Claim No: SCT 055/2024
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 MAITHA ALSHEHHI
BETWEEN
NOEL
Claimant
and
NATALIA
Defendant
| Hearing : | 28 March 2024 |
|---|---|
| Judgment : | 18 April 2024 |
JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI
UPON the claim having been filed on 2 February 2024 (the “Claim”)
AND UPON the Defendant’s defence with counterclaim dated 8 February 2024 (the “Counterclaim”)
AND UPON a hearing having been listed before SCT Judge Maitha AlShehhi on 28 March 2024 with the Claimant and the Defendant’s representative in attendance (the “Hearing”)
AND UPON reviewing the documents and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the amount ofAED 70,000.
2. The Defendant’s Counterclaim shall be dismissed.
3. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount ofAED 1,400.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 18 April 2024
At: 9am
THE REASONS
Parties
1. The Claimant is Noel (the “Claimant”), an individual filing a claim regarding his employment at the Defendant company.
2. The Defendant is Natalia (the “Defendant”), a company registered in the DIFC, Dubai, the UAE.
The Claim
3. The Claimant is seeking his salary disbursement and damages incurred following his termination from the Defendant company.
4. The Claimant submits that he started working for the Defendant from 3 July 2023 pursuant to the signed offer letter dated 26 June 2023 that provides for a start date of 3 July 2023 (the “Offer Letter”).
5. Although the Offer Letter mentioned the place/location of work to be in Dubai, the Claimant asserts that he was assured by Mr Noble , Chief Product Officer (“CPD”) that he was permitted to work remotely during this period.
6. In support of this, the Claimant submitted a screenshot of a translated conversation (from Russian) between himself and the CPD on LinkedIn which reads as follows:
“Claimant:
an immediate question: the location is Dubai, we have discussed distance working and business trips. is it still Iin force? And if yes that device setup should be? Is it going to be okay to use IP connection?
Mr Noble:
Yes, distance working and business trips
Clamant:
one more moment to check: are the business trips going to be at the expense of the company? (just in case)
And an additional question: what about working hours?
Mr Noble:
We may conclude a contract with a local company somewhere in Europel if you have an eye on some, send us a link, and our legal expert will have a look at it.
The business trips are going to be at the expense of the company”
7. The Claimant contends that he was an employee of the Defendant from 3 July 2023 to 11 August 2023. During this time, the Claimant submits that he never received any negative feedback about his performance and was surprised to find out that he was let go and that his Offer Letter was allegedly retracted before he commenced employment as he was not informed earlier. This was only communicated to him when he requested his salary payment, which resulted in termination of employment when the Defendant refused to pay his full salary as set out in the Offer Letter.
8. The Claimant takes the view that he was an employee of the Defendant based on the fact that he was given an employment email address, attended meetings, communicated on a regular basis with his manager through Microsoft Teams, had introductory sessions, met his colleagues from the production team and was made privy to confidential information, although, the Claimant adds that he never signed a non-disclosure agreement (“NDA”).
9. The Claimant adds that upon enquiring about his salary, he was asked to send his bank details as well as a list of all the items he worked on during his employment which he sent.
10. On 4 August 2023, the Defendant responded to the Claimant by way of email to inform him about his termination:
“Hi Noel,
Many thanks for our call today and the below information.
As discussed on the call, we will not be continuing our working relationship, so consider the offer letter as withdrawn.
As promised, I will get back to you by Tuesday 8th of August.
Best regards,
Norman
11. After repeated follow ups for payment, the Defendant sent the following on 18 August 2023:
“Dear Noel,
I hope all is well, and please accept my apologies for the time taken to get back to you.
As discussed on our call, I needed to get clarity on the facts of the situation before getting back to you.
The stance of our board is that the contract was never issued, the offer letter was retracted, and this was communicated to the person dealing with the matter before the joining date.
However, they have approved to pay 1/3 of one month according to the offer letter as a show of good faith.
Please share with me your banking details so I can arrange with finance to transfer the approved amount to you. Let me know if you have any other questions at any time.
I am deeply sorry for the inconvenience this matter has caused and wish you the best in your future endeavors.
Best regards,
Norman”
12. The Claimant submits that the Defendant is in breach of the DIFC Employment Law as it failed to produce a written employment agreement within 7 days of employment as required by the DIFC Employment Law and submits that although he is not required to do so, he requested several times for the same be produced by his managers to no avail.
13. Therefore, the Claimant is seeking payment in the total amount of AED 140,000 which comprises of payment in lieu of his salary in the amount of AED 40,000, penalties accrued under Article 19(2) of the DIFC Employment Law in the amount of AED 40,000 as well as compensation for loss of opportunity and damages in the amount of AED 60,000.
The Defence with Counterclaim
14. The Defendant takes the view that the Claimant’s employment was contingent upon the issuance of an employment visa as mandated in the Offer Letter. As such, the Defendant submits that the Claimant was unauthorised to work remotely as the Human Resources department was unaware of the Claimant’s recruitment up until he sent an email requesting his salary disbursement as he had completed one month of service.
15. The Defendant further submits that it is unaware of any instruction from management which would enable the Claimant to work remotely. Additionally, it could not find any record or email which pertains to eligibility of remote working given to the Claimant.
16. The Defendant contends that due to the Claimant’s senior position, it is his responsibility to follow up on the issuance of the employment agreement by way of email and reiterates that an Offer Letter cannot be treated as an employment contract.
17. However, at the Hearing, the Defendant’s representative confirmed that it does not deny that the Claimant was working at the Defendant company.
18. The Defendant is requesting the Claimant to return all confidential information it obtained during the Claimant’s employment.
Applicable law
19. This dispute is governed by the Employment Law Amendment Law DIFC Law No. 4 of 2021 (the “DIFC Employment Law”) in conjunction with the Offer Letter.
Discussion
Was the Claimant an employee of the company pursuant to the Offer Letter?
20. As a result of the Defendant’s confirmation at the Hearing that the Claimant was indeed an employee of the company, there is no need for me to determine the Claimant’s employment status as this was confirmed orally at the Hearing.. As such, I shall not discuss this in further detail.
21. As the Claimant was an employee during this period, it follows that the Claimant should be paid for his time during his tenure. As such, I find that the Claimant is entitled to the sum of AED 30,000 for the period between 3 July 2023 to 4 August 2023 (being his termination date).
22. Article 14 of the DIFC Employment Law stipulates that an employment contract must be provided to an employee within 7 days of employment which is in contravention with the Defendant’s statement that contracts are issued within a month of joining. Therefore, I find that the Defendant is in breach of the DIFC Employment Law for its failure to provide an employment contract even though it submits that it has retracted the Offer Letter, the fact remains that the Claimant served as an employee of the company for over one month.
23. Although the Defendant proceeded to file a Counterclaim in respect of retrieving confidential information, the Defendant’s representative failed to make any submissions at the Hearing in respect of this.
24. The Claimant confirmed that he has returned all confidential information and is not in possession of any further confidential information belonging to the Defendant. Therefore, I shall order that the Defendant’s Counterclaim is dismissed.
Is the Claimant entitled to penalties under Article 19 of the DIFC Employment Law?
25. The Claimant is requesting the Court to impose penalties for late payment in accordance with Article 19 of the DIFC Employment Law as the Defendant failed to pay within 14 days of termination date i.e.18 August 2023.
26. 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 (excluding, where applicable, any Additional Payments deferred in accordance with Article 18(2)
(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);
(c) a daily wage for each day of accrued Vacation Leave not taken;
(d) all outstanding amounts due in respect of the Employee under Article 66(7) not yet paid to a Qualifying Scheme.
(2) Subject to the provisions of Article 19(3) and 19(4), an Employee shall be entitled to and the Employer shall pay a penalty equal to an Employee’s Daily Wage for each day the Employer is in arrears of its payment obligations under Article 19(1).”
27. Article 19(1) of the DIFC Employment Law imposes an unequivocal obligation upon the Defendant to pay the full amount to the Claimant on time regardless of the circumstances. However, the Defendant did not pay any amounts to date and the Claimant consequently proceeded to file this claim on 2 February 2024.
28. Article 19(4) of the DIFC Employment Law pertains to the penalty that may be imposed by the Court against the Defendant and provides conditions as to when these penalties can be waived by the Court, and reads as below:
“A penalty pursuant to Article 19(2) will be waived by a Court in respect of any period during which:
(a) a dispute is pending in the Court regarding any amount due to the Employee under Article 19(1); or
(b) the Employee's unreasonable conduct is the material cause of the Employee failing to receive the amount due from the Employer.”
29. By virtue of the provision above, the Court can waive penalties imposed after 2 February 2024, being the date the Claimant filed the claim with the SCT.
30. The last day as to when the Defendant ought to have paid the Claimant his pending dues was 18 August 2023 (14 days from the termination date of 4 August 2023) and given that the Claimant filed its claim on 2 February 2024, I find that the Defendant is liable to pay a penalty of 168 days in compliance with Article 19(4) of the DIFC Employment Law. The Claimant’s wage is AED 30,000 x 12 months/260 days = AED 1,384.61 daily wage x 168 days = AED 232,614.48.
31. However, given that the Claimant quantified this claim in the amount of AED 40,000, I shall award the Claimant this figure only.
32. The Claimant is further seeking damages on the basis that the Defendant made false representations and misrepresented the position which induced him to accept this job offer and reject the rest. As a result, the Claimant allegedly missed another opportunity.
33. In response, the Defendant submits that there is no indemnification clause in the Offer Letter and therefore it should not be liable to pay any damages.
34. The Claimant failed to provide the Court with any evidence to supports its claim for damages, therefore, I shall dismiss this claim for lack of evidence.
Findings
35. The Defendant shall pay the Claimant the amount of AED 70,000.
36. The Defendant’s Counterclaim shall be dismissed.
37. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 1,400.