Hon. Justice Anthony Ubaka of the Lagos Judicial Division of the National Industrial Court has ordered Sterling Bank to pay her former employee, Mrs Nkechi, the sum of N10.45m as outstanding gratuity for her years of service.
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The Court declared that the failure of Sterling Bank to pay Mrs Nkechi her accrued gratuity entitlement was wrongful, having not established that the policy abolishing gratuity was duly communicated to her.
Justice Ubaka further ordered the Bank to pay Mrs Nkechi the sum of N300k as cost of action within 30 days, failing which the judgment sum shall attract interest at the rate of 10% per annum until fully liquidated.
From facts, the claimant, Mrs Nkechi, had submitted that she was employed by Magnum Trust Bank in 2000 and her employment was transferred to Sterling Bank in 2006 following a merger.
Mrs Nkechi asserted that she served Sterling Bank diligently for over 20 years, rose through the ranks to the position of Assistant Manager, and resigned her appointment effective in December 2020.
Mrs Nkechi contended that although she was paid part of her terminal benefits, Sterling Bank failed to include her gratuity, prompting her to demand payment through her solicitors.
In defence, Sterling Bank denied all the allegations and stated that Mrs Nkechi was not entitled to gratuity as the same had been abolished under the applicable Staff Handbook.
The Bank contended that a revised Staff Handbook introduced in 2015 was communicated to all staff via email and had replaced the earlier handbook relied upon by Mrs Nkechi.
In addition, counsel to Sterling Bank argued that Mrs Nkechi had been fully paid all her entitlements and failed to establish any legal basis for her claim for gratuity and interest.
In opposition, Mrs Nkechi’s learned counsel, U. C Ikegbule Esq argued that the Bank failed to prove that the 2015 Staff Handbook was communicated to his client and that her accrued rights could not be unilaterally extinguished.
In a well-considered judgment, Justice Ubaka held that an employer has the right to review its policies, such changes must be properly communicated to the employee before they can take effect.
Justice Ubaka reasoned that there is enough evidence pointing irresistibly to the fact that Mrs Nkechi is not aware of the new employee handbook of 2015, and did not receive the email to all staff on stopping the payment of gratuity to staff who have not worked for 5 years before 2015.
The Court stated that Sterling Bank failed to discharge the burden of proving that Mrs Nkechi was notified of the revised Staff Handbook abolishing gratuity.
The Court held that Mrs Nkechi’s entitlement to gratuity under the earlier Staff Handbook subsists and cannot be taken away without proper notice.
“The burden of proving that the claimant was aware of the new employee handbook lies on the Defendant, and failure to discharge the same is fatal to its case.
“To my mind, the defendant has a duty to pay the balance of the calculation of the claimant’s gratuity.” Justice A.N. Ubaka
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