Case Focus – Laboni v Lahit
Case: Laboni v Lahit
Case No: DIFC 168/2021
Jurisdiction: Dubai International Financial Centre (DIFC)
Court: Dubai International Financial Centre (DIFC)
Recommended by: SOL International Ltd
An employee filed a claim in the Small Claims Tribunal (“SCT”) against a company in the DIFC, seeking amounts allegedly owed to him underhis employment contract. The employeehad started his employment with the company in June 2020. However, the employee was unable to travel to Dubai from India because of COVID 19 travel restrictions. The parties agreed the employee would instead work from India but would only receive 60% of the agreed salary.The remaining 40% would be paid once his employment visa was issued, he settled in Dubai and was working there.
In August 2020, the employee was asked to move to Dubai immediately. However, the employee stated he was not able to move to Dubai as his spouse was now moving to London for work and he wanted to help her settle there. He suggested an alternative remote working arrangement which the company did not agree to. As a result, the employee resigned by email, but did not receive an acceptance of his resignation.
In October 2020, the parties agreed that the employee would work remotely from London every few months for some time, with an increased salary, but with the same 60-40 payment plan in place until his visa was processed.
By December 2020, the employee was informed the visa would be issued post company audit. In January 2021, the employee was paid his full salary and was informed the visa process would be completed by April 2021. However, on 13 April 2021, the employee resigned and he was not paid any outstanding dues or salary by the company.
The employee filed a claim with the SCT claiming accrued salary arrears from June 2020 to December 2020; unpaid salary for April 2021; penalties under Article 19 of DIFC Law No. 2/2019 (the DIFC Employment Law); medical insurance costs; accrued holiday pay and Court fees.
What was decided?
The Court found emails exchanged between the parties reflected the parties’ agreement in respect of payment of partial salary and the terms of the agreement. The employee was not entitled to accrued salary as the Court believed the parties had agreed the employee would only receive the payment when his employment visa was issued.
The employee had also claimed his salary from 1 April 2021 to 13 April 2021. This was agreed by the company and no judicial determination was required. The employee had failed to complete his visa process, so had not needed to be issued medical insurance in the UAE. As a result, the Court was not satisfied with the employee’s claim for 11,000 AED for medical insurance as it was not supported by any evidence and the claim was dismissed.
The employee claimed payment in lieu of 20 days’ accrued leave, and the Court decided in favour of the employee.
The company was required to settle the amounts owed to the employee within 14 days from his date of resignation. The company had failed to make such payment. This triggered daily penalties from 28 April 2021 to 6 June 2021, which was the day the employee filed a claim with the SCT.
The company was ordered to pay the employee AED 57,645.40 and Court fees of AED 1,152.90.
Since the start of COVID-19 in March 2020, the DIFC Courts, particularly the Small Claims Tribunal where employees are able to represent themselves have been facing unprecedented numbers of employment disputes. As a result of the extraordinary circumstances surrounding COVID 19 there have been a number of special agreements like the one in this case between employers and emloyees. Employers must still ensure proper care and consideration is taken during the employee recruitment process and determining the terms of employment. It is imperative that employees’ rights are safeguarded under all circumstances. If payment obligations on termination to employees are not made, as happened in this case employers may have to pay penalties as a result of the delay.
This publication is not intended to offer legal advice and is solely for informational purposes.
As published by LexisNexis Middleeast in the Lexis Middle East HR Alert November/December 2021