This Small Claims Tribunal judgment clarifies the interaction between approved annual leave and notice period requirements, establishing that an employer’s prior approval of leave during a notice period constitutes a waiver of the requirement to physically work that period.
What were the specific employment claims brought by Ferenc against Feray in SCT 191/2015?
The dispute arose from the resignation of the Claimant, a PR, Marketing and Social Media Executive, who sought unpaid salary, notice period pay, and end-of-service gratuity. The Claimant alleged that after resigning on 13 August 2015, the Defendant withheld her August salary, half of her September salary, and her gratuity, citing an alleged failure to complete one year of service and a failure to work the notice period.
The factual background of the employment relationship is defined by the initial contract terms:
On 14 September 2014, the Claimant signed an Employment Contract with the Defendant as a PR, Marketing and Social Media Executive at a monthly allowance of AED 7,000 plus accommodation, transportation, medical insurance, air ticket (economy class to home country every year) and annual leave (30 calendar days per annum).
The Claimant maintained that despite the Defendant's allegations of poor handover, she had fulfilled her professional obligations. As noted in the record:
Despite this, the Claimant submits that she diligently conducted her handover and returned all the items belonging to the Defendant that were in her ownership.
Which judge presided over the Small Claims Tribunal hearing for Ferenc v Feray?
The matter was heard and adjudicated by H.E. Justice Omar Al Muhairi. The hearing took place on 11 October 2015, following a failed consultation meeting before Judicial Officer Nassir Al Nasser. The final judgment was issued by the Small Claims Tribunal of the DIFC Courts on 22 October 2015.
What were the conflicting legal positions of Ferenc and Feray regarding the notice period and gratuity?
The Claimant argued that her resignation on 13 August 2015, with a notice period ending 15 September 2015, satisfied the requirements for gratuity and notice pay, as her leave had been pre-approved by the employer. Conversely, the Defendant argued that the Claimant failed to complete one year of continuous service and breached her contract by taking annual leave during the notice period instead of working.
The Defendant’s position was summarized as follows:
In addition, the Defendant submits that the Claimant took her leave on 20 August 2015 and did not complete the one month notice period.
The Defendant further alleged that the Claimant had exceeded her accrued annual leave and caused business damage by deleting emails during the handover process.
What was the central legal question regarding the completion of one year of service?
The Court had to determine whether the Claimant’s employment period—from 14 September 2014 to 15 September 2015—constituted "continuous employment of one year" under the DIFC Employment Law. The doctrinal issue centered on whether the effective date of termination is the date notice is given or the date the notice period expires, and whether the employer’s approval of leave during that notice period could be construed as a waiver of the requirement to work.
How did Justice Al Muhairi apply the doctrine of waiver to the notice period dispute?
Justice Al Muhairi determined that because the Defendant had pre-approved the Claimant’s leave request on 17 June 2015, they were fully aware of the overlap with the notice period when the resignation was submitted. By failing to object or request that the Claimant work an additional month, the Defendant effectively waived the notice requirement.
The reasoning focused on the employer’s conduct:
The Defendant did not provide any evidence to the Courts that indicated they communicated with the Claimant to hold off on the annual leave or agreed with the Claimant that she shall work for an addit
Consequently, the Court held that the Claimant had successfully completed her one-year term. Regarding the gratuity entitlement, the Court concluded:
Therefore, the Claimant completed continuous employment of one year and is entitled to gratuity payment pursuant to Article 62(1) of the DIFC Employment Law.
Which specific DIFC Employment Law provisions were applied to determine the Claimant's entitlements?
The Court relied on Article 59(3) of the DIFC Employment Law to validate the waiver of the notice period. This article permits employers and employees to waive notice or agree to different terms. Furthermore, the Court applied Article 62(1) to confirm the Claimant's entitlement to end-of-service gratuity upon the completion of one year of continuous service.
How did the Court calculate the deduction for excess annual leave?
The Defendant argued that the Claimant had taken more leave than she had accrued during her first year. The Court examined the leave requests—10 days in May 2015 and 24 days starting 20 August 2015—and found that the Claimant had indeed exceeded her entitlement. The Court calculated the deduction based on the daily wage:
Therefore, the Claimant is in excess of four days which she is not entitled to, calculated as follows: the daily wage of AED 233.33*4 days = AED 933.33.
What was the final monetary disposition and order for costs in Ferenc v Feray?
The Court allowed the claim in part, ordering the Defendant to pay the Claimant AED 15,400.00, comprising salary from 1–15 August 2015, the notice period pay, and the end-of-service gratuity. The Claimant was ordered to pay the Defendant AED 933.33 for the excess annual leave taken.
The final order stated:
For the reasons stated above, the Defendant shall pay the Claimant the sum of AED 15,400.00 plus Court Fees and the Claimant shall pay the Defendant the sum of AED 933.33 for the four excess days in annual leave.
The Defendant was also ordered to pay the Claimant’s court fees of AED 367.50.
What are the practical implications for DIFC employers regarding notice period management?
This case serves as a warning to employers that approving annual leave requests during a notice period may be interpreted by the DIFC Courts as a waiver of the employee's obligation to work that period. Employers must ensure that if they require an employee to work their full notice period, they must explicitly decline or reschedule any conflicting leave requests at the time of resignation. Failure to do so prevents the employer from later claiming a breach of contract or failure to serve notice.
Where can I read the full judgment in Ferenc v Feray [2015] DIFC SCT 191?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/ferenc-v-feray-2015-difc-sct-191
Cases referred to in this judgment:
(None cited in the provided text)
Legislation referenced:
- DIFC Employment Law, Article 59(3)
- DIFC Employment Law, Article 62(1)
- DIFC Employment Law, Article 62(2)(a)