The DIFC Court of First Instance awarded AED 2.1 million to a senior executive who was constructively dismissed after a change in ownership. The Court provided important guidance on the calculation of end-of-service gratuity under DIFC Employment Law No. 2 of 2019.
The claimant, a British national, served as Chief Financial Officer of a DIFC-registered financial services firm for 8 years. Following a majority stake acquisition by a new investor group, the claimant's responsibilities were systematically reduced, reporting lines changed, and his office access was restricted.
The DIFC Court applied the well-established test: whether the employer's conduct amounted to a repudiatory breach of the employment contract such that the employee was entitled to treat themselves as discharged. The Court found that the cumulative effect of the changes constituted a fundamental breach of the implied term of mutual trust and confidence.
The Court clarified that under DIFC Law No. 2 of 2019, Article 28, end-of-service gratuity is calculated based on the employee's last drawn basic salary, and the 21-day per year rate applies to the first five years with 30-day rate for additional years.