Claim No. SCT 017/2020
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 SCT JUDGE AYESHA BIN KALBAN
BETWEEN
LUNA
and
LINIE INTERNATIONAL LIMITED
| Hearing | : 8 March 2020 |
|---|---|
| Judgment | : 15 March 2020 |
JUDGMENT OF SCT JUDGE AYESHA BIN KALBAN
UPON the Claim Form being filed on 20 January 2020
AND UPON a Consultation being held on 19 February 2020 before SCT Judge Delvin Sumo with the Claimant and the Defendant’s representative attending
AND UPON the parties failing to reach a settlement at the Consultation
AND UPON a Hearing being held on 8 March 2020 before SCT Ayesha Bin Kalban
AND UPON reviewing all documents and evidence submitted on the Court file
IT IS HEREBY ORDERED THAT:
1. The Defendant shall pay the Claimant the sum of AED 28,799.94.
2. The Defendant shall pay the Claimant a portion of the Court fee in the sum of AED 575.99.
Issued by:
Hayley Norton
SCT Judge
Date of issue: 15 March 2020
At: 3pm
THE REASONS
The Parties
1. The Claimant is Luna (the “Claimant”), an individual filing a claim against the Defendant regarding her employment at the Defendant’s company.
2. The Defendant is Linie International Limited (the “Defendant”), a company in the DIFC.
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 1 April 2019 (the “Employment Contract”). The Contract sets out the Claimant’s joining date to be 1 April 2019.
4. The Claimant was terminated on 19 December 2019 by way of a letter, and she served her last working day on 18 January 2020.
5. On 20 January 2020, the Claimant filed a claim in the DIFC Courts Small Claims Tribunal (the “SCT”) claiming her end of service entitlements in the sum of AED 53,000 as well as penalties accrued under Article 19 of the DIFC Employment Law, defined below.
6. The matter was called for a Consultation before SCT Judge Delvin Sumo on 19 February 2019, whereby the parties failed to reach a settlement. In accordance with the Rules and the procedures of the SCT, the matter was listed for a hearing before me on 8 March 2020 (the “Hearing”) which was attended by both parties.
The Claim
7. The Claimant makes her claim on the allegation that she was terminated for not meeting the company’s expectations. The Claimant further submits that she has not been paid her end of service entitlements and that the Defendant intended to make unlawful deductions from her salary, to which she did not agree.
8. The Claimant therefore filed a claim in the SCT seeking her unpaid salary of December and January, her accrued but untaken annual leave, unpaid days in lieu and penalties amounting to the sum of AED 53,000.
The Defence
9. In response to the Claim, the Defendant confirms that it does not oppose the claims made by the Claimant. However, the Defendant submits that it had made deductions to the Claimant’s final payment, as set out below.
10. The Defendant has deducted the amount of AED 1,577.91 being 3 days’ salary in relation to the warning letter issued by the Defendant to the Claimant for her actions, set out by the Defendant to be “negative behavioural acts towards her colleague, misusing her position, changing client bookings to particular staff without reasons and making staff demotivated”.
11. In response to this deduction, the Claimant states that the warning letter had been provided to her on 14 January 2020, which was 2 days before her last working day with the Defendant. She refutes the allegations set out in the letter and therefore submits that the deduction made by the Defendant is unjust.
12. The Defendant also has deducted the amount of AED 2,901 being a variance charge for items that the Defendant had identified to be missing from its inventory. It is the Defendant’s case that the Claimant should be responsible for misappropriated items in her capacity as Store Manager, as she would have had oversight of the premises during her tenure. The Defendant has therefore partially charged the Claimant for the amount of the misplaced inventory.
13. In response to this deduction, the Claimant confirms that she had reported a colleague to the Defendant’s management team, as she had discovered that this individual had been responsible for stealing the items. The Claimant submits that the Defendant should have deducted the inventory variance charge from the individual responsible for misappropriating items, and states that the Defendant cannot hold her partially liable.
14. The third deduction made by the Defendant relates to a variance in the Defendant’s cash float. The Defendant submits that the Claimant should be responsible for such expenses seeing as it had been unable to locate original receipts relating to them, and reiterates that these amounts were spent during the Claimant’s management and with her approval. The Claimant submits that she had provided these receipts to the Defendant’s finance team and therefore refutes the Defendant’s claim for a deduction to be made to her final settlement in the sum of AED 340.74.
15. The Defendant alleges that it is company policy to deduct part of the amount of any missing inventory or variance charges from the Store Manager’s salary, therefore it submits that the Claimant must be held responsible during her employment with the Defendant’s company.
Discussion
16. The DIFC Courts and the SCT have jurisdiction over this case as it relates to a DIFC employment and the claim value in question is less than AED 500,000.
17. This dispute is governed by DIFC Law No. 2 of 2019 (the “DIFC Employment Law”) in conjunction with the relevant Employment Contract.
Findings
18. At the Hearing and in review of the Court file, it appears that the Defendant has paid the Claimant’s salary for days worked in December 2019, and the Claimant no longer claims this amount.
19. On 9 March 2020, the SCT Registry requested the Claimant to provide a final breakdown of the total outstanding claim amount. Subsequently, the Claimant provided the following breakdown of her end of service entitlements:
(a) Unpaid salary from 1 – 18 January 2020 in the sum of AED 9,600;
(b) 19 accrued but untaken annual leave days in the sum of AED 10,133;
(c) 2 unpaid days in lieu in the sum of AED 1,066; and
(d) Penalties under Article 19 of the DIFC Employment Law in the amount of AED 16,000.
20. The above set out claims are not disputed by the parties, and the only issue in contention relates to the deductions carried out by the Defendant as addressed above.
Salary, Vacation days and days in lieu
21. I am satisfied that the Claimant is entitled to her salary from 1 – 18 January 2020, 19 accrued but untaken annual leave days, and 2 unpaid days in lieu. Based on the monthly salary of AED 16,000, the Claimant’s daily wage is AED 738.46 per day (16,000 x 12 / 260 = daily wage). Therefore, for the days in January 2020, this amounts to AED 13,292.30 (AED 738.46 x 18).
22. Article 28(1) of the DIFC Employment Law reads as follows:
“where an employee’s employment is terminated, the employer shall pay the employee an amount in lieu of vacation leave accrued but not taken up to and including the termination date using the employee’s daily wage.”
23. In light of the above, the Claimant is entitled to compensation for 19 days of accrued but untaken annual leave. Therefore, the Claimant is entitled to AED 14,030.74 (AED 738.46 x 19). The Claimant is also entitled to 2 unpaid days in lieu amounting to AED 1,476.92 (AED 738.46 x 2).
Penalties under Article 19 of the DIFC Employment Law
24. The Claimant claims penalties under Article 19 of the DIFC Employment Law, that she submits she is entitled to pursuant to the Defendant’s failure to pay the amounts owing to her.
25. Article 19(4)(a) of the DIFC Employment Law states that;
“19. Payments following termination
(1) An Employer shall pay to an Employee all Remuneration (excluding, where applicable, any Additional Payments deferred in accordance with Article 18(2)), the Gratuity Payment and all accrued Vacation Leave not taken, within fourteen (14) days after the Termination Date.”
26. The Claimant filed her claim on the 20 January 2020. As established hereabove, the Claimant was terminated on 18 December 2019, and her last working day was 18 January 2020. The period of time allowed for the Defendant to settle the Claimant’s dues had not yet expired, therefore I am of the view that the Article 19 penalties cannot be awarded to the Claimant in this case. Should the fourteen-day period set out in Article 19 have passed and the Defendant had not paid the Claimant, the failure to pay would have triggered the Claimant’s entitlement to Article 19 penalties. Therefore, I hereby dismiss the Claimant’s claim for Article 19 penalties.
Deductions
27. Article 20 of the DIFC Employment Law reads as follows:
“20. Deductions
An Employer shall not deduct from an Employee’s Remuneration or accept payment from an Employee, unless:
(a) the deduction or payment is permitted under this Law, or agreed to in an Employment Contract not in contravention of this Law;
(b) the prior written agreement of the Employee has been obtained in respect of the deduction or payment, provided that such deduction or payment is not prohibited under this Law;
(c) the deduction or payment is a reimbursement for an overpayment of any Remuneration or expenses, or to recoup benefits utilised by an Employee in excess of their accrued entitlement under their Employment Contract; or
(d) the deduction or payment has been ordered by the Court.”
28. It is imperative to note that the Claimant has not consented to the deductions made by the Defendant. The Defendant has not provided any evidence or policy to demonstrate that the Claimant should be liable for the variance charges, nor has it met its burden of proof to show that the Claimant is responsible for the missing items in the Defendant’s inventory.
29. Therefore, I find that the Defendant’s deduction of the Claimant’s salary is unlawful and is not permitted under the Employment Law.
Conclusion
30. The Defendant shall pay the Claimant the sum of AED 28,799.94 being the total sum of the Claimant’s entitlements.
31. The Claim value set out by the Claimant in the Claim Form is AED 53,000, pursuant to which the Claimant has paid a fee of AED 1,060.71. In light of the fact that the Claimant’s claim for Article 19 penalties has been dismissed, I find it appropriate to apply a set-off to the fee that she has paid against the judgment sum awarded. Therefore, it is hereby ordered that the Defendant shall pay the Claimant a portion of the Court fee in the amount AED 575.99.
Issued by:
Hayley Norton
SCT Judge
Date of issue: 15 March 2020
At: 3pm