Afribank Nigeria Plc V. Homelux Construction Company Limited & Anor (2008)

LawGlobal-Hub Lead Judgment Report

MARY U. PETER-ODILI, J.C.A.

This is an appeal against the judgment of B.A. Ogunlesi-Adio, J of 7th March 1996, at the High Court Of Ogun State, Ota. The respondent as plaintiff by his Amended Statement of Claim dated 26th day of October, 1994 claimed against the defendant now appellant as follows:

”(i) A declaration that the purported termination of the appointment of the plaintiff vides the letter of 15th August, 1990 is in substance a dismissal from employment of the defendant.

(ii) That the plaintiff’s dismissal is unlawful illegal null and void

(iii) An order setting the said dismissal of the plaintiff aside.

(iv) An order compelling the defendant to reinstate the plaintiff.

(v) A sum of Twelve Thousand, Nine Hundred And Seventy Five Naira Sixty Eight Kobo (N12,975:68) being the salary and Allowances from the 15th day of August, to November, 1991.

(vi) Sum due to the plaintiff from the beginning of December 1991 to the final determination of this suit.

(vii) IN THEALTERNATIVE the plaintiff claims the sum of N12,975:68 as special damages being salaries and allowances due to the plaintiff from the defendant from 15th August to 30th November, 1991 and N150,000:00 general damages against the defendant for wrongful termination of employment. ”

In the trial court the plaintiff/respondent’s case was that he was the employee of the defendant/appellant between 1983 and 1990 when his appointment was terminated. He contended that his termination amounted to a dismissal in law and therefore illegal, null and void. The appellant had accused him of examination malpractices, for which he and two others were charged to court and later discharged on 19/4/91. He was later queried, vide Exhibit ‘E’. An administrative panel was set up in respect of the allegation. He contended that the defendant/appellant should have waited for the outcome of the case before taking further steps against him.

On the other hand the defendant/appellant’s case is that the plaintiff/respondent was under a contract of service with the appellant and the latter could terminate his appointment at any time with or without reason provided the terms of the contract in Exhibits ‘A’ and ‘H’ were complied with. The appellant contended that the respondent was paid one month’s salary in lieu of notice and that he was terminated because his services were no longer needed as shown in the letter of termination, Exhibit ‘F’, and payment of one month’s salary in lieu of notice and other emoluments. The appellant by its evidence denied liability as to the claims brought by the respondent and insisted that the termination of the appointment per Exhibit ‘F’ was proper as it did not offend the terms in Exhibit ‘H’.

At the end of the trial, the learned trial judge entered judgment in favour of the respondent in the following terms:

“Declarations sought in his Amended Statement of Claim as per paragraphs 39 (i)-(vi) thereof.”

Dissatisfied with the judgment the appellant appealed to this court and filed seven (7) grounds of appeal, out of which seven (7) issues were formulated for determination by this court. They are:

1. Whether the learned trial judge was right in distinguishing this case from the line of authorities cited in her judgment and in imputing motive or reasons for the termination of the appointment of the plaintiff respondent when the letter of termination does not state such motive or reasons.
2. Whether the learned trial judge properly directed herself on the evidence and was right in concluding that the plaintiff/respondent was terminated because of examination malpractices.
3. Whether in the light of the evidence and conditions of service of the appellant Exhibit ‘H’ the learned trial judge was right in her conclusion that the plaintiff/respondent was unlawfully terminated in the circumstances.
4. Whether the learned trial judge was right in giving judgment in favour of the respondent on the relief claimed in paragraphs 39 (i), (ii) and (iii) of the amended Statement of Claim.
5. Whether the learned trial judge was right in granting the consequential reliefs in paragraph 39 (ii) and (iii) sought in the respondent’s amended statement of claim after refusing the main relief in paragraph 39 (i) thereof which was asking for a declaration that the plaintiff/respondent’s termination by the defendant/appellant amounted to dismissal.
6. Whether the learned trial judge was in law right by granting the defendant/respondent the relief of reinstatement as contained in paragraph 39 (iv) of the amended statement of claim when the plaintiff/respondent neither pleaded the facts nor gave evidence that his employment had statutory flavour.
7. Whether the learned trial judge was right in law by awarding special damages to the plaintiff/respondent contained in paragraph 39 (v) and (vi) of the amended statement of claim when there was no evidence led to prove those items of special damages.

In response, the respondent on his part formulated a sole issue for determination which is in pari materia with the appellant’s third issue in the appellant’s brief of argument. The sole issue reads:

“Whether having regard to the provisions in the condition of service of the appellant in Exhibit ‘H’, the letter of appointment in Exhibit ‘A’, letter of termination of appointment in Exhibit ‘F’ and the totality of evidence before the lower court; the learned trial judge was right in giving judgment in favour of the respondent, as per his claims in the Amended Statement of Claim.”

In resolving the appellant’s issue one, the learned appellant’s counsel in his brief of argument submitted that the trial judge was wrong after agreeing with the authorities cited in support of termination distinguished the present case from those authorities, and also wrong in imputing reason or motive for the termination. Also that the trial judge was of the view that while an investigation is on in respect of an allegation against any employee, such investigation should be concluded before the employer could take any action against the employee.

With issue two, which the learned trial judge was wrong to have concluded that the respondent’s appointment was terminated as a result of examination malpractices rather than that his services were no longer required.

With issue three, that the learned trial judge was wrong to have concluded that the respondent was unlawfully terminated considering the contents of Exhibit ‘H’ the conditions of service and the respondent’s evidence admitting that his appointment could be terminated by giving him one month’s notice or one month’s salary in lieu of notice, which the appellant did in this case. The learned counsel submitted that no reason need be given for terminating the appointment of his servant and cited the case of Olarewaju v. Afribank (2001) 6 MJSC 68 at 17, and that in ordinary master and servant relationships a servant can lawfully be dismissed without observing the principles of natural justice. Further that the trial judge was wrong to have held that before an employer could summarily dismiss his employee from his services, the employee must be tried before a court of law even where the accusation is a gross misconduct involving dishonesty bordering on criminality, learned counsel cited and relied on Yussuf v. Union Bank of Nigeria Ltd (1996) 6 NWLR (Pt 457) 632 at 644.

Further that the respondent never gave evidence that the appellant reported a case of examination malpractice to the police, but rather a case of alleged threat to life was reported, page 26 of the printed records, there is no connection between the two. He submitted that Exhibit ‘J’ was specially prepared for this case, since the respondent never testified that eleven of them were reported to the police but rather the respondent with two others as shown on page 27 of the records. That Exhibit ‘J’ which PW2 tendered on behalf of the respondent was contrary to Exhibits ‘K’ and ‘K1’ that shows that two others were charged with the respondent.

He submitted that neither the Exhibits nor the evidence of the respondent including Exhibit ‘F’ (letter of termination) none supports the conclusion of the learned trial judge that the respondent was terminated on the allegation of examination malpractice.

Learned counsel submitted that the evidence before the trial court shows that Exhibits ‘A’ (letter of appointment) and ‘H’ (conditions of service) are the documents of the contract of service between the appellant and the respondent and that the appointment of the respondent having been terminated pursuant to the terms of the contract was lawful, he cited and relied on the case of Dr Ben O. Chukwumah v. Shell Petroleum Development Company of Nigeria limited (1993) 4 NWLR (Part 287) 512 at 560 which held that a master is entitled to dismiss his servant from his employment for good or for bad reasons or for no reason at all. He argued that termination of the respondent’s appointment by the appellant was lawful, he also urged this court to hold that the allegation of examination malpractice is misconduct in the appellant’s establishment, as shown in Exhibit ‘H’. Further that a servant can be lawfully dismissed without observing the principles of natural justice, provided the contract between the parties is not breached. See Olarewaju v. Afribank (2001) 6 MJSC 68 at 77. He urged this court to hold that the termination of the respondent by the appellant is lawful.

Issues four (4) and five (5) were argued together. The learned appellant’s counsel submitted that the learned trial judge in respect of her decision on the claims in favour of the respondent in paragraphs 39 (i), (ii) and (iii) of the amended statement of claim, which are claims based on wrongful dismissal, that once the trial judge had decided that the termination of the respondent did not amount to a dismissal, there was no longer any claim for a declaratory relief before the court. He argued that the learned trial judge made out a different case for the plaintiff/respondent, which a court should not do. See Alhaji Otaru & Sons limited v. Audu Idris and Anor (1999) 6 NWLR (Part 606) 330. Further that parties are bound by their pleadings and a judge has no jurisdiction to make out a case for the parties, see Onibudo v. Akibu (1982) 7SC60 at 62.

Finally that the decision is not supported by the reliefs in the statement of claim and the earlier pronouncement on the declaratory relief sought. He urged us to hold that the trial judge did not touch the alternative relief and the judgment could not have been based on it.

With relief six (6) the learned appellant’s counsel argued that the respondent’s appointment had no statutory flavour, therefore he was not entitled to reinstatement as claimed, this court was urged to so hold. He argued that the relationship was that of master and servant a contract of personal service in which the court cannot compel an employer to retain an employee in whom the employer has lost confidence, see Emmanuel Iwuchukwu v. Engineer David C. Nwizu and Anor (1994) 7 NWLR (Part 357) 379 at 411.

Learned counsel submitted that the court will not grant specific performance of a contract of service except under special circumstances such as:

(a) Where the contract of employment has a legal or statutory flavour thus putting it over and above the ordinary master and servant relationship; and

(b) Where a special legal status such as tenure of public office is attached to the contract of employment.

See Ben O. Chukwumah v. Shell Petroleum Development Company of Nigeria limited (19931 4 NWLR (Part 289) 512 and Olaniyan & Ors v. University of Lagos (1985) 2 NWLR (Part 9) 559.

Learned counsel urged this court to hold that the learned trial judge was wrong to have granted the relief of re-instatement.

In arguing the seventh (7th) and last issue the learned appellant’s counsel submitted that the plaintiff/respondent did not lead evidence to show that he was owed any money and did not prove any monetary claim, therefore that there was no basis for the judgment on the monetary claim as contained in paragraph 39 (v) and (vi) of the amended statement of claim. He urged this court to allow this appeal and set aside the judgment of the trial judge.

I must commend the learned respondent’s counsel Bayo Akeez Esq. who conceded to the appeal at the hearing of this appeal, this is how it should be, unlike some counsel who would fight an appeal here and up to the apex court knowing the futility of the appeal being pursued.

He agreed that he would be wasting the time of this court if he were to argue the appeal further. The briefs were already in, he relied on his brief. Learned counsel agreed that the respondent’s employment was that of master and servant relationship. He submitted that the appellant formulated their conditions of service, which does not have legislative backing. He adopted the respondent’s already filed brief.

For whatever it is worth, we would look at the arguments put up by the learned respondent’s counsel in his filed brief.

In response to the seven (7) issues formulated by the appellant, the respondent’s learned counsel Bayo Azeez Esq. in his brief identified and formulated a sole issue for the determination of this appeal, that is:

“Whether having regard to the provisions in the condition of service of the appellant in Exhibit ‘H’, the letter of appointment In Exhibit ‘A’ letter of termination of appointment in Exhibit ‘F’ and the totality of evidence before the lower court, the learned trial judge was right in giving judgment in favour of the respondent; as per his claims in the Amended Statement of Claim (supra)”

The respondent an employee of the appellant was served with Exhibit ‘F’ labelled “termination of appointment” dated 9/8/90, aggrieved by the letter the respondent brought this action. The appellant’s case is that the respondent was under a contract of service with the appellant which entitles the appellant to terminate his appointment at any time with or without reasons and vice versa provided the terms of Exhibits ‘A’, ‘H’ and ‘F’ were complied with. The issue for determination as formulated by the respondent is more or less as issue three (3) formulated by the appellant. The learned counsel argued that what is paramount is whether the condition of service Exhibit ‘H’ has statutory flavour or not?

He argued that a condition of service with statutory flavour to a contract of service cannot be inferred, the conditions must be expressly set out by statute or statutory regulations made under a subsidiary regulation.

Further that where an employment or a contract of service is governed by the provisions of a statute, or where the conditions are incorporated into regulations which derive their force from a statute, an employer who is a party to that contract of service is said to enjoy a legal status higher than that of master and servant. Therefore that once there is compliance with the terms of the contract of employment, the termination cannot be said to be wrong, learned counsel cited and relied on Oluseye v. LAWMA (2003) 17 NWLR (pt 849) 307 at 318, he argued that once there is nothing in the pleadings or evidence to show that the terms or conditions of service have statutory flavour, the prayers in paragraphs 39 (i) – (iv) of the respondent’s claim would be difficult to grant. He also relied on Idoniboye-Obu v. N.N.P.C. (2003) 2 NWLR (pt 805) 589 at 623 where it was held that any conditions of service drawn up by Board of Directors or the like cannot be said to have statutory flavour. He submitted further that Exhibit ‘H’ the conditions of service made out by the appellant council has no statutory flavour and that having complied with Exhibit ‘H’ by the issuance of Exhibit ‘F’, learned counsel argued that the appellant complied with the conditions of service between it and the respondent. The learned counsel finally submitted that in view of the decision in the two cases above, that the trial court should not have considered motive of the termination in reaching the conclusion in that it was not necessary and that the appointment of the respondent had no statutory flavour which would have entitled him to enjoy legal status higher than that of master and servant. Learned counsel conceded that he is bound by decisions of the court, to save the time of the court.

The respondent’s sole issue is similar to the appellant’s third issue but differently couched. I will therefore resolve the appellant’s issue three first. The outcome of this issue will determine the other issues as formulated by the appellant and that of the respondent.

Generally what determines termination of an appointment depends upon what the terms of contract between the parties provides.

The respondent’s letter of offer of appointment dated 4/10/83, Exhibit ‘A’, shows in the opening paragraph that the respondent was a permanent and pensionable employee of the appellant to be governed by conditions listed under subheads (a) – (i) in Exhibit ‘A’, paragraph (f) reads:

“That you will be subject to the conditions of service for staff of the council in Nigeria. A copy would be provided for your retention in due course.”

The last paragraph provided thus:

”If this offer of appointment is acceptable to you, please sign the duplicate copy attached and return same to the undersigned confirming that date of your assumption of duty. Please be advised that if I do not hear from you within 14 days from the date of this letter, the offer shall lapse.”

Exhibit ‘A’ was signed by E.B.O. Ogunleye for the Senior Deputy Registrar/Head of National Office of the appellant council, below which the respondent signed and dated 10/10/83 against the following lines in Exhibit ‘A’.

“I accept the offer of appointment on the terms and conditions stated above. I shall assume duty on 10/10/83.”

The respondent thus accepted to be bound by the terms of service of the staff of the council. The terms and conditions of service for staff of the appellant Council in Nigeria is contained in Exhibit ‘H’.

Chapter 15 paragraph, 15.01 as contained in Exhibit ‘H’ reads:

15.01:

“Resignation and termination of appointment (other than on Disciplinary Grounds)

Appointment may be terminated by either party as follows:-

(a) One week’s notice in the case of temporary employee who has served up to 30 days;

(b) One month’s notice for all established employee, or one month’s salary in lieu of notice.

(c) …..”

(Underlining for emphasis)

The letter of termination of appointment is Exhibit ‘F’, dated 9th August, 1990. (Signed by J.A. Tunde, Acting Principal Personnel Officer for Director of Administration) reads:

“I regret to inform you that your services are no longer required by the West African Examinations Council.

Your appointment is hereby terminated with effect from 15th August 1990.

I am by a copy of this letter informing the Accountant Abeokuta to pay your salary up to and including 15th August, 1990 plus a month’s salary in lieu of notice, less your indebtedness to the council.

………” (Underlining for emphasis)

By Exhibit ‘A’ the respondent was to be bound by Exhibit ‘H’. Exhibit ‘A’ was specific, clear and unambiguous. Exhibit ‘F’ entitled the appellant to terminate the respondent’s appointment as long as Exhibit ‘H’ was complied with. The question now is: does Exhibit ‘H’ have statutory flavour or not. An employment with statutory flavour arises where the body employing the man is under some statutory or other restriction as to the kind of contract which it makes with its servants and the grounds on which it can dismiss them. Where an appointment is regulated by statutory provision, such an appointment is said to enjoy statutory protection or statutory flavour. Olaniyan v. University of Lagos (1985) 2 NWLR (Pt 9) 599; Shitta-Bay v. Federal Civil Service Commission (1981) 1 SC40.

Before an employment could be said to have statutory flavour, the statute must expressly make it so, otherwise, the employment will be treated on the basis of the common law principle of master and servant. In the present case the conditions under which the respondent was employed were drawn up by the council, they therefore have no statutory flavour. The relationship ought to and is governed by agreement of the parties and not by statute; removal by termination of the appointment would therefore be in the terms spelt out in the conditions of service, Exhibit ‘H’.

In paragraphs 33 and 34 of the plaintiff’s amended statement of claim the plaintiff averred thus:

“(33) The plaintiff will contend at the trial of this suit that in substance the letter described termination (sic) of appointment served on the plaintiff is a letter of dismissal.

(34) The plaintiff avers that his appointment with the defendant was a pensionable one and that he had a right to remain in employment till the pensionable age. The plaintiff is at present 36 years old”.

In answer to the averments above in paragraphs 5 and 6 of the amended statement of defence the defendant/appellant averred that:

5. … Plaintiff was an employee on contract of service and could be and was terminated in accordance with the conditions of his employment with the Defendant. The defendant will at the trial rely on the letter of termination given to the plaintiff and the conditions of service for staff of the defendant.
6. The defendant avers that the plaintiff is only entitled to one month’s salary in lieu of notice as stated in the said letter of termination and that the said salary in lieu of notice was accordingly paid into his account No. 01044342 at the First Bank Nigeria Limited, Abeokuta. The Defendant will at the trial rely on its payroll payment voucher for August 1990 and other related documents”.

From the state of the pleadings, Exhibits ‘A’ and ‘H’, the employment of the appellant is not one that would be said to have statutory flavour.

Any conditions of service drawn up by a board or council as in this case cannot be said to have statutory flavour. See Idoniboye-Obu v. NNPC (2003) (supra)

What governs the relationship between the respondent and the appellant is the letter of appointment Exhibit ‘A’, dated 4th October, 1983. The contract of service is the basis of any grievance if any, the terms of Exhibit ‘H’ determines whether he succeeds or fails. The respondent agreed to the terms of Exhibit ‘H’ by his endorsement on Exhibit ‘H’ and acceptance of 10/10/83 earlier reproduced. The relationship between the parties is purely that of master and servant. Exhibit ‘A’ particularly paragraph (f) is specific, that the respondent would be bound by the conditions of service of staff of the council in Nigeria. The conditions of service as contained in Exhibit ‘H’, particularly paragraph 15.01 specified that an appointment may be terminated by either party by one month’s notice or one month’s salary in lieu of notice. A master may terminate the contract of employment with or without notice and without ascribing any reason for determination, but the master must however pay salary for the period of notice provided in the contract of parties. Maiduguri Flour Mills limited V. Abba (1996) 9 NWLR (pt. 473) 506. Further, a master is entitled to dismiss his servant from his employment for good or bad reasons or for no reason at all. However, where parties have reduced the terms and conditions of service into agreement, the conditions must be observed before exercising the right of dismissal. Chukwumah v. Shell Petroleum (1993) (supra). And Olanifimihan v. Nova lay-Tech Ltd. (1998) 4 NWLR (pt 547) 608.

Exhibit ‘F’ made it clear that the respondent’s services were no longer required and the respondent was to be paid one month’s salary in lieu of notice, which was paid to him as pleaded in paragraph 6 of the amended statement of defence. The respondent has not alleged not receiving the one month’s salary in lieu of notice.

The appellant averred that the respondent’s appointment was terminated in accordance with the conditions of his employment. The letter of termination Exhibit ‘F’, shows that the appellant complied with the conditions of employment of the respondent by the payment of one month’s salary in lieu of notice. See paragraph 6 of the amended statement of defence. Since the termination was according to the terms of the contract between the parties, the termination was therefore lawful. See Oluseye v. LAWMA (supra) also cited by the learned counsel for the respondent. The appellant’s issue three and the respondent’s sole issues are resolve in favour of the appellant.

Having held that the relationship between the parties had no statutory flavour but that of master and servant governed by Exhibit ‘H’ which was complied with in issuing Exhibit ‘F’, to terminate the respondent’s appointment, the learned trial judge was therefore wrong to have distinguished this case from the line of cases cited in the judgment and in imputing motive or reasons for the termination of the appointment of the plaintiff respondent. Issue one is therefore resolved in favour of the appellant.

In respect of issue two, the first paragraph of Exhibit ‘F’ made it clear that the services of the respondent was no longer required by the appellant and not as a result of examination malpractices as held by the trial judge, issue two in the appellant’s brief is answered in the negative.

Appellant’s issues 4, 5, 6, and 7 are tied to its issue three. Having held that the plaintiff/respondent’s termination was lawful, the trial judge was therefore wrong in giving judgment in favour of the respondent on the reliefs claimed in paragraphs 39 (i), (ii) and (iii) of the amended statement of claim. It follows that the reliefs in paragraphs (iv), (v) and (vi) should not have been granted to the plaintiff/respondent by the trial judge, and I so hold.

In respect of issue seven as formulated by the appellant concerning award of damages, Exhibit ‘H’ provided the condition whereby either side could terminate the contract by giving one month’s notice or payment of one month’s salary in lieu of notice. The appellant complied with this condition and the respondent did not aver that he did not receive the salary in lieu of notice as averred in paragraph 6 in the amended statement of defence. It was therefore wrong for the trial judge to have awarded damages, the respondent having received what was due to claim. See Nfor VS. Ashaka Cement Co. Ltd. (1994) 1 NWLR (pt 319) 222. Issue 4-7 of the appellants is resolved in favour of the appellant.

Having held that the employment has no statutory flavour, by the common law principles applicable to master/servant relationship, the respondent is entitled to do away with his services. Evidence has shown that the respondent was paid the one month’s salary in lieu of notice. A court can not impose an employee on an employer, the employer is free to do away with its employee as long as he keeps to the terms or agreement, and it is lawful.

It is glaring that the respondent’s employment had no statutory flavour and was therefore not entitled to the judgment of the trial court.

In consequence this appeal has merit and is hereby allowed. The judgment of the trial judge of 7th March 1996 is hereby set aside.

I award no costs.

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Other Citations: (2008)LCN/2671(CA)