January 18, 2023 SCT - Judgments and Orders
Claim No. SCT 417/2022
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 H.E. JUSTICE MAHA AL MHEIRI
|Hearing :||9 January 2023|
|Judgment :||18 January 2023|
JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI
UPON the Claimant filing an Amended Claim Form dated 29 December 2022
AND UPON a second hearing having been listed before H.E. Justice Maha Al Mheiri on 9 January 2023, with the Claimant in attendance and the Defendant’s representative failing to attend
AND UPON reading the submissions and evidence filed and recorded on the Court file
AND PURSUANT TO Rule 53.61 of the Rules of the DIFC Courts the (“RDC”)
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum of AED 69,433.80.
2. The Defendant shall immediately cancel the Claimant’s employment visa.
3. The Defendant shall pay the Claimant a portion of the Court fee in the sum of AED 1,388.68.
Date of issue: 18 January 2023
1. The Claimant is Mibhut (the “Claimant”), an individual filing a claim regarding his employment at the Defendant company.
2. The Defendant is Marto (the “Defendant”), a company registered in the DIFC located at Gate District Precinct, DIFC, Dubai, UAE.
Background and the Preceding History
3. The underlying dispute arises over the employment of the Claimant by the Defendant pursuant to an employment contract dated 23 January 2022 (the “Employment Contract”). The Claimant was hired as an Expansion Manager with a monthly salary of AED 24,000, consisting of:
(a) Basic salary in the amount of AED 14,333.33;
(b) Housing allowance in the amount of AED 6,000; and
(c) Other allowances in the amount of AED 3,600.
4. During July 2022, the Defendant started facing financial difficulties which lead to the founders of the Defendant’s company to flee the UAE. The Claimant’s September and October salaries were unpaid.
5. On 26 September 2022, the Claimant submitted his resignation to the interim CEO of the Defendant and was required to serve a 1-month notice period starting from 1 October 2022.
6. On 17 November 2022, the Claimant filed a claim in the DIFC Courts’ Small Claims Tribunal (the “SCT”) claiming various sums set out as follows:
(a) Salary for the month of September in the amount of AED 24,000;
(b) 1-month notice period in the amount of AED 24,000;
(c) Payment in lieu of 25 days of untaken annual leave in the amount of AED 20,000; and
(d) End of Service gratuity.
7. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a second hearing held on 9 January 2023 with the Claimant in attendance and the Defendant’s representative absent although served with notice.
8. RDC 53.61 of the Rules of the DIFC Courts stipulates that “if a defendant does not attend the hearing and the claimant does attend the hearing, the SCT may decide the claim on basis of the evidence of the Claimant only”.
9. This dispute is governed by the DIFC Law No. 4 of 2021 (Employment Law Amendment Law) (hereafter the “DIFC Employment Law”) in conjunction with the relevant Employment Contract.
10. I shall set out below each of the Claimant’s claims, as the Defendant failed to file any form of defence, the Court shall determine the matter on the basis of the DIFC Employment Law and the Employment Contract.
Outstanding salary for the month of September and 1-month notice period
11. The Claimant is seeking payment for his outstanding salary in the sum of AED 24,000 for the month of September and 1-month notice.
12. Article 62 of the DIFC Employment Law reads as follows:
“PART 10: TERMINATION OF EMPLOYMENT
62. Minimum notice periods
(1) An Employer or an Employee may terminate an Employee’s employment without cause in accordance with this Article.
(2) Subject to Articles 62(3), 62(4), 62(6) and 63, the written notice required to be given by an Employer or Employee to terminate the Employee’s employment shall not be less than:
(a) seven (7) days, if the period of continuous employment of the Employee is less than three (3) months, including any period of Secondment;
(b) thirty (30) days, if the period of continuous employment of the Employee is in excess of three (3) months but less than five (5) years, including any period of Secondment; or…”
13. As the Claimant worked for the Defendant from 23 January 2022, (i.e. more than 3 months), he is entitled to 1-month notice, as per the DIFC Employment Law. In light of this, I have determined that the Defendant shall pay the Claimant his salary for in the amount of AED 24,000 for the month of September and his 1-month notice in the amount of AED 24,000.
Payment in lieu of untaken annual leave
14. The Claimant claims an amount of AED 20,000 which reflects the amount accrued against his 25 days of untaken annual leave. The Claimant submits that he has not taken any annual leave during his employment period. The Claimant therefore claims payment in lieu of his 25 days of his annual leave.
15. I do not agree with the Claimant, as I find that the Claimant did not complete 1 year of service with the Defendant, thus enabling him to avail the 25 days’ annual leave per annum. The accrual of annual leave is carried out gradually throughout the year, and upon the resignation or termination of an employment relationship, any amounts owed would be pro-rated against the amount of time passed during the course of that year. The Claimant’s last working day was 31 October 2022, which resulted in the Claimant accumulating 19.35 days prorated until his notice period.
25 days per annum/12 months = 2.08 x 9 months and 9 days = 19.35 days
16. As such, I find that the Claimant shall be paid the amount of AED 21,433.80 (AED 24,000 x12/260 = AED 1,107.69 x 19.35 days = AED 21,433.80).
End of Service Gratuity and Contributions to the Qualifying Scheme
17. Article 19 of the DIFC Employment Law stipulates the following:
“(1) An Employer shall pay to an Employee, within fourteen (14) days after the Termination Date:
a. all Remuneration…
b. where applicable, any Gratuity Payment that accrued prior to the Qualifying Scheme Commencement Date under Article 66(1) not transferred to a Qualifying Scheme under Article 66(6)”
18. Article 66 of the DIFC Employment Law states, where relevant, that:
“(1) An Employee who is not required to be registered with the GPSSA under Article 65(`), and who completes continuous employment of at least one (1) year with their employer, before or after the Qualifying Scheme Commencement Date is entitled to a Gratuity Payment for any period of service prior to the Qualifying Scheme Commencement Date on the termination of their employment. …
(2) An Employee’s Gratuity Payment shall be calculated as follows:
(a) an amount equal to twenty one (21) days of the Employee’s Basic Wage for each year of the first five (5) years of service prior to the Qualifying Scheme Commencement Date; and
(b) an amount equal to thirty (30) days for the Employee’s Basic Wage for each additional year of service prior to the Qualifying Scheme Commencement Date. …
(7) From the Qualifying Scheme Commencement Date an Employer shall, on a monthly basis, pay to a Qualifying Scheme, for the benefit of each Employee who is not an Exempted Employee, an amount equal to as least the Core Benefits, which shall be calculated as follows:
(a) five point eight three percent (5.83%) of an Employee’s Monthly Basic Wage for the first (5) years of an Employee’s service, inclusive of any period of employment of Secondment served to prior to the Qualifying Scheme Commencement Date; and
(b) eight point three three percent (8.33%) of an Employee’s Monthly Basic Wage for each additional year of service…”
19. The abovementioned clauses provide that an employee is required to work a minimum period of 1 year for him to be eligible to receive his gratuity payment in accordance with the DIFC Employment Law. As such the Claimant’s claim for his gratuity payment shall be dismissed.
20. The Claimant seeks to recover the fee that he has paid to the Court for the filing of this Claim. I am of the view that, as the Claimant has been unsuccessful on some his claims, he should be entitled to recover a portion of the fee in respect of the claims for which he has been successful.
21. In light of the aforementioned, I find that the Defendant shall pay the Claimant the sum of AED 69,433.80.
22. I am of the view that, as the Claimant has been unsuccessful on some his claims, he should be entitled to recover a portion of the fee in respect of the claims for which he has been successful. The Defendant shall pay the Claimant the amount of AED 1,388.68 being 2% of the judgment sum owed to the Claimant.