By Elvis Evbaruovbokhanre Asia
Introduction of Weekly Review of The Judgments of The National Industrial Court of Nigeria [WRJ-NICN]
As the labour and employment community continue to grapple with the expanded jurisdiction of the National Industrial Court of Nigeria (NICN) and the nuances of its far-reaching powers to apply International Best Practices (IBP) and Labour Standards, the debate on the extent and scope of the jurisdiction and powers of the Court as encapsulated in section 254C of the 1999 Constitution as amended, have continued unabated. The debates, notwithstanding, the unassailable fact is that the NICN has been constitutionally mandated to ensure that Nigeria’s labour jurisprudence is in tandem with global trends and best practices. This is more particularly expedient considering the global shifts in the world of work vis-a-vis Nigeria’s archaic legislations on Labour and Employment.
The implication of the above is that one cannot continue to rely on existing case laws to correctly ascertain the current position of the law without looking at the decisions of the NICN as may be reviewed by the Court of Appeal. Interestingly, the Supreme Court may not have the opportunity to review the decisions in view of the fact that appeals emanating from the NICN now terminate at the Court of Appeal. The implication of this is that stakeholders will have to place great reliance on the decisions of the court which are hardly reported, unlike the decisions of our appellate courts. It is, therefore, expedient to pay a closer attention to the decisions of the court, hence the inspiration for this publication.
The goal of the publication is to highlight the decisions of the NICN and the pronouncements of the Court of Appeal thereon with a review or commentary. This inaugural edition features three decisions of the NICN on important issues such as arbitration of employment disputes, enforcement of employee handbook, the necessity for the dichotomy between termination and dismissal, appointment and termination of a Managing Director and the application of IBP.
Cases considered in this edition
- Udom Ufok Obot v. Communication Network Support Services Ltd [1]
4/7/2024- Justice (Prof.) E.A. Oji
Main Issue of law
Arbitration of employment disputes under the Arbitration and Conciliation Act, 1988, now Arbitration and Mediation Act, 2023.
Summary of facts
The Claimant was employed by a Contract of employment dated 5th June, 2007 which provides that in the event of a dispute, the parties shall proceed to arbitration under the Arbitration and Conciliation Act. In defence to the Claimant’s claim for his entitlement on redundancy and pension, the Defendant contended, inter alia, that the Court lacks jurisdiction because of the arbitration clause.
Courts’ Decision
The court held that though it does not agree that the arbitration clause was smuggled into the employment because the Claimant signed it and is relying on the letter for other claims; arbitration under the Arbitration and Conciliation Act is not suitable for employment disputes, as employment is not a commodity. The court also found that the arbitration clause was vague.
Legal principles relied on
Arbitration of employment disputes under the Arbitration and Conciliation Act, now Arbitration and Mediation Act
- In as much as parties are bound by their agreement, the NICN is now hesitant to refer parties to arbitration under the Arbitration and Conciliation Act(now Arbitration and Mediation Act). That Act being applicable to commercial disputes, is not best suited for employment disputes in light of the ILO position on labour.
- “Labour is not a commodity” is the principle expressed in the preamble to the International Labour Organization’s founding documents. It expresses the view that people should not be treated like inanimate commodities, capital, another mere factor of production, or resources or as items of commerce.
- Where parties agree on arbitration under other conditions, outside the Arbitration and Conciliation Act, the Court can and do refer the parties to arbitration.
Commentary
This decision provides a veritable guide for the use of arbitration in employment contracts. As a matter of public policy, employment relationships and disputes are not simple commercial undertakings to which simple commercial rules apply. This is why the relevant law governing commercial disputes in Nigeria does not contemplate employment disputes as commercial disputes in respect of which section 5 of the Arbitration and Mediation Act, 2023 applies. A combined reading of sections 1(1) (5) and 91 (1) of the Act on the definition of the words ‘commercial arbitration’, ‘commercial’ and ‘court’ shows that the parliament intended to exclude employment-related disputes from the application of the Act. If the parliament intended to include employment disputes and relationships as part of ‘commercial arbitration’, it would have expressly provided for its inclusion. A review of the Act in this regard in light of the Constitutional provisions in section 254C (1) (3) and (4) vesting all jurisdictions on the National Industrial Court including appellate and supervisory jurisdiction over any arbitral tribunal dealing with labour and employment matters, leaves one in no doubt that employment disputes are not commercial disputes to which the Act applies. Employment disputes are a special class of disputes which can be termed statutory disputes that are not arbitrable in typical commercial arbitration. This inference can also be drawn from section 12 of the Trade Disputes Act which excludes the application of the Arbitration and Conciliation Act.
Though not referenced, the position had earlier been affirmed by Honourable Justice Kanyip in Giuseppe Francesco E. Ravelli v. Digitsteel Integrated Services Limited[2]. In that case, one of the parties to a contract had approached the NICN requesting that the Court exercise its discretion in appointing arbitrators to resolve the dispute between the parties. The Honourable Court held clearly that the Arbitration and Conciliation Act, now the Arbitration and Mediation Act, does not contemplate disputes arising from labour and employment issues and that such disputes cannot be referred to commercial arbitration.
It must, however, be noted that despite the fact that this authority was cited by the author in Charles Olaluwoye v Envivo Communications Limited & Ors[3], the Court per Hon. Justice J. A Damachi on June 13, 2024 took a different position when it held in response to the argument that labour and employment disputes are not arbitrable under the Arbitration and Mediation Act that ‘it was upsetting’ to make such an argument. This demonstrates the inconsistency in major important decisions of the Court; however, the majority view on this point is more in tune with the legal philosophy and jurisprudence of labour and employment law. This is very necessary especially when one considers the relationship between the employee and the employer in terms of bargaining capacity. The imbalance of power during employment negotiation leaves the employee with zero powers to determine the terms of the contract. There is also the fact that the cost of commercial arbitration may be well outside the reach of the employee and may ultimately deprive the employee of the opportunity to ventilate his grievance against the employer. For example, in Charles Olaluwoye’s case, his claim was for unpaid salaries, how can he successfully invoke commercial arbitration when he had not received any salary for months?
The hint of the court in the case under review, for the benefit of stakeholders, is that parties wishing to have Alternative Dispute Resolution (ADR) mechanisms enforceable should predicate it on the legal framework for ADR of the NICN under the 2017 Rules as endorsed by section 254C (1), (3) and (4) of the 1999 Constitution. Parties may also consider the Industrial Arbitration Panel under the Trade Disputes Act where applicable[4]. The limitation expressed in the case may extend to all ADR methods, hence, in Ayangbade v. UBA[5], the court held that paragraph 6.7 of the UBA Group Staff Handbook Policy Document No: HRG: 001, dated June 2010, which captures ADR, constitutes an improper denial of access to justice and therefore unconstitutional.
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’.
Footnotes
[1] SUIT NO: NICN/LA/191/2020. Full judgment available at https://nicnadr.gov.ng/judgement/judgement.php?id=9034
[2] NICN/LA/599/2016 delivered on February 16, 2018
[3] SUIT NO:NICN/LA/285/2023
[4] In FBN v. EMENIKE & ORS (2022) LPELR-58536(CA), the Court of Appeal held that by virtue of section 48 of the Trade Dispute Act, the Industrial Arbitration Panel, has jurisdiction over pre-employment rights, rights that enure to the job, employment rights which arise during the pendency of the employment rights and the post-employment.
[5] SUIT NO NICN/YL/05M/2020, delivered on November 9, 21. Full judgment available at https://nicnadr.gov.ng/nicnweb/details.php?id=5710&p=Yusuf%20Mashood%20Ayangbade%20-VS-%20United%20Bank%20for%20Africa%20Plc
