James Okeh -VS- Lagos State University

IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE LAGOS JUDICIAL DIVISION

HOLDEN AT LAGOS

BEFORE HIS LORDSHIP HON. JUSTICE B. B. KANYIP, PHD

DATE: FEBRUARY 16, 2018

SUIT NO. NICN/LA/785/2016

BETWEEN

James Okeh – Claimant

AND

Lagos State University – Defendant

REPRESENTATION

Kamal Fawehinmi, with Urama Emmanuel, for the claimant.

No legal representation for the defendant.

JUDGMENT

By an originating summons dated and filed on 19th December 2016, and supported by an affidavit with attached exhibits and a written address, the claimant posed the following question for determination:

Whether going by the provisions of the Pension Act Cap 346 LFN 1990, then in force, as at the time respondent terminated the employment of the claimant, the claimant was not entitled to be paid his pension having served for the duration of 15 years as stipulated by the said Pension Act.

The claimant by this suit is seeking for the following reliefs:

A declaration that the claimant was in the employment of the respondent for a period of 15 unbroken years before his employment was terminated.
A declaration that the claimant, having being in service of the respondent, for 15 unbroken years is entitled to be paid his pension in accordance with the provision of section 3(2)(b) of the Pension Act Cap 346 LFN 1990, and interest so far accrued therein.
An (sic) mandamus compelling the respondent to calculate and pay all pension entitlements of the claimant, as at the date of the termination of his employment.
An order of this Honourable Court compelling the respondent to pay all interests in line with Central Bank of Nigeria (CBN) approved rate, so far accrued on the illegally withheld pension of the claimant, from the date of the termination of his employment till date.
Any order or further orders as this Honourable Court may deem to make in the circumstances of the case.
Cost of this a

The respondent did not enter any formal appearance, nor was it represented by any counsel throughout the hearing of the case. This does not, however, absolve the claimant from proving his case under the minimal evidence rule. See Mr. Lawrence Azenabor v. Bayero University, Kano [2011] 25 NLLR (Pt. 70) 45 CA at 69, Ogunyade v. Oshunkeye [2007] 4 NWLR (Pt. 1057) 218 SC at 247 and Attorney General Osun State v. NLC & ors [2013] 34 NLLR (Pt. 99) 278 NIC.

From the affidavit in support deposed to by the claimant of the originating summons, the claimant was in the employment in the respondent between the period of 1985 and February 2000 when his employment was terminated. The claimant, being dissatisfied with the termination of his employment, filed a suit in this Court with Suit No: NICN/LA/662/2012 and sought reliefs among others, that this Court declare the termination as wrongful for breach of fair hearing. That several meetings were then held between claimant and the representatives of the respondent with the aim of settling the matter out of Court. While the matter was ongoing before this Court, the respondent circulated a memo to pay the claimant only gratuities. The claimant’s solicitors then wrote at least two letters to the respondent educating it on the need to pay both pension as well as gratuity since the claimant qualifies for both under the Pension Act Cap 346 LFN 1990. Believing that the respondent will take the claimant’s position seriously and due to the claimant’s solicitors’ advice to focus on pursuing his entitlements as against pursing reinstatement, the claimant discontinued the suit against the respondent seeking reinstatement. However, the respondent only went ahead to pay the into the claimant’s account the sum N273,498.12.00 (Two Hundred and Seventy-Three Thousand, Four Hundred and Ninety-Eight Naira, Twelve Kobo) only, purportedly representing his gratuities, but held back his pension under the guise that a person whose employment was terminated cannot be paid pension. Hence, the claimant filed this originating summons.

The claimant submitted a sole issue for determination, namely: whether under provisions of the Pension Act Cap 346 LFN 1990, then in force, the claimant was not entitled to be paid his pension at the cessation of his employment brought about by the respondent’s termination of the claimant’s employment. To the claimant, prior to 2004, the Pensions Act of 1979, later the Pensions Act 1990 Cap 346 LFN 1990, was the prevailing and only applicable law with regards to all pension matters within the Federation of Nigeria. That the long title of the Pensions Act Cap 346 LFN 1990 describing the purpose of the Act states that it is: “an Act to consolidate all enactments dealing with pensions…” That the Pension Act was only repealed on 25th June 2004 when the new Pension Reform Act Cap P4 LFN 2004 was enacted, citing section 99 of the Pension Reforms Act 2004. Thus, that as at the date of the termination of the claimant’s employment by the respondent in February 2000, the only applicable law regulating the payment of pension was the Pensions Act 1990 Cap 346 LFN 1990.

The claimant went on that he was never at any time dismissed from the service of the respondent. That as clearly stated in his letter of termination, his employment was terminated due to re-organisation of the Bursary Department. That the Courts of the land have held in a plethora of cases that under termination of appointment, the employee is enabled to receive the terminal benefits under the contract of employment as distinct from when an employee is dismissed from employment, referring to Union Bank of Nigeria v. Soares [2012] LPELR-8018(CA), 7UP Bottling Company Plc v. Augustus [2012] LPELR-20873(CA), Mr A. S. Jambo v. Petroleum Equalization Fund (Management Board) & 2 ors [2005] 7 SC (PT II) 30 at 43 – 44 and Adeko v. Ijubu-Ode District Council [1962] 1 SC NLR 349. That the Courts have also been rigidly consistent that the right to pension is a right which accrues to an employee who qualifies for such and that such right cannot be arbitrarily or whimsically taken away by the employer; neither can the employer subject such right to his/her/its mercurial mood fluctuations, citing Momodu v. National Union Of Local Government Employees [1994] 8 NWLR (Pt. 362) 336. Consequently, that the claimant’s right to be paid his terminal benefits as provided by law is not in doubt as he eminently qualifies to be paid his pension as well as his gratuity in line with the clear provision of section 3(1)(c) and (2)(b) of the Pension Act1990, which provides as follows:

(1) No pension or gratuity shall be granted under this Act to any officer except on his retirement from public service in any of the following circumstances that is –

(c) on compulsory retirement for the purpose of facilitating improvements in the organization of the officer’s department or ministry so that greater efficiency or economy may be effected.

(2) Where an officer retires after 1st April, 1977, pursuant to subsection 1 of this section –

(b) if he has served for not less than fifteen years, he shall be entitled to pension.

To the claimant, a perusal of Exhibits A, B and C respectively will clearly show that the claimant was employed for a period of fifteen (15) unbroken years at the respondent institution. Also, that a further specific perusal of Exhibits C will also reveal that the claimant’s employment with the respondent was terminated due to “re-organisation” of the department he worked in. That all this goes to show that the claimant falls squarely within the provisions of section 3(1)(c) and (2)(b) of the Pension Act 1990. The claimant then invited the Court to peruse Exhibit D, which expressly points out that the respondent terminated the claimant’s employment “as a result of re-organisation in the Bursary Department by the University Governing Council” and that the claimant has put in “fifteen (15) years in the service of the University”. Therefore, that going by the clear provisions of the section 3(1)(c) and (2)(b) of the Pension Act 1990, the claimant is robustly and eminently entitled to be paid all his pension illegally withheld by respondent, urging the Court to so hold. In conclusion, the claimant urged the Court to grant all his reliefs as contained in the originating summons.

COURT’S DECISION

I took a careful look at the processes filed by the claimant and the submissions of the claimant’s counsel. The key issue that arises is whether the claimant is before this Court under the appropriate pension law? By Obiuweubi v. CBN [2011] 7 NWLR (Pt. 1247) 465, the law for determining a cause of action is the law as at the time the cause of action arose. What law then governs the claimant’s cause of action in this case? The case of the claimant is that his employment was terminated by the defendant on 17th February 2000; as such he is entitled to be paid pension under the Pensions Act Cap 346 LFN 1990. By this claim, the claimant contends that it is the Pension Act Cap 346 LFN 1990 that regulates his pension claim. But is this really the case?

There is no gainsaying that pension right is one that an employee has and must enjoy if proved. Case law authorities abound on this point. For instance, by Momodu v. NULGE [1994] 8 NWLR (Pt. 362) 336 CA, a pension is an accrued right of an employee, be the right in money or other consideration, on retiring from the services of his employer and satisfying the conditions for payment of the said pension. It is a right which cannot be unilaterally taken away by the employer. NEPA v. Adeyemi [2007] 3 NWLR (Pt. 1021) 315 on its part held that entitlement to pension and gratuity is a vested right; and whether an employee is eligible for pension and gratuity can be decided only by reference to the conditions of service. By RSCE v. Omubo [1992] 8 NWLR (Pt. 260) 456, in a pensionable employment the employee’s right to pension ripens in the year of his retirement; until then that right is only contingent upon attaining his age of retirement.

The claimant rests his case on the Pensions Act Cap 346 LFN 1990. The defendant is a State institution of Lagos State. Is the Pensions Act accordingly applicable to the claimant especially since the internal memo of the defendant dated 1st September 2015 talks of “the old Lagos State Pension Law”. I posed this question to counsel to the claimant in open Court when he was moving his originating summons. His answer was to refer the Court to the claimant’s counsel’s letter of 18th September 2015 addressed to the Vice Chancellor of the defendant University. At the second page of this letter, counsel had argued that their research revealed that “old Pension Law of Lagos State” does not exist. This is incorrect as when the claimant’s employment was terminated in 2000 Lagos State had a Pensions Law Cap P3 Laws of Lagos State of Nigeria 2003 Vol. 6 with a commencement date of 1st October 1954. The argument of the claimant’s counsel that prior to 2007 when the Lagos State Pension Reform Law 2007 was enacted, the Pensions Act Cap 346 LFN 1990 was the prevailing and only applicable law with regards to all pension matters in the Federation of Nigeria is accordingly wrong. Quoted out of context is the counsel’s reference to the long title of Cap 346 LFN 1990, which states: “An Act to consolidate all enactments dealing with pensions…” The consolidation of all enactments dealing with pensions was only in terms of civilian employees in the public service of the Federation. Is the claimant a civilian employee in the public service of the Federation? This remains the key question.

I indicated earlier that Lagos State has a Pensions Law Cap P3 Laws of Lagos State of Nigeria 2003 Vol. 6; though it is a law for regulating pensions and gratuities to be granted to officers in respect of offices held by them in the Civil Service of the Lagos State. Its commencement date is 1st October 1954. It has only two sections, section 1 (citation) and section 2 (adoption of provisions). Section 2, relevant for present purposes stipulates thus:

(1) It shall be lawful for the Governor by order to declare that any office in the civil service of the Lagos State shall be pensionable office for the purposes of this Law.

(2) The provisions of the Pensions Act [LFN Cap 346] in force immediately before the 27th day of May, 1968 are adopted and shall apply with such modifications and adaptations as may be necessary to officers in the civil service of the Lagos State who are –

(a) appointed after the 27th day of May, 1968; or

(b) transferred from another civil service after the 27th day of May, 1968.

This Lagos State Pensions Law in adopting the Pensions Act Cap 346 LFN talks of only the civil service of the State, not state institutions, agencies or corporations. The claimant in the instant case did not indicate that he is of the civil service of Lagos State as to have Cap 346 LFN apply to him.

By the explanatory note and section 1(1) of the Pensions Act, the Pensions Act deals with civilian employees in the public service of the Federation; as such the pension and gratuity grantable is to “any person on his retirement from the public service of the Federation…” Section 24 of the Pensions Act then defined “public service” or “service” to mean “service under the government of the Federation in a civil capacity or such other service in any organisation specified in Schedule 2 to this Act or such other organisation as Minister may from time to time by an order determine to be civil service for the purposes of this Act and service under any superannuation scheme in respect of which there is a reciprocal arrangement for the acceptance of service as qualifying service under this Act or any regulations made thereunder”. Section 24 goes on to provide that “qualifying service” means service in the public service or any approved service which may be taken into account in determining whether an office is eligible by length of service for a pension or gratuity. Now, pursuant to section 15(2), in the Second Schedule to the Pensions Act, organisations declared as public service under the Act are then listed. Federal Government is listed as well as Federal Government agencies, institutions and corporations. State Government or State institutions, agencies and corporations are not so listed. Section 15(1) of the Pensions Act on its part talks of transfer of service from the civil service to a civil service of a State or voluntary agency teaching service within the Federation to vice versa. The instant case is not one of transfer of service by the clamant as to make the Pensions Act Cap 346 applicable to his case.

The product of all of these provisions is that case law authorities abound in holding that the Pensions Act Cap 346 LFN applies only to employees in the public service of the Federation. For instance, Ukelele v. FBN Plc [2011] LPELR-3869(CA) held thus:

…Section 3(2)(b) and (c) of the Pensions Act Cap. 346 LFN 1990 is not applicable to this case which is between respondent (bank) and the appellant (clerk). The Pensions Act applies to employees in the public service of the Federation…

Psychiatric Hospital Management Board v. Ejitagha [2000] LPELR-2930(SC); [2000] 11 NWLR (Pt. 677) 154; [2000] 6 SC (Pt. II) 1 on its part held thus:

The mere fact that a person is said to be in public office does not ipso facto entitle him to pension or bring his service under the Pensions Act so as to subject his appointment to the provisions of S.4(2) of the Act. The Second Schedule to the Act lists the organizations and establishments declared as a public service under the Act. There are over one hundred of such Federal Government parastatals listed in the Second Schedule. The Psychiatric Hospital Management Board (respondent) is not there…

And by Abdullahi v. Military Administrator, Kaduna State & ors (2009) LPELR-27(SC); (2009) 15 NWLR (Pt. 1165) 417 SC:

Which of the Pensions Statute is applicable? Is it the Pensions Act as contended by appellant or the Pensions and Gratuities Law of Kaduna State? The applicable statute, in my view, is the Pensions and Gratuities Law, Cap III, Laws of Kaduna State 1991…

What I get from all of these authorities is that the Pensions Act Cap 346 LFN 1990 is not an all-comers law. It applies only to employees of the “public service of the Federation”, a term that does not include “public service of a State” if section 318(1) of the 1999 Constitution defining both terms is anything to go by. The claimant in the instant case is not an employee of the public service of the Federation and so cannot claim the benefit of Cap 346 LFN 1990. As it is, therefore, it is my holding that the claimant is before this Court under the wrong law.

Even if this were not the case, and the claimant is appropriately before this Court under the right law, there is the issue whether the claimant has made out his case. Under section 24 of the Pensions Act Cap 346 LFN 1990, “termination” in relation to an officer’s service means termination of service by retirement or withdrawal. Given this definition, therefore, the termination of the claimant’s employment by the defendant would mean termination of service by retirement or withdrawal. However, Achimugu v. Minister of FCT [1998] NWLR (Pt. 574) 467 held that by virtue of sections 3(2)(a) and (b) and 4(2) of the Pensions Act, for a public servant to qualify for pension he must have been in the service for 15 years and aged 45 years at the time of his retirement.

The thing with the case law authorities is that the payment of pension is contingent on the claimant having fulfilled all conditions enabling such payment. For instance, the claimant must have satisfied the Court that he is of pensionable age, the fact of having attained 15 years of service not being sufficient. All through the affidavit in support of the originating summons, the claimant did not indicate his age as to show this Court that he is of pensionable age, a prerequisite to recovery under the pension law. However, section 3(2)(c) of the Pensions Act Cap 346 LFN 1990 provides that an officer retiring under section 3(1), if he is required to retire after fifteen years’ qualifying service pursuant to the provisions of section 3(1)(c) to (h), he shall be entitled to pensions immediately on retirement, notwithstanding that he has not attained the age of forty-five years. By this provision, the requirement of age (at least 45 years as enjoined by Achimugu v. Minister of FCT) as a prerequisite for recovery of pension under the Pensions Act Cap 346 LFN 1990 appears to have been waived. The evidence before the Court as per paragraph 3 of the affidavit in support is that the claimant worked for the defendant from 27th March 1985 to 17th February 2000. While this technically means that the claimant fell short of the exact 15 years required, the internal memo of the defendant dated 1st September 2015 put the years of service of the claimant with the defendant to be 15 years; in other words, the defendant itself rounded off the period and made it 15 years. What this means is that if the claimant were to be an employee in the public service of the Federation, he would have appropriately been entitled to his claims as per the Pensions Act Cap 346 LFN 1990 since this was the law applicable at the time his employment was terminated by the defendant in 2000. But I held earlier that he is not such an employee.

On the whole, and for the reasons given, it is my holding that the claimant in claiming as per the Pensions Act Cap 346 LFN 1990 is claiming under the wrong law and as such has not successfully made out his case. The Pensions Act Cap 346 LFN 1990 is not applicable to the claimant. This being so, I cannot grant his claims. They fail and are hereby dismissed.