An Appraisal of Nigeria Employers’ Consultative Association’s Circular on ‘Status of the Law on Termination of Employment’

BACKGROUND

Nigeria Employers’ Consultative Association (NECA) is the umbrella organisation of employers in the Organised Private Sector of Nigeria. It was formed in 1957 to provide the forum for the Government to consult with private sector employers on socio-economic and labour policy issues.[1]

NECA provides a platform for private-sector employers to interact with the government, labour, communities, and other relevant institutions within and outside Nigeria to promote a harmonious business environment that will engender productivity and prosperity for the benefit of all. NECA is not a trade union but a dynamic and highly respected professional body registered under the Companies and Allied Matters Act 1990.

NECA released a general circular on the 1^st of April, 2021, where it sought to direct the attention of its members to what it termed “Status of the Law on Termination of Employment”. The circular made mention of statuary and judicial authorities which compel employers to further state reasons behind the termination of the employment of any of their employees, as against the previous position which only required employers to either give such employee the relevant notice of termination or payment in lieu of such notice.

It is important to state that the circular by NECA was addressed to its members i.e employees within the private employment sector (workers not employed by local, state, or federal government of Nigeria). Private sector workers are often employed with a simple employment contract (often written and sometimes, orally made). The relationship between a private sector employee and his/her employer is a pure master-servant relationship, and the workers and their tenure of employment have always been at the mercy of their employers.

Below is an evaluation of the old and new position of the law and court as stated by the NECA’s circular.

TERMINATION OF EMPLOYMENT UNDER THE NIGERIAN LABOUR ACT

There are many Laws with provisions regarding termination of employment in Nigeria, but the primary legislation governing employment in Nigeria is the Labour Act, Cap L1, Laws of the Federation of Nigeria 2004. The general position under the Labour Act as regards termination of an employment contract is that notice must be given. Section 11 (2) and (3) of the Labour Act[2] provide for minimum notice period as follows:

• Where the employee has been employed for a period of three months or less, either party may terminate with a minimum of one day notice.
• Where the employee has been employed for a period of more than three months but less than two years, either party may terminate with a minimum of one week notice.
• Where the employee has been employed for a period of two years but less than five years, either party may terminate with a minimum of two weeks notice.
• Where the employee has been employed for a period of five years or more, either party may terminate with a minimum of one month’s notice.
• When giving notice of termination of employment contract where the notice is 1 week or more, the notice must be in writing.

From the foregoing, it is clear that employers and employees of labour are free to terminate the employment relationship at any point in time in as much as the requirements of the Labour Act are complied with. In compliance with the Labour Act, it has become standard practice for employers of labour in Nigeria to give any employee whose employment is to be terminated a month’s notice or a month’s salary in lieu of notice.[3]

It is important to state that the one-month salary required under the Labour Act in lieu of such notice of termination of employment is different from the salary the employee is entitled to collect for that month his/her employment is to be terminated.

POSITION OF COURTS ON TERMINATION OF EMPLOYMENT IN NIGERIA

In the 1973 case of Sogbetun v. Sterling Products Ltd, the Plaintiff’s appointment was validly terminated by one month’s salary in lieu of notice. The plaintiff contended that the termination was wrongful since it was motivated by her refusal to succumb to the sexual advances of her employer. The court via Dosunmu J, in reiterating the well-settled law that motive is immaterial when termination is valid, said; “where an employee is lawfully dismissed by being given the notice or payment in lieu of notice stipulated in the contract of employment; the employer’s motive in dismissing her is irrelevant, and the fact that the employer has a bad motive or give an untrue reason does not make dismissal wrongful’’.[4]

In the same vein, in the renowned case of Osianya v. Afribank Nig Plc., the Supreme Court stated that a master can terminate the employment of his servant at any time and for any reason or no reason at all, provided the termination is in accordance with the terms of the contract of employment. The motive for such termination is irrelevant. [5]

From the above, save for cases of dismissals for misconduct, the general position of Nigerian  Labour Law has been that an employer is not obliged to give reasons for terminating an employee’s contract where such termination is coupled with notice or payment of a month’s salary in lieu of notice. It is imperative to state that this position only affects employees whose employment does not have statutory flavour.[6]

However, as stated by NECA, this well-settled principle of Nigerian Labour Law seems to be changing as shown in some recent decisions of the National Industrial Court (“NIC”).

In the 2015 cases of Duru v Skyle Bank Plc[7] and Aloysius v Diamond Bank Plc[8], the National Industrial Court relying on Article 4 of the International Labour Organisation Termination of Employment Convention, 1982 (No. 158) and Recommendation No. 166, held that an employer is bound to give reasons for terminating an employee’s contract, such valid reasons must be either connected with the employee’s conduct or based on the operational requirements of the undertaking, establishment or service. According to the decision, the National Industrial Court relied on its powers to have due regard to, and apply, international labour standards and international best practices.

As stated above, the NIC has, for instance, adopted the provision of the International Labour Organisation’s termination of Employment Convention 1982 (No. 158) which, even though not yet ratified by Nigeria as the international best practice concerning the termination of contracts of employees in pursuance of its power as contained in the 1999 Constitution (as amended)[9] and applied the provision in the determination of the case before the Court.

On 17th December 2019, the National Industrial Court per Hon. Justice B.B. Kanyip had reason to visit the question of ‘whether or not to apply the international best practices “giving of valid reasons for termination of employment” in cases before the court’. The Court held to the effect that the requirement to give a valid reason for termination of employment would only be applied if it is pleaded and proved by litigants before the National Industrial Court as the international best practice, either in the case before the Court or a previous case by virtue of which the Court may take judicial notice of the judgment[10].

It can be deduced from the above dictum by the President of the National Industrial Court of Nigeria, that the application of the said international best practice i.e “giving of valid reasons” in addition to giving notice or payment in lieu of notice for termination of employment is not automatic, it is by proving of fact. The court is not bound to apply the international best practices suo motu. The burden of identifying and proving the prevalent international best practice in each case before the court is the duty of parties.

CONCLUSION

Section 12 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) stipulates that “No treaty between the Federation and any other country shall have the force of law except to the extent to which any such treaty has been enacted into law by the National Assembly”. This provision is a clog that prevents Judges from applying provisions of international treaties and conventions except same have been domesticated. In line with this provision, the Supreme Court in the case of Abacha v Fawehinmi[11], held that “it is, therefore, manifesto that no matter how beneficial to the country or the citizenry, an international treaty to which Nigeria has become a signatory may be, it remains unenforceable if it is not enacted into the law of the country by the National Assembly.”

In concordance with Nigeria’s Constitution[12], it is the ratification and domestication of a treaty or convention that shows that it is enforceable[13], the aforesaid treaty was made almost four decades ago and it remains unratified and undomesticated. It, therefore, lacks the force of law in Nigeria.

In the same vein, section 254 C (2) of the 1999 Constitution (as amended), states that “notwithstanding anything to the contrary in this Constitution, the National Industrial Court shall have the jurisdiction and power to deal with or pertaining to the application of any international convention, treaty or protocol of which Nigeria has ratified relating to labour, employment, workplace, industrial relation or matters connected therewith”. A direct interpretation of this provision along the context of this article will imply that the international convention, treaty or protocol to be applied by the National Industrial Court has to be ratified for it to be applied. However, this is not to say that employees are not entitled to “valid reasons” as to why their employments are terminated.

As earlier stated, section 254(1)(f) of the 1999 Constitution of Nigeria (as amended), provides to the effect that the National Industrial Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters – “relating to or connected with unfair labour practice or international best practices in labour employment and industrial relation matters“. This provision of the Constitution as couched therein does not specify what is unfair labour practice or international best practices in labour employment, neither does it specify how they are to be proved in cases before the court. It, therefore, stands to reason that parties before the court have the burden to establish what amounts to unfair labour practice and international best practices in each case before the court.

Silhouetted against the above, it becomes imperative to state that there is a difference between the International Labour Organisation Termination of Employment Convention, 1982 (No. 158) as a “treaty” and “giving of valid reasons” as the international best practice in labour matters. The application of Article 4 of the International Labour Organisation Termination of Employment Convention, 1982 (No. 158) by the National Industrial Court, is not in the regard that it is a binding or enforceable treaty in Nigeria but because the provision “giving of valid reasons” was established before the Court to be the international best practice as regards termination of employment.

The National Industrial Court of Nigeria is the court with exclusive jurisdiction when it comes to employment and labour matters in Nigeria[14], the Court of Appeal has appellate and final jurisdiction when it comes to such matters. The earlier mentioned recent decisions of the National Industrial Court in support of “giving of valid reasons” have not been appealed against, therefore the position of the appellate court remains unknown.

There is only one National Industrial Court in Nigeria[15] but divided into different judicial divisions by the president of the Court[16]. Therefore, a judgment of a judicial division of the National Industrial Court in a case is not binding on another division of the National Industrial Court in another case, just like the judgment of one High Court in a case does not bind another High Court in a different case[17], no matter the similarities or sameness of the facts. The different judicial divisions of the National Industrial Court are all of coordinate jurisdiction, the judgment of any judicial division, in any case, does not supersede or bind another in a similar case. The decisions of any of the judicial divisions are at best “persuasive authorities” to other judicial divisions of the National Industrial Court in subsequent cases.

Premised on the above, it is obvious that a judgment of a judicial division or more of the National Industrial Court requesting employers to “give valid reasons” in termination of employment though applaudable, does not bind other judicial divisions of the National Industrial Court to give same judgment in similar matters before the Court, the judgment is at best of persuasive value in encouraging judges of the other judicial divisions of the National Industrial Court to hold same. Therefore, it will be misleading to say that the position of the law as regards termination of employment has changed. What constitutes international best practice might change from time to time but this is not to say the law has changed. Termination of employment with a month’s notice or a month’s salary in lieu of notice as contained in the Labour Act, Cap L1, Laws of the Federation of Nigeria is still the law.

RECOMMENDATIONS

In concordance with the general circular released by NECA on the 1^st of April, 2021, where it sought to direct the attention of its members to what it termed “Status of the Law on Termination of Employment”, it is advisable for employers to do the following:

1. Be diligent in documenting disciplinary records as they might become relevant when employees need to be laid off.
2. Be more cautious in their dealings and relationship with their employees.
3. Ensure that the termination of any employee’s employment is backed with a reasonable or justifiable reason.

However, in line with the earlier mentioned dictum of Hon. Justice B.B. Kanyip, application of the principle is not automatic[18]. Parties before the court who want the court to apply this provision “giving of valid reasons” in termination of employment, are to plead and prove same as the international best practice before the National Industrial Court, which has the exclusive power to apply the international best practices as contained in section 254C (1)(f) of the 1999 Constitution (as amended).

 FOOTNOTES:

[1] Who we are (neca.org.ng)

[2] Cap L1, Laws of the Federation of Nigeria 2004

[3] Section 11, Labour Act, Cap L1, LFN 2004

[4] (1973) N.C.L.R.323

[5] (2007) 6 NWLR (Pt.1031) 565 (SC)

[6] Omojolomoju v. Group Securicor Nig. Ltd & Ors (2013) LPELR-21477 (CA)

[7] (2015) 59 N.L.L.R (Pt. 207) 680

[8] (2015) 58 N.L.L.R (Pt.199) 92

[9] Section 254C (1)(f), CFRN 1999( As Amended)

[10] Edet v. Fidelity BankPlc (Unreported Suit No. NICN/LA/276/2014)

[11] (2001) WRN vol. 51, pp. 165-166

[12] Section 12, CFRN 1999 (as amended)

[13] Nnaji v. NFA & Anor (2010) LPELR-4629 (CA)

[14] Section 7(1) National Industrial Court Act 2006

[15] Section 1 (1) of the National Industrial Court Act 2006

[16] Section 21 (1) of the National Industrial Court Act 2006

[17] Savannah & Chemical Ind. v. EFCC & Anor (2020) LPELR-51398

[18] Edet v. Fidelity Bank Plc (supra)