MR. EMEKA SUNDAY AGBAI VS SHORELINE CHEMICALS AND OIL

IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE OWERRI JUDICIAL DIVISION

HOLDEN AT OWERRI

BEFORE HIS LORDSHIP: HON. JUSTICE I.S. GALADIMA

Date: 30^th October, 2018.

SUIT NO: NICN/YEN/52/2017

BETWEEN:

EMEKA SUNDAY AGBAI

CLAIMANT

AND

SHORELINE CHEMICALS AND OIL SERVICES LIMITED

DEFENDANT

REPRESENTATION:

– D. Ofekeze for the Claimant.

– Chime S. Chime for the Defendant.

JUDGMENT

The Claimant instituted this suit by way of complaint on 31/3/2017, in which the following reliefs were sought:

The sum of N4,410,000 (Four Million, Four Hundred and Ten Thousand, Naira) being salary arrears for March 2014-July 2014, September 2014, balance half of salary for October 2014 and November 2014 -February 2015 at N420,000 monthly and N210,000 for half month salary.
The sum of N160, 988. 88 (One Hundred and Sixty Thousand, Nine Hundred and Eighty Eight Naira, Eighty Eight Kobo) being 13th month salary for 2014.
The sum of N176,400 (One Hundred and Seventy Six Thousand, Four Hundred Naira) being leave bonus for 2014 accessed at 3.5% of the annual gross salary of N5, 040,000.
The sum of N819, 000 (Eight Hundred and Nineteen Thousand Naira) being the sum N31, 500 (Thirty One Thousand, Five Hundred) deducted monthly from the Claimant’s salary between January 2012 and February 2014 but not remitted to the designated pension fund administrator.
The sum of N819,000 (Eight Hundred and Nineteen Thousand Naira)being the sum of N31,500 (Thirty One Thousand, Five Hundred Naira) deducts monthly from the Claimant’s salary between January 2012 and February 2014 but not remitted to the designated pension fund administrator from January 2012 to February 2014.
The sum of N4, 620, 000 (Four Million, Six Hundred and Twenty Thousand Naira) being the value of the Claimant’s monthly gross salary multiplied by 11 years as stipulated by the Defendant’s employee’s handbook as redundancy benefits.
The sum of N1,608,420,19 as special damages being interest incurred by the Claimant as a result of his inability to defray the facility due to the Defendant’s failure to pay his salary.
The sum of Nl0, 000,000 as damages wrongful termination.
10% Interest on Judgment sum till same is liquidated.

CASE HISTORY:

The complaint was accompanied by statement of facts, witness statement on oath and other originating processes. The Claimant originally filed a motion for summary judgment alongside the originating processes. The Defendant filed a counter affidavit to that motion. However, the application for summary judgment was withdrawn by the Claimant’s Counsel on the 13/12/2017 and accordingly struck out by this Court. Consequently, the Defendant filed a memorandum of appearance and Statement of Defence, written deposition of its witness and other relevant accompanying processes on 2/5/2017. Hearing commenced on 15/2/2018. The Claimant in proof of his case, testified as CW1 and tendered 7 Exhibits while the Defendant also called a lone witness and tendered 4 Exhibits.

Trial ended on 12/6/2018. Interestingly, the Claimant’s counsel filed his final address on 11/10/2018, while the Defendant’s Counsel filed his on 12/10/2018. Adoption of both addresses were done respectively by Counsel on 15/10/2018. The matter was thereafter adjourned to today, 30/10/2018 for Judgment.

DEFENDANT’S SUBMISSIONS:

Two issues were raised in the final address of the counsel for the Defendant as follows.

Whether the Claimant has proved his case to be entitled to all his claims or the reliefs sought for?

Whether the Claimant can rely on the defendant non-functional handbook to be making claims of entitlements, benefits and allowances?

With respect to the first issue, counsel argued that the Claimant only proved that he is being owed certain salaries which can only be determined and calculated by the defendant’s account department, and the defendant is not owing the Claimant any other money, the court was urged to allow the account department of the defendant to determine and calculate the Claimant’s unpaid salaries and pay him accordingly.

On issue two, it was the submission of the defendant that the Claimant is not entitled to entitlements contained in the suspended handbook which was never in use at and during the pendency of the employment of the Claimant. It was also contended by counsel that the defendant did not instruct the Human Resources Manager to give Exhibit CW6 to the Claimant that was the reason the Claimant was not asked to sign for the said Exhibit as evidence to show that the defendant authorized giving CW6 to the Claimant, and that any staff who was paid ex-gratia using the Handbook does not mean that it had elected to pay every staff based on Exhibit CW6. Counsel cited the cases of SAMCHASE (NIG) LTD V GIDADO (2014) ALL FWLR (PT. 760), 1302,IFEANYI CHUKWU (OSONDU) LTD V SOLEH BONEH LTD (2000) NWLR ( PT.656), 322.

On the issue of damages for wrongful termination claimed, the defendant argued that the Claimant is not entitled to any damages and cited the case of DAODU V U.B.A. Plc (2004) NWLR (Pt.878) 276. Counsel also submitted that the Claimant did not lead evidence to show that the defendant guaranteed the loan facility granted to it by Skye Bank Plc or that the defendant will be liable for any obligation if it fails to pay the salary of the Claimant in his salary account.

Furthermore, counsel submitted that the 13^th month salary, fuel and leave allowances are paid on the defendant’s discretion and the claimant is not entitled to them, the case of AKINTOLA V BALOGUN (2000) NWLR (Pt. 642), 532 was cited and relied upon. In conclusion, defendant’s counsel argued that the Claimant is being owed salary which should be calculated by the defendant’s account department. That the amount presented by the Claimant cannot represent his salary because he is not in a position to calculate same. That the Claimant is not entitled to any of the entitlements in Exhibit CW8 or any damages at all.

CLAIMANT’S SUBMISSIONS:

In the Claimant counsel’s address, two issues were raised for determination, to wit:

Whether or not the defendant is bound by its Employee’s Staff Handbook (Exhibit CW 6)?
Whether or not the Claimant is entitled to the reliefs as contained in the statement of claim?

On issue one, Counsel submitted that the contention of the defendant that Exhibit C6 was suspended and that the Human Resources Manager gave the document without authority is not supported by any evidence, citing the cases of COKER V ADETAYO (1992) LPELR-1539(CA) AND AKINBADE V BABATUNDE (2017) LPELR-43463 (S), SANUSI v OBAFUNWA (2006) LPELR -11863, in supporting his further contention that DW1 did not deny the existence of the said exhibit, and facts admitted need no further proof. Also, it was contended by counsel that the defendant admitted under cross examination that it owed the Claimant salaries in arrears. The contention of counsel was that the 13th month salary is premised on Exhibit CW1 and assessed as one month basic salary and it is a contractual agreement and not a privilege by virtue of Exhibit CW1 and CW6. Counsel urged the court to grant it because their veracity were never impugned or contradicted by pleadings or cross examination.

For the Claimant’s leave bonus, pension deductions, pension contributions and redundancy benefits, he referred the court to exhibit CW6 the defendant’s handbook, and section 9 of the pension Reform Act 2004 and urged the court to grant same as they have been proved. For the redundancy benefits, Counsel referred the court to Exhibit CW6 which he said, spells out the benefits that shall accrue to the person whose employment was terminated on the ground of redundancy and submitted also that section 20 of the Labour Act makes provisions for termination during redundancy where the defendant is obligated first to inform the employee’s trade Union and follow the principle of last in first out, the failure of the defendant therefore to comply with section 20 of the Labour Act entitles him to damages of N10,000,000. The Claimant’s Counsel impressed on the Court to grant all his reliefs as sought.

COURT’S DECISION:

A brief summary of the facts of this case is that the Claimant was employed on 28^th July, 2004. His employment was confirmed on 5^th December 2005. His salary was increased in 2011 before he was terminated on the ground of redundancy in 2015. This suit was instituted to claim his arrears of salary, leave allowance, 13^th month salary, redundancy benefits assessed at the value of one and half of his gross monthly salary multiplied by the number of years he was employed; pension deductions and interest on a facility he obtained from Skye Bank. The defendant denies that the claimant is entitled to any benefits contained in the Handbook, pension contributions and it is not aware of a loan granted to the Claimant by Skye Bank Plc which was guaranteed by the defendant and serviced from the Claimant’s salary account.

A lone issue is for determination which is whether the claimant has proven his case as required by law to be entitled to the reliefs sought in this action?

I think that I ought to start by restating the well established principle of law relating to contracts of employment which is, where parties have agreed to be bound in their relationship by written agreements, such contracts must be governed by the terms of their contract. See P.A.N. LTD v OJE (1997) 11 NWLR (pt 530) 625 at 632.

From the pleadings and evidence in the instant case, it is clear that the claimant and defendant intended to be bound by the terms and conditions they entered into. The claimant in paragraph 2 of his Statement of Facts averred that: “by a letter dated July 28 2004, the claimant was employed by the defendant”.

Also, in paragraphs 5 and 6 of the same Statement of Facts, the following facts were averred:

“5. By a letter dated February 27 2015, the claimant’s employment with the defendants was terminated on the ground of redundancy…

Prior to the termination, the claimant’s gross salary wasN420,000…”

These averments were admitted in paragraphs 1 and 3 of the statement of Defence by the defendant, who went further to state in paragraph 4(ii) as follows:

“that all entitlements, privileges and benefits stipulated in the Handbook are not applicable because it is not part of employment of the claimant”

Going by the principle enunciated in ASHAFA FOOD FACTORY v ALTRAINE LTD (2002) 12 NWLR (pt 834) 448, that facts admitted require no further proof, the settled facts in this case are that the claimant was employed by the defendant in 2004 and he was on a monthly salary of N 420,000 before he was terminated on the ground of redundancy on February 27 2015.

The letter of termination of appointment (exhibit C3) stated the reason for the termination of appointment thus:

We regret to inform you of the termination of your employment effective March 1 2015 following current inactivity. Your position as project engineer has therefore become redundant.

The implication of this is that the letter of termination not only severed the employment relationship between the parties, but also indicated that the position occupied by the claimant is no longer necessary and/or useless to the employer. See N.S.E. v OZAH (2015) 6 NWLR (PT 1454) 76 at 96, paras B-C.

One issue in dispute between the parties in this case is whether or not the claimant is entitled to his redundancy benefits per exhibit C6 –the Staff Handbook?

Contrary to the Learned Counsel for the claimant’s argument that the defendant failed to comply with section 20 of the Labour Act, rendering the said termination unlawful, entitling the claimant to damages of N10, 000,000 for damages, the law is that under the class of a master and servant relationship, as existed between the parties in this case, an employer has the power to terminate the contract with his employee at any time or for any reason or for no reasons at all, per OLANREWAJU v AFRIBANK PLC (2011) 13 NWLR (pt 731) 691 at 705. The jurisdiction of this court to grant any reliefs claimed in this action is predicated on the existence of a right, which in private law arises in either of the circumstances; a right of property attached to the person, or right of contract: See S.P.D.C.N. LTD v NWAWKA (2003) 6 NWLR(PT 815) 184, particularly at 206 where the Supreme Court rendered the law thus:

“when parties make a contract, they make their own law, to which they are subject and which creates rights and obligations which bind them and to which the general law only gives recognition or force”.

In other words, the right of the claimant to call on me to determine if the termination of his contract of employment on the ground of redundancy is wrongful is not founded on any public law but on the terms and conditions in the contract entered into by him with the defendant.

The law on this point is firmly established in a plethora of cases that an employer in an ordinary master and servant relationship can fire his employee at will for a reason, or for no reason at all. The only curtailment to this right are two-fold, that is, an employer must terminate the employment contract in the manner provided for by the contract, and if reasons are given for the termination, he would substantiate those reasons to the satisfaction of the court. See OLANREWAJU v AFRIBANK (supra).

In this regard, exhibit C1 which is the claimant’s employment contract and exhibit C3 – his termination letter are crucial in determining what the terms of the contract of employment entered into between these parties, and whether those terms were complied with when the defendant terminated the claimant’s employment on the 27 of February 2014. That is to say in effect that exhibit C1 has reduced into writing the terms and conditions of the employment. It is this document that will determine the wrongfulness or otherwise of exhibit C3. See CHUKWUMA v. S.P.D.C.N LTD(1993) 4 NWLR (pt 289)512.

Having dispensed with this principle let me now consider the relevant contents of these exhibits. The second paragraph of page 2 of exhibit C1 reads:

“please note that in accordance with the terms of your contract, you are obliged to give one months’ notice, or pay one months’ salary in lieu of notice should you wish to terminate your employment after your appointment has been confirmed”.

While at first glance, this stipulation appears to confer the requirement to give notice of termination on the claimant, the Court of Appeal in TEXACO NIGERIA PLC v KEHINDE (supra) at 245 para C held that it is well established by our law that the right to terminate a contract of employment can be exercised by both parties to the contract. See also section 11(1) of the Labour Act which provides that either party to a contract of employment may terminate the contract of employment on the expiration of notice given by him to the other party of his intention to do so. See S.S. COY LTD v AFROPAK LTD (2008) 18 NWLR(pt 1118) 77 at 102.

Exhibit C2 shows that the claimant was confirmed on 5^th December 2005, and with that was entitled to one month notice or salary of one month in lieu of such notice. In exhibit C3 dated February 27 2015, the termination of the claimant’s employment was to take effect on the 1^st March 2015. From 27^th February to 1^st March 2015 falls short of one month. I find that the defendant did not give the claimant one month notice as required by the contractual agreement of employment between the parties. What is more? The claimant in his evidence in chief and cross- examination admitted that no payment of one month salary was paid simultaneously with the service of the termination letter.

Again, the reason of redundancy was given by the defendant in exhibit C3, following the reasoning in OLANREWAJU v AFRIBANK PLC (supra), that the defendant is obliged to prove that the claimant was redundant.

Now, redundancy in employment law is a form of severing an employment relationship, unique and set apart from termination simpliciter. In termination of an employment, while the employee is disengaged the position he held still exists, but when an employee is declared redundant, it presupposes that the job for which he was employed is no longer necessary or useless to the employer, as was held in N.S.E. v OZAH (supra), P.A.N. LTD v OJE (1997) 11 NWLR (pt 530) 625 at 635, paras A-B. Also, during cross-examination the claimant admitted that when his employment was terminated he was active, and overseeing projects. This piece of evidence was not controverted or challenged by the defendant, and in that event I find that the claimant was not redundant when he was fired by the defendant.

Consequently, I must hold that on February 27 2015 when the defendant terminated the employment of the claimant, it did so without giving one month notice or paying one month salary in lieu of notice in breach of exhibit C1, which is the contract of employment; and at trial it also did not substantiate the reason given for the termination, making the termination wrongful.

What is the claimant then entitled to for his wrongful termination?

The damages recoverable by a claimant whose employment was wrongfully terminated are losses foreseeable by the parties at the time of the contract arising if one breaks faith with the other. Such damages are not at large, they are limited by the terms of the contract, and the employee is entitled to would-be salaries for the length of time notice should have been given.

This principle was clearly outlined in RELIANCE TELECOM LTD v ADEGBOYEGA (2017) 8 NWLR (PT 1567) 319 at 332 as follows:

“ the damages payable for any employment that has been wrongfully terminated are not at large. They are limited by the conditions of service, and the plaintiff is only entitled to what he would have earned over the period of notice”.

As of right, the salaries to be paid over this period of notice would include benefits and other earnings in accordance with the contract of employment; per IFETA v SPDC LTD (2006) 8 NWLR (pt 983) 385 at 619-620, paras H-A, and UBN PLC v CHINYERE (2010) 10 NWLR (pt 1203) 453 at 475 A-C.

As a result, relief H which is a claim for N10,000,000.00 general damages, fails. I award the sum of N 420,000 only as damages for wrongful termination.

The claimant’s first relief in this suit is for arrears of full salaries for the months of March, April, May, June, July, September, November, and December 2014, January and February 2015 alongside half salary for October 2014. In proof of this relief, he tendered his statement of account as exhibit C7. He also admitted during cross-examination on 24^th April 2018 that in the course of his employment he was paid up till a point in 2014. This fact that the defendant owed him salaries was admitted by the defendant’s witness during cross – examination on 12^th June 2018. The Defendant admitted almost all the averments made by the claimant in this regard.

Therefore, I find that the claimant has proved that he was not paid any salaries during the months listed above. An employee is to be paid for the period he worked for his employer up to the date the contract of employment is severed. For this reason, I grant relief A in this suit.

Regarding relief B, exhibit C1 captured it as “bonus: 13^th month salary”. It is obvious that the payment of this bonus is tied to the end of the year, which in normal calculation is the 31^st December of every year. The claimant was terminated on February 27 2015 after the end of 2014, and is entitled to be paid his 13^th month salary as bonus for 2014 in line with his contract of employment. Relief B is therefore grantable.

On relief C, exhibit C1 indicates 20 working days as leave period, and leave allowance for those days at 3% of gross pay. The breakdown in exhibit C4A attached to the claimant’s salary increase letter shows that leave allowance is pro rated and paid monthly at N16, 098.89 in addition to basic salary and other allowances bringing the total pay to N420,000 every month. From the claimant’s pleadings and evidence, he was paid in January and February 2014 while he was owed the other months, excluding August when he was paid, and October when he was paid half. It follows therefore, that in granting relief A, the claimant is presumed to have been awarded his leave allowances for 2014 and for January and February 2015. If I award relief C – a lump sum of N176,400 as leave allowance for 2014, it will amount to double compensation for the claimant, which the law frowns at. TEXACO NIGERIA PLC v KEHINDE (2001) 6 NWLR (pt 708) 224 at 242, para A. As such, I refuse to grant relief C of the claims and I so hold.

The Claimant also claimed for pension deductions and pension contributions which amount to N819, 000, which the defendant was required to deduct in compliance with the Pension Act. Learned Counsel for the Claimant referred the court to section 9 of the Pension Reform Act, 2004 in his final address. Sections 9(1) and 11(5) of the Pension Reform Act, 2004 provide as follows:

“Subject to the approval of the commission established under section 14 of this Act, the contribution for any employee to which this Act applies shall be made in the following circumstances relating to his monthly emoluments:

(a) in the case of the Public Service of the Federation and Federal Capital Territory;

(i) a minimum of seven and half percent of the employer;

(ii) a minimum of seven and half percent by the employee; or

(b) in the case of the Military

(i) a minimum of twelve and a half percent by the employer;

(ii) a minimum of two and half percent by the employee;

(i) a minimum of seven and a half percent by the employer, and

(ii) a minimum of seven and a half percent by the employee.

Section 11(5)

The employer shall

(a) deduct at source, the monthly contribution of the employee in his employment; and

(b) not later than 7 working days from the day the employee is paid his salary, remit an amount comprising the employee’s contribution under paragraph (a) of this subsection and the employer’s contribution to the custodian specified by the pension fund administrator of the employee to the exclusive order of such pension fund administrator.”

Complying with the above stated statutory provisions, the defendant was obligated to deduct seven and half percent (7.5%) of the Claimant’s monthly emoluments and remit same to a specified pension fund administrator. Exhibit C4 (A—F) of the claimant’s payslips indicate that N13,136.57 was deducted as “CPF”, while N18,479.63 was deducted as “PAYE”.

The claimant also averred in paragraph 12 of his statement on oath that N31,500 was deducted from his pay and not remitted to the Pension Fund Administrator. This evidence remained unchallenged and is deemed admitted, with his evidence giving the terms of the transaction between him and the defendant was in terms with his statement of fact and in the absence of any evidence in rebuttal, he is entitled to judgement. See Nwabuoku V Ottih (1961) 2 N.S.C.C. 234.

The claimant in proving his relief of redundancy benefits relied on the Staff Handbook, which was pleaded and tendered in evidence as exhibit C6. Claimant’s Counsel in his adumbration during the adoption of his final address referred me to the decision of my Learned brother Justice S.H. Danjidda in (unreported) Suit No: NICN/YEN/51/2017: AMOS CHIBANI TUKURA v SHORELINE DREDGING AND OIL SERVICES LIMITED delivered on 12^th October 2018, in which the claimant was granted his redundancy benefits.

In the instant case, the claimant admitted that exhibit C6 was given to him in the course of his employment. He also stated that the Handbook was in use by the defendant in calculating the benefits of another employee. The Defendant’s Counsel in opposing this submission argued that the Handbook was suspended and not in use. Both counsel have argued quite extensively on the functionality or otherwise of exhibit C6.

With all due respect to Learned Counsel, I am of the view that the crucial issue of the bindingness of this exhibit was not properly canvassed. The overwhelming wealth of judicial authorities on this issue tilt towards the position that an extraneous document relied upon as a basis for a relief by any party to a contract of employment can only avail that party where such document is incorporated into the contract of employment. See CHUKWUMAH V S.P.D.C.N. (supra) at 567 paras B-H.

In IDONIBOYE-OBU v NNPC (supra) at 630, paras C-E, the Supreme Court succinctly held as follows:

“the court is not entitled to look outside the contract of employment as to the terms and conditions. These must be gathered therefrom and/or from other sources which can be incorporated by reference to the contract as the case may be. It is the best and only way of deciding the rights of parties under the contract” Emphasis mine. It is the best and only way of deciding the rights of the parties under the contract

See also ABALOGU v SPDC LTD (2003) 13 NWLR (PT 837) 308 at 336-7, paras H-D, where the trial court ignored the defendant’s Handbook exhibit E and collective agreement exhibit F , without considering them at all in his judgment.

The Supreme Court upheld the decision of the Court of Appeal as follows:

“if the exhibits E and F were not incorporated or embodied into the contract of service, the lower court was perfectly justified in ignoring or refusing to consider them in its judgement…as the parties are bound only by their contract of service dated 1-5-1974 which is binding between the parties”.

The Supreme Court further held at 337-8, paras H-C, that:

“I think the court below was perfectly right when upon close consideration of the issue it held thus:-

Therefore in the present case… exhibits E and F were neither incorporated nor embodied in the original contract of service exhibit A. The Learned trial Judge was quite right in ignoring or refusing to consider them in his judgement, in spite of the fact that … the documents have been duly pleaded…”

The Court of Appeal in TEXACO PLC v KEHINDE (supra) at 240 A-B, explained the phrase “incorporated by reference” by referring to the Black’s Law Dictionary 7^th Edition, page 770 as follows:

“a method of making a secondary document part of a primary document by including in the primary document a statement that the secondary document should be treated as if it were contained within the primary one—often shortened to incorporation—also termed adoption by reference”.

I therefore find that I have no jurisdiction to construe the terms and conditions outside what was agreed upon by these parties. My only duty is to interpret the document that gave rise to the employment relationship because parties are bound by the four walls of their contracts and a party who has entered into a contract with open eyes and mind cannot seek for better terms now that there is litigation and things are no longer at ease; per IDONIBOYE-OBU’s case (supra).

Ultimately, there is nothing in exhibit C1 suggesting that the Handbook was incorporated into it to make the conditions contained therein part of the claimant’s terms of employment with the effect that it is binding on the defendant, and/or, it gives the claimant a basis for his reliefs. Furthermore, there is nowhere in the statement of facts suggesting that the handbook was adopted by reference into the employment contract between the parties.

Flowing from the opinion, I hold that the claimant is not entitled to his relief for redundancy benefits as contained in exhibit C6. Relief F is therefore denied.

Further, the Claimant claims the sums of N1,608,420.19 as special damages being interest incurred as a result of his inability to defray the facility due to the defendant’s failure to pay his salary. I align myself with my learned brother’s (Danjidda, J’s) decision in suit no NICN/YEN/51/2017, that the relationship and transaction between the Claimant and the Bank in respect of the facility must have been reduced in writing, containing ascertainable terms and conditions of the loan facility that will include the percentage of the interest to be charged and the time when the loan will be liquidated which will determine the amount to be deducted every month from the Claimant’s salary. Thus, the court would not go on an expedition to determine the percentage of the interest to be charged either in the ordinary course of paying the loan or when there is default. On this note, I am of the opinion that the Claimant did not present sufficient materials before the court to be entitled to the amount claimed in his paragraph G of his claim. That claim fails and is hereby refused.

For the avoidance of doubt, reliefs C, E, F, G, and H are refused in this judgment.

I only allow and award the following reliefs to the Claimant, against the defendant thus:

The aggregate sum of N 4,410,000 being arrears of salaries for March, April, May, June, July, September, November, and December 2014, January and February 2015 alongside half salary for October 2014.

The sum of N 160,988.88 as bonus 13^th month salary for the year 2014.

The sum of N819,000 deducted from the claimant’s salary from January 2012 and February 2014 but not remitted to the designated fund administrator as pension.