By Elvis Evbaruovbokhanre Asia
Case: Nwikina, Barikui Lovina V. U&C Microfinance Bank Ltd[1]
Judge: Justice Z. M. Bashir
Date: 01/11/2024
Main Issues of Law
- Right of Employer to Dismiss Employee for Misconduct Bothering on Crime
- Right to Fair Hearing in Disciplinary Proceedings
Summary of Facts
The Claimant’s employment was terminated on the grounds of unauthorized posting of a cheque and opening of accounts that led to fraud against the Defendant. The Claimant was interviewed by a disciplinary committee, which produced a report forming the basis of the termination. However, the Claimant’s case was, inter alia, that she was neither given any query nor formally informed of the basis for the disciplinary committee’s proceedings. The Defendant justified the termination and counterclaimed for a loan the Claimant had taken as an employee.
Court’s Decision
The court held that the interview of the Claimant by the panel that investigated the matter was sufficient and that the absence of a formal letter or invitation to the interview was immaterial. Accordingly, the court determined that the termination was not wrongful.
Regarding the counterclaim, the court found though it was not proved by any evidence, the Claimant admitted its existence. Furthermore, it noted that since the Defendant had indicated that the Claimant’s terminal benefits were used to offset the loan, the relief could not be granted.
Legal Principles Relied On
- Right of Employer to Dismiss Employee for Misconduct Bothering on Crime
There is no legal requirement that an employer must try an employee in a court of law before summarily dismissing them, even where the accusation involves gross misconduct bordering on criminality. All that is required is for the employer to satisfy the principles of natural justice and fair hearing, including providing the employee adequate notice of the allegations to enable them to make representations in their defense.
- Right to Fair Hearing in Disciplinary Proceedings
The lack of a formal letter or invitation to a disciplinary interview is immaterial if the employee is aware of the allegations, interviewed, and questioned based on their knowledge of the misconduct. Termination based on the committee’s report is therefore valid in such cases.
Commentary
The decision affirms the now-settled position of the law that an employee need not be found guilty of fraud by a court before an employer can take disciplinary action, including termination. However, it seems that the court’s analysis of the facts trivialized the requirement of fair hearing in such circumstances. The court’s finding suggests that no query or formal correspondence regarding alleged fraud is necessary before a disciplinary committee or investigation panel interviews an employee for misconduct, particularly where the terms of employment do not make it a condition. This raises a critical question: how can an employee adequately prepare for a disciplinary interview or committee proceedings without prior notice of the allegations?
The court was overly fixated on the fact that the Claimant was interviewed by the committee, without sufficiently addressing her complaint that notice of the committee’s proceedings had not been communicated in a manner that met the requirements of fair hearing. It is even more perplexing that the court, while ruling on the Defendant’s counterclaim, held that no convincing evidence had been presented to substantiate the allegations of fraud.
This decision is inconsistent with appellate and other judicial decisions that emphasize the constitutional requirement of providing adequate notice for disciplinary proceedings. Failure to meet this requirement nullifies the outcome of such proceedings. In Ifeatu Anthony Emodi v. Diamond Bank of Nigeria Plc[2], the NICN, per Justice Sanusi Kado, nullified the outcome of a disciplinary committee’s proceedings because the claimant had not been given adequate opportunity to defend the allegations against him. In that case, the notice was deemed insufficient, and the nature of the allegations was not clearly indicated in the invitation.
In the instant case, no formal invitation or query was issued. The court opined that a query was unnecessary since the terms of employment did not make it a condition. Contrary to this conclusion, it is submitted that an employee’s appearance before a disciplinary committee, without prior and sufficient notice of the allegations under investigation, cannot satisfy the requirements of fair hearing.
The court attempted to justify its decision by noting that the Claimant had written two letters of appeal after her dismissal. However, it is submitted that these appeals should not factor into the determination of whether fair hearing was afforded. As commendably noted by Justice Sanusi Kado in Ifeatu Anthony Emodi v. Diamond Bank of Nigeria Plc, when procedural irregularities are alleged, the court must resolve these issues before addressing the substantive claims. Breaches of the right to be heard, a fundamental constitutional right, are threshold issues that must take precedence.
Another aspect of the case is the court’s reliance on precedents that treat employees without statutory protection as “common law servants” who can be dismissed at will. By citing cases such as Obanye v. Union Bank[3], Bala Waziri v. Bank of Agriculture Limited[4], and Dangote Cement Plc. v. Peter Asom Ager & Anor[5], the court reiterated that an employer cannot be compelled to retain an employee. Terms such as “master-servant” were repeatedly used, highlighting the persistence of this doctrine in Nigerian labor law.
This underscores the ongoing uncertainty in Nigerian labor law. Depending on the authority cited, one can argue either for or against the requirement of a valid reason for termination. This lack of consistency undermines legal certainty. Recent Supreme Court decisions (except the dissenting opinion of Oguwumiju JSC in Skye Bank PLC v. Adegun[6]), such as Okoh v. Federal Polytechnic[7], Bauchi, reaffirm the common law position that employers may dismiss employees at will, barring statutory protections. However, these decisions fail to consider the evolving jurisprudence of the NICN, which, empowered by the Third Alteration to the Constitution, is dismantling vestiges of common law by adopting international best practices, including rejecting the “master-servant” paradigm.
Finally, the court held that the Claimant’s terminal benefits were appropriately used to offset her loan. This may be explained by the fact that the Claimant did not challenge the existence of the loan but rather sought to justify why it could not be repaid. Although the issue was not raised for determination, it remains debatable whether the NICN has jurisdiction to adjudicate issues of loan recovery where the employer is a financial institution. In Odigboh v. Keystone Bank Limited[8], the Court of Appeal held that the NICN’s jurisdiction does not extend to loan recovery. However, the decision acknowledged that the NICN might have jurisdiction in appropriate cases where it is proved that the loan was advanced as part of the employer-employee relationship rather than a banker-customer relationship.
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/PHC/38/2023. Available online at https://nicnadr.gov.ng/judgement/judgement.php?id=9361
[2] See the 5th Edition of WRJ-NICN. Available at https://dnllegalandstyle.com/dnl/wrj-nicn-no-5-fair-hearing-unratified-international-best-practices-and-wrongful-termination-a-review-of-ifeatu-anthony-emodi-v-diamond-bank-plc/
[3] (2018) LPELR-44702 (SC)
[4] (2023) LPELR-60477(CA)
[5] (2024) LPELR-61800(SC)
[6] See the commentary on the 12th edition for a review of his Lordship’s position in this regard. Available at https://dnllegalandstyle.com/dnl/wrj-nicn-no-12-revisiting-probationary-employment-and-confirmation-in-nigerias-public-service-an-analysis-of-okpowhor-v-nimr/
[7] (2024) 15 NWLR (Pt. 1961) 261 SC
[8] Appeal No. CA/LAG/CV/163/2021 delivered on December 6, 2022.