Ramy Bahy Hassan Abouzeid v The Industrial Group Limited [2018] DIFC CFI 035 (28 February 2019)

Claim No: CFI-035-2018




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

of Dubai















Hearing: 21 February 2019

Counsel:William Frain-Bill instructed by Davidson & Co Legal Consultants for the Claimant

Robert Mitchley of BSA Ahmad Bin Hezeem & Associates for the Defendant

Judgment: 28 February 2019



UPONhearing Counsel for the Claimant and Counsel for the Defendant at the Trial held on 21 February 2019

AND UPONreviewing the submissions and evidence of both parties filed and recorded on the Court



1.The Defendant shall forthwith pay the Claimant the sum of AED 1,210,560 by way of penalty payment under Article 18 of the Employment Law.

2. It is declared that the Claimant is not entitled to any further End of Service

payment nor any further penalty.

3. The Defendant shall pay the Claimant his costs of the action, on the standard basis, subject to a proportionate reduction in respect of the costs relating to the deduction for medical insurance from the end of service benefits and the penalty payment from November 6 2016 onwards, such apportionment of costs to be the subject of submissions, as set out below, and assessment by the Registrar

thereafter, if not agreed.

4. The parties shall provide written submissions within 14 days of the date of this Judgment on the manner in which costs shall be apportioned and/or assessed should they be unable to agree.


Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of issue: 28 February 2019

At: 3pm




1.The essential facts in this dispute are relatively straightforward and can be expressed shortly. The dispute is over the entitlement of the Claimant to end of service benefits following his resignation from the employment of the Defendant and its termination on 30 September 2015.

1.1 There is a dispute over a sum of AED 14,054.14 which was deducted from the figure which was otherwise due to him of AED126,429. The lesser sum was paid to him on 6 November 2016.

1.2 There is a dispute over the Claimant’s entitlement to a penalty payment under the infamous Article 18 of the Employment Law which provides:

1.2.1 Article 18(1):

1.2.2 “An employer shall pay all wages and any other amount owing to an employee within 14 days after the employer or employee terminates the employment

1.2.3 Article 18(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”.

2. The period of 14 days from termination of employment on 30 September 2015 expired on 14 October The amount payable in the event of failure, under Article 18(2), is a penalty equivalent to the last daily wage for each day that the employer is in arrears.

3. There is an issue between the parties as to how the daily wage figure should be calculated but, in my judgment, the statute is clear as to the method to be applied. The “daily wage” is defined in the interpretation Schedule of the Employment Law as “the compensation received by an employee as wages for services performed during a working day. The daily wage shall be calculated taking into consideration the total amount of working days in a year.” This means that in any relevant penalty period the annual salary of an employee must be divided by the number of working days he was contracted to work, which in the case of the Claimant would exclude weekends and public holidays.

4. The Claimant only appears to have appreciated that the calculation took this form following the hearing since a daily wage of a lower figure that that which applies was previously put forward. It was only when the Court asked the parties for agreed figures that the dispute emerged, but regardless of the lateness of the plea, as a matter of law, the larger calculation must be correct.

The Parties’ respective cases

5. The Defendant’s case is that the Claimant and the Defendant made the following verbal agreement:

5.1 The Defendant would continue to sponsor and provide the Claimant with a residency visa after he stopped working for the Defendant;

5.2 The Defendant would permit the Claimant and his wife to continue to avail themselves of the Defendant’s medical insurance policy;

5.3 The Claimant would reimburse the Defendant for the cost of the medical insurance premium for the period of time after he stopped working for the Defendant, i.e. from 01 October 2015 onwards, which, as it turned out, amounted to AED 14,054.14 and

5.4 The Claimant would only receive his end of service benefits and final payment once he cancelled his visa, which did not occur until 26 September 2016.

6. The Claimant denies that such an agreement was made but accepts that it was agreed that his Residency Visa would not be cancelled until he had found another job and had notified the Defendant of this. There is a dispute as to when any agreement was made which may or may not be of significance, beyond the issue of credit of the witnesses.

7. In his letter of resignation of 4 August 2015, the Claimant stated that he was resigning “for personal reasons” and that the time had come for him “to attend to family issues”. His last day was to be 30 September 2015, although, on the evidence it was clear that his last practical working day was the last day of August and he came in to the office only rarely in September.

8. In the Letter of Resignation Acceptance dated 5 August 2015, signed for the Defendant, the Claimant’s end of service benefits were said to accrue until 30 September 2015 and the letter stated that “payment of the above benefits shall be in accordance with the Group policies and practices and subject to your acknowledgment and compliance with the following”.

“1. You acknowledge that such payment is in full and final settlement of all your rights under your Employment Contract and under the DIFC

Labour Law….

3. You shall co-operate in the cancellation of your residence visa, medical insurance and work permit.”

The Claimant signed the letter in acceptance under the rubric “I accept and agree to comply with the above terms, conditions and undertakings”.

The Alleged Agreement to postpone payment of End of Service benefits (“EOS”) until cancellation of the Visa

9. It was accepted by the Defendant from relatively early on in this action that a penalty payment was due under Article 18 in respect of the period of 27 days from 10 October 2016 (14 days after 26 September 2016, the date of cancellation of the visa) to 6 November 2016. The Defendant sent a representative round to the Claimant’s home in Dubai to collect the necessary documents, including his passport and ID, in order to attend at the Government offices to effect cancellation of the visa on 26 September, but due to administrative failures and internal liaison within the Defendant in October 2016 over the question of any deductions to be made from the EOS entitlement, payment was not made until November 2 and was only received for value on November 6. It appears that the Claimant, even on his own evidence had delayed the cancellation of his visa until September, being out of the country for some time, but this additional delay after cancellation of the visa could only be laid at the door of the Defendant.

10. It was conceded on 21 February, at the outset of the hearing which had been adjourned (on the application of the Defendant) from 20 February as a result of changes in representation, that any agreement that was reached as to deferment of payment of EOS, could not operate to prevent the application of Article 18 of the Employment Law. As I had indicated to the parties on 20 February, the Defendants would have had a hard struggle to argue differently. In my judgment the concession was rightly made, since, by reason of Articles 3 and 4 of the Employment Law, the operation of its provisions is compulsorily applicable.  The terms of Article 18(1) are mandatory, requiring the Employer to pay EOS within the 14 day period, as the words “an employer shall pay” demonstrate. Furthermore, the terms of Article 18(2) provide for what is to happen if an employer fails to pay any amount owing within that period. The wording, as the DIFC Courts

DIFC Courts
of Appeal has said on more than one occasion, is clear in its effect. Any failure gives rise to liability to pay the daily penalty for each day during which the Employer is in arrears. The statute simply provides that the Employer shall pay all amounts owing to the employee within 14 days after termination and for a penalty if there is failure to do so, for whatever reason.

11. The Court of Appeal decisions in Frontline Development Partners Ltd v Asif Hakim Adil [2016] DIFC CA 006 and Elseco Ltd v Pierre -Eric Lys [2016] DIFC CA 011 are authority for the proposition that it does not matter if the Employer was culpable, had a good excuse or was not at fault in making the payment of sums due within the 14 day period. There may be hard cases, where the effect of the law

the Law
seems wholly unjust or disproportionate, as examples given in the Court of Appeal show, but the policy of the law is both to punish the employer and to compensate the employee and thus promote good practice amongst employers. It is always open to the Employer to pay sums owing in order to stop the penalty arising or to bring the penalty period to an end and, if there is a dispute about what is owing, the Employer is at risk, should he be proved wrong at the end of the day.

12. If termination of employment is deferred by agreement, then the 14 day period would prima facie not commence until the deferred date, although if this was a contrivance to avoid the effect of the statute, it might well be struck down as invalid. Whether or not that is the case, if there is simply an agreement not to pay EOS until a later date, that does not change the effect of the Statute or render Article 18 inoperative. A failure to pay sums owing within the 14 day period following termination of employment leads automatically to the imposition of the penalty payment of the daily wage for each day of default.

13. The Defendant, on its own case, was generous to the Claimant in agreeing his request for extension of the medical cover and residence visa. Hypothetically, the Claimant might have abused that generosity, without impacting on his entitlement. All sorts of anomalies and hard cases can arise under Article 18; the Claimant could have deliberately delayed the cancellation of his visa and reckoned that the accumulating penalty was more beneficial to him than the immediate receipt of his end of service benefits; he could have been aware of the Defendant’s employment practice which was to make cancellation of the visa and payment of EOS contemporaneous, which was a sensible precaution to take; or there could have been an agreement as alleged by the Defendant; but that does not change the terms or application of Article 18 which require payment of sums due to the employee in the 14 day period prescribed and prescribe a daily penalty for not doing so.

14. The Claimant, by his signature to the Resignation Acceptance letter, agreed to co-operate in the cancellation of his residence visa, medical insurance and work permit, whether or not an agreement had been made by then to the continuation of either or both the visa and medical insurance. If there was an agreement on either the terms put forward by the Claimant, or on those put forward by the Defendant, in relation to the residence visa, it is clear, on the evidence I have seen, that the Claimant proved uncontactable after December 2015, did not respond to messages and left the country with the result that the Claimant was in breach in failing to co-operate in the cancellation of it, because he had to produce documents for presentation at the Government offices for cancellation. This could potentially give rise to a claim for damages but would not justify a failure to pay the end of service benefits and no such damage has been alleged in the pleadings, let alone established.

15. In such circumstances, the Defendants are liable for the daily wage from 10 October 2015 to 6 November 2016, even if there was an agreement relating to cancellation of the visa, as alleged by the Defendant. On the basis of 388 days of penalty and a “daily wage” of AED 3,120 (which is the total annual salary of AED 780,000 divided by 250 days which represents the working days in that period) the total penalty payment is AED 1,210,560.

The Alleged Agreement to extend the Medical Insurance at the Claimant’s expense

16. The other issue which has to be decided, which turns on the factual evidence, is whether or not there was agreement to the continuation of medical insurance and for reimbursement by the Claimant of the premium for the insurance in question. That has impact both in relation to the deduction in question (the sum of AED 14,054.14) from the payment made on 6 November 2016 and in relation to a further penalty from 6 November 2016 to the date of payment of any judgment which decided that the sum had wrongly been withheld. From 6 November 2016 to 21 February 2019 is a period of 838 days, so the penalty payment would be a significant sum, to which would fall to be added the daily rate from 22 February until actual payment.

17. Article 19 of the Employment Law provides the following, insofar as relevant:

“No unauthorized deductions

An employer shall not deduct from an employee’s wages or accept payment from an employee, unless:

a) The deduction or payment is required or authorized under a statutory provision or the employee’s contract of employment;

b) The employee has previously agreed in writing to the deduction or payment”

18. The parties entered into an Employment Contract on 24 February The relevant clauses for present purposes are:

“Sub-Clause 5.1: Authorized Dependents: “Authorized Dependents” means your spouse living with you and up to three (3) of your dependent children under the age of eighteen (18) living with you or until the end of your dependents’ 20th year who are still studying, listed and approved in Annex 1 of this Contract. You shall promptly notify the Company’s Human Resources Department in writing of any change in your Authorized Dependents.”

“Sub-Clause 5.6 Medical Coverage: You and your Authorized Dependents will receive coverage under the Company’s medical insurance policies, provided that you and/or your Authorized Dependents are not covered under your spouse’s medical insurance coverage. The Company may change the terms and coverage of its insurance policies at any time at its discretion.”

 “Clause 8.5 Should there be any amounts due from you to the Company upon the termination of your employment, the Company may deduct any such amounts from any monies due to you from the Company.”

19. In the light of these provisions, the sole factual issue which needs to be decided in order to determine the rights of the parties is, therefore, whether there was an agreement to extend the medical insurance following the end of the Claimant’s employment by the Defendant, and for the Claimant to pay the cost. If such an agreement was made between 5 August 2015 and 14 October 2015 then it is accepted that the sum of AED 14,054.14, as the relevant premium, could be deducted from the EOS payable and paid on 6 November 2016. On that basis, no further sum would be owing above beyond that paid on 6 November and no penalty payment under Article 18 could accrue beyond that date.

The Evidence

20. I heard evidence on this from the Claimant himself and from one witness employed by the Defendant, with a further statement from another employee put in evidence without her being called as a witness because she was no longer employed by the Defendant and had just given birth. After hearing the submissions of the parties about the terms of RDC 29.12, RDC 29.41, and RDC 29.101-103, the Claimant raised no real objection to the statement’s admissibility and accepted that the real question at issue was the weight to be attached to it, as compared with the oral evidence of the two witnesses whose evidence was tested in cross- examination. In the absence of any prejudice to the Claimant from the absence of notice given at the time of serving the statement, I ruled that the statement be admitted in evidence without prejudice to all arguments as to weight.

21. The Claimant said that on or about 3 August 2015, (which was before he submitted his letter of resignation), he had a conversation with Mr Zaghloul, who at the material time was the Defendant’s Vice President of Operations and who assisted with the HR function between July 2014 and the end of September 2015 in the absence of the Head of the HR Dept. In that conversation, Mr Zaghloul stated that there was a clash of management styles and that it was not workable for the Claimant to continue. It was agreed that he should resign his position and as he had to give a month’s notice, the formal date of termination would be taken as 30 September 2015, whilst his last day of work in practice would be 31 August. it was agreed that his UAE

residence visa would remain active until he found alternative employment and notified the Defendant thereof. There was no agreement to anything else at all and the subject of medical insurance and payment for it was never discussed at any time until the deduction was made from his end of service benefits in November 2016. He stated that on being informed of this, he told the Defendants that he had never agreed to the deduction and that if he had known the price he would have reduced the level of cover or simply obtained a cheaper policy.

22. The evidence of Mr Hatem Zaghloul was that the Claimant was provided with medical insurance for himself and his dependents, paid for by the Defendant, as part of his employment and was issued with medical cards for himself and his wife for the period 31 July 2015 - 30 July 2016. These cards were shown as received by the Claimant on 25 August 2015. Although he could not recall the exact date, at around the time of his last day at work in September 2015, Mr Zaghloul’s evidence was that the Claimant came to see him in his office, told him that his pregnant wife was suffering complications and was due to deliver soon and asked him to keep his medical insurance in place, at his expense, until he could find another job which would provide him with substitute cover. He wanted his visa extended also. Mr Zaghloul told him that the Defendant would have no problem to help him out as long as it was not “harmed” in doing so.   The medical insurance and visa went together, since, on Mr Zagloul’s evidence, the Defendant could not provide for insurance cover unless it continued to sponsor the Claimant’s visa. He therefore recommended to the HR Department that the visa and medical insurance be extended. As a consequence, with the oral approval of the Chief Financial Officer and the Head of Procurement who dealt with the Group Medical insurance, the Defendant did not seek to cancel the visa nor the medical insurance which would ordinarily have happened when an employee left the group, as the Claimant must have known. The Claimant was not required to produce his passport, Emirates ID card, and medical insurance card as would be required for someone leaving employment in order to cancel the visa along with the insurance. Although the surrender of the insurance card was not technically necessary to effect cancellation of the insurance cover for him and his wife, it was, of course, evidence of its existence and an employer and insurer would not want it retained by an ex- employee who had no continuing entitlement under the Group policy.

23. It was Mr Zaghloul’s evidence that the Defendant accepted the Claimant’s request to leave his visa open so that he could continue to benefit from the medical insurance for himself and his wife until he found alternative employment, which would include similar cover. The visa issue and the medical cover were linked in this way.

24. It was common ground between the Claimant and Mr Zaghloul that, whatever arrangement was concluded, it was agreed informally and without any documentation to evidence its terms. It was also common ground between the Claimant and Mr Zaghloul that the expectation was that the arrangement, whatever it was, would last about 2 months, it being assumed that the Claimant would find another job in that time. The absence of any document to show what was agreed means that I have to take a view on the evidence of the protagonists whilst taking into account the background circumstances and the inherent probabilities.  The underlying motivation for the arrangement was the resignation of the Claimant and the desire of the Defendant to be as helpful to him as possible until he found a new job, in circumstances where he was leaving employment whilst his wife was expecting a child.

25. Whilst in his statements, Mr Zaghloul never said that the Claimant expressly agreed to the deferral of the payment of EOS until cancellation of the visa, he spoke of his understanding of company policy which insisted that the two events occurred effectively simultaneously. This highlights the informal nature of what was arranged. To the extent that it matters, I find that there was no agreement to defer the payment of EOS until cancellation of the visa, although it was company policy that the two should go together, since otherwise there was no leverage or incentive on an ex- employee to give up the visa.  I am clear that this was the expectation of the Defendant, which the Claimant understood, even though there was no specific agreement on the point. It seems that it was not seen at the time as a matter of great significance, since the expectation was that the arrangement would only last for a couple of months before cancellation and payment of the EOS.

26. Given the conflict of evidence between the main protagonists, reference should be made to the statement of Ms Manai who was a receptionist in the HR Department who had responsibility for some administrative tasks including issuing and cancelling medical insurance cards for employees. In her witness statement she said that on a day shortly after the Claimant left the Defendant, she had a telephone conversation with him in which she reminded him that he was required to return the medical cards for his insurance and that of his dependents. The Claimant asked her not to cancel the insurance because his wife was pregnant and due to deliver at about that time and he needed to maintain the insurance coverage for the birth. He said that Mr Zaghloul (his direct manager) and Mr Elkhatib (the Procurement Manager responsible for insurance arrangements) had agreed to its continuation. She thereupon checked the position with Mr Elkhatib who confirmed that both he and Mr Zalgloul had agreed to this request and told her not to cancel the cards. In consequence she took no steps to do so or seek return of the cards.

Discussion and Analysis

27. The evidence from Ms Manai is significant evidence from a different source from Mr Zaghloul, even though it was not tested in cross- examination. Their evidence is mutually consistent, but there is a problem over the dates of the conversations, which permitted Counsel for the Claimant to submit that their evidence should be rejected.

28. There are, in the final analysis, only a limited number of possibilities here. Either there was an agreement of the kind of which Mr Zaghloul gives evidence and of which Ms Manai speaks; or he and Ms Manai are telling lies; or there was some misunderstanding between the Claimant and the other two. In reality, it seems to me that, if there was no such agreement, then the conclusion I would have to draw is that the Defendant, as a matter of gross administrative inefficiency, failed to carry out its ordinary procedures in cancelling such cover, continued the cover for the Claimant for no good reason and that Mr Zaghloul’s and Ms Manai ‘s evidence was false.

29. I do not consider that Mr Zaghloul and Ms Manai were fabricating events, although the former’s reference to dates must be wrong. Their evidence is consistent as to the agreement reached on medical cover, on what the Claimant wanted, and the reasons he expressed for that.

30. I  had wondered if there was any room for a mistake as to what was agreed- a misunderstanding of some kind, but can see no room for this, since there either was a request for continuation of cover or there was not, and if there was (as I consider there must have been since the cover was continued), it is self- evident that it could only continue at the Claimant’s expense, since it would have been obvious to the Claimant that he would have to pay for it and that the Defendant would not commit to expenditure of this kind for an ex-employee, as Mr Zaghloul says he told the Claimant.

31. Although the Claimant said that he did not know whether the cover had been extended or cancelled, that he did not make use of it and that he did not add his son to the list of dependents covered by it, following his birth- and there was no evidence of any confirmation of the arrangement following the conversations referred to between him, Mr Zaghloul and Ms Manai, I find that not only did he ask for it to be extended along with his visa to give him the security he desired whilst seeking another job, but he knew that it had been extended because he retained the medical insurance cards when he would otherwise have had to return them, and he had the continuing visa which was associated with that extension. Notwithstanding his evidence to the contrary, I find that the two issues were connected – the medical cover and the visa – and that he could not have the former without the latter, which was the basis of his expressed concern to Mr Zaghloul. He had received assurances from Mr Zaghloul as to continuation, however generally expressed, and his conversation with Ms Manai shows that he was well aware of what had been agreed and that his conversation with her did not result in any change to that.

32. As to the issue of the date of the conversation with Mr Zaghloul, I have come to the conclusion that neither the Claimant, in saying it was on 3 August, nor Mr Zaghloul, in saying it was around the end of September, is correct. There is a common thread which runs through the evidence of Mr Zaghloul and Ms Manai, which is that the request and arrangement made, which related to the visa and the medical cover, took place around the time when the Claimant was leaving, or had left, the Defendant’s employment and at a time when the Claimant was saying that his wife had complications in pregnancy and was due to deliver before long. The problem in saying that this was the end of September is that the Claimant’s son was born on 16 September without complications. It was argued for the Claimant that, in those circumstances, the Defendants’ witnesses could not be correct in what they were saying, as they maintained that his reasons for asking for the extension of cover after leaving was concern about his wife’s pregnancy. This could not have occurred at the end of September/beginning of October, since by that time the birth had occurred without complication.

33. However, I do not consider that the conversation would have occurred at the time put forward by the Claimant when parting of the ways was first discussed. Agreement was reached in principle on that which was followed by the letter of resignation on 4 August and the letter of acceptance of that resignation on 5 August. With the medical cards issued to him on 25 August, all then falls into place if those conversations occurred at about the time when the Claimant in practice left the employment of the Defendant, at the end of August, as opposed to the formal termination at the end of September. It would be natural for Mr Zaghloul (and for Ms Manai, to the extent that she may be taken to be saying the same thing) to think in terms of the time when he left as the time when he ceased to attend the offices for work purposes rather than the agreed formal termination date and then, on seeing that the end of September was the date of termination to confuse the dates accordingly. This fits with the sequence of events and the documentation surrounding these events.

34. Thus, in my judgment, there was a meeting between the Claimant and Mr Zaghloul on 3 or 4 August 2015 at which there was discussion and agreement that the Claimant’s employment could not continue. The question of parting of the ways was discussed. This was followed by the letter of resignation of 4 August and the letter accepting it on 5 August. The terms of the latter are significant because they are not consistent with any agreement having been reached at that stage for the continuation of the visa (an agreement which is undisputed), because the letter refers to the obligation of the Claimant to “co-operate in the cancellation of your residency visa, medical insurance and work permit”. The letter was written by Abdullah Almasri, the Acting Head of Human Resources, who could not have failed to refer to an arrangement for deferment of the cancellation of the visa had it been made by then, as the Claimant maintained.  Even though there would have been the continuing obligation to co-operate in its cancellation after any such agreement, there would have been some reference to that arising as and when the Claimant had found another job and the deferment of the obligation, since this was a formal letter, intended to enshrine the position between the parties and signed by both.  Thus, the informal oral agreement can only have been reached subsequent to this correspondence.

35. The provision of the Medical Cards to the Claimant on 25 August 2015, for which he signed a formal receipt, is perhaps neutral in this respect, because he was entitled to medical cover up until 30 September 2015, and no one recorded anything about the need to return those cards at the end of employment or on finding another job, but the point was covered in the letter of acceptance of 5 August signed by both parties. It seems likely that this either triggered the request for continuation beyond the end of employment with the corresponding need for a visa or at all events was followed by the request. As the Claimant was in practice leaving the Defendant’s employ on 31 August it would seem likely that the conversations for extension of the cover and the visa occurred at about this time, when his wife was expecting a child due on 16 September which proved to be the actual date of arrival also.

36. The expectation of a 2 month extension was falsified by events. The Claimant applied for jobs in Dubai and the GCC without success and when November came he was still looking for employment and then pressed for payment of his EOS. He had been travelling back and forth to Egypt, where his father was ill, as had his wife who visited family there with the new born son. It was in December 2015 that matters came to a head, when he spoke to Mr Zaghloul and asked for payment. At that point the informal nature of the arrangement created an issue. Mr Zaghloul when asked for payment over the telephone, consulted the Chief Financial Officer on another line, whilst holding on to the Claimant’s call, and relayed the statement that no payment could be made until the visa was cancelled. That was company policy of which the Claimant is likely to have been aware beforehand but of which he was now specifically apprised. The medical insurance did not feature in this conversation as such, though it would evidently, if thought had been given to it, have come to an end with the visa, for the reasons stated earlier in this judgment.

37. The Claimant, on his own evidence, however, decided that cancelling the visa was not in his best interests since in doing so he would have to sign a document saying that he had been paid all that he was due and he was concerned that payment would not be made. The matter was left unresolved and the Claimant left Dubai permanently for Egypt in January where he has since worked in the family business. I accept the evidence that efforts were made to contact him without success in order to arrange for the cancellation of the visa but that he was not responsive. Ultimately, on a return trip to Dubai, he did produce the documents. His evidence was that he was bullied into cancelling his residence visa on 26 September 2016 without receiving payment of his EOS benefits, despite his formed intention that he would maintain it until such time as the benefits were paid. It is clear that up till then, the Claimant was refusing to cancel his visa until he had received payment of EOS benefits and the Defendant was refusing to pay unless there was cancellation.   The two were intended to take place essentially contemporaneously and would ordinarily have occurred within the 14 day window after the end of the Claimant’s employment, but for the arrangements made between him and Mr Zaghloul. Instead there was something of an impasse, with the Defendant seeking to make contact with the Claimant who was out of the country, in order to effect cancellation of the visa.

38. The Claimant relied on a letter of 28 July 2016 which set out his EOS entitlement but made no reference to the medical insurance or to payment of the premium. The letter was written by Ms Khakimova, an administrator in the HR Department and referred to a final settlement figure of AED 126,429 without reference to any deduction for medical insurance premium.

38.1 It was the evidence of Mr Zaghloul that this letter expressed the EOS entitlement without reflecting any financial offset or deduction which was available as a result of any employee loan or overpayment of expense or other financial items, which were matters for the Finance Department.

38.2  The letter was written just before the expiry of the year’s medical cover for the Claimant and his wife. It was not in fact renewed thereafter because the Claimant had long since left the country and the original expectation was for a period of around 2 months only.

38.3 The figure for apportioned premium for the period post 30 September 2015 to the expiry of the cover on 30 July 2016 had to be calculated by the Financial Department as it was in October 2016, following cancellation of the visa.

38.4 Moreover, the letter did refer to the need for the Claimant to bring his passport, Emirates ID, DIFC Card and Insurance card for himself and his family- obviously for cancellation purposes, in accordance with the Defendants practice.

38.5 The author of the letter had not been involved in any of the discussions, and the letter contained at least one inaccuracy in any event as it referred to the need to return the DIFC card, which had already been done. He knowledge of events was obviously limited.

39. I conclude that the letter will not bear the weight which the Claimant seeks to attribute to it. It is not an admission of a sum due but a calculation of EOS entitlement prior to any legitimate deduction. In itself, it takes the matter no further.

40. I found Mr Zaghloul to be an honest witness and preferred his evidence to that of the Claimant, without reference to the supporting evidence of Ms Manai on statement. The Claimant had no explanation for the absence of any written complaint as to the deduction of the premium for the medical cover until these proceedings were brought and the reaction to which he referred in his statement on being told of the premium deducted from the EOS is illuminating. At paragraph 4.3 of his first statement he said that on seeing the amount deducted, he explained that had he known the price he would have reduced the level of cover or obtained a cheaper policy himself. Whilst he maintained in the same paragraph that he never agreed to any deduction at all and elsewhere said that medical cover continuation had never ever been discussed or agreed, this reaction is significant and suggests that he had asked for the cover to be continued, which could only be at his expense, but had not asked about the cost and was surprised when it was revealed how much it was when it was deducted from his EOS. This gives the lie to his other evidence. In fact, his witness statements were argumentative in many respects and self-serving and the suspicion must be that, having appreciated the draconian effect of Article 18, and its impact if a single penny was withheld of an amount owing on termination,  he persuaded himself that, as there was no obvious express confirmation in writing or otherwise of his agreement to pay the medical insurance premium, there was no such agreement, and that therefore further EOS sums were due which could give rise to a penalty payment for a further two and a quarter years beyond November 2016..

41. By contrast, Ms Manai’s evidence and Mr Zaghloul’s explanations for the extension of medical cover for him made sense of the situation where the Defendant extended some generosity to the Claimant in relation to both the visa and medical cover. He has legitimately taken advantage of the beneficent Employment Law provisions by reason of the extension of the visa, whose cancellation was expected within a couple of months and of the Group policy not to pay EOS until visa cancellation. Mr Zaghloul, in making the arrangements he did to assist the Claimant, did not direct his mind to the effect of Article 18. Had a specialist HR director been in place and responsible for the termination of the Claimant’s employment, no doubt, payment would have been made in the 14 day period and, in all probability the visa extension refused because of the lack of means of compelling its surrender, once payment was made. So also, the medical cover would not have been granted, since the cover could not be given without the visa.

42. The key factor in all this, to my mind, is that there was no reason for the Defendant to maintain the medical cover for the Claimant after termination of his employment unless the latter had asked for it. If he asked for it, it would follow that he would have to pay for it. The Defendant would inevitably insist on that, since a goodwill gesture was one thing, but company expenditure for a former employee was another. Unless there was total inefficiency on the part of the Defendant in continuing the medical cover for the Claimant and his dependents, the only explanation for such cover and the incurring of premium in respect of it, is the fact of a request by the Claimant to extend it at his expense. That reflects the inherent probabilities and, for the reasons given above, I find that this is what the evidence shows.


43. In all the circumstances, I find that there was a request made by the Claimant for continuation of the medical cover along with the visa and that he agreed that he would pay the relevant premium. The Claimant is therefore not entitled to any further EOS payment or to any further penalty by reference to the daily wage, which runs up to November 2016 as set out above (in the sum of AED 1,210,560)..

44. As to costs, it appears to me that, given the concessions as to the Article 18 sums due to the Claimant for the period up to November 6 2016, the Defendant must bear the costs of the action subject to a reduction in respect of the costs involved in the argument over medical cover and the penalty payment that would flow from it. On that point which is what occupied the Court at the hearing, the Defendant prevailed. How that falls to be assessed is a matter on which the parties can address me in writing if they cannot agree.

Issued by:

Ayesha Bin Kalban

Assistant Registrar

Date of issue: 28 February 2019

At: 3pm