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Eimhir v Eirik [2014] DIFC SCT 001

Eimhir v Eirik [2014] DIFC SCT 001

March 24, 2014

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Claim No. SCT 001/2014

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 OF DIFC COURTS
BEFORE H.E. JUSTICE SHAMLAN AL SAWALEHI

BETWEEN

EIMHIR 

Claimant

and

EIRIK

Defendant

Hearing: 16 March 2014

Judgment: 20 March 2014


JUDGMENT OF H.E. JUSTICE SHAMLAN AL SAWALEHI


Background

1. The Claimant is Eimhir, a previous employee of the Defendant. She worked as Recruitment Manager for the Defendant from 18 June 2012 until 7 January 2014.
2. The Defendant is Eirik.
3. On 9 December 2013, the Claimant sent her resignation letter via email to the Chief Executive Officer of the Defendant, indicating that she had been offered a position at a different company and that her last official day of work would be 7 January 2014. Additionally, the Claimant requested commission for her work in the amount of AED 125,485.
4. On 30 December 2013, the Defendant, e-mailed the Claimant informing her that no commission bonus was due to her because she had forfeited her right to a bonus by leaving the company before the financial year end of 31 March 2014 and because the bonus formula did not qualify her for any type of compensation.
5. As a result, on 7 January 2014, the Claimant filed a claim with this Court requesting the following:Commission — AED 127,897.87
End of service gratuity — AED 32,725.43
Two days unpaid annual leave — AED 1972.60
Outstanding salary fees for December and January — AED 37,404.10

Terms Agreed Upon by Both Parties

6. The Claimant’s outstanding salary was paid on 17 January 2014 in the sum of AED 30,500. The Defendant accepts that AED 6,904.10 still remains to be paid to the Claimant.
7. It is also agreed that the Claimant is entitled to compensation for two days’ annual leave. The Defendant confirms that payment in the sum of AED 1,972.60 is due to the Claimant in this regard.

Terms in Dispute between Both Parties

End of Service Gratuity

8. The Claimant requests end of service gratuity in the amount of AED 32,725.43, based on an AED 30,500 gross salary calculation.
9. The Defendant believes the actual amount due is AED 22,562.22 based on a 70/30 split calculation where seventy percent of the total salary is attributed to basic salary and thirty percent is attributed to allowances.
10. The Contract itself is silent on the issue of end of service gratuity in addition to the amount due to an employee upon termination of the contract. Due to this, the 70/30 split calculation put forth by the Defendant is hereby denied as inapplicable. Unless specifically laid out and agreed upon by both parties in the Contract, the 70/30 split calculation cannot apply. Accordingly, the basic rule of gratuity paid against the gross salary will be applied.
11. The Court rejects the Claimant’s calculation of gratuity based on her gross salary of AED 30,000 plus AED 500 for monthly medical allowances. The gratuity calculation is based on the gross salary amount of only AED 30,000. Therefore, the Court directs the Defendant to pay the Claimant the amount of AED 32,231.74 for end of service gratuity.

Commission

12. The Claimant believes that she is entitled to AED 127,897.87 in commission fees for 2013 and 2014 based on calculations from her billings and contributions to the Defendant.
13. The Defendant denies that any commission or bonus payments are owed to the Claimant because she terminated employment before the financial year end of 31 March 2014 and therefore waived her entitlement to any bonus payment. Additionally, the Defendant refers to the Contract, Clause 7.6 of which states,

“The Board shall consider at the end of each Year, the management accounts of the Company in respect of that year and resolve whether or not a payment on account of the Bonus calculated by reference to the results of the operations of the Company in the Year being considered, may be paid to the claimant, taking into account, in particular, whether the Company has sufficient cash available to pay to the claimant an amount on account of the Bonus without adversely affecting the day to day operations of the Company. A decision of the Board to pay an amount on account of the Bonus shall not be unreasonably withheld.”

14. For the period of the year 2012–2013 the Defendant asserts that the Claimant’s billings did not qualify her for a bonus as laid out by the Remuneration Committee, other than an award of AED 10,000 made in early 2013.
15. The Claimant has failed to put forth strong evidence in favour of her claim and accordingly, this Court rules that the Claimant is not entitled to commission or bonus pay of any kind. Taking into account the decisions made by the Remuneration Committee based on her actual billings and the fact that the Contract is clear on the discretionary nature of the commission payments absent any guarantee of commission or bonuses to be paid out, this precludes the Claimant from a valid claim for Commission.

Holding

16. For the reasons stated above, this Court directs the Defendant to pay the Claimant a total of AED 41,108.44 for outstanding unpaid salary, unpaid annual leave and end of service gratuity.

Issued by:
Nassir Al Nasser
Judicial Officer
Date: 24 March 2014
At: 12pm

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