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Halbert v Helentjee [2017] DIFC SCT 176

Halbert v Helentjee [2017] DIFC SCT 176

September 28, 2017

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Claim No. SCT 176/2017 

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 SCT JUDGE MAHA ALMEHAIRI 

BETWEEN

HALBERT

Claimant

and 

 

HELENTJEE

Defendant

 

Hearing: 5 September 2017

Final Submissions:  20 September 2017

Judgment:  27 September 2017

Amended Judgment:  28 September 2017


AMENDED JUDGMENT OF SCT JUDGE MAHA AL MEHAIRI


UPON hearing the Claimant’s representative and the Defendant’s representative

AND UPON reading the submissions and evidence filed and recorded on the Court file

IT IS HEREBY ORDERED THAT:

  1. The Claimant’s claims are dismissed.
  2. Each party shall bear their own costs.

 

 

Issued by:

Maha Al Mehairi

SCT Judge

Date of issue: 27 September 2017

Date of re-issue:28 September 2017

At: 12pm

 

THE REASONS

 

The Parties

  1. The Claimant is Halbert (herein “the Claimant”), former employee of the Defendant.
  2. The Defendant is Helentjee (herein “the Defendant”), a bank located in the Dubai International Financial Centre (“DIFC”), Gate Village, Dubai, UAE.

Background and the Preceding History

  1. On 3 December 2013, the Claimant signed an employment contract (“Employment Contract”) with the Defendant to commence his role as the Senior Executive Officer for the Defendant. The Claimant assisted in the set-up and success of the operations of the Defendant in the Middle East.
  2. On 19 June 2016, the Claimant was issued a letter of termination and put on garden leave for a period of twelve months, as per the terms of the Employment Contract; as such, the last day of employment was 18 June 2017. As the Claimant was placed on garden leave for the duration of the notice period, he was paid his salary and entitlements under the Employment Contract.
  3. As the Claimant’s gardening leave was near the end, the Claimant got in touch with the Defendant to request the following dues in accordance with his Contract. The amount that he considered to be outstanding as per the Employment Contract were (the “Outstanding Amounts”):
  • School fees for the year of 2017/2018 in the amount of AED 133,350 (“Annual Schooling Allowance”)
  • The remainder of the Pension Scheme for 2017 in the amount of AED 90,010.82 (“Pension Scheme”)
  • Penalties according to Article 18 up to 16 July 2017 in the amount of AED 52,822.35 (“Penalties”)
  1. As the Defendant refused to pay the Outstanding Amounts mentioned above, the Claimant proceeded in filing a Claim against the Defendant in the Small Claims Tribunal (“SCT”) on 17 July 2017. The Claimant and the Defendant’s representative attended on 16 August 2017 before SCT Officer Lema Hatim. However, the parties were unable to reach a settlement during or after the Consultation.
  2. On 5 September 2017, I heard the submissions of the Claimant’s representatives and the Defendant’s representative at a Hearing.

The Claimant’s Arguments at the Hearing

Annual Schooling Allowance

  1. The Claimant argues that in accordance with clause 8.1.2 of the Employment Contract, “The Employer shall contribute to school fees for children of the Employee in order to ensure that a consistent education program is provided while the employee continues to be employed by the Employer“… …”The school fees’ participation of the Employer is limited to a maximum of 150,000 AED per year. This amount will be reviewed every 2 years. All claims must be properly supported with original invoices/receipts/documents“.
  2. The Claimant argues that the Defendant has failed to pay the full amount of school fees for the 2017/2018 school year despite having the Claimant submit the invoices to the Defendant whilst being an employee of the Company. For the avoidance of doubt, in March 2017, the Defendant paid the Claimant the sum of AED 16,650 towards the registration of the school fees. On 22 May 2017, the Claimant sent an email to the Defendant setting out the school fees for the year 2017/2018, which totaled AED 151,032. As the Claimant’s allowance is capped at AED 150,000 and he was paid the sum of AED 16,650, the Claimant is claiming the difference for the school fees balance.
  3. The Claimant argues that the terms of the Contract state that as long as the Claimant is an employee of the Company, he would be entitled to reimbursement of school fees. These remain unpaid as set out above. The Claimant disagrees that because he is no longer an employee of the Defendant that he is not entitled to those payments. Those amounts fell due during the course of his employment and he notified the Defendant accordingly, with all supporting documentation and therefore, such amounts are due and payable.

Pension Scheme

  1. The Claimant argues that he is registered with the Swiss Life Preferred Plus pension scheme, which the Defendant pays into on an annual basis. This is a fixed contribution based on a 14% of the annual salary. The Defendant has failed to make the annual payment of 14% of the annual salary for 2017 into the pension scheme and instead has pro-rated the payment. Last year’s payment (2016) was in the sum of USD 48,985.49 (AED 180,021.68) but this year’s payment was only USD 24,492.74 (AED 90,010.82), which equates to half of the payment from the previous year.
  2. The terms of the Contract do not specify that payment of the pension will be paid on a pro-rated basis. As such the full entitlement based on the shortfall for the year should have been paid to him at the effective Termination Date and remains outstanding.

Penalties

  1. The Claimant argues that the amounts set out above were to be paid to him within fourteen (14) days of the effective Termination Date. Accordingly, as of 2 July 2017, all amounts outstanding were due and payable to him by the Defendant. The Defendant has failed to make such payments and accordingly, the Claimant claims penalties in accordance with Article 18 (1) and (2) of the DIFC Employment Law from 2 July 2017 until payments are made or up to the date of any judgment issued by the Court. As of 16 July 2017, the penalties accrued amounted to AED 52,822.35 (AED 3,521.49 x 14 days).
  2. As such, the Claimant believes that he is entitled to benefits as per his contract during his garden leave period of employment. The claim is for the annual schooling allowance of 2017/2018, the remaining half of the annual pension scheme plan, and penalties under Article 18 of the DIFC Employment Law.

The Defendant’s Arguments at the Hearing

  1. The Defendant argues that the Claimant is not entitled to the remedy sought in the Claim Form or to any relief. The Defendant has promptly paid the Claimant all of his contractual entitlements throughout the twelve-month period of his gardening leave up to and including 18 June 2017, which was the last date of his employment and the effective Termination Date.
  2. The Claimant and the Defendant have been in regular contact in the period prior to and shortly after the effective Termination Date. Throughout this correspondence, the Defendant has acted reasonably and in good faith, responding to the Claimant’s lengthy correspondence and providing full details of the amounts due to be paid to the Claimant upon the effective Termination Date as well as providing comprehensive reasons for and evidence of these amounts.

Annual Schooling Allowance

  1. The Defendant denies that any amounts are owing to the Claimant in respect of school fees. The Defendant admits that Clause 8.1.2 of the Contract required the Defendant to contribute to the school fees of the Claimant’s children during the period the Claimant remained in the employment of the Bank:

“The Employer shall contribute to school fees for children of the Employee in order to ensure that a consistent education program is provided while the employee continues to be employed by the Employer… ”

  1. As the Claimant admits, his last day of employment was the effective Termination Date, being 18 June 2017; his employment, and any entitlement he had under Clause 8.1.2 of the Contract accordingly ceased on that date. The Claimant’s statement that “I disagree that because I am now no longer an employee of the Defendant that I am not entitled to [the reimbursement of school fees]” is contrary to the clear and express wording of Clause 8.1.2 of the employment Contract.
  2. As to the remaining allegations in regard to the Annual Schooling Allowance of the Claimant’s submissions:
    • The Defendant admits that in March 2017 it paid AED 16,650 to the Claimant which constituted the registration fees payable for the 2017-18 school year for the Claimant’s children.
    • It is the Defendant’s position that since the 2017-18 the school year only commences in September 2017, some two and a half months after the effective Termination Date when the Claimant’s entitlement to any benefits under the Contract ceased, no amount is owed to the Claimant for school fees for the 2017-18 period.
    • It is irrelevant that the Claimant submitted the invoices for the school fees for the 2017-18 school year prior to the conclusion of his employment.
    • Further, the Claimant has already received payment over and above his contractual entitlement for school fees during the course of his employment at the Bank, as follows:
Period Amount paid (AED) Entitlement (AED)
2014 (pro rata 10 of 12 months) 183,959 125,000
2015 75,419 150,000
2016 249,443 150,000
2017 (pro rata 6 of 12 months) 16,650 75,000
Total 525,471 500,000

 

  1. The Claimant’s claim in respect of school fees amounts to a blatant attempt to claim that further amounts are owing to him, for which there is no contractual basis given that the claimed sums relate to the period after the employment relationship has concluded. The Bank therefore denies that the Claimant has any entitlement to the payment of amounts relating to school fees since:
    • prior to the Effective Termination Date, the Bank had already paid more than the amounts owing to the Claimant in respect of school fees under the Contract; and
    • after the Effective Termination Date, the Claimant’s entitlement to any payment for school fees ceases in accordance with Clause 8.1.2 of the Contract since the Claimant is no longer employed by the Bank.

Pension Scheme

  1. The Defendant denies that it has failed to make the correct pension contribution payment for the Claimant’s period of employment in 2017. The Defendant argues that it has fully complied with its contractual obligations to the Claimant and to the Pension Scheme Provider. The Pension Scheme Provider’s Regulations clearly state at clause 3.4 that “[a]ffiliation is extinguished at the end of the month in which the Member leaves the Employer’s service or loses his/her status as Chief Executive Officer.”
  2. As the Claimant admits, the pension contribution is fixed at 14% of annual salary. The Claimant’s employment was terminated on the effective Termination Date and as a result, the Claimant is only entitled to a pension contribution up until the effective Termination Date. The Defendant has made a payment of AED 90,010.82 in respect of the Claimant’s pension contribution for 2017 and has therefore, in fact, paid in excess of the amount which is strictly owed to the Claimant in respect of his pension contribution (had the amount been calculated on a strictly pro rata basis). This is for the following reasons:
  • The Claimant was only entitled to his annual salary up until the Effective Termination Date. The Effective Date fell on 18 June 2017, which is just less than half-way through the calendar year.
  • The Defendant paid AED 180,021.64 to the Claimant in respect of his pension contribution in 2016. Therefore, the Bank’s payment of AED 90,010.82 represented 50% of the amount paid in 2016 in respect of the full calendar year (being 14% of the Claimant’s salary). In strict terms, AED 90,010.82, being half of the full year amount, is the contribution the Claimant would have been entitled to had he remained employed up to 30 June 2017. The Defendant has therefore paid in excess of the amount the Claimant would have been entitled to had the Bank applied its calculations on a strict pro rata basis up until the Effective Termination Date.
  1. Indeed, the Claimant recognised the Bank’s entitlement to pro rata pension contributions in his letter of 26 June 2016 which stated that “monthly contributions should continue to be made up to and including the Effective Termination Date”. The Bank has therefore fulfilled its contractual obligations in this regard.

Penalties

  1. The Defendant submits that it has correctly made payment of all the amounts owed to the Claimant pursuant to the Contract. All such payments were made no later than 14 days after the Effective Termination Date.
  2. Any amounts paid by the Defendant more than 14 days after the effective Termination Date were paid by the bank in an attempt to settle the Claimant’s claim and as a gesture of goodwill. The Defendant was under no legal obligation to pay these amounts and accordingly, no penalty in accordance with the DIFC Employment Law is payable in respect of them.

Discussion

  1. The DIFC Courts and the Small Claims Tribunal have jurisdiction over this case as it regards employment within the DIFC and the amount in question is less than AED 500,000.
  2. This dispute is governed by the DIFC Law No. 4 of 2005, as amended by DIFC Law No. 3 of 2012 (the DIFC Employment Law) in conjunction with the relevant employment contract and any related amendments.
  3. The Claimant seeks payments for the annual schooling allowance, the remainder of the amount of the Pension Scheme and Article 18 penalty. The Defendant submits that it has correctly made payment of all the amounts owed to the Claimant pursuant to the Contract and has paid all the Claimant’s dues no later than 14 days after the effective Termination Date. I will address each of the claimed items in turn, to determine if any amounts are owed to the Claimant.

Annual Schooling Allowance 

  1. The Claimant’s claim in respect of school fees is an obvious attempt to claim further amounts for which he is not owed, there is no contractual basis given that the claimed sums relate to the period after the employment relationship ended. Therefore, the Court denies that the Claimant has any entitlement to the payment of amounts relating to school fees prior to the effective Termination Date, the Defendant had already paid the registration fees in respect of the Claimant’s children and according to the Employment Contract, and there is no obligation for him to do that since the school year starts after the termination date
  2. The Claimant’s entitlement to any payment for school fees ceases in accordance with the Employment Contract since the Claimant is no longer employed by the Bank as stated in Clause 8.1.2 (“The Employer shall contribute to school fees for children of the Employee in order to ensure that a consistent education program is provided while the employee continues to be employed by the Employer… “. As the period of employment ended, the benefits that come with the Employment Contract also ended.
  3. I find the Defendant’s argument are sufficient to prove that the Claimant’s Claim for Annual Schooling allowance should be dismissed, and the Claimant’s argument to be unpersuasive.

Pension Scheme

  1. The pension is paid on a monthly basis, as stated in Clause 10 of the Employment Contract “The Employee will be entitled to a pension allowance payable on a monthly basis”. As the wording is very clear and obvious there is no doubt that as soon as the period of the employment is terminated, the payment of the pension will end with it. As such, the wording says that it will be paid on a monthly basis and the Defendant has paid up until the effective Termination Date. This is also confirmed from the Pension Scheme Provider’s Regulations (“Regulations”) under Clause 3.4 “[a]ffiliation is extinguished at the end of the month in which the Member leaves the Employer’s service or loses his/her status as Chief Executive Officer”. The Claimant would have been well aware of these Regulations provided by HR and through access of the Swiss Life website directly.
  2. I find the Defendant’s argument is sufficient to prove that the Claimant’s Claim for the remainder of the pension scheme should be dismissed, and the Claimant’s argument to be unpersuasive.

Penalties under Article 18 of the DIFC Employment Law

  1. As per the outstanding amounts, the Claimant confirmed that he sought the penalty under Article 18 of DIFC Employment Law to be activated, it provides:

“(1) An employer shall pay all wages and any other amount owing to an employee within fourteen (14) days after the employer or employee terminates the employment.

(2) If an employer fails to pay wages or any other amount owing to an employee in accordance with Article 18(1), the employer shall pay the employee a penalty equivalent to the last daily wage for each day the employer is in arrears.”

  1. As the Defendant has no outstanding dues to pay the Claimant, the Court dismisses this request.

Conclusion

  1. In light of the aforementioned, I find that there are no outstanding amounts to be paid to the Claimant.
  2. Each party shall bear their own costs.

 

Issued by:

Maha Al Mehairi

SCT Judge

Date of issue: 27 September 2017

Date of re-issue:28 September 2017

At: 12pm

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