John Vitalo v Atlas Mara Management Services Limited [2019] DIFC CA 012 (23 March 2020)

Claim No: CA 012/2019



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

of Dubai









Hearing: 2 March 2020
Counsel: Gibson Dunn & Crutcher (Graham Lovett as Lead Counsel and Shane Jury assisting) for the Appellant
Stephenson Harwood Middle East (Farhaz Khan as Lead Counsel and Nathaniel Bird assisting) for the Respondent
Judgment: 22 March 2020


UPONthe judgment of H.E Justice Ali Al Madhani issued on 5 September 2019 (the “Judgment”)

AND UPONthe Appellant’s application filed on 26 September 2019 seeking permission to Appeal the Judgment (the “Permission Application”)

AND UPONthe order of H.E. Justice Ali Al Madhani issued on 11 November 2019 granting the Permission Application (the “Permission Order”)

AND UPONhearing counsel for both parties at a hearing on 2 March 2020

AND UPONreading the submissions and evidence filed and recorded on the Court



1. The Appellant’s Appeal is dismissed.

2. Costs of this Appeal shall be paid by the Appellant, in addition to the costs orders already made against the Appellant, the amount of which shall be assessed, if not agreed within 30 days of the issuance of this order, by the Registrar


Issued by:

Nour Hineidi

Deputy Registrar

Deputy Registrar

Date of issue: 22 March 2020

Time: 4pm




1. This is an appeal from the Judgment of H.E Ali Al Madhani dated 5 September 2019 in which he dismissed the Appellant’s claims for sums alleged to be owed under his contract of employment in the sum of AED 851,233 (the equivalent in aggregate of approximately US$230,0000 and for the statutory penalty which would follow if such sums were found to be due. The Appellant appeals on 4 grounds, with the permission of the Judge


1.1 That the Judge erred in law and as a matter of construction of the employment contract in deciding that the Respondent was not obliged to increase his living allowance in line with DIFC

inflation indices (the “Indexation Claim”).

1.2 That the Judge erred in law and as a matter of construction of the employment contract in failing to award the Appellant payment in lieu of accrued but untaken holiday (the “Holiday Claim”).

1.3 Consequent upon the success of Grounds 1 and/or 2, the Appellant submits that the Judge ought to have awarded him a penalty pursuant to what was then Article 18(2) of DIFC Employment Law 2005 (the “Penalty Claim”). As at 24 December 2019 the Penalty Claim was valued at approximately US$ 3.8 million (approx. AED 14 million).

1.4 The Appellant says that if his appeal is successful, he should be awarded his costs at first instance. In any event, the Appellant maintains that the Judge should have awarded him the costs of the two counterclaims brought by the Respondent which, apart from the award of US$1, failed (the “Costs claim”).

2. The Respondent submitted that the Court should have in mind the terms of RDC 44.117 and the decision of this court in Ibrahim Saif Hormodi v Bankmed SAL [2019] DIFC CA 006 in considering the grounds of appeal setting out alleged errors of law and construction. Reliance was also placed on the decision of the English Court of Appeal in Staechelin v ACLBDD Holdings Limited (2019) EWCA Civ 817 and the emphasis there placed on the warning against interference with first instance primary findings of fact and the inferences to be drawn from them. It was submitted that this Court should not interfere with any findings of fact made by the Judge, which were not challenged in the grounds of appeal, nor be distracted by allegations of wrong findings contentions that wrong weight was attached by the judge to particular findings relating to the pre contract negotiations or post conduct contract of the parties. In the present case, on the basis of the grounds of appeal, this court should exercise a review function and only interfere where there was some error of law, there being no procedural or other irregularity relied on as constituting injustice.

3. In the view of the Court, the ultimate question is whether the Judge arrived at the right result as a matter of law and/or construction and the findings of fact which he made, insofar as disputed, have only limited relevance to the issues of construction.

4. There are two relevant contracts of employment. The first was dated 1 April 2014 (the “2014 Contract”) and was made between an affiliated company of the Respondent which, itself, concluded the second contract, dated 1 August 2015 (the “2015 Contract”) with the Appellant and on which it is sued. The recitals to the 2015 Contract stated that the Appellant had been employed in the UAE

by Atlas Mara CO-Nvest Limited (the “Parent Company”) under the 2014 Contract and that the employment of the Appellant was, by the 2015 Contract, being transferred to the Respondent on substantially the same terms as the 2014 Contract. The Appellant was employed as the Chief Executive Officer of the Parent Company and such affiliates as might be determined by the Respondent. The commencement date of employment, as stated in the 2014 and 2015 Contracts was 1 July 2014, but it appears to be common ground that it actually started on 6 July 2014. By Clause 2.1 of the 2015 Contract, the previous entitlements under the 2014 Contract were “rolled over” to the 2015 Contract. The 2015 Contract was terminable on 6 months’ notice, which was given on 15 February 2017, expiring on 14 August 2017.

5. Whilst the parties also sought to rely on pre contract negotiations and post contract conduct, the fact remains that the form of words was negotiated as between lawyers and no common intention can be found in the preceding exchanges beyond an ultimate agreement to the form of words used. Furthermore, post contract conduct is often explicable on more than one basis, which does not help much in construing the words used. We refer to the latter later in this context, but the focus must be on the words used in accordance with the principle set out in Article 49(2) of the Contract Law, No 6 of 2004. We were referred also to this Court’s decision in Damac Park Towers v Youssef Issa Ward [2015] DIFC CA 006 at paragraphs 79-85 and the trio of decisions of the Supreme Court in England, culminating in Wood v Capita [2017] UKSC 24 and particularly the approach to construction set out in paragraphs 8-15 with the iterative process and the balancing there referred to between the textual and contextual approach with reference to the commercial objectives and a construction which accords with business common sense. We accept that those principles are of application.

The Indexation Claim

6. The issue of construction here relates to Clause 5.1.2 of the 2015 Contract, set out above, which is in materially identical terms to its predecessor in the 2014 Contract. Argument centred on the meaning of the last sentence and the question whether a discretion was conferred on the Respondent thereby and if so, the extent of it. The Judge held that there was a complete discretion in the Respondent as to the making of any adjustment for the allowance on the basis of inflationary effects on any of the matters referred to in the clause.

7. For convenience, the terms of the clause are set out here:

“5.1in consideration of the Employee undertaking the Employment, and during the Employment term, the Company shall pay the Employee as follows:

5.1.2an allowance in the monthly amount of United Arab Emirates Dirhams 168, 345, payable in semi-annual instalments of AED 1, 010, 070, to be used for housing, car, education costs, utilities etc. such allowance will be adjusted annually for local (Dubai) inflation (as determined by the Company) based on education, housing and utilities cost indexes”.

8. It is common ground that the Appellant’s employment contract was carefully negotiated and that both parties had the benefit of legal representation. It is also clear that Pursuant to the 2014 and 2015 Contracts, the Appellant was granted a variety of “Remuneration and Benefits”, which was the title to Clause 5:

8.1 A basic monthly salary of AED 153,041, equivalent to US$ 500,000 per annum.

8.2 A monthly allowance for living expenses of AED 168,345, equivalent to US$ 550,000 per annum.

8.3 A discretionary annual bonus with a target range from 0% to 200% of the Appellant’s base annual salary. For 2014, this bonus was guaranteed to be not less than US$ 1 million.

8.4 Stock options (said by the Respondent to be valued at US$ 1.15 million) and shares (said by the Respondent to be valued at US$3.42 million)

8.5 Reimbursement of travelling expenses, various subscriptions to professional bodies.

8.6 Participation in a group scheme for medical benefits for himself and his family, which was the subject of a claim which failed at first instance and which was not pursued on appeal.

9. The Appellant’s case was that Clause 5.1.2. provided for a mandatory annual adjustment of the allowance specified in the first sentence of the clause, which should have occurred, according to his evidence, on 5 July 2015, 5 July 2016 and 5 July 2017. He claimed a total of AED 341,764 on the basis of adjustments made by reference to the July figures in two indices, namely the indices headed “Housing, water, electricity, gas and other fuels” and “Education” in the Dubai Statistics Centre Consumer Price Index for each of the calendar years from 2014 -2017. Each of these annual sets of figures contained what were referred to as “main expenditure groups” including first of all a “General Index” which was the summation of the indices which appeared beneath it which included the two headings mentioned above and additionally other headings such as “ food and non- alcoholic beverages”, “clothing and footwear”, and perhaps more relevantly in the context of the disputed clause, “furnishings, household equipment and routine household maintenance” and “transport”. The calculation of the adjustment was made by taking the July figures for each year and comparing them with the previous year and weighting the adjustment so that one third was attributable to the difference in the “ education” index and two thirds to the “housing, water, electricity, gas and other fuels index”.

10. The Appellant essentially relied on the words “shall pay” in the first sentence of Clause 5.1 and “will be adjusted annually” in the first sentence of Clause 5.1.2 as showing a mandatory requirement for payment of the allowance in addition to the salary and, additionally, a mandatory adjustment to be made annually to take account of inflation in Dubai. The Respondent relied on the words “as determined by the Company” and the words “based on education, housing and utilities costs indexes” as giving the Respondent a wholesale discretion as to whether or not to make such an adjustment and at what level. Reference was made by the parties to other indicia such as the express reference to “complete discretion” in other clauses such as Clause 5.2 and the purpose of the allowance as set out, to be used for “housing, car, education costs, utilities etc” in the clause itself in support of their respective arguments.

11. The Appellant’s primary case originally was that there was no discretion vested in the Respondent at all, and that its role was confined to mathematical calculation of the amount of the adjustment by reference to the particular indices on which the Appellant relied. As developed in his supplementary skeleton argument at paragraph 13.2 and orally, however, the case made was not that a zero uplift would necessarily of itself constitute a breach of Clause 5.1.2. “What the Appellant has an absolute right to is not an uplift per se but the carrying out of the process prescribed by Clause 5.1.2 and in the event that this process, carried out reasonably and in good faith, and applying the specified indices, resulted in no increase, there would be no breach. At paragraph 13.4 of his supplementary skeleton, the Appellant accepted that “the clause does leave room for the Respondent to apply those indices and to give them appropriate weighting which it must do reasonably and in good faith. The indices had to be applied in some objectively reasonable way, but the Appellant was thus, it appeared, conceding that it did not follow that he was entitled to the sums claimed as the only possible determination open to the Respondent. It appeared to be accepted that a number of possible results could be reached by applying the indices referred to in the clause. Nonetheless, it remained the Appellant’s case that no other indices or considerations could be taken into account in making such a calculation and any calculation or determination had to be made reasonably and in good faith by reference to those indices alone which would inevitably mean some uplift year on year, even if not to the full extent of the changes in those indices as put forward by the Appellant. In the absence of a determination by the Respondent, the Appellant said, it was now for the Court to decide what the determination should have been.

12. The Judge held that the contract gave the Respondent a complete discretion as to whether there would be any increase in the allowance at all, stating that it was not possible to say what increase was provided for by the Clause. He placed emphasis on the words relied on by the Respondent “as determined by the Company”, to which the Appellant, in his view, ascribed no meaning. The express references to “discretion” in other clauses did not gainsay the need for a determination by the Respondent which inevitably, in his view, meant that the amount of any adjustment depended on the decision to be taken by the Respondent.

13. We consider that the Judge was right to say that it was not possible to determine from the words of the contract what any adjustment to the allowance should be, because that depended on the decision of the Respondent. Clause 5.1.2 did not provide a mechanism which the Court could utilise to find an objectively ascertainable figure. There was, therefore, inbuilt in the clause an element of discretionary judgment as to how any adjustment was to be made. This is clear to us not only from the words “as determined by the Company” but from the words “based on” which do not import a straight application of any indices of the kind referred to. Moreover, not only is there a Consumer Prices Index, to which the Appellant referred but there are also annual inflation figures published by the Dubai Statistics Centre, which could be used. Additionally, as appears from paragraph 9 above, there are a number of potential indices to which reference could be made for the consideration of a possible adjustment within the Consumer Prices Index itself and no guidance as to which indices are to be used nor the weighting to be given to each in such consideration. The “furnishings, household equipment and routine household maintenance” index was another index within the Consumer Prices Index to which reference could have readily been made, quite apart from those relied on by the Appellant. The “transport” index could also be considered relevant in the light of the reference to “car” in the first sentence which sets out the purpose of the allowance and which concludes with the word “etc”. That, in itself, suggests that other matters can be taken into account in coming to a determination of the appropriate adjustment to be made, above and beyond those to which the clause expressly refers.

14. The decision in Brogden v Investment Bank [2014] EWHC 2785 (Comm) is authority for the proposition that where a contract gives responsibility to one party to make an assessment or exercise a judgment, on a matter which materially affects the other party’s interests and about which there is ample scope for reasonable differences of view, the decision is properly regarded as a discretion which is subject to the implied constraints that it must be taken in good faith for proper purposes and not in an arbitrary, capricious or irrational manner. The 2015 Contract is such a contract and the determination under Clause 5.1.2 falls to be made without a formula which governs that determination and leads only to one objective result. There is, therefore, inevitably an inbuilt discretion in the decision maker.

15. We therefore take the view that the Respondent was under a duty to make a determination as to any adjustment to be made and that such determination had to be made rationally and in good faith- not arbitrarily, capriciously or perversely- as per the decision of Sir David Steel DCJ in Papadopoulos v Standard Chartered Bank [2017] CFI 004 at [21]. We consider that it was open to the Respondent to take into account factors outside and beyond the specific indices relied on by the Appellant which could play a part in a rational good faith decision, including the particular personal circumstances of the Appellant or the educational needs of his family, because there is nothing in the clause preventing that. The words “based on” give a freedom to the Respondent in applying the elements that are referred to, rather than tying it to a straight application of them, even if that were theoretically possible.

16. The Appellant says that the Respondent made no such determination at all, simply deciding not to make any adjustment at all. The evidence shows that a decision was made not to uplift on the annual reviews at all. Letters of 12 February 2015 and 27 April 2016 show that consideration was given to the overall package of remuneration and benefits payable to the Appellant and that the decision was taken not to increase the living allowance under Clause 5.1.2. Each letter provided that “Living allowance will continue at $550,000”.

17. The evidence shows, both in the letters referred to and in the witness evidence of Ms Hamza Bassey, the Respondent’s General Counsel, that decisions as to the Appellant’s remuneration were taken by a remuneration committee of the Board of Directors to which she was the adviser and whose meetings she attended, save that for 2016, where the minutes were produced to the Court.

18. The Remuneration Committee met on 9 February 2015 and the letter of 12 February to the Appellant followed which stated that his base salary and living allowance would continue at the same levels as before, that he would be awarded the $1m bonus which had been guaranteed for his first year under the 2014 Contract, but that he was to be granted 500,000 Stock options in circumstances where the 2014 Contract provided only that there would be a recommendation to the Board that he be granted an option over 300,000 shares.

19. The Appellant signed the 2015 Contract on 13 April 2016 and that referred also to his continuing living allowance at the same level as before.

20. The Remuneration Committee met again on 8 February 2016 and the letter of 27 April to the Appellant followed after publication of the Company’s results for the prior financial year to the market. The letter stated that his base salary would increase to $550,000, that a discretionary bonus would be paid by the grant of shares worth $500,000 as of 5 February 2016, that he would be granted 500,000 additional stock options and that his living allowance would continue at the same level as before.

21. By the time that any further consideration of an adjustment of living allowances would be due to take place- on 5 July 2017 according to the Appellant’s case- the Appellant had received his letter of termination and was on garden leave, with his notice expiring on 14 August 2017.

22. Not only is it clear from the evidence, that the Appellant made no complaint about the continuation of living allowances at the same level in each of the years 2015 and 2016 but that, despite his denials in evidence, he must have known full well what his contract provided because Ms Hamza Bassey’s evidence, which the Judge accepted was that the Appellant, as CEO, not only instructed the then current Head of Rewards not to implement any increases in living allowances to other employees but that he signed letters and hand delivered letters to all senior management, including herself, stating that there would be no such increase for them in respect of the 2015-2016 year. She was told by him that the Respondent had decided on no adjustment for that year. The idea that he did not have his own living allowance provisions in mind beggars belief.

23. Ms Hamza Bassey’s evidence was that the Remuneration Committee would consider the individual components of the executives’ compensation in the light of the total compensation being offered and that the package of discretionary benefits awarded in any year were considered in the round by the committee, not as isolated items. This was not the subject of cross- examination and was borne out by the minutes of the 8 February Remuneration Committee which show that the proposed compensation package for the Appellant was considered in the round, taking into account each of the elements of potential remuneration and benefits in coming to a conclusion as to the total of the awards to be made.

24. As a matter of analysis, if there was a failure to consider specifically the appropriate adjustment to be made to the living allowance and there was a duty to make a rational, good faith determination of what that adjustment should be, which appears to be the position on the evidence, that would amount to a breach of contract. That breach would sound in damages which would reflect what that decision ought to have been. It was contended by the Appellant that the loss amounted to the figures claimed by him on the basis set out above, or alternatively on the basis of alternative figures put forward by Ms Hamza Bassey as those which the Respondent would have used if it had taken the view that it had to make some adjustment.

25. The difficulty which stands in the way of the Appellant is the uncontroverted evidence that the Appellant’s remuneration and benefits package was considered in the round in each year. The Remuneration Committee came to a decision in each year which reflected the totality of awards to the Appellant, on whom the burden lies to establish loss, and who cannot, on the evidence, show that if an adjustment of whatever level had been awarded to him “based on” whatever indices were considered appropriate, his overall package would have been any different from what it was. A rational good faith decision which resulted in some adjustment to the living allowance, would have been taken into account in the overall awards of salary, bonus and stock options, with the same end result in monetary terms.

26. The Judge below, after reciting the parties’ main lines of argument in his judgment relied not only on the “as determined by the Company” wording of Clause 5.1.2 in deciding that the Respondent had a discretion whether or not to make an adjustment in living allowances, but also on the conduct of both parties in relation to the decision making process in 2015 and 2016 as supporting that conclusion. He accepted Ms Hamza Bassey’s evidence that the Appellant never contested the failure to grant an uplift during the course of his employment, and that it had been his recommendation to the Board that no such uplift was given to him or others in the employment of the Respondent. Whilst the Judge relied on this evidence to support his conclusion on construction in finding a total discretion whether to adjust the living allowance, we consider that its significance lies in the acceptance by the Appellant of the overall package awarded to him year by year and the implicit acceptance that any entitlement in respect of living allowance adjustment was swallowed up in the discretionary awards made to him which compensated him in other ways and would not, in total, have been any higher, if such adjustments to the living allowance had been made.

27. On this basis and for these reasons, the claim for additional living allowances must fail and the appeal on that ground dismissed.

The Holiday Claim

28. Under Clause 7.4 of the 2015 Contract, the Respondent was entitled to “change or reduce the Employee’s offices, duties or responsibilities and/or relieve the Employee of his offices, duties and responsibilities, require that the Employee not come to work and place the Employee on paid leave-of-absence status (“Garden Leave”). Further, the Company shall be entitled at its sole discretion to give the Employee pay in lieu of any notice of termination”.

29. Article 29 of the Employment Law Amendment Law provided as follows:

(1) “An employee electing to take vacation leave, shall do so by giving at least 7 days prior written notice to the employer specifying the days on which leave is to be taken and subject to any requirements imposed by the employer under Article 29 (2).

(2) The employer may require an employee to take vacation leave on specified days by giving at least 7 days prior written notice to the employee”.

30. Under Article 10 (2) of the same Law, nothing in that Law precludes an employer from providing in any contract of employment, terms and conditions that are more favourable to the employee than those required by that Law.

31. The dispute here centred on Clause 6.1 of the 2015 Contract which provided insofar as material:

“….the Employee will be entitled to 22 paid days’ holiday (work days) in each calendar year of completed employment, pro-rated for any partial years of employment . The holidays are to be taken at times which are mutually acceptable”

32. The Appellant submitted to the Judge and this Court that the last sentence of the clause meant that there had to be agreement between the parties as to the particular days of holiday to be taken, failing which he was entitled , under Article 28 of the Employment Law Amendment Law No 3 of 2012 to payment in lieu of vacation leave. That Article provides:

“Where an employee’s employment is terminated, the employer shall pay the employee and amount in lieu of vacation leave accrued but not taken. In the event that the employee has taken more vacation leave than has accrued at the termination date, the employee shall repay the employer the corresponding sum”.

33. There was, before the Judge below, argument as to the number of days taken by the Appellant as holiday which gave rise to claim and counterclaim for monies allegedly owing under Article 28.

34. The facts, as found by the Judge and plain from the documents were clear. On 15 February 2017 the Respondents sent the Appellant a letter terminating his employment which stated:

“You are to proceed on Garden Leave as set out in the Contract with immediate effect on February 15, 2017. You are not required to come into the Company’s offices during your Garden Leave, but you are to remain available for any transition matters at the request of the Company. During the Garden Leave period you remain an employee of the Company and, other than as set out above in respect of your attendance at the Company’s offices and performance of your daily duties, you remain bound by the terms of the Contract. This shall include but is not limited to your express and implied duties of confidentiality as well as your fiduciary duties.

35. By a letter of 4 May 2017, the Respondent, referring to the notice of termination, wrote “to provide further information with regards to your outstanding annual leave entitlement”. The letter continued:

“the Company has reviewed its records and has calculated your annual leave up to 14 August 2017 (the “Termination Date”). The Company’s records show that your outstanding annual leave entitlement is 29.7 days which includes 15 days carryover from your 2016 entitlement and 14.7 days in respect of 2017, which we will round to 15 days, making your final entitlement 30 days.

As such, I am notifying you that you are required to take annual leave during the period from (and including) 4 July 2017 to 14 August 2017”.

36. The response from the Appellant in an email of 5 June 2017 was to reserve his rights, saying that he assumed that the right that the Respondent was purporting to exercise, forcing him to take holiday during his period of gardening leave, was in accordance with the law

the Law
, and that the calculations made as to holiday owing were correct.

37. The evidence shows, as was accepted by Counsel for the Appellant, that the Appellant had a long- planned holiday and was abroad for a period in excess of 30 days between 29 June and 14 August 2017. It was also accepted that if he had not been on Garden Leave, he would have taken that period as acknowledged holiday leave.

38. The point argued below and before us was that the Appellant could not be compelled to take holiday leave during a period of Garden Leave unless he so agreed. His evidence was that: “given that I was on paid leave of absence status I did not feel it necessary to take holiday, nor did I agree to do so”. He stated that he did not consider the period spent travelling outside the UAE as vacation leave and that he remained able and willing to deal with any transition matters during his absence from the office on Garden Leave and there was no restriction on him travelling outside the country during that period.

39. The Judge gave a number of reasons for coming to the conclusion he did in favour of the Respondent, but found expressly that the Appellant’s travelling abroad for holiday purposes “can only objectively be construed as the Claimant

’s acceptance that such a period of time be treated as holiday”.

40. Argument below focused on the meaning of the words “mutually acceptable”. Various synonyms were put forward by the Respondent for those words which fell short of requiring actual agreement on the part of both parties to the dates when holiday fell to be taken, on the basis that there could not be an absolute right of veto, whether on the part of the employee or the employer to the taking of holiday by the employee. The Judge below found that it meant “convenient”, “mutually suitable” or “capable of agreement”. He came to that conclusion on the basis that it was wholly impractical and un-businesslike for either party to have such a veto over the taking of holiday by the employee and that the fiduciary and good faith duties of an employee, when combined with the requirements of Article 58 of the Contract Law which require each party to cooperate with the other where such cooperation might reasonably be expected for the performance of the other’s obligations, meant that the words meant something short of actual agreement. We agree with the un-business like characterization of any such veto.

41. It was conceded by Counsel for the Appellant that the Appellant had to act reasonably in the context of the clause. In our view, the wording used (“mutually acceptable”) imports an objective standard of reasonableness, which is why one of the dictionary synonyms uses the phrase “capable of agreement”. The duties of good faith and cooperation require that holidays be taken by the employee at a time which is reasonably acceptable to the employer and also that the employer cannot compel the employee to take holiday at a time which is not reasonably acceptable to him.

42. It is self-evident from the facts set out above and the Judge’s findings, that a refusal to take holiday at the very time that the Appellant had planned to take holiday and actually took it, would constitute unreasonableness on his part, particularly when the sole purpose of doing so was to claim additional monies in lieu of holiday. When not required to come into the office, to refuse to take holiday at any reasonable time put forward by the employer would constitute a breach of contract and/or duty on the part of the employee and he could not rely on his own wrongdoing in seeking to recover salary/benefits in lieu of holiday under Article 28.

43. Furthermore, if the terms of Clause 6.1 are seen as an unenforceable agreement to agree, the provisions of Article 29(2) of the Employment Law then bite, with the result that the Respondent was entitled to require the Appellant take vacation leave on specified dates by giving 7 days prior written notice which it did by letter on 4 May 2017.

44. In the circumstances, this ground of appeal must also fail.

The Penalty Claim

45. In the light of the decisions we have already reached, there was no sum of money owing to the Appellant at the date of termination and the penalty provisions of Article 18 (2) of the Employment Law Amendment Law are therefore inapplicable.

46. We should add, for completeness, that we do not consider that a breach of Clause 5.1.2 which could give rise to a claim for damages, if any were established, would fall within the meaning of Article 18(2) in any event. Article 18 refers to “all wages or any other amount owing to an employee” and penalises an employer for failure to pay such within the 14 day period following termination. Whilst “wages” is defined as “all payments made to an employee in return for work done or services provided under the contract of employment”, a claim for damages for a failure to determine an adjustment in living allowances does not, in our judgment, amount to “wages” or a sum which is owing to an employee until such time as the determination is made. The claim for damages is, in that respect, to be equated with a claim for compensation for discrimination under Part 9 of the Employment Law. It cannot be seen as a payment owing in respect of work done or services provided until such time as the determination is made in an amount which cannot be ascertained until such time as the determination is concluded.

The Costs Issue

47. As the Appellant has failed on each aspect of his appeal on substantive matters, the only question which arises is whether or not the Judge below, in exercising his discretion with regard to the award of costs erred in such a way that this court should interfere. We are not persuaded that we should.

48. It is acknowledged by Counsel for the Appellant that the counterclaim for overpaid wages on the basis of excessive holiday taken gave rise to minimal additional evidence or argument above and beyond that required for ascertaining the amount of holiday entitlement which the Appellant himself asserted in pursuing his claim for holiday pay, which failed.

49. As to the counterclaim for UBN director’s fees, where the Respondent recovered US$1 in circumstances where the Appellant accepted in his pleadings, and at trial, that he was bound to pay the Respondent the sums received by him as a UBN director, less any tax that he had to pay in the USA, we can see that there is more scope for argument, but consider that the Judge was well within the wide ambit of discretion afforded to him when making decisions on costs when concluding that all the costs of the action should be paid by the Appellant, when the payment which reduced the sum to US$1 was made following the hearing and before the delayed judgment.

50. In the overall context of the action, the respondent succeeded in defending the Indexation Claim, the Holiday Claim, the further claim for Medical Benefits and succeeded in part in one of the two counterclaim where the lost counterclaim in respect of excess holiday was said by the judge to represent “really a very small amount compared to the Claimant’s claims”. The Judge was entitled to come to the decision he did on costs.

51. At the risk of being trite, we would also observe that the discretion with respect to costs is vested in the judge at first instance, not this Court. This Court would only interfere with the exercise of that discretion if one of the limited and well-known grounds for such interference is made out, which has not occurred in this case.


52. It follows from all the above that the Appeal must be dismissed and that the Appellant must pay the costs of this appeal, on the standard basis, in addition to the costs orders already made against him. Such costs are to be assessed by the Registrar if not agreed.


1. I agree with the abovementioned judgment.


1. I agree with the abovementioned judgment and have nothing further to add.

Issued by:

Nour Hineidi

Deputy Registrar

Date of issue: 22 March 2020

Time: 4pm