ACB Limited V. Sabastine Ufondu (1997)
LawGlobal-Hub Lead Judgment Report
OGUNTADE, J.C.A.
The respondent was the plaintiff before the Maiduguri High Court in suit No. M/9/86 and the appellant the defendant. The appellant (hereinafter referred to as the defendant) is a banking organization. It employed the plaintiff. The plaintiff later rose to the status of a branch manager of the defendant’s Maiduguri branch. While he was a branch manager, the plaintiff granted loans and advances to some customers. The loans and advances were unauthorized in the sense that the plaintiff had not obtained the prior approval of the defendant before granting them. The issue that loomed large at the trial was whether the circumstances in which the plaintiff granted these unauthorized loans qualified to be classified as a flagrant disregard of the defendant’s instructions to its staff on lending as to amount to misconduct justifying the dismissal of plaintiff from the defendant’s employment. The plaintiff admitted that he granted the unauthorized loans and advances but contended that the circular from the defendant to its staff not to grant such loans and advances only came into existence after he had granted the loans and advances. The defendant suspended the plaintiff from its employment on 30/10/80; and on 1st June, 1981, it dismissed the plaintiff from its employment. In these circumstances, the plaintiff on 17 January, 1986, in reaction against his dismissal commenced proceedings against defendant claiming the following reliefs:
“(a) A declaration that the plaintiffs’ dismissal by the defendant was wrongful and unlawful, unjustifiable, null and void and of no legal effect.
(b) An order to the defendant to re-instate the plaintiff in his job.
(c) An order to the defendant to pay to the plaintiff all his arrears of salary and entitlements including allowances from the date of his purported dismissal to wit, 30/5/81 to the day of judgment and/or plaintiff’s re-instatement.
(d) General damages of N100,000.00 (one hundred thousand naira) for wrongful dismissal.
(e) An order to the defendant to pay to the plaintiff cash for the 1978/79 and 1979/80 annual leave(s) that the plaintiff did not enjoy through no fault of his own.
(f) An order to the defendant to pay to the plaintiff the balance of his salary being 50% of the plaintiff’s salary from the date of his suspension to wit 30/10/80 to the date of plaintiffs purported dismissal namely 30/5/81 together with all entitlements and allowances.
(g) The costs of this action.”
(See plaintiff’s Statement of Claim dated 9/4/86).
The parties filed and exchanged pleadings. The suit was tried by GARNDAWA J. On 4/3/92 the trial Judge delivered his judgment wherein he made the following orders:-
“1. That the plaintiff’s suspension from duty or from the employment of the defendant from the 30th October, 1980 leading to his eventual dismissal from the service of the defendant on the 30th May, 1981 are hereby declared wrongful, unlawful, null and void and of no effect whatsoever.
- That the plaintiff is not entitled to a re- instatement to his former post from 30th October, 1980.
- That the plaintiff is entitled to be paid all his emoluments (i.e his arrears of salary of N10,318.00 P.A. and other allowances) as from 30th May, 1981 up to the date of judgment in this suit.
- That the plaintiff’s appointment shall be deemed to be terminated from the service of the defendant with effect from the 5th March, 1992.
- That the defendant shall pay to the plaintiff the balance of his salary being 50% of the plaintiff’s salary from the date of his suspension to wit; 30/10/80 to the date of plaintiff’s purported dismissal namely 30/5/81 together with all entitlements and allowances.
- That the defendant shall pay to the plaintiff the cost of filing this suit assessed at N500.00.”
The defendant was dissatisfied with the judgment of the lower court. On 4/3/96, it filed an amended Notice of Appeal against the judgment wherein it raised six grounds of appeal. It is unnecessary that I reproduce the said grounds of appeal. In the appellant’s brief filed, the issues for determination in the appeal formulated out of the said grounds of appeal read thus:
“1. Whether in the circumstances of this case the learned trial Judge was right in holding the plaintiff/respondent’s dismissal from the employment of the defendant/appellant wrongful, unlawful, null and void and of no effect whatsoever.
- If the answer to issue No.1 above is in the affirmative, whether the trial Judge was right in his assessment and award of damages having regard(s) to the circumstances of the case.”
The respondent in his brief formulated the issues for determination thus:
“201. Whether the Honourable trial Judge was not justified in the circumstances of this case in holding that overdrafts given by the respondent (plaintiff) were not in flagrant or utter disregard of the appellant’s (defendant’s) instructions on lending and consequently the respondent’s dismissal was unlawful, null and void.
2.02. Whether the inferences drawn from or the construction and or interpretation placed or put on exhibit Q by the Honurable trial Judge were not correct or proper in the circumstances.
2.03. Whether the judgment of the Honourable trial Judge on the totality of the evidence was not supportable.
2.04. Whether the respondent was entitled to the damages claimed and awarded to him by the Honourable trial Judge in this case.”
The issues as formulated by the appellant are concise and germane. I prefer them to the respondent’s. The respondent would appear to have fragmented the issues to get four rather than the two formulated by the appellant.
I intend to consider the two issues for determination one after the other. A convenient starting point to the consideration of the first issue is the examination of the letter Exhibit ‘P’ by which the plaintiff was suspended from duty by the defendant on 30/10/80. Paragraph 1 of exhibit ‘P’ reads:
“We refer to the Kano Area Manager’s query to you dated 23rd September, 1980 on various malpractices and unauthorized overdrafts and excess over Head office approved limits totaling N210,644.26 and your reply dated 26th September, 1980 and hereby inform you that the Management is not satisfied with the defence put up in the letter.”
Now, what was the complaint made against the plaintiff in the query dated 23/9/80 referred to in exhibit ‘P’? And what was plaintiff’s reply thereto? Contrary to the 23/9/80 given in Exhibit ‘P’ as the date a query was given to the plaintiff, it would appear that the plaintiff was in-fact queried on 25/9/80. I take this as a mere mistake as to the correct date. Exhibit ‘K’ written to the plaintiff on 25/9/80 reads:
“RETURNS OF OVERDRAFT ACCOUNTS AS AT 22/9/80
I observed from the above returns that you granted total unauthorized overdraft of N210,744.26 to your various customers. This is made up thus:-
Excess over Head Office approved limit- N134,627.01
Unauthorized overdraft granted by you – N76.017.25
N210.744.26
Most of these advances were not secured and where securities were obtained they were either unperfected or below the value of the overdraft facility granted.
We have made similar observations on your past returns vide our letters, 25th and 27th August, 1980 and called for your comments but we have neither seen your reply nor have you put a stop to your unauthorized lending habit.
Our management has not restored the Branch Managers discretionary lending powers and I therefore consider your action ultra vires.
Will you please let me have your comments for management attention today. Your reply should be in triplicate.
(Sgd) J.O. Nwosisi
Area Manager (ON Tour)”
The plaintiff sent a reply to Exhibit ‘K’ on 7/11/80 vide Exhibit ‘L’. In the relevant part of the reply the plaintiff wrote:
“However in view of the recent development I sincerely regret and apologize for offering the following response to your query now.
I agree entirely with you that as at the date of your query management has not restored the Branch Manager’s discretionary lending powers which should have given me the necessary protection desired. However, the obvious was that the bulk of the excess and unauthorized lending I made to the customers was subject to monthly balancing.
Customers past records has shown favourable response on their part.
As at 15/10/80 when I handed over the management of the branch to Mr. Durn the position was as follows:-
Overdraft as per Head office approval- N188,139.96
Unauthorised/Excess by me 119,889.99
Unauthorised/Excess by Mr. Keskum
(Branch Accountant) 4,755.39
Unauthorized/Excess by Mr. Dankang
(Now Ag. Manager III Dengi) 154.13
N312939.47
In compliance with the managements new directive I am making vigorous efforts to obtain the co-operation of these customer(s) to normalize their accounts with us. The result of my efforts in this direction shall be communicated to you from time to time. If possible your advice and assistance shall be sought towards the realization of this objective.
Once more, I wish to tender my unreserved apology for the delay occasioned in responding to your query.
Your faithfully,
(sgd) S.E. Ufondu.”
The plaintiff in the portion of Exhibit ‘L’ reproduced above clearly admitted that he granted unauthorized loan to the tune of N119,889.99. He also agreed that at the relevant time, the discretionary lending power of branch managers which could have covered the lending had not been restored. What later introduced a twist into the matter was the circular Exhibit ‘Q’ issued by the defendant on 10th September, 1980. Under exhibit ‘Q’ the discretionary lending powers of branch managers under the defendant were restored. The plaintiff, a branch Manager Group (II) could under exhibit ‘Q’ lend N2,500.00 to a customer and he had an overall limit of N100,000.00. Exhibit Q also carried a provision which appeared in effect to have chosen to view lightly the transgression of branch managers who had granted unauthorized loans before 10/9/80 when exhibit ‘Q’ took effect. It is this provision that has caused the major problem in the dispute. The relevant part of Exhibit ‘Q’ reads:
“………. and advances granted by Area/branch managers prior to the operative date of this circular which have not been fully repaid must be regarded as having been granted under their discretionary lending powers and should be included for the purpose of determining their overall limit and shown in returns called for as per No.4 below (and at page 4 of same) ……….. A record of each officer’91s discretionary lending must be maintained to ensure that they keep within their limits. Where the limit is exceeded, the officer should immediately be cautioned and other disciplinary actions will follow if the officer fails to take corrective measures,”
In view of the provisions of Exhibit Q reproduced above, could it be taken that the plaintiff had been guilty of misconduct justifying his dismissal? I think not undoubtedly, the plaintiff had given unauthorized loans before 10/9/80. But by the provision of Exhibit Q, the defendant forgave the indiscretion of the plaintiff such that whatever unauthorized loans he had granted then fell to be treated as loans granted under his discretionary lending power. The lower court in its judgment at page 81 correctly found that indeed the plaintiff granted unauthorized or excess overdraft to bank customers.
At page 84 of the record the lower court in its judgment held:
“I would like also to conclude that based on the totality of the evidence adduced before me, I am of the humble opinion that the grant of such excess and/or unauthorized overdraft by the plaintiff to the trusted customers of the defendant was not in flagrant or utter disregard of the defendant’s instructions on lending because from the 1st June, 1978 when the Maiduguri branch of the defendant was opened for business to 25th September 1980 when the query was issued to the plaintiff by the defendant in this case there were no rules, regulations and circular governing the discretionary lending powers of Area and Branch Managers of the defendant Consequently, I will not uphold the submission of the learned counsel to the defendant that granting of unauthorized overdraft facilities per se would lead to misconduct for which an employee under the terms of Exhibit Y article 5(d) part 2 thereof could be summarily dismissed. It is my humble view that before gross misconduct contemplated by article 5(d) of section 1 part 2 of Exhibit Y could be established in relation to this instant case, there must be in effective existence or operation the rules, regulations or circulars governing the discretionary lending powers of the appropriate officers of the defendant at the material time. As I have pointed out early on in this judgment such circulars did not exist prior to the issuance of Exhibits Q and R. So, I hold that the plaintiff in this case, did not commit any gross misconduct under Exhibit Y which will warrant his summary dismissal as contained in Exhibits Y and X.”
I do not think the reasoning of the trial Judge as shown in the above passage could be faulted on the evidence available. The defendant had itself by Exhibit Q elected not to treat the act of the plaintiff in granting an unauthorized loan as a misconduct The defendant also stated that all that could happen to someone who granted an unauthorized loan in circumstances similar to that under which the plaintiff acted should only be cautioned. And other disciplinary actions were to follow only “if the officer fails to take corrective measures.” There was no evidence that the plaintiff was cautioned or that he failed to take corrective measures.
The letter by which the plaintiff was dismissed was tendered as Exhibit ‘V’. The letter linked the plaintiff’s dismissal with the grant of unauthorized loans. The first paragraph of Exhibit V reads:
“I write to inform you that at the last Board meeting held on 30th May 1981, your case was discussed and after careful consideration of all relevant facts, it was decided to dismiss you from the service of the Bank in accordance with Article 5(b) of part II (Section 1) of the Collective Agreement for Senior staff. You are hereby accordingly dismissed from the service of the Bank with effect from 30th May 1981, for gross misconduct by granting unauthorized advances to customers in utter disregard of the Bank’s instructions on lending.”
The defendant at the trial failed in my view to show that the plaintiff was guilty of the misconduct alleged against him. I shall now consider whether or not the lower court was in error in the damages awarded in favour of the plaintiff. It is now a settled law that the court will not decree the specific performance of a contract of personal service. The court will not force an employer to retain in its service an employee it no longer wants. The measure of damages in case of wrongful dismissal is the amount the plaintiff could have earned as salary for the period over the earliest time when the contract could have been lawfully brought to an end or determined. See N.P.M.B. v. Adewunmi (1972) 11 SC 111; Onalaja v. African Petroleum Ltd (1991) 7 NWLR (Pt 206) 691. In other words, an employee unlawfully dismissed will been entitled to his salary for the period provided by the contract of employment for the determination of the contract Where the contract is silent on the period of time to be given by either party to determine the contract, the court will read into the contract a provision that the contract is determinable with reasonable notice.
The employment of the plaintiff under the defendant was governed by Exhibit Y. However, Exhibit ‘Y’ has no provision for termination of employment with notice. The plaintiff was employed by the defendant in 1974. He served the defendant up to 30/5/81. This was a period of about 7 years during which the plaintiff rose to the status of a manager Group 11 on a salary of N10,318.00 per annum. Taking all these into consideration I consider it reasonable that the plaintiff be given three months notice to determine the employment.
The plaintiff will therefore be entitled to three months salary in lieu of notice. Further, the plaintiff was placed on suspension from 30/10/80 until he was finally dismissed on 31/5/81. The plaintiff was placed on half his monthly salary over the period. Since there was no justification for putting plaintiff on suspension in the just place the plaintiff ought to be paid the other half of his salary for the period between 30/10/80 and 31/5/81.
The lower court was in error to have deemed the plaintiff to be in the service of the defendant up to 5/3/92 when the defendant had dismissed him from 31/5/81. All that the plaintiff was entitled to was three months salary in lieu of notice.
In the final conclusion, this appeal partially succeeds. The judgment of the lower court save the order on costs is set aside. In its place I make the following orders:
- The plaintiff is to be paid the balance of 50% of his salary which was withheld by the defendant during the period of plaintiff’s suspension between 30/10/80 and 31/5/81.
- The plaintiff’s employment under the defendant is to be treated as coming to an end on 31/5/81 as determined by the defendant but the plaintiff shall be paid three months salary in lieu of notice.
- The plaintiff is to be paid all his other terminal benefits on the basis that the employment was brought to an end by way of termination with notice with effect from 31/8/81.
- The plaintiffs claim for reinstatement is refused.
- The defendant/appellant is entitled to cost on this appeal which I fix at N750.00.
Other Citations: (1997)LCN/0349(CA)
