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IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA IN THE LAGOS JUDICIAL DIVISION HOLDEN AT LAGOS BEFORE HIS LORDSHIP: HON. JUSTICE O.A. OBASEKI-OSAGHAE DATE: September 21, 2015 SUIT NO. NICN/LA/236/2014 BETWEEN MRS. CYNTHIA UBAH - CLAIMANT AND FRIGOGLASS INDUSTRIES (NIG) LTD - DEFENDANT REPRESENTATION C.C. Amasike for claimant. Olawunmi Alajiki for defendant. JUDGMENT The claimant filed this complaint against the defendant on the 27th May 2014 claiming the following: 1. The sum of N1,844,679.16 (One Million, Eight Hundred and Forty Four Thousand, Six Hundred and Seventy Nine Naira Sixteen Kobo) as payment for the claimant’s unpaid salary in October, 2013, leave allowance, gratuity and other emoluments. PARTICULARS OF ENTITLEMENT a) Claimant’s last salary = N125,577.583 3 Months’ salary in lieu of notice x N125,577.583 = N376,732.749 b) Leave allowance (2013) = N86,593 GRATUITY c) Gratuity is calculated by multiplying the last salary by the number of years of service (i.e. 11 years) = N1,381,353.41 (N125,577.583 x 11 yrs.) Total Entitlement: N1,844,679.16 2. The sum of N1,000,000.00 (One Million Naira) as general damages for malicious and unlawful dismissal of the claimant from employment. 3. An order directing the defendant to substitute the Letter of Dismissal from Employment issued to the claimant to Termination of Employment because it may have negative effect on the claimant seeking for another job because of obnoxious misconception that follows the term Dismissal from Employment. 4. Cost of this action. Accompanying the complaint is the statement of facts, witness statement on oath and copies of documents to be relied upon. The defendant entered appearance and filed its statement of defence, witness statement on oath, copies of documents on July 8, 2014. The claimant filed a reply on the 18th August 2014. The matter went to trial. The claimant’s case on the pleadings is that the defendant employed her as a Secretary on 12th August 2002 and her employment confirmed by letter dated 9th May 2003. She pleaded that sometime in 2005 she was promoted to Senior Secretary and no written document in this regard was given to her but her salary changed reflecting the promotion in a letter dated 18th March 2005. The claimant averred that she was verbally given the responsibility of processing foreign and local purchase orders and also monitoring purchase orders from Ugheli (Delta State) and Agbara (Ogun State) plants from Head Office; and that there was no written document from the defendant assigning these responsibilities to her. The claimant pleaded that she was promoted on 27th April 2007 to Purchasing Officer in charge of raw materials and in January 2008 was transferred to the Logistic Department to handle local purchase orders for staff requisitions and cullet (broken bottles) one of the major raw materials of the defendant. That in May 2009, she was promoted again. The claimant averred that as Purchasing Officer, she was not given a written job description but her duties were orally communicated to her and included sourcing cullet, monitoring, evacuation and delivery of cullet to factories, sourcing of transporters/haulers, registration of transporters, issuing and signing of contract letters. The claimant pleaded that the defendant placed an advert for Haulers and Mayito Resources Limited, a company belonging to her husband applied and was interviewed. The claimant averred that in 2010, Mayito Resources Ltd was registered with the defendant and was issued an appointment letter dated 18th March, 2010 and began haulage for the defendant. That in 2011, the defendant represented by Mr. Remi John had series of meetings with Mayito Resources regarding procurement of more trucks and in this regard the contract was extended to 2015. The claimant pleaded that in 2012 Mr. Ioannis was made the Head of her Department and on his commencement of duty, he told her that he was informed that the Managing Director of Mayito Resources Ltd was her husband and an investigation in to the activities of the company commenced. She pleaded that the company was suspended from further activities in the defendant pending the outcome of the investigation but that while the investigation was still on going was asked to resume with its job. The claimant averred that during the investigation she was interrogated. The claimant pleaded that in September 2013 Mr. Dimitrios became the Department Head and during her introduction and presentation of her job description, she informed him of her relationship with the Managing Director of Mayito Resources Ltd. The claimant pleaded that a query dated 4th October, 2013 from Mr. Dimitrios was issued to her questioning her authority to extend Mayito Resources Limited contract with the defendant and she responded to the query. She pleaded that as it was part of her duties to act in that capacity and being conversant with the problems the defendant had encountered with haulage of cullet, she extended Mayito’s Resources Ltd contract through a letter dated 13th September 2013. That since 2010 when the duty was assigned to her, she had been issuing and signing such letters without any queries, complaints or orders stopping her. The claimant pleaded that she was suspended indefinitely by the defendant through a letter dated 9th October 2013 and was later dismissed by a letter dated 30th October 2013. That she appealed the defendant’s decision to dismiss her through her letter dated 2nd December 2013 to the Managing Director in accordance with the defendant’s Employee Handbook. The claimant averred that Mayito Resources Ltd was not in competition with the defendant and that she worked with the defendant for eleven years and had received a long service award in 2012. She pleaded that she was unlawfully dismissed by the defendant and that her solicitors wrote the defendant demanding her re-instatement and withdrawal of the dismissal letter. The claimant gave evidence in support of her case. Her evidence in chief was by witness statement on oath which she adopted. It was in terms of the pleadings. Under cross examination, the claimant told the court that she was the officer in charge of interviewing contractors for cullet and that this duty was assigned to her by the logistics Director. The claimant told the court that she registered Mayito Resources Ltd as a contractor to the defendant and that her husband is the owner of Mayito Resources Ltd. She admitted that she is a director and shareholder in the company and that she has a financial interest in the company. The claimant said she disclosed her relationship with Mayito Resources Ltd but admitted that there is no written document of the disclosure. She told the court that she is aware the defendant has a business code of conduct and that no employee’s spouse is allowed to transact business with the defendant. There was no re-examination and the claimant closed her case. The case of the defendant on the pleadings is that the claimant was its former employee and as a well-organized and reputable corporate organization, it documents all activities relating to its employees including promotions, salary structure and increment. That the review of salary of employees is a yearly routine exercise and that increment in salary does not in all cases confer promotion on any employee. The defendant pleaded that it is not its practice to effect verbal promotions and that the claimant was never verbally instructed to perform functions beyond her job description neither was she authorized to award contracts or extend contracts using her discretion. The defendant averred that employees have a reporting line by which they take instructions and report on actions taken and no employee is authorized to act independently and without authority. The defendant pleaded that the claimant breached the company’s Code of Business Conduct in the registration of Mayito Resources Limited as a vendor rendering haulage services to it. It averred that Mayito Resources Limited is a family business involving the claimant, her husband and their two children and as such, the involvement of the company with the defendant is a breach of its Code of Business Conduct. The defendant averred that contrary to the declaration of conflict of interest signed by the claimant on 5/08/2005, the claimant did not inform the defendant of her interest in Mayito Resources Limited in addition to the interest of her husband and children at the time Mayito Resources Limited was registered. That despite acknowledging receipt of the defendant’s Code of Business Conduct on 26/05/2010, the claimant still concealed the fact of her interest and that of her husband and children in the company against the provisions of the Code of Business Conduct relating to conflict of interest. The defendant pleaded that none of its officers were aware of the claimant’s interest in Mayito Resources Limited nor the interest of her husband and children in the said company as she did not give any official declaration or communication of her interest in Mayito Resources Limited or her relationship with the other directors and shareholders. The defendant pleaded that Mayito Resources Limited did not officially communicate to it that it had any challenges concerning the services it rendered and did not receive any information or proposal from any bank nor Mayito Resources Limited; that the claimant acted on her own and without authority from the defendant. The defendant averred that the award of contracts or extension of contracts were not the responsibility or part of the duties of the claimant at any point in time. The power, authority and responsibility for the award of contracts or extension of same was at all times vested in the Head of Supply Chain department, who at the material time was Mr. Giasemis Dimitrios who did not at any time authorize the claimant to award or extend any contracts. The defendant pleaded that when the Supply Chain Manager saw the letter dated 13th September, 2013 extending the contract of Mayito Resources Limited which was not discussed with him or brought to his attention he issued a query to the claimant. The defendant pleaded that the claimant admitted in her reply that she acted on her own and without any authority. That it acted in accordance with its Employee Handbook and the Code of Business Conduct in handling the claimant’s dismissal from its employment and that the claimant is not entitled to three (3) months’ notice or salary in lieu. The defendant called one witness Vincent Nwaokwu (DW) its Public affairs Manager. His evidence in chief was by witness statement on oath which he adopted. Under cross-examination DW told the court that the claimant performed duties she was not authorized to perform. He said that the claimant only had problems when Mr Dimitrios took over as Head of the Department and that the defendant did not loose money as a result of the accusation of conflict of interest. The defendant then closed its case. The parties were directed to file their final addresses. The defendant’s final address is dated 25th March 2015 and filed on 26th March 2015. The claimant’s final address is dated 11th may 2015 but filed on 12th May 2015. The defendant’s reply on point of law is dated 12th June 2015. Counsel adopted their respective addresses. Learned counsel to the defendant submitted the following issues for determination: 1. Whether from the facts and evidence adduced in this case, the claimant’s actions amount to gross misconduct; and 2. Whether or not the defendant has the power under the contract of employment to dismiss the claimant from its employment and whether it acted properly in doing so in this case. He submitted that both parties are bound by the specific and express provisions of the employment contract and must comply with same citing the Katto v C.B.N [1999] 6 NWLR, Pt. 607, 39; Strabag v Adeyefa [2001] 15 NWLR, Pt. 735, 1; Ifeta v Shell Pet. Dev. Co [2006] 7 MJSC, 121 at 133. He submitted that by the provisions of paragraph 5.1 of the defendant’s handbook, it may suspend, terminate or dismiss an employee for an infringement of any of the listed acts or omissions including “gross insubordination”. He referred to Nwobosi v ACB Ltd [1995] 6 NWLR (Pt. 404) 658, UBN Ltd v Ogboh [1995] 2 NWLR (Pt. 380), P.C.N. Uzondu v Union Bank of Nigeria Plc [2009] 5 NWLR (Pt. 1133) 1, Underwater Engineering Co. Ltd v Darusha Dubefon [1995] 6 SCNJ 55; Anselim Osakwe v Nigeria Paper Mill Ltd [1998] 7 SCNJ, 222, Mike Eze v Spring Bank Ltd [2012] 1 CLRN at 647 for the definition of gross misconduct. Counsel submitted that the evidence adduced shows that the claimant’s conduct qualifies as gross misconduct as it is contrary to the provisions of the defendant’s Code of Business Conduct and it undermines the integrity of the defendant. Counsel submitted that the defendant retains the power to declare any act or omission by an employee a misconduct relying on Olabode Adewunmi v Nigerian Eagle Flour Mills (supra) where it was held that gross misconduct is what an employer deems a certain conduct to be. That in exercising its right of dismissal, the claimant was issued a query and the defendant being unsatisfied with the response dismissed her from its employment. He submitted that giving a query and a response thereto satisfies the elementary requirements of fair hearing citing Mike Eze v Spring Bank Ltd [2012] 1 CLRN at 1. He then urged the court to dismiss the case with costs. Learned counsel to the claimant submitted the following issues for determination: 1. Whether the claimant has performed a duty which she was not authorized to perform vis-à-vis the action amounting to gross misconduct and conflict of interest. 2. Inasmuch as the defendant has the power to sack the claimant whether the defendant acted properly in dismissing the claimant. He submitted that the evidence adduced shows that of the duties performed by the claimant were implied from the conduct of the parties citing Trade Bank Plc v Dele Morenikeji (Nig) Ltd [2005] 6 NWLR (Pt. 921) 309 at 327 and that it will amount to injustice for a party to take advantage of his own wrong relying on Buswell V Goodwin [1971] 1 ALL.E.R Pg. 418 at 421, Adedeji v N.B.N LTD [1989] 1 NWLR Pt. 96, Pg. 212 at 226-227. He submitted that the claimant did not commit any of the acts listed in the handbook for which the punishment is summary dismissal citing Obazuaye v First Bank Of Nigeria Plc [2013] 38 NLLR (Pt. 116) 28 at Pg.78-79. He submitted that the defendant had condoned the claimant’s actions in writing letters and contracts and so is caught by the principle of waiver and condoning citing Jadcom Ltd. v Ogun Electricals [2004] 3 NWLR (Pt. 859) 153 at 172. Counsel submitted that it is the law that where the defendant decides to give reasons for dismissing an employee he has to prove the reason to the court citing S.D.P.C (Nig) Ltd v Olanrewaju [2002] 16 NWLR (Pt. 792) 38. He submitted that the defendant has failed to discharge the onus placed on it and the claimant is entitled to her claims. Replying on point of law, defence counsel submitted that the claimant’s counsel misapplied the law that a man should not be allowed to take advantage of his own wrong. That rather than support his case, the authority cited supports the case of the defendant as it is the claimant who seeks to take advantage of her own wrong in wilfully placing herself in a position of conflict with the defendant. He submitted that the case of Obazuaye v First Bank of Nigeria Plc [2013] 38 NLLR, Pt. 116, Pg. 28 cited by the claimant’s counsel does not support the claimant’s case and that facts admitted need no further proof citing Provost, LACOED v Edun [2004] 6 NWLR (Pt. 870) 476, Omoregbe v Lawani [1981] 3-4 SC, 108. He then urged the court to dismiss the claimant’s case. I have carefully considered all the processes filed, the documents in support, authorities and arguments canvassed by counsel in this matter. The issues for determination in this judgement are: (i) whether the defendant has established the reason for which it summarily dismissed the claimant; (ii) whether on the pleadings and evidence the claimant ought to be entitled to the reliefs sought. It is settled that the burden of proof of establishing the terms of the contract of service that provides for the rights and obligations of the parties is on the claimant. See Section 131(1) & (2) of the Evidence Act 2011, Idoniboye-Obe v NNPC [2003] 2 NWLR (Pt 805) 589 at 630. The claimant has put in evidence her letter of offer of appointment, letter of confirmation of appointment, employee handbook and other service documents. While an employer is not bound to give any reason for doing away with the services of its employee, where a reason is given the law imposes on him a duty to establish the reason to the satisfaction of the court. See Olatunbosin v NISER Council [1988] 1 NSCC 1025; [1988] 3 NWLR (Pt 80) 25. The claimant has alleged that she was unfairly dismissed. The letter of dismissal is reproduced as follows: Dear Mrs Ubah, NOTICE OF DISMISSAL We refer to the query dated 4th October 2013 issued to you and your reply thereto with respect to the subject matter therein. In order to conclude our investigations you were placed on suspension with effect from 9th October 2013. Upon a careful investigation and consideration of the fact, it is evident that: • You acted in a grossly inappropriate manner on an issue on which you have no authority to act. • You were not expressly or by implication authorized or delegated to act by the letter dated 13th September 2013. You had sought to extend the contract between the company and a vendor, Mayito Resources Limited and bind the company to such contract without instruction or authority from any Director or Head of the department saddled with such responsibilities. It is instructive to note that by your response to the query issued to you, you admitted that you did not receive the appropriate authority or delegation to act as you did in the instant case. This admission is conclusive and amount to a gross misconduct. This action is not only a contravention of the Company policy but also the Companies and Allied Matters Act with respect to acts to be performed by a Company. Our investigation also shows that you are a Director in Mayito Resources Limited. This amounts to conflict of interest and is contrary to the Company Code of Business Conduct, a copy of which you signed. In the circumstances, be informed that you are hereby dismissed from the employment of the Company with immediate effect. Please handover all Company properties in your care and possession to your immediate Supervisor immediately. Yours Faithfully, Frigoglass Industries (Nig) Ltd Tunji Fadipe HR Manager-Nigeria Having given the reason as gross misconduct, the onus is on the defendant to establish that the claimant committed gross misconduct. In establishing its justification for the dismissal of the claimant, the defendant has put in evidence its Code of Business Conduct, Mayito Resources Limited Statement of Share Capital (Form CAC 2) and Particulars of Directors (Form CAC 7 ) filed at the Corporate Affairs Commission. The Code of Business Conduct (exhibit D--) has a provision on conflict of interest is as follows: • A director or employee of Frigoglass Group cannot participate in any activity that could conflict with such person's responsibilities with the Company. • A conflict of interest arises when a Director’s or employee’s personal activities or financial interests can influence the person’s ability to act in the best interest of the Company. • A Director or employee must not knowingly conduct business on behalf of the Company with family members (meaning such Director’s or Employee’s spouse, any parent, child, brother, sister, grandparent, parent-in-law, brother-in-law, sister-in-law etc) or organization with which such family member is associated. • A Director or Employee cannot have financial interest or ownership in any business enterprise that (a) does or seeks to do business with Frigoglass Group as a supplier, customer or agent; (b) is our competitor. Clause 8.4 of the Employee Handbook (exhibit C15) provides that: “Employees should not abuse their position of trust in the organization….To avoid any action that could be interpreted as using their positions unfairly, all employees shall refrain from any private business, trade or employment other than that of Beta Industries Limited during official hours except with the permission of management”. Clause 10 of the Managerial Service Agreement (exhibit C2) signed by the claimant provides that “in case the employee shall be guilty of disobedience, misconduct or neglect….the Company may immediately and without notice put an end to and determine the AGREEMENT.” The claimant signed on behalf of the defendant a contract letter dated 18th March 2010 (exhibit C6) appointing Mayito Resources Limited as a Hauler for three years. This indicates that the contract would lapse on the 17th March 2013. On the 4th of October 2011, a year and six months into the contract, she signed another letter (exhibit C7) extending the contract of Mayito Resources Limited to March 2015. The evidence adduced shows that the claimant is a Director of Mayito Resources Limited and has been allotted 300,000 Shares. Her husband is a Director with 600,000 Shares allotted to him and her two children are Shareholders. I find that this company belongs to the claimant and her husband and it is a family business. The claimant under cross-examination admitted these facts and said she was aware that no employee’s spouse should transact business with the defendant. There is no evidence that she disclosed her interest in Mayito Resources Limited to the defendant. The claimant signed the defendant’s conflict of interest certificate, the acknowledgement of training on the code of business conduct and obligation to report violation of the rules. As an employee on a Managerial rank, she understood the meaning of conflict of interest as contained in her contract documents. I therefore find that when the claimant registered Mayito Resources Limited as a contractor to the defendant, she abused her position of trust. A conflict of interest arises in the workplace when an employee has competing interests or loyalties that either are or potentially can be at odds with that of the employer. A conflict of interest is any activity, financial investment, interest, association or relationship that conflicts with an employee’s independent exercise of judgement concerning his/her employment. In this instance, the claimant as a Procurement Officer of the defendant awarded a contract to a company owned by her husband and herself to provide Haulage Services to the defendant. She knowingly conducted the business of the defendant with her own company. There is no doubt that her personal and financial interest certainly influenced her independent exercise of judgement and her ability to act in the best interest of the defendant her employer. This can be seen in her unauthorized action in extending the contract she had in 2010 wrongly awarded her company Mayito Resources Ltd to March 2015 for this reason: “that your company performed above average” even when the initial term had not lapsed. She also judged the performance of her company and gave it a mark above average. This was definitely an action taken to ensure that her company would continue to do business with the defendant for five years. I find the claimant’s action to be completely against the interest of the defendant. It was most certainly a case of conflict of interest. I hold that the claimant breached the defendant’s Code of Business Conduct and the terms of her contract of employment. Gross misconduct has been defined in U.B.N. v Ogboh [1995] 2 NWLR (Pt 380) 647 to be conduct of a grave and weighty character which is against the interest of the employer leading to loss of confidence in the employee by the employer as to warrant his continued retention; and that where an employee is found guilty of gross misconduct, he could be lawfully dismissed summarily without notice and without wages. See also Anaja v UBA Plc [2011] 15 NWLR (Pt 1270) 377. Gross misconduct has also been held to be what the employer deems it to be. See Olabode Adewunmi v Nigerian Eagle Flour Mills [2014] 14 NWLR (Pt. 1428) 443 at 458. I find the claimant’s conduct to be one of gross misconduct. I hold that the defendant has established the reason for which it dismissed the claimant from its services to the satisfaction of the court. See Bamgboye v University of Ilorin [1999] 10 NWLR (Pt 622) 290 at 326, Yusuf v Union Bank Plc [1996] 6 NWLR (Pt 457) 632. I hold that the claimant’s dismissal by the defendant was right and lawful. The claimant has made a claim for her October salary, gratuity, leave allowance and three months notice. By the provisions of her employment contract, she is not entitled to notice having been dismissed neither is she entitled to gratuity. She is only entitled to salary up to the date of her suspension, her own contribution to the company provident fund and earned leave allowance if any. The defendant is to pay these to her. The claimant’s case is hereby dismissed. Costs of N10,000.00 awarded against the claimant. Judgement is entered accordingly. ____________________________ Hon Justice O.A.Obaseki-Osaghae