By Elvis Evbaruovbokhanre Asia
Case: Mr. Yasar Aktekin V. Nile University of Nigeria[1]
Judge: Justice Sinmisola O. Adeniyi
Date: 01/11/2024
Main Issues of Law
- Employment with Statutory Flavour
- Termination of Employment with Payment of Salary in Lieu of Notice under a Contract of Employment
- Termination of Employment with or without Reason
Summary of Facts
The Claimant was appointed for four years as the Registrar of the Defendant and was reappointed on 21/10/2020 for a second term. On 29/10/2021, he was invited via email to a Zoom meeting with the Pro-Chancellor and the HR Manager to discuss staff pay-offs. However, at the commencement of the meeting, the Pro-Chancellor informed the Claimant that his employment had been terminated. This termination was subsequently confirmed via an email dated 02/11/2021.
The Claimant instituted an action, claiming that the termination of his appointment without justification was wrongful. He further argued that, under the University Law and Regulations, the position of Registrar was a statutory appointment for a fixed period of four (4) years.
The Defendant contended that the University was not established by an Act of the National or State Assembly but was a private educational institution incorporated under the Companies and Allied Matters Act. It argued that the relationship with the Claimant was a master-servant relationship and that the employment was lawfully terminated with the payment of three months’ salary in lieu of notice. The Defendant further alleged that the termination was justified because the Claimant made unauthorized representations to staff, claiming they were entitled to pay-off benefits not provided for in their contracts. This action purportedly caused the Defendant a financial loss of N91,397,340 (Ninety-One Million, Three Hundred and Ninety-Seven Thousand, Three Hundred and Forty Naira).
Court’s Decision
The court held that the employment did not have statutory flavor but was governed solely by the terms of the employment contract, which provided for the payment of three months’ salary in lieu of notice. The Defendant’s compliance with this provision discharged its obligations under the contract.
The court noted that the acceptance of three months’ salary in lieu of notice extinguished any claim—real or imagined—that the Claimant had against the Defendant. It reasoned that, as the relationship was one of master and servant, the Defendant was not required to follow any disciplinary process prior to termination. Employment under such a relationship could be terminated at will.
Legal Principles Relied On
- Employment with Statutory Flavour
An employment has statutory flavor when the appointment, termination, or discipline of the employee is governed by statutory provisions. In such cases, the conditions of service are derived from statutes, granting the employee a legal status higher than that of an ordinary master-servant relationship.
- Termination of Employment with Payment of Salary in Lieu of Notice
It is a settled principle of law that parties to a contract are bound by its terms. A party cannot unilaterally deviate from the agreement simply because its terms later appear unfavorable. This is encapsulated in the doctrine of the sanctity of contracts.
Where the terms of employment stipulate notice or payment of salary in lieu of notice for termination, compliance with these terms discharges the employer’s obligations under the contract.
- Termination of Employment with or without Reason
The Court will not impose an employee on an unwilling employer. Where an employer complies with the terms of termination—either by giving notice or paying the equivalent salary in lieu of notice—the termination is lawful. An unwilling employer cannot be compelled to retain a willing employee, and vice versa.
Commentary
The court’s decision emphasizes that employment acquires statutory flavor only through explicit legislative provisions. The Claimant’s argument that the University’s regulations—mandated by the National Universities Commission Act—conferred statutory status was rightly dismissed. Such regulations merely serve as directives for institutional governance and do not transform private university employees into statutory employees.
However, the court’s stance that a master-servant relationship permits termination “at will” raises important concerns:
- The Shift in Employment Law Standards:
Recent decisions by the National Industrial Court of Nigeria (NICN) have held that employers can no longer terminate employment without valid reasons. While the international best practices underpinning this jurisprudence were not pleaded in this case, they have arguably attained the status of judicial notice due to consistent judicial recognition by the NICN.
- The Role of Fairness in Employment Contracts:
The court’s narrow focus on the employment contract overlooks its duty to ensure fairness in labor relations. As a labor court, the NICN is empowered to uphold equitable standards, beyond merely enforcing contracts.
- The Use of the Term “Master and Servant”:
The continued use of the phrase “master and servant” is outdated and derogatory, evoking imagery inconsistent with modern employment relationships. Given the NICN’s constitutional mandate under the Third Alteration Act to ensure fairness, it should abandon this terminology.
- Failure to Justify Termination Reasons:
When an employer provides a reason for termination, it must justify it. The court’s failure to examine the Defendant’s stated reason—the Claimant’s alleged unauthorized representation—departs from established legal precedent.
Finally, this case highlights the persistent uncertainty in Nigerian labour law. As noted in the 15th Edition, opposing arguments regarding the necessity of valid reasons for termination can each find support in precedent. This inconsistency undermines legal certainty.
To address these issues, it is hoped that the Court of Appeal will soon have the opportunity to clarify foundational labour law principles, such as termination with or without reason. Furthermore, key cases concerning the scope of unratified international best practices currently pending before the NICN should be referred for appellate guidance under a case-stated procedure. This would help resolve ambiguities and align judicial practice with the critical principle of legal certainty.
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’
Footnote
[1] SUIT NO: NICN/ABJ/394/2022. Available online at https://www.nicnadr.gov.ng/judgement/judgement.php?id=9371