How Employers Can Prevent An Action For Constructive Dismissal Introduction

By Precious Okoh Esq

Generally, an employer may relieve his employees of their duties when he desires under regular legal circumstances; similarly, an employer has the right to quit his job whenever he desires depending on the terms of offer of employment as the law would not compel labour of either employee on employer or vice versa as that would amount to slavery. There are circumstances when the employer in lieu of an outright dismissal may choose to give the employee a soft landing probably not to dent the career reputation of the latter; the former may do this by constructive dismissal.

Constructive dismissal is a subtle way of dismissing an employee by inviting, cajoling or compelling a resignation from the employee.

In the United States, constructive discharge is a general term describing the involuntary resignation of an employee.

Canadian courts recognize there are circumstances in which the employer, although not acting explicitly to terminate an individual’s employment, alters the employment relationship’s terms and conditions to such a degree that an employee is entitled to regard the employer’s conduct as a termination, and claim wrongful dismissal, just as if they had been let go without any notice or termination pay in lieu of notice.

In the United Kingdom, constructive dismissal is defined by the Employment Rights Act 1996 section 95(1) c:

The employee terminates the contract under which they are employed (with or without notice) in circumstances in which they are entitled to terminate it without notice by reason of the employer’s conduct.

Examples of constructive dismissal include:

1. reduction in pay or not being paid at all.
2. being demoted without good reason.
3. allegation of poor performance which are unfounded.
4. disciplinary proceedings which are manifestly unreasonable.
5. a complete change in the nature of your job.
6. harassing or bullying.
7. Tacitly encouraging a resignation

CONSTRUCTIVE DISMISSAL IN NIGERIA

Generally when it deals with wrongful dismissal, an employee may bring an action against the employer.  An employee whose employment is terminated in ad variance with the terms of his/her employment is entitled to damages against his/her employer. The supreme court Per KARIBI-WHYTE, J.S.C . (Pp. 21-22, para. G held in Imoloame v. W.A.E.C. (1992) NWLR (Pt. 265)303 thus

It is well settled that in cases of wrongful dismissal “the measure of damages is prima facie the amount the plaintiff would have earned had the employment continued according to contract subject to a deduction in respect of any amount accruing from any other employment which the plaintiff, in minimizing damages, either had obtained or should reasonably have obtained.

However, Constructive dismissal is different from wrongful dismissal. In constructive dismissal, the employee is not wrongly dismissed and in fact, he is not even dismissed explicitly. Where he is put under circumstances unbearable for him all in a bid to obtain his resignation that is constructive dismissal. The striking question is at what point can the law be specific so as not to make a circumstance where the employer out of kindness invites or encourages the employee to resign amount to constructive dismissal. For instance, where an employee fails to carry out an organization’s directive, he may be fired. Where however, the employer instead of straight up dismissal allows some kindness and rather asks the employee to put in his resignation, how can the employer be protected.

In Mrs Vivien Folayemi Asana v. First Bank of Nigeria Ltd (SUIT NO. NICN/LA/184/2016), Mrs. Vivien Folayemi Asana (“Mrs. Asana“) was employed by First Bank of Nigeria Limited (“the Bank“) in 2007 as a Manager, and subsequently promoted to a Principal Manager. She claimed that during her employment, she maintained a record of excellent performance which informed her several promotions, and never had any disciplinary issues with the Bank. However, on 22nd January 2016, Mrs. Asana was compelled to tender her resignation letter, with her official e-mail account disabled on the same day. Thereafter, Mrs. Asana and her solicitor wrote separate letters to the Bank challenging the manner in which she was forced to resign, and requested for her re-instatement. The Bank simply demanded for the settlement of the welfare loan made available to Mrs. Asana during her employment, and communicated its intention to convert the loan to a commercial loan at the prevailing commercial interest rate. Mrs. Asana was of the view that by forcing her to resign, the Bank frustrated the repayment plan of the loan advanced to the claimant. Consequently, she claimed, amongst other reliefs:

1. A declaration that the purported and/or induced letter of resignation dated 22nd January 2016 and signed by her under duress is invalid and unlawful.
2. A declaration that her employment with the Bank still subsists.
3. A declaration that the Bank cannot convert her welfare loan to a commercial loan and run at the prevailing commercial interest while she was still challenging her forceful resignation from the Bank.
4. An order directing the Bank to reinstate and/or recall her to her duty post or employment and allow her to enjoy all benefits attached to the claimant’s status.

In response, the Bank argued that Mrs. Asana was never forced to resign, and that her resignation was a consequence of her poor performance within the financial year. The Bank therefore counterclaimed against Mrs. Asana

After a careful review of the submissions of both parties, the Court approached the issues under the following subheads:

Constructive dismissal: Mrs. Asana’s resignation letter stated thus: ‘Further to the request that I should resign, by Management of First Bank of Nigeria Ltd. I hereby tender my letter of resignation’. The Bank on its part, argued that Mrs. Asana was advised to resign based on her poor performance, and instead of having her appointment terminated, she decided to resign her appointment. To the Court, that was a classic case of constructive dismissal/discharge; any attempt to have an employee resign, rather than out rightly firing the employee means that the employer is trying to create a constructive discharge and for which a case of constructive dismissal is made.

Effect of Constructive Dismissal on the Recovery of Employee Loans 

In a claim of constructive dismissal, the remedy available to a successful claimant is damages and not reinstatement. In Miss Beer Koi v. Standard Alliance Life Assurance Co. Ltd  [2014] 47 NLLR (Pt. 154) 531 NIC damages were assessed and awarded

It is pertinent to note that a successful plea of constructive dismissal has the effect of vitiating a pending obligating of the claimant to the defendant. Hence, a successful claimant, in the circumstances, can no longer be held liable for repayment of subsisting employment loans advanced by the defendant and repayable by deductions from the employee’s salary.  

Conclusion

It is noteworthy that the court decided that the Asana’s case bordered on constructive dismissal when the Claimant’s letter of resignation contains the following words: ‘Further to the request that I should resign, by Management of First Bank of Nigeria Ltd. I hereby tender my letter of resignation.’ It is suggested that a mere document of resignation containing such information without physical acts not showing that the employer is inducing, encouraging cajoling or compelling the employee to quit should not be construed as constructive dismissal.

Further, employers should be well adivised when trying to dissolve legal relationships with employees.

Precious Okoh Esq., okohpreciousokoh@gmail.com