FARIDOON v FAUSTINA [2015] DIFC SCT 018 — Employment rights during probation (12 March 2015)

The Small Claims Tribunal clarifies that DIFC Employment Law minimum standards, including end-of-service gratuity, cannot be contractually waived even during a probationary period.

What was the nature of the dispute between Faridoon and Faustina regarding the termination of employment and the subsequent AED 439 award?

The dispute arose from the resignation of Faustina, a therapist, during her six-month probationary period. Faustina, employed by Feisal (represented by Faridoon), resigned on 9 February 2015. While the employer accepted the resignation, they demanded she work a notice period until 9 April 2015. Faustina refused, leading to a claim by the employer for breach of contract and a counterclaim by the employee for unpaid entitlements.

The core of the disagreement involved the employer's reliance on Clause 18.2 of the employment contract, which purported to allow termination without notice or gratuity during probation. The Court ultimately balanced the employer's right to notice against the employee's statutory right to gratuity. As noted in the judgment:

For those reasons, I have found that Faustina is entitled to the sum of AED 439 in addition to the courts fees, and I dismiss any other claims advanced by both parties for lack of supporting evidence.

Which judge presided over the SCT hearing in Faridoon v Faustina [2015] DIFC SCT 018?

The matter was heard before H.E. Justice Shamlan Al Sawalehi in the Small Claims Tribunal of the DIFC Courts. The hearing took place on 3 March 2015, with the final judgment issued on 12 March 2015.

What specific legal arguments did Faridoon and Faustina advance regarding the notice period and gratuity entitlements?

Faridoon, representing the employer, argued that under the "Terms and Conditions of Employment," Faustina was required to provide two months' notice upon resignation. Furthermore, the employer contended that Faustina was ineligible for any end-of-service benefits because the employment relationship concluded during the probationary period, citing Clause 18.2 of the contract.

Conversely, Faustina argued that her resignation during the six-month probation period exempted her from the notice requirements stipulated for post-probationary employment. She maintained that she remained entitled to end-of-service benefits despite the probationary status of her employment, asserting that the employer could not contractually override her statutory rights under the DIFC Employment Law.

What was the central legal question regarding the applicability of DIFC Employment Law to probationary periods?

The Court had to determine whether an employer can rely on contractual clauses to waive statutory employee benefits—specifically end-of-service gratuity and notice requirements—when the employment relationship is terminated during a probationary period. The doctrinal issue centered on whether the "minimum requirements" of the DIFC Employment Law are mandatory and non-derogable, regardless of the existence of a probationary clause in an employment agreement.

How did Justice Al Sawalehi apply the principle of non-derogable rights to the employer’s reliance on Clause 18.2?

Justice Al Sawalehi held that contractual provisions attempting to waive statutory minimums are ineffective. The Court emphasized that the DIFC Employment Law does not permit an employer to bypass the payment of gratuity simply by labeling the termination as occurring during a probation period. The reasoning focused on the hierarchy of law over private contract:

Contrary to Clause 18.2, DIFC Employment Law does not allow any waiver to what the Law describes as “the Minimum requirements” that defiantly includes gratuity payment, and a provision in an agreement to waive any of those requirements has no effect, except where expressly permitted under that Law, which is not the case under the section which deals with end of service gratuity Article 62 of the DIFC Employment Law, in accordance with Article 10(1) of that Law. 20.

Which specific sections of the DIFC Employment Law No. 4 of 2005 were applied to determine the parties' obligations?

The Court relied heavily on Article 59, which governs the termination of employment and the requirements for notice. Specifically, Article 59(2)(b) mandates a minimum of 30 days' notice for employees with at least one month of continuous service. Additionally, the Court cited Article 10(1), which establishes the non-derogable nature of the Law's minimum requirements, and Article 62, which governs end-of-service gratuity. Finally, the Court referenced Article 20 regarding the prohibition against charging employees for employment-related costs.

How did the Court interpret the notice period requirements under Article 59 of the DIFC Employment Law?

The Court rejected Faustina’s argument that her notice period was waived entirely due to her probationary status. Applying the general rules on minimum notice, the Court determined that the employer was entitled to compensation for the failure to provide the statutory notice period. The Court reasoned:

Then, I have found that Areli has failed to support her argument that her notice period was waived entirely, as by applying the general rules on the rights of employer and employee to minimum notice, in my view compensation for (30) days’ notice had to be given to Feisal in lieu of notice, in spite of the fact that the employment contract was terminated during the probationary period.

What was the final disposition and the specific monetary relief ordered by the Small Claims Tribunal?

The Court found that while the employer was entitled to compensation for the 30-day notice period, the employee was entitled to her statutory gratuity. After offsetting these respective claims, the Court ordered Faridoon to pay Faustina the net sum of AED 439. Additionally, the Court ordered the employer to bear the costs of the court fees.

What are the wider implications for DIFC employers regarding probationary clauses in employment contracts?

This ruling serves as a firm reminder that probationary periods do not grant employers a "blanket exemption" from the DIFC Employment Law. Practitioners must advise clients that any contractual clause attempting to waive gratuity or other statutory minimums will be struck down as unenforceable. Employers must ensure that their internal policies and employment agreements align with the mandatory protections afforded to employees under the Law, regardless of the duration of the employment relationship.

Where can I read the full judgment in Faridoon v Faustina [2015] DIFC SCT 018?

The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/faridoon-v-faustina-2015-difc-sct-018

Cases referred to in this judgment:

Legislation referenced:

• DIFC Employment Law No. 4 of 2005, Article 10(1)
• DIFC Employment Law No. 4 of 2005, Article 20
• DIFC Employment Law No. 4 of 2005, Article 27(1)
• DIFC Employment Law No. 4 of 2005, Article 59
• DIFC Employment Law No. 4 of 2005, Article 62