1

1

E-mail Article

Printer Friendly

Share Article

Investment bank wins unfair dismissal lawsuit

Six former employees of UAE-based Rasmala Investments have lost a legal challenge for unfair dismissal.

The ruling reversed an earlier decision that awarded damages to the six, but was appealed by the investment firm.
 
Rasmala Investments operates within the legal jurisdiction of the Dubai International Financial Centre, and was judged to be operating within its rights to terminate the employment of the six individuals on the basis that they operated under the free zone's regulations, not UAE employment law.
 
DIFC does not currently recognise the concept of unfair dismissal.
 
The former employees, who claimed they had their employment terminated without good reason, included a broker and a finance manager.
“We were expecting to get a bonus and they told us our jobs were terminated,” Rana Banat, who used to be an executive assistant at Rasmala, told Arabian Business.

“There were around 20 employees who lost their jobs, but only six of us filed the complaint,” she said on Tuesday.

In the initial hearing, held at the end of 2008, the judge ordered Rasmala to pay the claimants two or three months salary, depending on the length of time they were employed by the company.

However, Rasmala, represented by lawyer Graham Lovett of Clifford Chance, argued that the decision “was wrong in law in making an award in favour of the claimants”.

Rasmala consequently won its appeal, which overturned the original small claims tribunal judgment, because the contracts of the former employees stated that they were covered by DIFC law.

Companies which operate within the DIFC can opt to apply DIFC law, which involves an independent judicial system. Rasmala is one such example.

The judge concluded that there was no basis to import UAE labour law to this case and said only DIFC employment law should be applied in this instance, which makes no provisions for unfair dismissal.

As a result, it was decided that the former employees had no grounds to claim damages.

Rasmala said that it wanted to apply for $42,000 in costs from the former employees, but the judge ordered that these costs “be assessed”.

“I have been unemployed since November and don’t know how I’m going to pay that cost,” Banat told the court, with the respondents representing themselves.

The claimants have told Arabian Business that they want to reopen the case.

No Comments