Covid-19: Time to Address Unfair Labour Practices in Nigeria’s Banking Industry – Elvis E. Asia

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Introduction

Recently, a video of Access Bank’s MD/CEO, Mr. Herbert Wigwe addressing staff of the bank went viral[1]. In the video, Mr. Wigwe hinted on the bank’s plan to reduce its staff strength due to the effect of Covid-19. The video has elicited a lot of reactions with many criticizing the bank. The Minister of Labour and the Central Bank of Nigeria reacted to the video impliedly by directing that banks should not sack workers without permission[2]. The reactions to Mr. Wigwe’s video are understandable but misplaced. It is doubtful whether the regulatory directive issued by the CBN is sustainable. The truth is that with or without Covid-19, loss of jobs in the banking industry is inevitable.  Financial technology (FinTech) has made remote banking the new normal in the industry. It is therefore expected that staff whose jobs require physical services may have to go. Mr. Wigwe was only stating the obvious.

The problem we need to address in the banking industry is unfair labour practices. Unfair labour practices manifest in different shapes and forms in the industry leading to job  insecurity with dire effects on the  emotional well being of bank workers. Many staff in the industry are suffering from anxiety due to unhealthy pressure. Every stakeholder in the industry including investors, customers and the government must work to ensure that the problem is addressed. This is a national emergency that requires a fundamental shift in labour law regulation in Nigeria.

For example, while loss of jobs may be inevitable, how do you manage the process, how do we set the minimum requirement for terminal/redundancy benefits which are mandatory for every bank to comply with before termination of employment for any reason. Other important questions are: which job functions can be outsourced or contracted in the industry, to what extent can banks discriminate in promotion and salaries and in view of the fact that the bargaining power of employees in Nigeria is next to nothing, should there be a limit as to what clauses can be inserted in employment contracts.

This article highlights key areas of unfair labour practices in the Nigerian Banking sector and calls for an urgent legislative reform to discourage the practice.

Unfair Labour Practice

Unfair labour practice generally refers to inequitable actions by the employer that do not conform to both domestic and international best practices and labour standards[3]. Under the current Nigerian jurisprudence on labour and employment, the National Industrial Court (NICN) has the power to expand the scope of unfair labour practices[4]. From decisions emanating from the court and international labour standards, the following practices in the banking industry would amount to unfair labour practice:

Fictitious outsourcing/contract staffing

Labour outsourcing or contract staffing is a smart way for a business to focus on its core activities, reduce cost, manage risk and generally increase efficiency. However, in a country with little or no statutory protection for employees, like Nigeria, outsourcing has been abused by banks. Information from the National Bureau of Statistics shows that almost half of the staff in the industry are on contract. Contrary to the ideal behind outsourcing, banks claim to outsource their core functions and activities. Outsourced or contract staff regularly perform main/permanent banking functions. A bank and any employer for that matter should not be able to outsource the usual course of its business[5].

There have been efforts by judges of the NICN to intervene in appropriate cases to discourage this practice. In this regard, the Judges have   implied the existence of a contract of employment between an outsourced staff and the end-user, thereby regarding both the out-sourcing agency and the end –user as co-employers[6].A typical instance is where the outsourced staff carries on like an employee of the end-user even though the employment letter was signed with the contractor. It is opined that where a staff carries on the core banking function of a bank, the principle may be invoked.

In view of the way banks have abused outsourcing and contract staffing, there is need for legislative guidelines on the nature of the services an employer can outsource or contract. Casualization of employees under the guise of outsourcing should be addressed. As addressed elsewhere[7], in many other jurisdictions, legislations are been enacted to prevent companies from classifying workers as contract staff or independent contractors when they perform the usual function of the hiring entity’s business.

Discrimination

Discrimination takes different forms in the banking industry. The most pronounced is the disparity between the payment structure and mobility of an NCE/HND graduate and university graduates. Even where an NCE/HND graduate does more work and trains the university graduate, the university graduate earns more and has higher chances of promotion. In many banks, there is a limit to the promotion of NCE/HND graduates and when they eventually earn a university degree, the process of conversion is usually slow and may not be forthcoming.

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Over the years, there have been attempts to get the Court to make a pronouncement on this issue. No positive decision by the court was seen in the course of writing. In 2019, the House of Representatives passed a bill on B.Sc./HHD dichotomy but it is yet to see the light of the day. The practice is discriminatory and is likely to be pronounced unfair by the NICN when the court gets the chance to do so in the exercise of its jurisdiction to apply international labour standards on equal pay for equal work[8]. While an employer may promote and remunerate employees based on technical knowhow and levels of education, discriminatory salary and promotion structure for employees carrying out the same function is unfair. In the banking industry, the discrimination is nothing but an attempt to exploit and get cheap labour.

Erosion of the right to membership of Trade Union

The right to membership of a Trade Union is guaranteed by section 40 of the 1999 Constitution as amended, the Trade Union Act and various international conventions. This right has been eroded in the banking industry through direct and indirect actions of banks. Most banks expressly direct their staff not to participate in trade union activities. Contract staffing and Casualization is another surreptitious method banks have employed to discourage trade union activities in the industry. Unfortunately, the Association of Senior Staff of Banks, Insurance & Financial Institutions (ASSBIFI) and the National Union of Banks, Insurance & Financial Institutions Employees (NUBIFIE) which are supposed to be the umbrella Trade Union organizations representing employees in the industry seems to be interested only in collection of dues. The organizations made no comment on large scale sack in the industry in recent times and have not made any serious attempt to fight casualization in the industry.

Refusal to declare redundancy

Redundancy means loss of jobs due to excess of manpower[9]. Redundancy occurs where an employee becomes surplus to the requirement of the employer like in the situation painted in Mr. Wigwe’s viral video. The Labour Act sets out minimum standards that employers must meet in declaring redundancy. They must inform the workers through the trade union they belong or through their representatives, apply the principle of last in, first out and negotiate redundancy payments[10]. Though the Labour Act applies to limited categories of workers[11], the principles incorporate international best practices which are now enforceable by the NICN in Nigeria.

In order to avoid complying with these principles, banks deliberately do not officially declare a redundancy. They simply terminate the employment without stating reasons or lure staff to resign[12]. They do this because generally it is believed that under Nigerian law, an employer need not give any reason for termination.  In fact, it was fashionable to state that ‘your services are no longer required’ in termination letters. The good news however is that the NICN is now treating ‘services no longer required’ as redundancy which attracts redundancy payment under the employer’s redundancy policy[13].

Covid-19 or FinTech is no excuse for unfair termination of employment. It is unfortunate that there is no express provision on redundancy that applies to all categories of employment in Nigeria. We need to urgently address this because the NICN’s current system is uncertain, as it is not based on an express statutory provision.

Arbitrary termination of employment

In the banking industry, employees find out about the termination of their employment when they are unable to log on to the bank’s portal. Imagine the insecurity and depression employees face when they cannot say for sure that they would have a job the next day until they successfully log on to the portal.  This practice is again predicated on the power to hire and fire with or without reasons that has been the bane of employment law in Nigeria. The NICN is now seeking to put an end to this practice. In a few cases, the court has held that it was contrary to International Labour Standards for employers to terminate the employment of their employees without stating reasons[14].

Oftentimes, the employees do not get to know until they have been completely removed from the system and the payment of salary in lieu of notice is not made until a much later date. There must be a valid notice of termination[15] and the NICN has held that where the salary in lieu of notice is not paid on the employee’s last working day or contemporaneously with termination, the termination is invalidated and wrongful[16].

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While there may be good reasons for termination with immediate effect, the employee should not be made to find out that he/she is no longer a staff at the point of logging on to the bank’s portal. This is traumatizing, depressing, dehumanizing and against all known rules of fairness.

Pre-emptive termination of employment

One sinister practice in the banking industry is termination of employment just before employees hit certain milestones that would entitle them to certain benefits under the terms of employment. In most cases, unsubstantiated allegations are relied on[17] to force out the staff. In Mrs. Mojisola Pitan v. UBA for example[18], the court found that UBA constructively dismissed the Claimant on the eve of her retirement from service and awarded damages accordingly.

Denial of access to justice in terms of employment

Beyond employment letters, the main document which embodies the terms of employment in the banking industry is the Staff Handbook of the various banks. For whatever reasons, banks deliberately refuse to avail staff copies of the handbook. The Handbook is located on the intranet and staff may be punished if found to have downloaded it. Most staff struggle to get copies for their Solicitors when their employment is terminated except for a few that were able to obtain copies when they were still in service. Yet, this vital document determines the fate of staff upon termination of employment.

The Handbook often incorporates far-reaching terms, including the mechanism for dispute resolution. The provision contains lengthy pre-action formalities, which, from experience, is only intended to delay or prevent an aggrieved staff from seeking redress. For example, the staff is expected to submit his grievances to the Human Capital Development department of the bank which is supposed to resolve the matter within 90days. Luckily, the NICN has adopted progressive interpretation of such clauses. In Mrs. Mojisola Pitan v. UBA for example, the court held that the Claimant Solicitor’s letter calling for a meeting to resolve the matter and the failure of the bank to agree to the meeting satisfied the requirement. In Yusuf Moshood Ayangbede v. UBA[19], the court declared UBA’s Alternative Dispute Resolution clause as unconstitutional on the grounds, inter alia, that it contains uncertain dispute resolution procedure and that it will shackle the claimant’s constitutional right to gain access to court. The court consequently nullified paragraph 6.7 of UBA Group Staff Handbook. Beyond the view of Justice Nelson Ogbuanya who delivered the judgment, it will be difficult to enforce a clause ‘located on the intranet’ and with no express consent by staff.

Lack of adequate terminal benefits

One major fault line in our employment law is lack of express statutory terminal benefits. In most other jurisdictions, there are legislative prescriptions on minimum benefits due to employees upon termination. The banking industry exploits this by paying peanuts to staff upon termination. The court is handicapped here because benefits accruable upon determination can only be determined by the terms of employment.

Conclusion

There are many other instances of unfair labour practice in the banking industry including indefinite suspension of staff, defamation etc. which has been addressed elsewhere by the writer[20]. The reality is that the prosperity in the banking industry has hardly trickled down due largely to unfair labour practices despite huge public investment.  The industry is exploiting Nigeria’s archaic and irrelevant labour laws to the disadvantage of employees. Though the NICN has in many cases attempted to curb the incidence of unfair labour practice in the industry using its expanded jurisdiction under the Constitution, the challenge is that one is not certain as to what the law is on employment issues until declared by the court. There is also the possibility that our appellate courts may undo what the NICN is currently doing.

It is therefore imperative that Nigeria reforms its labour laws to discourage unfair labour practices. The Minister of Labour, may evoke sections 20 (2) and 88 (1) (e) of the Labour Act to make regulations on unfair labour practices generally in Nigeria rather than issuing political statements. A more enduring approach is to completely overhaul our labour law through the legislative process. It is hoped that the ongoing attempt to amend the Labour Act by the National Assembly would be fast tracked and reworked for a comprehensive review of our over 50 years’ old enactment to bring it in line with international best practices.

Elvis is the Managing Partner of Law Future Partners
Email: elvis.easia@gmail.com; elvis.easia@lawfuturepartners.com
09017163850

Footnotes

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[1] See https://www.youtube.com/watch?v=fX0HYZdL7HY

[2] See https://guardian.ng/news/mass-sacking-in-banks-averted-as-cbn-wades-in/

[3] See Mix & Blake v. NUFBTE (2004) 1 NLLR (Pt. 2) 247

[4] See section 254C(1) (f) of the 1999 Constitution which empowers the court with jurisdiction over unfair labour practices and international labour standards.

[5]The Federal Ministry of Labour and Productivity in May 2011 released guidelines on Contract Staffing and Outsourcing in the Oil and Gas Industry tagged “Guidelines on Labour Administration: Issues in Contract Staffing/Outsourcing in the Oil and Gas Sector”. The main thrust of the guidelines is that regular jobs and core operations in the Oil and Gas industry should be done by permanent staff. There is no reason why a similar guideline or statutory provision should not be made to apply to the banking and other industries.

[6] See Anthony Agum v. United Cement Company Ltd.(UNICEM) Anor Suit No: NICN/CA/71/2013, unreported judgment of Hon. Justice E. N. Agbakoba, J., delivered on March 3, 2017; Mr. Morrison OwupeleInimgba v. Integrated Corporate Services Ltd & Anor. [2015] 57 NLLR (Part 195) 268 (NIC); and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) v. Mobil Producing Nigeria Unlimited (MPNU) [2013] 32 NLLR (Pt. 92) 243 (NIC) 322B – 328F

[7] See Elvis E. Asia, ‘’The Future of Employment Law in a Gig Economy’’, https://lawfuturepartners.com/?p=1564 and https://www.academia.edu/42864568/The_future_of_employment_law_in_a_gig_economy

[8] There are many international conventions relevant to discrimination and equal pay for equal work. They include the , Discrimination (Employment and Occupation) Convention, 1958 (No. 111), article 7 of the International Covenant on Economic, Social and Cultural Rights and Article 15 of the African Charter on Human and Peoples’ Rights which has been domesticated in Nigeria. The underlying principles have been incorporated into domestic legislations of many countries.  Though the principles, which is also reflected in section 42 of the 1999 Constitution, speaks more to the pay gap between men and women, they are applicable to general pay disparity where the staff performs the same functions. 

[9] Section 20 (3) of the Labour Act, Cap L1LFN, 2004

[10] See section 20 (1) supra.

[11] The Act in section 91 (1) defines a worker to mean any person who has entered into or works under a contract with an employer, whether the contract is for manual labour or clerical work or is expressed or implied or oral or written, and whether it is a contract of service or a contract personally to execute any work or labour, but does not include persons exercising administrative, executive, technical or professional functions as public officers or otherwise. The vast majority of employees in the banking industry may not qualify as ‘worker’ under the section.

[12] Recently, 116 Ex-staff of United Bank for Africa instituted an action against the bank for, inter alia, surreptitiously asking them to resign even though they were already locked out of the system. The suit is marked NICN/La/112/2020. See https://www.nairaland.com/5742518/116-ex-employees-sue-uba-n2bn

[13]UbongAsangausungv. Mainstreet Bank Registrars Limited, delivered on December 12, 2019, http://judgment.nicn.gov.ng/pdf.php?case_id=1905

[14] See Aloysius v. Diamond Bank Plc (2015) 58 N.L.L.R (Pt.199) 92, Aero Contractors Co. Ltd v. NAAPE & ORS decided on 2nd April, 2014, AfolayanAderonke v. Skye Bank, unreported Suit No. NICN/IB/08/2015 delivered on May 17, 2017

[15] See Jimoh Adisa & 4 ors v. Stallion Plastic Industries Ltd unreported Suit No. NICN/LA/239/2012, judgment delivered on 20th March 2019 where the court that posting of the notice of termination on the notice board did not meet the requirement of notice to the employee as enjoined by section 11(1) of the Labour Act.

[16] Bello Ibrahim v. Eco Bank Plc delivered on December 17, 2019, http://judgment.nicn.gov.ng/pdf.php?case_id=1906.  See alsoUbong v. Mainstreet Bank Registrars Limited (supra )and Edet v. Fidelity Bank, delivered on December 17, 2019, http://judgment.nicn.gov.ng/pdf.php?case_id=1915

[17] In pre-emptively terminating employment, banks are in the habit of impugning the integrity of staff through unjustified queries or minor infractions. In line with the decision of the NICN in Godwin Okosi Omoudu v. Prof Aize Obayan & Anor, (Unreported suit No: NICN/AB/03/2012 it can never be just for an employer to, without just and established cause, impugned the integrity of an employee and based on this impugnation, goes ahead to peremptorily terminate his employment. Similar conclusion was reached in Leonard Oyinbo v. Guinness Nigeria Plc., suit number NICN/LA/639/2012, delivered in October, 2019, where the court held that dismissal on false allegation is unfair labour practice.

[18] Suit No NICN/LA/314/2016 delivered on March 20, 2019. The writer was part of the team of lawyers that represented the claimant.

[19] Suit No. NICN/YL/03/2016, delivered on July 6, 2018, available online at https://judgement.nicnadr.gov.ng/details.php?id=2884

[20] See Elvis E. Asia, ‘’Rights of Employees on Termination of Employment’’, available online at https://lawfuturepartners.com/?p=1498

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