Skip to Content

Jemy v Jemon [2016] DIFC SCT 124

Jemy v Jemon [2016] DIFC SCT 124

November 9, 2016

image_pdfimage_print

Claim No: SCT 124/2016

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 OF DIFC COURTS

BEFORE SCT JUDGE MARIAM DEEN

 

BETWEEN

 

JEMY

Claimant

v

JEMON

 Defendant

Hearing: 25 September 2016

Judgment: 9 November 2016


JUDGMENT OF SCT JUDGE MARIAM DEEN


 UPON the Claim Form being filed on 9 August 2016;

UPON the parties being called on 21 August 2016 for a Consultation with SCT Officer Mahika Hart, the Claimant attending via phone and the Defendant’s representatives attending in person;

UPON the parties not having reached settlement;

UPON a Hearing having been scheduled before SCT Judge Natasha Bakirci on 8 September 2016 at 10am, with the Defendant’s representatives attending but the Claimant being absent despite being served adequate notice of the Hearing;

UPON issuance of the Order of SCT Judge Natasha Bakirci of 8 September 2016 striking out the claim for the Claimant’s failure to attend the Hearing;

UPON the Claimant submitting an Application to Set Aside the Default Order pursuant to RDC 53.65 within 7 days of notice of the Order, pursuant to RDC 53.66; and

UPON the Order of SCT Judge Natasha Bakirci of 8 September 2016 being set aside by the Order of H.E. Justice Shamlan Al Sawalehi of 29 September 2016;

UPON a Hearing having been held before SCT Judge Mariam Deen on 19 October 2016, with the Claimant and the Defendant’s representative participating via telephone;

AND UPON reviewing all documents and evidence submitted in the Court file;

IT IS HEREBY ORDERED THAT:

1.The Defendant shall pay the Claimant AED 7,622.30 as end of service gratuity for his employment from 1 April 2012 until 10 August 2016.

2. The Defendant shall pay the Claimant AED 594.23 in relation to paid leave entitlement.

3. The parties shall bear their own costs.

THE REASONS

Parties

4.Gemy (hereafter the “Claimant”) is an individual employed as a strength and conditioning coach, formerly employed at Gemon Gym under an employment contract with Joane (DIFC) LLC dated 1 April 2011.

5. Gemon (hereafter the “Defendant”) is a gym located within the DIFC, owned by Joane (DIFC) LLC.

Background and the Preceding History

6. On 9 August 2016, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) for employment entitlements allegedly owed to him following his resignation from employment with the Defendant. The total claim value of USD 27,746.04, equivalent to AED 101,966.70, was to include end of service gratuity, untaken paid leave, repatriation air fare and reimbursement of the Court fee.

7. The parties were called for a Consultation with SCT Officer Mahika Hart on 21 August 2016, the Claimant attended via phone and the Defendant’s representatives attended in person, however, a settlement could not be reached.

8. A Hearing was scheduled before SCT Judge Natasha Bakirci on 8 September 2016, the Defendant’s representatives attended but the Claimant was absent despite being served notice. Accordingly, SCT Judge Natasha Bakirci issued an Order to strike out the claim.

9. The Claimant subsequently applied to Set Aside the Default Order pursuant to RDC 53.65 within 7 days of notice of the Order, pursuant to RDC 53.66, which was granted by H.E. Justice Shamlan Al Sawalehi on 29 September 2016.

10. A Hearing was scheduled before me on 19 October 2016, with the Claimant and the Defendant’s representative both participating via telephone. I heard submissions from both parties and the Defendant was granted additional time to submit evidence pertaining to the date the Claimant commenced his employment and a record of paid leave taken by the Claimant, following which the case was reserved for judgment. Additional evidence was submitted by the Defendant on 24 October 2016.

The Claim  

11. The Claimant’s case is that he was employed by the Defendant as a strength and conditioning coach pursuant to a contract of employment dated 1 April 2011 (the “Employment Contract”). He submits that following his resignation on 10 July 2016 he completed his last day of employment on 10 August 2016 and was subsequently offered AED 7,633 by the Defendant as end of service gratuity. The Claimant takes issue with the value of the offer considering his monthly earnings which he submits were entirely commission based and self-generating.

12. The Claimant asserts that despite the wording of the Employment Contract and his specified basic salary (by which the value of the end of service gratuity is calculated) he is entitled to significantly more than what was offered. He claims AED 96,905 as a more appropriate amount with respect to his end of service gratuity entitlement. This amount is based on a calculation involving the average monthly payment the Claimant received over the course of his employment and an entitlement to 30 days’ wages per year of employment, over five years, as per the date of the Employment Contract which reads as 1 April 2011. However, in the Hearing the Claimant conceded that it was 3 April 2012 when he first attended work, despite the date of the contract.

13. The Claimant also claimed he was not paid for holidays or provided with holiday pay and the Court has been asked to consider his paid leave entitlement along with reimbursement of the Claimant’s repatriation flight to the United Kingdom, for which AED 3,000 is sought.

The Defence

14. The Defendant submits that the Employment Contract itself is clear in that it specifies at Clause 7.3 that the Claimant’s basic salary is AED 2,500 with additional allowances of AED 2,000 for accommodation and AED 500 for transport (Clauses 7.4 and 7.5). The Defendant submits that the Claimant’s basic salary of AED 2,500 serves to calculate the end of service gratuity entitlement and that his employment ran from 1 April 2012 through 10 August 2012, which is 4 years, 4 months and 8 days, therefore, pursuant to Clause 15.b of the Employment Contract the Claimant is entitled to 14 days’ basic wage per employment year as he was employed between 3 to 5 years.

15. In the Hearing the Defendant submitted that the Claimant was paid the basic salary irrespective of whether he attended work or not, therefore this was a true ‘basic salary’ as defined by the DIFC Employment Law and the Claimant received his commission in relation to work done which accrued payments for the business over and above the basic salary amount.

16. In relation to paid leave, the Defendant provided a record of vacation time taken but stated that holidays less than one week were not included in the record. It was submitted that in any event, the Claimant was not entitled to payment in lieu of vacation days earned pursuant to Clause 8.3.5.b of the Employment Contract. Furthermore, as the Claimant resigned and was not terminated, the Defendant submits it is not liable for the cost of his repatriation, pursuant to Clause 14.3 of the Employment Contract.

Discussion

17. DIFC Employment Law governs this dispute and Article 62 provides the following regarding end of service gratuity:

“(1) Subject to Article 62(5), and (6), an employee who completes continuous employment of one (1) year or more is entitled to a gratuity payment at the termination of the employee’s employment.

(2) The gratuity payment shall be calculated as follows:

(a) twenty one (21) days’ basic wage for each year of the first five (5) years of service.

(b) thirty (30) days’ basic wage for each additional year of service, provided that the total of the gratuity shall not exceed the wages of two (2) years of service.

The daily rate for the employee’s basic wage shall be calculated based on the number of days in the year. The employer may deduct from the gratuity any amounts owed to the employer by the employee.

(3) Where the termination occurs prior to the end of any full year of employment, the gratuity payment shall be calculated on a proportionate basis…”

18. The Defendant does not dispute the Claimant’s entitlement to end of service gratuity, as he was an employee in continuous employment by the Defendant for over a year, pursuant to Article 62(1) of the DIFC Employment Law. The issue, therefore, is the amount due to the Claimant as end of service gratuity.

19. DIFC Employment Law requires calculation of the end of service gratuity by reference to the employee’s “basic wage”, a term which it defines in Schedule 1 as follows:

“basic wage means the employee’s wage excluding any portion of an employee’s wage received in-kind or as allowance for housing, travel, currency exchange (cashier), children’s education, social and entertainment or any other type of allowance, bonus or commission payment, or overtime pay. The basic wage shall be calculated taking into consideration the total number of calendar days in the year.”

20. It is the Defendant’s assertion that section 7 of the Employment Contract titled “Salary and Commission” clearly explains the breakdown of the Claimant’s earnings. Although Clause 7.1 stipulates the employee will receive a basic salary of AED 5,000 per month, Clause 7.3, 7.4 and 7.5 further breaks down this amount into a basic salary of AED 2,500 with an additional AED 2,000 allocated for accommodation and AED 500 for transport. Under the DIFC Employment Law’s definition, the amounts specified for accommodation and transport would be considered allowances and therefore, separate to and distinct from the basic wage of AED 2,500 per month. Clause 7.6 onwards outlines the commission structure of a ‘monthly bonus’ payable to the Claimant over and above the basic salary.

21.  The Claimant argued that it was unfair for his end of service gratuity payment to be calculated by reference to his basic salary, as defined by the Employment Contract. It was submitted that his total earnings were approximately AED 20,000 per month, which was entirely self-generated and based on commission he had earned. He claimed that the breakdown provided in the Employment Contract was misleading and the reality was that all his earnings were commission based with AED 5,000 being deducted and returned to him every month in the form of a ‘basic wage’. This is described in Clause 7.6 of the employment contract:

“The Employee will receive a basic salary of five thousand AED (5,000) on the 28th working day of the month in addition to a monthly bonus (the “Monthly Commission”) payable pursuant to the commission structure outlined below and based on the average price of the training session as per the conditions set forth here below. However, the Employee’s Monthly (as mentioned below) salary of five thousand AED (5,000) will be deducted from the total amount of the Monthly bonus granted to him.”

22. In the Hearing the Defendant submitted that the Claimant was paid a basic wage (inclusive of allowances) of AED 5,000 and the strength and conditioning coaching sessions he completed which accrued him commissions over and above that amount was paid to him in the form of a bonus. It was stated that the Claimant would receive this basic wage regardless of whether he attended work or not and although the Claimant submitted he once received less than this basic amount (AED 1,033) during a 4-week period of annual leave he had taken, it was accepted by the Claimant that the Defendant readjusted the following month’s salary to make up for the deficit.

23. The Claimant’s submissions in relation to the basic wage have been noted and I have sympathy with his view that the end of service gratuity should be calculated considering the reality of his monthly earnings. However, I am not satisfied that the Claimant has discharged his duty of proving, on the balance of probabilities, that his employment arrangement with the Defendant was anything other than what is outlined and detailed in the Employment Contract. It is my view that the Employment Contract is clear in what the basic salary and allowances were and how the commission was to be calculated. Although the Claimant’s salary was heavily based on revenue sharing, whether or not the basic salary was proportionate to the actual commissioned based earnings is not a matter for the Court to determine in the calculation of end of service gratuity. DIFC Employment Law defines the basic wage as being exclusive of any allowances or bonuses, therefore in the absence of evidence to the contrary I must find the Claimant’s basic monthly wage, for the purposes of calculating end of service gratuity to be AED 2,500. Accordingly, the basic daily wage is AED 82.19 (2,500 x 12 / 365).

24. There was some confusion over the commencement of the Claimant’s employment as the Employment Contract is dated 1 April 2011. In the Hearing both parties agreed that the Claimant was in fact employed from April 2012 and although the Claimant began personal training sessions a few days into the month I am satisfied that the Claimant began his employment on 1 April 2012, following the Defendant’s acceptance of this in its email dated 24 October 2012. There is no dispute regarding the Claimant’s final day of employment, therefore, his term of employment ran from 1 April 2012 to 10 August 2016.

25. Clause 15.b of the Employment Contract states that upon resignation an employee who is employed between three and five years shall be entitled to an end of service benefit equivalent to 14 days’ basic salary per year of employment. This is contrary to DIFC Employment Law, which provides for twenty-one (21) days’ basic wage for each year of the first five (5) years of service and this supersedes the terms of the Employment Contract, to which the Defendant agreed in the Hearing.

26. Therefore, the end of service gratuity payment should be calculated for the period of continuous employment from 1 April 2012 to 10 August 2016 (4 years and 152 days) at a rate of 21 days’ basic daily wage (AED 82.19) per year as follows:

4 x 21 = 84

(152 / 365) x 21 = 0.42 x 21 = 8.74

84 + 8.74 = 92.74

92.74 x 82.19 = AED 7,622.30

27. With respect to the Claimant’s entitlement to paid leave, Clause 8.1 of the Employment Contract provides for 20 days paid leave per annum and this is in line with Article 27(1) of DIFC Employment Law. Clause 8.3.5 of the Employment Contract prohibits payment in lieu of vacation days earned except where the employee’s employment is terminated or the employer agrees otherwise. Article 28 of DIFC Employment Law states:

“(1) Where an employee’s employment is terminated, the employer shall pay the employee an amount in lieu of vacation leave accrued but not taken. In the event that the employee has taken more vacation leave than has accrued at the termination date, the employee shall repay the employer the corresponding sum.

(2) Compensation in lieu of vacation leave shall be calculated using the employee’s daily wage applicable on the employee’s last day of employment”

28. In this case, the Claimant’s employment has been ‘terminated’ within the meaning of Article 28, albeit by his own resignation. Therefore, he would be entitled to an amount in lieu of vacation leave accrued but not taken prior to his effective date of termination.

29. The Defendant provided a record of leave but stated that it did not reflect periods of leave taken that were less than 1 week. Therefore, it was not a true and accurate reflection of the paid leave taken by the Claimant. It also failed to distinguish paid leave days from weekends and public holidays, therefore, the parties were directed to make additional submissions relating to paid leave by no later than 4pm on 7 November 2016; the Claimant provided a further email on 7 November 2016 to clarify he worked a 5-day rather than 7-day week, nothing additional was submitted by the Defendant. Pursuant to Article 16(1) of DIFC Employment Law it is an employer’s duty to keep payroll records, which are specified as including:

“(g) the dates of the national holidays taken by the employee and the amounts paid by the employer;

(h) the dates of the vacation leave taken by the employee, the amounts paid by the employer and the days and amounts owing…”

30. It is my view that the Defendant should not benefit from keeping inadequate payroll records; using the vacation record provided by the Defendant as a starting point and in the absence of evidence to the contrary, I have assumed the Claimant worked a standard working week between Sunday to Thursday. The Defendant’s vacation record provides that the Claimant took 118 days leave in total between 2012 and 2015, subtracting weekends from this figure I calculate this to become 83, with a further deduction of 3 public holidays which coincided with the periods of leave, bringing the total to 80 days. Therefore, as the Claimant was entitled to 20 days paid leave per annum, I am satisfied (in the absence of evidence from either party to the contrary) that the Claimant took all his annual leave entitlement from 2012 to 2015. The Claimants 5th year of employment commenced on 1 April 2015, concluding on 10 August 2016 and there is no record of him taking any leave during this period of 132 days. Accordingly, he is entitled to paid leave on a pro-rated basis; the Claimant worked for 132 days out of the year (132/365 = 0.36) which corresponds to 7.23 days paid leave entitlement for 2016 (0.36 x 20 = 7.23). As the daily wage is has been calculated as AED 82.19, I find that the Claimant is entitled to receive:

7.23 x 82.19 = AED 594.23

31. DIFC Employment Law does not provide for any requirements regarding the cost of repatriating employees, therefore, Clause 14.3 of the Employment Contract sets out the position applicable to this employment relationship:

“In the event that the employment is terminated, then the Company shall pay for the repatriation of the Employee…”

As the Claimant offered his resignation rather than being terminated by the employer, he is not entitled to reimbursement for his air fare back to the United Kingdom.

Conclusion

32. Accordingly, I find that the Claimant is owed a total of AED 8,216.53 by the Defendant as the sum of his end of service gratuity and paid leave entitlement. Nothing is awarded with respect to the cost of repatriation.

33. In the Claimant’s Particulars of Claim, he acknowledged that the Defendant’s offer of end of service gratuity in the sum of AED 7,633 was rejected by him. As the Court’s award is similar to the Defendant’s original offer I find it appropriate in the circumstances to order the parties bear their own costs as regards this claim.

Issued by:

Ayesha Bin Kalban

SCT Officer

Date of issue: 9 November 2016

At: 8am

X

Privacy Policy

The Dubai International Financial Centre and all its affiliates are committed to preserve the confidentiality, integrity and availability of client data and personal information.

Dubai International Financial Centre and all its affiliates employees, vendors, contract workers, shall follow Information Security Management System in all the processes and technology.

  1. DIFC Courts's Top Management is committed to secure information of all our interested parties.
  2. Information security controls the policies, processes, and measures that are implemented by DIFC Courts in order to mitigate risks to an acceptable level, and to maximize opportunities in order to achieve its information security objectives.
  3. DIFC Courts and all its affiliates shall adopt a systematic approach to risk assessment and risk treatment.
  4. DIFC Courts is committed to provide information security awareness among team members and evaluate the competency of all its employees.
  5. DIFC Courts and all its affiliates shall protect personal information held by them in all its form.
  6. DIFC Courts and all its affiliates shall comply with all regulatory, legal and contractual requirements.
  7. DIFC Courts and all its affiliates shall provide a comprehensive Business Continuity Plan encompassing the locations within the scope of the ISMS.
  8. Information shall be made available to authorised persons as and when required.
  9. DIFC Courts’s Top Management is committed towards continual improvement in information security in all our processes through regular review of our information security management system.
X

Disclaimer

The content of the DIFC Courts website is provided for information purposes only and should be disregarded when making decisions on inheritance and any other matters. Whilst every reasonable effort is made to make the information and commentary accurate and up to date, the DIFC Courts makes no warranties or representations to you as to the accuracy, authenticity or completeness of the content on this website, which is subject to change at any time without notice. The information and commentary does not, and is not intended to, constitute legal advice by the DIFC Courts or any person employed or connected with it or formerly so employed or connected, to any person on any matter, be it in relation to inheritance, succession planning or otherwise. You are strongly advised to obtain specific, personal advice from a suitably qualified lawyer in relation to your personal circumstances and your objectives. The DIFC Courts does not assume any liability and shall not be liable to you for any damages, including but not limited to, direct or indirect, special, incidental or consequential damages, losses or expenses arising in connection with this website, its administration and any content or lack thereof found on it. The information on this web site is not to be displayed except in full screen format. Although care has been taken to provide links to suitable material from this site, no guarantee can be given about the suitability, completeness or accuracy of any of the material that this site may be linked to or other material on the internet. The DIFC Courts cannot accept any responsibility for the content of material that may be encountered therein.