The Employment Law Year 2021: A Review of Significant Developments in Labour and Employment Law

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By The Employment and Labour Lawyers Association of Nigeria (ELLAN)

2021 was an eventful year in the labourand employment law space in Nigeria. The year was defined by crippling strikes in the judiciary and health sectors as well as significant court decisions on various issues including clarifying the powers of the Minister of Petroleum to regulate the release of workers in the oil and gas industry, data protection/privacy as a fundamental human right and the confirmation of the exclusive jurisdiction of the National Industrial Court of Nigeria (NICN) over maritime labour claims.

We also witnessed activity by regulators and the legislature which impact on workers’ rights and employers’ obligations. In this first of what is intended to be an annual publication, we highlight these developments as we look ahead to 2022.

INDUSTRIAL DISPUTES 

Judiciary Workers Strike

The Judiciary Staff Union of Nigeria (JUSUN) embarked on the longest industrial action in its history that lasted from 6 April – 9 June 2021, a period of 64 days. The industrial action which paralysed activities in courts across the country, was declared over the refusal by some state governments to implement the provisions of the Constitution of the Federal Republic of Nigeria 1999 (the Constitution) which grants the judiciary financial autonomy. This industrial action came on the heels of the Covid-19 pandemic which had crippled economic activities, including the judiciary in the previous year.

It would be recalled that the Abuja division of the Federal High Court (FHC) had in January 2014, held that financial autonomy for the judiciary is a mandatory constitutional requirement that must be complied with by the executive arm of government. In addition, on 22nd May 2020, President Muhammadu Buhari signed the Implementation of Financial Autonomy of State Legislature and State Judiciary Order, 2020 (Executive Order No. 10 of 2020) which created a first line charge on the Consolidated Revenue Fund for allocation of amounts already appropriated to state legislatures and judiciary. It also mandated the Accountant-General of the Federation to deduct from source, amounts due to state legislatures and judiciaries from the monthly allocation to each state for states that refuse to grant such autonomy.

Opinions were sharply divided among stakeholders about the necessity of the strike with some taking the view that it was a political issue while others saw it as a constitutional imperative that the state governors must comply with. The strike ended after a truce was brokered by the Chief Justice of Nigeria, which saw some state governments passing appropriation laws on financial autonomy of state legislature and state judiciary in their states.

Resident Doctors Strike

Doctors organised under the Nigerian Association of Resident Doctors(NARD) embarked on an indefinite strike on 2nd August 2021 that lasted for a period of 63 (sixty-three) days. The strike was caused by pay disputes between NARD and the Federal Government of Nigeria, following the failure of the government to honour an agreement reached with the association earlier in the year, at the end of the previous strike in April 2021 over unpaid salaries and allowances, amongst other demands. Following this, the association (which represents approximately 40 percent of doctors in the country) embarked on a strike action. The strike commenced as Nigeria was experiencing its third wave of the COVID-19 pandemic.

The strike was suspended following negotiations with the Federal Government of Nigeria and an order of the NICNfor the strike to be suspended to give room for negotiations.

ASUU Strike Threat

The Academic Staff Union of Universities (ASUU) continued its agitation for the Federal Government of Nigeria to honour the agreement it entered with the union after the suspension of the 9 months’ strike in December 2020. On 15th November 2021, ASUU issued a 3 week notice of its intention to embark on another indefinite strike action if the Federal Government of Nigeria failed to implement the provisions of the agreement. The notice created panic among stakeholders about the devastating effects another strike would have on the deplorable university system.

Some of ASUU’s outstanding demands are:

a)Full implementation of the 2009 Federal Government of Nigeria (FGN)/ASUU Agreement as renegotiated in 2021.

b)The implementation of all outstanding provisions in the February 2021 FGN/ASUU Memorandum of Action.

c) The immediate deployment of ASUU’S preferred human resource management software, called the University Transparency and Accountability Solution (UTAS).

d) Immediate payment of outstanding Earned Academic Allowances (EAA) and promotions arrears.

e) Immediate release of the report of the Presidential Visitation Panels to federal universities in 2021.

f) Immediate action on the recommendations of the Committee on State Universities.

At the time of this publication, the notice period had expired and ASUU is yet to embark on the planned strike action following reports of the release of funds by the Federal Government to ASUU to clear backlog of earned allowances of university lecturers.

EMPLOYMENT LITIGATION

PENGASSAN v Chevron[1] On release of workers in the oil and gas industry

On 26th February 2021, the NICN delivered a judgment regarding the validity of the Directorate of Petroleum Resources (DPR) Guidelines for the Release of Staff in the Nigerian Oil & Gas Industry 2019 (“the Guidelines”), in a suit filed by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) against Chevron Nigeria Limited over its planned retrenchment of workers. PENGASSAN argued that the exercise could not be carried out without the prior consent of the Minister of Petroleum Resources.

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The NICN, however, held that it is not mandatory for the holder of an Oil and Gas Industry Service Provider (OGISP) licence to obtain the consent of or provide notification to the Minister before embarking on any staff reduction, release or redundancy. The rationale for the Court’s decision is that such requirement would amount to an impediment to the freedom of parties to contract where the terms of the Guidelines have not been incorporated by reference into the contract of employment.  The NICN further held, that the Petroleum Act, Cap P10, LFN 2004, does not empower the Minister or the Director on behalf of the Minister to make the provisions stated in the Guidelines, and as a result,  the Guidelines cannot create such an obligation on a license holder.

Digital Rights Lawyers Initiative v National Identity Management Commission (NIMC) – On data protection as a fundamental human right.

In Incorporated Trustees Digital Rights Lawyers Initiative & Ors v. NIMC[2], the Court of Appeal clarified that the right to data rectification is a fundamental right, subsumed in the right to privacy under Section 37 of the Constitution of the Federal Republic of Nigeria, 1999 (CFRN).

The appeal was filed against the judgment of the High Court of Ogun State in a suit filed by one Mr. Adeyemi Toro, who had registered with the NIMC for the issuance of the National Identity Card and was issued a National Identification Number Slip which bore a month of birth different from his actual month of birth. He then applied to the NIMC for the rectification/correction of his date of birth and was asked to pay a fee of N15,000.00 (Fifteen Thousand Naira only) which he objected to, claiming that it violated his fundamental right to private and family life as guaranteed by Section 37 of the CFRN.

While the appeal was lost on jurisdictional grounds (with the court holding that the suit was in reality a challenge to an administrative action charging fees for data rectification and not a fundamental rights enforcement action), the Court of Appeal held that personal data protection as provided in the National Data Protection Regulations generally falls under the fundamental rights to privacy guaranteed in Section 37 of the CFRN.

This is the first appellate decision on the point in Nigeria and provides judicial support for the entrenchment of data protection and privacy as a constitutional right. It is an important decision for employers and employees to note because it lends credence to the view that data privacy breaches can be the basis of a breach of fundamental rights claim within the workplace.

MT Sam Purpose v Amarjeet Singh Bains– On exclusive jurisdiction of the National Industrial Court over maritime labour claims –

On the 5th of March 2021, the Court of Appeal, Lagos Division, delivered judgment in the case of MT Sam Purpose & Anor v Amarjeet Singh Bains& 6 Ors[3] confirming the exclusive jurisdiction of the NICN over maritime labour claims. The Court of Appeal relied on the provisions of the Constitution, the Admiralty Jurisdiction Act (“AJA”), the Merchant Shipping Act (“MSA”), the Labour Act and case law, to hold that the NICN is the court vested with exclusive jurisdiction to entertain maritime labour claims bordering on the wages of crew members and or seamen.

The respondents, as plaintiffs at the FHC, filed an action against the vessel MT Sam Purpose seeking several reliefs including claims for crew wages, cost of Admiralty Marshall expenses, cost of arrest and detention of vessel, general damages and pre-judgment interest sum. An application for the arrest of the vessel was also made which was granted by the Court. The owners of the vessel subsequently challenged the jurisdiction of the FHC to entertain the matter, relying on Section 254C(1)(a) and (k) of the Constitution and applied to discharge the order of arrest of vessel and to strike out the suit for want of jurisdiction. The FHC dismissed the application, leading to the appeal.

The Court of Appeal adopted a literal approach to the interpretation of the provisions of Section 254C(1)(a) and (k) of the Constitution and held that the intention of the drafters is to confer on the NICN exclusive jurisdiction over the subject matter of the items listed in that section, which includes maritime labour-related matters, inclusive of crew wages. What this means is that where the principal claim being contemplated in an action is one connected to labour or employment, such a dispute is within the exclusive jurisdiction of the NICN.

This judgment has proven to be controversial as the FHC had previously exercised exclusive jurisdiction over maritime labour claims. The decision represents another example of the increasing influence and powers of the NICN following the amendment of the Constitution in 2011 via the Constitution (Third Alteration) Act.

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Abe AdewunmiBabalola v. Equinox International Resources Limited – on proration of salary for periodic employees[4]

The prevailing practice when paying terminal benefits of a disengaged employee is to prorate the salary for the number of days worked in the month of disengagement. In Babalola v Equinox, Equinox terminated the appointment of the claimant who was its erstwhile Head of Human Resources and Administration. The claimant worked for 7 days in September 2012 and claimed for recovery of arrears of salaries and entitlement from June to August; and a pro-rated portion of the salary for September 2012.

However, the NICN held that pro-rata payment is not applicable to periodic employees. The Court relied on the earlier case of Grant Mpanugo v. CAT Construction Nigeria Limited & Anor[5] in holding that an employer is liable to pay full salary to the employee for that exit month and not a fraction (corresponding with the days on which the employee worked during that month). On this basis, the Court held that the claimant was entitled to payment of his full salary for September 2012, being the last month of his employment before his exit by way of termination on 7th September, 2012.

This decision is significant because it upends a practice that has become well entrenched in the workforce. It is left to see whether the decision will be overturned on appeal. In the interim, human resource managers need to be guided by this decision in disengaging employees.

LEGISLATIVE AND REGULATORY INTERVENTIONS

Finance Act Amendment to Personal Income Tax Act

The Finance Act 2020 (the Act) which was signed into law by the President on 31st December 2020 took effect from 1st January 2021 with tax reforms to the Personal Income Tax Act amongst others. The changes to the Personal Income Tax Act include:

  • Amendment of the rule on Significant Economic Presence (SEP) which now applies to include non-resident individuals, executors or trustees. The Minister of Finance will subsequently issue rules to define SEP as related to the Personal Income Tax Act (“PITA”).
  • Annual premium paid during the year preceding the year of assessment to an insurance company in respect of insurance on the individual’s life or the life of his spouse is now allowable as a deduction.
  • Incomes of N30,000.00 (Thirty Thousand Naira Only) or less are now exempted from tax.

The last change is particularly important and commendable as it is part of the reliefs granted by the government following the COVID-19 pandemic and will contribute to easing the burden on the less privileged in the workforce.

NBA Sexual Harassment Policy

Worthy of mention as a highlight of 2021 is the Nigerian Bar Association (“NBA”) Sexual Harassment Policy (“the Policy”), as this is the first of its kind in the legal profession. The document has 17 (seventeen) Articles with its objective to provide a safe environment for all employees free from discrimination and sexual harassment at the workplace. The Policy Statement further states that “the Nigerian Bar Association Women Forum (NBAWF) will operate a zero-tolerance policy for any practice of sexual harassment. Any person found to have sexually harassed another will face disciplinary action. All complaints of sexual harassment will be treated with respect and in confidence. No one will be victimized for making such a compliant.”

While the Policy does not have the force of law, it provides guidance for employers within the legal profession (although by Article 4, the Policy also professes to apply in all sectors of employment whether public or private) to deal with issues of sexual harassment in the workplace.

The Policy is quite commendable, especially in light of the ILO Convention C190 on Violence and Harassment in the Workplace and the recent decision of the NICN in EjiekeMaduka v. Microsoft &Ors[6] holding employers vicariously liable for sexual harassment claims perpetrated by employees in its organization. Under the Policy, employers are required to adopt a sexual harassment policy in the workplace and members of staff trained on the content of this policy.

PENCOM Non-Interest Fund VI

The National Pension Commission (“PENCOM”), the industry regulator of pension matters in Nigeria, recently introduced a Non-Interest Fund (Fund VI) following the demand by Retirement Savings Account holders for the opportunity to invest their retirement savings in non-interest instruments. The Fund complies with Sharia principles of investment in furtherance of the implementation of PENCOM’s multi-fund investment structure created in 2018, which seeks to provide investment portfolio choices to pension contributors and retirees.

Non-interest compliant instruments are defined as financial securities and specialist investment funds that comply with the provisions of Islamic Commercial Jurisprudence (Shari’ah) and any other established non-interest principles, as approved by the Financial Regulation Advisory Council of Experts (FRACE), or any other body constituted by the Central Bank of Nigeria and/or Securities and Exchange Commission, from time to time[7].

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RSA Transfer Window

On 16 November 2020, PENCOM issued a new regulation pursuant to Section 13 of the Pension Reform Act, 2014 (“PRA”) which permits the transfer of Retirement Savings Accounts (“RSA”) between Pension Fund Administrators (PFAs) (“The 2020 Regulation”).

Although section 13 of the PRA provides that an RSA holder may transfer his RSA from one PFA to another, not more than once a year, subject to the guidelines issued by PENCOM, the guideline was not issued by PENCOM until year 2020, and so, it was not possible for employees to change their PFA. This meant that everyone had to remain with the PFA they chose when the PRA was first enacted in 2004 or when they set up their RSA, even if the employee were to change his/her employment.

With the implementation of the 2020 Regulation and the opening of the transfer window in 2021 , a total of 31,518 RSA accounts with a value of approximately N148,000,000,000 (One Hundred and Forty Eight Billion Naira) in pension assets was transferred as at the third quarter of 2021.

Asides providing RSA holders with choice in the management of their RSAs, the opening of the transfer window has increased competition among PFAs and this should improve on service delivery within the pensions industry.

Paternity Leave in the Civil Service

The Federal Government of Nigeria on 29th September 2021 approved a 14-day paternity leave for fathers with new born and adopted babies (less than 4 months old) in the employment of the Federal Government. Before now, the concept of paternity leave was not recognised under any federal legislation and only some states like Lagos and Enugu implemented the concept of paternity leave.

Mandatory Vaccination in the Civil Service

As Nigeria enters the fourth wave of the COVID 19 pandemic, the Federal Government announced that with effect from 1st December 2021, all federal government employees would be required to show proof of Covid-19 vaccination or present a negative Covid-19 PCR test result done within 72 hours to gain entry into all the federal government offices in Nigeria and missions abroad.

Expectedly, the announcement was met with resistance by organized labour and criticisms by other stakeholders including the NBA on the ground of it being a violation of the fundamental human rights of the workers.

Edo, Ondo and Kaduna States have also followed the lead of the Federal Government by demanding proof of vaccination before entry into government offices.

2022: A LOOK-AHEAD

Mandatory Vaccination Litigations

We  anticipate litigations over the decision by government entities and some private employers requesting mandatory vaccination as a condition for accessing the office premises and for the continued employment of its workers in 2022. Already, the Chairman of the Nigerian Bar Association Section on Public Interest and Development Law, Dr. Monday Ubani, has issued a pre-action notice to the Federal Government to challenge its directive. There is a similar action filed by a Charles Osaretin pending at the FHC, Port Harcourt challenging the directive of the Edo State government.

With the Federal Government taking the lead, we also expect to see more private sector employers requiring the compulsory vaccination of employees before accessing the office premises. A court decision on the issue is likely within the year.

Subsidy Protests

In the course of the year, the Federal Government announced that the subsidy on petroleum products will be removed effective July 2022. This policy is likely to lead to an increase in the pump price of petroleum products with the Nigerian Upstream Regulatory Commission (successor to the Nigerian National Petroleum Corporation- NNPC) hinting that the price may increase to as much as N340/liter.

Expectedly, the announcement has met stiff resistance from organized labour. On 17th December 2021, the Nigerian Labour Congress (NLC) announced nationwide protests slated for 27th January and 1st February, 2022 against the policy. These protests are known to cause major disruptions to the economy. Employers and employees need to factor this into their plans for the year to ensure their safety and minimize disruptions to their business.

Industrial Unrest

With many of the demands by striking unions left unresolved and a temporary truce achieved, it is likely that there will be strikes by ASUU and NARD in 2022. We hope that the Federal Government and the unions will adopt negotiation in resolving these disputes.

This is a publication of The Employment and Labour Lawyers Association of Nigeria (ELLAN). It is only for informational purposes and is not intended to be legal advice. Enquiries about this publication and about ELLAN should be sent to ellannigeria@gmail.com

Footnotes

[1]  (Unreported Suit) NICN/LA/411/2020 – Judgment delivered on 26th  February, 2021  

[2] (Unreported suit) LPELR-55623(CA)

[3] (Unreported Suit) CA/LAG/CV/419/2020

[4]  Unreported Suit No: NICN/LA/166/2015, the judgement of which was delivered June 17, 2020)

[5] Unreported Suit No. NICN/LA/660/2015, the judgment of which was delivered on 20 September, 2019),

[6] Suit No: NICN/LA/492/2012, judgement delivered on 19 December, 2013

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