An Appraisal of the Grounds for Dismissing an Employee in Nigeria


By Ayanbanjo Adeola


It is without a doubt that an employer and employee relationship is governed by certain laws in Nigeria such as the Constitution of the Federal Republic of Nigeria,1999, The Labour Act, 2004, The employee’s compensation Act, 2010, The Pension reform Act, 2014, Factories Act, 2004, Trade Union Act, 2004, etc. However, this paper seeks to examine the grounds of dismissing an Employee in Nigeria as against the already established grounds in our laws.


By virtue of section 92 of the Labour Act, 2004, An employer means any person who has entered into a contract of employment to employ any other person as a worker either for himself or for the service of any other person and includes the agent, manager or factor of that first-mentioned person and the personal representatives of a deceased employer. See also Onumalobi v NNPC on the meaning of an employer.
An employer is an individual or an organization in the government, private, nonprofit, or business sector that hires and pays people for their work. As the authority within an organization, the employer defines the terms of employment for employees and provides the agreed-upon terms such as the salary. Simply put, an employer is a person, company, or organization that employs people and pays them for the work done.


It should be noted that the Labour Act uses the word “workers” in describing an employee and it defines a worker as 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, any person employed otherwise than for the purposes of the employer’s business or persons exercising administrative, executive, technical or professional functions as public officers or otherwise or members of the employer’s family or representatives, agents and commercial travellers in so far as their work is carried on outside the permanent workplace of the employer’s establishment or any person to whom articles or materials are given out to be made up, cleaned, washed, altered, ornamented, finished, repaired or adapted for sale in his own home or on other premises not under the control or management of the person who gave out the articles or the material or any person employed in a vessel or aircraft to which the laws regulating merchant shipping or civil aviation apply. An employee is someone who works for another person who controls what is to be done and how the job is performed, an individual that is hired to work for a person or company that pays them a wage or salary in return. An employee is a person, company or organization that hires and pay for work performed. They are classified as people who take direction from other professionals within the company.

Generally, a master or employer is entitled to suspend/retire/terminate or dismiss his servant’s or employee’s appointment for a good or bad reason or no reason at all, see the case of Commissioner for works, Benue state v devcon ltd . However, in recent judicial decisions of the National Industrial Court, this is no longer the position as in the cases of Duru v Skye bank plc and Aloysius v diamond bank plc , it was held that an employer is bound to give reasons for terminating an employee’s contract. In fact, in the case of Bello Ibrahim vs. Eco Bank Plc , it was held, that an employer is bound to give reasons for terminating the employment of an employee, the absence of which such termination will be rendered ineffectual and declared wrongful. Thus, From the cases highlighted, it is pertinent to note that the current position is that an employer is bound to give reasons for dismissing an employee.

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Although the Labour Act in section 9(7) already stated some grounds upon which an employee can be terminated – viz  by expiration of the stipulated period,,  by the death of the worker before the expiry of that period, by notice in accordance with section 11 of the Act or in any other way in which a contract is legally terminable or held to be terminated. However, there are certain judicial decisions illustrating grounds of dismissal and these shall be examined below:


The law is settled that where an employee steals or engages in outright fraud, he must disgorge his loot and is liable to instant dismissal without the benefit of any sort. See the case of Boston Deep Sea Fishing v Ansell where it was held, that where an employee is guilty of gross misconduct, and this has been defined as the conduct of a grave and weighty character as to undermine the confidence which should exist between the employee and his employers or working against the deep interest of the employer, he could be lawfully dismissed summarily without notice and without wages.
There are certain general standards that equity has imposed on an employee such as loyalty, good faith and avoidance of a conflict of duty and self-interest, enjoining employees to stick to norms of exemplary behaviour. The duty includes refraining from actions contrary to the employer’s legitimate interests, not competing with the employer or seeking appropriate business opportunities or assets. The Supreme Court decision in Ajayi v Texaco Nigeria Ltd , where the basis upon which the appellant was dismissed was that he had become disloyal by sabotaging the implementation of the employer’s policy on indigenous and working against the essential interest of the employer. The court held that this conduct is gross enough to ground dismissal. See also Asaolu v Olaiya Fagbamigbe Ltd , chukwumah v shell petroleum development co (Nig) Ltd .


Whistleblowing occurs when an existing or former employee disclosed information that he reasonably believes evidence a violation of any law, rule or regulation or gross mismanagement or gross waste of funds, an abuse of authority or a substantial and specific danger to public health and safety. The justification for whistleblowing lies in the view that employees owe loyalty not only to the employer but also to society. It recognizes that people are not only responsible for carrying out the rules and regulations of any society but also for seeing that others do the same. One should distinguish the fidelity duty from whistleblowing, the duty of fidelity relates to the failure of an employee to disclose to his employer facts that may injure his business interest while whistleblowing is concerned with disclosing information at a time when an employee should keep his mouth sealed.

An employee has the duty to carry out his activities with due care. This duty however lies on professionals who have undergone formal or informal training. The courts are not willing to impose a duty of skill on a person who does not possess a particular skill that he warrants to his employer nor to an employee who occupies a position as a result of promotion. One should however note that an act of neglect or carelessness or forgetfulness doesn’t generally justify instant dismissal as a reasonable man is bound to commit errors.
In Ningi v First Bank of Nigeria plc , where the appellant an accountant, opened an account for a prospective customer without obtaining due reference on him in accordance with banking practice and express instructions of his employer. The customer later defrauded bank #868,201.60. The magnitude of the fraud influenced the court of appeal in concluding that the singular act of negligence could ground dismissal. Also, in Yusuf v Union Bank of Nigeria , the appellant diverted money paid into a customer’s account to the credit of his friend’s account, his defence was that it was unintentional. The Supreme Court upheld his dismissal.

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Failure of an employee to report for work without permission when he is scheduled to do so is absenteeism. This, however, does not include employees who stay away from work without prior permission but who subsequently receive authorized leave for real or feigned reasons. It should be noted that whatever the cause of absenteeism from work, it has a most disorganizing effect on an organization, not only is it a form of financial loss it also leads to dislocation of work and loss of discipline. In Udegbunam v Federal Capital Development Authority , the appellant left his duty post at Abuja to pursue post-graduate studies at the University of Lagos without his employer’s permission. The Supreme Court upheld the termination of his appointment, the judge held that the appellant’s misconduct was gross enough to earn him dismissal and since termination is a lesser punishment, he had no right to complain. Also, in Osakue v Federal College of Education (Technical) Adana , the appellant, a senior lecturer with the respondent, pursued a full-time doctoral programme in the University of Benin without due permission. On his employer detecting the cause of his absence, he was terminated. His action for wrongful termination of his employment failed. For more clarification on this ground, see the case of OBO v Commissioner for Education, Bendel State .


It is settled that where an employee’s conduct adversely affects the advancement of the employer’s business and brings him odium he retains authority to discipline the refractory employee. Thus, in Moeller v Monier Construction co (Nig) Ltd , the plaintiff habitually brought in whores into his residence which was provided by the defendant employer. They came in the evening and left in the morning. Savage J, stated, “it is true that bringing in women into his room for the night is his private affair but when he is occupying the company’s flat such a thing is bound to affect the company adversely. The public is bound to conclude that the company encourages immorality amongst African girls by allowing their employees to bring bad girls into their premises. One cannot call a girl who is picked up in a hotel by a man and taken into the man’s room for the night a good girl, be she an African or European”

The above are a few grounds where the court has upheld the dismissal of employee asides from the grounds stated in section 9(7) of the Labour Act. However, in situations where an employee alleges that he or she has been wrongfully dismissed, there are certain remedies available to such employee and these will be briefly examined below

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a. Damages

This is the main and usually the only remedy for wrongful termination at common law because the law regards the relationship of master and servant as one of personal service. So, where an employer has breached the contract of employment thru the wrongful termination of the worker’s contract, the courts are reluctant to force the willing employee back on the unwilling employer. Damages, therefore, remain the most important remedy given by common law for wrongful termination of employment. See the case of G.B. Olivant (Nigeria) v I. B. Agbabiaka .

b. Pension and gratuity right is a very important fringe benefit that may have a direct bearing on the calculation of damages for wrongful dismissal. The general principle applicable to assessing the damages for loss of pension rights would seem to be that employee ought to be put in as good a position as he would have been in if the employer had performed the contract, probably in a manner least disadvantageous to himself. The claim for damages for loss of pension rights emanating from wrongful dismissal is a claim for the loss of the increase in the value of the pensions that the employee would have enjoyed but for the termination. But if the continuation of pension contributions, or the ultimate payments of benefits, is a matter within the discretion of the employer and not a legal obligation upon him, then the rule of least advantageous performance applies, and no damages are payable under this head. See Beach v Reed Corrugated Cases Ltd .

c. Bonus payment.
Bonus payment may be recoverable by an employee whose employment has been terminated if the payment has become part of the contractual remuneration of the employee but not otherwise. See the case of Management of Union Bank of Nigeria Ltd. v National Union of Banks Insurance and Financial Institutions Employees .

d. Incentive payments and Commission.

Where it can be shown that it was the employer’s contractual obligation to make incentive payments to the employee, such payment is recoverable, but otherwise, was it a mere expectation. In the latter case, the principle of least disadvantageous performance will apply.

It should be noted however that in assessing the damages for loss of rights by an employee wrongfully dismissed, the employee ought to be put in a good position as he would have been if the employer had performed the contract in a manner least advantageous to himself.

In conclusion, it is pertinent to mention that asides from the grounds mentioned in this work, there are several other grounds on which the courts have reasonably adopted to lean on as grounds for dismissal of employees. The court is a court of justice that expects that employers of labour adopt the best and modern practices in regards to the termination of employment agreements, one of which is stating a reasonable ground for the termination of employment. And thus, organizations and employers of labour must comply with the changes effected by our case laws and modern trends which seek to make the employer-employee relationship better.

Adeola is a graduate of law awaiting admission into the Nigerian  Law School


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