Dismissal (referred to informally as firing or sacking) is the termination of employment by an employer against the will of the employee. Though such a decision can be made by an employer for a variety of reasons, ranging from an economic downturn like the economic recession currently being experienced in Nigeria to performance-related problems. On the part of the employee, being fired has a strong stigma in many cultures and organizations.
To be dismissed, as opposed to quitting voluntarily (or being laid off), is often perceived as being the employee’s fault or under performance. Finding new employment may often be difficult after being fired, particularly if there is a history of being fired from previous jobs, if the reason for firing is for some serious infraction, or the employee did not hold the job very long. Job seekers will often not mention jobs that they were fired from on their resumes; accordingly, unexplained gaps in employment are often regarded as a red flag in a resume by most employers.
Often times due to the fear of being liable to an employee for damages or other remedies either provided by the law or in the terms of employment, some employers create an unbearable working environment to force the employee to resign in order to exonerate themselves against any liability by an employee. This action by the employer creating a hostile working environment to force an employee to resign out of his/her volition is called constructive dismissal.
By way of definition, constructive dismissal simply means a Situation where an employer creates such working conditions (or so changes the terms of employment) that the affected employee has little or no choice but to resign. In such cases, the employee retains the right to seek legal compensation as having being dismissed constructively.
Also, Constructive dismissal occurs where an employee terminates his employment in response to his employer’s treatment of Him. Although there has been no actual dismissal, the treatment is sufficiently bad that the employee is entitled to regard himself having been dismissed. Examples of constructive dismissal include:
- reduction in pay or not being paid at all.
- being demoted without good reason.
- allegation of poor performance which are unfounded.
- disciplinary proceedings which are manifestly unreasonable.
- a complete change in the nature of your job.
- harassing or bullying.
- been forced to work in breach of health and safety law.
In order for an employee claiming constructive dismissal to succeed he/she must prove as enumerated by Lord Denning in Western Excavating v. Sharp  1 All ER 713.
- A repudiatory breach on the part of the employer. This may be an actual or anticipatory breach, but must be sufficiently serious to justify the employee resigning.
- An election by the employee to accept the breach and treat the contract as at an end.
- The employee must resign in response to the breach
- The employee must not delay too long in accepting the breach, as it is always open to an innocent party to waive the breach and treat the contract as continuing (subject to any damages claim that they may have)
A Court handling a matter of constructive dismissal will also need to satisfy itself that the employee did not delay too long in resigning. Western Excavating v. Sharp  1 All ER 713. The facts of the case are thus: An employee (Mr. Sharp) worked for the company and one of his terms of contract was that if he worked extra time he could have time off in lieu. He then went on to take an afternoon off work to partake in a card game which led to his dismissal. He appealed the dismissal and was reinstated but with a 5 day pay suspension in its place. Without these 5 days pay he was in financial difficulty and attempted to get his employers to pay his accrued holiday pay in advance and when they refused that he asked for a loan of £40. The welfare officer explained they couldn’t loan that amount but suggested that Mr. Sharp should see him again to discuss the details. Mr. Sharp was not happy with this and so resigned. He then claimed for constructive unfair dismissal at the tribunal.
When it reached the court of appeal however Lord Denning took a different approach to the matter and the Court reversed the decision of the tribunal and held that Mr. Sharp had not been constructively dismissed at all. Lord Denning went on to state,
“If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct”
While this principle has been enshrined in the labour enactments of other jurisdictions and thus has a statutory backing, the principal enactment governing labour related matters in Nigeria i.e labour Act (CAP L 1 LFN 2004) does not have any statutory backing regarding constructive dismissal in the Nigerian labour law. However all hopes are not lost with the creation of the National Industrial Court under Section 254 A (1) third Alteration of the 1999 Constitution of the Federal Republic Of Nigeria (2011 as amended) Which creates the national industrial Court and vest it with jurisdiction under section 254 C (1) to entertain labour related matters.
Section 7 of the National Industrial Court Act 2006 provides that Court shall have and exercise exclusive jurisdiction in civil cases and matters-
(a) relating to….
(i) labour, including trade unions and industrial relations; and
(ii) Environment and conditions of work, health, safety and welfare of labour, and matters incidental thereto….
Subsection 6 provides thus:
The Court shall, in exercising its jurisdiction or any of the powers conferred upon it by this Act or any other enactment or law, have due regard to good or international best practice in labour or industrial relations and what amounts to good or international best practice in labour or industrial relations shall be a question of fact.
This provision is a great relief and of wide scope to enable the court in the exercise of its duty to apply best international labour practices in its administration of justice. The court in the case of Miss Ebere Ukoji V Standard Alliance Life Assurance Co. Ltd (Suit No: NICN/LA/48/2012) held thus:
Globally, and in labour/employment law, constructive dismissal, also referred to as constructive discharge, occurs when an employee resigns because his/her employer’s behavior has become intolerable or heinous or made life difficult that the employee has no choice but to resign. Given that the resignation was not truly voluntary, it is in effect a termination. In an alternative sense, constructive dismissal or constructive discharge is a situation where an employer creates such working conditions (or so changes the terms of employment) that the affected employee has little or no choice but to resign. Thus where an employer makes life extremely difficult for an employee, to attempt to have the employee resign, rather than outright firing the employee, the employer is trying to create a constructive discharge. The exact legal consequences differ from country to country, but generally a constructive dismissal leads to the employee’s obligations ending and the employee acquiring the right to seek legal compensation against the employer. The employee may resign over a single serious incident or over a pattern of incidents. Generally, the employee must have resigned soon after the incident. The court held the conduct of the respondent as amounting to a constructive dismissal.
At times, an employer may behave badly but his conduct will not amount to him making your position untenable. For instance, non-payment of salaries maybe as a result of an ailing economy which, will not suffice as a good ground at that time. Each case is however decided based on the facts and circumstances surrounding it.
Conclusively, the doctrine of constructive dismissal by virtue of the powers conferred on the National Industrial Court Act can effectively be applied under the Nigerian legal system, even though not enshrined in any statute, as was done by the Court in Ebere’s case (supra).This is a welcome development in the Nigerian Labour Law jurisprudence.
BY A.I IORTYAVER, LLB (BSU) BL