WHEN CAN A 'JOB APPLICANT' RELY ON THE EMPLOYER'S/AGENT'S COMMUNICATION OR CONDUCT TO ACTIVATE AN EMPLOYMENT CLAIM?
The world of work appears organised within a set, or well-ordered pattern. Parties have come to expect and even embrace the predictability of the entire process; first, a recruitment advertisement/process, selection, pre-contract negotiation (on specific engagement terms), and subsequently express communication of the date of commencement of the employment relationship (offer) and acceptance/rejection of the said terms, leading to the entering of a written employment contract.
The entire progression of events has always been characterised by some appreciable level of clarity, and is rarely implied. However, with relentless strides in technology, and the ever expanding intricacies of human communication, the question now arises as to when, precisely, the corresponding rights and obligations of the parties in an employment relationship can be said to crystallize in the course of communication between intended contracting parties. Put differently, at what point during the exchange of communication between a company's agent (usually a Human Resources personnel) and an applicant, do the rights and obligations arising out of an employment relationship between parties, become enforceable at the instance of either party? The recently decided case of Akande v. Lilygate Nigeria Limited – Suit No. NICN/LA/209/2016 – draws the fine line in this regard.
Further to a job vacancy advertisement by Lilygate Nigeria Limited (Lilygate), Mr. Akande applied for a position with the company. At the time he submitted his application, Mr. Akande was in the employment of Golden Tulip Hotel. He successfully participated in the rigorous interview process, and was issued a letter of offer of employment dated October 29, 2015; which he accepted on October 30, 2015. With this newly secured employment, Mr. Akande resigned from Golden Tulip Hotel and in line with the new contract, resumed with Lilygate on November 23, 2015. On resumption, he was informed that Lilygate had changed its mind regarding his employment; he was subsequently issued a rejection letter dated November 26, 2015, withdrawing same.
Aggrieved, Mr. Akande instituted an action claiming, amongst other things, the sum of N5, 000,000 (five million Naira) as compensation for loss of jobs and earnings, and unfair labour practice. Mr. Akande did not call any witnesses. Lilygate, on its part, argued that the offer letter was simply an invitation to treat, which was not binding; and subject to terms and conditions which Mr Akande agreed to. Lilygate also argued that the communication between its Human Resource Manager and Mr. Akande had no binding effect on it; and that the rejection letter issued to Mr. Akande only advised him of the outcome of his interview, which was that he was not recruited.
In delivering its judgment the National Industrial Court (NIC) rejected Lilyagate's argument that the acts and correspondence of its Human Resources Manager cannot impose a duty and/or liability on it. It found that:
- Lilygate, through its Human Resource Manager, had informed Mr. Akande via email of its desire to employ him as a cost controller, with an offer letter attached for execution.
- The said email was acknowledged by Mr. Akande, subsequent to which he then forwarded the executed offer letter to the same Human Resource Manager.
- The moment the offer letter was issued by Lilygate and accepted by Mr. Akande, a valid and binding contract of employment came into force; the fact that it contained conditions to be fulfilled subsequently did not make it any less valid.
The NIC held that the contract in issue generated an expectation interest on Mr. Akande's part, which he relied on and acted upon when he resigned from his prior employment to take up the employment offered. If not for the offer of employment, Mr. Akande would not have resigned from his previous employment. Therefore, in relying on Lilygate's promise of employment, Mr. Akande acted detrimentally and was entitled to compensation.
Having found that Mr. Akande had proved his case, the NIC ordered Lilygate to pay him N5, 000,000 (five million Naira) as compensation for loss of job and earnings, and unfair labour practice. The cost of the suit (N300, 000; three hundred thousand Naira), and interest on the aforesaid sums (10% per annum until fully paid).
This illuminating decision clearly defines the legal line that runs through the entire employment process; in other words, an employer's right to recruit, the principles of an employment contract, and the concept of unfair labour practice. There is definitely a need for clear and unequivocal terms of engagement; whether that would involve the insertion of a clause giving an employer a right to terminate prior to resumption is a fact yet to be tested, matters of 'expected interest' notwithstanding. What is clear is that the NIC frowns at an abuse of the common law right to hire and fire to the detriment of the job-seeker/employee, a product of the current disposition of the NIC in upholding international best practices as it considers the merit of each case by a review of the facts before it that time.
The tenets of the Law of Contract
In the present case, the NIC rejected Lilygate's argument and held that the letter of October 29, 2015, was not an invitation to treat as suggested, but was an offer of employment; an invitation to treat being merely an invitation to make an offer and not an offer. The NIC worked to apply the tenets of the Law of Contract and human rights to the unique facts before it and specie of contract. In doing so, labour rights were explained to inure at three levels: Pre-employment rights (prior to the commencement of an employment, such as rights inuring to job applicants), employment rights (during the pendency of an employment), and Post-employment rights (at the end of the employment, such as pension rights), all of which are enforceable. In this case, the pre-employment rights of Mr. Akande arose the moment he accepted the offer letter; the rejection letter was viewed as an afterthought.
On Mr. Akande accepting the offer letter, not only was an already valid contract of employment formed, but the rejection letter in effect breached that employment contract. Thus, if Lilygate wanted to treat the offer letter as an invitation to treat, it would have made clear their intention for Mr. Akande to, on receipt of same, make an offer, as against making an actual offer by the offer of employment. The NIC ensured to emphasize that it is not for employers to make offers of employment and simply resile from same at their whims and caprices. Employers are required by law to, at all times, act in good faith, reasonably and fairly towards people and matters under their charge in all circumstances. The law does not permit employers to act arbitrarily.
The actions of the Human Resource Manager
Another significant part of the NIC's decision was that a company can be bound by the act of its Human Resources Manager. The Companies and Allied Matters Act (CAMA) by Section 66 states that the acts of any officer or agent of a company shall be deemed to be acts of the company if the company represents the officer as having authority to act in that matter, in which case, the company shall be liable to any person who has entered into a contract or acted in reliance on such representation, unless such person had actual knowledge or ought to have known that such officer had no authority to act in that capacity. Therefore Mr. Akande had rightly argued that the Human Resource Manager is an officer of a company charged with the duty of employment and personnel management by the Board of Directors. Accordingly, the acts of the Human Resource Manager in employment and recruitment are deemed to be the actions of the company by virtue of Section 66. In the considered case, Lilygate failed to prove otherwise.
Recently, the Supreme Court of British Columbia in Canada held in the case of Buchanan v Introjunction Ltd., 2017 BCSC 1002 (CanLII) that the termination of the claimant employment without reasonable notice or payment in lieu of notice, amounts to wrongful termination. In that case, the plaintiff sued its employer for wrongful termination after receiving a mail 'retracting' the offer of employment given to him in October 2016, before he resumed work with the employer. The Court noted that the termination of contract of employment before the employee resumes duty constitutes an anticipatory breach of same. Bearing in mind the NIC's ability to consider international decisions reinforces the need for local employers to be cautious in matters such as these. The current employment climate in Nigeria strongly condemns any act that can be viewed as an act of intimidation, or unfair treatment or labour practice; the need to seek prior guidance of counsel at every stage is key.
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