Legal Intrigues Surrounding Termination Of A Contract Of Employment In Nigeria

By Genevieve Ike Johnson (Esq) ACIPM

Introduction

Oftentimes we hear employees complain ‘I have put in years of dedicated and productive service and do not deserve this treatment, termination! Without even a reason?’ Termination in Nigeria is a common occurrence. Many employees have gone from being employed one minute to job seekers the next especially in the private sector. This has resulted to a level of job insecurity. The rising trend of job insecurity is worrisome and the concerns have been diverse on whether the experiences by both employer and employee are properly accommodated by our Nigerian Labour laws.

In general, it is important to note that the main source of obligations and responsibilities in any employment relationship is the contract of employment or the status creating same, this is noted because variously, parties seem to forget the contents of the employment contract if any at all exits especially after long years of service. Of course Nigerian Legislation, other regulations, collective agreement, judicial precedents and customs are all applicable and relevant in the employment relationship. Any employment may be brought to an immediate end by the payment of wages or salary in lieu of the requisite notice. It is important therefore that both employees and employers have a firm grasp of the contents of whatever is binding the relationship whether contract or statute.

In this article, we would basically highlight:

Termination of common law employment

Termination of employment with statutory flavor and

Termination of employment by Operation of the law.

Firstly, we consider the definition of termination as follows:

What is Termination: It refers to the determination of employment, that is, bringing to an end the relationship that exists between an employer and employee. It can either emanate from the employer to an employee or by an employee’s resignation. Termination is usually upon giving the requisite notice, which must usually be in writing except for a one-day notice. The minimum termination notice of one day, one week, two week or one month must be served the employee depending on whether the employment had continued for at least a period of three months or less, two years not less than three months, five years not less than two years and five years or more respectively. [1]

The general position which is mainly of concern in this article is that Nigerian employers are entitled to terminate a contract at any time without stating the reason or cause for doing so provided that the contract of employment does not state otherwise and notice of termination is given to the employee or the employee is paid a salary in lieu of such notice.

Termination of Common Law Employment

As precedent generally obtainable in Nigeria, it has been upheld severally in Nigerian courts that the employer is not bound to give reasons for termination of his employee’s contract. The rule being he who hires can fire. In Momoh Vs CBN [2[ also in NRW Ind. Ltd Vs Akingbulugbe, [3] the court held that ordinarily, at Common law, an employer can terminate a contract of employment at any time with good or bad reason or no reason at all. The only obligation under the Common law applicable in Nigeria on an employer is to act within the bounds of the terms of the contract of employment regulating the contract of employment of the parties sought to be terminated. This is as shown in Daodu Vs UBA PLC [4] and in Chukwuma Vs SPDC (Nig) Ltd. [5]

This power to fire is subject to the contractual terms such as requirements of notice and right to be heard. The dual pillar of audi-alterem partem (hear the other side) and Nemo judex in causa sua (No one can be judge in his own cause) cut across all aspects of law, contract, administrative or Labour relations. This pivot of maintaining equilibrium between both the employer and the employee when terminating the relationship is the terms of agreement. In Katto Vs CBN, [6] it was held that courts may not look outside the terms of agreement (Contract) when deciding on matters that are central to the terms of the agreement or contract of employment. (Emphasis mine) In Uwagbanebi V NPPB, [7] it was held that power to terminate appointment is reserved for the employer and that ground for termination when stated in contract must be strictly adhered to see also British American Ins. Co Vs Omolaye. [8]   Employment can be terminated at any time including during probation. See Wayo Vs Benue State Judicial Service Commission. [9]

The position of the law in Nigeria is that the motive of termination of a contract of employment is irrelevant, meaning that an employer actuated by malice or bad faith can just comply with the provisions of the contract or statute regulating an employment and terminate! Indeed the reason for termination as obtainable in Nigeria may be spiteful, punitive or even petty; as the only relevant question will be whether the termination is wrongful or not. As supported by C, Nwagbara; [10]

‘It is now settled that where an employer gives the required notice to terminate, the validity of the termination cannot be challenged on the grounds that the employer was actuated by ill will, malice or any other improper motive’.

According to CK Agomo, [11] the reason or motive for termination is immaterial at common law, it may be spiteful, punitive or petty. The question would merely be whether the termination is wrongful or not and whether the notice period was complied with.

Termination of Employment with Statutory Flavour

A contract of employment is said to be with Statutory flavor where same is a creation of statute. This is usually employment in the public sector. In the Supreme Court decision in Longe Vs First Bank, [12] termination of employment with statutory flavor is stated to be governed by the laid down procedure for termination. Employment with statutory flavor protects the rights of employees against discriminatory termination, unlawful dismissal and redundancy. Employees may only be validly dismissed by complying strictly with the procedure prescribed in the enabling statute. Failure to do so will render the purported dismissal as unlawful, null and void and the employee will be entitled to be reinstated. In the case of Shitta Bey Vs Federal Public Service Vs Federal Public Service Commission, [13] The Supreme Court of Nigeria held that civil servants are not employed at the pleasure of the Federal Government and that Civil Service rules invest in these public service a legal status and they can be legally and properly removed only by and as provided in the said rules. In Ofomaja Vs Commissioner of Education, Edo State, [14] the court found in favour of the employee, that he was wrongfully dismissed and was held to still be in the service of Edo Civil Service because laid down procedures for termination were not followed and that the employee was not given fair hearing. A number of judicial authorities have supported the principle of law that employment with statutory flavor guarantees job security to some extent See Olaniyan Vs University of Lagos. [15]  See also UNTHMB Vs Nnoli, [16] where it was held that termination of the employment of the employee must comply with the procedure laid down under Section 9(1) of the University of Nigeria Teaching Management Board Decree No 10 of 1985.  Be it as it may, motive for terminating a contract with statutory flavor is irrelevant. This means an employer actuated by bad faith or ill motive can just comply with the provisions of the statute creating the employment.

Termination of Employment by Operation of Law

A contract is determined by operation of the Law if any given set of facts or events evoked legal provisions or principles which effectively terminate the contract without the intentional acts of the parties. At common law, frustration can determine an employment relationship. Frustrating circumstances are those occurrences which makes the performance of the contract impossible by any of the parties. They include an outbreak of war, see Brown Vs Haco Ltd, [17] where the plaintiff travelled to the East and the civil war caught up with him. By the time he found his way back to the Nigerian side, it was held that his contract had been frustrated.  Also change in law, death of either party or sickness. Death of either party to the contract of employment will terminate the contract. Dissolution of partnership, bankruptcy, liquidation or voluntary winding up where the employer is a corporate body may also terminate the employment of an employee. Sickness on the other hand may not necessarily bring a contract of employment to an end. Facts to consider under sickness are usually duration and nature of sickness, length of service of the employee and position occupied by the employee. Illness covering a period of one or two years has been held not to have frustrated a contract; while another lasting about one year was held to have frustrated it. It all depends on the facts on ground which could serve as evidence and the discretion of the court.

OBSERVATIONS, CONCLUSION AND RECOMMENDATIONS

In general, it seems quite unfortunate that in cases of unjustifiable termination including outright victimization, basic Common law principle will suffice to uphold such termination, that is, without the requirements of reason for the termination, considerably so, as the employee who having already lost his job in the circumstances might not have the resources for some of the hassles that further litigation may present. This amounts to unfair termination and It is evident that the purported exercise of right of termination when tested against the International Labour Organization standards as contained in ILO Termination of Employment Convention, [18] Article 4 of the said Convention requiring all removal to be with valid reasons which must be justified by the employer; fails in all respects.

Indeed, where an employer relies on any reason, he will be bound to substantiate the reason for the termination. This was upheld in NEPA Vs Eboigbe [19] See also Angel Shipping & Dyeing Ltd Vs Ajah. [20]  This rather suggests that unscrupulous employers will wittingly choose the option of not giving any reason for termination so as to avoid the requirement of substantiating it, so far a termination without reason will suffice. It is noteworthy also that except where the employer relies on a reason, the onus of proving the wrongfulness or unlawfulness of termination rests squarely on the employee who is alleging wrongful or unlawful termination. In such circumstance the employee is required to prove to the satisfaction of the court that;

(a.) He is an employee of the named defendant, that is the employer

(b.) The terms and conditions of his employment and

(c.) The manner and by whom he can be removed.

The case of Anaja Vs UBA PLC [21] is instructive. It is also thought provoking that as stated in the case of Katto v CBN (supra) on the power of the terms of Contract, that there are several cases of vague, nebulous and ambiguous terms of Contract issued to employees at appointment especially in private organisations which proves unhelpful at an instance of a perceived wrongful termination of employment.                 This generally calls for a strict enforcement of standard Contract terms between employers and employees by organisations. From the foregoing, it is apparent that a most important document between the employer and the employee is the employment contract which must make the provisions in a-c above succinct since at any time either party feels unfairly treated, the contract remains the only thing for the courts to interpret.

Considerations of what obtains globally in Labour relations on requirements for termination, especially as regards giving no reason at all by the employers has gradually made our courts begin to take a new attitude in digressing from what our Nigerian Labour Act provides on the issue. As can be seen in the case of Petroleum and Natural Gas Senior Staff Association of Nigeria V Schlumberger Anadril Nigeria Ltd; [22] The National Industrial Court presided over by the president of the court, Hon Justice Adejumo said:

‘The respondent also argued that it has the right to terminate the employment of any of its employees for reasons or no reason at all. While we do not have any problem with this at all, the point may be made that globally it is no longer fashionable in industrial relations and practice to terminate an employment without adducing any reason for such termination.’

Indeed, Article 4 of the International Labour Organization Termination of Employment Convention No. 158 makes natural justice, equity and fairness a part of labour and employment relations and that termination should be for cause only. Employment of a worker should not be terminated unless there is a valid reason for such termination, or it is connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service. The Convention provides that a worker should be given fair hearing when an allegation is made. This undoubtedly promotes job security which is currently lacking in Nigerian Labour laws. Over thirty-three countries have ratified the Convention and Nigeria is currently not one of them. As an international best practice that guarantees job security for her citizenry, Nigeria should ratify this necessary Convention among others in industrial and labour relations.

Again, the Constitution of Federal Republic of Nigeria [23] empowers the Courts to deal with matters relating to or pertaining to the application of international conventions which includes the International Labour Organization Convention 158 of 1982 among others. This implies  that courts can lean towards this provision of the ground norm and make decisions not repugnant to equity, natural justice and good conscience.

___________________________________

1. Section11(2) a-d Nigerian Labour Act, LFN, 2004
2. Momoh Vs CBN (2007) 14 NWLR (Pt 1055)508
3. NRW Ltd Vs Akingbulugbe (2011) 11 NWLR (Pt 1257)135
4. Daodu Vs UBA PLC (2004) 9 NWLR Pt 1878 276 at 280
5. Ben Chukwuma Vs SPDC (Nig) Ltd (1993) 4 NWLR (Pt 289)512
6. Katto Vs CBN (1999) 6 NWLR (Pt 607)370
7. Uwagbanebi Vs NPPB (1986) 3 NWLR (Pt 29) 489
8. British American Ins. Co. Vs Omolaye (1991)2 NWLR (Pt 187)65
9. Wayo Vs Benue State Judicial Service Commission (2006) ALL FWLR 66
10. C Nwagbara, Determination of Contract of Employment and Remedies for Wrongful Dismissal, Tait Publishers Nigeria, 2000
11. Ck Agomo, Nigeria Employment and Labour Relations Law and Practice, Concept Publication Limited, Lagos (2011) P.169
12. Longe Vs First Bank (2010) 6 NWLR Pt 1189
13. Shitta Bey Vs Federal Public Service Commission (1981) 1 SC40 at 57-58
14. Ofomaja Vs Commissioner of Education, Edo State (1995) 8 NWLR (Pt 411) 69
15. Olaniyan Vs University of Lagos (1885)2 NWLR Pt 9 598
16. UNTHMB Vs Nnoli (1992) 6 NWLR (Pt 250) 752, (1994) 8 NWLR (Pt 363) 576
17. Brown Vs Haco Ltd (1970)2 ALL NLR 47
18. ILO Convention 158 on Termination of Employment 1982 Article 4
19. NEPA V Eboigbe (2009) NWLR (Pt 1142) 150 at P 152
20. Angel Shipping & Dyeing Ltd V Ajah (2000) 13 NWLR (Pt 685) 532
21. Anaja V UBA PLC (2014) 4 ACE LR 82
22. Petroleum and Natural Gas Senior Staff Association of Nigeria Ltd (of 2008)11 NLLR (Pt 29)164
23. Constitution the Federal Republic of Nigeria (1999) as amended

References.

1. A O, Elias, ‘Summary Dismissal Upon Allegation of Crime-An Overview’, MRJFIL Vol. 3 No. 3 (2000)
2. C, Nwagbara, Determination of Contract Employment and Remedies for Wrongful Dismissal, Tait Publishers Nigeria, (2000).
3. C K, Agomo, Nigeria Employment and Labour Relation, Law and Practice, Concept Publications Ltd, Lagos, (2011)
4. E, Chianu, Employment Law, Bemicov, Publishers, Akure, Nigeria Ltd, (2004)
5. E E, Uvieghara, ‘Labour law in Nigeria,’ Malthouse Press Limited, Lagos, (2001)
6. E O, Abugu, ‘ILO standards and The Nigeria Law of Unfair Dismissal’, AJICL Vol. 17 (2009)
7. F, Ojo, ‘Legal Redress for Unlawful Termination of Employment: It is Time to call A Spade A Spade’, NJLIR, Vol. 1 No. 3 (2007)
8. J E O, Abugu, Treatise on the Application of ILO Convention in Nigeria, University of Lagos Press, Lagos, (2009).

9 M R, Fredland, The Contract of Employment, Oxford University Press, Oxford, (1976)

10. O, Ogunniyi, Nigeria Labour and Employment Law in perspective, Folio Associates Limited, Ikeja, Lagos, (1991)
11. O D, Amucheazi and E A, Oji, ‘Reinstatement of a Dismissed Employee in a contract of Employment; A case Review of Longe v First Bank of Nigeria Plc’, NJLIR Vol. 4 No. 2 (2010).
12. O, Animashaun, ‘Unfair Dismissal: A Novel Idea in Nigerian Employment Law’, NJLIR, Vol. 2 No. 1 (2008)
13. O K, Edu, ‘Dismissal upon Allegation of Crime in Nigeria: Need to comply with constitutional provision’. MRJFIL, Vol.10 Nos 3-4 (2006)
14. R K Salman ‘Concept of Dismissal and Natural Justice: An Essential Correlation’ Vol. 2 No 2, UILJ, Vol. 2 No. 2 (2005)
15. S, Erugo, ‘Security of Employment in Nigeria: A Case for Statutory Intervention’, NJLIR Vol. 1 No. 1 (2007)

Written by Genevieve Ike Johnson (Esq) ACIPM, genevievechioma@nigerianbar.ng