What was the specific monetary dispute between LACT and LOUTIV regarding untaken annual leave and unauthorized absences?
The dispute centered on the Claimant’s resignation from his position as an Executive Assistant, which prompted a claim for payment in lieu of untaken annual leave and statutory penalties. The Claimant sought a total of AED 112,429.52, which included a specific demand for 30 days of untaken annual leave.
The Claimant is claiming 30 days untaken annual leave from 2020 and 2021 in the amount of AED 16,615.20.
The Defendant contested this, arguing that the Claimant had already exhausted his leave entitlement and had, in fact, taken unauthorized leave. This led to a significant counterclaim by the employer for the reimbursement of salary paid during periods where the Claimant was allegedly absent without approval.
On 22 July 2022, the Defendant filed an Acknowledgment of Service and Counterclaim in the amount of AED 35,456 in relation to alleged unauthorised sick and annual leave.
Which judge presided over the SCT proceedings in LACT v LOUTIV [2022] DIFC SCT 259?
The matter was heard before H.E. Justice Maha Al Mheiri in the Small Claims Tribunal of the DIFC Courts. Following an initial consultation on 8 August 2022 that failed to produce a settlement, Justice Al Mheiri presided over hearings on 17 August 2022 and 31 August 2022 to resolve the conflicting claims regarding leave records and unauthorized absences.
What were the primary legal arguments advanced by the Claimant and the Defendant in SCT 259/2022?
The Claimant argued that he was entitled to payment for 30 days of untaken annual leave accrued during 2020 and 2021. Furthermore, he asserted that the Defendant’s failure to settle these amounts upon the termination of his employment triggered penalty provisions under the DIFC Employment Law.
In addition to the Claimant’s Claim for annual leave the Claimant is requesting to be paid sums that he alleges to have fallen due pursuant to Article 19 of the DIFC Employment Law.
The Defendant, Loutiv, countered that the Claimant had not only exhausted his annual leave but had also engaged in unauthorized absences. By cross-referencing HR records with the Claimant's immigration travel history, the Defendant argued that the Claimant had claimed sick leave while traveling outside the UAE. Consequently, the Defendant sought reimbursement for 62 days of unauthorized leave, arguing that the Claimant had breached his employment contract by misrepresenting his availability.
What was the central jurisdictional and doctrinal question before the SCT regarding the Article 19 penalty?
The Court had to determine whether the Claimant was entitled to a penalty payment under Article 19 of the DIFC Employment Law No. 2 of 2019. This required the Court to decide if the Defendant had failed to pay "sums due" upon the termination of employment. The doctrinal issue hinged on whether the Claimant had actually accrued untaken annual leave or if he had, in fact, taken excess leave, thereby negating the existence of any unpaid sums that would trigger the statutory penalty.
How did Justice Maha Al Mheiri apply the evidentiary test to the Defendant's counterclaim for unauthorized leave?
Justice Al Mheiri evaluated the evidence by comparing the Defendant’s internal HR records against the Claimant’s official immigration travel history. While the Court acknowledged that the employer bears the burden of maintaining accurate records, the evidence provided by the immigration report proved that the Claimant was absent during periods he claimed to be sick or on leave.
In light of this, I have determined that the Claimant’s claim for unpaid annual leave shall be dismissed, which by virtue dismisses the Claimant’s claim for Article 19 of the DIFC Employment Law.
The Court reasoned that because the Claimant had already exhausted his leave entitlement and taken additional unauthorized days, there was no outstanding balance owed to him. Consequently, the claim for the Article 19 penalty failed as a matter of law, as there was no underlying debt to support the penalty claim.
Which specific sections of the DIFC Employment Law No. 2 of 2019 were applied in this judgment?
The judgment primarily relied on Article 19 of the DIFC Employment Law, which governs the payment of sums due upon termination and the associated penalties for non-payment. The Court also considered the obligations under Article 16, which mandates that employers maintain accurate payroll and leave records. Additionally, the Court referenced Article 34 regarding annual leave entitlements to determine whether the Claimant had any remaining balance of leave to be paid out upon his resignation on 31 December 2021.
How did the Court calculate the specific amounts owed by the Claimant to the Defendant?
The Court utilized a daily wage calculation of AED 553.84 to determine the value of the unauthorized absences. After reviewing the evidence, the Court found the Claimant liable for 34 days of unauthorized absence and a separate amount for excess sick leave taken in 2019.
Accordingly, I find that the Claimant is ordered to pay the Defendant the sum of AED 18,830.56 for 34 days absence from work without any approval by the Defendant (34 days x 553.84 daily wage = AED 18,830.56).
This was supplemented by a finding regarding excess sick leave.
As such, I find that the Claimant shall pay the Defendant an amount of AED 4,984.56 in relation the excess sick leave taken in 2019.
What was the final disposition and the specific relief ordered by the SCT?
The Court dismissed the Claimant’s claim in its entirety. Regarding the Defendant’s counterclaim, the Court found in favor of the employer, ordering the Claimant to pay a total of AED 23,815.12, representing the value of unauthorized leave and excess sick leave. Additionally, the Claimant was ordered to pay a portion of the Court fees.
The Claimant shall pay the Defendant the amount of AED 476.30 being 2% of the judgment sum owed to the Defendant.
How does this ruling change the evidentiary expectations for DIFC employers regarding leave tracking?
This case reinforces the principle that while the employer has the primary statutory duty to maintain leave records, the Court will look to external evidence—such as immigration travel reports—to verify the veracity of leave claims when a dispute arises. Practitioners should note that an employer’s failure to maintain perfect internal records does not automatically preclude them from recovering salary paid for unauthorized absences if they can provide objective evidence of the employee's absence from the workplace. Future litigants must anticipate that the SCT will conduct a rigorous reconciliation of HR records against travel history when "sick leave" is contested.
Where can I read the full judgment in Lact v Loutiv [2022] DIFC SCT 259?
The full judgment is available on the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/small-claims-tribunal/lact-v-loutiv-2022-difc-sct-259
Legislation referenced:
- DIFC Employment Law No. 2 of 2019, Article 16
- DIFC Employment Law No. 2 of 2019, Article 19
- DIFC Employment Law No. 2 of 2019, Article 34