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You are here: BAILII >> Databases >> The Dubai International Financial Centre >> Nadia v Nabhan [2024] DIFC SCT 308 (29 August 2024) URL: http://www.bailii.org/ae/cases/DIFC/2024/DSCT_308.html Cite as: [2024] DIFC SCT 308 |
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Nadia v Nabhan [2024] DIFC SCT 308
August 29, 2024 SCT - JUDGMENTS AND ORDERS
Claim No. SCT 308/2024
THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum,
Ruler of DubaiIN THE SMALL CLAIMS TRIBUNAL OF DIFC COURTS
BEFORE H.E. JUSTICE NASSIR AL NASSERBETWEEN
NADIA
Claimant
and
NABHAN
Defendant
Hearing : 20 August 2024 Judgment : 29 August 2024 JUDGMENT OF H.E JUSTICE NASSIR AL NASSER
UPON this Claim being filed on 26 July 2024 (the “Claim”)
AND UPON a hearing having been held before H.E Justice Nassir Al Nassir on 20 August 2024, with the Claimant and the Defendant’s representative in attendance (the “Hearing”)
AND UPON reviewing the documents and evidence filed and recorded on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the total sum ofAED 217,522.54.
2. The Defendant shall pay the Claimant the Court fees in the sum ofAED 4,350.45.
Issued by:
Hayley Norton
SCT Judge and Assistant Registrar
Date of issue: 29 August 2024
At: 2pmTHE REASONS
The Parties
1. The Claimant is Nadia (the “Claimant”), an individual filing a claim against the Defendant regarding her employment at the Defendant’s company.
2. The Defendant is Nabhan (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 9 March 2016 (the “Employment Agreement”). However, as per the Employment Agreement, the commencement date of Employment is 1 December 2014.
4. On 26 July 2024, the Claimant filed her claim with the DIFC Courts’ Small Claims Tribunal (the “SCT”) seeking visa cancellation and payment of pending end of service dues to the sum of AED 277,334.72.
5. On 2 August 2024, the Defendant filed an Acknowledgment of Service with the intention to defend all the claim.
6. On 8 August 2024, a consultation was held before SCT Judge Maha Al Mheiri, however the parties failed to amicably settle the claim.
7. In line with the rules and procedures of the SCT, this matter was referred to me for determination, pursuant to a hearing held on 20 August 2024 (the “Hearing”). The Claimant and the Defendant’s representative attended.
The Claim
8. The Claimant submits that the issue of visa cancellation is resolved, therefore, the only remaining issues are the payment of pending end of service dues.
9. The Claimant submits that there are discrepancies in her gratuity calculations disregarding the confirmation from the DIFC Authorities and Zurich/DEWS regarding the correct figures, discrepancies in her accrued but untaken annual leave and discrepancies in the CPI adjustments.
Discrepancies in pre-DEWS accumulated gratuity and monthly contributions to DEWS
10. The Claimant submits that during her maternity leave in June 2022, the Defendant cut substantially her gratuity (both: pre-DEWS lumpsum gratuity was cut from AED 419,360.23 to AED 248,045.23). Dews monthly payment was cut from USD 1,876.81 to USD 1,125.36 in 2022, and from USD 1,966.90 to USD 1,179.34 in 2023 and from USD 2,031.81 to USD 1,218.25 in 2024.
11. Therefore, the Claimant submits that there is a shortfall of payment in the sum of AED 238,261.08.
2023 consumer price index (CPI) adjustment on 2024 salary from January to June 2024 not applied
12. The Claimant submits that the Defendant is refusing to apply 2023 CPI adjustment on the salary from January to July of 2024 which constitutes to a shortfall payment of AED 10,284.84 on the assumption that the CPI is 3.30%.
Discrepancy on calculation of pending 12 days holidays
13. The Claimant submits that the Defendant has agreed to pay her the holidays, however, disagrees with the calculation of the amount.
14. The Claimant submits that as per the Employment Agreement she is entitled to 22 days of holiday per year although she worked 3 days a week.
15. Therefore, the Claimant claims the sum of AED 28,788.80.
The Defence
16. The Defendant submits that the alleged discrepancies in the calculation of the Claimant’s end of service gratuity and DEWS entitlements is based on an incorrect interpretation of the DIFC Employment Law and is therefore an inaccurate calculation. The Defendant submits that the Claimant’s reference to correspondence with the DIFC and DEWS authorities is not relevant to the key issue at hand, as even if such individuals agreed with the Claimant’s calculation in email correspondence, it is the Defendant’s view that such calculations are incorrect when considered against the applicable law.
17. The Defendant submits that the parties must look to the legislation itself for the correct calculation.
18. The Defendant submits that the Claimant is not entitled to additional gratuity payment simply because the Defendant had not updated its financial accounts when it communicated the correction to the Claimant.
19. In relation to accrued but untaken annual leave, the Defendant submits that the Claimant was informed during her termination that she is required to take her 12 days remaining leave during the garden leave in accordance with Article 29(2) of the DIFC Employment Law. As such, the Defendant maintains that the Claimant is not entitled to any additional holiday pay as claimed in the claim.
20. In relation to the CPI, the Defendant submits that there is no express nor implied contractual term that would entitle the Claimant to a CPI adjustment following the termination of employment.
21. The Defendant does not deny that the CPI adjustment has been applied to its employees on a yearly basis according to applicable rates. However, such an application is evidently in the context of on-going employment.
22. The Defendant submits that the Claimant’s employment with the Defendant ended prior to the CPI increase was announced.
23. Therefore, the Defendant submits that the Claimant is not entitled to CPI increase following the termination of the Claimant’s Employment Agreement.
Findings
24. 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.
25. I shall recalculate the Claimant’s entitlements in accordance with the DIFC Employment Law.
2023 consumer price index (CPI) adjustment on 2024 salary from January to June 2024 not applied
26. I shall start with the CPI, because if the Claimant is entitled to the increase this will affect the calculation for other employment entitlements.
27. The Claimant claims that she is entitled to an increase of 3.30% CPI on her salary from January to June of 2024. However, the Defendant submits that the Claimant is not entitled to it as she was terminated prior to the announcement of the adjustment.
28. The Defendant provides that the adjustment occurred on 24 July 2024 by way of an email which provides the following:
“The purpose of this salary statement is to inform you of the fixed consumption as of 1 January 2024:
In order to set your annual salary, an increase of 1.60% has been established based on inflation rate of United Arab Emirates. The reference source is international Monetary fund (2023 value), which has been internally validated and used for all overseas offices.
The gross annual salary amount for the year 2024…
This amount is based on a full -time work (100%). A prorated calculation applies to those part time workers.
This amount is applicable as of 1 Janaury 2024, and the arrears will be back-paid as soon as possible…”
29. Clause 4.2 of the Employment Agreement provides: “each year, depending on the budget, CPI Increase and performance of the Employee, there will be the possibility of a salary review.”
30. Since it is confirmed by way of an email by the Defendant’s Head Quarters that an increase of 1.60% occurred and is applicable as of 1 January 2024, and the arrears will be back paid as soon as possible, I find that the Claimant is entitled to an increase of 1.60%.
31. The Claimant’s salary is AED 52,008.66 x 12 months = AED 624,103.92 x 1.60% = AED 9,985.66 + 624,103.92 = AED 634,089.58/12 months = AED 52,840.79.
End of Service Gratuity
32. Article 66 of the DIFC Employment Law provides the following:
“(1) An Employee who is not required to be registered with the GPSSA under Article 65(`), and who completes continuous employment of at least one (1) year with their employer, before or after the Qualifying Scheme Commencement Date is entitled to a Gratuity Payment for any period of service prior to the Qualifying Scheme Commencement Date on the termination of their employment. …
(2) An Employee’s Gratuity Payment shall be calculated as follows:
(a) an amount equal to twenty one (21) days of the Employee’s Basic Wage for each year of the first five (5) years of service prior to the Qualifying Scheme Commencement Date; and
(b) an amount equal to thirty (30) days for the Employee’s Basic Wage for each additional year of service prior to the Qualifying Scheme Commencement Date. …
…
(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.
33. The Claimant commenced her employment on 1 December 2014 and was terminated on 23 April 2024, serving 3 months’ notice, therefore her last working day was on 22 July 2024. The Claimant’s salary upon termination is AED 52,840.79.
34. The calculation shall be in accordance with Article 66(2)(a) and (b) from the period of 1 December 2014 to 31 January 2020.
35. For the Claimant’s first five (5) years the gratuity shall be calculated in accordance with Article 66(2)(a) in which the Claimant is entitled to receive an amount equal to 21 days of the employee’s basic salary:
AED 52,840.79 x 12 month/365 days = AED 1,737.23 x 21 days = AED 36,481.83 x 5 years = AED 182,409.15.
In relation to the two months, it shall be calculated in accordance with Article 66(2)(b), as such: 30 days/12 months = 2.5 days per month x 2 months = 5 days x 1,737.23 = AED 8,686.15.
36. From the period of 1 February 2020 to 22 July 2024 the calculation shall be in accordance with Article 66(7)(b) as such the calculation shall be as follows:
4 years, 5 months and 22 days:
AED 52,840.79 x 8.33% (being the minimum contribution amount defined by the Employment Law) = AED 4,401.63 x 53 months = AED 233,286.39 for 4 years and 5 months and for the 22 days it shall be calculated as follows: AED 4,401.63/30 days = AED 146.72 x 22 days= AED 3,227.84.
37. Therefore, in relation to gratuity the Claimant is entitled to the sum of AED 427,609.53.
38. At the hearing, it was confirmed that the Claimant received the sum of AED 248,045.23. Therefore, the remaining balance is 179,563.30.
Accrued But Untaken Annual Leave
39. The Defendant provided evidence that the Claimant is required to take her accrued but untaken annual leave of 12 days during the garden leave in accordance with Article 29(2) of the DIFC Employment Law. The wording is: “you are required to take the 12 working days annual leave in one consecutive period, starting on 14 June 2024 or such other day as may be notified to you at least 7 calendar days in advance.” However, the Defendant in its defence has agreed to pay the Claimant 12 days of accrued but untaken holidays.
40. As such, I shall calculate the Claimant’s entitlement in accordance with Article 28(3) of the DIFC Employment Law, which provides as follows:
“Compensation in lieu of Vacation leave, or any amount owed by the Employee in respect of excess Vacation Leave taken, shall be calculated using the Employee’s Daily Wage at the time of termination date.”
The daily wage is defined in the DIFC Employment Law as follows:
(a) An employee’s annual wage divided by two hundred and sixty (260) for an employee that works five (5) days per work week;
(b) In all other cases, an employee’s annual wage is divided by the product of:
(i) The average number of work days worked per work week by the employee over a relevant calculation period;
(ii) Multiplied by fifty two (52).
41. However, there is no evidence that the Claimant has utilized the 12 days accrued but untaken annual leave as no notice of vacation leave has been provided. In addition, in the Defendant’s defence, the Defendant submits that it agreed to pay an additional payment of 12 days, therefore, the calculation should be as follows:
AED 52,840.79 x 12 months = AED 634,089.48/156 days = AED 4,4064.67 x 12 days = AED 48,776.04.
42. The Claimant confirmed that the Defendant has already paid the sum of AED 20,803.46. Therefore, the remaining balance is AED 27,972.58.
Conclusion
43. In the light of the abovementioned, I find that the Defendant shall pay the Claimant the total sum of AED 217,522.54.
44. The Defendant shall pay the Claimant the Court fees in the sum of AED 4,350.45.