Claim No: 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 SHAMLAN AL SAWALEHI
Hearing: 7 February 2016
Judgment: 15 February 2016
JUDGMENT OF H.E. JUSTICE SHAMLAN AL SAWALEHI
UPON hearing the Claimant and the Defendant
AND UPON reading the submissions and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Claimant’s claim is rejected.
2. The Claimant is ordered to pay the Defendant AED 155,234 pursuant to the “Employee Final Settlement” executed by the parties on 13 January 2016.
3. The Claimant, Gable, is a DIFC registered company which operates a restaurant in the DIFC.
4. The Defendant, Gabriela, is a former employee of Gable LLC.
Background and the Preceding History
5. The Defendant was hired by the Claimant as the General Manager of Gable LLC and began work on 8 February 2015. His responsibilities included operational related tasks, including the responsibility to ensure that all the unpaid bills of consumption were closed.
6. During his time at Gable LLC, the Defendant had numerous email exchanges and meetings with managers and financial team members regarding the unpaid invoices for items consumed at the business, known as city ledgers, and the process for collecting on these invoices.
7. More specifically, the unpaid city ledgers, parts of which remained outstanding during and beyond the Defendant’s term of employment, were for items consumed at the Claimant’s business with promise of payment from the customer at a later time. In this way, the Claimant and its employees extended credit to certain customers upon which they later attempted to collect payment.
8. Specifics of the relevant email correspondence filed by the parties:
a. 3 March 2015 – Email from Chief Accountant to the Defendant stating that some city ledgers that cannot be recovered will be paid from the staff service charges, as agreed with Anthony (the previous General Manager). Email continues that this occurred last month and will occur again in the current month with a meeting for discussion on what to do in the next month.
b. 2 April 2015, 10:33AM – Email from Chief Accountant to the Defendant stating that the city ledgers older than 45 days will be written off against the staff service charges, resulting in lower amounts being paid to staff.
c. 2 April 2015, 12:13PM – Email from the Defendant to managers asking them to take care of city ledgers.
d. 30 June 2015 – Email from xxxx to the Chief Accountant asking him to agree with the General Manager and other managers on a clear policy for the city ledgers. The email also states that the policy should include the direction that anything not paid for one month should result in a “city ledger exclusion form” signed by the Accounts Department and the General Manager with identification of the form of deduction to be taken — “from salary of responsible person or service charges/ tips etc . . . .“ The email goes on to state that those items not sorted after one month should be discussed at the appropriate meeting with a resulting decision on responsibility and deduction.
e. 2 July 2015 – Email from the Defendant to managers regarding the city ledger policy, stating that the ledgers older than one month will be deducted from tips.
f. 20 July 2015 – Email from the Defendant to the Chief Accountant asking for an updated city ledger list.
g. 6 August 2015, 3:45PM – Email from Chief Accountant attaching updated city ledger list and asking the Defendant to follow up with the outstanding items.
h. 6 August 2015, 4:58PM – Email from the Defendant to managers updating the city ledger list and asking for action on the outstanding items.
i. 11 September 2015 – Email from the Defendant to managers asking for updates on city ledgers.
j. 17 September 2015 – Email from the Defendant asking Chief Accountant for updated city ledgers.
k. 6 October 2015 – Email from Chief Accountant to the Defendant asking for updates on city ledgers and stating that certain older items must be settled immediately. The email also states that the outstanding amounts will be deducted from the staff service charges if not updated by the end of the month.
l. 11 October 2015 – Email from the Defendant to managers updating on city ledgers.
m. 8 December 2015 – Email from Chief Accountant to the Defendant attaching updated city ledger and asking him to take care of the outstanding items.
9. The Defendant was given notice of his termination on 3 January 2016, from which a 60-day notice period runs. As revealed at the hearing, the Defendant was asked not to attend work during his notice period.
10. On 13 January 2016, the parties executed a final service settlement which granted a final payment of AED 155,234 to the Defendant upon his termination. On 14 January 2016, the Defendant was told via text message that his settlement payment was held up due to concerns over the city ledgers.
11. On 17 January 2016, the Claimant filed this claim with the Small Claims Tribunal claiming that the Defendant is responsible for payment of all outstanding city ledger invoices at the time of his departure, in the amount of AED 184,422.75.
12. The Defendant has made reference to an end of service settlement owed to him by the Claimant. This agreement was disclosed to the Court. The final settlement, signed by both parties on 13 January 2016, entitles the Defendant to AED 155,234. The Defendant has not filed a counterclaim to recover this amount in this case.
Particulars and Defence
13. The Claimant, Gable LLC, argues that because the Defendant’s job responsibilities included overseeing collection of overdue city ledgers and because he was responsible to ensure that all pending tasks were cleared before his departure, he is therefore responsible to pay the overdue city ledger sums himself. The Claimant contends that the Defendant was reminded of this responsibility verbally and in writing on several occasions but the task remained incomplete upon his departure from the company.
14. The Defendant, Gabriela, argued that he never took on personal responsibility for the overdue sums and that the procedure for payment of such sums was agreed by management, even prior to his employment with the company. This procedure specifically included attempting collection and then deducting amounts from the staff service charges and tips if not paid in the required time. The Defendant argues that since such procedure was already in place, it is unreasonable to think he personally took any responsibility for the unpaid city ledgers.
15. The Defendant also contends that he was never asked to take personal responsibility for the unpaid amounts. He argues that the previous General Manager had not taken personal responsibility for these charges upon his departure. He also contends that prior managers, who had personally authorised the city ledger credits, were not asked to pay them back upon departure from the company. Furthermore, he argues that he did not personally authorise the credits to be extended and thus cannot be personally liable for failure to pay.
16. The Defendant then claims that he heard nothing about his alleged personal responsibility for these charges until a 14 January 2016 text message from the Chief Accountant. Soon after this text message, the Claimant filed this claim against the Defendant.
17. During the hearing, the Defendant claimed that after being informed of his termination on 3 January 2016, he was asked not to come in to work for the remainder of his notice period. He argues that this shows that he could not be personally responsible for the unpaid city ledgers as the Claimant did not want him to continue attending work, where he could have made more progress on attempts to collect the unpaid amounts. Further, asking him not to attend diminishes arguments that he failed to fulfil his final work duties.
18. Finally, the Defendant claims that he is owed significant sums for his final end of service settlement. Specifically, a copy of the “Employee Final Settlement” was filed with the Court and listed the settlement amount as AED 155,234. This agreement was executed by both parties on 13 January 2016. The Defendant asserts that the Claimant attempted to argue against many of his settlement claims. He implies that this reluctance to pay his settlement caused the Claimant to file this claim to help them avoid paying him. While the Defendant claims that his settlement amounts have yet to be paid, he does not counterclaim against the Claimant for payment of such sums.
19. The question in this case concerns whether the Defendant is personally responsible to pay the overdue city ledger amounts upon his departure from the company.
20. The terms of the Defendant’s job offer, entered into with the Claimant on 2 February 2015, do not specify that the Defendant had any responsibility to pay unpaid invoices or city ledgers from his own pocket.
21. The email exchanges between the Defendant, the Claimant’s Chief Accountant and the individual managers shows that there was already a policy in place to deal with unpaid and overdue city ledgers, which involved deducting the overdue amount from the staff service charges after a certain amount of time. This is evidenced by the practice of the previous General Manager, xxxx, as detailed in the 3 March 2015 email from the Chief Accountant. There is no indication that the policy has changed since the Defendant was hired.
22. In fact, after Management requested clear articulation of the city ledger policy, the Defendant informed all the managers in the email of 2 July 2015 of the process for collecting city ledgers and the consequences for overdue items. The email clearly indicates that ledgers overdue by one month or more would be collected from the staff service charges/tips and thus would not be taken out of any staff salary. There is no indication in the record that this policy changed before the Defendant’s termination.
23. The existence of this specific policy is supported by a number of emails, dated 2 March 2015, 2 April 2015 and 6 October 2015, in which the Chief Accountant makes reference to his intent to deduct unpaid city ledgers from the staff service charges.
24. Furthermore, there is clear evidence that the Defendant did follow up on the city ledgers as his job required. This is evidenced by many emails from him discussing the city ledgers and asking the responsible managers to follow up on the outstanding amounts. Thus, the claim that the Defendant failed to complete outstanding tasks before his departure is unsupported.
25. Furthermore, the evidence obtained during the hearing that the Defendant was asked not to continue coming to work during his notice period further refutes this argument. Finally, it is clear from the 3 March 2015 email that the prior General Manager left the company when there were outstanding city ledgers and did not repay them himself. Instead, they were deducted from the staff service charges during the month he left and this continued in the month after he left the company.
26. In fact, had the Defendant not been performing his job properly, the Claimant would have been entitled to, and likely would have, terminated the Defendant “for cause” as allowed under Article 59A of the DIFC Employment Law (DIFC Law No. 4 of 2005, as amended by DIFC Law No. 3 of 2012). Terminating for cause would have relieved the Claimant of some of its duties upon termination, especially the duty to give notice and certain end of service payments. The fact that the Claimant did not follow this method implies a lack of wrongdoing on the Defendant’s part.
27. Furthermore, according to Article 19 of the DIFC Employment Law, an employer cannot make deductions from an employee’s wages unless such deduction was authorised by law, contract, court order, or written permission of the employee. This claim, that the Defendant personally pay the outstanding city ledgers, is an attempt to deduct the outstanding amounts from the Defendant’s final employment settlement and therefore avoid paying the settlement. Without written permission for doing so, the Claimant is not able to withhold the Defendant’s final payment and settlement to cover these outstanding city ledger charges.
28. Finally, the overriding objectives of this case are to confirm and finalise the responsibilities of the parties at the end of the Defendant’s employment with the Claimant company. In light of this objective, it is appropriate for the Court to finalise the “Employee Final Settlement” as agreed by the parties on 13 January 2016. This agreement was properly made and executed between the parties and thus should be enforced against the Claimant.
29. For those reasons, I have found that the Claimant’s claim is unsubstantiated and therefore rejected. Furthermore, I confirm the settlement benefits agreed upon by the parties on 13 January 2016. Thus, the Claimant is ordered to pay the Defendant AED 155,234. As regards to costs, the Claimant shall pay all court fees.
Maha Al Mehairi
Date of issue: 15 February 2016
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