Nigeria: You Can Fire But With Reason

Last Updated: 14 August 2018
Article by Perchstone & Graeys

A recent judgment of the National Industrial Court of Nigeria, handed down in the case of Afolayan Aderonke v. Skye Bank1 has reiterated the new dispensation in the determination of employment contracts. That is, that employees can no longer be lightly discarded (for good, bad or no reason at all) as employers are now required to give valid reasons for determination of the employments of their employees. Undoubtedly the judgement of the court has further reinforced the evolving dynamics in workplace power structure.

AFOLAYAN ADERONKE V. SKYE BANK

Ms. Afolayan (the claimant), an employee of Skye Bank (the defendant) was made to face the disciplinary committee of the defendant bank, for authorizing payment of a cheque to a third party without sighting the payee. She was found liable, and placed on suspension as a disciplinary measure. However, the outcome of the Committee's investigation was not communicated to her, salaries for the period of her suspension were not paid, and her employment was terminated. She filed an action, claiming the following reliefs: a declaration that she was in the employment of the defendant from when she was suspended till she was terminated, and the arrears of her salaries/benefits, that she would have ordinarily been entitled to the period of her suspension.

The defendant countered the claimant's position claiming that because the claimant was placed on a special type of suspension (fraud recovery suspension), she was not entitled to salaries and benefits. The bank further argued that the defendant did not owe the claimant any duty to inform her of the outcome of its investigation, and was thus entitled to terminate her employment without giving a reason.

The Court in arriving at its decision, examined the circumstances of the claimant's suspension vis-à-vis the provisions of the defendant's handbook. The defendant's handbook stated that during the period of suspension, the suspended staff shall be on zero pay. It further provided that where a staff is completely exonerated either at the instance of the investigations or disciplinary committee decision the suspension shall be withdrawn, and such staff shall be reimbursed with the withheld salaries for the period of suspension. It is apt to note, that the defendant's handbook went on to provide that any case of suspension should be determined within 3 months. In the instant case, it took the defendant almost three years to determine the case of the claimant. Not being able to ascertain whether she was exonerated or found culpable put the claimant in a rather awkward and disadvantaged position.

The Court found that there was no evidence before it showing that the claimant was found culpable of any allegation against her, and therefore held that claimant was absolved from all allegations against her and accordingly entitled to her salaries. The Court further held that employers should at least give valid reasons for determination of the employments of their employees, in accordance with current international labour standard and international best practices which the Court is enjoined to observe.

COMMENTARY

I. TERMINATION WITH/WITHOUT REASON

Before the decision of the NICN in Mr. Ebere Onyekachi Aloysius v Diamond Bank Plc2 in 2015, the courts relied on the harsh and rigid common law procedure of "at-will" employment, allowing employers to terminate employments for no reason at all. In Olaniyan v. University of Lagos3 the Supreme Court held that, "a master is at common law entitled to dismiss his servant from his employment for good or bad reasons or for no reason at all".

The seemingly settled position above, and as re-hashed in a number of court decisions in relation to master – servant employment relationship arguably no longer applies, as the NICN4 has declared that, "it is now contrary to international labour standard and international best practice and, therefore, unfair for an employer to terminate the employment of its employee, without any reason or justifiable reason connected with the performance of the employee's work".

The Court in Aderonke v. Skye Bank took that same view, relying on the Termination of Employment Convention, 1982 (No. 158) and Recommendation No. 166 of the International Labour Organisation (ILO); to the effect that employers should at least give valid reasons for determination of the employment of their employees. Whilst the Convention is not yet ratified by Nigeria, this is the current international best practice that the court is enjoined to observe.5

II. CONDONING INFRACTIONS

The Black's Law Dictionary, defines "condonation" to mean "a victim's express or, especially implied, forgiveness of an offence by treating the offender as if there had been no offence"6.

In the instant case, the claimant was on "Fraud Recovery Suspension" and the defendant's contention was that because the claimant did not report to the Investigation Unit (IU) of the defendant to sign the register as required by the terms of her employment, she was not entitled to her salaries.

By the provisions of the defendant bank's handbook, once the claimant failed to report weekly to the IU of the bank to sign an attendance register for two weeks, she would be declared to have abandoned her duties and be summarily dismissed. At any rate, even after failing to adhere to the afore-stated term in the handbook, the claimant was not dismissed after two weeks nor declared to have abandoned her duties. Rather, her employment was terminated almost three years later; and for no reason at all.

While terminating her employment, the bank did consider the alleged misconduct and non-compliance with the requirement of reporting to IU to sign the attendance register. In the light of this, the Court held that the Bank had condoned the alleged failure of the claimant to comply with the requirement and the defendant could not raise the same issue again.7

III. THE TEMPORAL NATURE OF SUSPENSION

Suspension does not mean an employment has been determined. A suspension means a temporary deprivation or stoppage of privileges and rights of a person due to a disciplinary procedure that could be for a fixed or indefinite period. During the period of suspension, the suspended employee still retains his employment until it is finally determined. The NICN considers vindictive suspensions as unfair labour practices, and in the circumstances of a suspension, the employee is still entitled to salaries and allowances except where the parties specifically agree otherwise in their terms.

CONCLUSION

The case of Afolayan Aderonke V. Skye Bank has reinforced the philosophy that parties to an employment contract are of equal bargaining position and as such the employer needs to be wary of the contents of its handbook (or other employment documents) and of heavy-handed practices. The Court is out to deflate the idea that employees are the weaker party and employers are enjoined to amend their policies and practices accordingly.

Footnotes

1. Unreported Suit No: NICN/IB/08/2015, judgement delivered on 17 May 2017.

2. [2015] 58 N.L.L.R 92.

3. (1985) 2 NWLR (Pt. 9) 599 – 685.

4. Mr. Ebere Onyekachi Aloysius v Diamond Bank Plc, supra.

5. Section 7 (6) of the NIC Act, 2006 and section 254C (1) (f) (h) of the Constitution of the Federal Republic of Nigeria, 1999 as altered by Third Alteration Act, 2010.

6. Bryan A. Garner, ed., Black's Law Dictionary, 9th ed. (St. Paul, Minn.: West, 2009).

7. Asake v. Nigerian Army Council [2007] All FWLR (Pt. 396) 720 at 749 para. F (CA); Chiagorum v. Diamond Bank [2014] 44 NLLR (Pt. 140) 471-472 and Nigerian Army v. Aminu-Kano [2010] LPELR-SC.243/2008 Per I.T. Muhammad, JSC. (Pp. 28-29, paras. A-C).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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