Claim No: SCT 029/2023
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
BEFORE SCT JUDGE MAITHA ALSHEHHI
|Hearing :||7 February 2023|
|Further submissions :||9 February 2023|
|Judgment :||16 February 2023|
JUDGMENT OF SCT JUDGE MAITHA ALSHEHHI
UPON the claim having been filed on 19 January 2023
AND UPON a hearing having been held before SCT Judge Maitha AlShehhi on 7 February 2023, with the Claimant and the Defendant’s representative in attendance
AND UPON a partial consent order dated 7 February 2023 in respect of the Defendant lifting the absconding case against the Claimant and cancelling the Claimant’s employment visa
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 6,923for penalties incurred under Article 19 of the DIFC Employment Law.
2. The Claimant’s other claims shall be dismissed.
3. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount ofAED 367.25.
4. Each party shall bear their own costs.
SCT Judge and Assistant Registrar
Date of issue: 16 February 2023
1. The Claimant is Mintil (the “Claimant”), an individual filing a claim against the Defendant regarding his employment at the Defendant company.
2. The Defendant is Mester (the “Defendant”), a company registered in the DIFC, Dubai, UAE.
Background and the Preceding History
3. The underlying dispute arises out of the employment of the Claimant by the Defendant pursuant to an employment contract dated 21 October 2022 with a start date of 24 October 2022 (the “Employment Contract”). The Claimant’s monthly remuneration is set out to be AED 7,500.
4. On 16 December 2022, the Claimant was terminated by the Defendant company by way of email with immediate effect.
5. On 19 January 2023, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking the following reliefs:
(a) Visa cancellation and fines to be imposed as set out in schedule 2 of the Employment Law DIFC Law No.2 of 2019 (the “DIFC Employment Law”);
(b) Compensation for failure to provide health insurance and fines to be imposed pursuant to schedule 2 of the DIFC Employment Law;
(c) Fines to be imposed for failure to pay his salary within 7 days of the end period pursuant to Articles 18(2), 20 and 28(2) of the DIFC Employment Law; and
(d) Compensation in the amount of AED 25,000 for losses incurred by the Claimant as a result of the Defendant’s actions.
6. On 30 January 2023, the parties attended a consultation before SCT Judge Delvin Sumo, however, they were unable to reach a settlement.
7. On 7 February 2023, in line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held (the “Hearing”).
8. On 9 February 2023, by way of a post-hearing submission, the Claimant provided the court with a breakdown of the amounts that he is seeking to claim which exceeds the amount mentioned in the Claim Form (AED 76,350) (the “Claimant’s Post-Hearing Submissions”).
9. It is important to note that the Court will only consider the financial limit sought within the Claim Form which, in this instance, is in the amount of AED 25,000. I note from the court file that the Claimant has only paid a filing fee for this claimed sum (i.e. AED 25,000) therefore any order I may make in favour of the Claimant shall be limited to a sum no greater than AED 25,000.
10. On 9 February 2023, the Defendant filed further submissions in response to the Claimant’s Post-Hearing Submissions.
11. At the Hearing, the parties reached a partial settlement of this claim, as such, a partial consent order was issued on 7 February 2023 in respect of the cancellation of the Claimant’s employment visa and ordering the Defendant to lift the absconding case against the Claimant (the “Partial Consent Order”).
12. I set out below the terms of the Partial Consent Order:
IT IS HEREBY ORDERED BY CONSENT THAT:
1. The Claimant shall sign the DIFCA employment permit visa cancellation form dated 30 January 2023, available on the DIFC Courts’ eRegistry portal, and return it by way of email to the Defendant’s representative by no later than 5:30pm on Tuesday, 7 February 2023.
2. The Claimant shall handover the DIFC employment card to the Defendant’s office reception area by no later than 5:30pm on Tuesday, 7 February 2023 and the Defendant’s representative is to provide the Claimant with an acknowledgement form to sign.
3. Upon completion of paragraphs 1 and 2 above, the Defendant shall immediately lift the absconding case against the Claimant and shall immediately proceed to cancel the Claimant’s employment visa.”
4. The above shall be completed as partial settlement of this Claim.”
13. By virtue of the Partial Consent Order, the Claimant’s claim for the cancellation of his visa and the lifting of his absconding case imposed against him has already been disposed of and will not be discussed in detail in the judgment. I shall address the Claimant’s remaining claims for monetary relief below.
14. For the sake of completeness, I hereby order that the Defendant’s name be amended to reflect the company’s name as per the Employment Contract, i.e. “Mester”. The error made by the Claimant within the Claim Form is a common one and the SCT’s practice in these circumstances is for the judge presiding over the hearing to discover an error of incorrectly named litigants or parties and recommend that the parties be correctly spelled going forward. I have determined that this order be made of my own initiative pursuant to RDC 4.12.
15. The Claimant’s case is that he was terminated from the Defendant company on 16 December 2022 (i.e. during his probationary period) and his salary for the period of 24 October to 31 October 2022 was delayed and not paid on time upon filing the claim with the SCT. In addition, his employment visa was not cancelled within 30 days following his termination date for no valid reason which prevented the Claimant from pursuing other job opportunities.
16. The Claimant submits that the Defendant failed to comply with the terms of the Employment Contract for failure to provide health insurance as expressly mentioned within. He further submits that continuous reminders were sent to the Defendant with no clear answer provided by the Defendant as to why he was not offered any insurance.
17. Notwithstanding the Partial Consent Order, the Claimant is still pursuing his monetary claim against the Defendant in relation to the delay of his visa cancellation and his salary payment.
18. Further to the above, the Claimant submits that the Defendant is liable to pay a fine as a result of the violation of the Employment Contract in the amount of USD 4,000. The first fine in the amount of USD 2,000 is in relation to the Defendant’s failure to cancel the Claimant’s employment visa in accordance with Article 57(4) of the DIFC Employment Law as stated in schedule 2 of the DIFC Employment Law (“Schedule 2”) and the second fine in the amount of USD 2,000 is for failure to provide the Claimant with health insurance in accordance with Article 56 of the DIFC Employment Law as mentioned in Schedule 2.
19. Within the Claimant’s Post-Hearing submissions, he states that the Defendant failed to pay his salary on time and within 14 days of being terminated and as such, the Defendant is liable for Article 19 penalties under the DIFC Employment Law in the amount of AED 11,500.
20. The Claimant concedes that had his visa been cancelled promptly, then he would have found another job with an increase in the salary. As such, he is claiming the amount of AED 10,000 as compensation.
21. The Claimant submits that he was asked to handover his DIFC employment card in order to process the visa and he was reluctant to do so absent a valid written obligation to do so by virtue of the Employment Contract or the DIFC Employment Law. This is mainly due to the reason that the DIFC employment card was provided to the Claimant by the DIFC and not the employer.
22. Due to the Defendant’s failure to provide health insurance for the Claimant, the Claimant submits that he had incurred costs when visiting a dentist due to pain in his tooth and was advised that the costs of fixing his tooth would be in the amount of AED 54,850.
23. At the Hearing, the Claimant confirmed that his salary for October 2022 was paid on 1 February 2023 and is seeking compensation from the Defendant in the amount of AED 11,500 as penalty equal to 46 days of the his daily wage pursuant to Article 19 of the DIFC Employment Law.
24. The Defendant submits that the reason for the delay in cancelling the Claimant’s employment visa was mainly due to the fact that the Claimant refused to hand over his DIFC employment card despite repeated requests as it is considered an asset of the company and identifies the Claimant as an employee of the Defendant company which is in compliance with Article 14(2) of the DIFC Data Protection Law.
25. As mentioned earlier, the Claimant’s claim for his visa to be cancelled and the return of the DIFC employment card has been dealt with and therefore it will not be discussed in detail herein.
26. The Defendant alleges that it obtained the Claimant’s health insurance on 15 December 2022 and has not cancelled the insurance since. The Defendant submits that the delay is expected due to the nature of such applications and states that the Claimant’s previous employment visa was cancelled on 2 November 2022 which resulted in the postponement of obtaining health insurance in favour of the Claimant.
27. The Defendant states that it did not refrain from providing health insurance and the Claimant ought to have notified the Defendant company if he had any concerns pertaining to his health.
28. The Defendant confirms that, in any event, dental insurance is not a benefit covered within the Claimant’s health insurance policy. As such, it denies the Claimant’s claim in relation to the compensation for failure to provide health insurance.
29. The Defendant submits that the Claimant was not restricted in pursuing other job opportunities and alleges that in the event the Claimant was successful in securing a job then he would have wanted his visa to be cancelled expeditiously.
30. Moreover, the Defendant states that there is no assurance or guarantee that the Claimant’s new job would have extended dental coverage to the Claimant. Therefore, the Defendant rejects the Claimant’s claim for compensation for damages in the amount of AED 10,000.
31. The Defendant submits that it paid the Claimant his outstanding dues on 1 February 2023 and the Claimant is not eligible for any compensation as the delay was primarily due to the Claimant’s failure to submit the DIFC employment card. The Defendant asserts that the calculation for the penalties is incorrect as well and that the claim should be rejected.
32. This dispute is governed by the DIFC Employment Law in conjunction with the Employment Contract.
33. I shall set out below each of the Claimant’s claims, the Defendant’s reply to each of the claims and accordingly, the Court’s reasoning and finding.
Outstanding wage and penalty
34. The Claimant is seeking payment for outstanding wages i.e payment for the days that he worked in October 2022 for which he did not receive payment on time and for penalties for late payment in accordance with Article 19(1) of the DIFC Employment Law.
35. The Claimant’s tenure with the Defendant company started at 24 October 2022 and ended on 16 December 2022. As such, the Claimant was terminated during his probationary period.
36. The probationary period requirement is set out in paragraph 4 of the Employment Contract as below:
“4. Probationary Period
4.1. It is clearly agreed and understood that the first three (3) months of such employment shall be regarded as a period of probation. During such probation period, the Parties shall be entitled to terminate this Agreement on delivery to the other of one day’s notice if it becomes evident that continuation of the employment is not suitable. The Employee shall in this instance not be entitled to any payment other than their pay for the period of actual employment.”
37. In line with the provision above, it is understood that the parties have the right to terminate the Employment Contract by giving one day notice. Additionally, the Claimant would be eligible to receive payment for the period he attended work which includes the period the Claimant is claiming (24 – 31 October 2022).
38. The Defendant does not address the Claimant’s claim with regards to imposing fines as mentioned in Schedule 2 and instead responds to the Claimant’s claim for penalties in accordance with Article 19 of the DIFC Employment Law as provided in the Claimant’s Post-Hearing Submissions.
39. The Defendant submits that the reason for the delay in payment is mainly because of the Claimant’s attitude in refraining to return the DIFC employee card which is a company asset. As such, this does not constitute a proper handover as per the Defendant company’s procedures.
40. Despite the above, the Defendant confirms that the final settlement amount was paid to the Claimant on 1 February 2023. Therefore, there is no outstanding amounts to be paid by the Defendant in relation to the Claimant’s end of service entitlements.
41. The Defendant rejects the Claimant’s claim for penalties on the basis the amount is not accurate and submits that it ought to be waived due to the Claimant’s “unreasonable conduct” in accordance with Article 19(4)(b) of the DIFC Employment Law which reads as below:
“A penalty pursuant to Article 19(2) will be waived by a Court in respect of any period during which:
(b) the Employee's unreasonable conduct is the material cause of the Employee failing to receive the amount due from the Employer.”
42. Taking into consideration the Claimant’s conduct and the Defendant’s defence above, I do not consider that the Claimant’s actions were “unreasonable”. This is owing to the fact that the Claimant was terminated with immediate effect and simply asked for a clarification as to the requirement that the Claimant return the DIFC employee card to the company.
43. At the Hearing, it was the Defendant’s position that the DIFC employee card is not just an access card, however, the Defendant should have made this clear to the Claimant instead of derailing the process for this long and refraining from directly answering the Claimant in relation to his queries with regards to the health insurance and the employment card. The Defendant’s response in an email dated 30 December 2022 was limited to stating“Please be advised this is a legal requirement before we process your full and final settlement.”
44. I note that the Defendant has provided the Court with a reference and explanation (from the DIFC Data Protection Law and other laws) as to why an employee card must be returned to the company but failed to extend the same courtesy to the Claimant despite repeated requests in emails exchanged between them. Suffice to say, I do not find the Claimant’s actions were unreasonable in this regard.
45. The Court must now determine whether the fines in Schedule 2 of the DIFC Employment Law are applicable or not in the claim at hand.
46. Article 68 of the DIFC Employment Law sets out the practice and administration of the fines as below:
“The Board of Directors of the DIFCA may:
(a) prescribe in the Regulations specific fines and penalties, in addition to the fines stipulated in Schedule 2;
(b) provide for procedures in relation to the imposition and recovery of such fines and the enforcement of actions required under such penalties;
(c) prescribe for procedures in relation to objecting to such fines or penalties; and
(d) delegate, where it considers it appropriate to do so, such of the functions and powers as may more efficiently and effectively be performed by officers, agents or employees of the DIFCA, including the powers to impose and collect any fines or enforce any penalties imposed pursuant to this Law or the Regulations, inclusive of the discretion to reduce or waive them.
(2) Where the Board of Directors of the DIFCA, or its delegate, considers that an Employer has contravened a provision of this Law to which a fine is stipulated in Schedule 2, it may impose by written notice given to the Employer a fine or a penalty, or both in respect of each contravention as set out in Schedule 2 or the Regulations.
(4) A certificate by the DIFCA, which states that a written notice was given to an Employer pursuant to Article 68(2) imposing a fine or a penalty or both on the basis of specific facts is:”
47. The definition of the Board of Directions as set out in the DIFC Employment Law is“the Board of Directors of the DIFCA appointed by the President from time to time”.
48. In accordance with the provisions above, I find that the responsibility and liability to impose the fines mentioned in Schedule 2 of the DIFC Employment Law falls upon the Board of Directors and not the DIFC Courts. Consequently, the Court is not in a position to impose such fines due to its administrative nature.
49. As a result, I shall dismiss the Claimant’s claim in relation to the fines as set out in Schedule 2.
50. Given that the Claimant has requested that the Defendant company be penalised pursuant to Article 19 of the DIFC Employment Law, I shall now consider whether this is applicable in the claim at hand.
51. The Claimant submits that the Defendant failed to pay him his dues within 14 days from the date of termination. Hence, pursuant to Article 19(2) of the DIFC Employment Law, the employer is required to pay penalty“equal to an employee’s daily wage for each day the employer is in arrears of its payment obligation under Article 19(1).”
52. In accordance with Article 19(1) of the DIFC Employment Law, the Defendant ought to have paid the Claimant his remuneration 14 days after the termination date i.e. by 30 December 2022, however, payment was made on 1 February 2023.
53. Article 19 of the DIFC Employment Law reads as below:
“Payments following termination
(1) An Employer shall pay to an Employee all Remuneration (excluding, where applicable, any Additional Payments deferred in accordance with Article 18(2)), the Gratuity Payment and all accrued Vacation Leave not taken, within fourteen (14) days after the Termination Date.
(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).”
54. 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.
55. 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.”
56. The last day as to when the Defendant ought to have paid the Claimant his pending dues was 30 December 2022 (14 days from the termination date of 16 December 2022) and given that the Claimant filed his claim on 19 January 2023, I find that the Defendant is liable to pay a penalty of 20 days in compliance with Article 19(4) of the DIFC Employment Law. The Claimant’s monthly salary is AED 7,500 x 12 months/260 days = AED 346.15 daily wage x 20 days = AED 6,923.
57. Hence, I find that the Claimant is entitled to penalties under Article 19 of the DIFC Employment Law in the amount of AED 6,923 due to the Defendant’s failure to pay the Claimant’s remuneration on time.
Compensation for late cancellation of visa
58. Although the issue of cancelling the Claimant’s employment visa has been dealt with by virtue of the Partial Consent Order, the Claimant is still seeking a fine to be imposed against the Defendant in the amount of USD 2,000 pursuant to Schedule 2 of the DIFC Employment Law.
59. The Claimant states that the Defendant did not provide the visa cancellation form after his termination and waited until 13 January 2023 to do so, and no reasonable explanation was given for the delay.
60. Following the above, the Claimant is seeking compensation in the amount of AED 10,000 for lost job opportunity by failing to cancel his visa on time.
61. The Defendant submits that the Claimant’s amount is based on speculation and there was nothing prohibiting the Claimant form pursuing other job opportunities. Therefore, the Defendant rejects the Claimant’s claim for compensation.
62. As mentioned earlier in the judgment, the fines can only be imposed by the DIFC Board of Directors and not by the DIFC Courts. Therefore, the Claimant’s claim in respect of imposing fines must be rejected.
63. Article 57(3) of the DIFC Employment Law reads as below:
“If an Employee is sponsored for UAE residence visa purposes by their Employer, the Employer and the Employee must cooperate to ensure the cancellation of the Employee’s UAE residency visa as soon as reasonably practicable following the Termination Date and by no later than thirty (30) days following the Termination Date.”
64. Further to the above, the DIFC Employment Law requires the cooperation of both parties to cancel the visa and does not mention any penalty for failure to do so, apart from the fine in Schedule 2 which cannot be levied by the DIFC Courts.
65. With reference to the compensation sought, I would have to agree with the Defendant in this instance primarily because the Claimant has not substantiated to the Court as to how he arrived at the figure of AED 10,000 especially since the Claimant failed to provide any valid offer letter presented by a different employer to take into consideration. Therefore, the Court is unable to evaluate the amount.
66. No further evidence was submitted by the Claimant to demonstrate to the Court that he incurred financial loss due to the delay in visa cancellation.
67. As a result of the above, I find that the Claimant’s claim in relation to compensation must be dismissed as the DIFC Employment Law does not warrant the Court to impose any penalties in this regard nor was evidence presented to show financial damage.
68. The Claimant submits that the Defendant failed to provide him with health insurance and denies the Defendant’s defence that the insurance was provided to him on 15 December 2022 on the basis that he never received one, nor was he notified in any email exchange between the parties’ post termination about the existence of the insurance.
69. The Claimant is seeking payment in the amount of AED 54,850 from the Defendant which represents the costs of fixing two of his teeth as well as fines to be imposed pursuant to Schedule 2.
70. I shall dismiss the Claimant’s claim in relation to fines for the reasons mentioned earlier in the judgment.
71. The Claimant alleges that the costs to repair his teeth which includes extraction, implants and further work is in the amount of AED 54,850. Nevertheless, this is not verified by any evidence in the form of a report from a licensed dentist.
72. The Defendant submits that it enrolled the Claimant into the health insurance package on 15 December 2022, however, dental insurance was not a part of it. In any event, the Defendant submits that the Claimant failed to bring to its attention any situation that required medical intervention. As such, it does not deem this sufficient and rejects the Claimant’s claim.
73. The Claimant only provided the Court with an X-ray image of his teeth. No receipt or medial report was associated with it. I find the evidence presented by the Claimant to have little persuasive value. The X-ray fails to include a date, nor does it set out any information identifying to the Claimant himself. The evidence is of little assistance in helping me to assess the damage that has occurred to the Claimant.
74. Due to the absence of a receipt or supporting medical certificate/report from a qualified dentist, I shall dismiss the Claimant’s claim for compensation in this regard.
75. I find that the Defendant has fulfilled its obligation to obtain health insurance for the Claimant in line with the Employment Contract and as per the health insurance card uploaded on the DIFC Courts’ eRegistry portal on 26 January 2023 which has an expiration date of 14 December 2023. Although, I find that there is no justifiable reason provided by the Defendant with regards to withholding the information that the health insurance was obtained for the Claimant on 15 December 2022 despite repeated reminders from the Claimant to confirm the same.
76. In light of the aforementioned, I find that the Defendant is liable to pay the Claimant the amount ofAED 6,923for penalties incurred under Article 19 of the DIFC Employment Law.
77. The Claimant’s other claims shall be dismissed.
78. Given that the Claimant has not been successful in all of his claims, I find that the Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount ofAED 367.25.
79. Each party shall bear their own costs.