A Review of the Decision in Modilim vs. United Bank for Africa Plc

Introduction

On 19th June 2014, Justice B. B. Kanyip of the National Industrial Court of Nigeria, sitting in Lagos, delivered a well-considered judgment in Mr. Patrick Obiora Modilim vs. United Bank for Africa Plc2, where the claimant sought, among other reliefs, a declaration that the defendant’s failure to upgrade and/or review the claimant’s emoluments to that of a general manager’s level amounted to a breach of his contract of employment and a declaration that the defendant constructively and wrongfully terminated the claimant’s employment.

Summary of Facts of the Case

The claimant was offered employment by the defendant as a Deputy General Manager and the defendant undertook to confirm his appointment as a General Manager after a period of six months subject only to the condition that the claimant would meet certain set targets contained in a performance contract executed by the parties. The claimant contended that he met the set targets and was confirmed but that the defendant continued to pay him the salaries of a Deputy General Manager for the 20 months he worked after his confirmation despite repeated demands by the claimant that his employment be reviewed to that of a General Manager. Consequently, the claimant was forced to resign his employment via a letter of resignation dated 31st March 2010 and the defendant purportedly accepted the claimant’s resignation via a letter dated 30th March 2010. The claimant contended that the totality of the defendant’s attitude clearly showed that he was constructively dismissed. The defendant, however, maintained that the claimant voluntarily resigned his appointment, did not work as a General Manager and therefore cannot be paid salaries of a General Manager.

Decision of the Court

In its judgment, the court held, inter alia, that the defendant’s failure to review the claimant’s level to that of a General Manager on confirmation was a breach of his contract of employment contained in the offer letter and letter of commitment, thereby holding the defendant liable to the claimant for breach of its commitment.

Loss of Expectation Interest and Claim thereof

The decision in this case is important as it touches on a novel area of the law which is not yet fully appreciated in Nigeria and other jurisdictions; that is, loss of expectation interests and claim thereof. In upholding part of the claimant’s relief, the court held as follows:

“Having therefore breached the contract of employment and so entitling the claimant to relief (b) as indicated, the next question is what the remedy of the claimant is. The commitment on the part of the defendant to be willing to review the claimant’s position to the level of General Manager gave rise to an expectation interest on the part of the claimant. The rule, by Tadduggoronno v. Gotom [2002] NWLR (Pt. 757) 453, is that there cannot be a vested right when an exercise is made subject to the fulfillment of some conditions and acceptance of those conditions at the discretion of the affirming body. And in Medical and Health Workers Union of Nigeria & Ors v. Federal Ministry of Health unreported Suit No. NICN/ABJ/238/2012, the judgment of which was delivered on July 22, 2013, this Court acknowledged that the practice of skipping of salary grade levels by Government can create an expectation interest, which in turn is capable of creating an entitlement or vested right in favour of the complainants who have all this while been beneficiaries of the practice. In the instant case, the conditions for the exercise of the commitment on the part of the defendant were all met. In fact, in University of Jos v. Dr. M. C. Ikegwuoha [2013] 9 NWLR (Pt. 1360) 478, the Supreme Court ordered that the respondent’s appointment be confirmed once the conditions for confirmation were met. In the instant case, the claimant is no longer in the service of the defendant, so the question of ordering that he be confirmed does not arise. The claimant in the instant case is accordingly entitled to a remedy regarding the loss of the expectation interest in terms of the breach of the defendant’s commitment to be willing to review his position to the level of General Manager”. 

Further, the Court queried: “What then is the measure of damages for this loss of expectation interest?” And, after its computation and determination of the difference in salaries between the Deputy General Manager and that of the General Manager, awarded the sum of N75,535,128.00 as the measure of damages in expectation interest that the claimant would have earned had the defendant kept to its commitment to review the employment of the claimant from the position of a Deputy General Manager to that of a General Manager upon confirmation as agreed.

Comments

The Court was right in holding that the defendant was in breach of its commitment to be willing to review the claimant’s position to the level of General Manager upon confirmation and that the breach gave rise to an expectation interest on the part of the claimant. Judges involved in labour/employment law disputes are encouraged to be proactive in granting claims for expectation interests where the facts and circumstances of cases reveal (as in the case under review) that certain benefits would have accrued to a claimant had the defendant kept to its commitment as contained in a contract of employment.