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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Noah v Nicole [2024] DIFC SCT 039 (28 May 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_039.html Cite as: [2024] DIFC SCT 039, [2024] DIFC SCT 39

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Noah v Nicole [2024] DIFC SCT 039

May 28, 2024 SCT - JUDGMENTS AND ORDERS

Claim No: SCT 039/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai

IN THE SMALL CLAIMS TRIBUNAL
BEFORE H.E. JUSTICE MAHA AL MHEIRI

BETWEEN

NOAH

Claimant

and

NICOLE

Defendant

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Hearing :	2 May 2024
Judgment :	28 May 2024

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JUDGMENT OF H.E. JUSTICE MAHA AL MHEIRI

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UPON the Claimant’s claim filed on 25 January 2024

AND UPON a hearing having been held before H.E. Justice Maha Al Mheiri on 2 May 2024, with the Claimant and the Defendant’s representative in attendance

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 sum of 10,666.66 in relation to unpaid salaries.

2. The Defendant shall pay the Claimant a penalty under Article 19 of the DIFC Employment Law in the amount of AED 1,846.16.

3. The Defendant shall pay the Claimant the DIFC Courts’ filing fee in the amount of AED 367.50.

4. The Defendant shall cancel the Claimant’s employment visa.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 28 May 2024
At: 11am

THE REASONS

The Parties

1. The Claimant is Noah (the “Claimant”), an individual filing a claim against the Defendant regarding his employment at the Defendant company.

2. The Defendant is Nicole (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 2 October 2023 (the “Employment Contract”). Pursuant to the Employment Contract, the Claimant was employed in the position of Hair Style with a monthly salary of AED 10,000, in addition to commission.

4. The Claimant signed the Employment Contract at the beginning of October 2023 however the Defendant’s salon was still under construction. The Claimant submits that although the Defendant’s salon was under construction he and his colleagues used to go and clean the premises. The Claimant also conducted interviews for potential staff and suggested products to the management to be used in the salon.

5. On November 2023, the Claimant requested to be paid his salary for the month of October, the Defendant paid him AED 10,000 as a loan stating that the salon was under construction in October and no work was performed by the Claimant resulting in no salary.

6. On 1 December 2023, the Claimant was paid the amount of AED 8,000 for the month of November stating that AED 2,000 was deducted from the loan that was given to him in November. On 5 January 2024, the Claimant was paid AED 3,000 for the month of December and was informed by the Defendant that his employment is terminated with no notice period.

7. On 6 February 2024, the Claimant filed a claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking the following reliefs in the amount of AED 21,370.75:

(a) Payment in lieu of pending salary from November 2023 to 5 January 2024 in the amount of AED 15,264; and

(b) Imposition of a daily penalty under Article 19(1) of the DIFC Employment Law from 20 January 2024 until payment of all outstanding sums.

8. On 19 March 2024, the parties attended a Consultation before SCT Judge Hayley Norton, however, they were unable to reach a settlement.

9. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held on 2 May 2024 (the “Hearing”).

Discussion

10. This dispute is governed by the Employment Law Amendment Law DIFC Law No. 4 of 2021 (the “DIFC Employment Law”) in conjunction with the Employment Contract.

11. I shall set out below each of the Claimant’s claims, the Defendant’s defence to each Claim, and accordingly, the Court’s reasoning and finding.

The pending remuneration

12. The Claimant submits that he signed the Employment Contract on 2 October 2023, and was supporting the Defendant in any way needed. The Claimant argues that although the salon was under construction he was supporting the Defendant by cleaning the premises, interviewing potential staff, and providing product recommendations for the salon.

13. The Defendant argues that the salon was under construction and there was nothing to for the Claimant to do in the month of October, as a result the amount of AED 10,000 was given as a loan and not as salary for the month of October. In addition, the Defendant deducted the amounts paid for acquiring the Claimant’s visa as he was terminated early, and the Defendant submits that the Claimant should pay the expenses incurred.

14. To determine whether the Defendant would be entitled to reclaim the amount of AED 8,000 for the early termination visa fee, the Court must determine whether the Employment Contract defined the payments that fall under early termination. Articles 21 and 57 of the DIFC Employment Law reads as follows:

“21. Recruitment costs

(1) …

(2) Subject to Article 21(3), an Employer is not permitted to recoup from an Employee any costs or expenses incurred by the Employer in the course of recruiting the Employee.

(3) If an Employee terminates their Employment Contract for any reason other than termination for cause under Article 63, and their Termination Date falls within a period of six (6) months from the Employee's date of commencement of employment, the Employer may, subject to Article 57(2), recoup from the Employee such reasonable costs or expenses which:

a. were directly incurred by the Employer in the course of recruiting the Employee;

b. are supported by proof of expenditure provided by the Employer to the Employee; and

c. are specified in the Employment Contract as being payable by the Employee to the Employer in such circumstances.

57. Visas and permits

(1) If an Employee is required to work in the DIFC, their Employer is required to obtain and maintain, at the Employer's own cost, the requisite sponsorship documentation (including UAE and DIFC identity documentation), visas, authorisations, licenses, permits and approvals as may be required from time to time by Federal Law, Dubai Law, a Competent Authority or a Personnel Sponsorship Agreement, to enable the Employee to work lawfully for the Employer in the DIFC and comply with any such requirements.

(2) An Employer is not permitted to:

(a) recoup any costs and expenses incurred pursuant to Article 57(1) from an Employee; or

(b) retain the passport or other original personal documents of an Employee.

(3) 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.

(4) An Employer who contravenes Articles 57(1), (2) or (3) is liable to a fine as set out in Schedule 2.”

15. In review of Article 21 of the DIFC Employment Law, I note that the law specifies the circumstances where an employer can request the employee to refund the amounts paid during the employment process or in the situation of early termination fee before the 6 months period. The law also gives an exception, being that the employer cannot recoup the visa costs paid for the employee’s visa.

16. The terms used in DIFC Employment Law are clear and leads the Court to conclude that the any clause agreed between the parties in the Employment Contract against this Article must be considered void.

17. Moreover, the Court finds that as the Claimant signed the Employment Contract with the Defendant, the Defendant has a contractual duty and is responsible to pay the monthly salary of the Claimant. The Claimant was available and ready to serve his duties under the terms of Employment Contract. There was no prior agreement between the parties written or verbal that the Defendant will not pay the monthly salary before the salon is open for business. From 2 October 2023 until 5 January 2024 the Defendant paid the Claimant in total AED 21,000. According to the Court’s calculations, the Claimant should receive for this period the amount of AED 31,666.66, as set out below:

October 2023	November 2023	December 2023	1-5 January 2024
AED 10,000	AED 10,000	AED 10,000	AED 1,666.65

18. Accordingly, the Defendant shall pay the remainder of the amounts pending from the Claimant’s salaries in the sum of AED 10,666.66.

Article 19 penalty in accordance with the DIFC Employment Law

19. The Claimant seeks the accrual of a daily penalty in the amount of his daily wage pursuant to the Defendant’s failure to pay his employment entitlements within 14 days of the Claimant’s last working day. The Claimant submits that he should be entitled to this penalty charge from 20 January 2024, being 14 days from 5 January 2024.

20. Article 19 of the DIFC Employment Law stipulates as follows:

i. “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.

ii. 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).

iii. A penalty pursuant to Article 19(2) may only be awarded to an Employee if the amount due and not paid to the Employee in accordance with Article 19(1) is held by a Court to be in excess of the Employee's Weekly Wage.

iv. 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.”

21. Pursuant to Article 19 (1) of the DIFC Employment Law, an Employer is required to pay an Employee all remuneration within fourteen (14) days after the termination, and in such instances where payment is not made within the time period, pursuant to Article 19(2) that Employer shall pay a penalty equal to an Employee’s daily wage for each day the Employer is in arrears of its payment obligation under Article 19(1).

22. In accordance with Article 19(1) of the DIFC Employment Law, the Defendant ought to have paid the Claimant by 20 January 2024, however, the Claimant filed a case on 25 January 2024. I also highlight that Article 19(4)(a) directs that the Court will waive the penalty amount accrued and accruing for the period of time in which a dispute is pending with the Courts. Therefore, I am of the view that the Claimant is entitled to 4 days of penalty pursuant to Article 19 of the DIFC Employment Law.

23. The last day as to when the Defendant ought to have paid the Claimant his pending dues was 20 January 2024 (14 days from the termination date of 5 January 2024) and given that the Claimant filed his claim on 25 January 2024, I find that the Defendant is liable to pay a penalty of 4 days in compliance with Article 19(4) of the DIFC Employment Law. The Claimant’s monthly salary is AED 10,000 x 12 months/260 days = AED 461.54 daily wage x 53 days = AED 1,846.16.

24. Hence, I find that the Claimant is entitled to a penalty under Article 19 of the DIFC Employment Law in the amount of AED 1,846.16 due to the Defendant’s failure to pay the Claimant’s remuneration on time.

Conclusion

25. In light of the aforementioned, I find that the Defendant shall pay the Claimant the sum of 10,666.66 in relation to unpaid salaries.

26. The Defendant shall pay a penalty under Article 19 of the DIFC Employment Law in the amount of AED 1,846.16.

27. I am of the view that, as the Claimant has been successful in his claims, he is entitled to recover the court fee applicable to the filing of this case. The Defendant shall therefore pay to the Claimant the amount of AED 367.50 for the Court fee.