Rights of Employees in Termination of Employment – Elvis Asia

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Introduction

Many employees lost their jobs at the end of 2019. The most affected were bank employees. Unverified report has it that one bank practically ‘imprisoned’ some staff until they ‘voluntarily resigned’ their employment.  Many were threatened with dismissal and loss of benefits unless they resigned.

Unfortunately, employees are unaware of their rights during the course of termination of their employment.  Many choose, as it is typical of Nigerians, to ‘leave the matter in the hands of God or Allah’. This is partly attributable to the general notion and practice that employers have the right to terminate the employment of their employees with or without reasons. Case law even used terminologies reminiscent of slavery like ‘master’ and ‘servant’ to describe the relationship. The situation is not helped by Nigeria’s outdated Labour Act.

The good news is that things are changing. Buoyed by the Third Alteration of the Constitution[1] which vested it with the power to apply International Best Practices and Labour Standards[2], the National Industrial Court of Nigeria (NICN) is rewriting the rule book on termination of employment and related rights. This article highlights some of these developments and general statements of law on termination with a view to educating employees on their rights when their employment is terminated. Employers need to also be aware of possible grounds for claims against them in the event of wrongful termination.

There must be reasons for termination of employment

Prior to the Third Alteration of the 1999 Constitution, the general position was that employers could terminate employment with or without stating reasons. In fact, it was fashionable to state that ‘your services are no longer required’ in termination letters. 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[3]. The NICN also treated ‘services no longer required’ as redundancy which attracts redundancy payment under the employer’s redundancy policy[4].

Proper notice or payment in lieu must be given for a valid termination of employment

Employees are entitled to notice of termination or salary in lieu. A common practice by employers is that they terminate the employment of their employees with immediate effect and subsequently pay salary in lieu of notice along with other terminal benefits the employees are entitled to. The NICN has held that this practice is wrong and 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[5].  Also importantly, the court held that the employees are entitled to gross salary in lieu and not basic salary unless the terms of employment expressly states otherwise[6].

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Liability for constructive dismissal

It is not uncommon for employers to create a hostile working environment for an employee with a view to forcing the employee to resign. In some cases, the employer will put pressure on the employee to resign through direct and most often, subtle threats. In one case, the writer of this article was involved in at the NICN, the employee was asked to resign or be dismissed.

There are instances where the hostile working environment may not necessarily be with a view to getting the employee to resign. For example, where the boss is sexually harassing the employee or fails to promote the employee despite meriting promotion. Where an employee resigns because the employer has deliberately made working difficult; or the employee has been coerced, lured or otherwise made to resign, such employee is deemed to have been constructively dismissed[7]. Constructive dismissal entitles the employee to make a claim against the employer for damages.

Employees in outsourcing/contract staffing arrangements may claim damages for wrongful termination against the end-user

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, contract staffing can be and has been abused. This is one of the areas the NICN has come in to offer some remedy. The court has 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[8]. 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. The effect of this is that in deserving cases, the outsourced staff can institute actions against the contractor and end-user thereby increasing the chances of getting substantial damages in the event of wrongful termination of employment.

Loss of expectation interest

Another scenario is where an employer either terminates the employment of an employee or constructively does so in order to avoid meeting its commitment to the employee. This can happen for example where an employee is promised promotion upon meeting certain conditions. Failure to give the promotion may frustrate the employee to the point of resignation. The NICN has held in similar circumstances that there was loss of expectation interest in respect of which the employee is entitled to substantial damages[9].

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The principle of loss of expectation interest is pretty novel in Nigeria. It is contended that it may be employed in cases where employees are forced to resign or their employment terminated just before meeting a milestone that would have entitled them to substantial benefits.

Indefinite Suspension amounts to wrongful termination

An employer may suspend an employee pending investigation of alleged misconduct but the suspension cannot be unreasonable or indefinite without pay. An indefinite suspension without pay in the absence of an express provision in the terms of employment is wrongful and entitles the employee to claim arears of salaries and other benefits until the date of judgment in an action filed by the employee[10].

Substantial damages may be awarded for wrongful termination

The general principle of law before the NICN was that damages for wrongful termination were limited to salary in lieu of notice and accrued entitlements and benefits as agreed under the contract. The NICN has again moved away from merely awarding payment in lieu of notice as damages; the court is instead awarding substantial damages to reflect the unlawfulness of a termination or dismissal[11]. In one case, the court awarded about N77m against UBA for constructive dismissal[12] and recently, the court even went to the extreme of ordering reinstatement of the employee[13].

Possibility of defamation claim

Upon termination of employment, some employers, particularly in the banking sector, would publish notices to their staff about the circumstances in which an employee’s employment was terminated with a view to dissuading similar practice. However, where the publication is false and lowers the estimation of the employee in the eyes of reasonable members of society, the employer may be liable in an action for defamation[14].

Conclusion

The era where employees were equated to slaves is over. The NICN is more than ready to ensure equity in employer/employee relationships. An employee whose employment has been terminated in unpalatable circumstances should engage the services of an experienced employment lawyer to explore possible legal remedies available to him/her. Yes, God will take care of your future plans but let the law take care of the wrongful termination of your employment.

Elvis E. Asia is a Senior Counsel in Nigeria. Elvis can be contacted on: 09072546246, elvis.easia@gmail.com

[1] The Constitution of the Federal Republic of Nigeria (Third Alteration) Act No. 3 of  2010 elevated the National Industrial Court to the status of a superior court with expanded jurisdiction and powers

[2] section 254C (1) (f) and (h) of the 1999 as amended

[3] 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, Afolayan Aderonke v. Skye Bank, unreported Suit No. NICN/IB/08/2015 delivered on May 17, 2017

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

[5] Bello Ibrahim v. Eco Bank Plc, delivered on December 17, 2019, http://judgment.nicn.gov.ng/pdf.php?case_id=1906.  See also Ubong 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

[6] Ubong v. Mainstreet Bank Registrars Limited (supra).

[7] Mr. Patrick Obiora Modilim v. United Bank for Africa Plc, unreported Judgment in Suit No. NICN/LA/353/2012, delivered on 19th June 2014

[8] 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 Owupele Inimgba 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

[9] Mr. Patrick Obiora Modilim v. United Bank for Africa Plc (supra)

[10] See Adekunle v. United Bank for Africa delivered on May 21, 2014, http://judgment.nicn.gov.ng/pdf.php?case_id=616 and Lasisi Gbadegesin v. Wema Bank, delivered on February 23, 2012, http://judgment.nicn.gov.ng/pdf.php?case_id=348

[11] Olufemu Amodu v. Epesok Paper Mill Limited (2016),  http://judgment.nicn.gov.ng/pdf.php?case_id=1206. See also the case of British Airways v. Makanjuola [1993] 8 NWLR (Pt. 311) 276 and Section 19(d) of the NICN Act, 2006

[12] Modilim v. United Bank for Africa Plc supra.

[13] Bello v. Eco Bank Plc supra.

[14] It is uncertain which court has jurisdiction over such a claim. NICN regularly declines jurisdiction. See Brown v. University of Uyo & ors delivered on 11th June, 2018, https://judgement.nicnadr.gov.ng/details.php?id=1920; Otton v. University of Uyo (NICN/UY/06/2012) and Dr. Celestine U. Njoku v. Engr. Clinton C. Emekoma (NICN/OW/66/2014) and Joseph Faniwenmi & Ors. v. National Union of Chemical Foot Wear, Rubber, Leather and Non-metallic Product Employee Suit No. NICN/LA/431/2013 delivered on 29th April, 2014 http://judgment.nicn.gov.ng/pdf.php?case_id=593. There are conflicting decisions of the Court of Appeal on the issue. The latest decision suggests that NICN has jurisdiction. See BISONG v. UNICAL (2016) LPELR-41246(CA); AKPAN v. UNICAL (2016) LPELR-41242(CA); and MHWUN v. EHIGIEGBA (2018) LPELR-44972(CA)

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