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The Position Of The Nigerian Courts On Termination Of Employment – Part I – Employment Litigation/ Tribunals



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The question on the lawful procedure for the termination of
employment contracts is a question that has been presented before
the courts over the years. Different jurists have posited different
views on the subject. There is, however, a consensus that firstly,
the contract of employment must be categorized based on either the
presence or absence of statutory flavour in the
contract.1

A contract of employment is said to have statutory flavour where
the conditions for the appointment and bringing the contract to an
end are governed by an enabling statute.2 The
classification of the contract of employment along this line
thereafter determines the procedure and extant rule that apply to
the termination of the employment. We shall in the first part of
this article, review, and state the extant position of the Nigerian
courts on several procedural requirements for termination of
contracts of employment.

Employment with statutory flavour

With regards to employments with statutory flavour, the enabling
statute usually stipulates the procedure for terminating such an
employment.3 Any contravention of the conditions
precedent or any other procedural requirements stated in the
statute for the termination of such employment would render the
termination void.4 In the event that the court
determines that the contract has been illegally terminated, the
court is empowered to grant a decree of specific performance
stating that the employee should be reinstated.5

The Nigerian courts have held that because the procedure for
termination of such employment is regulated by statute, they are
foisted with a legal status higher than that which obtains under a
contract of employment simpliciter.6 As a
result of this higher status, if the procedure for termination is
not followed, the employee cannot waive the illegal procedure
because of the settled principle of law that as a matter of public
policy, parties cannot change the provision stated in the
constitution or a statute.7

It is important to note that an employer organisation being
merely established by statute is not enough to confer statutory
flavour on such an employment.8 For the employment to be
classified as an employment with statutory flavour, it is pivotal
that the terms and conditions of service of the employment are
engrained in the statute or in a subsidiary legislation made
pursuant to the statute.9 In addition, the employee must
also prove that he was employed pursuant to these statutorily
entrenched provisions.10

Employment without statutory flavour (employment
simpliciter)

If a contract is devoid of statutory flavour, i.e., an
employment simpliciter, the contract of employment would
generally govern the terms of the employment.11 The
employee handbook in so far as it contains the terms of the
employment would in addition to the letter of employment and any
other employment contract, govern the matters and terms of
employment contained in it.12 As a general principle, if
the terms of the contract are clear and unambiguous, the courts
would restrict itself to the interpretation and application of the
terms of the contract and not import external terms into this
contract.13

The Labour Act (the “Act”),14 the principal
law regulating labour matters in the country also stipulates in
certain instances, the procedure for terminating the employment of
a ‘Worker’. It should be noted that the term
“Worker” under the Act has a restrictive meaning and does
not have the same meaning attributed to it in popular parlance. A
Worker is defined to mean “any person who has entered into or
works under a contract with an employer, whether the contract is
for manual labour or clerical work or is expressed or implied or
oral or written, and whether it is a contract of service or a
contract personally to execute any work or labour, but does not
include –

  1. any person employed otherwise than for the purposes of the
    employer’s business;

  2. persons exercising administrative, executive, technical or
    professional functions as public officers or otherwise;

  3. members of the employer’s family;

  4. representatives, agents, and commercial travellers in so far as
    their work is carried out outside the permanent workplace of the
    employer’s establishment;

  5. any person to whom articles or materials are given out to be
    made up, cleaned, washed, altered, ornamented, finished, repaired,
    or adopted for sale in his own home or on other premises not under
    the control or management or the person who gave out the article or
    the material; or

  6. any person employed in a vessel or aircraft to which the laws
    regulating merchant shipping or civil aviation
    apply.”15

Concepts applicable to termination of employment contracts

Notice period

The contract of employment usually dictates the length of notice
or payment in lieu required to terminate an employment. In
the event however that the contract of employment is silent on the
length of notice, the requisite notice period would be dependent on
whether the employee comes within the definition of a Worker (as
defined under the Act) or not. If a Worker, the requisite notice
period depends on the length of employment and classified as
follows under the Act –

  1. 1 (one) day, if the length of service is up to three
    months;

  2. 1 (one) week, if the length of service is up to two years;

  3. 2 (two) weeks, if the length of service is up to five years;
    and

  4. 1 (one) month, if the length of service is five years or
    more.16

If the contract of employment is silent on the notice period and
the employee is not within the contemplation of the definition of a
Worker under the Act, the courts have held that regardless, there
is an implied term that the contract can only be terminated by the
employer giving the employee reasonable notice.17 What
the court determines to be reasonable notice is a subjective test
that would be determined on a case-by-case basis. In determining
what is reasonable, the courts would usually consider the nature of
the contract of employment and the status of the employee in the
establishment – the higher the position of the employee and
the higher the employee’s salary, the longer the length of
notice required to terminate the contract and vice
versa
.18

Payment in lieu of notice

If the employer elects to make payment to the employee in
lieu of notice, one question that employers are usually
faced with is in calculating the payment to be made, what sum is
mandatorily required to be paid to the employee. For a Worker, the
Act states that only the part of the employee’s wages that the
employee receives in money, exclusive of overtime and all other
allowances would be taken into account in the calculation of the
amount to be paid.19 Flowing from the above, it appears
that the employer is mandatorily required to make payment of the
salary/wages alone as classified under the contract of employment
and allowances such as wardrobe allowance, and other like
allowances which are usually included in the employee’s total
renumeration package are excluded from the sum mandatorily required
to be paid to the employee.

Ex gratia payment

Also, the employer is not required to make ex gratia
payments to the employee and it is irrelevant that the employer
usually makes such ex gratia payments when the employment
of other staff members have been terminated.20 To adopt
the reasoning of popular jurist, Henry Campbell Black, the author
of the Black Law Dictionary, the term ex gratia applies to
anything accorded as a favor, as distinguished from that which may
be demanded ex debito, a matter of right, and because of
this, it carries no legal obligation on the employer which the
employee can seek to enforce.21 It is also a settled
legal principle that a legal obligation must flow from the
existence of a right entrenched in a contract.22

Footnotes

1. Olaniyan v University of Lagos
(No.2) (1985) 2 NWLR (Pt. 9) 599; Balogun v University of Abuja
(2002) 13 NWLR (Pt. 783) 42

2. Oforishe v Nigerian Gas Company
(2018) 2 NWLR (Pt. 1602) 35 at 53; Paras E-F

3. For instance, Section 16 of the
University of Abuja Statute No. 1 lays down the extensive procedure
for termination of the employment of any academic, administrative,
or professional staff of the University of Abuja. See also Section
17 of the University of Benin (Transitional Provisions) Act

4. Federal Polytechnic, Mubi v. Yusuf
(1988) 1 SCNJ 1
; Afribank Plc v. Nwanze
(1998) 6 NWLR (Pt.553) 283

5. Ifeta v. S.P.D.C. Nigeria Limited
(2006) LPELR-1436(SC); Isievwore v. NEPA (2002)
LPELR-1555(SC)

6. Olaniyan v University of Lagos
(No.2) (1985) 2 NWLR (Pt. 9) 599; Balogun v University of Abuja
(2002) 13 NWLR (Pt. 783) 42 at 62 Paras G -H

7. AG, Bendel v AG, Federation (1981) 10
SC 1 at 54; Ogbonna v AG, Imo State (1992) 1 NWLR (Pt. 220) 647 at
696

8. Fakuade v. OAUTH (1993) 5 NWLR
(Pt. 291) 47; Nigerian Gas Company Ltd v. Dudusola (2005) 18 NWLR
(Pt 957)320

9. Oforishe v Nigerian Gas Company
(2018) 2 NWLR (Pt. 1602) 35 at 60 – 61; Paras G – A;
Idoniboye-Obu v. N.N.P.C. (2003) 2 NWLR (Pt.805)589 at 622 Paras E
– F; 631 Paras E – G.

10. Idoniboye-Obu v. N.N.P.C. (2003)
2 NWLR (Pt.805)589 at 620 – 621 Paras E – A

11. Olaniyan v University of Lagos
(1985) 2 NWLR (Pt. 9) 599; Oforishe v Nigerian Gas Company (2018) 2
NWLR (Pt. 1602) 35 at 53 – 54; Paras E-A, C- H

12. Shuaibu & Ors v. NBC PLC
(Coca-Cola) (2020) LPELR-52110 (CA); Keystone Bank v Clarke (2020)
LPELR-49732 (Pp 40 – 44 Paras F – B)

13. Olanrewaju v Afribank Nig Plc
(2001) LPELR 2573

14. Cap L1, Laws of the Federation of
Nigeria, 2004

15. Section 91 of the Labour Act

16. Section 11 (2) of the Labour Act

17. Imoloame v WAEC (1992) 9 NWLR
(Pt. 265) 303 at 321; Paras A – C; Kusamotu V. Wemabod Estate
Limited (1976) LPELR-1720(SC)

18. ibid

19. Section 11 (9) of the Labour Act

20. Giwa v Wema Bank (2021)
LPELR-54851

21. ibid

22. Abdullahi & Ors V. El-Rufai
& Ors
(2021) LPELR-55627

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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