Olayinka Kusamotu V. Wemabod Estate Limited (1976)

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IDIGBE, JSC. 

The question in this appeal is whether the appellant is entitled to a longer period of notice of dismissal and consequently a larger sum of money in lieu thereof than he actually got from his employers, the respondents.

By a judgment of the 9th day of September, 1974, the High Court of Lagos State awarded in favour of the appellant in an action for wrongful dismissal by the appellant against the respondents a total sum of £362.16.8d (N725.68) whereof the sum of £335.6.8 (N666.68) represents the appellant’s salary for a period of two months and £29.10.0 (N59) represents his car basic allowance for the same period (in addition to his salary for one month and car basic allowance for the same period given to him by his employers when they terminated his employment with them). This award is consequent upon the appellant’s claim “for the sum of £46,000 (Forty-Six Thousand Pounds) being special and general damages for wrongful termination of appointment”; and this appeal is from the judgment aforesaid.

Briefly, the facts which form the background to the claim of the appellant, as found by the trial court and so far as they are material to his appeal, are as follows: By a letter of August 25th, 1969 (Exhibit “A”) the respondents offered the appellant, a legal practitioner, employment as legal secretary to the respondent company on terms therein stated; the offer was accepted by the appellant who commenced work on the 1st day of September 1969. The appellant’s employment was regulated by a document issued by the respondents entitled “Wemabod Estate Limited Conditions of Service Senior Staff” (Exhibit “B”).

The appellant claims that his employment with the respondents was wrongfully terminated by a letter of December 7th, 1971, (Exhibit “D”), addressed to him when his period of probation had expired; although the trial court, in its judgment, was of the view that when Exhibit “D” was sent to the appellant his period of probation had not ended and there is no appeal against this specific finding of the said court. The relevant portions of the letter of appointment which was from the Board of Directors (Exhibit “A”) read:-   “(1) the terms of the appointment are as follows:- (a) Salary – £2,000 per annum in the company’s salary scale £2,000 x 60 – £2,300 (b) You will be on probation for one year after which your appointment will be confirmed subject to your work and conduct being satisfactory  (c) Car Basic Allowance – A car basic allowance of £14.15 per month will be paid in respect of your car and you will (be) entitled to claim mileage at 4d per mile for all official journey(s).  (4) The effective date of your employment will be the date when you assume office.”

It is, we think, desirable to set out portions of Exhibit “B” which bear relevance to the question in this appeal, and these are:-   “(7) Established Staff: means a person appointed to the company’s permanent establishment. (8) UNESTABLISHED STAFF: means a person appointed to the company’s non-permanent establishment. (13) .APPOINTMENTS:    (i) All appointments of Senior Staff are made by the Board of Directors (ii)  (iii) Probation: All appointments will be on probation for a minimum period of one year. (iv) Confirmation of appointment will be subject entirely to satisfactory work and conduct during the period of probation. (v) If during the period of probation it is established that the work and conduct of an employee is not satisfactory, his appointment may be terminated.  

(B) NON-PERMANENT Non-permanent senior staff appointments (i.e. contract and temporary appointments) may be made by the Board on clearly defined terms and conditions.   (21) DISCIPLINE OF STAFF: (a) Whenever an officer is guilty of an offence likely to result to termination or dismissal, such matter will be referred to the Board for action. (b) Whenever an officer is guilty of gross neglect, breach of discipline or misconduct, disciplinary action may be taken by the Board by terminating, dismissal or any other disciplinary action as may be considered appropriate (c) TERMINATION OF APPOINTMENT FOR GENERAL INEFFICIENCY Before the appointment of a confirmed officer is terminated for general inefficiency, he should have received at least two written warnings stating in what respects his work or conduct has been found unsatisfactory. The appointment of an officer on probation may however be terminated at any time during the probationary period. (underlining supplied)   (22) REMOVAL FROM SERVICE: Whenever the company has cause to remove an officer other than on grounds stated in 21(b) above, such as abolition of (sic) officer or re-organisation or other cause not attributable to the officer, he should be compensated by payment of 6 months salary or a month’s salary for every 12 months of service within the establishment whichever is the higher.

A number of letters exchanged on both sides were received in evidence, among them Exhibits “K” “L” “M” “M1” “M2” “M3” “M4” and “C” from which it is clear that the respondents hardly considered the conduct of the appellant in the discharge of his functions or his performance of his duties satisfactory. For instance, by Exhibit “E” (a letter of 31/5/71) the Managing Director conveyed to the appellant the decision of the Board of Directors to extend the appellant’s period of probation for another period of six months to “enable the new Board to make its own judgment” on the appellant’s service to the company; and the Board accordingly, “directed that an interim report” on the appellant’s “work and conduct should be submitted by the Managing Director in three months time and that a final report be given to the Board by the end of the extended probationary period”.

Again, the Exhibit “M1” a letter of 26th September, 1970, the Managing Director wrote to the appellant as follows:   “.It has been agreed by all Directors present (at the meeting of 25/9/70) that I should deprecate your action in the strongest possible terms as your behaviour amounts to another example of your inability to comply with normal administrative procedure. I consider it essential to point out to you, once again, that the manner in which you have consistently conducted yourself in the affairs of the company leaves much to be desired and does not reflect credibility on anyone occupying the post of legal secretary of this company I therefore wish to inform you that another normal warning is being issued to you by this letter.”

And without confirming the appellant’s appointment or calling for the “final report” referred to in Exhibit “E” the respondents’ Managing Director on 7th December, 1971, wrote to the appellant in Exhibit “D” as follows:- “I have been directed by the Board of Directors to inform you that your probationary appointment with the company is hereby terminated with effect from today, 7th December, 1971. You are to be paid one month’s salary in lieu of notice.”  

The implication from the above sequence of events could be that when the respondents terminated the appellant’s employment they were acting under Clause 21(c) of Exhibit “B” which provides for termination of appointment on grounds of general inefficiency and when acting under this clause of Exhibit “B” “the appointment of an officer on probation may however be terminated at any time”. The learned trial Judge, however, did not so find; on the contrary the judgment is on the basis that the dismissal was wrongful and, again, the trial court did not expressly make any such findings. There is no cross-appeal on this issue.   In the circumstances, this court can answer the question raised in this appeal only on the basis that the dismissal of the appellant by the respondents was wrongful.

On this aspect of the case the learned trial Judge observed as follows:-   “I am firmly of the view that the parties never intended to enter into a contract of employment which would not be terminated until the plaintiff attained the retiring age of 55 years. It is all the more so when it is realised that the plaintiff was on probation for a minimum period of one year.

At the expiration of the year, the defendant company had to extend the period of probation for another six months to enable the Board give further consideration to the work and conduct of the plaintiff. It is not in dispute that the defendant company is entitled under clauses 1(4) (sic) (V) [(for (V) read (b)] 21(c) and 22 of Exhibit “B” to exercise general power of discipline over the plaintiff, including termination, dismissal or removal from service.

Whilst it is true no mode of termination or period of notice of termination of appointment has been stipulated by clauses 21(a) (sic) (V) and 21(c) of Exhibit “B”, it may be useful to seek guidance under clause 22. That clause provides that whenever the defendant company has cause to remove an officer other than on grounds stated in clause 21(b) (the learned trial Judge omitted the following words “SUCH AS ABOLITION OF OFFICE OR RE-ORGANISATION OR OTHER CAUSE NOT ATTRIBUTABLE TO THE OFFICER” which appear between the words “stated in 21(b) above” and be “should be compensated” appearing in the relevant portion of clause 22 to which he just made reference) such an officer will be entitled to compensation of six months salary or a month’s salary for every twelve months of service within the establishment, whichever is higher.   I

imagine that the provision deals with established staff, but the plaintiff being on probation, could not be regarded as an established staff. Consequently, in my view, he will not be entitled to as long a notice as six months or payment of six months salary in lieu of such notice where a contract of employment is silent on the question of notice of the termination of an employee’s appointment, it is usual for the court to imply a reasonable notice. In the circumstances of the plaintiff, and having regard to his probationary appointment and the fact that he had put in over two years service I am inclined to the view that he should be given three months notice or paid three months salary in lieu of such notice”.

The learned trial Judge then made an award of two months salary and car basic allowance for the same period in addition to that already made in, and paid under, Exhibit “D”, each in respect of one month, by the respondents to the appellant. Briefly, the argument of Chief Sobo Sowemimo, learned counsel for the appellant, is that clause 22 makes no distinction between the established and unestablished staff.

It provides for the permanent staff to which the appellant belongs and consequently the appellant is entitled to six month’s salary in lieu of notice for such period or a month’s salary for every twelve months of service within the company whichever is the higher; in this case, where the appellant served the company for under two years he must be entitled to a total salary of six months. 

Learned counsel for the appellant, therefore, asks for additional award of three months salary and three months car basic allowance. Learned counsel for the respondent, Mr. Adesina, felt quite unable to resist the contention and conceded the submission made on behalf of the appellant.   Having conceded the issue we will make the additional award and this appeal will succeed only because the contention of the appellant was conceded on behalf of the respondents.

For the avoidance of doubt as to the law on the subject of length of notice required for termination of contracts of employment and its application to the facts in the case in hand we feel, however, bound to point out that clause 22 of Exhibit”B” has no relevance to the claim of the appellant. Firstly, we think that clause 22 applies to persons appointed to the established staff who are not on probation when they cease to serve the company. Secondly, it is our view that clause 22 aforesaid applies to members of the established staff who – as the provisions of the clause clearly show – are removed from service for a cause or causes not attributable to their own fault: such as when they are removed because of abolition of the office they hold, or, upon re-organisation of the company.

The appellant’s employment was terminated. He was not removed under any of the circumstances envisaged under clause 22 of Exhibit “B” ; on the contrary, the evidence which the learned trial Judge accepted points heavily to his employment having been terminated for causes attributable to him. Although the learned trial Judge has made no specific finding on the point, the earlier portions of the passages of his judgment quoted earlier on tend to support this view. That he failed to make any specific finding on the issue does not in any way detract from our view that clause 22 of Exhibit “B” has no application to this claim.  

The learned trial Judge having taken the view that the termination of the appellant’s employment was wrongful, what matters next in this claim is whether the appellant received reasonable notice of termination of employment and it is because the trial court considered that he did not, that it decided that three months (and not one month’s ) salary in lieu of such notice was due to the appellant.

The law is that, generally, the length of notice required for termination of contracts of employment depends on the intention of the parties as can or may be gathered from their contract and in the absence of any express provision, the courts will always imply a term that the employment may be terminated by a reasonable notice (from either of the parties ); and even where (as clearly provided in clause 21(c) of “Exhibit “B” for persons still under probation) the employer has power to terminate the contract in his absolute discretion, the law enjoins the employer to give reasonable notice to the employee (see Re-African Association and Allen (1910) 1 KB 396). What is reasonable notice must vary with facts of each given case; and in determining what amounts to reasonable notice regard must be taken of the circumstances and type of employment, local, professional or trade customs; and, generally, decided cases can only be looked upon as guides for they do not, in the circumstances, lay down any rule of law. The cases of Gabertini v. Waller (1947) 1 All ER 746 and Davson v. France (1959) 109 LJ 526 show that in the circumstances of these cases and the facts therein received in evidence,  professionals (theatrical performers in the one case and, in the other, musicians not employed for a fixed term) and their respective service employments terminated in each case with two weeks notice.

There is hardly anything stated in evidence in the case in hand which makes it unreasonable to terminate the employment of a legal secretary on probation (in this case, the appellant) whose performance was hardly satisfactory to the respondents, with three months’ notice which the trial court felt disposed to allow in favour of the appellant.   The other ground of appeal argued in this court relates to the failure of the trial court to award costs in favour of the appellant. The learned trial Judge gave no reasons for his failure to do so. Learned counsel for the appellant has submitted, and learned counsel for the respondents concedes the submission, that although it is the absolute discretion of a trial Judge to award costs, he should not refrain from making an award in favour of a successful litigant unless he has good reasons therefor. We think there is merit in the submission; the learned trial Judge should have made an award of costs in favour of the appellant. In this connection, we draw attention to the judgment of this court on the point in the case of Haco Limited v. S.M. Daps Brown (1973) 4 S.C. 149 at 154 and the cases therein cited.

This appeal in respect of the inadequacy of the award of damages, however, succeeds because learned counsel for the respondents conceded the contentions and submissions of learned counsel for the appellant and it is allowed. It is hereby ordered that the judgment of the High Court of Lagos State in Suit No. LD/297/72 dated the 9th day of October, 1974, in so far only as the award of damages is concerned, be and is hereby set aside and, in substitution therefor, it is ordered that the appellant is awarded a total of N2,190 (whereof N2,013, i.e. £1006.10.0. represents six months salary due to the appellant and N177 (i.e. £88.10) car basic allowance due to him in respect of the same period).

The appellant shall have costs of this appeal assessed at N267 (whereof N166,45 represents his out of pocket expenses) and costs in the lower court assessed at N270; and this shall be the judgment of the lower court.

Other Citation: (1976) LCN/2219(SC)