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Flip v Freja [2015] DIFC SCT 114

Flip v Freja [2015] DIFC SCT 114

July 22, 2015

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Claim No: SCT XXXX

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

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

IN THE SMALL CLAIMS TRIBUNAL

BEFORE H.E. JUSTICE OMAR AL MUHAIRI

BETWEEN

FLIP

                                                                                                Claimant

and

 

FREJA

                                                                                                Defendant

 

Hearing: 12 July 2015

Judgment: 22 July 2015


JUDGMENT OF H.E. JUSTICE OMAR AL MUHAIRI


 

UPON presiding in a hearing on 15 July 2015 which was attended by the Claimant and the Defendants’ representative;

AND UPON reading the submissions and evidence filed and recorded in the Court file;

IT IS HEREBY ORDERED THAT:

  1. The Defendant shall pay the Claimant the amount of AED 10,000
  2. Each party shall bear their own costs.

PARTIES

  1. The Claimant is Flip a Pakistani national working in the DIFC
  2. The Defendant Freja a recruitment consultancy located in the DIFC

THE REASONS

  1. The Claimant was employed by Flip DIFC as a recruitment consultant. She started work on 23 November 2014, and was originally situated in Singapore before moving to Dubai to commence work with the Defendant. As such, the Claimant’s contract included a clause for relocation assistance which was standardly used by the Defendant for any employee that was relocating.
  2. In the contract the Claimant was offered AED 10,000 for the first four weeks of accommodation and AED 4,000 for freight forwarding and an airline ticket from Singapore to Dubai.
  3. On 18 May 2015 and before the completion of the Claimant’s probation period, the Defendant served the Claimant with a termination letter, and a final settlement agreement that included all her dues minus the AED 10,000 for relocation assistance and AED 4,000 for freight forwarding.
  4. On 25 May 2015 the Claimant emailed the Defendant requesting that they rethink the deduction of AED 10,000 for the relocation allowance deduction, and stated that the deduction was wrongful and that she did not leave the company but was terminated and that the Defendant should reimburse the amount of AED 4,000. The Defendant’s reply was that since she was leaving the company within the probationary period, through the decision of Freja the assistance amount of AED 10,000 was due.
  5. On 21 June 2015 the Claimant filed a case in the Small Claim Tribunal. The parties failed to settle in the consultation phase, and the claim was listed for a hearing before me on 12 July 2015.
  6. At the hearing the Defendant agreed to pay all the Claimant’s pending dues and pay the AED 4,000 for freight forwarding as a good gesture towards the Claimant.
  7. The matter that is currently disputed before me is the AED 10,000 for relocation assistance.

EMPLOYMENT CONTRACT

  1. The Claimant is claiming the amount of AED 10,000 for relocation assistance from Singapore to Dubai, as stated in the Claimant’s contract signed 27 October 2014:

“Assistance and reimbursement

Freja will contribute to the cost of your relocation as follows

(a) Accommodation for the first 4 weeks upon transfer, up to the value of AED 10,000 (non en cashable, administered by the company)
(b) ………….
(c) The assistance outlined above is repayable in the event that you leave the company within twenty-three (23) months, you hereby consent to payroll deductions being made to repay this if necessary.
I. If you leave within the first 12 months – full amount repayable.
II …….
III……..
IV……..”

  1. The law in general differentiates between the word terminate and resignation. Employee termination in law is where the contract of an employee is terminated by the employer, with or without notice. Resignation on the other hand is defined as the act an employee takes with the intention to resign, with an ascertainable date on which it will take effect. It is clear from the submissions that the Defendant terminated the Claimant’s contract as they wanted to end that relationship.
  2. The Claimant contends that the assistance is repayable in the event that one leaves the company, but she did not leave the company, and asserts that she was clearly terminated by the company, and termination is not equal to leaving. Hence the relocation assistance deduction is unauthorized, in her view.
  3. The Claimant has also submitted correspondence from the company’s office manager, XXXX, in November 2014, asking her if she would like the AED 10,000 allowance to be given as cash or for the company to arrange her stay. No further details were given to the employee as explanation about the clause in the contract.
  4. The Defendant replied back stating that the employee was leaving within the probationary period, through the decision of Freja and therefore the assistance amount of AED 10,000 is due. The Defendant asserts that the Claimant did not pass her probation period due to a number of issues including work-ethic and absence record and that the AED 10,000 has been paid for and clear guidelines provided within her employment contract specified if that she was to leave within the 12 month period of joining the company, the relocation assistance would be fully reclaimable by the Defendant.
  5. The DIFC Contract Law No.6 of 2004 is silent in regards to vague and unclear clauses in the contract, but Article 57 explains that the contractual obligations of the parties may be express or implied.
  6. Article 57 of the DIFC Contract Law No. 6 of 2014, reads as follows:

“Implied obligations arise from:

(a) the nature and purpose of the contract;

(b) practices established between the parties and usages;

(c) good faith and fair dealing; and

(d) ……”

  1. Subsection C in the Contract Law above deals with good faith and fair dealing. The Claimant was given assurance that the Defendant would bear the costs of the relocation and she acted upon that assurance and what the employee contract stated. It was never explained exactly what the term “leave” meant in the definition of the company or the company handbook. The Defendant has provided one scenario of this incident which does not amount to a precedent. If the company asked for the reimbursement of the AED 10,000 to every employee that joined from abroad and left the company within the probationary period then the outcome would be different.
  2. If by the word “leave”, which is stated in the contract, the Defendant meant that either the employee leaves or is terminated for the amount to be re-paid, then the Defendant should have specified that in the employee’s contract under the termination or probation period sections.
  3. In my judgment I am satisfied that the Defendant has failed to provide a detailed explanation of the relocation clause and since they terminated the employee’s contract they must bear the cost of the relocation, assistance in the amount of AED 10,000.

 

Issued by:

Maha AlMehairi

Judicial Officer

Date of Issue:  22 July 2015

At: 4pm

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