Innovative decisions of NICN
Decisions that could potentially rewrite labour law jurisprudence, at least in Nigeria, are being given by the National Industrial Court (NICN). This article identifies some of these decisions and their impact on the principles of labour law in their current states.
In Friday Abalogu v Shell Petroleum Development Co,(1) the appellant was employed by the defendant on 3 May 1971 and subsequently became a permanent and pensionable member of staff at the company. In a letter dated 25 January 1995, he was notified that he was due to retire on 3 August 1996 (his 55th birthday). Afterwards, he received another letter dated 31 January 1995, this time informing him that his employment had been terminated. He was paid three months' salary in lieu of notice. The trial court rejected his contention that the termination was null and void as he was already due for retirement and maintained that the termination was valid as it was in accordance with the contract of service voluntarily executed by both parties. This position, which was premised on the common law position that an employer has an unfettered right to fire, was affirmed by the Court of Appeal and the Supreme Court.
When determining employment cases, courts in Nigeria have consistently applied common law labour principles established in previous decisions. Such common law principles include:
- the unfettered right of a master(2) to dismiss his servant for a good or bad reason or no reason at all;(3)
- the inability of a court of law to impose a servant on an unwilling master;(4)
- sanctity of the contents of the contract of service;(5) and
- the only remedy available to an employee whose employment is deemed wrongfully terminated is damages calculated at the amount legitimately due to them at the time of termination of their employment and nothing more.(6)
The decisions of the trial courts in Nigeria suggest that the application and or adherence to these principles is, however, gradually changing, specifically with the NICN, which appears to be carrying out a quiet revolution by substantially rewriting national labour law jurisprudence.
The Third Alteration Act(7) (the alteration) conferred on the NICN, to the exclusion of all other courts in Nigeria, the jurisdiction to adjudicate on all matters relating to labour, employment, industrial disputes, trade unions, and the interpretation and application of the provisions of Chapter IV of the Constitution of the Federal Republic of Nigeria as it relates to labour and matters arising from the workplace such as the conditions of service, health, safety and the welfare of workers.(8) The alteration also empowered the NICN to adopt international best practices and international labour conventions in the resolution of employment disputes;(9) a development that has led the NICN to import radical terms such as "unfair labour practice" and "international best practices" in its rulings.
The subsequent parts of this article explore certain aspects of our labour law jurisprudence that the NICN has succeeded in modifying in favour of current and international best practices. There is an apparent inconsistency in the decisions of different divisions of the NICN and the attitude of the Court of Appeal when considering cases that the NICN deals with directly. Moreover, the attitude of the Court of Appeal is in constant flux.
Application of undomesticated international conventions
Relying on section 12 of the 1999 Constitution (as amended), Nigerian courts have unswervingly maintained the irrefutable position that a court in Nigeria can only rely on international treaties or conventions that have been ratified by Nigeria and domesticated by the National Assembly.(10) Thus, no matter how beneficial the convention, it remains unenforceable if it is not enacted into the law of the country by the National Assembly.(11) It was not surprising, therefore, that when Aero Contractors Co (Nig) Ltd v National Association of Aircrafts Pilots and Engineers (NAAPE) & 2 Ors(12) was brought for determination before the NICN, it was contended for the defendant that the NICN cannot apply International Labour Organization (ILO) conventions 87 and 98 (on the Freedom of Association and Protection of the Right to Organise, and the Right to Organise and Collective Bargaining, respectively). This is because, although ratified, they have not been domesticated in Nigeria.
However, rejecting this argument, the NICN held that section 254C(2) of the Constitution (introduced by the third alteration) created a watershed provision that empowers the NICN to apply international labour treaties or conventions that have been ratified by Nigeria but not domesticated by the National Assembly. This provision, therefore, constituted the domestication demanded by section 12 of the Constitution.
With this interpretation, the NICN has proceeded to apply the principles expounded in international labour conventions whenever it is called upon and the circumstances of the case before it so demands. For instance, it relied on article 4 of the Termination of Employment Convention of 1982 (no. 158) and appellate Recommendation 166 of the ILO Convention, to order specific duties in a master-servant relationship.(13) This appeared to go against familiar principles of labour law.
The NICN also adopted the practice of using international law to strengthen a decision based on domestic law. In Folarin Oreka Maiya v The Incorporated Trustees of Clinton Health Access initiative, Nigeria & 2 Ors,(14) the court, after evaluating the evidence presented, determined that the claimant had been dismissed on account of her pregnancy. This constituted a breach of her rights to protection from discrimination under section 254(c)(1)(f)(h) of the Constitution, the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act and the non-domesticated ILO Convention No. 111 of 1958 on discrimination. In this case, the court awarded one year's full gross pay totalling more than 5 million naira (£8,800) in favour of the claimant. The NICN also relied on the undomesticated ILO Convention to hold that termination of employment which is not connected with capacity or conduct of employee amounts to unfair labour practice.(15)
Termination for no reason
The NICN appears to have departed from the traditional view under common law that an employer can terminate an employee's contract with or without reason provided they comply with the terms and conditions of the employment contract. The courts, in applying this common law principle, have often held that in such cases the motive for exercising the right to fire does not render the exercise ineffective.(16) However, the NICN has stated that this practice constitutes unfair labour practice which is contrary to international best practices.
Relying on the provisions of section 254(c)(1)(f)(h) and section 254(2) of the Constitution (as amended), the NICN has held in some cases that it is an unfair labour practice for an employer to terminate an employee without stating a reason.(17) In those decisions, the NICN relied on the Termination of Employment Convention (TEC82) 1982 and Recommendation 166 as establishing the international best practices and international labour standard in the termination of employment. Notably, in article 4 of TEC82 it is provided that "the employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service".
In line with article 4 of TEC82, (No. 158) of the ILO Convention and Recommendation 166 on the Termination of Employment at the Initiative of the Employer of 1963, the NICN insists that employers shall not terminate a contract of employment unless there is a valid reason for such termination connected with the capacity or conduct of the employee or based on operational requirements of the employer and that an employee should be entitled to receive a written statement from his employer of the reason or reasons for termination on request.(18)
The NICN is attempting to rewrite labour law jurisprudence using an established understanding of master-servant relationship, wherein the former is endowed with the unfettered power to hire and fire the latter for good or bad reason, or for no reason at all, subject to the terms of the contract between the parties. Therefore, in cases where employment was terminated without reason or a valid reason, the NICN revoked the termination, awarded damages where appropriate and ordered the reinstatement of the employee.(19) It made no difference that such termination was in accordance with the contract of employment executed between the parties.
Other instances where the NICN refused to apply the common law principle include: where the employee was dismissed after testing positive for HIV(20) and where a female employee (who was still on probation) was fired for no reason, shortly after informing her supervisor that she was pregnant.(21) In effect, the former principle of common law that an employer can dismiss an employee for any reason or no reason at all has not only been reviewed but appears to have been effectively overturned by the NICN; at least in some of its decisions.
Whether preventing employers from terminating employment contracts without giving a reason can continue to subsist as extant law is debatable; particularly with the recent pronouncements of the Court of Appeal. It seems that the foundation for the innovative principle is weak, especially with regard to the decision of the Court of Appeal in Oak Pensions Limited v Olayinka,(22) and subsequent decisions of the NICN.(23) These have reiterated the common law principle of a master's right to fire, in accordance with the contract of employment, for any reason or no reason at all. There is need for certainty regarding these and other issues that the NICN handles.
Award of general or exemplary damages
Another aspect of common law jurisprudence that the NICN appears to be reviewing is the practice of awarding damages where it is established that there was wrongful termination. It has long been the case that, except for when a breach occurs as a result of damages contemplated by the parties at the time of entering into the contract, no other damages should be awarded.(24) Therefore, there can be no room for claims that are merely speculative or sentimental unless these claims are provided for by the terms of the contract. The prevailing position of the courts is that the only remedy available to an employee whose employment is deemed wrongfully terminated is damages calculated at the amount legitimately due to him at the time of termination of his employment and nothing more.(25) Therefore, even after determining the wrongful termination of a litigant's employment, the court will not award damages exceeding the amount of salary or wages the employee would have earned in employment for the period of notice required to lawfully terminate the employment.
In recent decisions, the NICN has taken a different approach. Relying on section 14 of the National Industrial Court (NIC) Act 2006, it has held that the court has the discretion to award general, exemplary or aggravated damages for wrongful termination of employment. For instance, In Onuhikemi v Smridu Nigeria Ltd (see endnote 20), the court awarded 24 months of salary with the value of in the sum of 739,200 naira (£1,300) in general damages, as well as 30,800 naira (£55), which is equivalent to a one month salary in lieu of notice, and costs of 100,000 naira (£175). In Folarin Oreka Maiya (see above), upon determining that the claimant was dismissed due to her pregnancy, the court held that the worker was entitled to general damages and exemplary or aggravated damages, amounting to one year's full gross pay. Furthermore, in Adema v NSPMC,(26) where the employer was unable to establish the criminal allegation for the dismissal, the NICN awarded six months of salary as compensation.
It is noteworthy that the burden is on the claimant to prove their entitlement to the damages sought and must specifically plead special damages. The NICN will decline to award damages that are not pleaded for or sufficiently proved.(27)
Remedy of reinstatement
The traditional position is that a court of law will not compel an unwilling employer to retain employees it does not need and, therefore, it cannot impose a worker on an unwilling employer.(28) For this reason, in an ordinary master-servant relationship, failure of an employer to terminate in accordance with the terms of the contract was deemed wrongful and not null and void. Therefore the dismissed employee cannot ask for reinstatement, and consequently, even if it is determined that the termination was carried out in accordance with the terms of service, it remains effective.(29) The prevailing view is that the relief of reinstatement is only available to persons whose employment has statutory flavour.(30)
The NICN is carrying out a quiet revolution in this area of law. In Bello Ibraham v Ecobank Plc, no reason was given for the termination of the claimant's employment. In response, the court held that the termination of the claimant was wrongful and unfair due to non-contemporaneous payment of salary in lieu of notice, non-adherence to Convention 158 and Recommendation 166 of the ILO, which the court has power to enforce under section 254C of the Constitution of the Federal Republic of Nigeria of 1999 (as amended) and section 7(6) of the National Industrial Court Act of 2006. Consequently, the court ordered the reinstatement of the claimant back to the employment of the defendant with immediate effect.
It is respectfully contended that forcing a willing employee on an unwilling employer could potentially negatively affect peace and harmony in the workplace.
Application of privity of contract in triangular employment and co-employment
Privity of contract presupposes that only the parties tied to a contract can sue or be sued based on the contract's terms. A stranger, therefore, who is not a party to an employment contract could not be bound to observe the terms of that contract or sue nor be sued on the contract.(31) The practice of outsourcing(32) is fairly common among top organisations in Nigeria and was recognised by the NICN in Stephen Ayaogo & 16 Others v Mobil Producing Nigeria Unlimited & Another.(33) It is also common practice for companies to have subsidiaries, each of which are independent and separate legal entities from the parent company. Based on the doctrine of privity of contract, outsourced employees can only sue the companies that employed them and not the end user to whom they are seconded. In the same vein, a direct employee of a subsidiary company cannot sue the parent company.
In several judicial pronouncements, the NICN has recognised that in a country like Nigeria, where triangular employment and co-employment is rampant among top employers, there is a need for judicial intervention to protect the rights of vulnerable employees. On this premise, the NICN regards privity of contract as a general principle of law that is subject to certain exceptions and enjoins courts to conduct an enquiry into the merits of the case to reveal the true position of things.(34) Consequently, where triangular employment is determined, the question of who is responsible for performing employer responsibilities is determined by the facts found by the court in each case, and where an end user instructed an employer or outsourcer to terminate the contract of employment, both companies were held to be co-employers and the employee was entitled to choose any one of them.(35)
It has also been held that where the direct employer can be construed as an agent of the end user, the two companies would be treated as one.(36) NICN will not always consider the existence of a contract between the worker and the end user. For that to happen, it must be proved that the intermediary is the agent or employee, or tool or simulacrum of the end user, or the whole relationship is false, or where there have been direct negotiations of the terms and conditions of service between the end user and the worker.(37)
The NICN has also circumscribed the principle of separate legal personality between companies and their subsidiaries. In essence, if it is determined that a subsidiary is false or is integrated and under the control of the parent company to the extent that the subsidiary is for all intents and purposes "the agent" or "employee" or "tool" of the parent company, the NICN will regard them as co-employers. Thus where a company transferred one of its employees to its subsidiary, the NICN held that both the parent company and the subsidiary are co-employers of the employee.(38) In Ejieke Maduka v Microsoft Nigeria Ltd & Anor,(39) the NICN ruled that both the first respondent and its parent company, the second respondent (Microsoft Corporation), are co-employers of the applicant and are both liable because, although the claimant was a direct employee of the first respondent, her employment was subject to and governed by the worldwide policies of the parent company, which affects all employees, subsidiaries and affiliates of the parent company.
Where it determines that there is triangular employment or co-employment, the NICN hesitates to apply the privity of contract principle until it determines that there is no disguised employment relationship whose appearance is different from the underlying reality, or which is intended to nullify or weaken the protection afforded to workers by the law.
Common law places no obligation on an employer (or former employer) to provide reference to an employee; it is not considered as one of the enduring rights at the end of the employment. However, the NICN held in Kelvin Nwaigwe v Fidelity Bank Plc(40) that there is an implied term in contracts of employment imposing a duty on the employer to provide work reference in respect of its employee, whether former or existing; which work reference must be true, accurate, fair and not misleading to a future employer. The NICN has proceeded to apply this principle in subsequent cases, including Kefre Ekpo Inyang v Alphabeta Consulting LLP,(41) where it held that the defendant was liable for the loss of the employment with a new employer for failure to release the claimant's certificate of service. The new position, therefore, is that an employee, at the point of exit (and even during employment) is entitled to a workplace reference that is true, accurate and not misleading to a future employer.
This principle extends to references given after employment has ceased. In Mr Ifechukwude Adigwe v FBN Mortgages Limited,(42) after the claimant had voluntarily retired, the defendant proceeded to purportedly terminate his employment on allegations of misconduct. Upon being served a questionnaire by the claimant's new employer, the defendant instead elected to write to the claimant's new employer stating the claimant was terminated and was still indebted to the defendant. As a result of this letter, the new employer terminated his employment. The NICN held that the supposed termination was a nullity as the defendant had effectively resigned and that the letter does not meet the test of being "true, accurate, fair and not misleading to a future employer". Consequently, the court awarded costs in favour of the claimant.
In subsequent articles, the attitude of appellate courts and conflicting decisions of the NICN will be examined.
For further information on this topic please contact Tonye Krukrubo or Duunebari Seth-Nzor at Aluko & Oyebode by telephone (+234 1 462 8360 71) or email (t[email protected] or [email protected]). The Aluko & Oyebode website can be accessed at www.aluko-oyebode.com.
(1) (2003) LPELR-SC.122/1999;  13 NWLR (Pt. 837)309
(2) The term "master" is equivalent to "employer" and "servant to employee/worker". The terms are used interchangeably in this article.
(3) Obanye v Union Bank (2018) LPELR-SC.569/2015 (Pp. 25, paragraph A).
(4) Thus the court cannot order the reinstatement of an employee whose employment was wrongfully terminated. Ziideeh v Rivers State Civil Service Commission (2007) ALL FWLR (Pt.354) 243 at 265 paragraphs D - E (SC); Gabriel Ativie v Kabel Metal (Nig) Ltd (2008) 10 NWLR (Pt.1095) 399 at 415, paragraphs C-F; 416, paragraphs B-E; 419, paragraph. F (SC).
(5) Parties are bound by the contents of the contract of service and as such any termination in accordance with the contract is sustainable. Obanye v Union Bank (see above).
(6) Obanye v Union Bank (see above).
(7) Constitution of the Federal Republic of Nigeria (Third Alteration Act) 2010.
(8) Section 254(C) (1) of the Constitution of the Federal Republic of Nigeria (as amended).
(9) Section 254C of the Constitution of the Federal Republic of Nigeria 1999 (as amended).
(10) Section 12(1) of the Constitution and the decision in Abacha v Fawehinmi (2000) 6 NWLR (Pt. 660) 228 at 346-347.
(11) See The Registered Trustees of National Association of Community Health Practitioners of Nigeria and 2 Ors v Medical and Health Workers Union of Nigeria  2NWLR [Pt. 1072] 575.
(12) Suit No: NICN/LA/120/2013 delivered on 4 February 2014.
(13) Bello Ibrahim v Eco Bank Plc Unreported Suit No: NICN/ABJ/144/2018; Judgment delivered 12 December 2019.
(14) Suit No: NICN/ABJ/13/2011 delivered on 21 December 2011.
(15) Ebere Onyekachi Aloysius v Diamond Bank Plc  58 NLLR 92.
(16) Obanye v Union Bank (see endnote 6) (Pp. 24, Paras. F); Chukwuma v Shell Petroleum Nig. Ltd (1993) 4 NWLR (Pt. 269) 512; Oforishe v Nigerian Gas Company Ltd (2017) LPELR-SC.175/2006.
(17) See Ebere Onyekachi Aloysius v Diamond Bank Plc (above); Duru v Skye Bank Plc (2015) 59 NLLR (Pt. 207) 680; Suit No. NICN/ABJ/144/2018: Bello Ibrahim v Ecobank Plc (see above).
(18) Recommendation 166 of Termination of Employment Recommendations R166 at paragraph 13.
(19) See Ebere Onyekachi Aloysius v Diamond Bank Plc (above) and the unreported decisions of the NICN in Suit No: NICN/ABJ/144/2018 – Bello Ibrahim v Eco Bank Plc (see above) and Suit No. NICN/IB/08/2015 – Afolayan Aderonke v Skye Bank delivered on 17 May 2017.
(20) Onuhikemi v Smridu Nigeria Ltd unreported Suit No. NICN/LA/265/2015 delivered on 15 July 2016.
(21) Folarin Oreka Maiya v The Incorporated Trustees of Clinton Health Access Initiative Nigeria & Ors (see above).
(23) Emana Ibor Edet v Fidelity Bank Plc, Suit no. NICN/LA/276/2014 (Unreported). Judgment delivered on 17 December 2019; ThankGod Albert v Leisure Investment Ltd, Unreported Suit No. NICN/ABJ/382/2017. Judgment delivered by Justice Sanusi Kado, who had earlier delivered the judgment in Bello v Ecobank.
(24) British Airways v Atoyebi (2014) 18 NWLR (Pt. 1133) 504.
(25) Obanye v Union Bank (see above) (Pp. 27, paragraphs F); Ifeta v SPDC (Nig.) Limited (2006) 8 NWLR (Pt. 983) 585. The locus classicus for this position is judgment of Fry, L.J in De Francesco v Barnum (1890) 45 chapter D 430, 438.
(26) Adema v NSPMC  26 NLLR (Pt. 74) 247.
(27) Oyewumi Oyetayo v Zenith Bank Plc (2012] 29 NLLR (Pt. 84) 370 (NIC).
(28) Okwara Agwu & Ors v Julius Berger Nigeria Plc. (2019) LPELR-47625(SC).
(29) Wilbros Nig. Ltd. & AR\nor. v Macaulay (2009) LPELR-CA/PH/177/96 (Pp. 37-38, paragraphs E-A).
(30) Chukuma v Shell Petroleum Dev. Co of Nig Ltd (see above).
(31) Reichie v Nigeria Bank For Commerce And Industry (2016) 8 NWLR (Pt. 1514) 294 (SC) 314C-D, 315A-B, 316B-H.
(32) Also called "Triangular Employment", which occurs where an agency outsources its employees to another company (known as the end user or host company). In such cases, outsourcing company hires its employers for the primary purpose of supplying them to the end user.
(33)  30 NLLR (Pt. 85) 95.
(34) Ayaogo v Mobil (see above).
(35) Anthony Agum v United Cement Company Ltd (UNICEM) & Anor, Suit No: NICN/CA/71/2013 unreported judgment of Hon. Justice E. N. Agbakoba, J., delivered on 3 March, 2017.
(36) Mr. Morrison Owupele Inimgba v Integrated Corporate Services Ltd  57 NLLR (Pt. 195) 268 (NIC).
(37) Engineer Ignatius Ugwoke v Aeromaritime (Nigeria) Limited unreported Suit No. NICN/LA/482/2013 judgment delivered on 30 November 2016.
(38) Oyewumi Oyetayo v Zenith Bank Plc (see above).
(39) Suit No. NICN/LA/492/2012 unreported judgment delivered on 19 December 2013.
(40) Unreported Suit No. NICN/LA/85/2014 delivered 24 January, 2017.
(41) Suit No. NICN/LA/550/2016, delivered 4 June 2018.
(42) Suit No. NICN/LA/526/2016 (Unreported). Judgment delivered 9 July 2019.