May 12, 2023 court of first instance - Judgments
Claim No: CFI 015/2019
IN THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
IN THE COURT OF FIRST INSTANCE:
MUSSAAB TAG ELSIR ABDELSALAM
EXPRESSO TELECOM GROUP LIMITED
|Trial :||8 May 2023 – 9 May 2023|
Mr Michael Patchett-Joyce instructed by Mahmood Hussain Advocates & Legal Consultancy for the Claimant
Mr Stephen Doherty instructed by HFW for the Defendant
|Judgment :||12 May 2023|
JUDGMENT OF JUSTICE SIR JEREMY COOKE
UPON the Claimant’s Claim having been filed on 20 March 2019
AND UPON the Claimant’s Particulars of Claim dated 5 May 2019 and the Amended Particulars of Claim dated 29 March 2020, 17 June 2020, 3 January 2022, 1 February 2022, 25 April 2022 and 17 April 2023
AND UPON the Defendant's Defence without Counterclaim dated 9 June 2019, 16 July 2020 and 23 May 2022
AND UPON the Claimant’s reply to the Defence dated 24 June 2019, 5 August 2020 and 13 June 2022
AND UPON the Order of H.E. Justice Ali Al Madhani dated 10 March 2020
AND UPON the Consent Order dated 10 June 2020
AND UPON the Amended Judgment of H.E. Justice Ali Al Madhani dated 5 September 2021
AND UPON the Claimant’s Appeal Notice dated 12 September 2021
AND UPON the Judgment of the Court of Appeal in CA-011-2021 dated 20 December 2021
AND UPON the Order of H.E. Justice Nassir AL Nasser dated 6 April 2022
AND UPON the Order of Justice Sir Jeremy Cooke dated 6 April 2023
AND UPON the Claimant’s skeleton argument dated 3 May 2023
AND UPON the Defendant’s skeleton argument dated 4 May 2023
AND UPON reviewing the parties’ submissions in the case file
AND UPON hearing Counsel for the Claimant and Counsel for the Defendant at the Trial listed before me on 8 and 9 May 2022 (the “Trial”)
IT IS HEREBY ORDERD THAT:
1. The Claimant’s claims are dismissed.
2. The Claimant shall pay the Defendant’s costs, to be assessed by the Registrar if not agreed.
Date of issue: 12 May 2023
SCHEDULE OF REASONS
1. There are three signed “Contracts of Employment” concluded by the Defendant (“Expresso”) with the Claimant, the nature of which is disputed. On their face they are fixed term contracts of employment running respectively from 1 November 2008 until 31 August 2010, 1 August 2010 – 31 July 2012 and 1 August 2012 – 31 July 2014. These proceedings have a convoluted history as appears from the judgement of the Court of Appeal in this matter dated 20 December 2021 to which reference should be made. The Particulars of Claim have gone through no less than eight permutations, of which the last is dated 17 April 2023. The Claimant brings claims against Expresso under each of the three contracts, to which I shall refer as “Agreement 1”, “Agreement 2” and “Agreement 3”.
1.1 Under Agreement 1, the Claimant seeks payment for a relocation allowance, unpaid salary, salary differences, payment in lieu of leave not taken and air tickets. His gross salary thereunder was AED 40, 592 monthly in arrears.
1.2 Under Agreements 2, The Claimant seeks payment for payment in lieu of leave not taken and air tickets.
1.3 Under Agreement 3, the Claimant makes similar claims as under Agreement 2. He also seeks 6 month’s payment of wages in lieu of notice and/or equivalent damages for failure to terminate the agreement in accordance with its terms.
1.4 Additionally, the Claimant claims an “End of Service Gratuity” (“ESG”) based on employment from 1 November 2008 to 31 July 2014, a period of five years 273 days.
1.5 All three Agreements are expressly governed by the laws of the DIFC.
2. These claims are resisted on a number of different grounds, including time-bar, absence of entitlement on a contractual and/or factual basis and matters of law which are said to render the claims unsustainable. Reliance is placed by Expresso on a Draft Consultancy Agreement with an effective date of 1 October 2009 which was sent to the Claimant but was never signed by him. This provided for termination of Agreement 1 as of 30 September 2009 and for the payment to be made thereafter of the sum of AED 12,500 monthly in circumstances where Expresso’s parent company, Sudatel Telecom Group (“Sudatel”) was to employ the Claimant. Expresso also rely upon a contract dated 1 September 2009 between the Claimant and Sudatel (“the Sudatel Contract”) under which he was engaged as Planning Division Manager for a period of two years and thereafter until terminated by two months written notice. The Sudatel Contract was subject to the Labour Law of the Sudan and it is common ground that payments were made to the Claimant thereunder by Sudatel. The Schedule to that contract provided for a monthly salary, allowances for fuel, car running and maintenance and for annual provisions for benefits in the form of a relocation and other allowances. From that point onwards until 31 July 2010 and the commencement of Agreement 2, payments of AED 12,500 only were made by Expresso to the Claimant.
Agreements 2 and 3
3. Although it will be necessary to touch on some of the disputes which arise under these two Agreements, because of the issue of the interrelationship between them, the draft Consultancy Agreement and the Sudatel Contract, it is clear to me that the claims made under both Agreement 1 and Agreement 2 are inescapably time-barred. The relevant statutory time limit for bringing proceedings is six years from the date of breach in accordance with Article 38 of the Court Law and Article 123 of the Contract Law, there being no express limitation period in the Employment Law applicable to either Agreement, being Employment Law No. 4 of 2005 (“the 2005 Law”) and Employment Law Amendment Law DIFC Law No. 3 of 2012 (“the 2012 Law”).
4. Employment Law DIFC Law No. 2 of 2019 (“the 2019 Law”) is of relevance to the current dispute and its application was discussed by the Court of Appeal in the context of limitation arguments in this very case and the difference between the application of substantive and procedural law on a retrospective basis. For present purposes it is sufficient to direct any reader to the Court of Appeal judgement at paragraphs 70 – 89 and particularly to paragraph 83. The Court of Appeal rejected the application of the six month time limit set out in Article 10 of the 2019 Law to any claim which had already been commenced in the Courts in accordance with the limitation provisions applicable to claims under the 2005 Law or the 2005 Law as amended by the 2012 Law. The court however expressly stated that “any employee who had not commenced a legal proceeding under the 2005 Law, within six months of the termination of his or her employment at the time that the 2019 Law came into effect, would not be able to have that claim considered by the Court”.
5. A direct application of the statutory provisions applicable to claims under the 2005 Law and/or the 2012 Law necessarily results in any cause of action accruing prior to 21 March 2013 being barred by effluxion of time. The causes of action giving rise to claims under Agreements 1 and Agreement 2 accrued well before that time.
5.1 In the case of Agreement 1, any payments due under it were, at the latest, payable seven days following the expiry of the fixed term, both as a result of the express terms of clause 13.4 of Agreement 1 and Article 16 of the 2005 Law. Agreement 1 was due to expire on 31 August 2010 but was actually replaced by Agreement 2 commencing on 1 August 2010. At the very latest, a claim would have to be filed before 7 September 2016 in order not to be time barred in respect of any cause of action arising under Agreement 1.
5.2 In the case of Agreement 2, any payments due under it were, at the latest, payable seven days following the expiry of the fixed term, both as a result of the express terms of clause 10.4 of Agreement 2 and Article 16 of the 2005 Law. Claims were governed by the 2005 Law (as the 2012 Law did not come into force until 22 December 2012) and were at the latest, payable, similarly by 7 August 2012. Any claim, in order not to be time barred should therefore have been filed before 6 August 2018.
6. The Claimant, in argument, sought to rely upon the principle set out in sections 29 – 30 of the English Limitation Act relating to acknowledgement of debts. That is a statutory principle under English aw which has no equivalent provision in any statute in the DIFC and it is not permissible to import into the statutory regime which is applicable in the DIFC a foreign provision of this nature. The English authorities relied on by the Claimant cannot therefore assist the Court and the claims for unpaid salary, relocation allowance, payment in lieu of leave and air tickets under Agreements 1 and 2 must therefore fail.
7. There is a separate argument which relates to ESG, since Expresso contended that this fell to be determined in relation to each of the Agreements individually, whereas the Claimant submitted that its entitlement depended on the concept of “continuous employment” which, as alleged, ran throughout the period covered by Agreements 1 – 3, with the result that the calculation of the entitlement fell to be made by reference to the total period of 5 years 273 days. The result of treating the Agreements individually is different, both because of time bar issues and because, under Article 62 of the 2005 Law (as amended) the ESG arises to a higher level when continuous employment exceeds five years of service.
8. There are three specific claims which arise under Agreement 3, apart from the claim for ESG and penalty payments which are claims which are asserted on the basis of all three Agreements.
Breach of the Notice Provision and Payment in lieu of Notice/ damages.
9. Clause 3 of Agreement 3 provided, under the heading “Term of Appointment”:
“3.1 The Term of the Employment will commence on 1 August 2012 and shall continue until 31 July 2014 unless terminated pursuant to Clause 13 (13) herein.
3.2 Your employment is for a Fixed Term starting and finishing on the date specified in clause 3.1 subject to:
(a) You are resigning from your employment under the relevant termination provisions of this Agreement; or
(n) the Company terminating your employment in accordance with the termination clauses of this Agreement.
3.3 Nothing in this Agreement shall expressly or by implication you read as providing an entitlement to or expectation of any further employment beyond this engagement. Any agreed extension must be made in writing and signed by the parties.
3.4 Prior to the end of the Fixed Term the Company will:
(a) Confirm or advise to you the date on which the Fixed Term is to end; and,
(b) Confirm or advise to you the reasons for the Fixed Term coming to an end; or
(c) Negotiate an extension if the work is to continue for a further period.”
10. This raises the issue of termination and clause 9 of Agreement 3 is headed “Effective date of Termination & Notice Period”. This has to be read in the light of clause 3 which, as set out above, provided for automatic expiry of the employment unless there was an agreed extension in writing signed by the parties.
11. Clause 9 then provided:
“9.1 In relation to this fixed term Agreement, which expires without being renewed under the same contract, the effective date of termination means the date on which the term expires.”
12. Underneath that appeared the heading “Notice to Terminate Employee’s service, or resignation”.
“9.2 In the case of fixed term employment Expresso may at any time, terminate the employee’s service by a six months’ notice. Alternatively, Expresso may pay six months’ salary in lieu of notice period if considered necessary.
9.4 And employee may resign at any time from his/her post by a 30 day notice. Resignation must be in writing and the employee must continue his/her work until notified of the decision to accept his/her resignation. Resignation while on leave is not acceptable.
9.5 This Article does not affect the right of either party to terminate the Employment without notice where there is cause ....”
13. Clause 10.1 sets out provisions relating to termination of the employment with cause, whilst 10.2 provides for termination by the employee within the first three months of the Employment and reimbursement of the costs pertaining to work permits, visas and the like:
13.1 Clause 10.3 provides: “On termination of Employment, the Company shall pay all wages owing to the Employee within 7 days after the end of the pay period”.
13.2 Clause 10.4 provides: “On termination of Employment, the Company shall pay the Employee an amount in lieu of vacation days accrued but not taken. In the event that the Employee has taken more holiday time than has accrued from and including the date on which the Employment terminated (at the “Termination Date”), the Employee shall repay the Company the corresponding sum.”
14. The Claimant submitted that, in the context of a sequential series of fixed term contract, Expresso could not circumvent contractual notice and/or statutory minimum notice periods. Counsel argued that clause 3.4 imposed a mandatory obligation on Expresso to pursue one of two alternative routes before the end of the Fixed term: either to confirm or advise the date on which the Fixed Term was to end and the reasons for it coming to an end or negotiate an extension if the work was continued. Consequently, the contract of employment did not simply end by effluxion of time. Clause 9.2 was then construed to mean that there was a requirement of a six-month notice to terminate and that in circumstances where there had been no such notice, the Claimant was entitled to six months’ payment in lieu.
15. I cannot accept this construction. The terms of clause 3 make it plain that Agreement 3 was a fixed term employment which came to an end at 31 July 2014 and there was to be no entitlement or expectation of any further employment beyond that. Any extension had to be made in writing and signed by the parties and there was no such extension. It is true that clause 3.4 provided that, prior to the end of the Fixed Term, Expresso had to inform the Claimant what was to happen but Expresso did send an email to the Claimant on 30 January 2014 expressly notifying the Claimant “officially that the fixed term employment contract will come to an end on 31 July 2014 without being renewed” and informing him that Sudatel would prepare a contract for him which duly occurred. In other words, he was told that there was to be no renewal because he was to have a contract with the parent company. There was thus no breach of clause 3.4 by Expresso and the fixed term of Agreement 3 came to an end on its expiry date.
16. There is no question of any “termination” by Expresso as such and the reference in clause 9.2 to the giving of a six-month notice of termination refers to the possibility that was open to Expresso “at any time” to terminate the service by such a notice before the end of the fixed term. Under that clause, at any time during the course of the fixed term, Expresso could bring the contract to an end by giving six months’ notice or paying six months’ salary in lieu. That did not occur. There is no requirement for any six-month notice to be given to bring the contract to an end at the expiry of the fixed term and Schedule 1 of the 2012 Law provides that “the effective date of termination” “in relation to an employee who is employed under a contract for a fixed term which expires without being renewed under the same contract, means the date on which the term expires”. This is the wording repeated in clause 9.1 and makes the point clear.
17. In consequence, the Claimants claim for six months’ pay either in lieu of notice or as damages must fail.
Payment in lieu of untaken leave
18. Clause 6, under the heading “Annual Leave” provides as follows:
“6.1The Employee will be entitled to a paid annual leave of 24 working days to be accrued within the first year of employment in accordance with Articles 25 and 28 of DIFC law No. 4 of 2005 …
6.2 Annual leave will be taken at a time agreed by the Chief Executive Officer (the “CEO”) by way of a leave application form which must have been approved at least two weeks before the start of any leave period”.
6.3 The Employee will not be entitled to receive pay in lieu of annual leave that is not taken except approved exceptionally by the CEO or when the Employment is terminated. Leave accrued but not taken in any year shall not extend beyond March of the following year. Any further extension of accrued leave will only be granted with the CEO’s express written approval.”
19. On the face of it, this clause is conclusive in relation to any entitlement to pay in respect of untaken leave and Article 27 (5) of the 2012 which was applicable at the date when Agreement 3 came to an end provided as follows:
“An employee is not entitled to a payment in lieu of vacation leave earned except where:
(a) the employee’s employment is terminated;
(b) or the employer agrees otherwise.”
20. The parties argued about the construction of these provisions, with the Claimant submitting that, as appears above, there was termination of the fixed term constituted by Agreement 3 but when the provisions relating to “termination” are seen in context, and particularly in the context of clause 3, it is plain that there is no entitlement to pay in lieu of untaken leave unless the contract is terminated prior to the expiry of the fixed term with earned but untaken vacation and not when the contract comes to an end by expiration of the fixed term.
21. In consequence, this claim must also fail.
22. Clause 2 of Agreement 3 provided for remuneration in what was described as “a remuneration package” which included a Basic Salary of USD 11,000 per month, a living allowance of USD 1500 per month, a transportation and fuel allowance of rest USD 1500 a month and the following, in addition:
“The Company will provide you with round-trip air tickets to you and to your family members (spouse and children) in Economy Class, once every year to travel to your home country (Sudan).”
23. Clause 2.1.5 defined the words “Gross Salary” as comprising the Basic Salary, the Living Allowance and the Transportation Allowance, but made no reference to clause 2.1.4. The terms of that subclause do not suggest that there is any entitlement to money in lieu of the provision of a round-trip air tickets. In his evidence, the Claimant maintained that he was entitled to the cost of a round-trip air ticket to Sudan and this was calculated on the basis of prices as at today’s date of air tickets from Dubai to Sudan and back.
24. This claim is odd for at least two reasons: first, the terms of the subclause, as already mentioned, make no suggestion of an entitlement to a cash payment if the entitlement to a round-trip air ticket for himself and/or for family members was not taken up. He claimed only for himself and not for any family member. Secondly, as appeared from the evidence, the Claimant had effectively relocated to Sudan in accordance with the options provided in clause 1.2 and 1.3 of Agreement 3 and the Sudatel Contract of 1 September 2009 which provided that the Sudatel President had the right to relocate the Claimant inside or outside Sudan.
24.1 Whether or not it could be said (see below) that the Claimant was “based within or formally worked within DIFC” for the purpose of the 2012 Law, the reality was that he was working under the aegis of Sudatel in Sudan.
24.2 He had to travel between Sudan and Dubai which was covered on business class flights as a business expense and he never had the need to take up his contractual entitlement to an economy flight to Sudan and back in any year of his employment under Agreement 3 since Sudan was where, in practice, he was located for his work throughout the duration of Agreement 3 and where his home was.
24.3 All his flights on business to other parts of Africa, whether made via Dubai or otherwise were paid for, as would be expected, by Expresso/Sudatel.
24.4 He therefore had no reason to travel to his home country of Sudan because that was where he was, in practice, living when not travelling to Dubai or elsewhere on business. That is doubtless the reason why he did not make any such claim for a round-trip air ticket during the course of his engagement under Agreement 3.
25. In the circumstances this claim must also fail.
The Nature of Agreement 1, Agreement 2 and Agreement 3
26. The previous claims which I have determined all arose under the contractual provisions which were accepted as being binding on the parties, whether or not the nature of the Claimant’s engagement was governed by the 2005 Law or the 2012 Law, which had provisions which applied only to contracts of employment as opposed to contracts for services as an independent consultant. It was Expresso’s case that, following the conclusion of the Sudatel Contract in September 2009, thereafter the Claimant acted as consultant to Expresso and was employed by Sudatel who managed and controlled his work. The importance of this point is that it impacts upon any entitlement to ESG and statutory Penalties.
27. Reliance is placed by Expresso upon the draft Consultancy Agreement which the Claimant refused to sign and the fact that he accepted the sum of AED 2,500 monthly thereunder without, it is said, any complaint at the time about any reduction from his Gross Salary consisting of Basic Salary under Agreement 1 of AED 40,592, per month. The Claimant’s evidence was that he constantly complained that he was not being paid what he was owed and the claim which he has advanced under Agreement 1 for missing salary, whether wholly or partially, is said to reflect the differential of which he was deprived. There is no evidence of any complaint in writing from him before 2016 but he maintained that the reason for this was that all emails were on the company’s servers and that every two years or so these were updated by deleting past messages. Mr Alloub’s evidence was that no such complaint had been made.
28. Whilst the evidence is most unsatisfactory on this point, it is hard to see why, however disorganised Expresso/Sudatel may have been (and it was according to Mr Alloub in relation to formalising contractual arrangements, Agreement 2 and Agreement 3 should take the form that they do if they were truly contracts for services as a consultant as opposed to employment contracts. Mr Alloub, in his evidence confirmed that this is what they were, although he may not have had the necessary legal expertise to appreciate the distinction. Although the form of any contract is not determinative and much depends on who controls the manner of work of the individual in question, the Claimant was a senior employee in a management capacity and although apparently answerable to the Sudatel CEO, this is equally consistent with a contract of employment with Expresso and secondment to Sudatel or with the existence of two contracts of employment with more than one employer, particularly when, according to Mr Alloub’s evidence, Sudatel was the parent company and Expresso was essentially a holding company which had been set up in Dubai with a view to avoiding sanctions against Sudan in circumstances where the Sudanese government was a substantial shareholder in Sudatel.
29. The Claimant’s evidence was that he had a dedicated office in Dubai at the headquarters of Expresso where he kept his documents and to which he went from time to time when not travelling or working in Sudan. Although he rarely spent more than a week or 10 days there, his evidence was that he was rarely in any one country for more than two weeks at the time.
30 .On the material available I am unable to conclude that Agreements 1, 2 and 3 are anything other than contracts of employment as they state on their face, although their exact interrelationship with the Sudatel Contract in relation to common features such as entitlement to leave or living allowances is not one which I can determine. That point resurfaces however in a different guise in the next section of this judgement.
The applicability of DIFC Employment Law
31. All three Agreements are expressly governed by the law of the DIFC but that does not, in itself, result in the application of the 2005 Law or the 2012 Law. Article 4 (1) of the 2012 Law provides for its application to “an employee of an establishment having a place of business within the DIFC or an entity that is created by Law No. 9 of 2004” where “the employee is based within, or ordinarily works within or from, the DIFC”. Article 4 (2) provides that “the applicable law to a contract of employment of an employee based within, or who ordinarily works within or from the DIFC, shall be this Law”.
32. Two separate issues arise here.
32.1 First, Expresso, as referred to in each of the Agreements is registered in the DIFC but, at all material times, its offices were not in the DIFC but were in Saba Tower 1, JLT in onshore Dubai. The reason for this, as explained by Mr Alloub, was that at the time of its incorporation in 2007, the office which Expresso intended to occupy in the DIFC was not yet built and the company was located in onshore Dubai with the permission of the DIFC Company Registry. Since the office was outside the DIFC, it is hard to see how he could be said to be based within it or ordinarily working within or from it.
32.2 Secondly, there is a dispute as to whether or not the Claimant was based within, or ordinary worked within or from Dubai, let alone within or from the DIFC. Although his evidence was that he had an office in Saba Tower, dedicated to himself, the reality was that he was assigned to work in Africa by Expresso and did so in conjunction with the Sudatel Contract under which he was in practice based in Sudan.
33. All three Agreements referred to Expresso as registered in the DIFC with a registered office in on shore Dubai. Each agreement named the Claimant’s place of work as “the Company’s Dubai Office”, which could only refer to the on-shore office. His business cards, under Agreements 1 and 3, showed this office as his address but his email address could of course be accessed anywhere. Clause 1.2 and/or clause 1.3 of each Agreement, in differing language, provided that he could be required to work from time to time in performing services for associated companies in the Expresso group of companies in the UAE or elsewhere. This is what actually happened, as part of a restructuring which occurred during the course of Agreement 1 and which led to the draft Consultancy Agreement and the Sudatel Contract into which the Claimant entered and which was dated 1 September 2009. The Sudatel Contract described his “Area” as Expresso HQ, but as appears below, that did not reflect the reality of the position. The Sudatel Contract provided for what was a small monthly salary in international terms but for additional annual allowances and, according to Mr Alloub, free housing. It provided for a relocation allowance, a fuel and car allowance and 25 days of holiday, together with a terminal payment of a gratuity and the right to relocate the employee. The obvious overlaps with the terms of Agreement 1 are incapable of reconciliation. As Mr Alloub’s evidence showed, the manner in which Sudatel organised itself and its relations with its employees left much to be desired, with the result that he was not even aware of the Sudatel Contract and the payments made to the Claimant under it until later. Sudatel did not consult him as to the way in which the Claimant’s contractual arrangements were to operate, as between the parent company and Expresso and issues arose in consequence. The Draft Consultancy Agreement, which the Claimant professed never to have seen, but which I find was sent to him and to two other employees in a similar position who agreed to its terms, provided for termination of employment by Expresso from 20 September 2009 and a transfer of employment to Sudatel. Although the Claimant refused to conclude such a Consultancy Agreement, as stated by Mr Alloub and, in his own evidence, the Claimant said that he wanted 6 month’s salary in lieu of notice from Expresso in order for it to be terminated, the reality is that, in performing his work thereafter, he was managed by and answerable to the CEO of Sudatel and was based in and worked from Sudan, as well as being paid by Sudatel. whilst receiving AED 12,500 per month as a “consultancy fee” from Expresso up to the conclusion of Agreement 2.
34. In practice, the centre of his operations was in Khartoum, but he constantly travelled to countries in West Africa where telecommunications services were provided and also to suppliers in Europe. At paragraph 10 of his first witness statement, he described the nature of his work around Africa and the senior position he held, described as Planning Division Manager in the Sudatel Contract. He would return to Sudan where his home was, in circumstances where he was, on Mr Alloub’s evidence supplied with free housing by Sudatel. The nature of the Claimant’s employment was not office based in Dubai but, as a member of the Group Executive team, he functioned with senior management in Sudan and was answerable to the CEO of Sudatel, the parent company. In litigation in Sudan, the Claimant alleged that he had been employed there between September 2008 and May 2017.
35. He was cross examined on his travelling and in the example of 40 weeks about which he was questioned, no more than 5 working weeks were spent in Dubai and never for more than 7 days plus a weekend. This compared with periods of 2-3 weeks at a time in Khartoum. There was a period when he was in Khartoum, in the middle of the relevant 10 month period, for some 2 and half months with only a short trip to Rome on business during that period. The reality was that as a member of the Group Executive team of Sudatel he operated from Khartoum with other members of that team. He told the Court that his home remained in Sudan throughout the duration of the three Agreements.
36. Although he said that he had a dedicated office in the on shore Dubai premises where he kept documents and that he was in Dubai for some periods of time, passing through in transit to other countries which he had to visit, since the offices of Expresso, constituting its Headquarters were in on shore Dubai, he cannot be said to have worked out of any office in the DIFC nor was there any evidence that he ever set foot in it. He had no residency visa to live in the UAE, without which he could not stay in the country for more than 30 days at a time.
37. In applying the test as to where an employee is based or where he ordinarily works, or from which he ordinarily works, English authorities in relation to employment statutes show that the conduct of the parties is the key and not the contract terms themselves (See Lawson v Serco  IRLR 289 per Lord Hoffman at ). It is the way in which the contract is operated which matters and, on the evidence adduced here, it cannot be said that the Claimant was based within or ordinarily worked within or from the DIFC.
38. In these circumstances I am unable to find that, on its own terms, the 2012 Law is applicable to the Claimant’s contract of employment with Expresso, and in particular Agreements 2 and 3, after the Sudatel Contract was concluded, despite the fact that the Agreements are governed by the law of the DIFC and many provisions in them were obviously based on a template which appeared to correlate with some of the provisions of DIFC employment law. The very form of the documents constituting those Agreements showed deficient drafting, with mismatched numbering and one provision, clause 14.4, which was incoherent. It is what happened on the ground which counts and that does not fall within Article 4 of the 2005 or 2012 Law.
39. In consequence the claims for ESG and Penalties also fail.
40. Nonetheless, as the matters were fully argued I proceed to determine the remaining issues as if the 2012 Law did apply to Agreement 3.
End of Service Gratuity (ESG)
41. Clause 15.1 of Agreement 1, clause 12.1 of Agreement 2 and clause 12.1 of Agreement 3 provided that, upon termination of Employment, the Claimant would be entitled to “an end of service gratuity according to the applicable Employment Law” save in circumstances which are inapplicable to the present case. The entitlement therefore depends on the application of the Employment law provisions for such end of service payments.
42. The applicable Employment Law, if it had applied, would, in the Claimant’s submission, be Article 62 of the 2005 Law as amended by the 2012 Law which applied at the end of the fixed term of Agreement 3, namely 31 July 2014. Article 62 provides that an employee who completes continuous employment of one year or more is entitled to a gratuity payment at the termination of the employment. The gratuity payment is calculated on the basis of 21 days’ “basic wage” for each year of the first five years of service and 30 days’ “basic wage” for each additional year of service beyond that, up to a cap of two years’ worth of wages.
43. “Basic wage” is defined in Schedule 1 to the 2012 Law as meaning “the employee’s wage excluding any portion of an employee’s wage received in and/or as allowance for housing, travel” and various other matters. The basic wage is to be calculated taking into consideration the total number of calendar days in a year. Article 62 (3) provides that where the termination occurs prior to the end of any full year of employment, the gratuity payment is to be calculated on a proportionate basis.
44. As submitted by the Claimant, the gratuity entitlement is calculated on “years of service” and is not referenced to any particular individual contract of employment. It was said that there was no basis for separating the periods under Agreement 1, Agreement 2 and Agreement 3 when what was at issue was “continuous employment” under Article 62 (1) with calculations based upon “years of service” under Article 62 (2). The Court should look at the total period of continuous employment by the same employer, whether there had been promotion, change of position or role, alterations in salary or other benefits. No claim could arise as long as the continuous employment was in being, as it could only arise at the end of such continuous employment when all the years of service could be aggregated. No cause of action therefore accrued for ESG for the Claimant until 31 July 2014. It was submitted that this was the underlying policy of the provision, as is the case for redundancy payments in other jurisdictions and that this was the view taken by the judge in the Small Claims Tribunal in Ferko v Fermando Limited  DIFC SCD 020 (8 November 2015).
45. In these circumstances, the relevant period would be five years 273 days with a calculation based on the Claimants basic wage of USD 11,000 per month and a daily wage of USD 361.64. This would result in the Claimant’s entitlement the sum of USD 46,087.29, if the claim were valid.
46. Counsel for Expresso submitted that there was no continuous employment over the duration of Agreements 1-3 for three different reasons. I have rejected the argument that Agreements 1-3 were consultancy agreements and not contracts of employment, which was the first reason advanced. I also reject the second reason put forward, namely that there was only a consultancy agreement between 1 October 2009 and 1 August 2010 when Agreement 2 began, so that any period of continuous employment was broken for that period. As I have already found, I do not consider that the evidence is sufficient for me to take that view in the light of the strange interrelationship between the Sudatel Contract, the Draft Consultancy Agreement and Agreements 1, 2 and 3, given the express terms of the latter Agreements and Mr Alloub’s evidence.
47. The third reason is however more compelling, based on the definition in the 2005 and 2012 Law of “effective date of termination”. This provides that “the effective date of termination in relation to an employee who is employed under a contract for a fixed term which expires without being renewed under the same contract means the date on which the term expires”. In order for the employment not to be treated as terminated at the end of a fixed term contract, it has therefore to be “renewed under the same contract”. If that is to be read literally any difference in the terms of a new fixed term contract, other than the period of employment in question, would mean that there was no renewal, because it would not be the same contract. An increase in salary or a change of role or any other change in the terms of the new contract would mean that there could be no continuous employment, because that which had existed under the old fixed- term agreement had come to an end. Whilst this may seem a hard reading for the employee, I am unable to escape from the effect of the words used which result in the effective date of termination of employment being the expiry of the fixed term, absent renewal. If the employment is effectively terminated, it cannot be said to continue.
48. In the present case there were differences between Agreements 1, 2 and 3 and there was no renewal by conclusion of the subsequent Agreement. There were not only changes in job title but changes in salary and entitlements but above all, in each case a fresh contract was entered into which was not an extension or renewal of what preceded it. The decision of the SCT judge (which does not bind me, of course) involved a finding of renewal which enabled him to avoid the effect of the words of the definition to find a continuous period of employment (despite a salary differential). It is conceivable that renewal might be found in circumstances where there were minor changes and it would always be a question of fact whether what was done constituted renewal or a renegotiated agreement. Each case would turn on its own facts. For the reasons given, I cannot see how employment which comes to an end with expiry of a fixed term and is said to be effectively terminated can be considered to continue thereafter, when employment on different terms in another fixed term contract is agreed, as here, particularly when each Agreement in clause 3.4 speaks of the possibility of negotiating an “extension”, which was never done.
49. The effect of that conclusion would be two-fold in the present case if the 2005 Law or 2012 Law applied. First, any entitlement to ESG would arise at the end of each fixed term contract and relate to the years of service under that contract in continuous employment. Secondly, in consequence, claims for ESG under Agreements 1 and 2 would be time barred for the reasons given earlier. A claim for ESG under Agreement 3 would then fall to be calculated on the basis of the two year period of service from 1 August 2012 to 31 July 2014. This would mean a calculation on the basis of 2 x 21 x the daily wage of USD 361.64, if calculated correctly by the Claimant, amounting to USD 15,188.88.
The Statutory Penalty Payment
50. Article 18 of the 2012 Law which was repealed by the 2019 Law was effective as at the date of expiry of Agreement 3 on 31 July 2014. There is an issue between the parties as to whether or not an Article 18 (2) claim was made before the 2019 Law came into effect on 28 August 2019. It was on 20 March 2019 that the Claimant filed his claim in the DIFC and it was on 5 May 2019 that Particulars of Claim were served. Both of those events occurred prior to the 2019 Law coming into force which had the effect of reducing the time limit to 6 months or any claim not previously advanced in respect of an employment contract.
51. The issue which arises is whether or not any of the various versions of the Particulars of Claim included a claim for statutory penalty under Article 18 (2) prior to a pleading which was first produced in January 2022 following the decision of the Court of Appeal in December 2021. Having examined those different versions prior to that, I consider that Expresso is right to say that nowhere is there any reliance on the relevant provision in the relevant statute on which reliance is now placed for a penalty payment. At paragraphs 88 and 89 of the judgement of the Court of Appeal, the following appears:
“88. In our opinion the appeal should be allowed. It is clear that initially the Appellant was asserting a cause of action for breaches of, or arising out of, the 2005 Employment Law. It is the asserted facts that define his cause of action rather than the particular law which he invokes. He should therefore have leave to amend his Particulars of Claim in order to invoke such provisions of the 2005 Employment Law as support the relief which he claims by reference to the facts which he has alleged’’
89. It can fairly be said that the Appellant, acting through his advisers, has been the author of his own misfortunes. He initially invoked an unelected law. He then relied upon a misconceived belief, at first instance, that rights and obligations created under the 2019 Law had retrospective application. For these reasons, in our opinion, the costs order in the Court of First Instance should stand. The Appellant should have an opportunity now to amend his Particulars of Claim to make clear the statutory provisions upon which he relies. The Respondent should have any costs thrown away by reason of that amendment. There should be no order as to the costs of the appeal.”
52. RDC 7.34 (a) requires that “All claim forms must state the law which governs the dispute”. In common law jurisdictions, a party is required to plead the facts which constitute the cause of action and does not have to plead points of law. If a cause of action is statutory alone, however, such as a breach of statutory duty it would be necessary to plead the statute and its breach in order properly to plead a cause of action. As the DIFC is a jurisdiction founded upon statute, there is a need to plead the statute upon which any cause of action is founded. This is primarily a procedural requirement because it appears in the Rule of Court.
53. The Court of Appeal stated that the Claimant should be given the opportunity to amend his Particulars of Claim to make clear the statutory provisions upon which he relies, but in saying that, it did not give permission to amend and must have had in mind, as appears from the earlier discussion in the judgement of the application of the limitation provisions in the different statutes, that a new cause of action would likely be time barred.
54. Counsel for Expresso rightly submitted that the DIFC knows of no principle of “relation back” where a new head of claim is raised by amendment so that it operates as if it had been made at the time proceedings were first commenced. In England & Wales, this concept has been long established but particular rules of court are in place which essentially mean that it is not open to a party to obtain permission to amend where the effect of such amendment would be to introduce a claim which would be time barred at the time that the amendment was sought. None of this applies in the DIFC. If therefore an amendment was needed to include new facts in a pleading to give rise to a different cause of action, and that cause of action was already time barred, this Court would proceed on the basis that the new claim had no realistic prospect of success. In those circumstances the amendment would not be allowed.
55. Here, it could be said that no new facts need to be alleged at all. Article 18 (2) is a provision of law which applies in circumstances where employment comes to an end and wages or other amounts owing to an employee are unpaid 14 days thereafter. In those circumstances, under article 18 (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”.
56. However, the claim is undoubtedly founded on a statutory provision, namely Article 18 (2) of the 2005 Law as amended by the 2012 Law. There is no valid cause of action under that statute in relation to sums due under Agreements 1 and 2 both because no sums are owing under those Agreements by reason of time bar and also because the 2012 Law did not come into force until 23 December 2012, after both those Agreements had come to an end. The only claim for penalty that would be open to the Claimant would relate to sums owing under Agreement 3. The essential question is therefore whether or not a claim for a penalty under Article 18 (2) is a statutory cause of action which required it to be pleaded. Historically, it appears that lower courts such as the STC have disallowed such claims where they have not been pleaded. As a matter of principle, it appears to me, that it is necessary to plead the fact that sums were owing under Agreement 3 and remained unpaid at the end of the 14-day period provided by Article 18 (1) with the result that penalties were owing under Article 18 (2). It seems to me that it is necessary to plead the relevant Article which is an essential part of the cause of action. Without such a plea, no cause of action under Article 18 (2) has been pleaded. It is a statutory right which must be claimed and pleaded, to which limitation provisions apply. By not pleading the point until after the expiry of the 6-year limitation provision which applies under the 2012 Law (as explained by the Court of Appeal) the Claimant lost the right to make a claim in respect of the accrued right vested in him.
57. The claim, as framed by the Claimant was based a “daily wage” as defined in Schedule 1 to the 2012 Act. The penalty for any outstanding amounts therefore was said to run from 15 August 2014 at the rate of USD 672 per day, which as at 3 May 2023 was said to amount to 3180 days and a total figure of USD 2,136,960. Expresso stated that the calculation was wrong in a number of respects.
58. In his evidence, the Claimant accepted that he had agreed, when a loan was made to him by Expresso in order to pay a personal debt of his, that it should be set off against any sum owed to him. As at 4 October 2016, the ESG, on the findings I have made, had the 2012 Law applied, would have amounted to USD 15,188.88 but the penalty payment which would have accrued, had it applied in respect of the period of time between 15 August 2014 and 4 October 2016 would have been such that the payment of the USD 250,000 would not have extinguished the liability, but it would be credited against any sum owed.
59. The calculation advance cannot be correct in any event. When the 2019 Law came into force on 28 August 2019, Article 19 (4) (a) provided that a penalty pursuant to Article 19 (2) “will be waived” by the Court in respect of any period during which “a dispute is pending in the court regarding any amount due to the Employee under Article 19 (1)”. As is made plain on the decision of the Court of Appeal in The Industrial Group Ltd v Abdelazim El Shekh El Fadil Hamed  DIFC CA 005 and 006 (20 September 2022) at paragraphs 53 – 72, the accrued rights to a penalty at 28 August 2019 survives the new law coming into force, but thereafter there is no continuing right because of the terms of the 2019 Law. The aggregation of the penalty provisions ceases at that date because of the existence of a dispute as to entitlement to any sums at all. The maximum entitlement in respect of penalties could only run from 15 August 2014 until 28 August 2019, with the set- off of the USD 50,000 paid by Expresso on the Claimant’s behalf.
60. In the circumstances and for the above reasons, the Claimant fails and his claims must be dismissed. The claims under Agreement 1 and Agreement 2 are all time barred. The claims for six months’ pay in lieu of notice/damages, for payment for untaken leave and for air tickets under Agreement 3 all fail as a matter of contract. The claims for ESG and statutory penalties fail because the 2012 Law is inapplicable to Agreement 3.
61. Judgement must therefore be given for Expresso with costs, to be the subject of assessment by the Registrar if not agreed.