is a matter properly confined to disciplinary action and not summary dismissal.

35. On behalf of the Claimant, Ms Leonora Riesenburg submits that the Claimant has substantial evidence that, in order to carry out his work load, he was obliged to work an average of as much as 85 hours per week during his employment and that this continuing pressure on him caused his mental and physical condition to decline to the point where he needed to take medical advice and to rely on medication. In this connection the Claimant is entitled to allege that the Defendant “failed to ensure that the Claimant received minimum international standards and conditions of employment” (paragraph 40 of the Particulars of Claim), failed to limit the Claimant’s “working time” to no more than 48 hours for each (seven) day consecutive period without first obtaining the Claimant’s consent in writing (paragraph 41 of the Particulars of Claim) and failed to take any reasonable measures, either directly or indirectly, to ensure that the Claimant did not work to excessive hours or hours detrimental to his health or safety, (paragraph 42 of the Particulars of Claim), thereby acting in breach of its duties under the DIFC Employment Law.

36. In this connection, in paragraph 18 of the Claimant’s Reply and Defence to Counterclaim it is pleaded that from around September 2009 onwards, the Claimant was asked by his managers, Philip Sibley and Sumanth Badlga, in no uncertain terms to work continuous additional hours to cover the shortage of staff in the Defendant’s Finance Department It is pleaded in paragraphs 18 and 19 of the Reply:

18. From around September 2009 onwards, the Claimant was asked in no uncertain terms to work continuous additional hours to cover the shortage of staff in the finance department by his managers, Phillip Sibley and Sumath Badlga. As we will show below, using existing examples (which are intended to be exemplary only), this additional work was not contemplated by the parties on date of entering into the Employment Contract.
19. The Respondent’s blanket assertion that it is up to the individual to minimise the requirement to work additional hours is not only a de facto admission that additional hours were mandated but also clear testament that the Claimant had sparse choice but to work an average of an 85 hour week. By way of clarification, we emphasise the use of the word average: In actual fact, and in particular during quarter end periods, the Claimant worked well in excess of the stated 85 hour week. The Respondent exploited the Claimant’s goodwill and work ethic to further its own interests; knowing full well that as the sole bread winner of his family the Claimant would be malleable to such additional demands. The Respondent’s failure, given its financial standing and reputation in the international marketplace, to employ additional staff to make up what was evidently a notable shortfall in the size of the team in the financial department is Inexcusable in the circumstances.

It is further the pleaded case that the Defendant’s requirements that the Claimant should put in as much working time as he was required to went well beyond what was contemplated by clause 9 of the Contract of Employment. Further, the work required of the Claimant went outside the scope of the job title of “Regional Sox Manager”. In paragraph 24 of the Claimant’s Reply and Defence to Counterclaim it is pleaded that prior to signing the Contract of Employment the Claimant raised with Helga Smit, Regional Assistance Vice President – Human Resources, the wording of clause 2 of the proposed contract stating that his area of expertise lay in audit and internal controls and not claims or customer services, thereby making it inappropriate for the Defendant to shuffle him around between branches and departments, and was assured that clause 2 would not apply to him in as much as “his job was isolated in the … Financial Department and sufficiently defined”. In reliance on this, the Claimant pleads that he signed the contract. On this basis, the Claimant pleads that he was under no obligation to undertake work, such as that in Doha, which was outside the scope of his employment. In this connection also, the Claimant pleads in the Reply and Defence to Counterclaim, paragraph 30, that he was required by Mr Sibley, his line manager, not only to evaluate the adequacy of the internal controls relevant to inter-company processes in accordance with SOX Law1 as set out in the internal Risk and Control Matrix but also to generate “hard numbers”, the calculation of the inter-company business for each reporting office or to gather and prepare variance analyses relating to 27 reporting offices in 21 countries.

37. In relation to the Claimant’s case that he was required to carry out work outside the scope of his contract, the following is pleaded at paragraph 37 of the Reply and Defence Counterclaim:

37. In the given context, the Claimant’s role and responsibilities pursuant to SOX law is ordinarily limited to assessing key deficiencies raising questions of ‘fraud’ and examining the existing controls to address any connected failings. They do not extend to the activity actually conducted by the Claimant at his line manager’s bequest; namely to conduct the actual ‘fraud work’, which included (amongst other things):

37.1 Interfacing with the Arabian hub office;
37.2 Interfacing with the UK Fraud Investigation and general facilitation;
37.3 The interviewing of key officials;
37.4 assisting with actual calculations for the ‘fraudulent amount’;
37.5 Liaising with the IT department; and
37.6 The production of specific reports to meet the fraud audit team’s requirements.
We repeat these are blatant excesses of the Claimant’s scope of employment.

38. Further, it is pleaded at paragraph 43 as follows:

43 Not only did the Claimant inherit additional duties and responsibilities from 1 January 2010 onwards, but he was actively encouraged by Mr Sibley to carry them out. On or about April/ May 2010, Mr Sibley met with the Claimant at Caribou Cafe in the DIFC. It was agreed that if the Claimant assisted Mr Sibley in proving to Michael Whitwell, the Regional President that Mr Sibley was up to the job, the Claimant would be rewarded with a pay rise equivalent to Mr Sibley’s old salary. The Claimant relied on this verbal undertaking and holds the Respondent to account. The Respondent is held to be vicariously liable for the acts and/or omissions of its officers. In a testament to the man-hours invested by the Claimant in return, the Respondent did not fill the role of Deputy Regional Controller during the tenancy of the Claimant’s remaining employment. The Claimant remains to be compensated for additional out pocket expenses and ‘value saving’ to the Respondent.

39. Ms Riesenburg submits that all these pleaded matters give rise to claims with a real, as distinct from a fanciful, chance of success and as to which there ought to be a full trial.


Discussion

The Claim for Wrongful Dismissal

40. It is conceded on behalf of the Defendant that there is a triable issue as to whether the Claimant was wrongfully dismissed. That concession is made with reference to Articles 57(3) and (4) and Article 60(4) of the DIFC Employment Law, specifically whether the circumstances were such as to justify termination of the Claimant’s employment without notice having regard to the test set out in Article 60(4). The impact of that concession is that it is also conceded that there is a triable issue as to those claims pleaded in paragraphs 58.1, 58.2 and 58.3 of the Particulars of Claim: namely payment in lieu of one month’s notice, compensation for unused holiday allowance and end of service gratuity. However, the amounts claimed under each head are strongly disputed.

41. In this connection I accept the submission of Ms Fiona Campbell, on behalf of the Defendant, that the issue of wrongful dismissal depends only on whether the Claimant’s conduct fell within the wording of Article 60(4).

42. In the course of argument, the question was raised whether the effect of clause 19 of the Contract of Employment was to introduce into the Contract of Employment UAE Labour Law and, if so, to what extent. It provided as follows:

19. Applicable Law and Jurisdiction
The applicable law for this contract will be the UAE Labour Law.
Your employment will at all times be governed by existing company policy as well as all changes in company policy and will be subject to all local regulations, concerning working conditions and the UAE Labour Laws.

43. Both parties accepted from the outset that the Contract of Employment was governed by DIFC Employment Law. However, the specific contractual incorporation of UAE Labour Law raised the possibility that the latter might be contractually applicable to the extent that it was not in conflict with the DIFC Employment Law on which both parties relied.

44. This proposition is, in my view, untenable. Exactly the same point arose in Rasmala Investments Limited v Rana Banat & Others CFI 001-006/2009 (6 April 2009) in which Yaakob J held that the DIFC Employment Law applied to an employment contract notwithstanding that it expressly provided that it was governed by the laws of the UAE. The reasoning in that judgment, with which I entirely agree, was that the DIFC Law No.3 of 2004 – The Law on the Application of Civil and Commercial Laws in the DIFC – having permitted by Article 7 the adoption of the laws of another jurisdiction in relation to civil and commercial maters arising within the DIFC – provided by Articles 8(1) and (2) (a):

“(1) Since by virtue of Article 3 of Federal Law No. 8 of 2004, DIFC Law is able to apply in the DIFC notwithstanding any Federal Law on civil or commercial matter, the rights and liabilities between persons in any civil or commercial matter are to be determined according to the laws for the time being in force in the Jurisdiction chosen in accordance with paragraph (2).
(1) The relevant jurisdiction is to be the one first ascertained under the following paragraphs:

(a) so far as there is a regulatory content, the DIFC Law or any other law in force in the DIFC.”

45. Since the DIFC Employment Law set out statutory rights and protection of the employee who was employed by DIFC entity within the DIFC from which the parties could not contract out, it was a law “of regulatory content” and applied mandatorily and exclusively to the contract of employment notwithstanding the express incorporation of UAE Laws and regulations in the event that DIFC laws and regulations did not cover the area of dispute between employer and employee.

46. The effect in DIFC Law is, therefore, that where the employer is a DIFC entity and the employment is to be in the DIFC, a choice of law provision such as that at clause 19 which purports to incorporate any other labour law is unenforceable under DIFC Law.

The Claim for Unfair Dismissal

47. In Article 63 of the DIFC Employment Law it is provided as follows:

“63 (1) The Director may propose Regulations to the Board of Directors of the DIFC Authority in respect of any matter that facilitates the administration of the Law or further the purpose of the Law, including but not limited to:
(g) the maximum compensation for discrimination or unfair dismissal.”

48. For reasons of which I am not aware the Director has proposed no Regulations as to the maximum compensation for unfair dismissal and there is no other provision in the Employment Law which refers to unfair dismissal. Like Yaakob J I conclude that DIFC Law contains no prohibition of unfair dismissal.

It follows that all references in the Claim Form and the pleadings, the Particulars of Claim and the Reply and Defence to Counterclaim to unfair dismissal must be struck out for they cannot found a cause of action.

The Claim for a Fine
49. There can be no doubt that the Director of Employment Standards has power under Article 79 of the DIFC Employment Laws to impose a fine for contravention of that Law or for failure to comply with a decision of the Director or the Court. If a fine is imposed as part of a determination following reference of a claim to the Director, the determination must include a statement of the fine. Further, under Article 70(2) the Director “may refer a matter to the Court for disposition”.

50. It seems that the DIFC Authority has caused the present Director to refer to the Court all complaints alleging contravention of the Employment Law. In practice, therefore, whenever an employee or former employee wishes to make a claim against an employer for wrongful dismissal or for any breach of the Employment Law, it is transferred to the Court.

51. Upon such a transfer, the Director effectively requests the Court to decide all issues of liability and compensation by way of damages. But does it also cede to the

Court its power to fine? To this question the answer must be No. It is provided by Article 79 of the DIFC Employment Law that the Director may impose a fine against any person found to have contravened a provision of that Law or the Regulations. Such a fine is to be imposed in the manner prescribed by the Regulations. A fine so imposed is a debt due to the DIFC “and may be collected by the Director in the same manner as wages”. However, the function of the Court in entertaining a complaint referred to it by the Director is to determine whether the complainant is entitled to a personal remedy, such as damages. Accordingly a claimant has no entitlement to claim a fine as a remedy. It is only if there is an appeal to the Court against the Director’s decision to impose a fine that the Court becomes concerned with the issue whether a fine is an appropriate punishment for breach either of the Employment Law or of the requirements of a determination issued by the Director. Thus in the present case the Claimant can have no cause of action which entitles him to invite the Court to impose a fine on the Defendant and that part of the Claim Form and the Particulars of Claim must be struck out.

The Claim for Overtime
52. It is not suggested that the Employment Law contains any provision upon which a claim for overtime can be founded. Nor is it pleaded that overtime payments are provided for in any particular term of the Contract of Employment. However, in paragraph 17 it seems to be pleaded that the extra work – outside ordinary working hours – was outside the contemplation of clause 9 of the Contract of Employment. Hence, it appears to be submitted that industry practice and/or international practice required the payment of overtime. Alternatively, the conversation with Mr Sibley at the Caribou Café in the DIFC pleaded in the Reply, paragraph 43, is relied upon as giving rise to a distinct claim in unjust enrichment or quantum merit.

53. In my judgment, on neither basis, at least as pleaded, has the Claimant any realistic prospect of success.

54. A claim for overtime has to be based on an express or implied term that if more than a specified amount of time is worked at the employer’s request, a particular rate of pay will apply to the additional working period. The Contract of Employment contains no express term which could form the basis for such an entitlement. Under clause 5 the basic salary was to be calculated per month. Under clause 6 bonus payments were at the option of the Defendant.

55. Under clause 7 performance reviews were to be carried out annually but the result of such reviews was to be at the sole discretion of the Defendant. Under clause 9, although there is a statement of “the working hours of the Company” as being Sunday through Thursday from 08:30 to 17:30, there is also the statement as to the Claimant’s “hours of work” being “dependent on the extent of your workload at any particular time and the need to meet deadlines etc”. That is a clear indication which can leave no doubt that the Claimant may have to work outside “the working hours of the Company” previously described and that it is his workload which may determine to what extent this is necessary. The clause then goes on to point out the possibility that “the nature of (the Claimant’s) duties” might make it necessary for him to work “over weekends or even public holidays”. The overall effect of clause 9 is that the determinant of the length of time for which he may need to work in any one month and the extent to which he may have to work at weekends or on public holidays is to be dependent on his workload.

56. Alongside these express provisions there is no room for the implication of a term entitling the Claimant to overtime payments or additional weekend or public holiday payments.

57. Nor, in my judgment, is there any basis for the introduction of a claim in restitution or quantum meruit for such work merely because the Claimant was requested to perform such extra work. The real problem is that the working time to which such request would be for extra working time could not be defined. Indeed no method of calculation has been pleaded. By his Reply to RFI dated 29 January 2012 the Claimant has pleaded into a claim in restitution by his reference to Part 5 of DIFC Law No. 7 of 2005 – the DIFC Damages Law. Article 48 of that law provides:

48. Right to restitution Restitution is available where the remedy is expressly provided in the DIFC Contract Law or where there has been unjust enrichment of one party at the expense of another party and there has been no subsequent change in the position of the enriched party which would render it unjust to order the enriched party to restore the benefits received.

58. However, the voluntary carrying out of work which may arguably be more time-consuming or beyond the scope of a monthly employment contract such as this without any reference by either the employer or the employee to the payment of additional remuneration would not provide the employee with a remedy under this provision of the Damages Law if, which is not the case here, that had been explicitly pleaded. The so-called Caribou Cafe promise goes nowhere near forming the basis for a tenable claim under this formulation. Its substance is both insufficiently precise and palpably non-binding. Given a pre-existing contract of employment, with remuneration by monthly salary and provision, in clause 6, for discretionary ex gratia payments “for superior performance” in any calendar year, there would have to be very clear evidence pointing to a common assumption of additional payments for longer hours of work before there could be a basis for a restitution or quantum merit claim. The claim for overtime must therefore be struck out.

The Claim for Out of Pocket Expenses

59. The claim in respect of the cost of an airline ticket for the Claimant and his family, if founded on the basis that the money was due to him before his employment was terminated, is viable only if clause 13 of the Contract of Employment had the effect of providing for his entitlement before he had worked for one year from commencement of the employment or from the last previous ticket payment. It is not, in my judgment possible to read clause 13 as having that effect. “Once every year” can mean only once per year’s work. The last previous payment received by the Claimant was in June 2010, after his first year’s employment, and the next ticket payment would, therefore, fall due in June 2011, long after the expiration of any notice period to which he might have been entitled had his employment been terminated by one month’s notice. Accordingly, I accept the Defendant’s submission that this claim has no chance of success and must be struck out.

60. As for the claims for other heads of out of pocket expenses, spousal residence fees, maintenance of professional memberships and travel expenses incurred on weekend working days, there is not pleaded any contractual basis for such claims. Whereas the Contract of Employment, clause 5, provides for a monthly travel allowance in the fixed sum for AED 3,200, there is no basis for implying that overtime would become payable for weekend work in the absence of such express further undertaking by the Defendant. I would further strike out all those claims for out of pocket expenses.
The Claims for Bonuses

61. The effect of the Contract of Employment is that there was no obligation on the Defendant to pay any bonus in any calendar year. Accordingly, there could not be an accrued liability to pay any undeclared bonuses and the termination of the Contract of Employment, were it wrongful, could not in law have caused the loss of any such payment, since the Defendant might not choose to make me. The claim must, therefore, also be struck out.
The Claim for General Damages

62. This claim is summarised at paragraph 60 of the Particulars of Claim. There are four components. The underlying substance of those components is to be found at paragraphs 40-55 of the Particulars of Claim. As I understand the Claimant’s case it is said that the Defendant imposed on him a continuingly severe workload and in consequence he developed high stress symptoms which required medical treatment and thereby suffered pain and suffering and pecuniary loss. The pecuniary loss appears to include loss of earnings for nine months, medical expenses and loss of deposit on residential property as well as the value of assets disposed of to provide essential cash for living expenses. The exact connection between the Defendant’s conduct and the development of illness by stress is not easy to follow from the Claimant’s pleadings.

In this connection it is to be observed that this claim could only be formulated as a claim in tort for, as I have already held, there is no available and sustainable breach of the Contract of Employment on which it could be founded.

63. Accordingly, the claim could, if properly pleaded, only be advanced in accordance with the Common Law principles relating to claims for stress at work established in such cases as Walker v Northumberland CC [1995] 1 ALL ER 737 [2002] PIQR 241 and French v Sussex CC [2005] PIQR 243. For the purpose of mounting such a claim for injury due to stress at work it is essential to plead those facts which are relied on as putting the employer on notice of the enhanced risk of personal injury. Failure to do so will involve the claim being struck out: see French v Sussex CC, supra.

64. In the present case the Claimant has not pleaded such facts as could be relied on as putting the Defendant on notice of enhanced risk of personal injury and accordingly, this part of the claim must be struck out.

Conclusion

65. It follows from what appears in this judgment that the Defendant is entitled to succeed in its application to strike out all those heads of the claim referred to in the Claim Form and the Particulars of Claim except the claim for wrongful dismissal and the monetary remedies based on it, specifically the claim covered by paragraphs 58.1 and 58.2 of the Particulars of Claim.

66. Counsel should agree an Order and submit it in draft for the Courts’ approval.

Deputy Chief Justice Sir Anthony Colman
Date of Issue: 5 July 2012

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