Termination of Employment Contracts

L

a

b

o

u

r

L

a

w

I

 TERMINATION OF A CONTRACT OF EMPLOYMENT.

T

e

r

m

i

n

a

t

i

o

n

o

f

t

h

e

c

o

n

t

r

a

c

t

o

f

e

m

p

l

o

y

m

e

n

t

.

•

Termination vs dismissal:

•

Termination allows the parties to bring the COE to an end at any time

with valid notices and the employee may still be entitled to certain

benefits

•

Dismissal is a disciplinary measure and the employee usually forfeits

any benefits.

T

e

r

m

i

n

a

t

i

o

n

o

f

C

o

n

t

r

a

c

t

o

f

E

m

p

l

o

y

m

e

n

t

•

Contract of employment can be terminated in various ways including

by:

•

operation of law,

•

intention of the parties; and

•

By notice given by any of the parties.

O

p

e

r

a

t

i

o

n

o

f

L

a

w

•

1. 

Death: 

The death of the worker most definitely leads to the

termination of the contract of employment from the moment of his

death.

•

Section 9(7)(b) Labour Act provides that a contract shall be

terminated by the death of the worker before the expiry of the

stipulated period of employment.

•

This is because a contract of service is a personal contract.

1

.

D

e

a

t

h

•

The contract is terminated from the time of death hence any right

that accrues to the worker before this time is enforceable.

•

The termination shall therefore be without prejudice to the rights of

the personal representatives or dependants of the worker to make

legal claims for his rights and benefits that accrued before his death

(S. 9(8) Labour Act)

2

.

F

r

u

s

t

r

a

t

i

o

n

o

f

t

h

e

C

o

n

t

r

a

c

t

I

.

•

this occurs where a contract of employment becomes impossible to

perform.

•

Frustration of a contract refers to the 

premature determination

 of an

agreement lawfully entered into between parties which, 

owing to the

occurrence of an intervening event or change so fundamental during

its operation

, as to be regarded by law, both as striking at the root of

the agreement and as entirely beyond what was contemplated by the

parties when they entered into the agreement

F

r

u

s

t

r

a

t

i

o

n

o

f

t

h

e

C

o

n

t

r

a

c

t

I

I

•

It occurs where after the contract, events occur which make the

performance of the contract impossible, illegal or radically different

from what was in the contemplation of the parties.

•

These events include:

•

subsequent legal changes,

•

destruction of the subject matter of the contract,

•

outbreak of war and

•

 government requisition of the subject mater of contract

F

r

u

s

t

r

a

t

i

o

n

o

f

t

h

e

C

o

n

t

r

a

c

t

I

I

I

•

the death of an enterprise or business where a company is dissolved,

goes bankrupt, is liquidated or a partnership is dissolved.

•

The sale of a business may also have the same effect.

•

 In 

Nokes v. Doncaster Amalgamated Collieries Ltd 

(1940) AC 1014,

the taking over of a company was held to have determined a miner’s

employment and thus he could no longer be liable for an offence

which only a servant could commit.

F

r

u

s

t

r

a

t

i

o

n

o

f

t

h

e

C

o

n

t

r

a

c

t

I

V

•

Any other supervening event that makes the contract impossible to

perform will also frustrate the contract.

•

For instance a contract of apprenticeship will be frustrated if the subject

matter of the instruction is destroyed.

•

innate inability, illness or injury if it is of such a nature or long period as to

adversely affect the performance of the contract of employment.

•

 This can be any physical or mental incapacity.

•

Such illness or injury of this nature is a however a question of fact and

where it is of a temporary nature, it will not be sufficient to terminate the

contract of employment.

C

o

n

d

o

r

v

.

B

a

r

r

o

n

K

n

i

g

h

t

s

L

t

d

(

1

9

9

6

)

1

W

L

R

8

7

•

a member of a pop musical group collapsed due to the strenuous

nature of their job. The terms of contract stipulated that he was to

perform in the defendant’s band seven days a week as a drummer

and also feature as a star performer. After a medical examination, it

was certified that he could not work for 7 days a week but only 4. This

was unsuitable for the defendant’s business and he dismissed the

plaintiff on the ground of illness even though his contract contained a

non-dismissal clause.

•

In an action for damages for wrongful dismissal, the court held that

the dismissal was lawful since the plaintiff's health made it impossible

‘in the business sense’ for him to perform his obligations.

F

r

u

s

t

r

a

t

i

o

n

o

f

t

h

e

C

o

n

t

r

a

c

t

V

•

Under common law, an employer is at liberty to terminate the

employment of a seriously sick or incapacitated worker.

•

Under section 16 of the Labour Act, a worker is entitled to be paid

wages for up to 12 working days in any one calendar year during

absence of work caused by temporary illness certified by a registered

medical practitioner.

•

 However, the worker must be ready to continue his work except for

the incapacity produced by the illness and the employer is at liberty

to request that the worker be examined by a qualified medical

practitioner nominated by him.

I

n

t

e

n

t

i

o

n

o

f

t

h

e

P

a

r

t

i

e

s

•

Expiration of time:

•

an employment for a fixed period of time will be terminated

automatically at the expiration of such period in the absence of any

extension of the employment. See section 9(7)(a) Labour Act.

•

An employment for a fixed period needs no formal notice of

termination and the effluxion of time or performance/completion of

the job automatically discharges the contract

I

n

t

e

n

t

i

o

n

o

f

t

h

e

P

a

r

t

i

e

s

I

I

•

Terms of the Contract

: parties to a contract of employment can

include the mode or way by which the contract may be determined in

so far as it was voluntarily made.

•

This is usually spelled out expressly in the contract or as stipulated in

the industry or trade.

•

For instance the contract may be stipulated to come to an end once it

has been performed or on some other mutual conditions agreed

upon by the parties.

•

Where the parties  mutually agree to a new agreement, this

terminates the previous contract of employment.

S

t

r

a

n

g

e

(

S

.

W

)

L

t

d

v

.

M

a

n

n

(

1

9

6

5

)

1

A

U

E

R

1

0

6

9

•

The respondent was employed as a manager by the plaintiff. His COE

contained a clause which prevented him from carrying on business of a

similar nature within 12 miles of the company for 3 years after cessation of

his service. Due to a disagreement, the parties mutually agreed that the

defendant should relinquish his position and be appointed as manager for

the credit department. 27 days after his new appointment, he was

dismissed without notice.

•

The defendant took up a job with another company within the restricted

area. The plaintiff sued in order to enforce the restrictive covenant.

•

The court held that the new appointment replaced the original agreement

which has ceased to subsist.

I

n

t

e

n

t

i

o

n

o

f

t

h

e

P

a

r

t

i

e

s

I

I

I

•

Notice Given by Any of the Parties:

1.

Resignation by the Worker:

•

a contract may also be determined by the unilateral act of one of the

parties.

•

A worker has an absolute right to resign from his employment and

this has been identified as the difference between a servant and a

slave  (per Lord Atkin  in 

Nokes v. Doncaster Amalgamated Collieries

Ltd

 (1940) AC 1014).

R

e

s

i

g

n

a

t

i

o

n

b

y

t

h

e

W

o

r

k

e

r

•

In 

T.O.S Benson v. Onitiri 

(1960) 5 FSC 61, 82, the Supreme Court

affirmed that a person has an ‘absolute right to resign’ and no

discretion lies in the employer to refuse to accept the resignation.

•

To do so would amount to forced/compulsory labour contrary to the

freedom to contract and the fundamental right to dignity of human

person

under section 34(1)(c ) of the constitution.

•

Even where it is a pensionable employment, once the worker has

fulfilled all the necessary conditions to be entitled to retirement

benefits, he can still voluntarily resign and be entitled to his

retirement benefits.

R

e

s

i

g

n

a

t

i

o

n

b

y

t

h

e

W

o

r

k

e

r

•

Once the resignation becomes effective, the employment has been

terminated and no disciplinary action can be initiated against the

worker.

•

The contract of employment usually stipulates the required period of

notice the worker may give to the employer upon his resignation or

amount of payment in lieu of notice.

T

e

r

m

i

n

a

t

i

o

n

b

y

t

h

e

E

m

p

l

o

y

e

r

I

•

An employer

can terminate the employment upon notice to the

worker. However

•

(a) such a dismissal must be for all or any of the 

reasons

 express or

implied in the contract of employment;

•

(b)proper 

notice

 must be given to the worker; and

•

( c) the proper 

method of dismissal or termination

 of employment

must be followed.

•

The employer has the right to terminate the contract of employment,

however such a termination must be lawful.

T

e

r

m

i

n

a

t

i

o

n

b

y

t

h

e

E

m

p

l

o

y

e

r

I

I

•

Article 4 of the ILO Termination of Employment Convention 1982

stipulates as follows:

•

‘the employment of a worker shall not be terminated unless there is a

valid reason for such termination connected with the capacity or

conduct of the worker or based on operational requirement of the

undertaking, establishment or service’.

•

Therefore it can be determined due to the inefficiency or lack of

competence of the worker, acts of misconduct, or operational

requirements like redundancy or economic hardship for the emplo

T

e

r

m

i

n

a

t

i

o

n

b

y

t

h

e

E

m

p

l

o

y

e

r

I

I

I

•

The exercise of the right of the employer to terminate the

employment during a redundancy (excess manpower) is governed by

section 20 of the Labour Act.

•

Redundancy means ‘an involuntary and permanent loss of

employment caused by an excess of manpower’ (s. 20(3) LA).

•

The principle of ‘last in, first out’ is to be adopted in dismissing

workers subject to all factors of relative merit including skill, ability

and reliability.

T

e

r

m

i

n

a

t

i

o

n

b

y

t

h

e

E

m

p

l

o

y

e

r

I

V

•

The employer shall also inform the trade union or worker’s

representatives of the reasons of and the extent of the redundancy.

•

 He shall also use his best endeavours to negotiate redundancy

payments to the discharged workers.

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

Except a contract is determined by death or effluxion of time, some

notice is required to terminate the employment whether on the part

of the worker or that of the employer.

•

Either party to a contract of employment may terminate the contract

on the expiration of notice given by him to the other part of his

intention to do so (s.11(1) LA).

•

Notice here refers to a formal notification or information by the party

seeking to terminate the contract to the other party that the contract

is to be brought to an end at a specified date and sometimes

(especially if it is given by the employer) the reason for the

termination.

O

.

A

.

M

a

r

t

i

n

s

v

.

B

r

a

i

t

h

w

a

i

t

e

(

I

n

s

u

r

a

n

c

e

B

r

o

k

e

r

s

)

&

C

o

L

d

(

1

9

7

2

)

C

C

H

C

J

/

7

2

•

the defendant company under the contract of employment had the right to

terminate the plaintiff's appointment ‘at any time without notice’. The

defendant in exercising this power terminated the plaintiff’s appointment

without saying anything to the plaintiff.

•

After two years, the plaintiff instituted this action for arrears of salary

which fell due before this action was instituted (he rightly didn’t sue for

wrongful dismissal).

•

The court granted the claim of the plaintiff and held that the reservation of

the right to terminate appointment at any time without notice does not

mean that the worker is not to be told in clear words that his services are

no longer required. The court therefore held that there had been no valid

termination of the employment.

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

Even though notice of termination, resignation or retirement has

been given, the worker remains in the service of the employer till the

notice expires and can therefore be disciplined or summarily

dismissed within this period.

•

He is also entitled to all his benefits till the contract is actually

terminated even though notice has been given

A

m

o

k

e

o

d

o

v

.

I

G

P

(

1

9

9

9

)

6

N

W

L

R

(

p

t

6

0

7

)

4

6

7

•

the plaintiff, a superintendent of police, was dismissed retroactively

from Dec 10 1987 by a letter dated Feb 1  1989. This dismissal was

held to be ineffective and the plaintiff ordered to be reinstalled to his

post with effect from Dec 10 1987.

•

The plaintiff gave a notice of his intention to retire in Nov 1989  but

before the notice expired, he was dismissed from service under the

Pubic Officers (Special Provisions) Act 1984.

A

m

o

k

e

o

d

o

v

.

I

G

P

(

1

9

9

9

)

6

N

W

L

R

(

p

t

6

0

7

)

4

6

7

•

On suing for this, the court held that he remained in the service until

the expiration of his three months notice within which period he was

subject to all the benefits and advantages an officer of his rank was

entitled to as well as any disciplinary measures that his employers

deems necessary to maintain generally on a serving officer. Therefore

the dismissal of the appellant within the period of his retirement

notice is the exercise of the employer’s right over its serving officers.

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

Where a contract specifies the period of notice and form, these must

be complied with for the notice to be valid. The notice must be

specific and unequivocal.

•

 Note that time begins to run when the notice is served on the other

party

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

In 

Adeniran A. Adeyemo v. Oyo State Public Service Commission

(1979) 1 FNR 28, the contract provided for notice of 1 month, the

court held that the employer could not terminate the contract on the

basis of a 30 days notice.

•

Note that one month’s notice is different from 30 days notice in law.

•

 If a one month’s notice is served on a day other than the first day of

the month it will be ineffective unless it extend to cover the end of

the following month (see Oyekoya v. GB Ollivant (nig) Ltd (1969) 1 All

NLR 80).

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

A Contract Of Employment terminates when notice is expired or where

payment is made or accepted in lieu - 

B

en Chukwuma v Shell

(1993) 4

NWLR (pt 289) 512

•

Withdrawal of Notice is Permitted. See 

Brindle v HW Smith

 (1973) 3 All

ER 130- notice does not become effective until the day of its expiration

or when the employee stops coming to work. It could be withdrawn

before it expires provided it has not been accepted by the other party.

•

Notice is not required to be accepted by the other party in order to be

valid - 

Resignation need not be formally accepted to be valid .

See

Yesufu v Gov of Edo State

(2001) 26 WRN 121,133

Notice of Termination

•

In the absence of any stipulation in the contract as to the length of

the notice, section 11(2) LA provides for the following length of time:

•

(a) one day, where the contract has continued for a period of three

months or less;

•

 (b) one week, where the contract has continued for more than three

months but less than two years;

•

 (c) two weeks, where the contract has continued for a period of two

years but less than five years; and

•

 (d) one month, where the contract has continued for five years or

more.

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

The Act requires that any notice that is for a  period of one week or

more shall be in writing and the period of notice excludes the day on

which the notice is given (section 11 (2) & (3) LA).

•

 The contract of employment can or usually also provides that

payment can be made in lieu of notice (section 11(6) LA). Where this

is done, the contract is terminated once the payment has been made.

•

Once notice has been given, some have postulated that it may not be

withdrawn without the consent of the other party. However note that

as stated earlier, a notice of resignation or retirement need not be

accepted by the employer otherwise to insist on this requirement

would amount to forced labour

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

Whatever may be the mode of termination of employment, the

proper procedure must be followed and must also be exercised by the

proper person vested with this right/power by the contract or law.

•

Where the length of notice for termination of a contract of service

was not predetermined by the parties, the common law rule applies.

That rule is that the court will presume that a contract of service is to

terminate by reasonable notice given by either party.

N

o

t

i

c

e

o

f

T

e

r

m

i

n

a

t

i

o

n

•

What amounts to reasonable notice will depend on

a.

The intention of the parties as revealed by the terms of the

contract;

b.

The nature of the contract

c.

The status of the employee in the establishment.

•

The court could also have recourse to the custom of the trade to

determine what is reasonable notice.

•

Thus, the higher the position held by the employee, the larger his

salary, the longer will be the notice required to put his contract to an

end (see in S.S.Co Ltd v. Afropak Nig Ltd (2008) 18 NWLR [1118] 77)

V

a

l

i

d

T

e

r

m

i

n

a

t

i

o

n

•

Termination must be lawful:

•

It must be for a 

reason

 stated in COE

•

Proper notice

 must be given

•

The 

agreed procedure

 of termination must be employed

•

The power to terminate must be exercised appropriately. See 

Hart v Gov Rivers

State

 (1976) 11 SC 211

 – the governor assumed the power vested in the civil service

commission and the SC declared the action of dismissal as invalid.

•

Where no method is agreed, a reasonable method should be adopted

Article 4, I

nternational 

L

abour 

O

rganisation(ILO)

 TOE Convention 1982 -

•

the employment of a worker shall not be terminated unless there is a valid reason

connected with capacity, conduct or based on operational requirement of the service

34

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

Despite the requirement for a notice before termination of an

employment, either of the parties still has the right to terminate the

contract without notice by reason of such conduct by the other party

that would enable him to treat the contract as repudiated (S. 11(5)

LA).

•

Dismissal refers to discharge from service or office.

•

Summary dismissal refers to a termination of the contract of

employment by the employer without notice and it usually takes

immediate effect.

•

Dismissal from employment carries a stigma with it in and the worker

is deprived of his benefits unlike retirement.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

An employer has a right to summarily dismiss a worker for gross

misconduct which includes willful disobedience to lawful and

reasonable orders, neglect and conduct incompatible with the

master’s business or worker’s duties.

•

This right is exercisable whether the contract is for a fixed term or not

and is viewed to be implied in the contract of employment. It can also

be viewed as a power to rescind the contract upon a serious

fundamental breach by the worker which goes to the root of the

contract.

•

Such a worker therefore loses his entitlement to notice or payment in

lieu of notice by his gross misconduct.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

A master has full powers to terminate the employment of his servant

at any time, for any reason or indeed for no reason at all provided the

termination follows the procedure spelt out in the contract of service;

otherwise the master will be liable in damages for the breach of

contract.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

Gross misconduct is a conduct of a grave and weighty character as to

undermine the confidence which should exist between the employee

and his employer or working against the deep interest of the

employer (see U.B.N Plc v. Soares (2012) 11 NWLR (pt 1312) 550)

•

Misconduct is viewed seriously and punished harshly.

•

Any act outside the scope of any employee’s duties in his employer’s

establishment which is prejudicial to the latter’s interest is willful

misconduct.

U

.

B

.

N

P

l

c

v

.

S

o

a

r

e

s

(

2

0

1

2

)

1

1

N

W

L

R

(

p

t

1

3

1

2

)

5

5

0

•

The respondent led other staff of the appellant in a strike action

contrary to his contract of employment. The respondent and others

involved in the strike action where consequently dismissed. All other

staff involved in the strike action later wrote letters of apology on the

basis of which the appellant allowed them to resign their

appointments thereby entitling them to gratuity and pension. The

respondent failed to write an apology and rather sued for wrongful

dismissal.

U

.

B

.

N

P

l

c

v

.

S

o

a

r

e

s

(

2

0

1

2

)

1

1

N

W

L

R

(

p

t

1

3

1

2

)

5

5

0

•

The trial court found in favour of the respondent but this decision was

upturned at the court of appeal.  The court of appeal held that:

•

Willful disobedience of a lawful and reasonable order of an employer

by an employee is a definite act of misconduct, which at common law,

attracts the penalty of summary dismissal, because such willful

disobedience is a reflection of a total disregard of an essential

condition of a contract of service, namely, that the servant must obey

a proper, responsible and lawful order of the master, in default of

which their contractual relationship cannot be expected to continue.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

However, the employer who acquiesces or has waived this right

cannot seek to exercise same right later.

•

Ademola CJN stated in 

Electricity Corporation of Nigeria v. George

Micol

 (1969) NMLR 265, 269 that:

•

 ‘it is settled law that if a master did not complain and appeared to be

satisfied with a servant’s conduct, that complaint cannot be a ground

for dismissal on a subsequent occasion’.

•

Before the employer’s act can amount to  condonation, he must have

known about the misconduct and done nothing about it.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

An employer must give reasons for summarily dismissing a worker.

•

In 

Nunnink v. Costain Blansevoort Dredging Ltd 

(1960) LLR 90, the

court held that where an employer dismissed a worker for

incompetence, the onus was on the employer to prove the

incompetence of the worker.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

The exercise of the power of summary dismissal is also subject to the

principles of natural justice (

audi alterem partem

 and 

nemo judat in

causa sua

).

•

This is particularly so for where the employment is one with statutory

flavour or the procedure for summary  dismissal is stipulated in the

contract of employment.

•

It also applies where the employee is to be dismissed for gross

misconduct bordering on criminality

•

The  employee must be tried by an independent tribunal and also

given the opportunity to defend himself.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

The worker must know the allegations against him and the supporting

evidence and thereafter be allowed to defend himself.

•

Even where a preliminary inquiry was made by a board, the report of

such a board alone cannot be the basis of a summary dismissal in the

absence of the worker having an opportunity to defend himself (see

A.I Wilson v. AG of Bendel State & Ors

 (1985) 2 NWLR (pt 4) 572).

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

b

y

S

u

m

m

a

r

y

D

i

s

m

i

s

s

a

l

•

Note that mere participation in the proceedings of an inquiry or

giving evidence before it does not necessarily constitute fair hearing

as required by section 36 of the constitution.

•

 Oputa JSC stated in 

Garba & Ors v. University of Maiduguri 

(1986) 1

NWLR (pt 18) 550 that ‘

•

the courts have always drawn the vital difference and distinction

between hearing a man as a witness in an administrative inquiry and

hearing him in defence of his good name, his integrity or his conduct’.

Where the worker is not given fair hearing, the court will set aside the

dismissal.

M

o

t

i

v

e

f

o

r

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

•

The law does not consider the motive behind the termination of

employment; it only considers whether the termination was

wrongful or not (

i.e whether due process was followed)

•

In 

Nfor v. Ashaka Cement Co. Ltd 

(1994) 1 NWLR (pt319) 222, the

plaintiff was paid 3 months salary in lieu of notice at the time of

termination of her employment as stipulated under his coe. He sued

for a declaration and damages. The court held that he was not

entitled to the reliefs sought and stated that once a contract of

employment is legally terminated, motive is irrelevant in common law

contract of employment.

S

u

s

p

e

n

s

i

o

n

o

f

C

o

n

t

r

a

c

t

o

f

E

m

p

l

o

y

m

e

n

t

•

This is the state of affairs where a contract of employment is still in

force but there is neither work being done in pursuance of it nor

remuneration being paid under the agreement.

•

It is a temporary deprivation, cessation or stoppage of the privileges

and rights of an employee.

•

Suspension of the employee can take place as a disciplinary measure

against an erring employee

•

It can also occur in order for the employer to decide or investigate

allegations  of misconduct made against an employee.

S

u

s

p

e

n

s

i

o

n

o

f

C

o

n

t

r

a

c

t

o

f

E

m

p

l

o

y

m

e

n

t

•

Suspension is not the same as dismissal or termination of

employment; it is only putting the contract of employment on hold

•

Some employees may be put on full or half salaries during this period

and some may not be paid at all.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

w

i

t

h

S

t

a

t

u

t

o

r

y

F

l

a

v

o

u

r

•

Where a worker is employed pursuant to a statute or regulation, then

such an employment is deemed to have a statutory flavor.

•

This type of employment is regulated by statutes and not just

common law rules that govern the master/servant relationship.

•

An employee with such an employment can only be disciplined and

the appointment terminated according to the procedure provided in

the statutes.

•

Therefore, employment with statutory flavor enjoys a special status

higher than the ordinary master/ servant relationship.

T

e

r

m

i

n

a

t

i

o

n

o

f

E

m

p

l

o

y

m

e

n

t

w

i

t

h

S

t

a

t

u

t

o

r

y

F

l

a

v

o

u

r

•

Where the laid down procedure is not followed such act of discipline

or determination is null and void and of no effect.

•

Generally, employment in the private sector is that of a master and

servant while in the public/civil service it is usually with statutory

flavor.

A

l

h

a

s

s

a

n

v

.

A

B

U

Z

a

r

i

a

(

2

0

1

1

)

1

1

N

W

L

R

[

p

t

1

2

5

9

]

4

1

7

,

4

5

4

•

Where the conditions for the appointment or determination of a

contract of service are governed by the provisions of a statute such

that a valid determination or appointment is predicated on satisfying

statutory provisions, such contract is said to enjoy statutory

protection.

•

 The contract is not determinable by parties but only by statutory

preconditions governing its determination

A

l

h

a

s

s

a

n

v

.

A

B

U

Z

a

r

i

a

(

2

0

1

1

)

1

1

N

W

L

R

[

p

t

1

2

5

9

]

4

1

7

,

4

5

4

•

However, the fact that an employer is a creation of statute or

statutory body does not, without more, raise the legal status of its

employees over and above the normal common law master and

servant relationship.

•

The facts that an employee is a Federal Public servant and the

employer is created by statute do not on their own elevate the

employee’s contract of employment to a contract with statutory

flavor.

Alhassan v. ABU Zaria (2011) 11 NWLR [pt

1259] 417, 454

•

Also, the fact that a person is pensionable federal public servant does

not mean that his contract of employment is protected by statute.

•

Whether a contract of employment is governed by statute or not

depends on the interpretation of the contractual document or the

applicable statute

Alhassan v. ABU Zaria (2011) 11 NWLR [pt

1259] 417, 454

•

the appellant was a senior staff of the 1

st

 respondent. He was initially

employed as an administrative officer and subsequently posted to the

security office and later as college secretary of the college of

agriculture.

•

While in the last position, in disobedience to the college’s instruction,

he contested for chairmanship of SSANU and lost. He was therefore

given a query and letter of last and strong warning.

•

His appointment was eventually terminated and he was paid 3

month’s salary in lieu of notice.

Alhassan v. ABU Zaria (2011) 11 NWLR [pt

1259] 417

•

He contested this termination  at the court on the ground that his

appointment was wrongful and sought order for reinstatement with

payment of all his accrued salaries and emoluments in arrears.

•

Though he lost at the trial court, on appeal, the court of appeal after

considering certain provisions of the law and his contract of

employment concluded that statutory provisions where incorporated

in the appellant’s contract of employment.

The case showcases the following:

•

Where the employee is still on probation, no procedure need to be

followed provided there is satisfaction that there is good cause for the

termination. However once the appointment is confirmed, the

procedure for termination must be followed otherwise the

termination shall be invalid.

•

Where the officer is guilty of misconduct or a breach of regulation,

then a 

lis inter partes 

arises and there arises also a need for a hearing

before deciding his guilt. There is a case for an administrative body

acting judicially. The principles of fair hearing binding on judicial

bodies are therefore imported automatically.

The case showcases the following:

•

In public employment, where the employee is qualified by

appointment for a permanent and pensionable position and has

actually satisfied the conditions, there should be, in the interest of

justice, a presumption that the employment cannot be terminated by

mere notice but should be terminated only for misconduct or other

specified reason

The case showcases the following:

•

In a contract with statutory flavour, unless the contract of employment is

properly determined in the manner envisaged by the contract of

employment, an order of specific performance or re-instatement will

normally be made by the court.

•

Once a finding is made by a trial court that an employment has statutory

flavor, and the termination was wrongfully made and void, the only

consequential order that can follow such finding is the re-instatemnt of the

employee.

•

The inference is that the employment is deemed to be continuous and it

will be as if there had never been a termination. An order of reinstatement

is therefore the only logical order to follow such findings.

T

h

e

c

a

s

e

s

h

o

w

c

a

s

e

s

t

h

e

f

o

l

l

o

w

i

n

g

:

•

An employer in this instance has no right to terminate the

appointment at will because  the employee does not hold his

appointment at the pleasure of such employer. Unilateral termination

of employment with statutory flavor does not terminate a contract of

employment.

•

 However if the employee accepts the unilateral repudiation of the

contract this can terminate the contract. But where he does not

accept it whether expressly or by his conduct, there could be no valid

repudiation. The repudiation by one party alone does not terminate

such a contract, it takes two to end it.

T

h

e

c

a

s

e

s

h

o

w

c

a

s

e

s

t

h

e

f

o

l

l

o

w

i

n

g

:

•

Under the common law master/servant relationship, where an employee

accepts salary in lieu of notice of termination of his employment, he may

not be heard to complain later that his contract was not validly and

properly determined because his conduct could render the determination

mutual.

•

However acceptance by an employee under statute of salary in lieu of

notice does not amount to acceptance of the invalid and void retirement.

•

Also application for and collection of salary in lieu of notice does not

render valid the invalid and void act o f unlawful and wrongful retirement.

As an act which is void 

ab initio

, it cannot be validated by subsequent acts

even if valid.

•

 Such retirement remains void notwithstanding the acceptance of the

payment of salary in lieu of notice.

G

o

v

.

E

k

i

t

i

S

t

a

t

e

v

.

A

k

i

n

y

e

m

i

(

2

0

1

1

)

1

7

N

W

L

R

[

p

t

1

2

7

6

]

3

7

3

•

the appointment of the chairman and members of the Ekiti state local

government service commission (the respondents) was terminated by the

appellants  before the expiration of the their tenure.

•

They were appointed pursuant to the local government services

commission law. Without regards to the procedure laid down under the

law, they were dismissed by a radio announcement.

•

The appellants argued that the respondents were appointed at the

pleasure of the appellant.

•

The trial court disagreed with this and held that the respondent's

appointment had a statutory flavor and they were therefore entitled to

hold office for 3 years and can only be terminated in accordance to the

provision of the law.

G

o

v

.

E

k

i

t

i

S

t

a

t

e

v

.

A

k

i

n

y

e

m

i

(

2

0

1

1

)

1

7

N

W

L

R

[

p

t

1

2

7

6

]

3

7

3

•

Upon appeal, the court of appeal dismissed the appeal.

•

The court held that the 

ratio decidendi of Olaniyan v. University of

Lagos 

(1985) 2 NWLR [pt 9] 599 ( a locus classicus on this case) is that

where there are clear statutory provisions governing the relationship

of master and servant, the only way to terminate the contract of

service of the servant is by complying with the procedure laid down in

the statutory provision.

G

o

v

.

E

k

i

t

i

S

t

a

t

e

v

.

A

k

i

n

y

e

m

i

(

2

0

1

1

)

1

7

N

W

L

R

[

p

t

1

2

7

6

]

3

7

3

•

It further distinguished between a contract of employment in the private

sector and that of the state or government

•

In the private sector, the power to employ originates from common law,

while the power of the state or government to employ is regulated or

founded on statute.

•

The legal relationship of the rights and duties between the employer and

employee are imposed by the public law and not by mere agreement of the

parties.

•

 This relationship is therefore not like ordinary contract of service between

a master and a servant. It goes beyond that.  The employment, promotion,

discipline or removal of a public employee is therefore regulated by

statutes and no public office, organ or body or person exercises his

personal powers.

G

o

v

.

E

k

i

t

i

S

t

a

t

e

v

.

A

k

i

n

y

e

m

i

(

2

0

1

1

)

1

7

N

W

L

R

[

p

t

1

2

7

6

]

3

7

3

•

Fair hearing in this instance means that the employee should

1.

know the allegation against him and the evidence in support of this,

2.

be given the opportunity to defend himself,

3.

be present at the investigation by the committee at all times,

4.

 be given the opportunity to listen to and cross-examine the

witnesses testifying against him,

5.

present his own evidence or witnesses.

W

r

o

n

g

f

u

l

T

e

r

m

i

n

a

t

i

o

n

o

f

C

o

n

t

r

a

c

t

o

f

E

m

p

l

o

y

m

e

n

t

•

This occurs when the contract is brought to an end in breach of terms

of the agreement or some other unlawful means.

•

 Where a worker’s employment is terminated, he is generally entitled

to damages. But where such wrongful termination amounts to a

dismissal, he may also be entitled to a reinstatement which is

basically returning him to 

his status quo ante

 especially where the

employment enjoys statutory protection.

W

r

o

n

g

f

u

l

T

e

r

m

i

n

a

t

i

o

n

o

f

C

o

n

t

r

a

c

t

o

f

E

m

p

l

o

y

m

e

n

t

•

In master/servant relationship, reinstatement is rarely granted since

the court would not like to force an unwilling master to continue to

work with a servant (UBN v. Chinyere (2010) 10 NWLR [pt 1203] 453,

at 475).

•

The onus of proving wrongful termination of employment however

lies on the employee. He has to show the court the terms of his

employment and the ways and manners these were breached.

R

e

m

e

d

i

e

s

f

o

r

W

r

o

n

g

f

u

l

T

e

r

m

i

n

a

t

i

o

n

o

f

C

o

n

t

r

a

c

t

o

f

E

m

p

l

o

y

m

e

n

t

A.

Remedies provided by the contract of employment

:

•

the contract of employment can specify the remedies accruing to each of

the parties where there is a breach of contract. Such specified remedies

would be enforced by the court.

•

Parties are free to stipulate remedies so long as they are not illegal or

contrary to public policy.

•

The contract can also specify the form of remedy such as payment of

money as compensation for breach.

•

It can also stipulate the procedure for obtaining such remedies such as

submitting the dispute to an arbitration. The court will enforce such a

clause  and will not assume jurisdiction unless the parties had earlier

gone through arbitration.

B

.

R

e

m

e

d

i

e

s

p

r

o

v

i

d

e

d

b

y

C

o

m

m

o

n

L

a

w

a

n

d

E

q

u

i

t

y

•

these are remedies that would be available in any breach of contract

except that the uniqueness of employment contracts are taken into

consideration.

1

.

R

e

s

c

i

s

s

i

o

n

•

a contract may be avoided where either of the party has repudiated the

contract or on the grounds of fraud.

•

Mere repudiation of a contract will not put an end to the contract unless

there other party accepts it. Once it is accepted, the contract is terminated

and the other party can rescind the contract

•

Dr. Adesegun Banjo v. Uni of Ibadan 

(1979) 2 OY SHC 248 where the

plaintiff accepted the repudiation of the defendant, the court held that the

contract had been terminated and there was no longer a foundation upon

which the plaintiff could rest the continuance of the contract.

•

Section 82(1)(d) LA also empowers the court to rescind a contract of

employment ‘upon such terms as to apportionment of wages or other sum

due …’ as it deems fit.

2

.

A

p

p

o

r

t

i

o

n

m

e

n

t

o

f

W

a

g

e

s

•

where a contract of employment is terminated by operation of law

(such as liquidation of a company, frustration of the contract) the

worker is still entitled to his wages according to the terms of the

contract and where not specified, he is entitled to a reasonable

remuneration on a 

quantum meruit 

basis.

•

 See section 81 (1) (a) LA.

3

.

D

e

c

l

a

r

a

t

i

o

n

o

f

R

i

g

h

t

s

•

an aggrieved party can apply to the court to make a declaration in respect

of their rights under a contract of employment.

•

A declaratory proceeding essentially determines the legal rights of the

party seeking it.

•

It is suitable where the aggrieved party is desirous of challenging the

validity of the decisions or action of the other party with a view to

declaring it null and void

•

It is ideal where some condition precedent necessary for effective exercise

of the power of dismissal or termination of employment are not complied

with; therefore effective in curbing abuse of power.

•

Also used where a person acting in dual capacity acted in one instead of

the other.

G

e

o

r

g

e

H

u

t

c

h

f

u

l

v

.

H

a

m

i

l

t

o

n

B

i

n

e

y

&

A

n

o

r

(

1

9

7

1

)

1

A

l

l

N

L

R

1

6

8

•

the 1st defendant was acting both as the chairman and governing

director of the 2

nd

 defendant company. The court held that the

dismissal of the plaintiff was 

ultra vires

 even though the governing

director had the powers to remove any director howsoever

appointed, the letter of removal had been signed by the 1

st

 defendant

as the managing director which power the managing director does

not possess.

3

.

D

e

c

l

a

r

a

t

i

o

n

o

f

R

i

g

h

t

s

•

Where termination of a worker’s employment is in breach of the right of

fair hearing, or disregard for principles of natural justice, the court will

declare such as invalid.

•

Fair hearing is also mandated by section 262(2) of the Companies and

Allied Matters Act in the removal of a director of a company.

•

Note that being a declaratory judgment, it may not be easily enforceable as

such especially in the Nigerian society where many do not have regard for

the rule of law.

•

 It can however be enforced through an order of mandamus or committal

to contempt.

•

Usually, other remedies such as an injunction are sought together with a

declaratory judgment in order to give it effect.

4

.

I

n

j

u

n

c

t

i

o

n

•

this is an order of the court restraining a party from doing an act or

compelling a party to do an act.

•

The court is reluctant to compel performance of a contract of service either

by a worker or employer unless there has been a breach of some law.

•

Karibi Whyte in 

Olaniyan & Ors v. Uni of Lagos 

(1985) 2 NWLR (pt 9) 599,

stated as follows:

•

‘it cannot now be disputed that there are contracts of service which are

not of personal service and in respect of which sentimental reasons of

personal relationship do not apply. For instance, the contract of service in

the civil service and statutory corporations, though creating a relationship

of master and servant, the personal relations in respect of domestic

servants contemplated at common law does not exist’.

4

.

I

n

j

u

n

c

t

i

o

n

•

Other exceptions include as stated in 

Adebayo Ojo v. Lister Motors

(Nig) Ltd

 (1980) OYSHC, 1:

•

‘In some cases, a servant who has been wrongfully dismissed may get

an order of specific performance i.e an order reinstating him or an

order restraining the master from dismissing the servant. Instances of

such occasions are where the contract is for life, or where there is no

power to terminate the contract by either side due to statutory or

contractual terms excluding the power of termination’.

4

.

I

n

j

u

n

c

t

i

o

n

•

The courts are however not so reluctant where the order is to restrain

one of the parties from committing a breach of contract or the law.

•

 Lumley v. Wagner 

(1843) 60 All ER 368-an injunction was granted

restraining an opera singer from singing in another theatre in breach

of her COE

•

Udeaja v. Rex Jim Lawson

 (1966-67) 10 ENLR 252 –injunction

restraining the defendant from committing a breach of his contract of

service

•

Warner Brothers Pictures Inc v. Nelson

 (1937)1 KB 209 – defendant

actress was restrained from acting in a film by another company in

violation of her contract with the plaintiff.

I

n

j

u

n

c

t

i

o

n

•

The court is likely to grant an injunctive relief where:

 (i) the relationship between the employer and worker is impersonal

and does not involve personal confidence,

 (ii) the nature of the employment or consequences and circumstances

of a unilateral termination will be inequitable; and

(iii) the purported termination is without regard to statutory procedure

or in breach of rules of natural justice.

5

.

D

a

m

a

g

e

s

•

refers to monetary compensation for loss or injury suffered.

•

Damages is a very common remedy where there has been a wrongful

termination of a contract of employment.

•

Note that damages are not expected to be a gold mine for the injured party

but are rather intended to provide reasonable compensation for the loss or

injury suffered.

•

Damages may be assessed based on the amount the worker would have

earned including any benefits or entitlements had the contract lasted its

full term or during the period of notice(see 

I.H.A.B.U.H.M.B v. Anyip

 (2011)

12 NWLR (pt 1260) 1 at p.20).

•

It can also take the age, opportunity of obtaining another job and other

fringe benefits into consideration

U

B

N

v

.

C

h

i

n

y

e

r

e

(

2

0

1

0

)

1

0

N

W

L

R

[

1

2

0

3

]

4

5

3

•

The Court of Appeal held that where the termination of a contract of

service is wrongful, the measure of damages the plaintiff would be

entitled to would be salaries for the length of time  during which

notice of the termination would have been given in accordance with

the contract of employment. The plaintiff would also be paid other

legitimate entitlements due to him at the time the employment was

brought to an end.

6

.

S

p

e

c

i

f

i

c

P

e

r

f

o

r

m

a

n

c

e

•

such an order is hardly made in labour matters since the court is

reluctant to force an unwilling employer or worker to work together.

•

An order of specific performance may be granted on the same

conditions as they are granted under law of contract which are

•

(i) the plaintiff must show that a contract exists and that the plaintiff

performed his own part of the contract

•

(ii)where the subject matter of the contract no longer exists (eg

where the post has already been filled) the court is not likely to grant

the order

6

.

S

p

e

c

i

f

i

c

P

e

r

f

o

r

m

a

n

c

e

•

(iii) the court is inclined to grant it where the condition precedents

have been fulfilled and the party seeking it has fulfilled or is ready to

fulfill his part of the contract

•

(iv) the order will be made only where it will not cause injustice to a

third party

•

(v) the court is likely to make the order where damages is an

inadequate relief

•

(vi) the court will not grant it where it will be difficult or impossible to

enforce the order.

S

p

e

c

i

f

i

c

p

e

r

f

o

r

m

a

n

c

e

•

Specific performance is an equitable remedy and it is granted at the

discretion of the court where damages would not be sufficient.

•

Essentially, it refers to the reinstatement of the employee in the

employer’s service

•

The court hardly makes such an order  in common law employment

since it would amount to forcing two unwilling parties to work

together

•

Such orders are however made with respect to employment with

statutory flavour. See 

Olaniyan & Ors v. University of Lagos 

(1985) 2

NWLR (pt 9) 599; 

Okocha v. Civil Service Commission, Edo State 

(2004)

3 NWLR (pt 861) 494

7

.

P

r

e

r

o

g

a

t

i

v

e

R

e

m

e

d

i

e

s

•

These are prohibition, certiorari and mandamus.

•

Prohibition is an order of the court that restrains a party from taking a

course of action which may adversely affect the vital interests of

another.

•

An order of certiorari requires the proceedings of a body to be

brought before the High Court in order to determine whether they

are lawful and if not they are quashed.

•

 An order of mandamus compels that a specific act must be done by

the body or person who has a public duty to do it against whom a

declaratory judgment might have been obtained.

C

.

S

t

a

t

u

t

o

r

y

R

e

m

e

d

i

e

s

•

These are specific remedies provided by certain statutes.

•

For instance right to pension under the Pensions Reforms Act,

•

right of an employee to compensation under the Employees

Compensation Act,

•

right of a worker to be paid his wages during a lock out under the

Trade Disputes act,

•

 right of a worker dismissed due to redundancy to be paid

compensation under the Labour Act.