IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
BEFORE HER LORDSHIP HON. JUSTICE E. A. OJI, PhD
DATE: TUESDAY 25TH SEPTEMBER 2018
SUIT NO. NICN/LA/437/2017
BETWEEN
- OKECHUKWU DENNIS IWUALA
CLAIMANT
AND
PORTS AND CARGO HANDLING SERVICES LTD
(A MEMBER OF SIFAX GROUP)
DEFENDANT
Representation:
H U Anyanwu appears for the Claimant
Chibuikem Opara appears for the Defedant
JUDGMENT
The Claimant commenced this action against the Defendant by a General Form of Compliant dated and filed on 13th September 2017, together with the Statement of Facts, List of Claimant’s witnesses, the Claimant’s Witness Statement on Oath, Verifying Affidavit, List of Documents; all dated the same 13th September 2017 and copies of all the documents to be relied on by the Claimant at the trial of the suit. The Claimant claims the following reliefs against the Defendant:
- The sum of N2,288,083.33 (Two Million, Two Hundred and Eighty-Eight Thousand Eighty Three Naira and Thirty Three Kobo) being the Claimant’s outstanding redundancy benefits at the time he was relieved of his duties on redundancy on the 18th day of March 2016.
- General and punitive damages in the sum of N10, 000,000.00 (Ten Million Naira).
In response to the claim, the Defendant entered conditional appearance dated 16th October 2017. The Defendant filed its Statement of Defence on 16th October 2017 together with a List of Defendant’s Witnesses and Defendant’s Witness Statement on Oath deposed to by Chidi Iloegbu, List of Documents and copies of the documents to be relied on at the trial.
In response to the Defendant’s Statement of Defence, the Claimant filed his Reply to the Statement of Defence on 3rd November 2017.
Trial commenced in the suit on 13th February 2018 and was concluded on 9th April 2018. The Claimant gave evidence for himself as CW1, by adopting his Witness Statement on Oath deposed to on 13th September 2017. The Claimant was thereafter cross-examined. During the examination in chief, the Claimant tendered in evidence the following documents:
- Exhibit C1- Claimant’s Appointment Letter dated 27th October 2008;
- Exhibit C2- Claimant’s Redundancy letter dated 17th March 2016;
- Exhibit C3- Confirmation of appointment letter dated 1st December 2009;
- Exhibit C4- The Sifax Handbook containing the Conditions of Service;
- Exhibit C5- Claimant’s last pay slip, February 2016;
- Exhibit C6- Letter to Minister of Labour by the Short paid workers including Claimant;
- Exhibit C7- Letter of the Minister to the Defendant’s Managing Director;
- Exhibit C8- 2nd Letter of the Minister to the Defendant’s Managing Director;
- Exhibit C9 – 3rd Letter of the Minister to the Defendant’s Managing Director;
- Exhibit C10 – Letter from Law Office of HU Anyanwu to Defendant’s MD.
The Defendant’s Witness, Mr. Chidi Iloegbu gave evidence as DW1 by adopting his Witness Statement on Oath deposed to on 16th October 2017 and he was cross-examined accordingly. The Defendant tendered in evidence the following documents:
- Exhibit D1- Defendant’s letter of employment to the Claimant dated 27th October 2008;
- Exhibit D2- Extract of the Minutes of Meeting held with the Maritime Workers Union of Nigeria dated January 11, 2016;
- Exhibit D3- Old SIFAX Handbook;
- Exhibit D4- New SIFAX Handbook;
- Exhibit D5- Redundancy letter to the Claimant dated March 17, 2016
At the end of trial, the Court ordered the parties to file their respective final written addresses. The Final Written Addresses were adopted on 12th July 2018 and the Court adjourned for judgment.
CASE OF THE CLAIMANT
The case of the Claimant is that he was an employee of the Defendant from 3rd November, 2008 until 18th March, 2016 when he was relieved of his duties by the Defendant on grounds of redundancy. His appointment was confirmed via a letter dated 1st December, 2009. The redundancy letter also carried the Claimant’s terminal and redundancy benefits as calculated by the Defendant. Claimant asserts that the Defendant kept the company’s handbook (which contains worker’s condition and terms of service including the calculation pattern of workers benefits) out of the reach of workers and as such no staff had at his disposal the handbook that contains his condition of service. The Defendant paid the terminal and redundancy benefits according to its calculation and as contained in the redundancy letter of 17th March, 2016. The Claimant, along with other ‘redundanced’ workers not being satisfied with the redundancy benefits went to the Human Resources Department of the Defendants company and insisted on having access to the “kept secret handbook” whereupon they were given a photocopy. Claimant referred to the provision on redundancy as contained on page 24; the relevant portion which states:
The redundancy benefits shall be as follows:-
– 1-2 years: 4 weeks gross pay for each completed year of service
– 2-5 years: 6 weeks gross pay for each completed year of service
– 5 years and above: 8 weeks gross pay for each completed year of service.
The Claimant asserts that as at the effective date of his redundancy, he had put in 7 years 4 months and 16 days of service and calculating on the basis of the provision of the contract of employment referred to above will entitle him to the sum of N1,288,083.33(Two Million, Two Hundred and Eighty-eight thousand eighty-three naira, and thirty-three kobo but was paid only N315,000.00(Three Hundred and Fifteen Thousand Naira) which is less than his redundancy benefit for one year. Claimant states that after several representations to the Management of the Defendant to no avail, a group of those affected by the unpaid redundancy benefits took their complaints to the Federal Ministry of Labour and Employment but the Defendant refused to pay them. During cross examination, Claimant stated that he got the SIFAX Handbook after he had been disengaged and they were informed they were short paid. He stated that they got it from the Admin. From the Redundancy letter, Claimant challenges only item 2 which is on redundancy benefits.
CASE OF THE DEFENDANT
The case of the Defendant is that the terminal and redundancy benefits contained in the redundancy letter served on the Claimant are what the Claimant is entitled to from the Defendant’s handbook. It is the case of the Defendant that it operates an open policy and usually gives the extant handbook to any employee of the company at the time of his employment. That the Claimant was given the handbook that was operational at the time of his employment; and that the handbook is available at the human resources department of the Defendant. Defendant asserts that it paid the Claimant what he is entitled to, including his terminal benefits and the redundancy benefits as contained in the Defendant’s handbook. Defendant relies on the Sifax Handbook which became operational on 1st March 2016. Defendant states that the Sifax Group Handbook is never kept secret. Defendant contend that Claimant referred to the old handbook which was replaced with a new Handbook. That the old handbook which became effective on 1st January, 2013 was expressly stated on its page 1 to be subject to review after three years. The old Handbook was reviewed by the company upon consultation with the Claimant’s Union Representatives and, the Maritime Workers Union of Nigeria. Defendant further states that the reviewed SIFAX Handbook took effect from the 1st of March, 2016 after due notices were given to the various heads of departments for onward notice to the individual employees. That the old Sifax Handbook came into operation on 1st January, 2013 and was therefore not in existence when the Claimant was employed and when his employment was confirmed; and that the provision for termination by reason of Redundancy is now contained at page 49 of new SIFAX Handbook and not page 24 of the old Handbook. During cross examination, witness to the Defendant stated that as long as the new Handbook has not come into effect, the old one is the operational one.
CLAIMANT’S REPLY TO DEFENDANT’S STATEMENT OF DEFENCE
Claimant stated that no employee of the Defendant was given a copy of the Handbook and that the new SIFAX Handbook never existed as at the time both the redundancy letter and the incomplete payment was made by the Defendant to the Claimant. Claimant alleges that the Human Resources office gave them the old SIFAX Handbook in April 2016 when they sought for the Handbook; because that was the only Handbook in existence. Claimant also states that at no time before this suit did the Defendant’s state that there was a new Handbook; and that the purported new Handbook is a fabrication and an afterthought to deny the Claimant his rightful redundancy benefit.
SUBMISSION ON BEHALF OF THE DEFENDANT
The Defendant in its Final Written Address raised the following issues for determination:
- Which Handbook governed the Claimant’s employment with the Defendant at the time the Claimant was issued the redundancy notice?
- Whether the Claimant is entitled to any further award of general and punitive damages and interests for the severance of his employment by reason of redundancy.
On Issue 1, Defendant submits that Exhibit C4 and D3 must be read as a whole and not in bits and pieces and that Claimant cannot pick and choose from a singular document the provisions that he believes favours him while urging the court to neglect some provisions in the same document. Defendant also submits that the 2016 Handbook, Exhibit D4, which commenced operation on the 1st of March 2016 has effectively replaced the 2013 Handbook, Exhibit C4 and D3 and that the 2013 Handbook had ceased being in operation as at March 17, 2016 when the Claimant’s employment with the Defendant was severed by reason of redundancy. Having ceased being in operation, the 2013 handbook which is now effectively replaced cannot be revived to govern the employment or disengagement of the Claimant as at the time of the redundancy notice. The Defendant argues that there are various heads of payment made by the Defendant to the Claimant at the time of the severance of the employment by reason of redundancy. These heads of payment including “Terminal Benefits” and “Salary” were all made under the 2016 Handbook – Exhibit D4; that the Claimant’s only complaint is centered on the payment head of “Redundancy Benefits”; and contend that accepting the payments that came with “increase” while rejecting one payment head for any reason will amount to approbating and reprobating at the same time – Agidigbi v Agidigbi (1996) 6 SCNJ 105 at 119.
On Issue 2, Defendant submits that the conditions applicable to severance by redundancy are quite distinct from those applicable to retirement or other conventional modes of relieving an employee from active service such as termination, resignation or dismissal; and not one that should attract general and punitive damages.
SUBMISSION ON BEHALF OF THE CLAIMANT
The Claimant in his Final Written Address raised the following issue for determination:
- From the totality of evidence (oral and documentary) before this Honourable Court, was Exhibit D4 in existence/operation as at the 18th March, 2016 or was it a fabricated after-thought in an effort to deny the Claimant his due benefits?
Claimant submits that the evidence on the existence of the New Handbook is not credible, as Defendant never referred to its existence throughout the period the demand was made by the Claimant and his colleagues, relying on the Old SIFAX Handbook.
DEFENDANT’S REPLY ON POINTS OF LAW
In its Reply on Points of Law, Defendant urged the Court to discountenance the unsworn evidence in Claimant’s Written Address of what purportedly transpired at the meetings held at the Ministry of Labour and Employment between the Defendant and some former employees of the Defendant and which handbook that was used, as no evidence was led to establish that – Obasuyi v Business Ventures Ltd. [2000] 5NWLR (Pt. 658) at 690.
COURT’S DECISION
I have carefully considered the processes filed, the evidence led, the written submissions and authorities cited in the final addresses. I also heard the evidence of the two witnesses called at the trial as well as watched their demeanour. In addition, I evaluated all the exhibits tendered and admitted. Having done all this, I adopt the following issues for determination; to wit:
- Which Handbook governed the Claimant’s employment with the Defendant at the time the Claimant was issued the redundancy notice?
- Whether the Claimant is entitled to his Claim.
As stated by the Defendant in its Written Address, it is not in dispute that the Claimant was a former employee of the Defendant and put in some years of employment with the Defendant before the 17th of March 2016, when his employment was severed by the redundancy notice – Exhibit C2. Thus, he was entitled to some benefits from the Defendant. Parties to an agreement or contract of employment are bound by the terms and conditions of the contract they signed and cannot operate outside the terms and conditions – Isheno v Julius Berger (Nig,) Plc (2008) 6 NWLR (Pt. 1084) 582. Usually, where there is an express written agreement, the court will not consider extraneous materials or factors in enforcing such agreement. As aptly put by the Supreme Court in Ibama v Shell Petroleum Development Company of Nigeria (2005) 17 NWLR (Pt. 954) 364 at 389 per Oguntade JSC:
The appellant’s case highlights the well-known principle that a court is without the power to write a new contract for parties in substitution for that which they subscribed their signatures. In some cases of breach of contract of employment, the strict adherence to terms agreed by the parties to their contract may produce harsh and oppressive results. But that is a matter outside the control of the court. Sympathy is not always the forerunner to justice.
Issue one – Which Handbook governed the Claimant’s employment with the Defendant at the time the Claimant was issued the redundancy notice?
At the time of his employment, the claimant was given a letter of employment (Exhibit C1). While the content of the letter of employment is not disputed in any way, its provisions are not comprehensive enough to cover every situation that may arise. The letter of employment contains a provision to the effect that there are other conditions of employment contained in the company’s (defendant) “condition of employment”. It is trite that the terms and conditions of employment need not be contained in the letter of employment alone. Thus, where the letter of employment and any other document like the handbook refer to one another or are connected together by reasonable inference to constitute a complete memorandum, the court will give effect to the whole. In Ondo State University v Folayan (1994) 7 NWLR (Pt. 354) 1, the Supreme Court held that all the several documents that form the conditions of employment must be read together. There is no contention if the SIFAX Handbook forms part of the terms of employment of the Claimant; the contention is however, which of the contesting Handbooks was in effect for the purpose of determining the conditions of Claimant’s Redundancy Benefits; namely:
- SIFAX Handbook effective January 1st 2013 – Exhibit C4/D3
- SIFAX Handbook effective March 1st 2016 – Exhibit D4.
Whereas Claimant contends that it was C4/D3 that was operative at the time of the determination of his employment and should govern the entitlements due to him, the Defendant contends that it was D4 that was operative and the conditions therein should govern Claimant’s entitlement upon the determination of his employment on grounds of redundancy.
Though the Claimant stated that he was never aware of the contents of C4/D3, both parties are agreed that the SIFAX Handbook formed part of the conditions of service. Parties are also agreed that C4/D3 was introduced and came into force on the 1st of January 2013. The question that needs to be answered is whether the 2013 version of the Handbook had effectively been changed and the 2016 version introduced effectively, as at the time the Claimant was disengaged.
By the provisions of the Handbook; the Defendant reserves the right to review the Handbook after three years “upon consultation with the Union representatives”. On March 1, 2016, the Defendant introduced its reviewed Handbook – Exhibit D4 which it purports was made after consultations with the Union representatives. They refer to a meeting held with the Union representatives on the 11th of January 2016. Exhibit D2 is the Minutes of the said meeting as tendered by the Defendant. Part of the proceedings of that meeting reads:
The ED …informed that the meeting is primarily convened to afford everybody the opportunity of making inputs on how to improve on some salient areas in the proposed new Hanedbook having consulted widely with the representative of Maritime Workers Union of Nigeria on the issue(Paragraph 2, Page 1 of Exhibit D2)
The issue was extensively deliberated and it was unanimously agreed by all that the retirement benefits and leave bonus in the current handbook should be improved upon. The Union however made it clear that the company should inform them of the Management recommendations for both the retirement benefits, leave bonus and thirteenth month salary before the new policy will be implemented.(Paragraph 3, page 2 of Exhibit 2)
The Union President was of the view that anything that has to do with welfare of staff should be handled with care. That they will not support any provision that will erode the welfare of staff or that will reduce the entitlement payable to employees who have spent the most useful part of their lives working for the company.
In alleging that the 2013 Handbook had been changed pursuant to the meeting recorded in exhibit 2 above, Defendant did not proceed to show that thereafter further steps were taken to change the Handbook. The Defendant did not also show how and when the Recommendations for the new Handbook was presented to the Union as agreed at the meeting of 11th January 2016. Again, short of stating that they have introduced a new Handbook in their evidence, there is no proof of how it was introduced, and how the staffs were informed. The Defendant in its evidence stated that:
I can also recognize the reviewed SIFAX Handbook which took effect from the 1st of March 2016 after due notices were given to the various heads of departments for onward notice to the individual employees.
Having stated this, it was expected of the Defendant to tender the documents of Notice given to the various Heads of Departments; and the onward Notices to the individual employees. This, the Defendant failed to do. Again, considering that the reason for calling the meeting evidenced in exhibit D2 was to produce an improved welfare package in the proposed new Handbook (Exhibit D4), especially on redundancy benefits; I have gone through the provisions of both the old and new Handbook, in relation to the subject of terminal benefits, and do not find any improvement in that relation. This queries if Exhibit D4(new Handbook) was actually the product contemplated by D2. For instance, whereas in Exhibit C4/D3(the old Handbook) the redundancy benefit is:
1-2 years: 4 weeks gross pay for each completed year of service.
2-5 years: 6 weeks gross pay for each completed year of service
5 years and above: 8 week gross pay for each completed year of service
The terminal benefits are:
The company shall however pay terminal benefits which will be calculated as two (2) months basic salary for every completed year of service
Under the new Handbook(Exhibit D4) redundancy benefit is:
The company shall pay a redundant staff his/her terminal benefit plus two months gross salary as redundancy benefits.
The terminal benefit is:
The company shall pay terminal benefit which will be calculated as two (2) months basic salary for every completed year of service – Such employee would have worked for 3years and above to qualify for termina1 benefit.
Whereas under the old Handbook(C4/D3) Claimant would earn as redundancy benefit the sum of N2,608.083.33, under the new Handbook(Exhibit C4) he will earn N343,000.00. This could not have been the product of consultation between Management and the Workers’ Union who had agreed to improve the terminal benefits of workers.
The Defendant also asserted that the heads of payments including “Terminal benefits” and “salary” were all made under the 2016 Handbook (Exhibit D4). I have considered the provision of exhibit D4 in relation to the actual benefits paid to the Claimant in this suit, and find that they do not correspond. This again suggests that the Defendant did not use D4 (the 2016 version) in its computation. The explanation to this is that it probably did not exist at the time.
The Defendants made great weather of the provision in the Handbook that it shall be subject to review after 3 years. It stands to reason that this provision does not automatically repeal the old Handbook until such a time that a new one replaces it, through the proper procedure for doing so. Until a new Handbook is properly introduced, the old Handbook remains in force and regulates the relationship of the parties. To hold otherwise will lead to a situation that once a period of 3 years is reached, the Handbook terminates immediately, even before replacement. That will surely lead to the absurd situation of having a period unregulated by any document, in the life of the employment of the workers.
From the above, there is clearly no improvement in the benefits provided by the new Handbook, as to be flowing from the meeting evidenced by D2. Therefore, in the absence of any evidence showing that there was any meeting for the preparation of D4, any communication on the existence of D4, any improvement as anticipated in D4, and no reference to the document prior to this suit, it is safe to assume that D4 did not exist at the time of the disengagement of the Claimant. Having not been in existence, I find that D4 cannot operate as containing the terms of contract of employment of the Claimant. I therefore find that the document in operation at the disengagement of the Claimant is Exhibit C4/D3(the 2013 Handbook).
Issue 2 – Whether the Claimant is entitled to his Claim.
Having found that the old SIFAX Handbook was the operational Handbook at the time the Claimant was disengaged, I have considered the tabulation of what is due to the Claimant as presented in his evidence (his last pay slip, exhibit C5), which was not challenged, and find that the Claimant is entitled to Relief 1 of his claim for the sum of N2,288,083.33(Two Million, Two Hundred and Eight-Eight Thousand Eighty Three Naira Thirty Three Kobo) only, being the Claimant’s outstanding redundancy benefits at the time of his redundancy on the 18th day of March 2016, I so hold.
The Claimant also in his pleadings sought payment of interest on the above sums at the rate of 21% per annum until judgment, and, thereafter, at the interest rate of 10% per annum till the said sum is liquidated. The first leg of this claim is pre judgment interest. The law is trite that before a party can claim pre-judgment interest, he has to plead not only his entitlement to the interest, but the basis of the entitlement either by statute or contract/agreement between the parties, or under mercantile custom or under principle of the equity. See Dantama v. Unity Bank Plc (2015) LPELR-24448(CA). It is for the Claimant to prove his entitlement to the stated pre judgment interest. This accords with the age old principle that he who asserts must prove same. The Claimant has failed and/or neglected to prove how he becomes entitled to the rate of interest claimed. Not having proved same this head of relief is refused and dismissed. See also Mr. Kurt Severinsen v. Emerging Markets Telecommunication Services Limited [2012] 27 NLLR (Pt. 78) 374 NIC; Mr. Valentine Ikechukwu Chiazor v. Union Bank of Nigeria Plc SUIT NO. NICN/LA/122/2014 judgment delivered on 12th July 2016.
The Claimant also sought payment of interest at the rate of 21% on the judgment sums from the date of Judgment till final liquidation. The Rules of this Court provides direction and guidance with respect to post judgment interest. In this respect, Order 47 Rule 7 of the Rules of this Court states inter alia that the Court at the time of delivering judgment may order interest at a rate not less than 10% per annum to be paid upon any judgment. Therefore, pursuant to Order 47 R 7 of the Rules of this Court all the sums due under and by virtue of this Judgment (except cost) shall attract 10% interest per annum from today until final liquidation.
With respect for Relief 2 for general and punitive damages in the sum of N10,000,000.00(Ten Million Naira), I find from the facts of this case that Claimant is entitled to general damages. General damages flow naturally from the wrongful act of a defendant complained of – The Shell Petroleum Development Company of Nigeria Limtted v. Chief G.B.A. Tiebo VII (supra) at 466, para. C. per OGUNTADE, JSC.- Owena Mass Transportation Company Ltd. V. IMAFIDON (2011) LPELR-4810(CA) I set and award to the Claimant general damages of N500,000, 00.(Five Hundred Thousand Naira) only. As held by the Supreme Court in Akinkugbe v. E.H. (Nig.) Ltd. (2008) 12 NWLR (Pt.1098) 375 S.C
General damage often consists in all items of loss which a plaintiff is not required to specify in his pleadings in order to allow him recover monetary compensation in respect of them at the trial.
On the whole, Claimant’s case succeeds, but without the pre-judgment interest.
- The Defendant is hereby Ordered to pay to the Claimant the sum of N2,288,083.33(Two Million, Two Hundred and Eight-Eight Thousand Eighty Three Naira Thirty Three Kobo) only, being the Claimant’s outstanding redundancy benefits at the time of his redundancy on the 18th day of March 2016,
- The Defendant is also ordered to pay the sum of N500, 000.00 as General Damages to the Claimant.
- The adjudged sums are to be paid within 30 days from this judgment, failing which it shall attract interest at the rate of 10% per annum.
Judgment is entered accordingly.
…………………………………….
Hon. Justice Elizabeth A. Oji PhD
