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FOOTWEAR, LEATHER AND RUBBER PRODUCTS WORKEI UNION OF NIGERIA AND MANAGEMENT OF SANUSI RUBBER WORKS LIMITED (NATIONALINDUSTRIAL COURT) H ON. JUSTICE (CHIEF) P.A. ATILADE PRESIDENT DR O.I. ODUMOSU MEMBER S.O. KOKU,ESQ. MEMBER DR. E. C. IWUJI MEMBER ALHAJI Z.M. BELLO MEMBER SUIT NO: NIC/3/83 DATE OF JUDGMENT WEDNESDAY 3RD OCTOBER, 1984 LABOUR LAW Closure of factory - Company closing i its factory - Duty on to have regard the governing determination of contract service of employees - Failure to a necessary notices of termination appointment to workers - Effective Entitlement of workers to be paid wages in lieu of notice. LABOUR LAW Closure of factory - When employer will be deemed to have closed its factory indefinitely - Relevant considerations. LABOUR LAW Leave allowance - Discharged workers had earned their annual leave - Obligation employer to pay leave allowance thereto. LABOUR LAW Notice - Length thereof required labour law - Section 11, Labour Act, 1974 LABOURLAW Redundancy - Implications of – whether entails total discharge of all workers stoppage of production. LABOURLAW Re-engagement of workers - Re-engagement of workers as new employees by company - Entitlements under former contracts of employment - Right of re¬engaged workers thereto. TRADE DISPUTE Closure of factory - Company closing down its factory - Duty on to have regard to law governing determination of contracts of service of employees - Failure to give necessary notices of termination of appointment to workers - Effect -Entitlement of workers to be paid wages in lieu of notice. ISSUE: Whether the Award of the Industrial Arbitration Panel can be supported by the evidence, as presented before it and also before the National Industrial Court. FACTS: The Respondent issued a Notice of Closure of its factory dated 20th November, 1981. By it the factory was closed down indefinitely and the management indicated that all workers and staff would be recalled as soon as things improved. As a result of the closure of the factory, a trade dispute was declared and referred to the Industrial Arbitration Panel (IAP). The issues in dispute before the IAP were: refusal to give one month's notice before closure; refusal to pay redundancy benefits, and leave allowance. The IAP subsequently made its Award to which the Appellants objected and the dispute is referred to the National Industrial Court by the Minister of Labour. The Appellant’s case was that the indefinite closure of the Respondent's factory amounted to redundancy of workers; that the notice of closure did not comply with relevant law termination of contracts by notice, and that the workers are entitled to be paid wages in lieu of notice, redundancy benefits and leave allowance. On the part of the Respondent, it was contended that there had not been any termination of contract between the union members and the management, that the temporary closure of - by the management was not a termination of the contracts of employment of the union members, and that the management had not at any time declared any worker HELD: (Granting payment of wages in lieu of notice and leave allowance): 1. On When an employer will be deemed to have dosed its factory indefinitely - Where an employer closes down its factory without indication as to the probable duration of the closure or an estimation of the period of time the company expected things to improve; and there is no evidence that the company offered any consideration to keep the contracts of employment alive during such a period, the court will hold that such a closure is indefinite. This is because, "indefinitely" means no more or less than that there is no set limit to the period of closure. 2. On Duty on company closing down its factory to serve requisite notices on workers and rights of workers where it fails - The decision of the management of a company to close down its factory indefinitely ought to be taken with due regard to the provisions of the law governing the determination of contracts of service of the employees. Where management does not give the necessary notices in writing as required by law to terminate workers’ appointment, the workers concerned are entitled to be paid wages in lieu of notice. 3. On Implications of redundancy - Redundancy, per se, affects only a proportion of the workers engaged on the production of goods and services, and not all of them. Thus, the shedding of redundant workers does not entail the stoppage of production In this case, the matter was not the dismissal of workers who were surplus to requirement, but the total discharge of the entire production process work-force owing to circumstances beyond the control of the company, and therefore n: redundancy pay was awarded 4. On Employer's obligation to pay discharged employees leave allowance- An employer who has discharged its workers is required to pay the discharger workers who had earned their annual leave, for the particular year of discharge, the appropriate leave allowance. 5. On Right of workers re-engaged by a company to be paid their entitlements under the former contract of service - Where workers are re-engaged by a company as new employees, they should be pair, their outstanding entitlements under their former contracts of employment. 6. On How notice given under labour law - Under section 11 of the Labour Act, 1974, any notice for a period of one week or more shall be in writing. HON. JUSTICE (CHIEF) P.A. ATILADE PRESIDENT, DR O.I. ODUMOSU MEMBER, S.O. KOKU,ESQ. MEMBER, DR. E.C. IWUJI MEMBER, Z.M. BELLO MEMBER