By Elvis Evbaruovbokhanre Asia
Case: Bukonla Abimbola (Trading under the name and style of Bukky Joy-Bright Ventures) v. Nigerian National Petroleum Corporation & Anor[1]
Judge: Justice (Prof.) E.A. Oji
Date: 3/7/2024
Main Issues of Law
- Determination of the existence of an employment relationship.
- Jurisdiction of the NICN on disputes arising from contract for services.
Summary of Facts
The Claimant entered into a contract with the Defendant for cleaning, gardening, and waste disposal at the Defendant’s office and surrounding environment in Lagos. The contract was subject to annual renewal, contingent on satisfactory performance. The last renewal occurred on 27th June 2019, effective from 1st July 2019 to June 2020. However, by a letter dated 6th January 2020, the Defendant terminated the contract. The Claimant initiated an action for wrongful termination of employment and sought damages for the unexpired term of the contract. The Defendant argued that the agreement was “a contract for service” and not “a contract of service,” and that Bukky Joy-Bright Ventures was never an employee.
Court’s Decision
The court held that, under international labour jurisprudence and the definition of a worker in section 91 of the Labour Act, the primacy of facts is applied in determining an employment relationship. Based on the facts, the court found that an employment relationship existed. The court further held that the termination was wrongful, as the contract stipulated that renewal was automatic unless there was a lack of satisfactory performance, which was not the reason for the termination. Consequently, the court awarded the Claimant the value of the unexpired term of the contract (from January to June 2020), along with general damages.
Legal Principles Relied On
a) Determination of the question of whether there is employment relationship
As laid down by international labour jurisprudence, the court applies the primacy of facts in determining employment relationships. This principle is detailed in the ILO Report titled “The Scope of the Employment Relationship” (ILO Office: Geneva, 2003, pages 24-25). The primacy of facts is consistent with the definition of a contract of employment in section 91 of the Labour Act, which recognizes “an agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker.”
b) Jurisdiction of the NICN on disputes arising from contract for service
In the decision of the Supreme Court of Nigeria in Shena Security Co. Ltd v Afro Pak (Nig) Ltd & 2 others(2008) 18 NWLR (Pt. 1118) p. 82, where the Court was faced with the issue of whether the contract to supply security guards and supervisors by the Appellant to the Respondents was a contract of service or one for service to qualify the Appellant as a worker; the Court restated the meaning of a worker under the Labour Act as referring to any person who has entered into or works under a contract with an employer whether the contract is for manual or clerical work or is expressed or implied oral or written and whether it is a contract of service or a contract to personally execute any work or labour. Such a contract, according to the Supreme Court is commonly referred to as contract for service. By section 254(C)(1)(a) and (k) of the Constitution, the NICN has jurisdiction over any matter relating to and connected with labour, employment, and non-payment of salaries and wages.
Commentary
This decision further affirms the NICN’s stance on the dichotomy between contracts of service and contracts for services. The court has consistently held that, in light of its expansive jurisdiction under section 254(C) of the 1999 Constitution, it has authority to entertain general labour and employment matters, regardless of whether the contract is termed ‘service’ or ‘for service.’ The court has anchored this position on the Supreme Court’s decision in Shena Security Co. Ltd v. Afro Pak (Nig) Ltd & Ors, which holds that a ‘for services’ contract can sometimes be classified as employment when the facts demonstrate the elements of an employment relationship[2]. This approach may be justified by public policy considerations, which are paramount in labour and employment law. Employers often attempt to mask employment relationships through legal manoeuvres, especially in the gig economy, where platforms frequently disguise employment as independent contracting. Many countries are adopting regulatory measures to ensure fairness in such scenarios.
However, in this particular case and others decided by the court, the court may have overreached, and such an unrestrained approach could be detrimental to commerce, as it limits businesses’ ability to legitimately outsource non-core functions. In attempting to protect workers in disguised employment situations, the court has set a precedent that could potentially classify almost all services rendered by independent contractors as employment, thus bringing them within the NICN’s jurisdiction. This would imply that any contract for services, including those for construction, professional services, cleaning, IT support, and consultancy, could be construed as creating an employment relationship. The court’s interpretation, particularly in Alphacyn Nigeria Limited v. Registered Trustees of Prince and Princess Estate Residents Association & Anor[3], extends to contracts that involve some form of labour. For instance, in Fedison Manpower Supply Ltd v. Niger Blossom Drilling Nigeria Ltd[4], the court ruled that a contract for the supply of staff was labour-related and thus within the NICN’s jurisdiction.
While the court claims to rely on international instruments for the definition of employment and labour, it is doubtful whether there is anywhere in the world where clear cases of outsourcing are classified as employment. The writer’s view is that the focus should be on targeting disguised employment situations, not on expanding the NICN’s jurisdiction over all contracts for services. This current stance could create uncertainty around the court’s jurisdiction and detract from its core mandate as a specialist employment and labour court.
In light of this decision, employers should review their service agreements if they wish to maintain independence from service providers. Decisions like this one may also have implications for tax and other statutory obligations for employers.
Elvis E. Asia is the Managing Partner of Law Future Partners and a PartneratBols Attorneys, Nigeria. He has an LLB, Ambrose Alli University; and LLM from the University of Lagos. He is a member of the Chartered Institute of Arbitrators, United Kingdom, Institute of Chartered Secretaries and Administrators of Nigeria and the Chartered Institute of Taxation of Nigeria. Elvis is the author of the book ‘Oil and Gas Insurance and Nigeria’s Local Content Policy’
[1] SUIT NO: NICN/LA/416/2020. Full judgment available at https://www.nicnadr.gov.ng/nicnweb/details.php?id=9033&p=Bukola%20Abimbola%20-VS-%20Nigerian%20National%20Petroleum%20Corporation%20&%20ORS
[2] See also Alphacyn Nigeria Limited v Registered Trustees of Prince and Princess Estate Residents Association & Anor SUIT NO. NICN/ABJ/57/2023, delivered by Hon. Justice Kanyib on 26 JULY 2023 . available online at https://www.nicnadr.gov.ng/nicnweb/details.php?id=8139&p=Alphacyn%20Nigeria%20Limited%20-VS%20Registered%20Trustees%20of%20Prince%20and%20Princess%20Estate%20Residents%20Association%20&%20ORS
[3] supra
[4] Suit No. NICN/YEN/444/2016, delivered on 29 March 2022. Available online at https://www.nicnadr.gov.ng/judgement/details.php?id=6983