Claim No: CFI 011/2012
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
COURTS
Court
In the name of His Highness Sheikh Mohammad Bin Rashid Al Maktoum,
Ruler
of DubaiRuler
IN THE
COURT
OF FIRST INSTANCECourt
BEFORE DEPUTY
CHIEF JUSTICE
SIR ANTHONY COLMANChief Justice
Between
| HANA AL HERZ |
Claimant
Claimant
|
and DUBAI INTERNATIONAL FINANCIAL
CENTRE AUTHORITY
|
Defendant
Defendant
|
| Hearing: | 10 February 2013 |
| Counsel: | James Wynne on behalf of Star & Partners LLP for the Claimant Graham Lovett of Clifford Chance LLP for the Defendant |
| Judgment: | 10 July 2013 |
JUDGMENT OF DEPUTY CHIEF JUSTICE SIR ANTHONY COLMAN
Introduction
By these proceedings the Claimant, to whom I shall refer as "HAH", claims:
(a) Reinstatement of her employment by the Defendant together with payment of wages lost;
(b)
Damages
for breach of her contract of employment;
Damages
(c) Punitive damages;
(d) Compensation pursuant to Article 68(2)(b) of the
DIFC
Employment Law 2005;
DIFC
(e) Any payments due and owing under Article 68(2)(e);
(f) Any other determination that the Director of Employment Standards sees fit to order under Article 68;
(g) Compensation for unauthorised deduction from wages pursuant to Article 17 of the DIFC Employment Law.
1. HAH commenced employment with the Defendant on 1 August 2005 as Senior Manager of the Governor's Office.
2. She had previously worked for Emirates NBD for several years and had been promoted to a significant managerial role.
3. From January 2006 HAH was transferred to the Defendant's Insurance Department and in December 2007 she was made Director of Insurance and Re-insurance. In 2006 and 2007 she received substantial bonus payments amounting to 5 times her monthly salary. In 2007 and 2008 she received considerable salary increases and again in 2010. The evidence suggests that she was an extremely dedicated worker who thrived on challenging employment to the effect that at management level she was regarded as a high-flyer.
4. In April 2010 Marwan Lutfi ("ML") began working for the Defendant as Deputy CEO and Head of Business Development. He set in motion a process of re-structuring which resulted by August 2010 in HAH, as well as being appointed Head of Insurance and Reinsurance, being given the job of streamlining client management in both the Insurance and the Business Development departments. This involving a massive increase in her workload which occurred simultaneously with numerous staff movements. Her immediate line manager was ML and he in turn reported to Abdullah Al Awar ("AA") who was CEO of the
DIFCA
.
DIFCA
5. The re-structuring exercise initiated by ML also gave rise to considerable friction amongst staff members and as between some members of staff and management, including HAH, not least because of the comparative lack of ability, educational standard and motivation of some staff members. There were clearly times when the atmosphere became somewhat fraught. In August 2010 some staff members complained to AA and to Nabil Ramadan, Chief Operating Officer of the DIFCA, about HAH's conduct, including the use of bad language. Human Capital conducted an investigation involving the entire departmental staff. ML who had not been informed of this investigation, then conducted a further investigation and the matter apparently ended when a warning was given to HAH orally regarding her manner of speaking to subordinates.
6. However, HAH was deeply wounded by the complaints and the Human Capital investigation and resolved to leave the Defendant's employment. At a private meeting requested by AA in the Capital Club shortly afterwards he accepted that the complaints had been badly handled, expressed great enthusiasm for her work and persuaded her to change her mind about leaving. She decided to stay on and attempt to realize her capabilities. In this connection she was in December 2010 awarded a salary increase from AED 46,658 to AED 65,000.
7. In January 2011 HAH had a PDS evaluation with her line manager, ML, and subsequently with AA. The latter increased her score above that in her self-assessment, a course which clearly reflected the views of her capabilities expressed to her at the Capital Club meeting.
8. In February 2011 there was a further re-structuring when ML caused the Insurance and Business Entities department to be combined with the Retail and Events Department. HAH was appointed to re-organise the combined departments. In the course of 2011 the retail department's level of business occupancy rose from 66 per cent to 98 per cent.
9. HAH was awarded a further bonus in July 2011 in recognition of her having positively contributed to the growth and development of the DIFC.
10. Amongst the important responsibilities undertaken by HAH was contact with overseas clients and potential clients in order to develop the DIFC's Business with foreign companies. In that capacity she travelled to New York and Sao Paulo in April/May 2011. ML also participated in that tour. On 26 May 2011 she and ML travelled together to South East Asia for a business development trip. They both went to Seoul. At the end of that trip HAH flew to Bangkok for a medical check-up. She treated this as part of annual leave with ML's authority and made formal application through the Defendant's SAP system. She arrived there on 3 June 2011 and left on 8 June. She and ML returned from Bangkok to Dubai on the same flight. In the meantime on 6 June 2011, HAH was awarded a salary increase of AED 20,000 bringing her salary to AED 85,000 which AA had approved.
11. Then, in about the middle of June 2011, there occurred the one event which in HAH's view underlies the circumstances giving rise to these proceedings: ML proposed marriage to her.
12. Her evidence, which I accept, was that they had not previously had any romantic relationship, although they and AA all had a close, friendly relationship which developed in the course of their work together. HAH did not immediately accept ML's proposal. Her previous marriage had made her sceptical about it. Soon after that proposal she asked to see AA privately and told him of ML's proposal. AA spoke highly of ML and he advised her to have further discussions with ML. He was not at all discouraging, but did ask that, if they decided to go ahead, she should keep it to herself and not inform anyone in the DIFC.
13. After further discussions HAH agreed to marry ML provided that her family approved. That approval was given in mid-July 2011 and it was arranged that the Melcha would take place before the Dubai courts on 27 July 2011. And so it did.
14. At about this time ML had discussed the issue of the marriage with AA. The latter had then expressed the view that one of ML and HAH would have to leave the DIFCA if they went ahead. When HAH was told about this by ML, she was furious and took the position that she was not prepared to leave her job as she had family and financial obligations to take care of. It was only on 11 August 2011 that ML formally notified Hani Hirzallah, Head of Human Capital, with a copy to AA, that he and HAH would be getting married. In that email he stated that AA had instructed that either he or HAH must leave the DIFCA but that they had been given until the end of the year to decide who should leave. That message was immediately replied to by AA in an email which pointed out that ML had been wrong about the time for his and HAH's decision, which was 31 August 2011. The message went on:
"Rest assured I have explored all possible opportunities within the organisation where either of you could play a role whilst abiding by the policy and unfortunately there weren't any roles that suit either of you taking into consideration your level of seniority".
HAH then had a meeting with AA in mid-August 2011 at which AA told her that the matter was closed because ML had agreed to step down from his position. It appeared that, following discussions between AA and ML, the latter was to cease to hold the position of Deputy CEO and to become Advisor to the CEO (AA), a position which had to be specially created; and that therefore HAH would henceforth no longer have ML as her line manager but would instead report direct to AA. That was the position that had been reached by 6 September 2011, the date on which AA sent an email to all the staff announcing the marriage and congratulating HAH and ML and stating that ML would henceforth assist AA in corporate level projects.
15. The wedding ceremony took place on 30 September 2011. The catering for the celebratory party was done by Events to Remember ("E2R"), the same company as that appointed by DIFCA on 9 October 2011 to provide the catering for the prestigious International Bar Association reception in the DIFC. It is unnecessary for the purposes of these proceedings to consider in detail the negotiations that took place between ML and AA and others and the Defendant regarding the future employment of ML or the behind-the-scenes contacts which took place within the Defendant about ML's position. However, what emerges from the correspondence and the documents is that it was never seriously proposed to HAH that HAH should leave the Defendant while ML remained in post either in the artificial position of Adviser to the CEO or any other position apart from her line manager.
16. It was also the case, however, that matters were coming to a head between the Defendant and ML.
17. On 25 August 2011 ML sent an email to AA and Hani Hirzallah, Head of Human Capital, stating that he had decided to let HAH continue in her role and that he would hand over his existing responsibilities. He did not offer to resign from all employment by the Defendant. Meanwhile, on 4 September 2011, Badr Buhannad, Chief Audit and Risk Officer at the DIFCA Audit and Risk Department, produced a report on HAH and ML the purpose of which was described thus:
"to investigate conflict of interest surrounding the issues, potential misuse of power and conflict of interest in decision making plus management of suitable recommendations or actions to be taken in light of investigative results".
18. The matters investigated were (i) that it was found that HAH and ML had taken 25 days matching leave in the previous 12 months; (ii) that salary increases for HAH and promotions recommended by ML were not carried out impartially by ML because they exceeded what was given to others in the DIFCA; (iii) ML had shared with HAH business-related matters outside her scope of work including high level matters involving the CEO.
19. The recommendations included setting up a high level committee to look into the issues and make recommendations, the review and assessment of main decisions within the past 12 months within the particular area of conflict of interest, and to evaluate whether any potential impartiality was present in general and insurance business entities.
20. Unknown to HAH, on 11 October 2011 there was a closed meeting of the DIFCA audit committee to consider the case of HAH and ML. That meeting recommended that both HAH and ML be suspended from work and that a senior executive should interview both of them and give them two options: "bothto resign peacefully and the chapter is closed" orboth"be subject to a special investigation to look into the matter and face consequences up to termination" (emphasis added). AA re-acted to that decision by suggesting the appointment of a senior level committee before confronting HAH and ML to identify and determine any breach against the organisation's policies and procedures and the code of ethics/conduct and provide a recommendations to AA.
21. Nothing was done about setting up this committee. It never met and it never made any recommendations. The Audit Committee made no reply to AA's suggestion for 6 weeks.
22. Then on 29 November 2011, Hussain Al Qemzi, Chairman of the Audit Committee, wrote to AA and Badr Buhannad as a follow-up to the recommendations of the Audit
Committee referred to above. He recommended that both HAH and ML be immediately suspended. On the same day AA called a meeting with ML at which he called for ML's immediate resignation, accusing him of "making allowances" to HAH. These allegations were denied by ML who formally refused to tender his resignation.
23. On 30 November 2011 HAH and ML received telephone calls from Hani Hirzallah, Head of Human Capital. The calls were made on the instructions of AA given in the presence of Badr Buhannad and Roberta Calarese, Chief Legal Officer of the DIFCA. AA refused to give Hani Hirzallah any specific reasons for the instructions other than that they were based on an instruction from the Audit Committee. Indeed, that very day the Chairman of the Audit Committee had instructed AA immediately to suspend HAH and ML from work and to confiscate all company assets including their laptops.
24. Hani Hirzallah duly telephoned ML and informed both him and HAH that they must either submit their resignations immediately or be suspended. HAH was unwilling to resign and 15 minutes after the telephone call she (and ML) received an email from Hani Hirzallah informing her that she was suspended from office with immediate effect, her access to the premises and emails being suspended. She was asked to return all DIFCA assets. She replied at once expressing surprise and asking to know the reasons for her suspension which she said she believed to be in violation of DIFC law and the Defendant's regulations.
25. On 4 December 2011 the Defendant terminated ML's employment without notice. It was stated that the decision had been taken on the grounds that employment of relatives as per DIFCA Employment Policies and Procedures was generally not allowed. His notice period would be paid in full.
26. On 8 December 2011 Buthaina al Tayer, Manager — Human Capital Business Partner, informed HAH, in answer to her request, that she had been suspended in order to review her conduct in the past year based on internal policies and procedures. Further request to Buthaina al Tayer and AA elicited no further information. On 29 December 2011 the Audit Committee approved an extension of the period of suspension until 31 January 2012. HAH was informed of this extension on 3 January 2012. In the meantime, DIFCA had appointed Ernst & Young ("EY") to conduct an investigation into the following:
(a) whether and, if so, how the relationship between ML and HAH may have led to them making decisions that were not in the best interests of DIFCA, by virtue of the conflict of interest caused by their relationship;
(b) to provide specific factual examples of the above (if any) and of decisions taken, or transactions passed, in respect of which the benefit to DIFCA was/is not clear or where the decision may not have been optimal for DIFCA;
(c) to seek to determine the period over which inappropriate practices, if any, took place as a result of the relationship.
27. The extension of HAH's suspension was in order to give enough time for EY to complete their report.
28. On 19 January 2012 HAH was again informed that her suspension was extended to 31 January 2012 and that a meeting had been arranged between her and the investigating committee on 18 January 2012. On 12 January 2012 she was informed that the committee would include EY. If required she would be provided with 3 days after the meeting to submit facts and call witnesses at a second meeting. On 16 January 2012 HAH replied that in view of the involvement in the meetingofexternal parties — which was not within the DIFCA disciplinary procedure, she would be accompanied by a
legal representative
. Nabil Ramadhan replied that the meeting would be an informal discussion to clarify certain matters relating to her conduct and therefore legal representations would not be permitted. She could delay until the next meeting the response to questions with which she was not comfortable.
Legal Representative
29. The meeting duly took place on 18 January 2012. In the course of it HAH was closely questioned about the part she had played in the selection of EDR as the provider of the catering for the IBA Conference in November 2011 having regard to their quoted price and against the background that this same firm had provided the catering at her wedding reception. A major area of investigation was whether the DIFCA Procurement Department had been involved and exercised independent judgment. Her evidence was that she had been instructed by AA to organise the catering for the IBA as quickly as possible and that she had acted in conjunction with Procurement. She was also asked about what she was doing after the trip to Seoul with ML and her subsequent visit to Bangkok.
30. On 20 January 2012 HAH wrote to Nabil Ramadhan complaining that she had not been given any explanation for her suspension and that the meeting had been a fishing expedition to try to make a case against her. She called for a copy of the transcript.
31. On 25 January 2012 — EY produced their report.
32. The terms of reference of EY were expressed in paragraph 2.1.5 of their report as follows:
Whether and, if so, how the relationship between Mr Lutfi and Ms Herz may have led to them making decisions that were not in the best interests of DIFCA, by virtue of the conflict of Interest caused by their relationship.To provide specific factual examples of the above (if any) and of decisions taken, or transactions passed, In respect of which the benefit to DIFCA was/is not clear or where the decision may not have been optimal for DIFCA.
To seek to determine the period over which inappropriate practices, if any, took place as a result of the relationship.
33. In paragraph 2.2.1 of the report under the heading "SCOPE", EY set out a summary of the LC sources of evidence on which they relied in reaching their conclusions thus:
An initial meeting with DIFCA's internal auditor to understand what work he had already undertaken in relation to this Issue and the information he obtained.Imaging of the laptop computers of both Mr Lutfi and Ms Herz.
Review of documents and information made available to us from various departments, including the HC team, the Finance Department and the Business Development Department
Reading the material in the personnel files of both Mr Lutfl and Ms Herz.
Recorded interviews with various current members of DIFCA staff, including Ms Herz.
Review of the "Investigation Report" dated 4 September 2011 prepared by Mr Badr Buhannad (Mr Buhannad), Head of Audit & Risk Department.
34. EY directed their attention to four key issues:
(a) the appointment of E2R to organise and cater the IBA reception on 3 November 2011.
(b) HAH's rapid career progression and concomitant salary increases in September 2010 and May 2011;
(c) complaints about HAH's conduct by two junior members of staff who alleged that she had been aggressive and rude and that ML always supported her against the complainants.
(d) HAH's conduct in taking allegedly unapproved leave from 6 to 8 June 2011 in Bangkok simultaneously with ML's presence there.
35. The report identified certain primary facts relevant to the key issues as derived from documents and records to which EY had access but it did not expressly draw inferences from such primary facts and where there was found to be a conflict between HAH's account and information provided by DIFCA employees and officials and primary and other documents, it did not set out to resolve the conflict. In the result the report identified findings of fact and conflicts of evidence relevant to the essential purpose of its terms of reference, namely whether the relationship between HAH and ML might have led to their making decisions that were not in the best interests of DIFCA by virtue a conflict of interest caused by their relationship but without making any findings of fact as to whether they had in terms acted detrimentally to DIFCA by reason of their relationship. Those matters referred to under the column headed "Facts" in the table in paragraph 1.1.2 are merely the salient undisputed facts and factual issues relevant to each of the key issues.
36. With regard to the engagement of E2R, the report recorded that the choice of caterer was handled (unusually) by the Business Development Department and not the Procurement Department and that of the six prospective suppliers originally invited to quote (which did not include E2R) only one was on the Procurement Department's approved list. The basis on which quotations were obtained was not consistent as between suppliers. There was a conflict of evidence as to whether, as alleged by Shaima Aman — a member of the selection team — HAH had added E2R to the original list — a fact denied by HAH. There was a further conflict of interest as to whether HAH had refused to allow Ms Aman to negotiate a reduction on the quotation given by Empire Catering, a firm previously engaged by DIFCA, which had originally quoted AED 200,000 against E2R's AED 196,000 on the grounds that DIFCA should not be unduly reliant on a single supplier, an argument HAH subsequently raised in an email to Ms Aman. In the event, HAH selected E2R as the suppliers to be recommended to DIFCA and on 19 September 2011 she told AA that at ML's request her department had handled the selection and in recommending E2R described its quotation as the "best one". The actual approval was given by Mr Nabil Ramadhan, in the absence of AA because he was told by HAH that it must be finalised urgently but having also been told that the Procurement Department had not been involved.
37. The report drew attention to the three so-called "potential" breaches of the DIFCA Procurement Policy:
(a) only the Procurement Department was permitted to procure services relating to the IBA reception;
(b) quotations should have been obtained only from suppliers registered on the DIFCA's database;
(c) quotations must be obtained in respect of identical requests for proposal, thereby reducing the risk of lack of comparability.
38. The report, at paragraph 3.3.1 indicated that some 9 days after she had recommended them for engagement for the IBA reception, the same firm provided catering and event set-up services at her wedding. Her evidence to EY was that she did not regard this as resulting in her having a perceived or actual conflict of interest: she kept the two transactions separate in her mind.
39. With regard to HAH's trip to Bangkok from 3 to 8 June 2011, from which she returned to Dubai on 8 June with ML, there was no evidence in DIFCA records, according to the report, that HAH had applied to DIFCA for this period as annual leave except for her assertion, and there was no evidence of any defect in the on-line leave application system.
40. As to the possible breach of the DIFCA's Code of Ethics, the report refers to the section on conflict of interest which provides:
"An actual or potential conflict of interest occurs when an employee is in a position to influence a decision or an action that may result in a personal gain for that employee or for a relative as a result at the Company's business dealings. For the purposes of this policy, a relative is any person who is related by blood or marriage, or whose relationship with the employee is similar to that of persons who are related by blood or marriage."
41. In paragraph 5.1.3 of the report there are set out a number of facts which EY suggest may indicate that over time the relationship between ML and HAH "may have ceased to be an arms-length business relationship", although there was no identifiable watershed date when this occurred. These events included ML approving for HAH the largest pay rises in the Business Development Department in September 2010 and May 2011, in the year July 2010 to July 2011 HAH's and ML's holidays days overlapped for a total of 39 days, ML's strong support for HAH in the face of Human Capital's Investigation report regarding the complaints against HAH by two employees and his issue of official covering letters in November 2010 to the two complainants and finally the coincidence of HAH's and ML's overseas business trips in April–July 2011 in the course of which, although Kevin Birkett from her Department was with her for 16 days in total, ML was with her for a total of 42 days. Although on 25 July 2011 ML informally told AA that he intended to marry HAH and the Melcha was held on 27 July, it was only on 11 August 2011 that ML formally informed AA that he "intended" to marry HAH — some 17 days after they had formally been married under Islamic law.
42. The report (at paragraph 5.2) sets out the various promotions and salary increases given to HAH between June 2010 and May 2011 which I have already described.
43. In paragraphs 6.1 and 6.2 — the report identified various instances of HAH's unpopularity with the staff of her department, starting with the complaints of the employees in August 2010 and giving examples of other staff members being antagonised by her methods of addressing staff, including comments of staff as to the deleterious effect on staff morale were she to return after suspension.
44. On 26 January 2012, the day following receipt of the report, there took place a meeting of the Audit Committee of the Board of Directors of the DIFCA at which it was resolved that, having reviewed the report, it should recommend termination of HAH's employment, provided that the DIFCA had a right to terminate under the contract.
45. On 30 January 2012, Buthaina al Tayer Manager — Human Capital Business Partner sent a message to HAH requesting her to attend a meeting on the following day (the last day of her suspension) at which she would be informed of the conclusions of fact arrived at following investigation of her conduct. HAH replied on the same day indicating that she was not prepared to attend unless she was first provided with specific details of the allegations against her. Ms al Tayer replied that such information would be provided during the meeting.
46. HAH did not attend the meeting.
47. And so, on 31 January 2012 Ms al Tayer sent to her a message stating that as she had failed to attend the meeting, the DIFCA's decision was attached. That was stated in a message from Nabil Ramadhan stating that "based on the outcome of the investigation, the DIFC Authority no longer wishes to continue this employment relationship and therefore terminates your employment in accordance with the Employment Law and the Employment Contract". The DIFCA felt that her conduct in the past year had not been in line with the DIFC Code of Values and Ethics and the DIFCA Employee Policies and Procedures. She was to receive all her entitlements under the Employment Contract and she was not required to serve her notice which would be paid in full together with any other applicable benefits.
The DIFCA Employment Agreement
48. The applicable employment agreement operated from 1 August 2006. It provided as follows:—
1. Job Description and Entry Grade
The Employee will be employed in the position of Senior Manager, Business Development — Insurance and Re-insurance with an entry grade of five (5) subject to the terms of the DIFCA's Employee Policies and Procedures in effect from time to time, which are hereby incorporated by reference as an integral part of this Agreement ("Policies and Procedures"), related to grading, including without limitation any changes to the Employee's grade during the term of this Agreement.
3. Compensation
The Employee will receive as compensation for services rendered as of the date of execution of this Agreement, a salary and allowances in United· Arab Emirates Dirhams ("Dhs") as per the following:
| Basic Salary: (60% of total): | AED 18, 900/- |
| Allowances: (40% of total): | AED 12, 600/- |
| Total Monthly Compensation: | AED 31,500/- |
Allowances include, inter alia, compensation for transportation, housing, etc., all to be obtained by the Employee as the Employee may deem fit.
6. Annual Leave
The Employee shall be entitled to thirty (30) working days of leave per year.
7. Performance Bonus
DIFCA may at its sole discretion award employees bonuses from time to time, based on their performance in the carrying out of their employment.
Where such bonuses are paid, if any, these do not form part of the total annual compensation, whether for calculation of end of service gratuity or otherwise.
8. Term and Termination
The Employee's employment shall be for an unlimited period and will remain in force until one Party delivers to the other Party one (1) month's written notice of termination.
13. Conflict of Interest/Non-Competition
13.1 The Employee shall at all times comply with the provisions of DIFCA's constitutive documents on conflicts of interest.
15. Rules and Regulations
, the Government of Dubai or the Government of the United Arab Emirates.
In addition to the terms and conditions set forth in this Agreement, by entering into this Agreement the Employee expressly and irrevocably agrees that the Employee shall follow and abide by any applicable rules and regulations issued from time to time by DIFCA, the DFSA
DFSA
16. Applicability of DIFCA Employment Law
The Employee's employment shall be governed by the DIFC Employment Law No. 4 of 2005, as may be amended from time to time (the "Employment Law").
The Parties' Submissions
49. It is common ground that the contract of employment is governed by DIFC Law.
50. On behalf of the Claimant it is submitted that the primary basis for the discrimination claim is Article 56 of DIFC Law No.4 of 2005. This provides as follows:
"56. Discrimination(1) Discrimination for the purposes of this Article means a distinction based on personal characteristics relating to sex, marital status, race, nationality or religion, mental or physical disability that has the effect of imposing burdens, obligations or disadvantages on a person not imposed upon other persons or that withholds or limits access to opportunities, benefits and advantages available to other persons under this Law. In the case of mental or physical disability, such condition shall not constitute a basis for a discrimination claim unless it is of a long-term nature, generally no less than twelve (12) consecutive months in duration.(2) An employer shall not:(a) refuse to employ or refuse to continue to employ a person; or(b) discriminate against a person regarding employment or any term or condition of employment,because of that person's sex, marital status, race, nationality, religion, mental or physical disability, unless there is a bona fide occupational requirement."
51. It is submitted that these provisions have the same effect with regard to "marital status" as Article 58(2)(a) of DIFC Law No.3 of 2012 which provides:
"Discrimination for the purposes of Article 58(1) means where: (a) an employee is treated less favourably than others would be treated in the same circumstances on one of the prohibited grounds in Article 58(1)"
The material words in Article 56(2) are:
"An employer shall not: … (b) discriminate against a person regarding employment or any term or condition of employment, because of … marital status …, unless there is a bona fide occupation requirement".
52. It is provided by Article 56(5) that the Director (of Employment Standards) "may determine what constitutes a bona fide occupational requirement in this Article". However, the Director not having done so, it is submitted that a requirement will be"bona fide"for the purpose of Article 56(2) only if it is reasonable, proportionate and pursues a legitimate aim and is necessary for the achievement of that aim. The burden for bringing the employer within the bona fide occupational requirement exercise rests with the employer.
53. Mr James Wynne argues on behalf of the Claimant that the words "because of … marital status" are to be construed as they would be in the English Courts.
54. In this connection Mr Wynne relies on the general principles set out by the
Court
of Appeal inKing v The Great Britain China Centre[1991] IRLR 513 in which, at paragraph 38, Neill LJ observed:
Court
"(2) It is important to bear in mind that it is unusual to find direct evidence of racial Discrimination. Few employers will be prepared to admit such discrimination even to themselves. In some cases the discrimination will not be ill-intentioned but merely based on an assumption 'he or she would not have fitted in:(3) The outcome of the case will therefore usually depend on what inferences it is proper to draw from the primary facts found by the Tribunal. These inferences can include, in appropriate cases, any inferences that it is just and equitable to draw in accordance with s.65(2)(b) of the 1976 Act from an evasive or equivocal reply to a questionnaire.(4) Though there will be some cases where, for example, the non-selection of the applicant for a post or for promotion is clearly not on racial grounds, a finding of discrimination and a finding of a difference in race will often point to the possibility of racial discrimination. In such circumstances the Tribunal will look to the employer for an explanation. If no explanation is then put forward or if the Tribunal considers the explanation to be inadequate or unsatisfactory it will be legitimate for the Tribunal to infer that the discrimination was on racial grounds. This is not a matter of law but, as May LJ put it in Noone [1988] IRLR 195, 'almost common sense'.(5) It is unnecessary and unhelpful to introduce the concept of a shifting evidential burden of proof. At the conclusion of all the evidence the Tribunal should make findings as to the primary facts and draw such inferences as they consider proper from those facts. They should then reach a conclusion on the balance of probabilities, bearing in mind both the difficulties which face a person who complains of unlawful discrimination and the fact that it is for the complainant to prove his or her case."Tribunal
Reference is also made to the judgment of Lord Nicholls in the House of Lords inNagarajan v London Regional Transport[1999] 572 at paragraph 19:
"Decisions are frequently reached for more than one reason. Discrimination may be on racial grounds even though it is not the sole ground for the decision. A variety of phrases, with different shades of meaning, have been used to explain how the legislation applies in such cases: discrimination requires that racial grounds were a cause, the activating cause, a substantial and effective cause, a substantial reason, an important factor. No one phrase is obviously preferable to all others, although in the application of this legislation legalistic phrases, as well as subtle distinctions, are better avoided so far as possible. If racial grounds or protected acts had a significant influence on the outcome, discrimination is made out. Read in context, that was the industrial tribunal's finding in the present case. The tribunal found that the interviewers were 'consciously or subconsciously influenced by the fact that the applicant had previously brought tribunal proceedings against the respondent."
55. With regard to the claim based on the Defendant's breaches of express contractual terms the Claimant relies on provisions of the Defendant's Employee Policies and Procedures incorporated into the contract of employment by Clause 1. These are as follows:
13.1. "Disciplinary process must be initiated for transgressions which have been observed or brought to the attention of the management within the 30 calendar days period". (Progressive Discipline para 4.0)13.2. "Human Capital Representative will be involved at all stages of the Disciplinary Process". (Progressive Discipline para 4.0)13.3. "Any allegation or complaint about an employee's conduct must be investigated as soon as reasonably possible before disciplinary action is taken". (Progressive Discipline para 4.0)13.4. An employee may be suspended for a maximum of one month so that facts and evidence may be obtained (Progressive Discipline para 4.0). It is implicit within this that the allegations already exist.13.5. "Employees may be placed on an investigative leave (for a maximum period of one month) pending the determination of further disciplinary action, if any."13.6. "Employee will be informed of the disciplinary hearing at least five working days before it is to take place, Disciplinary hearing will be held within 10 working days of having notified the employee of the pending disciplinary procedure."13.7. "The employee has the right to call on his/her witnesses and to examine adverse witnesses at the hearing."13.8. "The Disciplinary enquiry will be conducted and chaired by the Chief of Human Capital and the Head of the Department of the employee."13.9. "An employee can appeal the decision from the Disciplinary Enquiry to the Grievance Committee within three working days."
56. With regard to the claim based on breach of terms implied into the contract of employment. Mr Wynne argued that the following terms ought to be implied:
(a) that the DIFCA would not without reasonable or proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee;
(b) good faith;
(c) reasonableness.
57. In this connection the Claimant relies on a decision of Michael Hwang DCJ on a strike-out application in the Court of First Instance inKleily Ghassan Elias v Julius Baer (Middle East) Ltd.(CFI 014/2009) 22 Nov. 2009. In the course of his judgment the Deputy
Chief Justice
recognised that the implied term of mutual trust and confidence was an overarching common law doctrine of
the law
of employment — in substance to the effect that the employer will not, without reasonable and proper cause, conduct himself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. He went on to consider the effect of two important English decisions on the applicability of that implied term to the exercise of the employer's power to dismiss. Those authorities areEastwood v Magnox Electric plc[2004] 3 All ER 991 and the earlier House of Lords decision inJohnson v Uniyis Ltd[2001] 2 All ER 801. He analysed in some detail the reasoning of Lord Hoffmann in the latter case, identifying in particular his reluctance to imply such a term in relation to dismissal itself because that implied obligation was directed topreservingthe working relationship between employer and employee as distinct from restricting the exercise of the power of dismissal and secondly his rejection of that term in respect of dismissal because under English Law there was the Industrial Relations Act 1971 and subsequently the Employment Rights Act 1996. Accordingly, there was no justification for the implication of a term covering substantially the same ground as the legislation.
Chief Justice
the Law
58. This reasoning was in substance reluctantly followed by the House of Lords in Eastwood which in the leading judgment delivered by Lord Nicholls upheld the concept of an exclusion area over which the implied term would not be applicable because that was the area of the statutory regime. Outside that area were included breaches of the implied term whichprecededthe actual dismissal. The judgment of Hwang DCJ was concerned only with whether the applicability of the implied term to dismissal was unarguable. He held, rightly in my view, that it was not. The process of reasoning which provided a basis for the argument was that in a jurisdiction in which there was no statutory regime applicable to dismissal, as there was in England, the main reason or at least one of the two reasons for the rejection of the argument in Johnson did not apply. Accordingly, it was arguable that once that had gone, as in the DIFC, the common law duty of trust and confidence should prevail and apply to the employer's exercise of his contracted right to terminate the employment on notice.
59. The Claimant relies on that reasoning in the present case, as well as on the dissenting judgment of Lady Hale inEdwards v Chesterfield Royal Hospital NHS Foundation
Trust[2012] 2 All ER 278 and on Articles 56 to 58 of the DIFC Contract Law under which terms are implied into contracts from the nature and purpose of the contracts, good faith, fair dealing and reasonableness and there is an overriding duty of co-operation when such co-operation may reasonably be expected for the performance of the contract.
60. It is further argued that to permit an unfettered right to dismiss on notice could make contractual performance substantially different from that which was reasonably expected by the employee. In support of this argument Mr Wynne relies on Articles 36(1(f), 38, 40(1) and Schedule 2 to the Implied Terms in Contracts and Unfair Terms Law, No.6 of 2005, as well as on Article 3 of the Employment Law which states amongst the purposes of the law the following:—
"(a) ensure that employees in the DIFC receive the minimum international standards and conditions of employment and(b) promote the fair treatment of employees and employers."
61. The Claimant's submission is further that her character was defamed by the manner in which she was treated, specifically by being suspended for first one month and then a succeeding month and then dismissed, that the treatment being the result of a breach of the implied term of mutual trust and confidence. This was frankly accepted by her counsel as a difficult claim, not least because there has been no evidence that any of the Defendant's actions or statements were such as to damage her reputation.
62. The Claimant also claims that she was entitled to an end of service gratuity under Article 60 of the Employment Law.
63. Finally, the Claimant claims that the Defendant should not have deducted the value of a BlackBerry which was originally provided to her by the Defendant but which she did not return to the Defendant upon termination of her employment.
64. On behalf of the Claimant it is argued that, having regard to the manner in which she was treated, as outlined in the earlier part of this judgment, and, in connection with that, the manner in which ML was treated and the central role in the decision taking process played by AA and Nabil Ramadan, the predominant cause of the termination of her employment or at least an equally potent cause was her marriage to ML.
65. The marriage is said to have been more than a mere trigger or background circumstance, but rather the overriding motive for the termination set within the somewhat complex professional and social relationship between AA, ML and the Claimant.
66. Alternatively — on the basis that her employment wasnotterminated because of her marital status within the meaning of Article 56(2) — the manner of her treatment by the Defendant from September 2011 to January 2012 was contrary to those parts of the Defendant's Employee Policies and Procedures quoted above as well as the Defendant's duty of good faith and confidentiality and that those breaches of duty culminated in and caused the termination of her employment.
67. The submissions of the Defendant may be summarised as follows. Firstly, with regard to the circumstances of the Claimant's contract being terminated, there was no concept of unfair dismissal in the law of the DIFC. This was the effect of the decision of Justice Tan Sri Siti Norma inRasmala Investments Ltd v Rana Banat and Others(8 April 2009) CF1-001-006/2009 in which the reasoning was that, whereas by Article 63 of the Employment Law it was provided that the Director of Employment Standards was given power to propose to the Board of Directors of the DIFCA in respect of …"(g) the maximum compensation for discrimination or unfair dismissal", no such proposals with regard to unfair dismissal have been made, nor, indeed, have they been made since that decision. It was held that, whereas the Employment Law contained a comprehensive code of those principles applicable as a matter of law to contracts of employment in the DIFC, it contained no reference to unfair dismissal, except that in Article 63, a provision to which effect had never been given. It was therefore concluded that unfair dismissal was not a principle of DIFC employment law. InAhmed Mohamed Abdel Aziz Saleh v Chartis Memsa Insurance Company(5 July 2012) CFI 021/2011, I reached the same conclusion as Justice Tan Sri Siti Norma and for substantially the same reasons.
68. It is further submitted by Mr Graham Lovett on behalf of the Defendant that, having regard to the fact that the new Employment Amendment Law, No. 3 of 2012 enacted after the above two judgments had been given, although incorporating in Part 10 a comprehensive code as to theterminationof employment makes no mention of unfair dismissal. In this connection it is to be observed that in the 2012 Law Article 63 of the 2004 Employment Law has totally disappeared, as has the Director of Employment Standards.
69. The Defendant's submission is developed against this background by a frontal attack on the Claimant's argument that a termination of a DIFC contract of employment which was tainted by lack of good faith or breach of confidence on the part of the employer would be impermissible and therefore in breach of the contract, notwithstanding that it complied with the notice provisions in the contract, as in the present case. Mr Lovett argued that to depart from the express terms of the contract of employment by introducing by implication an overriding duty upon an employer only to exercise the power to terminate in good faith or reasonably or proportionately could introduce a very undesirable element of uncertainty into contracts of employment, both from the point of view of the employee and the employer. If there were to be such a term, it should only be introduced by legislation and not by the Court.
70. Additionally, it is submitted, with regard to implication of a term limiting the employer's reliance on the express power to terminate the contract, that reliance on the Implied Terms in Contracts and Unfair Terms Laws No. 6 of 2005 is misplaced. It does not expressly provide for any implied term which regulate termination of employment contracts or for implied terms applicable to employment relationships.
71. Apart from the issue of unfair dismissal, the Defendant challenges the Claimant's reliance on discrimination against her within the meaning of Article 56(2) of the Employment Law in its unamended form. It is submitted that there was no discrimination "because of her marital status": the entirety of the Defendant's conduct in its dealings with her including her suspension, additional suspension and termination of her employment was founded on conflicts of interest which had taken place before her actual marriage (Melcha), albeit they arose from or were connected with her preceding close personal relationship with ML.
72. The instances of conflict of interest included both the setting of her PDS scores and the criteria for bonus allocations for both of which exercises ML was directly responsible, as well as for salary increases. The Defendant further relies on alleged distortion in the treatment, following the departmental staff complaints, of the Claimant on the one hand and the complaining staff on the other hand, the latter being held substantially to blame and punished with reprimand letters, whereas the Claimant received no more than an oral warning about the use of bad language. These decisions were those of ML as the Claimant's line manager.
73. The Defendant further relies on the circumstances surrounding the selection of E2R as events organisers for the IBA Reception as well as caterer for the wedding reception. It is alleged that this was in spite of internal advice that E2R's quotation for the IBA Reception was not the cheapest price quoted.
74. Reliance is placed on the conduct of the Claimant and ML in spending periods of time together in Bangkok in the course of returning from Korea. This conduct is said to support the existence of a close personal relationship before their marriage.
75. It is submitted in the alternative that if, contrary to the Defendant's primary submission, there was discrimination against the Claimant because of her marital status, there was "a bona fide occupational requirement", namely that to have the Claimant and ML working in the same department and with her reporting to him as line manager was untenable due essentially to there arising a perceived conflict of interest. Thus the marriage merely triggered the Audit Committee's own investigation and that conducted by EY. The underlying subject of the latter investigation was whether there had been a conflict of interest arising out of this professional personal relationship. It was in reliance on the EY Report that the Audit Committee took the decision to terminate the Claimant's Contract.
76. As to the claim for entitlement to a gratuity upon termination of her contract, it is submitted that as the Claimant was enrolled in the DIFCA Pension Scheme in accordance with Article 61 of the Employment Law she is not eligible to receive an end of service gratuity under Article 62 of the Employment Law.
77. Finally, the Defendant submits that because the BlackBerry that was issued to the Claimant is the property of the Defendant, it is permissible to deduct from the amount paid to the Claimant as wages in lieu of the three months' notice period an amount which is equivalent to the value of that equipment.
Discussion
Unfair Dismissal
78. It is accepted by the Claimant that the only conceptual route to the application of a principle of unfair dismissal is by means of an implied term that the Defendant will only be permitted to avail itself of the express power to terminate the contract of employment on notice if that is done in accordance with the duty of good faith, confidentiality, fair dealing and reasonableness and is exercised reasonably and in a proportionate manner. It will at once be observed that the introduction of such a term introduces a multi-facetted qualification to the operation of the express term. As to this, there are conceptual and practical problems.
79. The primary conceptual problem is that there is a fundamental principle of contractual construction in Common Law jurisdictions that in order to imply a term either on the grounds of business efficacy or on the basis of trade usage there must be no necessary inconsistency between that which is sought to be introduced by implication and that which on its proper construction the parties have expressly agreed. This long-standing principle is founded on the maintenance of contractual certainty but, although of pragmatic purpose, it is a principle of law. It can, however, be displaced by the introduction by legislation of terms into particular types of contract or the qualification or prohibition of certain contractual terms. A typical example of implication by operation of law is obviously Article 58 of the DIFC Employment Law which restricts the freedom which an employer would otherwise have to deploy labour without the restrictions on discrimination imposed by that section. Another example is Law No.6 of 2005, The Implied Terms in Contracts and Unfair Terms Law, Articles 37, 38 and 39. In general, an express term cannot be displaced or superseded by implication unless legislation is the means of implication.
80. It will at once be seen that were an employer's right to terminate a contract of employment on notice to be restricted by implication on the grounds that the employer had exercised that contractual right in an unfair manner by having acted contrary to his general implied duty of good faith and confidence, the principle of the primacy of express terms over implied terms would be infringed.
81. In the DIFC there is a comprehensive legislative code applicable to contracts of employment, namely the Employment Law. If there were to be a free-standing principle that certain principles of unfairness or lack of good faith or breach of confidence restricted the employer's power to terminate an employment contract on notice in accordance with its express terms, it is inconceivable that it would not be included in that Law. Yet there is no mention of any such principle, notwithstanding that Article 58 sets out an explicit code regarding non-discrimination which by paragraph (1) expressly restricts the employer's right to exercise powers which he would otherwise have had "regarding
employment or any term or condition of employment".
82. The obvious practical problem with the Claimant's submission as to implication of a term is that any such term would be difficult to define and of uncertain application. Whereas the concept of discrimination lends itself to a relatively precise definition as in Article 58(1), (2) and (3) of the Employment Law, the same cannot be said in relation to unfairness in respect of dismissal. Further, it would introduce an area of uncertainty with regard to the right of employers to terminate employment and lead to a significant increase in wrongful dismissal claims.
83. Much reliance was placed by Mr Wynne on the proposition that the implication of such an implied term could be founded on the English Common Law, having regard to the decisions inJohnson v Unisys Ltd; supra andEdwards v Chesterfield Royal Hospital NHS Foundation Trust, supra and to the observations of Hwang DCJ inKteily Ghassan Elias v Julius Baer (Middle East) Ltd, supra, in concluding that the proposition as to implication was not unarguable on a
strike out
application. As recognised by Hwang DCJ, the two English decisions left open what would have been the position in English Law were it not for there being a pre-existing legislative framework directed to unfair dismissal and were thus reluctantly constrained to confine the applicability of the implied term of good faith, confidence and fair dealing to the period of employment prior to the employer's exercise of his powers of termination.
Strike out
84. In my judgment, these authorities do not justify the introduction into DIFC Law of any general principle of unfair dismissal. The introduction of any such principle otherwise than by legislation would be wrong in this jurisdiction. It would be inconsistent with the fundamental principle of the primacy of the express terms of a contract, subject only to the introduction of inconsistent implied terms by legislation, and it would introduce into employment a serious element of uncertainty which would probably lead to innumerable disputes about wrongful termination.
85. If any such principle of unfair dismissal is to be introduced, it should therefore be by legislation and not by judicial innovation.
Discrimination
86. In order to establish that an employer is in breach of the duty not to discriminate under Article 56(1) or 58(1) (under the amended Law), it must be proved that in one or other of the circumstances set out in Article 56(2) or 58(2) (under the amended Law), the employer in taking the relevant decision was relying either exclusively upon or was influenced by one or other of grounds (a) to (f) or was relying upon or was influenced as much by one of those grounds as any other grounds. In the present case the only ground relied on is (b) "marital status". Specifically the relevant discriminating treatment of the employee must be shown by reference to the difference between that which was actually accorded to him/her and that which would have been accorded to him/ her had she not been married. In other words, it is necessary to investigate what difference, if any, did her married status make to the manner in which she was treated: see as to the materiality of the formal status of marriage the decision of Underhill J inHawkins v Atex Group Ltd and Others(13 March 2012) 2012 WL 609052.
87. Were it to be established that there was discrimination on the grounds of or because of the Claimant's marital status, the Defendant could avoid liability by bringing itself within the exception of a bona fide occupational requirement (Article 56(2) and Article 58(2) of the amended Law. Accordingly, the Employment Law contemplates that a positive case of discrimination is established but the particular discriminatory conduct of the employer is founded on a bona fide occupational requirement, namely "a requirement reasonably necessary for the normal performance of a particular role or occupation" (Article 58(4) of the amended Law).
88. I interpose that it has not been argued on behalf of the Defendant that Articles 56 and 58 do not apply to the entitlement of the employer to terminate the contract but are confined to the treatment of the employee within the period of employment but not extending to the termination of employment. Although I doubt if that is the correct meaning and effect of these provisions, I would not express a concluded view on that issue at this stage.
89. I have already set out all the main details of the relationship between the Claimant and the Defendant in the course of her employment to the time of termination of her contract. What is quite clear is that the relationship began to change from about early August 2011, following her Melcha on 27 July having been disclosed to AA. Therefore, AA at first took the position that either the Claimant or ML would have to leave the DIFCA. It is to be observed that at this stage AA did not apparently entertain the option of both the Claimant and ML remaining with the DIFCA but with ML ceasing to be her line manager. On the face of it that would have broken the chain of authority between them and therefore avoided conflicts of interest occurring in the future.
90. Accordingly, from 11 August 2011 both the Claimant and ML remained employed by DIFCA but subject to their decision as to which of them would leave, a final decision to be taken by them by 31 August. On 25 August 2011 ML informed AA that they had decided that ML should leave. What then happened was that the Claimant remained in her job from then until 30 November 2011, whereas ML immediately ceased to be Deputy CEO and ceased to be her line manager. ML was appointed to what was a virtually non-existent function as Assistant to the CEO and the Claimant was henceforth required to report direct to AA as her line manager.
91. In the meantime, what had clearly happened was that the DIFCA Audit Committee had embarked upon an investigation of the decisions which had been taken over the period from June 2010 with regard to the Claimant's remuneration, over the complaints about the Claimant's relationship with subordinates in her department and about her engagement of E2R for the IBA conference. They had also looked at her visit to Bangkok at the same time as ML. It is unclear precisely what input AA had in these investigations. What is quite clear, however, is that the committee appears to have developed a strong suspicion both that the Claimant and ML had a close social relationship for at least several months before their marriage and that there was a likelihood that ML's decisions about her remuneration and managerial conduct, such as the trip to Bangkok, had been coloured by that relationship.
92. By the end of September 2011, there had been added to those areas of suspicion the Claimant's part in the engagement of E2R for the IBA Reception as well as for the catering at her wedding reception.
93. ML, however, then suggested that, notwithstanding his previous agreement to leave DIFCA, he might remain on the basis that, since the Claimant had ceased to report to him, there would be no further risk of any conflict of interest.
94. At this point, the Defendant by its Audit Committee appears to have changed its approach. This change, I infer, arose from two distinct concerns. First, there was the belief that ML, having come to occupy only temporarily a completely artificial appointment (Assistant to the CEO), had now changed his position and was seeking to stay permanently employed. Secondly, there was an increasing suspicion that during the period before her marriage the Claimant had benefited from a conflict of interest due to her close relationship with ML and subsequently had abused her position by causing E2R to be engaged for both her wedding and the IBA Reception.
95. It was against that background that on 30 November 2011 the Audit Committee instructed AA to request Hani Herzallah to deliver to the Claimant and ML the ultimatum that both must immediately resign or be suspended. The purpose of the alternative of suspension was to enable the Audit Committee to engage an outside investigation. That is what was done by the engagement of EY to report specifically on those areas upon which the committee had particular concerns. The Claimant, having declined to resign, was thereupon suspended on full pay.
96. On 4 December 2011 the Defendant terminated ML's employment. It is unnecessary for present purposes to investigate what triggered that course. Thereupon the Claimant's marital status was no longer such that she was married to any employee of the DIFCA. At that point, however, no final decision had been taken to terminateheremployment. Further, from that point onwards, there was no possibility of there being any continuing conflict of interest arising from her marriage to another employee. Nor was there any continuing need to employ ML or her in a different capacity to avoid any conflict of interest.
97. Her suspension did not mean that the Defendant would necessarily terminate her employment. It simply meant that they were undecided what course to take until EY had reported and they had her response to the report. For that reason the suspension was extended for a further month as from 3 January 2012 by which time EY had indicated that their report could be completed.
98. The final decision to terminate her employment on 31 January 2012 was, in my judgment, the consequence of the Audit Committee's belief that past conflicts of interest
might have occurred and that it was undesirable that she should go on working for DIFCA in any capacity for that reason. Putting it broadly, the Audit Committee did not feel comfortable with her continuing to work for DIFCA in any capacity. Her marital status was not a material consideration. The fact that she and ML had married merely flagged up to the Audit Committee what it suspected, that theirpre-existingrelationship might have been such as to give rise to conflicts of interest to the prejudice of the DIFCA. The Defendant would, in my view, probably have acted in an exactly similar way if the Claimant and ML had never formally held a Melcha.
99. Accordingly, I conclude that the Claimant has failed to establish that in terminating her employment the Defendant was discriminating against her because of or on the grounds of her marital status. It was simply exercising its contractual right to terminate the contract by giving the requisite notice or to pay her salary in lieu of notice, even if its reason for doing so might have been misconceived.
100. The question of whether there was a bona fide occupational requirement for termination therefore does not arise. That issue can be triggered only if it isfirstestablished that the employer's conduct has been discriminatory.
The Implied Terms in Contracts and Unfair Terms Law
101. Article 38 of the Implied Terms in Contracts and Unfair Terms Law applies only where one of the parties — in this case the Claimant employee deals on the employer's written standard terms of business. I infer that in this case the Claimant was indeed employed on the standard terms of employment of the DIFCA.
102. Applying paragraph (2) of Article 38 the Defendant employer "cannot by reference to any contract term….(b) claim to be entitled to render a contractual performance substantially different from that which was reasonably expected of him… except in so far as …. the contract term satisfies the requirement of reasonableness".
103. The proposition that these provisions somehow fetter the right of the Defendant to terminate the contract of employment by giving notice in accordance with the termination clause presents itself to me as completely untenable.
104. The contractable performance which was reasonably to be expected by an employee under the terms of the Claimant's contract was one by which she or the Defendant would be entitled to terminate by giving one month's notice. If the Defendant terminated without notice, it would be under a secondary obligation to compensate the Claimant for the lack of notice by paying her an amount equivalent to one month's salary. The Defendant was paid an amount well in excess of one month's salary. Moreover, the contract term itself could not be said to have failed to satisfy the requirement of reasonableness.
105. Accordingly, the Claimant cannot deploy Article 38 in order to mount a claim for unfair or wrongful dismissal.
The Gratuity Claim
106. The Claimant being a
UAE
national, the Defendant had enrolled her in the UAE pension scheme in accordance with Federal Law No.7 of 1999 and Article 61 of the Employment Law.
UAE
Accordingly, by reason of Article 61 she was not eligible to receive an end of service gratuity.
The BlackBerry Deduction
107. The Defendant having terminated the Claimant's employment without notice, they were liable to pay her an amount equivalent to the salary which she would have earned during the period of notice to which she was entitled. She was entitled to receive one month's notice. She was therefore entitled to be paid an amount equivalent to one month's salary. However, having made numerous requests to the Claimant for the return of her BlackBerry, the Defendant deducted from what they paid to her an amount which they claimed to be the value of the BlackBerry on the grounds that it was DIFCA property and had been provided to her for the purposes of her work. However, the amount from which the deduction was made was equivalent tothreemonths' salary, not one month's salary.
108. When the Defendant terminated her employment without notice she, the Claimant, would have been entitled to damages on the grounds of lack of notice, her loss beingprima faciethe salary which she would have received had notice been given: seeCollins v Knitmaster(1957) CLY 1258. Because the Claimant has been paid an amount equivalent to three times her entitlement to compensation for grant of notice (three months' salary) she can have suffered no overall loss by the deduction of the value of the BlackBerry if that deduction still left her with a payment equivalent to one month's salary. It appears that such was the case. Thus, even if she and not the Defendant was the owner of the BlackBerry, she has suffered no recoverable loss by reason the deduction.
Conclusions
109. The claim for damages for unfair dismissal is dismissed.
The claim for damages for dismissal otherwise in breach of the Claimant's contract of employment is dismissed.
The claim for defamation is dismissed.
The claim for failure to pay a gratuity is dismissed.
The claim for wrongful deduction of the value of a BlackBerry is dismissed.
The claim for discrimination on the grounds of marital status is dismissed.
110. In view of my conclusion that the Defendant was entitled to terminate the contract of employment by giving notice to that effect on 31 January 2012, it is unnecessary to consider whether the Defendant failed to comply with the requirements of the Employee Policies and Procedures. The Defendant did not purport to dismiss the Claimant for cause whereby it could be argued that the dismissal was initiated by an omission to comply with disciplinary procedures. On the contrary, the Defendant simply availed itself of the entitlement to terminate the contract under clause 8. It is therefore unnecessary to investigate the Defendant's compliance with the Employee Policies and Procedures. There is no concept of constructive dismissal under DIFC Law.
Issued by:
Amna Al Owais
Deputy Registrar
Deputy Registrar
Date: 10 July 2013
At: 1pm