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Did The Court Validly Resurrect The Guidelines For The Release Of Staff In The Nigeria Oil And Gas Industry In Shell Petroleum Development Company Of Nigeria V. Minister Of Petroleum Resources & 2 Ors? – Employment Litigation/ Tribunals



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Introduction

On 26th February 2021, the National Industrial Court (NIC) per
Hon. Justice E. A. Oji, delivered a judgment in Suit No:
NICN/LA/411/2020 – Petroleum and Natural Gas Senior Staff
Association of Nigeria (PENGASSAN) & 3 Ors. V. Chevron Nigeria
Limited (the PENGASSAN case)
1 holding
that the Guidelines for the Release of Staff in the Nigeria Oil and
Gas Industry 2019 (the Guidelines) which required the written
approval of the Minister of Petroleum Resources (the Minister)
prior to the termination of an employee’s employment in the
petroleum industry, was invalid. Oji J. came to this conclusion
having held that the Minister acted beyond the scope of his powers
under Section 9 of the Petroleum Act2 in enacting
Regulation 15A of the Petroleum (Drilling and Production)
Regulations 1969 (as amended) (the Regulations) pursuant to which
the Guidelines was made by the Department of Petroleum Resources
(DPR), now known as the Nigerian Upstream Petroleum Regulatory
Commission (the Commission).

On 28th July 2022, the NIC per Hon. Justice B. B Kanyip,
delivered another judgment in Suit No: NICN/ABJ/178/2022 -
Shell Petroleum Development Company of Nigeria v. Minister of
Petroleum Resources and 2 Ors. (the Shell case)

3 , holding that the Guidelines are valid and applicable
to employment contracts within the petroleum industry. While not
faulting the decision of Oji J. in the PENGASSAN case,
Kanyip J. held that the provisions of the Petroleum Industry Act,
2021 (PIA)4 which came into force after judgment was
delivered in the PENGASSAN case “supplanted”
Section 9 of the Petroleum Act, and thus, the Guidelines are not
beyond the scope of the powers of the Minister (1st Defendant) and
the Commission (the 2nd Defendant in the suit) and relying on his
interpretation of the PIA, he held that the Guidelines are valid
and applicable.

This article examines the NIC’s importation and
interpretation of the PIA to validate the Guidelines, against the
background of the decision in the PENGASSAN case.

The Shell case

By a letter dated 2nd June 2021, the Claimant
terminated the employment of one of its employees, Gbenuade Joko
Olanitori. Dissatisfied, Olanitori petitioned the DPR on the ground
that the Claimant did not comply with the Guidelines by failing to
obtain the written approval of the Minister before terminating her
employment. Upon being queried by the DPR, the Claimant maintained
that its termination of Olanitori’s employment was in terms
with her contract of employment, and that the Guidelines was
inapplicable in this instance. The DPR on its part, maintained that
the Guidelines were applicable and by a letter dated 28th January
2022, imposed a fine of US$250,000 on the Claimant for failure to
seek and obtain the Minister’s approval prior to the
termination of Olanitori’s employment as provided by the
Guidelines.

Disgruntled by the fine imposed on it, the Claimant filed a suit
at the NIC raising several questions for the determination of the
Court amongst which was whether the Defendants are empowered by law
to enforce or continue to enforce any provisions of the Guidelines
which have been invalidated and rendered null and void by virtue of
the decisions of the NIC in the PENGASSAN case and the
Supreme Court in Shell Petroleum Development Company of
Nigeria Limited & Nwaka
5 . The Claimant
also argued that Section 12 of the Petroleum Act forbade the DPR
from making the Guidelines on behalf of the Minister, rendering
same invalid.

In determining the questions posed by the Claimant, Kanyip J.
held that the Claimant’s right to come to court culminated only
on 28th January 2022, when the fine of US$250,000 was imposed on
it. Thus, the Court determined that the PIA, which came into effect
on 16th August 2021, was applicable in conjunction with the
Petroleum Act. The Court further stated that although the PIA did
not repeal the Petroleum Act, it supplanted it in several
respects.

On the issue of the validity of the Guidelines the Court found
that “There is a marked difference in the
provisions of section 9 of the Petroleum Act and the corresponding
provisions of the PIA as to make PENGASSAN & 3 ors. v. Chevron
Nigeria Limited distinguishable from (and so not applicable to) the
instant case”
and that by Section 3(1)(a) and
(i) of the PIA, “The exception in section 12 of
the Petroleum Act (“except the power to make orders and
regulations”) has been done away with.”
,
thus, the Minister can “delegate in writing to the
Chief Executive of the Commission or Authority any power conferred
on the Minister by or under this Act.”

In distinguishing the PENGASSAN case, the Court relied
on several provisions of the PIA including section 317(2) of the
PIA which provides that all rules, orders, notices or other
subsidiary legislation made under the Petroleum Act, the Petroleum
Profits Tax Act, and the Deep Offshore and Inland Basin Production
Sharing Contract Act shall continue to have effect as if made under
the corresponding provisions of this Act; section 3(1)(a) and (i)
of the PIA, which provides that the Minister shall formulate,
monitor and administer government policy in the petroleum industry
and delegate in writing to the Chief Executive of the Commission or
Authority any power conferred on the Minister by or under this Act;
section 6 of the PIA, which charges the Commission with the
responsibility of implementing such policies for and objectives as
are consistent with the provisions of the PIA; section 10 of the
PIA which grants the Commission the power of enforcing regulations,
policies and guidelines formerly administered by the DPR or the
Petroleum Inspectorate and section 10(f) specifically grants the
Commission the power to issue guidelines in accordance with the
provisions of the PIA or any regulation in respect of upstream
operations.

The Court also referred to Sections 10 and Section 12A of the
Interpretation Act6 that: “10
(2)
An enactment which confers power to do any act shall
be construed as also conferring all such other powers as are
reasonably necessary to enable that act to be done or are
incidental to the doing of it; 12(1) Where an Act
confers a power to make a subsidiary instrument, proclamation or
notification, the power shall include — (c) in the case of a
subsidiary instrument, power to prescribe punishments for
contraventions of provisions of the instrument, not exceeding as
respects a particular contravention — (i) in the case of
rules of court imprisonment for a term of three months or a fine of
fifty Naira or both, (ii) in any other case, imprisonment for a
term of six months or a fine of one hundred Naira or
both.”

Based on the above reproduced laws, the Court held that the
powers now vested in the Minister by the PIA, portend that the
Guidelines are valid and operable, rendering the decision in the
PENGASSAN case inapplicable to the Shell
case
.

On the tenability of the judgment in the Shell
case

The above reasoning of the learned judge is in our opinion
untenable.

Our first point of divergence is on the applicability of the PIA
to the determination of the validity of the Guidelines in the
Shell case. The basis of the suit is the interpretation of
the Guidelines in relation to the termination of Olanitori’s
employment and the resulting fine imposed on the Claimant. Also,
the grievance which led to the petition to the DPR resulting in the
fine imposed on the Claimant is the termination of Olanitori’s
employment. These events occurred before the enactment of the
PIA.

The position of the Court to the effect that the cause of action
arose in January 2022 based on its finding that “but for
this fine, the claimant would not have come to this Court as it did
in this matter, hence the claimant’s cause of action”

is a surprising if not unfounded stretch at justifying the
Court’s reliance on the PIA in reaching its decision. While the
Court is right that the applicable law in deciding a matter is the
law as at the time the cause of action arose, the Court failed to
appreciate that the reliefs sought by the Claimant were hinged on
the propriety or otherwise of the termination of Olanitori’s
employment as at the time it occurred. The Claimant’s relief
that the purported imposition of a fine by the Commission via its
letter of 28 January 2022 was illegal, was based on the
Claimant’s contention that the Guidelines were invalid.

The current legal status of the said Guidelines ought to have
been considered by the court in determining whether the Claimant
was liable for the imposition of the fine. This can only be
determined based on the Petroleum Act which gave birth to the
Guidelines and not the PIA.

A statute operates prospectively and cannot apply
retrospectively unless it is made to do so by clear and express
terms, or where it only affects purely procedural matters and does
not affect the right of the parties7 . The Guidelines
requiring the Minister’s approval before termination was
already declared invalid by the Court and the Claimant was not
under any obligation to abide by its provisions. As such, the
Claimant cannot be said to be in breach of a law which was not in
existence or has been invalidated when it acted and any fine
imposed pursuant to same must be held illegal.

The Second point is, can the PIA be interpreted as having
validated the Guidelines which was made in exercise of a
non-existent power and already pronounced invalid by the Court as
at the time the PIA was enacted?

The reasoning of the Court in the Shell case was that
the Guidelines have been saved by the provisions of the PIA which
validates the power of the Minister to make the type of policies
contained in Regulation 15A of the Regulations and in turn, the
Guidelines. However, Section 317(2) of the PIA which the Court
relied on does not detract from the position of the law that once a
legislation is pronounced invalid, it ceases to exist8
in law. Thus, reference to ‘All rules, orders, notices or
other subsidiary legislation”
in Section 317(2) of the
PIA must be interpreted to exclude legislations which a court of
competent jurisdiction has pronounced null and void. Moreso in this
case, the Court had in a previous decision before the enactment of
the PIA9, held that the Guidelines which is a subsidiary
legislation, was made without express powers provided under its
primary enabling law, that is, the Petroleum Act. Applying the
expressio unius est exclusio alterius rule of
interpretation10 , section 9 of the Petroleum Act does
not empower the Minister to make regulations pertaining to
employment. It is therefore a grave error of interpretation as
espoused by the Court, to give effect to the provisions of the
Guidelines as it did in the Shell case.

Thus, to the extent that Regulation 15A of the Regulations was
made without the enablement of the Petroleum Act, the Guidelines
made pursuant to the said Regulation must remain invalid and
ineffective. The finding of the Court that “Section
3(1)(a) of the PIA was not part of section 9 of the Petroleum Act
and so must be read as a conscious act by the draftsman to validate
the Guidelines
is irreconcilable with the
status of the Guidelines which is already pronounced dead.

Further, Section 10(f) of the PIA granting the Commission the
power to issue guidelines in accordance with the provisions of the
PIA or any regulation in respect of upstream operations is a
literal interpretation, only applicable to guidelines and
regulations that may be issued after the PIA came into force. There
is no ambiguity in the said provision to require any other
interpretation.

The provisions of the Interpretation Act relied on by the Court
in the Shell case are not to the effect that an enactment
can ratify or revive an invalid law but only regulates how to
construe powers conferred by an enactment and any subsidiary
legislation. In fact, it would be a great misapplication of the
Interpretation Act to assume such an interpretation.

The judgments in the PENGASSAN case and Shell
case
were delivered by Judges of coordinate Jurisdiction, both
of the NIC. Thus, Kanyip J. was not bound by the judgment delivered
by Oji. J. and only an appellate court can set aside either
judgment. However, it is our view that the position taken by
Kanyip. J is untenable under our jurisprudence irrespective of the
construction of the powers now donated to the Minister under the
PIA. Our position lies with the decision of Oji J. that the
Guidelines which were made without any enabling law are invalid.
Thus, the PIA which came into force after the Guidelines were made
cannot change the status of the Guidelines which were dead on
arrival.

Footnotes

1 Suit No: NICN/LA/411/2020 – Petroleum and Natural Gas
Senior Staff Association of Nigeria (PENGASSAN) & 3 Ors – Vs-
Chevron Nigeria Limited

2 Petroleum Act, Cap P10, Laws of the Federation of
Nigeria 2004

3 Suit No: NICN/ABJ/178/2022 – The Shell Petroleum
Development Company of Nigeria Limited -Vs- The Minister of
Petroleum Resources & 2 Ors

4 Petroleum Industry Act, 2021

5 [2003] 6 NWLR (Pt. 815) 184

6 Interpretation Act, CAP I23, Laws of the Federation of
Nigeria 2004.

7 Oshinye v. C.O.P. (1960)2 SCNLR 216

8 A.S.H.A v Tijani (2012) 8 NWLR (Pt. 1303) 483 at Page
506 para-E-F

9 PENGASSAN v Chevron (Supra)

10 Meaning that the express mention of one person, thing,
act, or consequence, excludes the others

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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