Claim No: SCT 042/2025

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

OLIVE

Claimant/Applicant

and

ONYX

Defendant/Respondent

ORDER WITH REASONS OF H.E. JUSTICE ANDREW MORAN

UPON reviewing the Judgment and Order of H.E. Justice Nassir Al Nasser (the “Judge”) dated 21 May 2025 (the “Judgment” and “Order”)

AND UPON reviewing the Claimant’s Appeal Notice dated 3 June 2025 seeking permission to appeal the Judgment (the “Application”)

AND UPON considering the documents and submissions filed by both parties and recorded on the case file

AND UPON considering the submissions made on behalf of the Applicant and Respondent at a combined hearing on 14 September 2025 (the “Hearing”) of the Application and the Appeal

AND PURSUANT TO the Rules of DIFC Courts (the “RDC”)

IT IS HEREBY ORDERED THAT:

1. The Application is granted and permission to appeal paragraph 2 of the Order is allowed but otherwise refused.

2. The Appeal against paragraph 2 of the Order is allowed and that part of the Order is set aside.

3. The Applicant and Respondent shall bear their own costs of the Application and Appeal.

Issued by:
Delvin Sumo
SCT Judge and Assistant Registrar
Date of Issue: 19 September 2025
At: 9am

Introduction:

1. By an Appeal Notice, including the required Application for Permission to Appeal, issued on 3 June 2025 (the “Application”), the Claimant Applicant and intending Appellant, Olive, seeks permission to appeal the Judgment of H.E. Justice Nassir Al Nasser sitting in the Small Claims Tribunal (the “SCT” or the “lower court”), of 21 May 2025.

2. The judgment was made dismissing all the claims for relief brought by the Claimant against the Defendant, while upholding the Defendant’s counterclaim seeking compensation for unauthorised absence in accordance with Article 28 of the DIFC Employment Law.

3. By his judgment, the Judge ordered as follows:

4. Under Rule 53.87 of the Rules of the Dubai International Financial Centre Courts 2014 (the “RDC”), the “Court”, meaning the Court to which an appeal is made, will allow an appeal where the decision of the lower court was:

5. By RDC 53.89, an application for permission to appeal a decision of the SCT, must be made to the Court of First Instance (the “CFI”) in a particular form, and under RDC 53.91, permission to appeal may only be granted by me as a Judge of the CFI where:

6. Application of that test, or satisfaction that its requirements have been met, obviously requires a prospective inquiry and assessment. In short, an applicant/intending appellant must show that there is a real (i.e. a realistic as opposed to a fanciful) prospect of persuading an Appeal Court that the Judge of first instance, in the SCT was wrong in what he decided. This requirement must be satisfied by the grounds of appeal advanced, and submissions made at an oral hearing (if one takes place) showing that the Judge erred in his findings and decision.

7. It is the current practice of this Court in appropriate cases, where it considers a hearing of an application for permission to appeal is appropriate and/or grants an applicant’s request to hold one, to proceed by way of a so-called “rolled-up” hearing of the application, and, if the test (supra) for the grant of permission to appeal is met, to proceed to hear and determine the appeal at the same hearing. This is such a case, and the Parties were informed and understood (as they confirmed at the Hearing) that the Court would proceed in that manner, when it decided that the Application gave rise to an important question of law, and that a hearing should be held to determine it.

8. The underlying dispute arises from the employment of Olive by the employer, Onyx pursuant to an employment contract dated November 1, 2017 (the “Contract”), under which the Claimant was engaged for the position of Chief Executive Officer (“CEO”). The Claimant and the Defendant/Respondent are hereinafter collectively referred to as the “Parties”.

9. On 25 October 2024, the Defendant issued a Termination Letter terminating the Claimant’s employment with immediate effect (the “Termination Letter”) on the ground of the Claimant’s alleged breach of contract, inter alia, unauthorised absence, failure to meet reporting requirements and sharing confidential information.

10. On 29 October 2024, the Claimant sent an email to the Defendant requesting, inter alia, the grounds for the immediate termination without prior notice, to which there was no response.

11. On 16 December 2024, the Claimant, through his instructed solicitors Curtis, Mallet-Prevost, Colt & Mosle LLP (“Curtis”), sent a legal notice to the Defendant contending that there was no factual, legal or statutory basis for the Termination Letter and stating that he was entitled, inter alia, to: (i) terminate his employment with the Defendant with immediate effect from the date of Curtis’ letter: and (ii) elect for payment to be made in lieu of his notice under Articles 19(1) and 63(2) of the DIFC Employment Law and other entitlements which he has claimed in these proceedings.

Summary of the Judge’s approach to and reasoning for his findings:

On the claim:

12. In making his decision, the Judge identified that the first issue to be decided in the case was whether the Claimant’s termination for gross misconduct was to be treated as lawful or unlawful. The Judge referred to and applied Article 63(1) of the Employment Law, explaining at paragraph 33 of the Judgment, that examination of the lawfulness of termination with immediate effect, required the Court to consider as a first stage, the conduct relied on by the employer for termination and whether it should be characterised as conduct that “warrants termination”. As a second stage of the examination, the Judge explained that the Court considers whether a reasonable employer would have terminated the employment on the ground or grounds.

13. The Court noted that although the Defendant relied on wrong articles and rules in the Termination Letter, the termination was also based on the Claimant’s absences, failure to submit requested monthly reports, and alleged breaches of confidentiality.

14. The Judge found no evidence to support the claim of data security violations (no breach of confidentiality). However, the Judge found that there was evidence before the Court which showed that from July 2024, the Claimant failed to submit the required monthly reports, even after returning from a short sick leave in August and September.

15. As to the Claimant’s absences from work, the Judge found that the Defendant had provided evidence from the period from March to October 2024, which demonstrated the Claimant’s absence from work during several periods. He referred to the Claimant’s submission that the office was not ready to hold business meetings and that his absence from the office was due to meeting clients in other locations. The Judge noted at paragraph 42 of the Judgment, that the Claimant failed to submit evidence that he had business meetings in other locations; and at paragraph 43 that he had failed to justify his absences. The Judge then found that the Claimant’s unjustified absences and his failure to provide the requested monthly reports, warranted termination of his employment for cause, and was lawful under Article 63 of the Employment law; and that by virtue of Article 63(3), he was not entitled to the relief claimed in the proceedings. On that basis and for those reasons he dismissed the claim.

On the Counterclaim:

16. The Judge recorded the factual and legal basis of the Respondent’s counterclaim at paragraphs 25-29 of the Judgment. It is not necessary to recite the details of the claim or the Judge’s calculation of days of absence and excess vacation leave taken, at paragraphs 47-53 of the Judgment, for which compensation was claimed and awarded; what is important for the purposes of this Application and Appeal, is the legal basis on which the claim was made and on which judgment was entered on the counterclaim. This was clearly and exclusively recorded in paragraphs 28 and 51 of the Judgment in the following terms:

17. The court observes in passing that no other legal basis of claim was sufficiently advanced before or relied upon by the Judge in making his Judgment and Order; and thus, allusion to claims for breach of contract or unjust enrichment in oral submissions at the Hearing, were irrelevant. The Judge did not properly have or consider such claims before him, and he did not order the Claimant to pay AED 49,018.86 to the Defendant on the basis of anything other than Articles 28(2) and (3) of the Employment Law. The important issue of law in this appeal, on which it appears there is no authority in the DIFC, is whether it was lawful for the Judge to make the order he did on the counterclaim, pursuant to those Articles of the Employment Law?

18. The Judge found that the evidence showed the Claimant was absent from work for 49 days from 18 March 2024; that he was entitled to only 24.5 days paid leave from January 2024 to the termination of his employment, so that the balance of 24.5 days should be treated as unpaid leave. However, he had been paid for those days and so the Judge calculated the Defendant was entitled to be compensated in the amount of AED 49,018.86 by the Claimant, for the excess vacation leave taken, in accordance with Articles 28(2) and (3) of the Employment Law.

The Applicant’s Grounds of Appeal:

Ground 1: Incorrect application of Article 28(2) DIFC Law No. 2 of 2019

19. This ground was advanced in a concise, well-formulated and forceful manner in the Appeal Notice, which cannot be improved by any summary, as follows:

20. This ground was rehearsed persuasively by Mr Bychikhin at the Hearing but added to in substance only by reference to Article 20 (together with Article 66(5)) of the Employment Law, which, it was submitted, demonstrates the statutory intent of the Employment Law, to regulate deductions from remuneration by prohibiting them, unless certain conditions are met; and by providing for claims for unlawful deductions.

21. In attempting to respond to this technical legal ground of appeal, the points of substance that Mr Ollie, appearing for the Respondent, advanced, were that recovery was justified to prevent unjust enrichment, “this [if it were allowed] would undermine the Employer’s right to remedy contractual breaches”. He submitted that the judgment aligns with the purpose of Article 28 to ensure that employers are not liable for unearned wages.

Discussion and determination of Ground 1:

22. The court was first of all persuaded that permission to appeal on this ground should be granted on the basis that there was, for the reasons which follow for allowing the appeal on this ground, both a realistic prospect of success and a compelling reason why the appeal should be heard and determined. This was to clarify the scope, meaning and effect of Article 28 of the Employment Law and how that article is to be applied in this jurisdiction.

23. In this court’s judgment, the Applicant is correct in his submission that the Employment Law has been amended with the clear legislative intention to provide, inter alia and in the provisions under which the Judge (erroneously in this court’s view) made his order on the Counterclaim, for a regime regulating and permitting deductions from an employee’s remuneration otherwise due to him or her, only in certain circumstances.

24. The purpose and intent of Article 28 is to provide a clear and simple procedure or mechanism for employers and employees, to apply themselves, upon a termination of employment. It deals simply with entitlement to payment or deductions in respect of vacation leave to which an employee has become entitled but not taken; and deductions from any payments otherwise due to an employee on the termination date, in respect of vacation leave already taken during the currency of the employment, to which an employee had not become entitled, at the date of termination.

25. It is a provision that regulates entitlement to monies in the employer’s hands due to an employee upon termination of his/her employment. It creates an obligation on the employer to pay a departing employee for vacation leave earned but not taken at the date of termination; and it confers a strictly confined and limited right on the employer to deduct “from any payments due to the Employee on the Termination Date”, an amount calculated in accordance with Article 28(3) where a departing employee has taken more vacation leave than has accrued to him/her under his contract of employment at the Termination Date.

26. Article 28 confers no other right or obligation on an employer or employee respectively. Specifically, it does not, on the clear wording of the Article, create a statutory cause of action or confer a right to sue for recovery of damages for leave taken, which had not accrued under a terminated contract of employment. Specifically, it does not create a statutory obligation on the employee, to repay wages paid for days of leave taken, which had not accrued.

27. There are of course other causes of action that might have been relied upon as the basis of the claim and order for payment made by the Judge on the counterclaim. These might include claims in contract or for a remedy in restitution for money had and received or for unjust enrichment. It is clear however, that the Judge did not consider or make his order on the basis of such potential claims or legal bases for them, but made it solely and exclusively upon his consideration and application of Articles 28(2) and (3). In the judgment of this Court, he was not entitled to make that order under the terms of the Article. For that reason, his order on the counterclaim was unlawful and must be set aside.

Ground 2: Incorrect Application of Burden of Proof in the Assessment of Gross Misconduct

28. Again, this ground is succinctly advanced but in this case it may be reduced in short summary to contentions that the Judge misapplied the burden of proof and relied on insufficient evidence.

29. The Respondent relied on two grounds for the termination which were accepted by the Judge as warranting termination (a third was rejected – see above). It is submitted in the Appeal Notice (paragraph 11) that in relation to the ground of absences from the office, it was for the Respondent to establish that the absences were unjustified and that instead, the Judge placed the burden on the Applicant to prove he was attending business meetings off site, which he failed to discharge, instead treating absence from the office alone as sufficient to justify immediate termination.

30. As to the second ground, failure to submit reports as requested for several months, the Judge gave no consideration to whether this conduct, viewed in context, would warrant termination with immediate effect by a reasonable employer. This ground was developed in oral submissions by Mr Bychikhin at the Hearing, who argued that the Judge had failed to apply the objective test of reasonableness, required by Article 63(1) of the Employment Law, pointing to the fact that in the Judgment, there was no recounting of his assessment of the seriousness of the alleged failure to submit the reports, no assessment of its impact on the business and no engagement in a meaningful way with the statutory test – there was a lack of discussion and reasoning, showing that the test was not applied. Instead, the Judge adopted a “mechanistic” approach and presumed that non-submission of the reports without more, meets the threshold for immediate termination.

Discussion and determination of Ground 2

31. It is necessary to make three preliminary observations before dealing with this ground and its sub-grounds.

32. First, a judgment of a judge dealing with a case in the SCT, is not required to refer to and deal with every competing piece of evidence and argument placed before the tribunal in reaching and expressing findings of fact and/or law on which the judgment turns. The Judge is of course required to consider all of the relevant evidence and argument placed before him, but in a judgment in the SCT, he is only required to refer briefly to the principal factual and legal contentions of the Parties; to make and express his findings of fact in a concise manner that is rational, coherent and reasonably open to him on the evidence before him; and thereafter to apply the law to the facts as he finds them to be, in reaching his judgment.

33. Secondly, an appeal from a decision of a Judge in the SCT, as was explained to the Parties at the Hearing, is not a complete rehearing of the trial before the Judge but a review to ascertain, as limited by RDC 53.87 (supra), whether the Judge went wrong; or his decision was unjust because some serious irregularity occurred at trial in reaching the decisions made. If the decision reached was one that the Judge could reasonably have come to on the material before him, then even if an appeal court would have reached a different decision, it will not substitute its own decision for that of the Judge.

34. Thirdly, if it is apparent from elsewhere in the judgment that the SCT judge was aware of and had in mind the relevant legal test or question in approaching and making his decision, that decision will not be set aside on the ground that he omitted to recite that test or question again, at the point of expressing a finding. That is unless that finding is one that no reasonable judge could have reached applying the test or answering the question, on the material before him, which would tend to show he was not applying the test or reached a perverse result in its application.

35. Dealing first with the criticism that the judge did not apply the correct objective test when deciding that the Applicant had conducted himself in a manner which warranted termination and that a reasonable employer would have terminated the employment as a consequence thereof. Further, that he proceeded in a mechanistic fashion. The ground and submission are essentially founded on the lack of narration by the Judge of his application of the test (or asking himself the relevant questions) at paragraphs 38 and 43 of the Judgment, when expressing his findings in relation to the failure to submit reports and the Applicant’s absences from the office. Whilst the Court accepts that there is at those points in the judgment, no narration of him directing himself or applying the tests or answering the two questions, there is no doubt whatsoever the Judge had the relevant questions well in mind from paragraphs 31-33 of the Judgment. There, the Judge articulated what was to be decided correctly, recited the relevant Article 63(1) and outlined the two-stage approach and objective assessment (whether a reasonable employer would have terminated the employment on that ground) which the Article mandates. In this Court’s view, it is completely untenable to suggest that when, a few paragraphs later in the Judgment he was making and expressing his decisions, he was not applying the two stage test and approach he had articulated on the very same page. That submission is accordingly rejected and provides no realistic prospect of success on an appeal.

36. As for the ground and submission that the Judge reversed the burden of proof in relation to the absences from the office, by placing the burden on the Applicant to prove he was attending business meetings off site, when it was for the Respondent to establish that the absences were unjustified, this is to misunderstand the contractual obligation – which was to be in the office; and the Respondent’s burden, which was to prove that he was not in the office as he contractually was required to be. There was extensive evidence before the Judge proving the Applicant’s absence from the office during periods when offices were available for meetings and that he was not engaged in business meetings. It was open to the Judge to accept this evidence, and he plainly did accept it. The Judge was entitled to conclude, as is implicit in his findings and approach, that this evidence gave rise to an evidential, not a legal burden on the Applicant to explain his absences from the office. There was extensive evidence and argument from both sides concerning his explanation, which was refuted by the Respondent. The Judge was therefore entitled to observe that the Claimant had failed to submit evidence that he had business meetings in other locations, and that observation does not substantiate the ground that he was thereby reversing the legal burden of proof. The breach of contract was proved, and the Judge was not satisfied of the reasons advanced to justify the breach. There is nothing in this ground and it does not give rise to a realistic prospect of success on appeal.

37. As for the ground that the Judge relied on insufficient evidence, in the case of the failure to submit reports, there was abundant evidence before the Judge from the Respondent, which the Judge was entitled to accept, and must be taken to have accepted, even though he did not refer to it in his Judgment, that the failure to provide the requested reports was detrimental to the business. I have read the extensive expositions advanced by the Respondent in the materials they placed before the Judge, of the difficulties the lack of reporting presented; and though vigorously disputed as false and invented ex post facto, the Judge was entitled to accept the Respondent’s case and evidence in this respect. Although his Judgment as to this aspect of the Applicant’s conduct contributing to the warranting of the termination, contains minimal findings or references to the evidence of its adverse impact on the Respondent’s business, there is enough to be satisfied that the Judge made a finding that was open to him on the evidence before him (which the Court has reviewed); viz., that taken with the absences, this lack of reporting warranted termination and a reasonable employer would have terminated the contract. The Judge highlighted in his Judgment that this was a prolonged failure and there was evidence of its adverse effect before him. In the Court’s judgment, there is no realistic prospect of showing on appeal, that the Judge was wrong in what he decided. It is clear from paragraphs 20 and 43 of the Judgment that the defence case was advanced and upheld, on the basis of the combined effect of the breaches relied upon. Whilst the Judge assessed them independently, there is no reason to find that the Judge did anything other than conclude that taken in combination, the breaches warranted termination and that a reasonable employer would have terminated the contract of employment for those reasons. There is no basis for the submission that the Judge adopted a mechanistic approach and failed to assess the seriousness of the conduct or its impact on the employer.

38. As to insufficiency of evidence of absences, this is frankly a hopeless ground and submission after an extensive review of all of the evidence marshalled and placed before the Judge by the Respondent.

39. For all of the foregoing reasons, permission to appeal on ground 2 is refused.

Ground 3: Breach of Statutory Right to Reasons for Dismissal under Article 64 of DIFC Employment

40. It is submitted in this ground that:

41. Article 64 is limited to providing as follows:

42. There is nothing in the Employment Law which gives rise to the consequences contended for in the submissions on this ground quoted above. The Article itself does not provide for any sanction or consequence of it being breached, certainly nothing like the consequences contended for in this ground of appeal.

43. At the hearing, the Court asked Mr Bychikhin if there was any authority for the second proposition advanced. He produced no authority and referred without any particulars of them only to, “general principles of the Employment Law”, and the requirement of the Article itself, to provide sufficient detail for the employee to understand the basis of an immediate dismissal for cause.

44. Further examination of the Employment Law does reveal a sanction or consequence for breach of the Article but it is not the consequence or sanction contended for by the Applicant. Article 67 provides as follows:

45. Whilst it is possible that a case might have been brought under the emphasised provisions for a fine or penalty, there was no such case before the Judge; and he did not err in failing to determine a case that was not before him or in failing to refer to Article 64. There is therefore no basis for asserting that the Judgment on the issue of whether the termination was warranted is procedurally and legally flawed. By the time the Judge came to determine the issues before him, the Applicant had full and complete notice of the reasons for his dismissal and a full and complete opportunity to contest that they warranted termination of his contract of employment for cause.

46. As for the second quoted submission, even if there was non-compliance with Article 64, (which it is not necessary to decide) it was not a serious procedural or other irregularity in the proceedings, (within the meaning of RDC 53.87) but a breach of an article of the Employment Law, committed and complete long before the proceedings were commenced. There was no procedural irregularity in the proceedings before the SCT, where the grounds relied on for the termination were extensively and repeatedly articulated in the pleadings and evidence before the Court.

47. This third ground of appeal is accordingly lacking in any merit and permission to appeal on this ground is accordingly refused.

Conclusion:

48. For the reasons now given, permission to appeal on Ground 1 is granted. The appeal against the order on the Counterclaim is allowed and the Judge’s order that the Applicant shall pay AED 49,018.86 to the Respondent is set aside.

49. Permission to appeal on Grounds 2 and 3 is refused.