A Father Christmas In June: The Babalola V Equinox Decision

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Earlier in the year, particularly in June, the National Industrial Court gave a very decisive judgment that has forever changed the game on the Nigerian labour and employment scene. More importantly, the court, especially my Lord Justice N.C.S Ogbuanya did not only judiciously grant the Claimant’s prayers before the court, he granted even more exceedingly and abundantly than the Claimant could ask for or think. Who says that the court cannot also be a Father Christmas?

 

In September 2011, Mr. Abe Adewunmi Babalola (the Claimant) was employed by Equinox International Resources Limited (the Defendant) as Head of Human Resources and Administration with a probationary period of six months. He worked in this role until September 2012, way past the probationary period, when his employment was terminated. At the time of his termination however, he was owed arrears of salaries – part of his salary for May 2012, and full salaries for June, July and August 2012. In 2015, he sued for the recovery of his unpaid salaries for the aforementioned months, for the 7 days he worked in September 2012 and for the one-month salary in lieu of notice. He also claimed general damages for the hardship occasioned by the nonpayment of the salaries.

TRIAL FACTS

By an Offer of Appointment Letter dated September 20, 2011, the Claimant was employed to serve as the Defendant’s Head of Human Resources and Administration,with six (6) months probationary period, of which he accepted and commenced work. However, just within one year, the Defendant terminated the employment by a letter dated 7 September 2012, despite his having worked diligently. This reason given for the termination as indicated in the said termination letter was the economic crunch that affected the Defendant. The Claimant insisted that he did not do anything wrong despite alleged misdeeds and incompetence also introduced by the Defendant in the said termination letter and its pleadings before the court.That at the point of the termination, the Defendant was owing him some arears of salary, made up as follows:

Balance of N52, 000 after paying half salary of N68, 000 for the month of May 2012.

-Salaries for the months of June, July, August and 7 days he worked in the month of September 2012 before the termination on 7 September 2012.

-One month salary in lieu of notice as stipulated in the offer of appointment.

The Claimant also informed the court that he made several attempts to recover his out standing salary arrears and benefits, even by engaging a Solicitor (Sokoya & Co) who wrote to the Defendant a demand letter dated 31 October 2013, which it ignored. The Claimant narrated how the Defendant rebuffed efforts he made when he contacted the Directorate of Citizens Rights and Office of the Public Defender, Lagos State Ministry of Justice, who both initiated a separate settlement drive and separately invited the Defendant on 29thAugust 2014 and 21st October 2014 respectively. He then commenced this suit with the legal support of the Office of the Public Defender, Lagos State Ministry of Justice.Claimant also contended that he has suffered financial hardship over the Defendant’s unreasonable delay in paying his outstanding salaries and benefits.

 

While the Defendant agreed with the Claimant on the employment history, it differed on the basis of the termination, amount of owed outstanding salary arears and months covered, and entitlement to salary in lieu of notice. Defendant admitted owing the balance of N52, 000.00 as balance of May 2012 salary, but contended that it did not owe the Claimant the salaries for the months of June, July, August and any part of September 2012. The Defendant contended that even though it terminated the employment of the Claimant on 7 September 2012, the Claimant had abandoned his duty post during these months, which amounted to constructive resignation of his appointment without notice.

The Defendant insisted that the Claimant was not entitled to any notice or salary in lieu of notice because he was dismissed for various infractions, ranging from gross misconduct, incompetence, dereliction of duty and absenteeism from work, as well as implicated in the erroneous employment of two relatives who conspired to steal the Defendant’s goods worth over N3M (three million naira). Defendant denied having been invited by the Office of the Public Defender over any petition on the matter, and that it honoured the invitation of the Citizens Mediation Centre, by briefing a lawyer for representation.

ADR- HOW LATE IS TOO LATE?

From his wrong ful termination in September, 2013, the Claimant clearly exhausted all known means of ADR before resorting to court in May, 2015. The facts of the case clearly shows the multifarious efforts of the Claimant to get redress amicably and quietly. It is important for all who find themselves in his shoes to follow suit. Where the other party is reasonable, redress may be obtained within a short period. Where unreasonable, it will be glaring to all that the necessary was done. This is however not advised for time bound issues which must be commenced by litigation within the bounds of the stipulations of the law. It is also important to sound a note of warning to the likes of Equinox who take such prolonged ADR for granted. It is not unusual for parties to ignore and dare their victims to do their worst. This is not in the best interest of both parties, as the wheel of justice, though slow, is always and certainly sure!

 

REASONS FOR TERMINATION

Whenever an employer seeks to terminate an employee, it is not bound to give reasons for such termination in the letter of termination of employment. If however it chooses to give reasons, he has the burden of proving those reasons on a balance of probability should the matter go to trial. If at all, the employer decided to introduce alien reasons not given at the point of termination, during trial, the onus of proof still lies on it to proof those reasons. In the words of the Honourable Justice Nelson Ogbuanya;

“The law is quite settled that in a common law rule of master–servant relationship, as in the instant case, an employer can relieve the services of the employee with or without reason, but where a reason is given, particularly based on allegation of misconduct, and is challenged by the employee, the employer has the evidential burdenand duty to justify same, otherwise such employer incurs liability thereto. I so hold. InShell Petroleum Co. Ltd v. Olanrewaju [2008]18 NWLR (Pt.1118) SC1 @Pp.19-20, Paras.H;A-B, the Supreme Court per Tabai JSC, held:“The guiding principle which has been articulated and applied in many cases including Olatunbosun v.

N.I.S.R Council (1988) 1NSCC (1025)188, is that an employer is not bound to give reasons for terminating the appointment of his employee. But whereas in the case, he gives a reason or cause for terminating the appointment, the law imposes on him a duty to establish the reason to the satisfaction of the court.

In the case, the appellant, having given gross misconduct to warrant his dismissal, has the onus to establish that the respondent was indeed guilty of alleged misconduct to warrant his dismissal. And in a case such as this, the court must be watchful to ensure that in the investigations or proceedings of the domestic panel culminating in the employee’s dismissal, the rules of natural justice were not breached”.

 

ARE TERMINATION AND DISMISSAL ONE AND THE SAME?

No. In this case, the court provided a clear distinction between termination of employment and dismissal from employment. The defendant, as do many employers as well, continued to use both distinct terms interchangeably during trial. Termination is the determination of a contract by either the employer or employee with or without reasons. It is more like a formal end to a contract which does not necessarily imply a relationship gone sour but gives a lawful flavor to the determination of the employment. In the words of the court-

“Though Dismissal and Termination are both legally recognized exit pathways for employee in employment relationship, and are often misconceived as interchangeable,some key distinguishing features mark them out with divergent outcome in employment exit pathways.Basically, ‘Termination’ is an employment contractual exit available to both employer and employee, and may go with or without reason, as it may not be for disciplinary purpose, but just for mere compliance with extant contract of service to bring the employment relationship to a lawful end. On the other hand, ‘Dismissal’ is solely a disciplinary measure available for only the employer with consequential denial of pecuniary entitlements of employee’s earned terminal benefits and image battering; casting doubt of future employability.”

The court was as well of the same view in Leonard Oyinbo v. Guinness Nig. Plc (Suit No. NICN/LA/639/2012, Judgment delivered Sept.20 2019).

 

ON FRACTIONAL (PRO-RATED) PAYMENT OF SALARY

Perhaps, the most interesting part of this case is the court’s decision that the Claimant was in fact entitled to a full month’s salary for September 2012. In its reasoning, the court was of the opinion that meting out pro-rated payment to an employee in periodic employment i.e a salaried employee, would amount to a variation in the salary sum per month, and negate the underlining principle of salary earning- equal pay sum regardless of the difference in number of days per month. Indeed Mr Babalola, the Claimant, had worked for 7 (seven) days in September 2012 before his termination and had only sought to be paid pro rata for those 7 (seven) days. However, the court thought he deserved more. It is trite law, that the court is not a Father Christmas and therefore cannot grant a relief not sought or more than that sought by any of the parties before it. The Honourable Justice Ogbuanya however begged to differ. In his words-

“I go with the law. In Grant Mpanugo v. CAT Construction Nig Lt & Anor. (Suit No. NICN/LA/660/2015, Judgment delivered on Sept.20, 2019), I took out an opportunity to review the principle underpinning payment of salary in periodic employment, and came to the conclusion that pro rata payment of salary is not applicable to workers in periodic employment, but only applicable to daily paid workers. It was reasoned that pro rata/fractional payment of salary is not applicable to workers in periodic employment who receive salary per calendar month; not calculated by the number of days, otherwise, there will be no equal salary monthly per year, given that the twelve months of a year do not have equal days, particularly the month of February, with days as low as 28 or 29 days. I adopt the same reasoning. Consequently, in my considered view, in a periodic employment of this kind, an employer who decides to terminate an employee within a new month is liable to pay for full salary of that exit month and not fraction of the days the employee worked in the month. I so hold. On that note, the Claimant is entitled to payment of his full salary in the month of September 2012, the last month of his employment before his exit by way of the termination on 7 September 2012. I so hold.”

The bottom line here is that the court though not being a Father Christmas has the power to give exceedingly, abundantly, more than is asked for or contemplated by a Claimant before it, as long as it is fair and just to do so. And this is in line with Court’s duty to do justice in all cases.

 

PROBATION VERSUS CONFIRMATION

The onus to confirm an employee after the probationary period or otherwise, lies with the employer. And where it refuses to take any clear action and the employee continues to work after the probationary period, such employee is deemed confirmed. In the words of the Honourable Court-

“In other words, probationary period is akin to courtship period for a new employee and the employer to assess each other for suitability in the new employment relationship. The law is that unless the employer terminates the employment within the probationary period, if it feels that the employee’s conduct and competence are not satisfactory during the probation, the employee is deemed to have been confirmed if he/she continues to work for the employer after the probationary period.”

Thus, the court deemed the Claimant confirmed after March 2012, being the 6 month of the probationary period, and therefore entitled to the one-month salary in lieu of notice.

 

AWARDS

The Court clearly decided in the Claimant’s favour on all fronts. The Defendant was ordered to pay all salary arrears from the May to September, as well as salary in lieu of a month’s notice (October). The Court as well awarded N1,000,000.00 (one million naira) as general damages in favour of the Claimant against the Defendant, for the wrongful withholding of his accrued salaries and not paying him off upon termination of his employment since September 2012, thereby exposing him to undue financial difficulties. In the Court’s opinion, the unwarranted delayed payment of his outstanding salaries for three years before the inception of the suit, and up until the judgement, which totaled about 8(eight) years constituted what was termed as unfair labour practices. The sum of N500, 000.00 (five hundred thousand naira) was also awarded as cost, in favour of the Claimant against the Defendant, for diligently prosecuting the matter from inception to judgment. To cap it, the defendant was mandated to comply with the judgment within one (1) month of this Judgment, failing which 10% interest rate per annum, shall accrue on the Judgment Sums until fully liquidated.

Speak of a good measure, pressed down, shaken together and running over. The Claimant not only got judgement but as well the enforcement, on a platter. It is worthy to note however that the Claimant explored all means of amicable settlement before resorting to court, and he diligently prosecuted his matter. It goes without saying that the Court considers the conduct and demeanor of parties before it, alongside the substance of their cases. What else could bring out the Santa in June than diligence in prosecution, a clear case of having being wronged, and conscientiously exhausting all means of redress before going to court.

 

MofOluwawo Oluwapelumi Mojolaoluwa is a legal practitioner based in Lagos, Nigeria. She runs a content creation outfit called House of livingstones, and as well consults for small businesses on branding and business development. She can be reached at houseoflivingstones@gmail.com.

 


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