Claim No. SCT 098/2018
THE DUBAI INTERNATIONAL FINANCIAL CENTRE
In the name of His Highness Sheikh Mohammed Bin Rashid Al Maktoum,
IN THE SMALL CLAIMS
ISLAY RESTAURANT (ISLAY LIMITED)
Hearing: 10April 2018
Judgment:12 April 2018
JUDGMENT OF SCT JUDGE NASSIR AL NASSER
UPONthis claim having been called for a hearing, the Claimant attended the hearing and the Defendant’s representative also attended;
AND UPONreading the submissions and evidence filed and recorded on the Court
IT IS HEREBY ORDERED THAT:
1.The Defendant shall pay the Claimant the sum of AED 11,000.
2. The penalties under Article 18 of the DIFC
3. The Defendant shall pay the Claimant the Court Fees in the sum of AED 367.50.
Nassir Al Nasser
Date of issue: 12 April 2018
1.The Claimant is Ikrut (herein “the Claimant”), an individual filing a claim against the Defendant regarding his employment at the Defendant company.
2. The Defendant is Islay (ISLAY Limited) (herein “the Defendant”), a company registered in the DIFC located in the DIFC, Dubai.
Background and the Preceding History
3. The underlying dispute arises over the employment of the Claimant by the Defendant in the position of “Reception Reservations Manager” by an employment contract dated 10 May 2017 (the “Employment Contract”) and the starting date was 25 May 2017.
4. Pursuant to the Employment Contract, the Claimant’s total salary was AED 15,000 per month which consists of basic salary in the sum of AED 10,000 and housing allowance in the sum of AED 5,000. The Claimant was also entitled to 20 working days annual leave if his service at the company exceeded one year.
5. The Claimant alleges that he was terminated verbally in December 2017, he also alleges that he was not given two months’ salary for November and December 2017, overtime, end of service gratuity, reimbursement of deductions made in regard to his visa and medical insurance along with interest when the payment was due.
6. On 6 March 2018, the Claimant filed a claim in the DIFC Courts
7. The parties met for a Consultation with SCT Judge Natasha Bakirci on 12 March 2018 but were unable to reach a settlement.
8. The Claimant and the Defendant’s representative attended the hearing listed before me on 10 April 2018.
9. The Claimant’s case is that he was employed by the Defendant from 25 May 2017 pursuant to his Employment Contract.
10. The Claimant now seeks the total sum of AED 11,000 which consists of reimbursement of deductions made in regard to his recruitment charges in the sum of AED 4,630 and penalty of late payment under Article 18 of the DIFC Employment Law 4 of 2005, as amended by DIFC Law No. 3 of 2012 (the “DIFC Employment Law”).
11. The Claimant alleges that the company is charging him the sum of AED 4,630 for recruitment fees, regarding which he was informed that this charge is illegal although it is mentioned in the Contract that the company will deduct this amount.
12. The Claimant also alleges that upon his resignation, both parties mutually agreed to shorten the notice period to one month.
13. The Claimant also alleges that he is entitled to penalties under Article 18 of the DIFC Employment Law due to the deduction made, which led the Defendant to be late on the repayment of the sums deducted.
14. On the other hand, the Defendant alleges that all companies have similar policy and procedure, that if an employee leaves within a certain period of time he is obliged to repay the recruitment fees.
15. The Defendant’s representative also alleges that he is not sure whether this deduction is legal or illegal, in addition, he never came across any Article in the DIFC Law that mentions visa, but he heard that the deduction is legal. However, they request that the Courts decide this matter as although they have sought legal advice they could not receive any solid advice on deduction of recruitment fees.
16. This dispute is governed by DIFC Law No. 4 of 2005, as amended by DIFC Law No. 3 of 2012 (the “DIFC Employment Law”) in conjunction with the relevant Employment Contract.
17. The Claimant claimed the reimbursement of the visa expenses the Defendant deducted from him in the sum of AED 4,630.
18. However, the Claimant and the Defendant entered into an Employment Agreement on 10 May 2017, clause 8 of the Employment Contract mentions that “in any event that either party terminates your employment for any reason within the first 18 months of the starting date, you shall be require to reimburse the company for the costs of your visa, training and relocation expenses which the company has paid for you…”
19. Article 19(b) of the DIFC Employment Law states that:
“An employer shall not deduct from an employee’s wages or accept payment from an employee, unless:
(b) the employee has previously agreed in writing to the deduction or payment;”
20. Article 20(1)(a) of the DIFC Employment Law states the following:
“A person shall not request, charge or receive, directly or indirectly, from a person seeking employment a payment for:
(a) Employing or obtaining employment for the person seeking employment;”
21. Although Article 19(b) of the DIFC Employment Law authorises the deduction if both the employer and employee have agreed in writing, such deductions are not authorised under Article 20(1)(a) of the DIFC Employment Law which clearly states that a person shall not charge directly or indirectly from a person seeking employment a payment for employing them.
22. Due to the unlawful deduction, the Claimant argues that he is entitled to penalties under Article 18 of the DIFC Employment Law.
23. Article 18 of the DIFC Employment Law states the following:
“18. Payment where the employment is terminated
(1) An employer shall pay all wages and any other amount owing to an employee within fourteen (14) days after the employer or employee terminates the employment.
(2) If an employer fails to pay wages or any other amount owing to an employee in accordance with Article 18(1), the employer shall pay the employee a penalty equivalent to the last daily wage for each day the employer is in arrears.”
24. The DIFC Courts of Appeal has held inFrontline Development Partners Limited v Asif Hakim Adil(2016) CA-006 that if Article 18 becomes punitive or harsh for employers it is for the legislator to amend the law
25. The Defendant did not on purpose hold the amount and refuse to pay the Claimant, but the Defendant was actually unaware if the Claimant was entitled to such payment or not. However, pursuant to the approach of the Court of Appeal as mentioned above, the repayment of the deduction actually passed the 14 days after the last day of employment.
26. The Claimant resigned on 25 January 2018, with his last day of employment as agreed on 19 February 2018. Therefore, the Defendant should have made the payment to the Claimant by no later than 5 March 2018. The penalty starts calculating from 6 March 2018 until the date of payment.
27. I find that the Claimant is entitled to penalties under Article 18 of the DIFC Employment Law at his last daily wage of AED 500 from 6 March 2018 until the date of full payment, which calculates to the sum of AED 15,000.
28. However, the Claimant claimed the sum of AED 11,000 only which consists of the reimbursement of the visa expenses in the sum of AED 4,630 and penalties under Article 18 of the DIFC Employment Law in the sum of AED 6,370.
29. The Courts will only decide pursuant to the amount claimed in the claim form, the Claimant should have amended the claim form, claimed the correct amount and paid the Court Fees pursuant to the amount claimed.
30. In light of the aforementioned, I find that the Defendant is liable to pay the Claimant his dues in the amount of AED 11,000 for the reimbursement of visa expenses and penalties under Article 18 of the DIFC Employment Law.
31. The penalties under Article 18 of the DIFC Employment Law shall accrue until the date of payment.
32. The Defendant shall pay the Claimant the Court Fees in the sum of AED 367.50.
Nassir Al Nasser
Date of Issue: 12 April 2018
At: 11 am