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MR RAYMOND ASIEGBU EZEH VS PORT HARCOURT ELECTRICITY

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IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE OWERRI JUDICIAL DIVISION

HOLDEN AT OWERRI

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

Dated: 19th March , 2019

SUIT NO. NICN/OW/46/2017

Between:

MR RAYMOND ASIEGBU EZEH

CLAIMANT

And

PORT HARCOURT ELECTRICITY DISTRIBUTION COMPANY

DEFENDANT

Representation:

Perfect Okorie; O.U. Igbokwe for Claimant.

  1. Eleanya for the Defendant.

JUDGMENT

This action was filed by the Claimant on the 4th of August, 2017 by way of complaint for the following reliefs:

  1. A declaration of the honourable court that the termination/ disengagement of the Claimant from the employment of the Defendant was wrongful and contrary to the Defendant’s rules and regulations and provisions of the employee handbook.
  2. An order of the court compelling the Defendant to reabsorb the Claimant into the employment and to pay him this salary and entitlement from the month of September 2016 till date.

Or alternatively:

  1. An order of the honourable court compelling the Defendant to pay to the Claimant the sum of N10,000,000(ten million naira) for the wrongful termination/disengagement of his employment.
  2. An order compelling the Defendant to pay up the balance of what is outstanding in the said loan guaranteed for the Claimant.
  3. An order of the honourable court compelling the Defendant to pay the Claimant the sum of N383,655.50 being amount due as the Claimant’s unutilized leave to cash for the years 2014 and 2015.
  4. An order compelling the Defendant to pay the Claimant the total sum of N315,000 being the relocation allowance due to the Claimant for the transfer from Garden City East to Promise City South (Eket) or any other sum calculated and determined by the Court as provided in the employee handbook.
  5. An order of the honourable court commanding the Defendant to pay the Claimant 10 percent monthly interest on the judgment sum from the time of judgment till final liquidation.

The Defendant entered appearance on 4/10/2017 and filed its defence on the same day. The Claimant filed a reply and issues were accordingly deemed as properly joined.

SUMMARY OF THE CAUSE OF ACTION:

The Claimant was provisionally employed by the Defendant on 31/5/2014. His employment was confirmed in December 2014. During the employment, the Defendant wrote a letter of recommendation on the Claimant’s behalf to Skye Bank undertaking to domicile his salary account with it in order to back up the personal term loan based on the value of the Claimant’s monthly salary. On 9/9/2016, the Claimant was disengaged from the Defendant’s employ. Being aggrieved therefore, the Claimant believes that his disengagement is wrongful, and that the Defendant is liable to pay certain unpaid allowances and the outstanding balance on his loan from Skye Bank.

CLAIMANT’S CASE:

The Claimant testified as his only witness in his case on 24/5/2018, and was duly cross-examined on the same day, whereupon he closed his case. He tendered 8 documents as exhibits in the course of this trial thus:

Exhibit C1—disengagement letter dated 9/9/2016.

Exhibit C2—employment letter dated 31/5/2014.

Exhibit C3—employee handbook.

Exhibit C4—Defendant’s emails to the Claimant.

Exhibit C5—letters of redeployment dated 31/12/2014 and 9/5/2014 respectively.

Exhibit C6—Claimant’s letters to the Defendant dated 9/11/2016, and 1/11/2016.

Exhibit C7—Defendant’s letter of undertaking to Skye bank dated 21/1/2016.

Exhibit C8A—Claimant’s statement of account from First bank.

Exhibit C8B—Claimant’s statement of account from Skye bank.

DEFENDANT’S CASE:

The Defendant on 26/9/2018 called one witness, Etini Akpabio, who adopted his written deposition but did not tender any documents as exhibits. Mr. Okorie, the Claimant’s Counsel, cross-examined him on that day. With the close of trial, parties’ Counsel were ordered to file their respective final addresses in compliance with the Rules of this Court. The final addresses of both Counsel having now been duly filed and served were adopted on the 24/1/2019 and adjourned to today, the 19/3/2019 for delivery of judgment.

DEFENDANT’S FINAL SUBMISSIONS:

The Defendant’s Counsel proposed three issues for determination in his written final arguments of 22/11/2019, thus:

  1. Whether the employment of the Claimant was not rightfully terminated in line with the terms of contract of employment?
  2. Whether the Defendant was under any obligation by reason of the letter of introduction and undertaking to domicile salaries dated 21st January 2016 written at the Claimant’s request to the Claimant’s bank – Skye Bank (wherein the Defendant only guaranteed that the salary account of the Claimant shall be domiciled with the Claimant bank Skye Bank (nig. Ltd) automatically translated to mean that the Defendant had guaranteed to repay the loan or keep the Claimant in its employment until the loan is fully paid.
  3. Whether the Claimant has proved his case taking into cognizance the contract of employment between parties and in line with labour law and decided cases, as to be entitled to the reliefs claimed before this Court?

On the first issue, Counsel argued that the Claimant’s employment falls into the category of an ordinary master/servant relationship governed by exhibits C2 and C3, which was effectively severed by exhibit C1. It was the contention of Counsel that the exhibit C1 front-loaded and served on the Defendant was different from the one tendered in court, in that the last paragraph of exhibit C1 is not contained in the original copy issued to the Claimant and front-loaded by him.

It was further contended and purportedly on the strength of Section 128(1) of the Evidence Act and the decisions in Adebola v. UBA, and Akpabot v PHCN Plc (citations supplied) that in a question of wrongful dismissal or termination of employment where the contract terms between parties are documentary as in the instant case, the Court’s role is firmly restricted to interpreting the terms and conditions in the documents and no more.  On this note, Counsel urged this Court to peruse Exhibits C1, C2, and C3 and find that the employment of the Claimant was properly terminated.

It was argued that by article 22 of Exhibit C3, leave cannot be accumulated for more than one year, and employees who do not intend utilizing their annual leave are required to obtain the approval of management before deciding not to proceed on leave. According to Counsel, this approval enables the Defendant to compute and monetize such unused periods, but the Claimant despite not obtaining such approval, was paid the sum of N191,827.75 as unutilized leave grant for 2016.

The Court was invited to dismiss claim E as the Claimant was purportedly only entitled to leave after confirmation of his employment, and was neither entitled to leave in 2014 nor had he proved that he did not proceed on leave in 2015.

Similarly, learned Counsel contended that the Claimant is not entitled to relocation allowance because he was never transferred to Eket. That this can be gleaned from his transactions garnered from his statements of account which do not record any transactions done in Eket.

Regarding the termination of the Claimant’s employment, Counsel submitted that the Defendant Company acted properly in issuing the Claimant with exhibit C1 in line with Article 60 (9) and 88 of Exhibit C3 which entitles either the employee or the employer to give one month notice of disengagement or payment of one month’s pay in lieu. Counsel went further to add that even if this Court finds that the disengagement was wrongful, the entire sum this Claimant should be entitled to is the salary he would have earned over the period of notice. The cases of Zideeh v RSCSC, Ativie v Kabel Metal Ltd, and Sheno v Julius Berger (citations supplied) were relied upon by Counsel for his submissions.

With respect to issue two, the Defense Counsel argued that the contract for the loan was strictly between the Claimant and Skye Bank, and a stranger such as the Defendant in the instant case cannot sue or be sued for obligations arising therefrom it not being privy to the contract – per E.T&E.C Nig Ltd v Nevico (citation supplied). He further submitted that the Claimant admitted during cross-examination that the Defendant’s guarantee as a Guarantor for the loan was only limited to domiciling the Claimant’s salary in Skye Bank.

Such admission in counsel’s opinion require no further proof and is admissible in line with the case of Ude v A.G. Rivers State(citation supplied).

Finally, on issue three, Counsel submitted that from the evidence before this Court, the Claimant was unable to prove his case. I was urged to dismiss this case with substantial costs as same accordingly lacks merit.

 

CLAIMANTS’ FINAL SUBMISSIONS:

The Claimant’s Counsel on 27/11/2018 filed his final address, in which three issues were also formulated for determination as follows:

  1. Whether considering the circumstances of the case the Claimant is not entitled to fair hearing before the termination of his employment by the Defendant.
  2. Whether the Claimant is not entitled to the payment of his unpaid allowances.
  3. Whether considering the nature of guarantee made by the Defendant on the loan facility, the Defendant can terminate the Claimant’s employment within the period of the facility and if so, whether the Defendant is not enjoined to offset the loan before the termination of the Claimant’s employment.

On issue one above, Counsel submitted that by the evidence of the Claimant, he had discharged the burden of proof of his disengagement. Purportedly, the Defendant’s reason for disengagement was that he scored poorly in the performance assessment. In his Counsel’s opinion, the failure to give the Claimant an opportunity to explain himself before terminating his employment is a denial of fair hearing and makes the disengagement wrongful.

Regarding issue two, learned Counsel argued that the parties are in agreement in their pleadings that the Claimant did not use his 2014 and 2015 leave, and by article 12(5) of exhibit C3 the Claimant is entitled to be paid his 2014 and 2015 leave grants at the time of his exit.

With respect to the relocation allowance claimed, he contended that the Claimant averred that he was transferred from Garden City East (Rivers state) to Promise City south (Akwa-ibom state), which amounted to an inter-city transfer entitling him to relocation allowance.

On issue three, Counsel submitted that the Defendant’s undertaking to domicile the Claimant’s salary for his 36 months’ term loan amounts to an estoppel on the Defendant’s part from terminating the Claimant’s employment while the loan remain unpaid. See: SDV Nigeria Ltd v Philip Ojo&anor  (citation supplied).

Furthermore, Counsel relied on the decision in Oloro Jay Jay v Skye Bank(citation supplied) where the Court accordingly relied on the Blacks Law Dictionary definition of guarantee as 1. To assume a suretyship obligation, to agree to answer for a debt or default…3.to give security to; and submitted that carefully looking at exhibit C7, the Claimant’s salary was the only source of the loan repayment. Thus, exhibit C7 contains an implied term that the Defendant will keep the Claimant in its employ until the loan was fully paid off.

Reacting to the Defendant’s final address, Counsel submitted that it was averred in the statement of claim that the Defendant did not give the Claimant a copy of his disengagement letter thus the reason none was front-loaded. Exhibit C1 tendered was accordingly obtained by an “insider” and the Defendant did not produce any other disengagement letter. Again, Counsel submitted further that the Defendant did not deny the averment by this Claimant that he did not appropriate his leave in 2014 and 2015, and the Claimant is not required to prove he did not appropriate his annual leave for those periods as same amounted to an admission by the Defendant Electricity Company. See: P.D. Hallmark Contractors Ltd v Gloria Gomwalk (citation supplied).

It was further contended that the Claimant never admitted under cross-examination that the Defendant did not guarantee his loan.

In conclusion, Counsel urged this Court to hold that the Claimant has proved his case and resolve all issues in his favour accordingly.

 

DEFENDANT’S REPLY ON PONTS OF LAW:

 

In his Reply on points of law filed on 24/1/2019, learned Defense Counsel reiterated his earlier positions in his final address, and submitted that the Claimant under cross-examination, had admitted that he did not obtain management approval before choosing not to proceed on his annual leave in 2015. Counsel urged the court to hold that the Claimant’s employment was rightfully terminated, and that the Defendant had fully paid all his terminal benefits in accordance with his contract of employment.

DECISION:

Before deciding this matter, it must be first noted that the Defendant’s Counsel filed a copy of the alleged disengagement letter which is slightly different from the copy tendered as Exhibit C1, possibly to substantiate his assertion that the actual disengagement letter given to the Claimant was not the same as the one he tendered as evidence. It is the law that a Court is entitled to look at a document in its file while writing its judgment despite the fact that the document was not tendered and admitted as exhibit at trial; per Akinola v V.C. Unilorin (2004) 11 NWLR (pt 885) 616 at 650.

Looking at the two letters of disengagement I find that indeed they are substantially the same. The only difference between them is the concluding paragraph in exhibit C1 that reads: “Mr. Raymond Asiegbu Ezeh, your performance of 51% in the recent appraisal is below the company’s expectation of 65% hence not acceptable and your services no longer required”. This paragraph was left out in the disengagement letter frontloaded and filed alongside the Defendant’s pleadings but not tendered during trial. The implications of this shall be considered in the course of this judgment.

Having considered all the processes before me, I find that the following facts are not disputed between the parties:

  1.         The Claimant was employed by the Defendant on 31/5/2014.
  2.         His employment was confirmed on 31/12/2014.

   iii.        The Claimant was deployed to Diobu on 12/5/2014.

  1.         He was subsequently redeployed to Promise City South from 1/1/2015.
  2.         The Defendant wrote a letter of introduction and undertaking to domicile the Claimant’s salary account in Skye Bank as a prerequisite for the grant of the 36 months’ term loan granted to him.
  3.         The Claimant was disengaged on 9/9/2016.

The issues I consider paramount for the resolution of this case flow from the facts which were disputed by the parties, and they are:

  1.         Whether the claimant’s employment was wrongfully terminated?
  2.         If the answer to (i) above is in the affirmative, what quantum of damages is the Claimant entitled to?

   iii.        Is the Claimant entitled to relocation allowance for his redeployment to Promise City South?

  1.         Whether the Claimant is entitled to be paid leave grants for 2014 and 2015 in cash?
  2.         Is the Defendant liable as guarantor for the outstanding balance of the Claimant’s  loan from Skye Bank?

From the contract of employment tendered by this Claimant, it is crystal clear that the relationship between the Claimant and the Defendant Company is a mere master and servant relationship. It is settled law that a master may terminate his servant’s employment at any time and for any reason at all, provided the terms of contract of service between them are complied with. See: Dudusola v N.G.Co. Ltd (2013) 10 NWLR  (pt 1363) 423 at D-E.

Exhibit C2 the contract of employment between the parties stipulates that disengagement of the Claimant’s employment may be done upon giving a month’s notice or a month’s basic pay in lieu of such notice. Now, looking at exhibit C1 – the disengagement letter, the Defendant chose the latter option of giving a month’s  salary in lieu of the required notice. The second paragraph of the said exhibit C1 reads thus:

“consequently, we shall credit your account with the sum of N599,897.70 (five hundred and ninety nine thousand eight hundred and ninety seven naira, seventy kobo only) being the full and final payment of your entitlements from PHED”

The law governing this situation is clear. Where a contract of employment gives an employer a right of termination by paying the employee salary in lieu of notice, it is insufficient that in the letter of termination he offers to pay the salary in lieu of such requisite notice – See Chukwuma v Shell Petroleum (1993) 4 NWLR (pt 289) 512 at 536-7, G-B.

The 9th of September 2016 was the date the Claimant’s  salary in lieu of notice ought to have been paid directly to him or through his designated bank. The salary in lieu must be paid at the time the letter of disengagement was delivered to the Claimant by the Defendant Company. What has emerged from the evidence of the Claimant  particularly in Exhibit C8B, is that there was no payment of the one month’s salary in lieu of notice to him as at 15th  September 2016 when the statement of his salary account was retrieved. This piece of evidence is unchallenged and not discredited, and as such must be believed. Thus, in the case at hand the Defendant Electricity Company having terminated the Claimant’s employment without giving him the required notice, failed to pay him at the time of the termination, his salary in lieu of requisite notice of disengagement.

Therefore, I find that the disengagement of the Claimant on the 9/9/2016 is wrongful as it was not done in compliance with the contract of employment stipulated in exhibit C2. I accordingly hold that the Claimant is entitled to be paid his one month’s basic salary in lieu of notice.

It is apt to now observe at this juncture therefore, that the submissions of both Counsel on the disparity in the contents of the disengagement letters are immaterial to the determination of this suit. This is because the ultimate purport of Exhibit C1 was to sever the employment relationship between the parties which it did albeit wrongfully.

Having found and held the disengagement of the Claimant to be wrongful, the general law is that an order for reinstatement or reabsorption back into the Defendant’s employment cannot be made in cases of ordinary master and servant relationship. Accordingly, the relief B sought by the Claimant fails and is hereby dismissed. The Claimant is only entitled to damages for the Defendant’s act of wrongfully terminating his employment – See Dudusola v N.G.Co. Ltd (supra) at 436. I will only award as damages to the Claimant, a year’s basic salary at N98,932.35 per month as spelt out in exhibit C1. Accordingly, I award the sum of N 1,187,188 to this Claimant as damages for the wrongful termination his employment to be paid by the Defendant Electricity Distribution Company within 14 days of this here judgment.

On relief D, which seeks for “an order compelling the Defendant to pay up the balance of what is outstanding in the said loan guaranteed for the Claimant”, this Claimant had tendered Exhibit C7 as proof of the existence of the guarantee executed by the Defendant to secure his loan from Skye Bank. My task here is straightforward. I have to determine whether from Exhibit C7, the Defendant should be personally liable to pay Skye Bank for the Claimant’s outstanding loan?

Simply put, a guarantee like in the circumstances of this present case, is a written undertaking made by one person to another to be responsible for the repayment to that other, should a third party fails to pay a debt. Chami v UBA (2010) 6 NWLR (pt 1191) 474 at 501, F-H. In a contract of guarantee, there are three parties involved, namely:

(1)                The creditor,

(2)                The principal debtor; and

(3)                The secondary debtor or guarantor.

A guarantor’s liability arises where he/she either undertakes to become the real debtor at the inception, or undertakes to be liable when the principal debtor defaults – See Fortune Bank Plc v Pegasus Trading office (2004) 4 NWLR (pt 863) 369 at 389, A-C.

In this case, the relevant portions of Exhibit C7 reads:

“We hereby confirm that he is a confirmed staff and that we strongly recommend him for the loan. We also irrevocably and unconditionally undertake:

  1. To continue to domicile his salary account 1765199162 with Skye Bank Plc and shall not transfer it without the written consent of the Bank.
  2. ….
  3. His full and final/exit benefit shall be advised in writing to the bank shall be paid to his account 1765199162 with Skye Bank Plc in event of his disengagement from this organization.”

 

There is no suggestion in the foregoing paragraphs of Exhibit C7 reproduced above, demonstrating any intention by the Defendant to stand in for the Claimant in the event he defaults in the repayment of his loan. If there is any guarantee at all, it is merely to domicile the Claimant’s salary account in Skye Bank, to inform Skye Bank when the Claimant ceases to be its employee, and to pay the Claimant’s final entitlements into the said salary account.

I find and hold therefore that the Defendant is not personally liable to repay any outstanding balance of the loan granted by Skye Bank to the Claimant contrary to the latter’s assertion.

Once again, it is a well and established principle of law that a master can terminate his servant’s employment for good or for bad reasons or for no reason at all. Consistent with this principle, an employer cannot be stopped from terminating the employment of his employee, merely because he/she wrote a letter of introduction, undertaking to domicile the salaries to his/her employee’s creditor. Likewise, an employee cannot in law be stopped from resigning if he so desires because he was granted a loan by a third party on the strength of his employer’s introduction.

Hence, the Claimant Counsel’s arguments in respect of Exhibit C7 are discountenanced. Accordingly also, relief D is hereby denied and dismissed.

With respect to reliefs E and F for the unutilized leave commuted to cash, and for the relocation allowances respectively, the Claimant had relied on the provisions of Exhibit C3 – the Employee Handbook as a basis for these claims. It is crucial to these reliefs of the Claimant, to determine the status of exhibit C3 in the contract between the Claimant and the Defendant.

The Handbook is an extraneous agreement, and it can only be a basis of any relief(s) by him against the Defendant Company if and when it is incorporated in the employment contract of the Claimant. Indeed, I find nothing in the averments by the Claimant’s statement of material facts or in his Exhibit C2 suggesting that exhibit C3 was ever incorporated into exhibit C2. Exhibit C3 not being incorporated into the Claimant’s employment contract, cannot found any relief sought by him thereunder. See – Chukwuma v Shell Petroleum (supra) at 544 E-F, and Idoniboye-Obu v NNPC(2003) 2 NWLR (pt 805)589 at 603 C-E.

Therefore, reliefs E and F for the various sums of N383,655.50 and N315,000 purportedly being amounts due as the unutilized leave and relocation allowances respectively, are hereby denied.

In summation, I find and hold that the disengagement of the Claimant’s employment was wrongful on the basis that he was not given the required length of notice as stipulated in the contract of employment.

I hereby award the sum of N500,000.00 being the cost of this action to be paid within 14 days of this judgment.

For the avoidance of any doubts, I hereby award these sums only to the Claimant against the Defendant Company thus:

  1. Order the Defendant to pay the sum of N98,932.35 as his one month basic salary in lieu of notice.
  2. Order the Defendant to pay the sum of N1,187,188 to the Claimant as damages for wrongful termination of the Claimant’s employment.
  3. The sum of N500,000.00 being the cost of maintaining this suit.
  4. Order the Defendant to pay the total judgment sum in (1), (2)and (3) above amounting to N1,786,120.35 within 14 days of this here judgment failing which the entire sum shall attract interest at 10% per annum until fully discharged.

This suit accordingly succeeds in part only and I so pronounce.

Delivered in Owerri this 19th day of March, 2019.

 Justice Ibrahim S. Galadima,

Presiding Judge.

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