By Elvis Evbaruovbokhanre Asia
Case: Engr. Ogbale Agbo V Dangote Cement Plc[1]
Judge: Justice (Prof.) E.A. Oji
Date: 4/10/2024
Main Issues of Law
The current attitude of the NICN to Termination of Employment without Reason
Summary of Facts
The Claimant had altercations with his HOD, which almost led to a physical assault. The next day, his employment was terminated with a letter stating that his ‘services were no longer required.’ The Claimant instituted the action for wrongful termination of employment.
Court’s Decision
The court held that the termination of the Claimant’s employment was wrongful and contrary to the terms of employment. The court further held that terminating employment on the grounds of “services no longer required” is contrary to international best practices, which require that termination be justified with a reason.
Legal Principles Relied On
The Current Attitude of the NICN to Termination of Employment Without Reason
- The emerging jurisprudence in industrial and labour relations is that termination of employment must be with reasons. The decision of the Court of Appeal in Keystone Bank v. Afolabi 14 (2017) LPELR-42390, to the contrary, was not based on the 3rd Alteration Act of the 1999 Constitution, which empowered the court to apply international best practices.
- Labour law and practice in Nigeria has since been freed from the shackles of draconian common law principles.
- The termination of employment without stating reasons, especially where there is an immediate cause attributable to the termination, takes on the guise of punishment or penalty, which is contrary to the disciplinary procedures outlined in the terms of employment.
Commentary
The current majority decision of the NICN is that employers must give reasons for terminating employment. However, the jurisprudential basis for this decision, which is the application of international best practices, is far from fully settled or clarified. The majority of the Court of Appeal’s decisions continue to maintain old common law principles. Though, as the court rightly observed, these decisions may not have considered the jurisprudence introduced by the 3rd Alteration to the Constitution, some judges of the NICN still rely on these decisions. Furthermore, many recent decisions arose from appeals against NICN judgments, creating uncertainty in labour and employment law practice in the country[2].
In February 2024, Justice Ogwunwumiju of the Supreme Court, in a concurring judgment in Skye Bank v. Adegun[3], attempted to intervene by stating that it is no longer fashionable to terminate employment without giving reasons. However, the issue of the application of international best practices, which underpins the current jurisprudence of the NICN, was not submitted before the Supreme Court for determination in that case. Therefore, the issue was not mentioned in the lead judgment by Justice Agim. The case also arose before the 3rd Alteration to the Constitution. As a result, in the later Supreme Court decision in Dangote Cement Plc v. Ager & Anor[4], decided in March 2024, no reference was made to it, and the Supreme Court restated the principle that an employer need not provide a reason for termination.
Despite this, until a firm contrary position is decided by the appellate courts, employers are advised to ensure that proper reasons are given for termination. Gone are the days when an employer could terminate employment by stating “services no longer required” when, as in the present case, there was an unwritten cause. The court can now investigate the circumstances surrounding the termination, which must not only be justified but must also comply with the appropriate termination procedures outlined in the terms of employment.
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/311/2021
[2] See for example LIGHTENING NETWORKS LTD v. NYADA & ORS (2023) LPELR-61010(CA) and HUAWEI TECH LTD & ANOR v. NYADA & ANOR 2023) LPELR-61009(CA)
[2] Supra note 7.
[3] (2024) LPELR-62219 (SC)
[4] (2024) LPELR-61800(SC)