In the Name of His Highness Sheikh Khalifa bin Zayed, President of the United Arab Emirates / Ruler of Abu Dhabi

Abu Dhabi Court of Cassation – Labour Chamber

In the session held at the Abu Dhabi Court of Cassation on Tuesday, 13 Jumada al-Awwal 1441 AH, corresponding to 08/01/2020 AD

Presided over by Judge: Zuhair bin Ahmed

With the membership of Judge: Othman Makram

With the membership of Judge: Azhari Mubarak

The case was heard: No. 278-2019 - Labour-M-R-Q-A-Z Labour Main Headquarters

Registered on: 04/12/2019

Subject: Cassation of the Appealed Judgment

After hearing the oral arguments, reviewing the documents, and deliberation, the following judgment was issued:

The Grounds

The facts of the case, as evident from the appealed judgment and all other documents, are that the plaintiff (the appellant) filed Case No. 945/2018, Labour Full, Abu Dhabi, against the defendant (the respondent), requesting in his final claims that she be ordered to pay him his outstanding wages from January 2018 until full payment, to confirm his employment under a permanent contract in implementation of the agreement between them, and to compel her to pay the amount of 18,800 AED for notice period pay, 56,400 AED as compensation for arbitrary dismissal, 20,003 AED for end-of-service gratuity, 28,200 AED for annual leave pay, 5,000 AED for a travel ticket, compensation for material and moral damages incurred due to his dismissal from work, the return of his passport, and for the judgment to be enforced with expedited effect without bond. In his statement, the appellant mentioned that he joined the respondent's employment on 17/7/2016 with a basic salary of 4,400 AED and a total salary of 18,800 AED. When she dismissed him from work and did not pay his aforementioned dues, the lawsuit was filed. On 29/4/2019, the court ruled to compel the respondent to pay the appellant 18,800 AED for notice period pay, 56,400 AED as compensation for arbitrary dismissal, and 6,698 AED for his annual leave pay, and ordered her to hand over his passport, making the total amount awarded to him (81,898 AED). It rejected the claims for outstanding wages, end-of-service gratuity, travel ticket allowance, and compensation for material and moral damages. The appellant appealed this judgment in Appeal No. 1935/2019, and the defendant filed a counter-appeal in Appeal No. 2197/2019. After the Court of Appeal consolidated the latter appeal with the former for being interrelated, it ruled on 30/9/2019 in the matter of Appeal No. 1935/2019 to partially set it aside concerning the rejection of the claim for end-of-service gratuity and to re-adjudicate by awarding an amount of 4,462 AED, thus making the total amount awarded to the appellant (86,560 AED) instead of (81,898 AED), and upheld it in all other respects. In the matter of Appeal No. 2197/2019, it was rejected. The appellant challenged this judgment by way of cassation through the present appeal. The appeal was presented to this court in chambers, which found it worthy of consideration and scheduled a hearing.

The appellant argues in his first ground of appeal that the challenged judgment erred in applying the law, contradicted the established facts in the record, and was flawed in its reasoning for not ordering his confirmation under a permanent employment contract as per the explicit text of the agreement between him and the respondent, under which she waived her right to unilaterally terminate the employment contract between them.

Abu Dhabi Court of Cassation – Labour Chamber

Judgment Annex No. 278-2019 - Labour-M-R-Q-A-Z 278-2019 - Labour-M-R-Q-A-Z

Date: 08/01/2020 AD

This right is more beneficial to the worker and is approved by the labor law. Therefore, it was incumbent on the appealed judgment to affirm it and rule accordingly, especially since the appellant trained for more than a full year with the respondent, and it is inconceivable that this sacrifice made for the sake of joining an employment contract would be terminated by the respondent at any time and whenever she wishes. He had successfully passed the training courses prescribed by the respondent until the year ended, and the appellant continued to work after the end of that period, starting from 17/7/2017 until 24/1/2018. On the latter date, the respondent prevented him from working and arbitrarily dismissed him, failing to adhere to what was stated in the agreement between them regarding the necessity of confirming him with a permanent employment contract. Therefore, the respondent was obliged to fulfill her obligation stated in the contract and keep the appellant in his job until he reached retirement age. However, she did not do so and dismissed him without a legitimate reason. As the appealed judgment violated this view and did not grant the appellant's request for confirmation in his job, it has erred in applying the law and contradicted the established facts in the record, which flaws it and requires its cassation.

This argument is unfounded. As established by the jurisprudence of this court, an employer is not legally obligated to reinstate a worker whose service has been terminated, whatever the reason for such termination. The worker's right in this case is limited to the compensation stipulated in Article 123/1 of the Labour Relations Law. The text of the aforementioned article, which states that '(if a worker is arbitrarily dismissed, the competent court shall order the employer to pay compensation to the worker. The court shall assess this compensation taking into account the type of work, the extent of damage sustained by the worker, and the length of his service, after investigating the circumstances of the work. It is required in all cases that the amount of compensation does not exceed the worker's wage for a period of three months, calculated on the basis of the last wage he was entitled to...)', indicates, as established by the jurisprudence of this court, that although the legislator has granted the worker the right to claim compensation for arbitrary dismissal according to the principles and elements specified in the labor law, he is not entitled to demand reinstatement to his job once the employer has decided to dispense with his services and has notified him of his intention to terminate the employment contract that binds him to the worker. This is because it is the employer's right to choose from among his employees those whom he deems to have the necessary qualifications to perform the tasks assigned to them and to dispense with those whom he deems not to have such qualifications, as it is his right to organize his establishment in the manner he deems appropriate and in the way that achieves the goals he has set for his establishment. This being the case, and as the respondent had terminated the employment relationship between her and the appellant on 24/1/2018 and had notified him of her decision to end his service, and the court concluded that this termination of the employment contract was not based on a legitimate reason and had an arbitrary nature, and accordingly awarded him compensation that it deemed sufficient to remedy the damage he sustained due to his arbitrary dismissal, there is no fault on the part of the court for rejecting his request for reinstatement to work, as long as it awarded him the compensation approved by the law for his dismissal. This is not affected by what the appellant relied on in his ground of appeal that the agreement between him and the respondent stipulates the 'confirmation of the trainee with a permanent employment contract'. This obligation on the respondent's part, whatever the view on it, is conditional on the trainee successfully completing the training program he is subject to. As the appealed judgment concluded this and awarded the appellant compensation for arbitrary dismissal, its rejection of his request to compel the respondent to reinstate him to work is based on a sound foundation of fact and law, and the argument against it for this reason is without basis.

The appellant argues in his second and third grounds of appeal that the appealed judgment erred in applying the law and violated the right to defense by not calculating the end-of-service gratuity awarded to him based on his total salary of (18,800) AED, considering that the allowances granted to him by the respondent are an integral part of the wage and were described as allowances to reduce his entitlements arising from his employment contract. He had insisted in both stages of litigation on calculating his deserved end-of-service gratuity based on the basic salary plus allowances, as these allowances were not detailed when determining his due wage and were written in aggregate to reduce his entitlements upon termination of his service. As it is legally established that the end-of-service gratuity for a worker is calculated based on the last wage he was receiving, which includes what has become customary or practiced to be granted to him until the worker considers it a part of the wage, not a gratuity, and it is considered in calculating the end-of-service gratuity for workers who are paid monthly by the last basic salary they receive, including the wage stipulated in the employment contract and any increases to it that have a permanent and stable character, except what was explicitly excluded by Article 134 of the Labour Relations Law, it was incumbent on the appealed judgment to rule on that basis. However, it contradicted this view and calculated the end-of-service gratuity awarded to the appellant based on the basic salary only, without the total salary of 18,800 AED, which flaws it and requires its cassation. The appealed judgment also erred when it calculated the leave allowance on the basic salary, despite the fact that the total salary is the same as the basic salary, which flaws it and requires its cassation.

Abu Dhabi Court of Cassation – Labour Chamber

Judgment Annex No. 278-2019 - Labour-M-R-Q-A-Z 278-2019 - Labour-M-R-Q-A-Z

Date: 08/01/2020 AD

This argument is unfounded. It is established by the jurisprudence of this court that the text of Article 1 of the Labour Relations Law states that 'in the application of this law, the following words and phrases shall have the meanings assigned to them respectively, unless the context requires otherwise...'

Wage: All that is given to the worker in return for his work under an employment contract, whether in cash or in kind, paid annually, monthly, weekly, daily, or on the basis of the hour, the piece, or production, or in the form of commissions. The wage includes the cost of living allowance and also includes any grant given to the worker in recognition of his honesty or efficiency, if these amounts are stipulated in the employment contracts or in the internal work regulations of the establishment or if it is customary or practiced to grant them to the extent that the workers of the establishment consider them part of the wage and not a donation.

Basic Wage: The wage stipulated in the employment contract during its validity between the two parties, and it does not include allowances of any kind.... This indicates that the basic wage is the fundamental consideration that the worker is entitled to for performing his work or preparing himself for it and represents the minimum amount to be paid to him, which is stipulated in the employment contract or any subsequent agreement to increase or decrease it, whether the agreement is explicit or implicit, provided that such increase or decrease has affected the basic wage. The concept of the basic wage does not include allowances, benefits, and grants given to the worker, as mentioned in the text, whether their source is an agreement 'the contract' or the internal work regulations of the establishment or has been granted until it is considered part of the wage. However, they, along with the basic wage, constitute the components of the total or gross wage. Consequently, if an agreement is proven between the employer and the worker for a wage increase, and the increase affects the basic wage or affects one of the components of the total wage, what is proven shall apply. But if the parties agree on a wage increase and the text on the increase is absolute without specifying whether the agreed increase affects the basic wage or is related to an allowance or a bonus, the court will interpret the text in search of their intention in light of any available evidence. If that is not possible, the increase will be considered to apply to the basic wage, in accordance with the general principles of interpretation of the employment contract in the manner most favorable to the worker. In the absence of a proven agreement - after bargaining - for a wage increase, but it is proven from the wage protection system or bank statement that it has become a fixed and regular practice for a period of time to give the worker more than the agreed wage - without describing the increase - this increase is considered as 'other allowances' given to the worker in recognition of his honesty or efficiency, and it has become customary or practiced to grant it to him until he considers it part of the wage, not a donation. Therefore, it is added to the components of the 'total' gross wage, not the basic wage, and consequently is not included in the calculation of the end-of-service gratuity as it is one of the 'other allowances' grants, in accordance with Article 134 of the same law. It is also legally established that the legislator in Articles 78 and 79 of the Labour Relations Law differentiated in the matter of the wage on which the annual leave allowance for the worker is calculated between one who is still in service and one whose service has ended. While this allowance is calculated for the former on the basis of his basic wage to which he is entitled plus the housing allowance, it is calculated for the latter on the basis of his basic wage which he was receiving at the time of entitlement to the leave only. Since this is the case, and it is established in the documents that the text in the contract in force between the parties dated 17/7/2016 states that the basic wage is 4,400 AED, and the appellant did not provide evidence of an agreement to increase the basic wage stipulated in the contract, while it was proven from the wage statement dated 24/1/2018 that an amount of 18,800 AED was transferred as a total salary for the appellant, therefore what exceeded the basic wage stipulated in the contract is considered 'other allowances' which are included in the components of his 'total' gross wage but are not included in the calculation of the end-of-service gratuity as they are 'other allowances' grants according to Article 134 of the Labour Relations Law. The same applies to the leave allowance which was calculated on the basis of the basic wage, and this is correct considering that the appellant's claim for this allowance was made after the termination of his service, which means it should be calculated on the basis of the basic wage the appellant was receiving without adding any allowance. As the appealed judgment concluded this and calculated the end-of-service gratuity due to the appellant and the annual leave allowance on the basis of his basic wage of 4,400 AED and not on the basis of what he claims as a total salary of 18,800 AED, its conclusion was sound and justified, with no violation of the law or the established facts in the record, and the argument based on the two mentioned grounds is without basis.

The appellant argues in the fourth ground that the appealed judgment erred in applying the law and was deficient in its reasoning and flawed in its inference by refusing to award him the overdue wages since January 2018 at a rate of 18,800 AED per month, despite the fact that it is the worker's right to receive his wage on the prescribed dates, and any condition that deprives him of this right is absolutely null and void. As the appealed judgment violated this view and ruled to reject his claim for overdue wages, this flaws it and requires its cassation.

Abu Dhabi Court of Cassation – Labour Chamber

Judgment Annex No. 278-2019 - Labour-M-R-Q-A-Z 278-2019 - Labour-M-R-Q-A-Z

Date: 08/01/2020 AD

This argument is unfounded. The obligation on the employer to pay the worker's wage agreed upon in the contract is valid as long as the worker performs his work or makes himself available for it, even if no work is assigned to him. This means, as established by the jurisprudence of this court, that the wage is a right the worker receives from the employer in exchange for performing the agreed-upon work, as long as the contract is still in force between the two parties. It is an obligation arising from the employment contract unless the worker disputes the date set for the termination of the employment relationship and fails to provide evidence of not performing work during the period for which he claims wages. The trial court has full authority to ascertain the worker's wage and estimate its value without oversight from the Court of Cassation, provided it bases its judgment on sound reasons sufficient to support it and leading to the conclusion it reached. This being the case, the court of first instance, whose judgment was upheld by the appealed judgment in this regard, addressed the appellant's claim mentioned in the ground of appeal, both presenting and refuting it, and rejected it based on what it found from the termination of his employment contract with the respondent on 14/1/2018 and his acknowledgment of receiving his salary for January 2018. Therefore, he has received his full right to his due wages, and there is no basis for claiming more than what he has received in wages, as the employment relationship between him and his employer has ended, considering that wage is only due in exchange for work. Since the appellant did not work during the period for which he claims wages, he has no right to what he claims. As the court of first instance concluded this and rejected his claim, and the appealed judgment upheld its conclusion, it has complied with the correct application of the law and has not contradicted the established facts in the record. The argument raised in this ground of appeal is merely a substantive dispute, which is not permissible, regarding what the trial court independently assesses from the evidence and documents of the case, from which it soundly concluded that the appellant is not entitled to what he claims in wages.

The appellant argues in the fifth ground of appeal that the appealed judgment erred in applying the law and was deficient in reasoning and flawed in inference by refusing to compensate him for the material and moral damages he claims were inflicted upon him due to his dismissal from work, despite his damage being proven and correctly supported, with no justification for its rejection. As the appealed judgment contradicted this view and rejected the claim, this flaws it and requires its cassation.

This argument is unfounded. It is established by the jurisprudence of this court that it is not permissible to apply the provisions of tortious liability in a compensation claim where the injured party is linked to the responsible party by a prior contractual relationship. Applying the provisions of tortious liability in the existence of a contractual relationship would undermine the contractual provisions related to liability for non-performance, thereby violating its binding force, unless it is proven that the damage incurred by one of the contracting parties was the result of the other party committing an unlawful act, thereby establishing tortious liability based on a breach of a legal obligation that he is prohibited from committing, whether he is a contracting party or not. Furthermore, it is not legally permissible to compensate for the same damage twice. This being the case, the initial judgment, upheld in this regard by the appealed judgment, had awarded compensation to the appellant for the arbitrary dismissal he suffered, in the amount of (56,400) AED. Therefore, its rejection of his claim for compensation for what he calls material and moral damage is sound and justified, as the claimed compensation, whatever the view on it, is included in the compensation for arbitrary dismissal awarded by the court. It is not legally permissible to compensate for the same damage twice, in addition to the non-fulfillment of the conditions for tortious liability in the claim being made. As the appealed judgment concluded by upholding the appealed judgment in its rejection of this claim, what it concluded was sound and properly justified, and there is no ground for challenge. Therefore, the argument based on this ground is without basis.

As what has been presented has been decided, the appeal must be rejected in its entirety.

For these reasons

The Court has ruled:

To dismiss the appeal and exempt the appellant from its costs.

Abu Dhabi Court of Cassation – Labour Chamber

Judgment Annex No. 278-2019 - Labour-M-R-Q-A-Z 278-2019 - Labour-M-R-Q-A-Z

Date: 08/01/2020 AD

Unofficial digital copy