Peter Onyeachonam Obanye V. Union Bank Of Nigeria Plc (2018)
LAWGLOBAL HUB Lead Judgment Report
CHIMA CENTUS NWEZE, J.S.C.
The appellant was an employee of the respondent. The respondent, by a letter of November 28, 2003, although back-dated to October 30, 2003, terminated the said employment. Sequel to the said letter, the respondent credited his account with the required one month’s salary in lieu of Notice on December 3, 2003. However, only five days later, the respondent reversed the payment. Having failed in all his attempts to persuade the respondent to reverse the said termination of his employment, the appellant repaired to the Anambra State High Court, Onitsha Judicial Division.
Thereat, he caused a Writ of Summons to be issued and served on the respondent. He claimed the following reliefs:
(a) A Declaration that the termination of the plaintiffs employment by the defendant is illegal, null and void and of no effect, the defendant having failed to comply with the staff condition of service by paying the plaintiff one month (sic) salary in lieu of service (sic, Notice);
(b) An Order for the defendant to pay the plaintiff all his salaries from December, 2003 and from
1
2004 to 2008, which is the sum of N17,057,967.00 (Seventeen Million, Fifty-Seven Thousand, Nine Hundred and Sixty-Seven Naira) and such other entitlements due to the plaintiff until judgment is delivered;
(c) An order that the plaintiff is entitled to 6263 unit shares of UBESOT as a staff of the defendant;
(d) N100,000,000 (One Hundred Million Naira) general damages for the plaintiffs unlawful dismissal.
Upon the eventual joinder of issues in the settled pleadings, the matter went to trial. The appellant, (as plaintiff) testified as the sole witness. He tendered nineteen exhibits, Exhibits P1-P19. On her part, the respondent, (as defendant), equally called only one witness who testified and tendered one exhibit, Exhibit D1. The High Court (hereinafter, simply, referred to as “the trial Court”) dismissed the plaintiff’s case, prompting the appellant’s appeal to the Court of Appeal, Enugu Division, (hereinafter simply referred to as “the lower Court”).
The lower Court allowed the appeal in part, holding that “all that the appellant is entitled to is one-month (sic) salary in lieu of Notice and any other entitlements
2
legitimately due to him at the time of termination of his employment and nothing more.” Aggrieved, the appellant further appealed to this Court entreating it to determine the two issues he set out. However, at the hearing, he withdrew the second issue. Thus, the only extant issue for the determination of this appeal is the one framed thus:
Whether the appellant is not entitled to damages, the Court of Appeal having found that the employment of the appellant was wrongly terminated as the one month’s salary in lieu of Notice was not paid, the respondent having breached the terms of the Contract of Employment binding the two parties
The respondent, on the other hand, framed a sole issue in these words:
Whether the measure of damages for alleged wrongful termination of employment or wrongful dismissal ought not to be the amount equivalent to the period of notice that the affected persons ought to be given as stipulated by the contract
For the avoidance of any doubt, I shall adopt the appellant’s sole issue after all, it is his appeal. Thus, the issue for the determination of this appeal is that couched thus:
3
Whether the appellant is not entitled to damages, the Court of Appeal having found that the employment of the appellant was wrongly terminated as the one month’s salary in lieu of Notice was not paid, the respondent having breached the terms of the Contract of Employment binding the two parties
ARGUMENTS ON THE SOLE ISSUE
APPELLANT’S SUBMISSIONS
At the hearing of this appeal on March 13, 2018, Onyebuchi Ononye, learned counsel for the appellant, adopted the brief filed on October 14, 2015. In the said brief, he contended that the appellant was an employee of the respondent.
He gave an incomplete citation of The Black’s Law Dictionary (Ninth edition) for the definition of “Contract.” He equally referred to Section 9 of the Labour Act, Cap L1 Vol. 8, Laws of the Federation of Nigeria, 2004 for the definition of “contract of employment.” In his submission, the cardinal point from the definition is that there has to be an agreement between the employer and the employee, the former offering a working opportunity and the latter willing, accepting and agreeing to work for the employer.
4
He cited Sections 9(7); 11(1) and (2) and 11(6) of the Labour Act.
He explained that, in the course of hearing the matter at the lower Court, the appellant herein (as plaintiff at the trial Court) had tendered Exhibit P19, the Procedure and Main Collective Agreement between the Nigeria Employer’s Association of Banks, Insurance and Allied Institutions (NEABIAI) and the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI). “The Collective Agreement.” He referred to paragraph 8 of the Contract of Service tendered by the respondent, Exhibit D1; Ifeta v. S.P.D.C.N. Ltd (2006) 32 WRN 1, 28-29; Ajagbe v. Idowu [2011] 17 NWLR (Pt. 1276) 422, 429.
He pointed out that the appellant tendered Exhibit P19, the Collective Agreement, Article 4 (ii) (d) thereof, refers. He canvassed the view that the respondent’s argument that she is not bound by the contents of Exhibit P19 is unsupportable having regard to the decision of the lower Court on Exhibit P8 and the Court’s affirmation of the DW1’s confirmation of the binding nature of the Collective Agreement.
He pointed out that the appellant was issued with Exhibit P1, dated October 30, 2003, terminating his employment.
5
The said exhibit was however issued to him on November 28, 2003. He explained that, as at the time the said exhibit was issued, the appellant had worked for the month of November for which he was paid. He noted that the respondent, in compliance with the terms of the contract of service, acknowledged the payment of the one month’s salary being payment in lieu of notice. The respondent equally acknowledged payments of benefits due to the appellant.
Learned counsel noted that, in fulfillment of the payment of the one months salary in lieu of notice, the appellant’s account was credited with the one month’s salary in lieu of notice. He pointed out that that payment was reversed five days later. In effect, he contended, the respondent dismissed her employee without paying the one month’s salary in lieu of notice or issuing a one month’s notice to terminate the employment; thus, breaching the fundamental term of the contract with the appellant. No other benefit was paid to the appellant,Longe v. FBN Plc [2010] 6 NWLR (Pt. 1189) 1, 57; Olaniyan v. University of Lagos (1985) LPELR – SC. 53/1985.
6
He explained that it was this singular act of non-compliance with the terms of the contract that gave rise to the suit and this appeal. He maintained that the employment of the appellant was wrongfully terminated due to the respondent’s failure to issue to the appellant a one month’s notice terminating his employment or the payment of one month’s salary in lieu of notice, U.B.N. v. Ogboh (1995) 2 NWLR (Pt. 350) 647; Ativie v. Kabel Metal (Nig) Ltd (2008) 10 NWLR (Pt. 1095) 399; Kusfa v. United Bawo Construction Co. Ltd (1994) LPELR-SC.180/1989; (1994) 4 NWLR (Pt. 336) 1; (1994) SCNJ 1.
In his submission, the respondent in dismissing the appellant chose the end of the year so as to invoke some hardship on him. He noted that the non-payment of the one month’s salary in lieu of notice had occasioned much hardship on the appellant, citing paragraph 16 of the Statement of Claim. He pointed out that the lower Court failed to consider this grievous damage in its award of damages. This position, he pointed out, was against the evidence of the appellant that due to the said non-payment that he had suffered grievously and immense financial loss due, paragraph 17 of the Statement of Claim which was unchallenged.
7
He cited U.B.N. Plc v. Ajabule (2011) 18 NWLR (Pt. 1278) 178, 181 as authority for the view that general damages need not be specifically pleaded or the particulars pleaded. He pointed out that the lower Court ought to have considered the grievous damages and immense financial loss that the appellant suffered in awarding damages. Accordingly, its judgment should not have been based only on the payment of the one month’s salary in lieu of notice. In his submission, the non-payment of the one month’s salary in lieu of notice, having occasioned hardship on the appellant, he was entitled to more award as damages to cushion the effect of the hardship which the respondent made him to suffer, paragraph 16 of the Statement of Claim. The lower Court failed to consider these grievous damages, which the appellant assessed and put at 100,000,000 (One Hundred Million Naira) only as his general damages. He urged the Court to consider the circumstance surrounding the case and award damages that are adequate: damages which, to a reasonable extent, would cushion the effect of the hardship the appellant had suffered due the respondent’s wrongful termination of his employment.
8
RESPONDENT’S ARGUMENTS
On his part, Ikeazor Akaraiwe, learned counsel for the respondent, adopted the brief filed on November 27, 2015. He submitted that in an action for wrongful termination/dismissal/retirement, only two primary issues call for determination, namely:
(i) Whether the termination/dismissal/retirement of the plaintiff is wrongful
(ii) What is the measure of damages recoverable where the termination/dismissal/retirement is found to be wrongful
He cited Ekeagwu v. Nigerian Army (2010) LPELR-1076 (SC) for this proposition. He pointed out that, in the instant case, the lower Court found that the appellant’s employment was wrongfully terminated. The Court accordingly awarded him his one month’s salary as damages being the measure of damages recoverable since the termination was found to be wrongful, Nze v. N.P.A. (1997) 11 NWLR (Pt. 526) (sic).
He canvassed the view that the measure of damages which the appellant could recover was the amount equivalent to the amount of notice and nothing more. In his submission, the lower Court rightly held that the appellant was entitled
9
to one month’s salary in lieu of notice. He maintained that the contract of service was the bedrock upon which an aggrieved employee must found his case. He therefore succeeds or fails upon the terms or conditions contained therein, W.N.D.C. v. Abimbola (1966) 1 All NLR 159.
He referred to Exhibits P19 and D1, the Collective Agreement and Conditions of Service stipulating the terms and conditions of service, respectively, citing Article 4 (ii) (d) of Exhibit P19 and Exhibit D1. He took the view that the above provisions in the written contract of service were binding on the parties. The Court therefore lacks any legal power or jurisdiction to look anywhere else for the purpose of identifying the terms of contract other than the written agreement voluntarily entered into by the parties. In effect, no extrinsic evidence can alter the terms of a written contract, U.B.N. v. Ozigi (1994) 3 NWLR (Pt. 333) 385.
He further contended that the only remedy available to the appellant whose employment was wrongfully or unlawfully determined in contravention of the terms or conditions of service is that in cases of ordinary
10
employment (such as the one between the appellant and respondent) where the terms provide for a specific period of notice before termination, or salary in lieu thereof, is the award of salary for the period of notice, and other legitimate entitlements due to the employee at the time the employment was brought to an end.
He explained that the appellant was neither entitled to an award of general damages nor a decree of reinstatement. In his submission, the rationale for this is that a Court cannot impose an employee on an unwilling employer, the only exception being the contract of employment with statutory flavor. This appeal does not fall into that category, FMC, Ado-Ekiti and Ors v. Alabi (2011) 38 WRN 80, 100-101; Bamgboye v. UNILORIN [1999] 10 NWLR (Pt. 622) 290.
On the damages recoverable in cases of wrongful dismissal/termination of employment, he cited Shena Security Co. Ltd. v. Afropak (Nig.) Ltd and Ors [2008] 4-5 SC (Pt. 11) 117; Osisanya v. Afribank (Nig.) Plc (2007) 6 NWLR (Pt. 1031) 565; Ifeta v. S.P.D.C.N. of Nig Ltd [2006] All FWLR (Pt. 314) 305.
He agreed with the lower Court’s award of one month’s salary in lieu of notice to the appellant as damages.
11
This must be so, he contended because the measure of damages in a situation where the employer has a right to terminate the contract before the end of the term, apart from other entitlements should be limited to the amount the plaintiff would have earned over the period of the notice. He maintained that the appellant was not entitled to the award of general damages. This, he contended, must be so since in awarding damages, the Court will not include compensation for injured feelings or the loss that may have been sustained from the fact that the employees dismissal had made it more difficult for him to get another job. He urged the Court to dismiss the appeal.
RESOLUTION OF THE SOLE ISSUE
As indicated earlier, the trial Court dismissed the plaintiff’s case, prompting the appellants appeal to the lower Court. The lower Court allowed the appeal in part. At page 283 of the record, it first pointed out that:
The appellant tendered the collective agreement (Exhibit P19) to show that he is entitled to one month (sic) notice or one month (sic) salary in lieu of notice.
12
The Court below held that the agreement is not binding on the respondent. In Abalogu v. SPDC Nig. Ltd. (2003) 13 NWLR (Pt. 837) 308, 337, the Supreme Court unequivocally held that where a collective agreement is incorporated or embodied in the conditions of a contract of service whether expressly or by necessary implication, it will be binding on the parties The appellant tendered Exhibit P8 to show that the collective agreement forms part of the conditions of his service
The respondent has clearly by the contents of Exhibit P8 expressly adopted and incorporated the terms of the collective agreement into the appellants conditions of service. DW1 also confirmed the fact that the collective agreement is binding on the appellant and the respondent to some extent. At least, Exhibit P8 clearly puts it beyond any doubt that the respondent accepted the fact the Section 1 Article 4 (a), (I)-(IV) of the collective agreement is binding on the parties. Article 4 stipulates the procedure to be followed in taking disciplinary actions against an employee
In the face of Exhibit 8 and the evidence of DW1, the inescapable conclusion that must be reached is that the
13
respondent expressly adopted the provisions of the collective agreement by virtue of Exhibit P8.
Turning to the question of the breach of contract between the parties, the lower Court took the view that:
a community reading of the averments of both parties leave (sic) one in no doubt that the parties are ad idem that the appellant is entitled to one month (sic) salary in lieu of notice. The point of disagreement is whether or he was paid
From the pleadings and the evidence of both parties, it is not difficult to come to the conclusion that the appellant worked for the respondent in the month of November, 2003. Exhibit P19 is evidence of payment of his salary for that month. He earned that salary and in law he is entitled to it. In law the appellant’s employment continued until 28th November, 2003 when he was served with the letter of termination and not the 30th October, 2003 which is the date on the letter. In other words, the effective date of the termination of the appellant’s appointment is 28th November, 2003 and not 30th October, 2003…
In law, the effect of the above finding is that the
14
respondent did not pay the appellant the agreed one month (sic) salary in lieu of notice. There was non-compliance with the provisions of Article 4 (ii) (d) of the collective agreement (supra).
(Pages 292 et seq]
The lower Court finally dealt with the issue of the appellant’s remedies in these words:
The next question is what remedies the appellant is entitled to for failure to give the agreed one month (sic) notice or pay (sic) one month (sic) salary in lieu of notice (sic). The law is settled that where a contract of employment is terminable on notice and the employee is not given the requisite notice or payment in lieu of notice, the only remedy available to the employee is the award of salary for the period of the notice and any other entitlements due to him at the time of the termination of the employment. A declaration that the contract is still subsisting or that the termination is null, void and of effect will not be made except in some cases of employment with statutory flavor. The general principle of law is that a servant cannot be imposed on an unwilling master even where the master’s behavior is wrongful All that the appellant is entitled to is
15
one month (sic) salary in lieu of notice and any other entitlements legitimately due to him at the time of termination of his employment and nothing more
[Pages 294 et seq; italics supplied for emphasis]
The appellant’s counsel inveighed against the above reasoning and conclusion of the lower Court, [paragraph 3.21, page 12 of the appellant’s brief]. In doing so, he would seem to have wished away numerous decisions on this Court on this point. Remarkably, however this Court has ware-housed a robust corpus of jurisprudence on the measure of damages awardable in circumstances such as those present in the instant appeal.
In the first place, I endorse the conclusion of the lower Court that parties are bound by the terms of their contract. If the conditions for the formation of a contract are fulfilled by the parties thereto, they will be bound. It is not the function of a Court to make a contract for the parties or to rewrite the one which they have made, U.B.N. v. Ozigi (1994) 3 NWLR (Pt. 333) 385, 404. Thus, unless it is established in evidence that a party was fraudulently led into an agreement, parties are bound by
16
the written and express terms of their contract, Chidoka v. First Finance Co. Ltd (2012) LPELR-9343 (SC); [2013] 5 NWLR (Pt. 1346) 144. In other words, in the absence of fraud, duress and undue influence or misrepresentation, the parties are bound by their contract, Makwe v. Nwukor (2001) 7 SC (Pt. 1) 1, 38; A-B; Alade v. Alic (Nig.) Ltd [2010] 19 NWLR (Pt. 1226) 111.
My Lords, I cannot find any justification for disagreeing with the above conclusion of the lower Court. Under the common – and Nigerian – laws, the position is that, ordinarily, a master has the right to terminate his servant’s employment for good or bad reasons or for no reason at all. The basic principle considered normally in the resolution of a dispute between a master and his servant where the former determines the latter’s appointment is the determination of whether the contract of service between the two of them is one with statutory-colouration/flavour.
Where the servant is removed in a contract with statutory flavour, the first question the Court would ask is: has the servant’s employment been determined in accordance with the way and manner prescribed by the statute under reference
17
Or, is the contract governed by an agreement of the parties and not under any statute Where the servant is sought to be removed in a contract with statutory flavor, that is, a contract of employment wherein the procedures for employment and discipline, including dismissal, are clearly spelt out, such a contract must be terminated in the way and manner prescribed by the statute. Any other manner of termination which is inconsistent with the relevant statute is void and has no effect.
However, in other cases governed only by agreement of the parties and not by statute, removal by termination or dismissal would be in the form agreed to. Any other form of dismissal or termination connotes only wrongful termination or dismissal. It therefore does not warrant a declaration of such dismissal as void. Where this happens, the only remedy open to the plaintiff is a claim for damages for that wrongful dismissal and not reinstatement.
This is based on the notion that no servant can be imposed by the Court on an unwilling master even where the master’s behaviour is wrong. For his wrongful act, the master is only liable in damages and nothing more,
18
Chukwumah v. Shell Petroleum Dev. Co. Ltd. (1993) 4 NWLR (Pt. 289) 512, 560; Union Bank v. Ogboh [1995] 2 SCNJ 1, 16; [1995] 2 NWLR (Pt. 380) 647; N.E.P.A. v. Isieveore (1997) 7 NWLR (Pt. 511) 135; Fakuade v. O.A.U.T.H. (1993) 5 NWLR (Pt. 291) 47; Adeniyi v. Governing Council, Yabatech (1993) 6 NWLR (Pt. 300) 426; Imoloame v. W.A.E.C. [1992] 9 NWLR (Pt. 265) 303; Bankole v. N.B.C. (1968) 2 All NLR 371; Shitta-Bey v. Federal Public Service Commission [1981] 1 SC 40; U.N.T.H.M.B. v. Nnoli (1994) 8 NWLR (Pt. 363) 376; N.O.M. Ltd v. Daura (1996) 8 NWLR (Pt. 468) 601.
What flows from this latter category, that is, in cases governed only by agreement of the parties, and not by statute, is that the measures of damages recoverable in situations of wrongful termination or dismissal of a servant are determined by what the employee would have earned over the period of notice required for the determination of the employment, Nom Ltd v. Daura (supra); N.P.M.B. v. Adewunmi (1972) 11 SC 111; Onalaja v. African Petroleum Ltd [1991] 7 NWLR (Pt. 206) 691; Chukwumah v. Shell Petroleum Dev. Co. Ltd. (1993) 4 NWLR (Pt. 289) 512;
19
International Drilling Co. Ltd. v. Ajijala (1976) 2 SC 115; Akinfosile v. Mobil (1969) NCLR 253; WNDV v. Abimbola (1966) 1 All NLR 159; Mayne and McGregor on Damages (12th edition); paragraph 608.
Simply put, therefore the measure of damages in cases of wrongful dismissal of this category is always the amount of money that is payable during the period of notice to be given by the employer as stipulated in the contract of employment, Nigerian Produce Marketing Board v. Adewunmi (1972) 11 SC 111; Olatunbosun v. N.I.S.E.R Council (1988) 3 NWLR (Pt. 80) 25.
In all therefore, I take the view that the lower Court correctly stated and applied the applicable principle of law in a master and servant relationship. In International Drilling Company (Nigeria) Limited v. Moses Eyeimofe Ajijala (1976) 2 SC 64, 73-74, this Court made the point that:
The principles of law governing the award of damages were stated recently by this Court in: Western Nigeria Development Corporation v. Jimoh Abimbola (1966) NMLR 381, 382; and Nigeria Produce Marketing Board v. A. I. Adewumi (1972) 1 All NLR (Pt. 2) 433, 437.
20
In the latter case, we stated the law as follows at p. 437:
In a claim for wrongful dismissal, the measure of damages is prima facie the amount that the plaintiff would have earned had the employment continued according to contract, Beckham v. Drake (1849) 2 H. L Cas 579 at pages 607-608. Where however the defendant, on giving the prescribed notice, has a right to terminate the contract before the end of the term, the damages awarded, apart from other entitlements, should be limited to the amount which would have been earned by the plaintiff over the period of notice, bearing in mind that it is the duty of the plaintiff to minimize the damage which he sustains by the wrongful dismissal.
The application of this principle was vividly demonstrated by this Court in the case of Western Nigeria Development Corporation v. Jimoh Abimbola, supra, where Ajegbo, JSC, (delivering the judgment of the Court), after stating the guiding principles, said at page 382:
The plaintiff was given a letter of appointment (Exhibit A)… The plaintiffs appointment was governed by the contract to which he entered at the time of his appointment. If he had been given one month’s notice before termination of
21
his appointment, he would have had no claim whatever on the Corporation. But he was not given notice, and he is entitled to one month’s salary in lieu of notice. That is all he can get as damages. Other matters that the Judge considered are irrelevant.
[Italics supplied for emphasis]
From all I have said above, I am left with only one option. It is the dismissal of this appeal for lacking in merit. I hereby affirm the judgment of the lower Court. Parties are to bear their costs. Appeal dismissed.
SC.569/2015
