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A recent decision of the Supreme Court of Nigeria has quietly shaken the foundations of Nigerian employment law. In Skye Bank Plc v. Adedokun Adegun1 ("Adegun"), the apex court appeared to embrace the jurisprudential approach of the National Industrial Court (NICN) in adjudicating wrongful dismissals, adopting an interpretation rooted in international best practices. This shift is remarkable given that such international best practices, though persuasive, have not been domesticated into Nigerian law as required by Section 12 of the Constitution, despite Section 254C of the Constitution and Section 7(6) of the NICN Act seemingly empowering the NICN to consider them, and it was the Apex Court, whose judgments are binding on all other courts in Nigeria, that delivered this judgment.
Yet, any applause for this progressive approach remains muted. Subsequent decisions, particularly Dangote Cement Plc v. Ager2 ("Dangote"), have cast doubt on whether the position heralded in Adegun signals a permanent doctrinal shift or merely reflects a fleeting moment of judicial liberalism. These conflicting decisions of the Supreme Court expose an enduring tension at the heart of Nigerian employment law: should employment relationships be governed strictly by the contracts parties freely enter into, or should they be shaped by evolving international standards that demand fairness, justification, and dignity in the workplace?
A Turning Point?
Delivered on 27 February 2024, the Supreme Court's decision in Skye Bank Plc v. Adedokun Olusegun Adegun marks a momentous departure from the traditional common law orthodoxy that has long governed employment relationships in Nigeria. It signals a judicial pivot towards principles grounded in fairness, procedural due process, and international labour standards.
The Respondent, Mr. Adegun, was a staff member of the defunct Cooperative Bank Plc, which later merged with other institutions to form Skye Bank Plc. His dismissal on 29th March 2006 followed a review by the Bank's integration team, which revisited past disciplinary issues during his employment at Cooperative Bank. The integration team concluded that he was involved in fraudulent withdrawals from a customer's account between August 2004 and December 2005 and terminated his employment for gross misconduct.
However, the background tells a more complex story. Prior to the merger, Cooperative Bank Plc had already queried the Respondent over the withdrawals, issuing ten specific questions to which he responded not with direct answers but with an apology. While this response was arguably inadequate, the Bank's final decision at the time was to issue only a caution, suggesting either resolution or, at the very least, non-culpability.
Years later, the integration team's decision to revisit and discipline the Respondent afresh on the same facts was at the heart of the legal contest. The Respondent approached the High Court, seeking redress for wrongful dismissal. The trial court agreed that his dismissal was procedurally defective but, in line with orthodox common law reasoning, awarded only one month's salary in lieu of notice and ₦100,000 in general damages.
The Court of Appeal, however, took a different view, enhancing the damages to ₦14,221,000, equivalent to two years' salary. On further appeal, the Supreme Court not only affirmed the award but used the opportunity to articulate a progressive judicial philosophy. The Court held that the failure to give the Respondent an opportunity to defend himself before the integration team constituted a denial of fair hearing. It further held that even if such hearing had been granted, it was improper for an employer to "rediscipline" an employee for the same offence on the same facts, especially after the matter had been previously addressed and resolved by way of a caution. Doing so, the Court noted, violated the doctrine of estoppel.
Crucially, the Supreme Court acknowledged that it is no longer acceptable, either legally or morally, for an employer to terminate employment without justification. The Court emphasised that international best practices and global labour standards now inform the adjudication of employment disputes in Nigeria. Termination must not only be procedurally sound but also substantively fair. Arbitrary dismissal, particularly of high-performing or long-serving employees, is no longer in vogue.
In Adegun, the Supreme Court thus confirmed a subtle yet transformative shift: Nigerian labour jurisprudence is steadily realigning itself with global standards, where fairness, equity, and dignity of labour are paramount. This case stands as a watershed moment in reinforcing employee rights and shaping employer obligations within the modern workplace.
A Jurisprudential Shift
In a rare judicial moment, the Supreme Court expressly recognised the evolving jurisprudence in labour and industrial relations. It leaned on the constitutional and statutory reforms ushered in by the Third Alteration to the 1999 Constitution and the National Industrial Court Act 2006, declaring that employers must now consider capacity, conduct, or organisational restructuring when determining whether to terminate employment.
The Court also introduced the principle of proportionality, a concept borrowed from international labour law, which requires employers to weigh the gravity of an employee's alleged misconduct against mitigating circumstances before opting for the most severe disciplinary action.
In Adegun's case, the stigma of dismissal for dishonesty and the evidence that he became unemployable as a result of the bank's actions justified a substantial award of damages. This was a striking departure from the prevailing rule that dismissed employees, no matter how unjustly treated, are entitled to only nominal compensation.
A Hollow Victory?
However, the celebration of Adegun as a watershed moment is threatened by the seeming inconsistency in the Supreme Court's subsequent judgment. In Dangote Cement Plc v. Ager & Ors.3 , the Court reiterated the classic position that an employer has the unfettered right to terminate employment without stating any reason, provided adequate notice or payment in lieu is given, and such termination is in accordance with the stated procedure in the employee's employment contract which the Justices noted will form the formal agreement or contract that would regulate and govern the relationship between the parties, and is binding on the parties.
This directly contradicts the logic and moral force of Adegun. It also raises unsettling questions: Is the Supreme Court now delivering contradictory judgments, or is it merely correcting itself? Could it be that the international best practice, which the Industrial Court relied upon and affirmed in Adegun, has not, strictly speaking, been enacted into Nigerian law in accordance with Section 12 of the Constitution? Does this development perpetuate the contradictions between Section 7(6) of the NICN Act, the relevant constitutional provisions, and the various rules of interpretation? Can legal practitioners and HR professionals rely on Adegun as a precedent, or is it an isolated exception?
All these considerations are important when attempting to decipher the practical implications of these conflicting judgments. However, this brings to the fore the reality that every case may need to be judged on its own merits to effectively answer these seemingly challenging questions. The facts of this case(Dangote' case) are as stated below:
The Respondents were employees of the former Benue Cement Company, Plc, taken over by the present Appellant, who were suspended indefinitely for an investigation to be carried out on allegations of fraud and the theft in the company's commercial/ marketing department. The Respondents protested their indefinite suspension and when the company failed to do anything about it, they filed the action at the trial Court against the company and an injunction was issued that no further disciplinary action be taken against the Respondents during the pendency of the action. Meanwhile, the Benue Cement Company, Plc. was acquired and taken over by the Appellant and the employment of the Respondents along with other employees of the acquired company, was terminated. As a result, the Respondents amended their claims before the trial Court to include reinstatement and payment of entitlements from the date of the indefinite suspension and termination of employment on the basis of a breach of their contract of employment.
The trial court declared the indefinite suspension and termination unlawful and ordered that they be paid their entitlements from the date of the suspension. The Court of Appeal upheld this decision. Dissatisfied, Dangote Cement Plc appealed to the Supreme Court.
Some of the obiters of the Apex Court as regards the issue of dismissal and termination of an employee from employment while considering the issue of dismissal/termination without the need for a justification are as follows:
"By their contract therefore, the Appellant, as an employer, has/had the requisite power and authority to lawfully terminate the employment of the Respondents without any stated reason/s; whether disciplinary or otherwise, so long as the requisite notice of payment in lieu thereof, was given or made. Where that is done, then the termination becomes proper, valid and lawful under the terms and conditions freely agreed to in the contract...
The reason being that in an ordinary master/servant relationship, an employer has the right to terminate his employee's employment for good or bad reason, or for no reason at all. See Shitta-Bey Vs Federal Public Service Commission (1981) 1 SC 40 @ 56; Olaniyan Vs University of Lagos (1985) 2 NWLR (Pt. 9) 599. The employer must however comply with terms of the agreement between the parties. Failure to comply with the terms of the agreement renders the termination wrongful but not null and void."
The distinguishing factor between this case and the Skye Bank case was that the termination of employment in Dangote's case was carried out contrary to the terms and conditions of the employment contract. The contract allowed Dangote Cement Plc to terminate an employee's employment without giving a reason, provided that the company gave the appropriate notice period based on the employee's level or made a payment in lieu of notice. The Supreme Court, while affirming the validity of this contractual provision, held that the termination was wrongful due to Dangote Cement Plc's failure to make the required payment in lieu of notice, but it was not unlawful simply because no reason for termination was given. This decision underscores that the application of international best practices by the courts is ultimately dependent on the specific terms of the employment contract and the facts of each case.
Footnotes
1 (SC/406/2018).
2 (2024) LPELR-61800 (SC).
3 Supra.
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