IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
BEFORE HIS LORDSHIP HONOURABLE JUSTICE K. I. AMADI
DATED: OCTOBER 25, 2018 SUIT NO: LA/08/2016
BETWEEN:
JACOB FOLARIN CLAIMANT
AND
UNION ASSURANCE CO. LTD DEFENDANT
REPRESENTATION:
- O. AgiodeEsq.andTudunAkindeleEsq.for the Claimant
Anne AbyemEsq.for the Defendant
JUDGMENT
INTRODUCTION
The Claimant herein by a general form of complaint and statement of facts dated and filed on 7th January, 2016 commenced this suit and claimed as follows:
- A Declaration that the Claimant is entitled to a redundancy benefits under the Defendant’s condition of service.
- A Declaration that termination being a disciplinary measure by definition in the Defendant’s condition of service could not be applied to the Claimant who did no wrong as envisaged by the condition of service.
iii. An Order compelling the Defendant to pay to the Claimant the sum of N21, 831,796.00 as severance benefit.
- Cost for this action.
The Defendant responded by filling its statement of Defence and other processes on the 8th March, 2016.
TRIAL
Trial commenced on the 30thday of November, 2016. The Claimant’s opened his case testified by himself as CW1. Claimant tendered 12 documents which were admitted and marked accordingly.
The Defendant opened its Defence on 21st June, 2017 and called one witness; Mrs. Abimbola Alabi the Company Secretary, who tendered 5 Exhibits and they were admitted and properly marked. At the end parties closed their cases and filed their respective final written addresses.The parties adopted their final written addresses on the 17th day of May 2018, this judgment could not be delivered within the 90days window allowed for delivery of judgments for the reasons which I have stated in my letter to the Chief Justice of Nigeria in that regard.
BRIEF FACTS OF THE CASE.
The facts of the case according to the Claimant are that he was employed by the Defendant on 17th June, 1999, and on 6th May, 2014 his employment was terminated alongside six others.
That before his termination the original owner (Union Bank Ltd) had commenced negotiation to sell its majority interest to a new investor (the Defendant) wherein the Claimant and his colleagues were notified that the prospective buyer would trim down the work force. The Claimant stated that under his contract of service termination of his employment can only be on disciplinary measure. That since that he did not commit any offence to warrant his termination on ground of disciplinary measure, his termination therefore is on ground of redundancy. That when the defendant realised its unfair termination the Defendant paid a revised severance benefit to four out of seven staff on 13thNovember, 2014 which was calculated by 200% of the total sum of each employees basic salaries (Housing, Transport and lunch allowances). That if the handbook is applied he is entitled to N21, 831,796.00.
The Defendant on the other hand, argued that it terminated the Claimant’s employment based on the condition of service and paid his full terminal benefits and gratuity. That the termination was not based on redundancy but on the ground that the Claimant’s services were no longer required. That the termination of the employment of the Claimant and his colleagues was not on ground of redundancy, also that the additional payment made to the four other employees was made on ground of ex-gratia which is at the management‘s discretion. Therefore the claimant is not entitled to redundancy pay as no redundancy was declared by the defendant.
ADDRESSES OF THE PARTIES
In his final written address the learned counsel for the Defendant raised one issue for determination thus:
1) Whether the Claimant is entitled to the redundancy benefits sought.
Counsel submitted that the Claimant has not proved his case that since the Claimant agreed that he and his colleagues were aware of the Defendant’s intention to sell its majority shares. Consequent upon which his termination was made before the taking over of the defendant by the new investors. Counsel submitted that there was no redundancy declared at the company.
Continuing Counsel argued that since the language of Exhibit CD (letter of termination) was that his employment was terminated as the company does not need his services any longer and nothing more. That an employer for no reason can terminate his employee referring to the case Onu v First Bank Plc (2015) 63 NLLR (Pt.221) 75 NIC
To this the Defendant stated that the payment made to the 4 staff disengaged employees were based on ex-gratia, without more to the disengaged staff. Even the Claimant testified that he did not know that there were redundancy benefits.
Counsel submitted further that the Claimant was in error to hold that paragraph 3.5of Exhibit CP-CP71 was meant for disciplinary purpose only. He stated further that the said paragraph is not exhaustive. Also the use of the word “MAY” being discretionary means there can be other situations than those therein enumerated to warrant termination of an employee. Counsel urged this Honourable Court to hold that Claimant is not entitled to redundancy benefits and to dismiss Claimant’s claims for lacking in merit.
The learned counsel for the Claimant in his own final written address submitted three issues for determination thus:
(i) Whether by the contract of service between Claimant and Defendant as contained in chapter 3-5 Exhibit CP-CP71 the employment of the Claimant with the Defendant can be terminated when there is no allegation of misdemeanour or misconduct stated therein against Claimant.
(ii) Whether the so called termination of appointment of the Claimant is not wrongful in that Claimant had not been accused of any offence for which disciplinary measure could be meted.
(iii) Whether from the circumstances of the termination of the Claimant, the Claimant was not by reason thereof rendered or declared redundant or whether by virtue of the condition of service/contract Exhibit CP-Cp71 Claimant ought not to have been declared redundant and therefore entitled to redundancy benefit under the conditions of service.
Counsel argued issues I and II together and submitted that Claimant is entitled to the benefits sought since it is a term of his condition of service. Counsel referred to the case of Afribank (Nig) Plc v Osisanya (200) 1NWLR where it was held that “the term of contract of service is the bedrock of any case where the issue of wrongful termination of employment calls for determination. Thus, as the contract of service is the bedrock on which an aggrieved employee must found his case, he succeeds or fails upon the terms thereof.”
Counsel urged the Court to hold that Exhibit CP-Cp71 (contract of service) is upon which the Claimant’s case rested, which in chapter 3.2 provides thus: “Separation between the company and the employee maybe due to any of the following:
- Voluntary Resignation
- Termination of Appointment
- Redundancy
- Dismissal
- Retirement
- Invalidation by Death
Counsel submitted that the word “terminate” means a disciplinary process. Again, that by chapter 3.2 Defendant contracted not to determine the services under termination save he is guilty of misdemeanours or infracts chapter 3.5.Hence, on this ground, the Claimant is not guilty of such.
On issue three, Counsel argued that since Defendant’s condition of service stipulated that termination is on ground of disciplinary measure and Claimant being under no such disciplinary procedure cannot loss his employment by such means except on redundancy, that the Defendant did not dispute that massive restructuring which took place, which exercise affected the Claimant and other colleagues of his.
Counsel submitted further that the Defendant was avoiding “special Redundancy payment thus labelling the process a termination under service no longer needed, which phrase is alien to the contract between the parties. Finally, Counsel prayed this Honourable Court to find for the Claimant and grant his reliefs.
The Defendant filed its Reply on point of law dated 14th march, 2018. Counsel submitted that redundancy cannot be inferred in the termination of the Claimant’s employment. Counsel urged this Honourable Court to discountenance the submissions of the Claimant and dismiss this suit.
COURT’S DECISION
I have read all the processes filed by the parties in this suit. The final written addresses of the parties including the reply of the Defendant to the final written address of the Claimant are hereby incorporated into this judgment and specific reference shall further be made to them where necessary. In my view, all the issues as raised by the parties can be summarized into one issue that is; whether the Claimant is entitled to his claims. I shall therefore resolve this sole issue by treating the claims of the Claimant as follows:
Claims 1, 2 and 3 shall be treated together. The relationship between the parties in this case is purely a master and servant relationship which is guided by the common law and in such a relationship there is an implied condition of service that each of the parties has inherent powers to terminate the contract at any time. Because the law is settled that an employee cannot compel the employer to retain him no matter how desirable that may be on humanitarian or other grounds. In as much as, the same way an employer cannot compel an employee to remain in his service no matter how indispensable his services may be to his employersee Odinkenmere v. Impresit Bakolori (Nig) Ltd (1995) 8 NWLR (Pt. 11) p. 52 at 66.
It is important to state that the case of the Claimant is not that some employees were declared redundant and consequently paid redundancy benefit while he was not so declared. The case of the Claimant is that he was not paid redundancy benefit which his colleagues who were terminated with him at the time and the same circumstances were paid later after the payment of severance benefit; meaning that their termination was under redundancy. It is stated that redundancy has its unique characteristic. In the case of P.A.N vOje (1997) 11 NWLR (Pt.530) the Court of Appeal held that Redundancy in service, is a mode of removing off an employee from service when his post is declared “redundant” by his employer. It is not a voluntary or forced retirement. It is not a dismissal from service. It is not a voluntary or forced resignation. It is not a termination of appointment as is known in public service. It is a form unique only to its procedure where an employee is quietly and lawfully relieved of his post. Such type of removal from office does not, in my view, carry along with it any other benefit except those benefits enumerated by the terms of contract to be payable to an employee declared “redundant.” Per Mohammed, J.C.A. (P. 15, paras. A-D).
The claim of the Claimant is purely for payment of severance pay which was paid to his other colleagues whose employment was also terminated with him.
In justifying the difference in items of payment between the Claimant and the other employees paid, the learned counsel for the defendant submitted that the other four other employees were given ex-gratia payments. That the said ex-gratia payment is discretionary. The question to ask here is; what is the criteria for the exercise of the discretion for the payment of the said ex gratia and why was the claimant excluded. In the absence of any answer to that question, I find and hold that the claimant was discriminated against and he is equally entitled to the payment of the said ex gratia payment as was paid to his other colleagues.
However, section 14 of the National Industrial Court Act 2006 provides that the Court shall in the exercise of the jurisdiction vested in it by or under this Act in every cause or matter, have power to grant, either absolutely or on such terms and conditions as the Court thinks just, all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of any legal or equitable claim properly brought forward by the Court so that, as far as possible, all matters in dispute between the parties may be completely and finally determined and all multiplicity of legal proceedings concerning any of those matters avoided.
Also Section 19(d) of the National Industrial Court Act 2006 provides that the Court may in all cases and where necessary make any appropriate order, including- an award of compensation or damages in any circumstances contemplated by this Act or any Act of the National Assembly dealing with any matter that the Court has jurisdiction to hear.
In view of the foregoing, I award N3, 000,000, (Three Million Naira) as ex gratia payment to him.
In sum I order as follows:-
- The Defendant shall pay the Claimant the sum of N3000000(Three Million Naira) as ex-gratia payment
- The Defendant shall pay the Claimant the sum of N100, 000 being the cost of this suit.
iii. All monetary awards in this judgment shall be paid on or before 30 days hence failing which they shall attract 20% interest per annum until fully liquidated.
Judgment is entered accordingly.
…………………………………..
Hon. Justice K. I. Amadi, Ph.D.
Judge
