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Nanette v Neo [2024] DIFC SCT 225

July 29, 2024 SCT - JUDGMENTS AND ORDERS

Claim No. SCT 225/2024

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

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

IN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSER

BETWEEN

NANETTE

Claimant

and

NEO

Defendant

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Hearing :	23 July 2024
Judgment :	29 July 2024

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JUDGMENT OF H.E JUSTICE NASSIR AL NASSER

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UPON this Claim being filed on 3 June 2024

AND UPON a hearing having been held before H.E Justice Nassir Al Nassir on 23 July 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 total sum ofAED 110,513.08

2. The Defendant shall pay the Claimant the Court fee in the sum ofAED 2,210.26.

Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 29 July 2024
At: 2pm

THE REASONS

The Parties

1. The Claimant is Nanette (the “Claimant”), an individual filing a claim against the Defendant regarding her employment at the Defendant’s company.

2. The Defendant is Neo (the “Defendant”), a company registered and located in DIFC, Dubai, UAE.

Background and the Preceding History

3. The underlying dispute arises over the employment of the Claimant by the Defendant pursuant to an employment contract dated 22 June 2023 (the “Employment Agreement”) commenced on 10 July 2023.

4. On 3 June 2024, the Claimant filed her claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking payment for May salary and accrued but untaken leave in the sum of AED 83,987.08.

5. On 7 June 2024, the Defendant filed an Acknowledgment of Service with the intention to defend all of the claim.

6. On 14 June 2024, a consultation was held before SCT Judge Maitha Al Shehhi, however the parties failed to amicably settle the claim.

7. On 20 June 2024, the Claimant amended her claim and added a claim for payment into the DIFC Employee Workplace Savings Scheme (“DEWS”) to the sum of AED 26,526. Therefore, the total claim is AED 110,513.08.

8. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held on 23 July 2024 (the “Hearing”). The Claimant and the Defendant’s representatives attended the Hearing.

The Claim

9. The Defendant at the hearing confirmed that the Claimant is entitled to May salary of 26 days to the sum of AED 53,991.69 and accrued but untaken leave in the sum of AED 29,995.39. However, in relation to DEWS, the Defendant submits that their understanding is that the Claimant shall complete one year of continuous employment to be entitled to DEWS.

10. The only issue between the parties is whether the Claimant is entitled to DEWS. The Claimant commenced employment on 10 July 2023, resigned on 26 February 2024, and agreed that her last working day will be on 26 May 2024.

11. Clause 14 of the Employment Agreement states the following:

“you will be enrolled into our pension scheme starting from the commencement date and Neo will make the Employer’s mandatory contribution from this date until the end of your employment with Neo or your Employment is transferred to a different entity within Neo. The mandatory contributions are percentage of your monthly basic salary and the percentage of are defined by your length of service. These contributions will not impact your salary received by you; this is in addition to your current base salary. Under DEWS Scheme, if you worked for less than 5 years you will be entitled to 5.83% and if you have been employed for over 5 years, the percentage becomes 8.33% (based on your basic salary).”

12. The Defendant submits that Article 66(12) of the DIFC Employment Law provides that:

“An Employer may defer the payment of an Employee’s Core Benefits to a Qualifying Scheme during the Employee’s probation period agreed to in an Employment Contract, in which case … (b) in the case of con-confirmation of the Employee’s employment, no Core Benefits will be payable in favour of the Employee to a Qualifying Scheme, …”.

13. The Defendant submits that the Claimant’s employment was initiated on 10 July 2023 and, per Article 3.2 of her employment contract, was subject to a 6-month probationary period. The Defendant adds that Claimant’s probationary period was extended by 3 months to April 2024, but she tendered her resignation in February 2024.

14. The Defendant submits that as the Claimant was not a confirmed employee the company it had no obligation to enroll her into the DEWS scheme, and the Claimant is not entitled to any benefits.

15. The Defendant had not deferred the payment or provided evidence that the payment will be deferred to after the confirmation of employment. The Defendant had an obligation to enrol the Claimant to the DEWS scheme from the commencement date of employment as agreed in the Employment Agreement.

Discussion

16. This dispute is governed by DIFC Law No. 4 of 2021 (Employment Law Amendment Law) (hereafter the “DIFC Employment Law”) in conjunction with the relevant Employment Agreement.

17. Article 66 of the DIFC Employment Law which provides the following:

“(7) From the Qualifying Scheme Commencement Date an Employer shall, on a monthly basis, pay to a Qualifying Scheme, for the benefit of each Employee who is not an Exempted Employee, an amount equal to as least the Core Benefits, which shall be calculated as follows:

(a) five point eight three percent (5.83%) of an Employee’s Monthly Basic Wage for the first (5) years of an Employee’s service, inclusive of any period of employment of Secondment served to prior to the Qualifying Scheme Commencement Date; and

(b) eight point three three percent (8.33%) of an Employee’s Monthly Basic Wage for each additional year of service…

(8) for the purpose of Article 66(7):

(b) any calculation to establish an Employee’s monthly basic wage shall not be less than fifty percent (50%) of the Employee’s monthly wage.”

18. The Claimant’s employment with the Defendant commenced on 10 July 2023 to 26 May 2024, totalling 10 months and 16 days. As such, the Claimant shall be entitled to receive the money contributed on her behalf to the DEWS scheme and shall be calculated in accordance with Article 66(7) of the DIFC Employment Law. The Claimant’s basic salary is AED 45,500 which shall be calculated as follows:

Between 10 July 2023 to 26 May 2024:

The Claimant’s monthly basic wage is AED 45,500 x 5.83% being the minimum contribution amount defined by the Employment Law) = AED 2,652.65 per month x 10 months = AED 26,526.5

In relation to the 16 days of May 2024 it shall be calculated as follows:

AED 2,652.65 / 30 days= AED 88.42 x 16 days= AED 1,414.72

19. Therefore, the Claimant is entitled to receive the sum of AED 27,941.22.

Conclusion

20. In light of the aforementioned, I find that the Defendant shall pay the Claimant the total sum of AED 111,928.30. However, the Claimant has only claimed the sum of AED 110,513.08 and so my order shall be limited to what she claimed.

21. The Defendant shall also pay the Claimant the Court fee in the sum ofAED 2,210.26.