INTRODUCTION
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It is no longer news that Nigeria has been battling with the novel Corona virus (Covid-19) which has been declared a global pandemic by the World Health Organization (WHO). The coronavirus pandemic has become a global threat, increasing from 197,590 infections and 7,954 deaths as at March 17, 2020, to 2,350,075 infections and 161,270 deaths as at April 19, 2020—barely a month. In a bid to contain the virus the spread of the coronavirus disease, President Muhammadu Buhari on the 30th day of March 2020 issued a directive that led to the lockdown on some major cities in the country like Abuja, Lagos and Ogun State and also placed travel restrictions across states in Nigeria in line with the Quarantine Act of 2004.
These lockdown directives have led to the shutdown of many businesses, especially those that cannot be operatedfrom private homes. Only businesses proffering essential services have been exempted from the lockdown directive; hence, the nation’s economy is adversely affected alongside with its businesses.
This development has caused lot of employers and employees panic. Some employees are of the opinion that they are not contract staffs hence they should be paid their wages in full as it is not their fault that they were not able to render the services required of them, wondering if there are any legal backings to their claims.
On the other hand, some employers are of the opinion that their contract with their staffs is a contract of service and this services were not provided hence payments cannot be made as monies were not made too. Ostensibly, bothparties are looking for legal backings for their claims.
This article aims at resolving these conflicts and educating both the employers and the employees on the position of the laws regarding their various claims, proffering recommendations and opinion as to how best employers can handle this situation.
DEFINITION OF ESSENTIAL TERMS
WORKER: The Labour Act defines a “worker” as any person who has entered into or works under a contract with an employer, whether the contract is for manual Labour or clerical work or is expressed or implied or oral or written, and whether it is a contract of service or a contract personally to execute any work or Labour.
EMPLOYER: Wikipedia defines an employer as a person or institution that hires employees. Employers offer wages or a salary to the workers in exchange for their work or labour.
WAGES: This according to Labour Act means remuneration or earnings (however designated or calculated) capable of being expressed in terms of money and fixed by mutual agreement or by law which are payable by virtue of a contract by an employer to a worker for work done or to be done or for services rendered or to be rendered.
CONTRACT OF EMPLOYMENT: According to Labour Act, contract of employment” means any agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker.
FORCE MAJEURE: This is a concept under the common Law. Force majeure are contractual clauses which alter parties’ obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations. This is a way of terminating contracts. However, Force majeure in most cases suspends the obligations during the force majeure event but the obligations are not discharged (unless the parties agree otherwise).
IS THERE A SUBSISTING RELATIONSHIP BETWEEN PARTIES IN THE WAKE OF THE PANDEMIC?
Yes, there is a subsisting relationship between the employers and their employees. However, the basis of the employment relationship is the employment contract entered into between the employee and the employer in terms of which the employee would render services to the employer and the employer would remunerate the employee for the services rendered. Where there is only a supervening impossibility frustrating or suspending the contract agreement between them, it does not amount to outright termination of employment unless the employer chooses to lay off his staff. Where employer chooses to lay off his staff, he must in accordance with Section 11 of the Labour Act communicate that to the employee.
The supervening impossibilities (Covid-19 lockdown) has made it impossible for employees to render the services as contained in their contracts of employment. Rather than gain, most companies have lost and this is no fault of either of the parties.
ARE EMPLOYERS BY LAW EXPECTED TO PAY SALARIES? IF NOT, CAN EMPLOYEES SEEK REDRESS IN COURT?
Wage as defined above are monies paid for a work done or to be done or for services rendered or to be rendered. Thus, an employer is under no legal obligation to pay salaries/wages to employees because no “work” tookplace during the lock-down period which entitles employees to earn wages/salaries. In a lock-down, it is clear that many employees are not in a position to render the contractual services at all.
The contract between both parties have been frustrated by supervening impossibilities which simply means that the employer is unable to perform his contractual obligations (payment of the employee’s salary/wages) due to factors beyond its control and on the other hand the employee is also unable to perform his obligations (rendering of his services) in accordance with the employment contract due to factors beyond his/her control.
The supervening impossibility in this case is Covid-19 lock-down. In terms of this principle, the employer is discharged from its contractual obligations and therefore, it is not obliged to pay the employee and on the other hand, the employee is also discharged from his/her contractual obligations and he/she is therefore not obliged to render his/her services. The normal consequence of supervening impossibility in common law is the termination of the contract. Hence, the employees cannot seek the redress in court for failure on the part of their employers to pay them and vice versa.
OPTIONS OPEN TO EMOLOYERS IN OTHER TO REMAIN IN BUSINESS DURING AND AFTER THE LOCKDOWN:
➢ Variation of contracts of employment to provide for reducing work hours, reduced benefits, pay cuts, voluntary leave without pay, temporary layoffs etc. It is imperative that the employers seek the consent of the employees in doing this so that there will be consensus ad idem.
➢ The employer may terminate the contract on the ground of redundancy in accordance with Section 20 of Labour Act which provides to the effect that the employer shall inform the employees/or their TradeUnions the reasons and the extent of the redundancy. Employers are also to observe the principle of “last in, first out”, redundancy allowance shall also be paid to the affected persons.
➢ Employees are entitled to paid annual leaves as contained in Section 18 of the Labour Act as agreed by both parties. Considering the current realities of the lock down, employers may instruct the employees to take their annual leave including accumulated annual leave for the period of lock-down. Accordingly, nothing prohibits an employer from placing an employee on paid annual leave during the lock-down period. This employees while on their paid annual leave as a result of the lockdown are not expected to render any services whatsoever to the employer
➢ Employers are also required to notify the relevant tax authorities, statutory agencies and pension fund administrators of the changes in the remuneration package of employees if any.
CONCLUSION
The Covid-19 is a global pandemic that has shaken the entire world, the world’s economy and private business at large. It would be unfair for either the employer or the employee to insist that the obligations as contained in the terms of their agreement be carried out in strict sense of it as the obligations have ab initio been frustrated by supervening impossibilities. The above stated is the general law as it concerns the employer/employee relationship during this lockdown. However, it is imperative for employees to read and understand the terms of their employment as most contractual agreements have the force majeure clauses which prima facie brings their contractual agreement to a pause.
Anaele Osinachi Hope, LLB, BL, LLM (International Law and Diplomacy) can be reached at anaelesosinachihope@gmail.com
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