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Nida Fatima Raza v Millenium Finance Corporation Ltd [2009] DIFC CFI 027

Nida Fatima Raza v Millenium Finance Corporation Ltd [2009] DIFC CFI 027

May 30, 2014


Claim No. CFI 027/2009


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









Hearing: 21 and 22 June 2010

Counsel: Mr Benjamin Burgher on behalf of Clyde & Co LLP for the ClaimantMr Lachlan Davidson in-house counsel for Millenium Finance Corporation for the Defendant

Judgment: 23 June 2010


1. These proceedings are brought by Ms Nida Fatima Raza against her former employer Millennium Finance Corporation Limited. That employment terminated by reason of redundancy at the end of September 2009.

2. Ms Raza’s claim falls under two main heads. First, she claims that she was not paid the full amount due to her on the termination of her employment and, second, she claims in relation to shares in the employer company which, as she asserts, should have been issued to her under her contract of employment but which, as is common ground, were not issued to her.
3. The claims under the first main head, that is to say, claims to underpayment on termination of the employment, turn on two questions: first, whether Ms Raza was entitled to written notice of termination and, second, whether the notice to be given was three months’ notice, as she asserts, or the one month’s notice that the employer company sought to give.
4. The claim under the second main head, that is, the claim for shares, or for monetary compensation in lieu of shares, turns on the question, what effect is to be given to the obligation to grant “employee shares” or “shares under an employee share plan” in circumstances where the employer company did not have a scheme for the allocation of shares to employees either at the time that it assumed that obligation at the commencement of the employment, or thereafter throughout the appointment? If Ms Raza is entitled to monetary compensation for breach of the obligation to grant shares, as she seeks, valuation issues arise.
5. As a matter of first impression the questions fall to be resolved by construing the relevant provisions of the employment contract. But, in the events which happened, there is a prior question: what are the relevant provisions of the employment contract? That prior question arises because, at or about the time the employment commenced, Ms Raza and the employer company signed two contractual documents: the first, a single page headed “Summary Terms and Conditions”; the second, a more lengthy document comprising 12 pages described as a Letter of Employment (or Offer Letter) with attached Terms and Conditions and a Contract Annexure.
6. The single-page document “Summary Terms and Conditions” is undated. It was signed by Ms Raza on 18 March 2008: but Ms Raza had indicated (just before she went on holiday on 5 March 2008) that she was intending to sign the document, which at that date already bore the signature of Mr Keinde, the Chief Executive Officer of the employer, and it has been treated by the parties as having an effective date of 5 March 2008. Nothing turns on that date.
7. The Summary Terms and Condition document includes the following, so far as material. First, a heading:
“Summary Terms and Conditions Offer of Employment—Nida Raza (the candidate)”
with an explanatory text in these terms:
“The following outlines summary terms and conditions of a proposed offer of employment to be extended by Millennium Finance Corporation Limited (MFC) to the candidate.”
The document includes items for guaranteed bonus, relocation allowance and employee share plan; and an item “Other” which is in these terms:
“Definitive terms of employment subject to certain undertakings in relation to exclusivity, confidentiality, termination, personal account dealing and insider trading, non-competition and data protection (among other things). Allowances are typically refundable on a pro rata basis on the cessation of employment.”

8. Ms Raza commenced work with the employer company on 7 April 2008. During the course of that day she was given a second document to sign. That could not have been unexpected. It would have been obvious to her from the reference in the Summary Terms and Conditions document:

 “… a proposed offer of employment to be extended by Millennium Finance Corporation to the candidate.” that she would be asked to sign a definitive contract of employment in due course: there was plainly something to come following the Summary Terms and Conditions document.

9. The document given to Ms Raza on 7 April 2008 begins with the words: “This contract is made on 05-03-2008”. It is common ground that that date is 5 March 2008. That was the date of Ms Raza’s oral agreement to the Summary Terms and Conditions document.

10. The 7 April 2008 document then goes on, following the words “in this offer letter”, to define the parties. It continues with a recital “whereas both parties have agreed to”: the recital continues over three pages and eight clauses, with a number of subclauses.Clause 1.6 of the Offer Letter is at the foot of the first page. It is in these terms:

“1.6 Notice Period. Upon a prior notice of 30 days both parties shall have the right to terminate this contract.”

11. Clause 2 sets out the employee’s remuneration package in an aggregate amount which is consistent with that in the Summary Terms and Conditions document. At the end of the recital (that is to say at the top of page 4) there is a provision in the following terms:

“This offer of employment consisting of this letter of employment, together with all attachments listed below, defines and contains the entire agreement of the parties and no representations, inducements, promises or agreements, oral or otherwise, not embodied herein shall be of any force or effect except in instances where, by mutual agreement, employer issues to employee a special term and condition of employment. Such special term and condition of employment shall refer specifically to the appropriate clause which it supersedes and/or is in reference to and within the clause, the subclause, in question.”
12. Consistently with the description of those four pages as an Offer Letter, there is a paragraph on page 4 which provides that “the offer of employment remains valid for a period of 14 days from the date of this letter of appointment”; and the employee is asked to initial each page of the Terms and Conditions of Employment and to return one copy of all documents. The Offer Letter is signed by Mr Keba Keinde described as “CEO—MFC”.
13. Ms Raza’s signature appears on page 4 of the Offer Letter; under the words “Accepted by”. Next to her signature there appears a list of attachments. Those attachments are described as (1) Offer Letter (four pages), (2) Terms and Conditions of Employment (five pages) and (3) Employee Job Specification (pages). That is perhaps a little inept in that the Offer Letter is plainly not an attachment to itself. But the Terms and Conditions of Employment are an attachment to the Offer Letter. They extend over six pages, pages 5 to 10; although it may be said that the first of those pages, page 5, is in the nature of an introduction to the five pages which follow. Ms Raza signed on page 5; and signed again on page 10.
14. Pages 6 to 10 are said to be a Schedule to the Agreement referred to on page 5. They contain clauses relating to restrictions, confidentiality, ownership of work product, non competition, termination of employment and governing law. The governing law is the law of the Dubai International Financial Centre.
Clause 6.1 in the Schedule (on page 8 of the document) is in these terms:
“Termination. This agreement may be terminated at any time by either party giving to the other the period of notice applicable, as explicitly stated in the letter of appointment, in writing and at the expiration of such notice this agreement should forthwith cease and terminate and neither party shall have any claim against the other for remuneration damages or otherwise except for any rights which may have accrued prior to the termination hereof provided always that the employee shall continue to be bound by clauses 3, 4, 5 and 6 which deal with matters like confidentiality, product, ownership and no competition.”
15. On page 10 of the Schedule (which, as I have said, bears Ms Raza’s signature) there is subclause 10.5 under the heading “Entire Agreement and Interpretation”. The sub-clause is in these terms:
“This agreement constitutes the entire understanding of contract between the employer and the employee and supersedes any and all prior or contemporaneous oral or written representations or communications with respect to the subject matter hereof all of which communications are merged herein. This agreement should not be modified, amended or in any way altered except by an instrument in writing signed by the employee and the delegated representative of the employer. All amendments or modifications to this agreement shall be binding on the parties despite any lack of additional consideration so long as the same shall be in writing and excluded by the relevant parties.”
Page 11 of the document given to Ms Raza on 7 April 2008 is headed “Contract Annexure – Expatriate Employees”. After describing the parties it continues:
“It is hereby stated that the following terms and compensational benefits will supplement the clauses mentioned in the previous contract. All other terms and conditions of the abovementioned contract will remain the same.”

16. Then follow references to clause A-1, A-2 and A-3. Clause A-1 refers to guaranteed bonus; and is in the same terms as the comparable provision in the Summary Terms and Conditions document. Clause A-3 refers to relocation allowance; it is also in the same terms as the comparable provision in the Summary Terms and Conditions document. Clause A-2 (which appears between A-1 and A-3) is in these terms:

“Employer will grant employee shares equivalent to USD 200,000 on the basis of KIPCO/UGB entry valuation.”
17. Page 12 contains the execution, by the signatures of Mr Keinde and Ms Raza, of the Contract Annexure (described as “This amendment in the contract on the effective date”).
18. As I have indicated in the course of describing the document given to Ms Raza on 7 April 2008, her signature appears on four pages: that is to say, on pages 4, 5, 10 and 12. At the foot of each of those pages and on all other pages there is a note in bold type “Employment Contract of Ms Nida Raza dated 05-03-2008”.
19. There is no doubt that Ms Raza did sign two copies of the document on 7 April 2010; that one copy was returned to the employer company; and that the other copy was retained by her in an envelope. Her evidence was that she did not examine the copy which she retained, which remained in its envelope until shortly before she was made redundant on 27 September 2009.
20. I shall need to refer later in this Judgment to the circumstances in which Ms Raza signed the document on 7 April 2008. At this stage it is sufficient to draw attention to three matters. First the offer letter (at clause 1.6.1) provides for both parties to have the right to terminate the contract “upon a prior notice of 30 days”. That is inconsistent with the notice period of three months for which the Summary Terms and Conditions document provides.
21. Second, the Schedule to the Terms and Conditions attached to the Offer Letter (at clause 6.1) provides for termination at any time by either party giving to the other the period of notice applicable as explicitly stated in the letter of appointment “in writing”. There is no requirement for writing in the Summary Terms and Conditions document; nor under the general law in the DIFC.
22. Third, the Contract Annexure (at clause A-2) provides for the grant of “employee shares”. That is consistent with, but not in precisely the same terms as, the comparable provision in the Summary Terms and Conditions document. That refers to an “employee share plan”.
23. Ms Raza worked for the employer company from 7 April 2008 until 27 September 2009. She ceased to work for the company following a meeting on 27 September 2009 at which she was told that she was being made redundant.
24. By reason of the economic downturn in the region during 2009, the company had decided at a Board meeting held on 26 September 2009 that it would not continue its business in relation to debt capital markets. Ms Raza, who had been employed as Director, Debt Capital Markets, was amongst a number of staff for whom there was no longer a role within the company as a result of that decision. There is nothing in evidence to suggest that this was not a genuine redundancy; and, indeed, I think Ms Raza accepts that she had seen it coming for some months.
25. The meeting on 27 September 2009 was attended by Ms Raza, Mr Markarov the Chief Operating Officer and a Director of the employer company, Mr Patrick Rugel (another Director of the employer company) and Ms Shobana Mackinnon, Director of Human Capital. Ms Raza, Mr Markarov and Ms Mackinnon have each made Witness Statements and given oral evidence in the course of the trial. Although there are minor differences in recollection as to what took place at the meeting on 27 September 2009, they are not material to the issues I need to decide.
26. In substance, Ms Raza was told that her position as Director, Debt Capital Markets had been made redundant; that she was to leave her employer’s premises immediately; that she was not to return for work; and that a settlement calculation would be sent to her by email. She was given nothing in writing on that day. She was also told that her September salary, which in the ordinary course was payable on that day, would be paid to her in full.
27. The best contemporary evidence of what took place on 27 September 2009 is in an email sent by Ms Raza to Ms Mackinnon later in the very early hours of the following day in which she said this:
“Per the meeting requested by you today with Alex Markarov and Patrick Rugel present, I was informed that MFC is currently eliminating my current position; the Director of Capital Markets. I have been informed by Alex that I’m not required to be in the office but please note that I remain available throughout my notice period if required. Kindly provide my settlement information as soon as it is ready per my designated grade zero benefits grid of MFC.”
28. The “designated grade zero benefits grid of MFC”, to which Ms Raza referred in that email, was a document headed “MFC Employment Benefits Policy” of which she had been given a copy by Ms Mackinnon on or about July 2009 in connection with the engagement of new employees in the department for which Ms Raza was responsible.
29. The relevance of that document, in Ms Raza’s eyes – and the reason why she refers to it in her email to Ms Mackinnon—is that the notice period for an employee of her grade (that is to say, Director, SVP) is shown to be three months.
30. The promised email was sent by Ms Mackinnon on 30 September 2009. It referred to:
“… the notice given to you on 27 September 2009 regarding the termination of your employment at MFC since your position was made redundant.”
Attached to that email was a schedule said to be “a final settlement calculation” and the settlement letter “as per your contract”.
31. The final settlement letter was signed by Mr Markarov and Ms Mackinnon and dated 29 September 2009; although, as I have said, it was not sent to Ms Raza until the following day. It was in these terms, so far as material:
“Due to the current economic situation which has resulted in company rationalisation, your position as director has been made redundant which was notified on 27 September 2009, your last day of employment. Please find below your final dues which will be paid to you.”
There then follows a short table indicating that the total final dues, after a deduction, amounted to AED 153,544.10.
32. The detailed calculations were set out on a separate page headed “Finance Settlement” which was also attached to the email. That page showed the date of termination to be 27 September 2009 and the “official last day” to be 26 October 2009.The calculation of the amount due—and, in particular, the calculation in relation to gratuity, notice pay and leave—were made on that basis. The amount of salary due to Ms Raza was calculated as 27 days for September 2009. That had the effect that, instead of her monthly salary of AED 58,334, she was to receive AED 52,500.60 in respect of arrears of salary. The amount of her notice pay was calculated at one month’s salary: that is to say, AED 58,334. Statutory gratuity was calculated on the basis of a term of employment commencing on 7 April 2008 and ending on 26 October 2009 and leave was calculated on the basis that the period of employment ended on 26 October 2009.
33. Three matters arise in that context: the first is that if Ms Raza was entitled to written notice of termination, the salary to which she is entitled would have been a salary for the whole period up to 30 September; not the salary of 27 days only. The second point is that if she were entitled to three months’ notice, the notice pay would not have been the AED 58,334 but a figure of some three times that amount: that is to say, AED 175,002. The third point is that, if she were entitled to three months’ notice then the “official last day” would have been 31 December 2009, not 26 October 2009, and that would have affected the calculation of the gratuity and the amount in respect of untaken leave.
34. Ms Raza responded to the settlement notice on the same day, in an email which she sent to Ms Mackinnon. In the form of the email that is before the Court, it includes not only Ms Raza’s comments on the Settlement Letter but also Ms Mackinnon’s response to those comments.
35. Ms Raza wrote in her email that she found the settlement which she had just received “completely unsatisfactory”. The material complaints which she made were: first, as to the September salary, which, as she said, should have been the full amount of AED 58,334; second, in respect of the notice period which she asserted should have been three months; third, in relation to holidays, which, as she contended, should have given her compensation for 12 days untaken holiday, an amount of AED 23,333; and, fourth, in relation to the statutory gratuity, which, as she contended, should have given her a full amount to the end of a three month notice period equal to 36 days’ pay; an amount of AED 42,154. Her complaint in relation to the notice period was based on the MFC benefits policy grid, to which she had referred, and also to what she asserted was a precedent in relation to colleagues of her grade who were given three months’ notice even if their contract had provided for one month. This, she said, was discriminatory.
36. The company, through Ms Mackinnon, maintained the stance which was set out in its Settlement Letter.
37. Ms Raza complained to the Director of Employment Services but, shortly thereafter, on 11 October 2009, she filed the Claim Form in the present proceedings. The Particulars of Claim which were attached to that Claim Form were subsequently amended. I need to refer to certain passages in the amended Particulars of Claim of 18 May 2010.
38. At paragraph 2 of the amended Particulars of Claim, Ms Raza asserts that she, as claimant, was employed in the position of Director of Debt Capital Markets under a Summary of Terms and Conditions of Employment dated 18 March 2008, and was subsequently given an employment contract Offer Letter on 7 April 2008.
39. In paragraph 5 she refers to oral notice of termination on 27 September 2009 and claims unpaid wages for 27 to 30 September 2009. She does that on the basis that she was entitled to a written notice of termination in accordance with the Defendant’s Employee Handbook 2008. She does not, there, rely on the provisions in clause 6.1 of the Schedule in the Offer Letter.
40. In relation to the three months’ notice period, she claims in paragraph 11 of the amended Particulars of Claim that she was entitled to three months’ notice under the summary terms signed by her and Mr Keinde. She also claims entitlement to three months’ notice under the Employee Benefits Policy; and further asserts, in paragraph 12, a “Custom and Practice” of applying a three months’ notice period for employees in her staff grade and that that custom and practice was a term of her employment.

Paragraphs 18 to 20 refer to her claim in relation to shares. Paragraph 18 is in these terms:

“Under clause A-2 of the contract the claimant was entitled to ’employee shares equivalent to USD 200,000 on the basis of KIPCO/UGB entry valuation’.”

41. This entitlement is confirmed in the summary. Paragraph 19 pleads that no shares in the Defendant were ever issued to the Claimant and accordingly she claims compensation of US$200,000 against the Defendant. In paragraph 20, the claimant pleads that the defendant misrepresented its intention as set out in the contract and the summary terms to grant her shares in its organisation and induce her to enter into the contract on the basis that she would become a shareholder in the Defendant. It is said that: “At no time was the Claimant informed that the grant of shares was conditional on the Defendant introducing an employee share scheme under which shares would be granted to her”.

42. I turn then to the issues in this case. The first main issue, as I have indicated, is whether Ms Raza received less than that to which she was entitled on the termination of her employment at the end of September 2009.

43. It seems clear to me that what took place at the meeting on 27 September 2009 did not have the effect of terminating her employment on that date, or on any other date. The effect of the meeting was to exclude Ms Raza from continuing to do the work for which she was employed.

44. I reach that conclusion for two reasons: first, the provisions of the contract on which the employer company relies require “prior notice of termination”: that is to say, the provisions contemplate that the contract will terminate at the end of a period of notice. It is clear that Ms Raza was not given “prior notice of termination” on 27 September 2009: she was not given notice that her employment would cease on a future date. She was simply told not to come back the following day.

45. The contract contains no provision for immediate termination with a payment in lieu of notice. That, of course, is a matter which the parties can agree: and, often in cases of this nature—faced with the reality of the position—that is a matter on which they will agree. But they did not agree to that on 27 September 2009. They had not agreed, on 27 September 2009, what the relevant payment in lieu of notice would have been.

46. The first document which could have had the effect of terminating Ms Raza’s employment was the email which was sent to her on 30 September 2009. Given that that email was sent to her, it becomes unnecessary to resolve the question whether notice had to be given in writing: that email did give her written notice of the fact that her employment was being terminated. But that email made no reference, on its face, to the period of notice. It simply referred to “notice given to you on 27 September”; in circumstances where no period of notice had been given on 27 September 2009. But read with the attachments it is clear that Ms Raza was being given one month’s notice from 30 September 2009. That month would have expired on 30 October 2009. If her contract could be terminated on one month’s notice, then 30 October 2009 would be the relevant termination date.

47. In those circumstances, Ms Raza is plainly entitled to damages in respect of the failure to terminate her employment in accordance with the contractual terms. The question is how should those damages be measured? In my view, they should be measured, first, by awarding her the difference between the full salary for September 2009 and the 27 days’ salary for that month which she actually received. Second, they should be measured by reference to what the period of notice—and the resulting gratuity and balance of untaken leave—would have been if a proper notice had been given on 30 September.

48. That leads to the question: what period of notice had to be given? The employer company, understandably, relies on clause 1.6.1 of the offer letter of 7 April 2008. That, it says, was the relevant contractual term.

49. On behalf of Ms Raza, her primary case, I think, is that the document of 7 April 2008 is really quite irrelevant. The relevant document is the Summary Terms and Conditions document which she signed on 18 March 2008. That document provides for three months’ notice.

50. It has been difficult to understand the basis upon which it is submitted that the contract of 7 April 2008 could be irrelevant. It is not said—or it is not said in terms—that Ms Raza did not think that the document of 7 April 2008 had any contractual effect. In my view that would be a hopeless submission: if it were made. It seems plain to me that, when Ms Raza signed the document of 7 April 2008, she appreciated that she was signing a contractual document; and appreciated that she was signing a contractual document which related to her contract of employment.

51. If she is bound by that contractual document, then, by its own terms, it plainly supersedes the earlier document which she had signed on 18 March 2008. I have referred to clause 10.5 in the Schedule to the Offer Letter; and to the clause at the end of the Offer Letter which is in similar terms.

52. It was suggested—somewhat faintly perhaps—that the contract of 7 April 2008 could be rectified in order to correct what was said to be an obvious common mistake in clause 1.6.1 on the first page of that Offer Letter. That there is an inconsistency between the provisions in clause 1.6.1 of the Offer Letter and the notice provision in the Summary of Terms and Conditions is not in doubt. The question is whether that inconsistency was the result of a common mistake—that is to say, a mistake made by both parties—or whether it was a change which the employer had intended, for whatever reason, to make.

53. In the absence of any evidence as to the employer’s intention in relation to clause 1.6.1 (other than the clause itself), I could not reach the conclusion that the employer signed the Offer Letter under a mistake unless I were satisfied that there was no other credible explanation which could be offered for the inconsistency. I am unable to reach that conclusion. It seems to me that there could have been a number of reasons why the employer had had a change of mind in relation to the notice period. It is not self-evident, to the point of being obvious, that clause 1.6.1 found its way into the Offer Letter as a result of a mistake on the part of the employer.

54. The real question, which is not pleaded, is whether the employer can rely upon clause 1.6.1 in circumstances where, as she asserts, Ms Raza did not notice that the change had been made: that is to say, did not notice that the notice period in the Offer Letter differed from the notice period in the Summary Terms and Conditions which she had signed on 18 March 2008.

55. The underlying law, as it seems to me, is clear. A party who signs a document knowing it to contain contractual terms is bound by the contractual terms which it does contain—even if she has not read them—unless there has been a misrepresentation on the part of the other party to the effect that the term in question was not included in the document. If there were such a representation, and that representation were relied upon, then there would be a case for an estoppel which prevented the party making the representation from asserting that the document could be enforced in a manner which was inconsistent with the representation. Those principles are well established and need no authority.

56. In the present case it is not pleaded that a representation was made to Ms Raza to the effect that the terms of the Offer Letter did not differ in any material respect from those of the earlier Summary Terms and Conditions document which she had signed, nor that she relied on such a representation when signing the Offer Letter. But, in the course of her evidence, Ms Raza explained the circumstances in which she had signed the document on 7 April 2008. She said this, in a Witness Statement which she signed on 18 May 2010 at paragraphs 12 and 13:

“(12) The day I started I had very little time to work on administrative duties. I was only given the fully detailed employment contract offer letter on 7 April 2008 to sign. I was told by Zahir Minkara that terms in the summary terms were reflected fully in the offer letter and that MFC had simply reproduced the summary terms. I trusted him that the summary terms were completely reproduced and not amended in any way. Unfortunately, I only paid detailed attention to the contract annexure to the offer letter, which reflected the summary terms and what Zahir Minkara had told me. I also thought that MFC and I had already substantively agreed the terms of my employment contract when I signed the summary terms. It must be said that when I signed the summary terms I reviewed the document very carefully as I was led to believe that it represented the final agreement between MFC and I. As a highly paid professional worker in America before I joined MFC, the summary terms were an acceptable offer for me to join MFC, rather than accept the other offers of employment that had been made to me. I agreed the terms of my employment on the basis of the summary terms.
(13) I was asked to sign the offer letter immediately and return back to the human resources department for filing. With the pressures of having moved to a new country, pressures to start on projects prematurely and on the clear assurances provided to me by Zahir, I assumed everything I had agreed to in the summary terms would be correctly reflected in the detailed offer letter. I signed the offer letter after very briefly reviewing it.”
When she came to give evidence before me, Ms Raza accepted that she could not recall Mr Zahir Minkara saying that the Summary Terms and Conditions were reflected fully in the offer letter; at least, not in those terms. She said:
“I don’t remember what Mr Zahir actually said. I understood that there should be no differences.”
Later in the course of re-examination she said:
“I asked if I should read it. He said I could read it at my leisure. He said it was the same as already agreed to. No indication that subsequent terms would be different.”
That evidence must be understood with the contents and form of the documents in mind. It must have been obvious to Ms Raza that the terms of the Offer Letter of 7 April 2008 and its attachments, extending over 12 pages, could not be the same as those in the Summary Terms and Conditions. It must have been obvious, on even a casual glance, that the Offer Letter of April contained many more terms than had been in the Summary Terms and Conditions: indeed, the Summary Terms and Conditions had indicated that that would be the case.

57. I am prepared to accept that Ms Raza assumed that there was no material difference from what she was told by Mr Minkara: but she did not, on her own evidence, rely on that assumption. She did check some of the terms in the 7 April 2008 document. She told me that she must have checked the salary, the remuneration package (at the top of page 2): that would have been a matter she had in mind. She told me that she probably flicked through pages 2 and 3. To get to those pages, she must have passed page 1. She told me that she specifically checked the matters which she thought were of importance to her: that is to say, the guaranteed bonus and the relocation allowance which appear in the annexure. So she was not relying on the assurance that everything was the same. She checked that those things that mattered to her were, indeed, the same.

58. In those circumstances, can she be permitted to say that the Defendant is estopped from relying on provisions which she did not check? In my judgment the answer to that question must be no. She decided to check some provisions—and not to check other provisions—because she made an assumption that she did not need to check the others. But that was not an assumption which she made in reliance on anything Mr Minkara had said: it was an assumption which she made because she did not regard the provisions which she did not check as likely to be material to her.

59. I mention those matters because, after Ms Raza had given her evidence, it was clear that this was really the only point of substance on which she could have relied in support of her case that she was not bound by the notice period specified in clause 1.6.1 of the Offer Letter. But, she had not taken that point in her pleaded case. There was, therefore, no opportunity for the employer company to meet it by calling Mr Minkara to give evidence. But Mr Davidson, who appeared for the employer company, admitted frankly that, in any event, it would probably not have been possible to contact Mr Minkara, or to call him as a witness. In those circumstances, I would have been sympathetic to an application on behalf of the Claimant to amend her pleaded case; and I would have been sympathetic to the view that no real prejudice would be caused to the employer company by granting an application to amend. But no application to amend was made: there was no case advanced on the basis of estoppel by representation. I have addressed the point only to indicate to Ms Raza that I have considered her evidence and that I have reached the conclusion that, on the basis of her evidence, she could not have set up a case for estoppel in relation to the document which she signed on 7 April. That being so, the notice period provided for in her contract was 30 days.

60. Two other matters are relied upon in this context. The first is an allegation that, at least in relation to employees of Ms Raza’s grade, there was a custom or practice that the employer company would not rely on a contractual one month notice period; but would allow three months. That allegation was not made good in the evidence, despite cross-examination of Mr Markarov.

61. Second, that whatever might have appeared in the 7 April 2008 contract as to the applicable notice period, the term was varied by the MFC Employee Benefits Plan. There are, it seems to me, two answers to that contention. The first is that the contract itself provided that any variation must be in writing signed by both parties and that condition was never satisfied in relation to the Employee Benefits Plan. Second, and perhaps more substantially, I was satisfied from the evidence of Ms Mackinnon and Mr Markarov that the Benefits Plan did not have the effect of varying any existing contract; or even of providing an inflexible format for any future contracts.

62. The purpose of the Benefits Plan was to set out the limits of discretion available to those responsible for hiring new employees within the various grades. It set out the maximum benefit in relation to each of the various items listed—including notice of termination—which could be agreed with a prospective employee without express authority from more senior management. It did not provide a ceiling because an application could be made to the Chief Executive Officer for a dispensation to go beyond the amount of the benefit specified in the Benefits Plan—and it did not provide a floor—because the responsible officer of the employer hiring a new employee could offer a benefit in an amount which was less than the amount of the benefit stated in the Plan. I am satisfied that the Employee Benefits Plan was an internal management document for those limited purposes: it had no contractual effect.

63. The position, therefore, is that there is no reason why the employer should not have been able to rely on the 30 days’ notice in the contract of 7 April 2008. Had it done so, the employer could, by its email of 30 September 2009, have brought Ms Raza’s employment to an end on 30 October 2009. That is the date to which the benefits in the form of statutory gratuity and untaken leave should be calculated: that is the basis upon which a payment should be made in lieu of notice.

64. I put it in that way because the benefits in relation to statutory gratuity and untaken leave were actually calculated up to 26 October 2009 and not up to 30 October 2009. Whether that period of a few days would make any difference is a matter which the parties can seek to agree and agree the figures. I have not sought to do the calculation.

65. That leaves the question: what compensation, if any, should Ms Raza receive in relation to the shares which were not issued to her? It has been common ground that the effect of the provision—in both the Summary Terms and Conditions and in the contract of 7 April 2008—was that the number of shares equivalent to US$200,000 on the basis of KIPCO/UGB entry valuation would have been 62,500. The question, therefore, is whether Ms Raza was promised that she would have 62,500 shares, without restriction, as soon as she joined the employer company; or whether, as the employer company contends, she was to have those shares as part of an Employee Share Plan which, it is said, would have contained restrictions and, indeed, might very well have contained provisions for a deferred grant.

66. The evidence showed that at the dates of the Summary Terms and Conditions and the April 2008 contract, there was no Employee Share Plan. There was an intention, perhaps fairly inchoate at that stage, that there would be such a plan in due course; and consultants, Mercer, was asked to prepare what came to be described as “a long-term incentive plan design”. That proposal was put before the Board at the beginning of 2009. The Board decided not to implement the proposal. The effect was that there never has been an Employee Share Plan in relation to the employer company. Had there been an Employee Share Plan—either at the time when Ms Raza commenced her employment, or subsequently during the term of her employment—I would have no doubt that she would have been contractually entitled to the issue of 62,500 shares on the terms of that Plan.

67. Nevertheless, Ms Raza’s evidence was that the promises made to her led her to expect shares in the company whether or not there was an Employee’s Share Plan; and irrespective of the terms of such a Plan. She said this, at paragraph 11 of her First Witness Statement:

“At no time was any statement or representation made to me by anyone from MFC that such an equity stake would be dependent on MFC setting up an employee share option scheme. All the discussions I had were specific to my individual employment with the common intention of both MFC and I that a significant part of my package would be an equity stake with MFC as a result of my entering into employment with MFC.”
In her Second Witness Statement at paragraph 8 she expanded that, saying this:
“I was told categorically that I would be a shareholder of MFC. Although I did not know the exact reconstruction on which I would be given shares in MFC, I was not told that this agreement was subject to MFC setting up an employee share scheme or any other qualifications or conditions. This unconditional offer of shareholding was then confirmed in writing in my employment contract, both in the Summary Terms and Offer Letter.”
In the course of her oral evidence, she told me that she did not know anything of an Employee Share Plan; and that she took the provision in the Summary Terms and Conditions—and, I think, in the Offer Letter or its Annexure Contract—to mean that she was to receive unrestricted shares.

68. I have referred to her pleaded case. That does not rely on anything that she was told or promised by anyone outside the contractual terms. Her pleaded case is that she was entitled to “employee shares under the contract”; and that the intention of the parties was as set out in the contract and the Summary Terms and Conditions. The intention set out in the contract and the Summary Terms is, as it seems to me, plain: that shares should be granted in accordance with the terms of an Employee Share Plan.

69. I am prepared to infer that that contractual provision carries with it an implied representation that there is an Employee Share Plan: at least if it were not made clear that, at the time, there was no Employee Share Plan. But that takes the matter a little further because an implied representation that there is an Employee Share Plan says nothing as to what the terms of that Employee Share Plan were, or might have been. In those circumstances, I need to ask myself whether an Employee Share Plan, in the terms subsequently proposed by Mercer, would have been within the reasonable contemplation of the parties as the sort of plan that was in mind. It seems to me that the Mercer proposals do represent a fairly typical Employee Share Plan in relation to a company of this nature.

70. Mr Markarov, whose evidence I accepted in this respect, told me that a senior professional banker, working in this field and familiar with employee incentives, would appreciate that the shares under an Employee Share Plan would come with restrictions. That, as it seems to me, is difficult to contradict. The obvious purpose of an Employee Share Plan is to incentivise employees; both to remain with the employer and to work to increase the net asset value of the employer so that, when the shares are ultimately realised, their value reflects the employee’s contribution to the success of the enterprise.

71. In those circumstances, although I accept that Ms Raza should be able to rely on an implicit representation that there was an Employee Share Plan at the time when she commenced her employment, I am unable to be satisfied that that representation has led to any loss. I am not satisfied that, in the circumstances of this case, shares issued to Ms Raza under an Employee Share Plan would have been of any value to her when her contract came to an end in September 2009. Accordingly, I dismiss that element of the claim.

72. I should add this, in case this matter goes further. I make a finding that I accept Mr Mitchell’s evidence of the value of 62,500 shares in the employer company, on the basis that it has really not been seriously challenged.

73. The outcome, therefore, is that she succeeds on her claim in relation to unpaid September salary. She succeeds in part—subject to the detailed quantification—in her claim in relation to statutory gratuity and untaken holiday leave, because the date to which those calculations were made was a few days short of the date that it should have been. But that may be de minimise. She fails on her claim for three months’ notice pay and she fails on her claim to compensation in relation to unissued shares.

74. I direct that the parties do the calculation to see whether there is actually any difference between an end date of 26 October 2009 and an end date of 30 October 2009. I suspect there may not be much difference; but there may be some, small, difference. Subject to that, the claim succeeds to the extent that I have indicated.

Justice Sir John Chadwick


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