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IN THE NATIONAL INDUSTRIAL COURT HOLDEN AT LAGOS BEFORE THEIR LORDSHIPS: Hon. Justice B.A. Adejumo - President Prof. B.B. Kanyip - Member Barr. M.B. Dadda - Member DATE: JULY 13, 2006 SUIT NO. NIC/1/2005 BETWEEN Metal Products Senior Staff Association of Nigeria (MEPROSSAN)…….Applicant AND Aluminum Smelter Company of Nigeria Limited (ALSCON)……………Respondent REPRESENTATION OF PARTIES Ademola A. Adewale, for the appellant Magaji Ibrahim, for the respondent JUDGMENT This is a matter referred to this court by the Honourable Minister of Labour and Productivity acting under the powers conferred on him by section 13(1) of the Trade Disputes Act (TDA) Cap. 432 LFN 1990 vide a letter dated 11th January, 2005 with the referral instrument attached and simply dated December 2004. Under the referral instrument, this court is called upon – To inquire into the trade dispute existing between Metal Products Senior Staff Association of Nigeria (MEPROSSAN) [and] Aluminum Smelter Company of Nigeria (ALSCON) Ikot Abasi Akwa Ibom State, over the following points: (a) Violation of terms of Collective Agreement by ALSCON. (b) Memorandum of Understanding (c) Improper placement of staff during recruitment (d) Lack of promotion (e) Discrimination against Nigerian staff in accommodation/Housing Policy. (f) Indebtedness to some staff on furniture grant. (g) Severance Benefits The present matter had earlier been heard by the Industrial Arbitration Panel (IAP) and an award made by the IAP. It is this award of the IAP that the appellant nationally objected to in two letters, the appellant did not really object to any of the findings and awards on the issues brought before the IAP. Instead, the appellant complained that the respondent was refusing to engage the respondent in any discussion aimed at implementing the IAP award. In fact, by a letter dated 7th March, 2004 with Ref. No. HE/842/CON 130, the appellant wrote to the Honourable Minister of Labour complaining about the respondent’s disrespect to the provisions of the subject of the Award made to staff by the Industrial Arbitration Panel’. The appellant urged the Minister to refer the matter to this court, invariably to evoke the coercive powers of the court against the respondent. In the notional objection of 21st November, 2003, the appellant complained to the Minister that the respondent abandoned the proceedings at the IAP. Incidentally, during the hearing of this matter, counsel for the respondent appeared only once, and this was at the first sitting of this court on 2nd March, 2005. Thereafter, counsel did not show up throughout the hearing of the matter. In joining issues, parties exchanged memoranda. The appellant’s memorandum was filed on March 17, 2005. This was later replaced by an amended memorandum filed on April 19, 2005. The respondent filed its memorandum on September 9, 2005. And on February 7, 2006, the appellant field a list of documents to be relied upon in proving its case. From the appellant’s memorandum, the appellant’s case is that it is dissatisfied with the part of the IAP’s award that says that the expired collective agreement should continue to operate until a new core investor takes over the management of ALSCON. The appellant premised this objection on the grounds that: (1) The award of the IAP did not follow from the earlier findings of that court. (2) The award of the IAP gives the 2nd party the opportunity to evade the negotiation of a new collective agreement indefinitely. (3) It is unfair and unreasonable for an expired collective agreement signed over 4 years ago to remain in operation. (4) The respondent has the means and capacity to negotiate a new collective agreement with the appellant and fulfill the terms thereof. (5) The Bureau of Public Enterprises (BPE) letter of 28th February, 2003 on pre-privatization monitoring is at best government policy and not law. (6) The aforesaid BPE letter being government policy is merely directory and not mandatory. (7) The aforesaid letter taken as a whole does not bar the respondent from re-negotiating a new agreement with the appellant. According to appellant, both parties entered into a collective agreement, which was to expire on 30th June, 2002, after 18 months. In line with Article 35 of the expired collective agreement, the appellant gave notice of its intention to resume negotiation of a new collective agreement. That apart from acknowledging the receipt of the said notice of renewal, the respondent bluntly refused to re-negotiate any collective agreement with the appellant. Instead, the respondent lured certain members of the appellant, that is, the caretaker committee, to enter into a Memorandum of Understanding (MOU) on behalf of the appellant, which MOU has been held to be null and void by the IAP. This issue of the violation of the terms of the collective agreement, to the appellant, is the basis of its present appeal to this court. The other six issues as couched in the referral instrument to this court are, therefore, no more relevant and so were not again canvassed by the appellant. The appellant was contented to go by the IAP awards on them. The appellant, however, urged the court to note that the respondent is yet to comply with the respective awards made by the IAP on the said issues 2-7. This, therefore, leaves out only issue 1. And here, the argument of the appellant is that by Article 35 of the collective agreement in issue, the collective agreement had a life span of 18 months commencing from the 1st day of January 2001 to 30th June 2002 and the renewal of which either party may give one month’s notice in writing to the other party of the intention to resume negotiation of a new collective agreement. That at the expiration of the collective agreement in issue, the appellant wrote to the respondent of its intention to negotiate a new collective agreement but which the respondent failed to reciprocate arguing that the BPE letter of February 28, 2003 prevented it from entering into a new collective agreement. The appellant then urged the court to, among other things; (1) Declare that the collective agreement between the parties has expired since 30th June 2002 and is no longer valid and of no effect whatsoever. (2) Set aside the said collective agreement. (3) Compel the respondent to immediately enter into negotiation with the appellant with a view to preparing a new collective agreement. (4) Order the execution of a new collective agreement between the parties. (5) Compel the respondent to comply immediately with the various orders made by the IAP in this matter. (6) Declare the BFE letter as mere policy statement that does not have the force of law. The respondent acknowledged the existence of the collective agreement and the appellant’s proposal for a new collective agreement. Its contention, however, is that given the situation of the company, the respondent’s representatives saw reason with the company and entered the MOU whereby the parties agreed to suspend the negotiation of a new collective agreement until the takeover exercise of the company was completed and a new investor takes over the plant or if the company adopts a new business strategy that will ensure the reactivation of the plant, whichever is earlier. That it was after this MOU was entered into that the BPE stepped in to privatise the company. On the MOU, the respondent argued that it was misguiding and unacceptable for the appellant and the IAP to say that the caretaker committee of the appellant has no mandate to enter into the MOU simply because the expired collective agreement did not make any provision for an emergence of the MOU on the expiration of the collective agreement. That those who signed the MOU on behalf of the appellant had earlier been presented to the respondent as valid caretaker officers of the appellant with whom the respondent could deal after the tenure of the then executive officers of the appellant had lapsed. That when the respondent dealt with the caretaker officers, it had no knowledge of any limitation in mandate as to the powers of the caretaker officers. And if the caretaker committee had no mandate to enter the MOU, the respondent wondered which mandate it would have to negotiate a new collective agreement. Consequently, that the rejection of the MOU by the IAP has no legal basis and so this court should set aside that finding of the IAP. After all, that there is no provision in the expired collective agreement hindering the parties from negotiating and agreeing on anything defining their relationship. On the issue of dialogue on severance benefits, the respondent argued that the proper party for the dialogue would be the new owner of the company once it privatized. That it would be unfair for the present management to negotiate with the appellant in anticipation of the future act of a new. The respondent then urged the court to a) Uphold the ruling of the IAP that the expired collective agreement should continue to be in force until a new investor takes over the company. b) Declare that the MOU is legally binding on the parties. c) Reject the ruling of the IAP that parties should negotiate on severance benefits separately given that the existing conditions of service made provisions for benefits payable to any staff that loses his service as a result of any restructuring/redundancy in the company. In reply to the memorandum of the respondent, the appellant contended that it was speculative for the respondent to await a core investor to take over the company when there was a law suit at the Federal High Court involving one of the would be core investor and the BPE. And that given that litigation takes time, to urge that negotiating a new collective agreement should await the resolution of the dispute in court is to employ delay tactics. Secondly, that the respondent cannot now raise the issue of the MOU, which the IAP set aside, as the respondent did not appeal against the verdict of the IAP. Moreover, that there is no provision for the MOU in the collective agreement; and since documents should be interpreted literally, there was no basis for entering into the MOU. That even if the caretaker committee were to have the power to negotiate the MOU, they did not seek the consent of the Association to negotiate the MOU but rather unilaterally did so when some of the members were lured to Abuja and induced with money and gifts to sign the MOU thus tainting the MOU with fraud and illegality. That not all the principal members of the caretaker committee were party to the MOU, thus invalidating the MOU. On the issue of the dialogue on severance benefits, the appellant argued that the earlier this issue is dealt with by the parties, the better it will be for all concerned. In any event, that the respondent did not object to the finding of the IAP on this matter. The appellant then urged the court to grant it all the reliefs it claims. All of these issues, particularly the issues of the validity of the collective agreement and the issue of severance benefits, were also orally canvassed by the appellant given that the respondent counsel only showed up once in court. In fact the appellant called in one witness to testify but later abandoned this, on application to the court, in favour of producing relevant documents pertaining to the matter, which the appellant did on February 7, 2006. To conclude, the appellant urged the court to order that the parties negotiate a new collective agreement and that the respondent complies with award No.7 of the IAP. We have carefully considered all the processes filed in this matter and the oral submissions of counsel in the matter. Despite the fact that the referral instrument listed seven issues for the determination of this court, the arguments of counsel were restricted to essentially two issues: the question of the violation of the terms of the collective agreement and that on severance benefits. The appellant is contesting the holding of the IAP that the collective agreement should continue to operate until a new core investor takes over the management of the company. To the appellant, the collective agreement had long lapsed and so cannot be held to continue in operation. Whether this is true or not depends on the construction of Article 35 of the collective agreement, which deals with the issue of duration of the collective agreement and provides as follows: The duration of this agreement shall be for a period of not less than Eighteen (18) months commencing from 1st day of January, 2001 and terminating on the 31st day of June 2002. However, either party may one month before the termination of the agreement give to the other notice in writing of its intention to resume negotiations with the object of drawing up a new agreement. Where such notice not given, this agreement shall be deemed to continue in force and effect until such a time when a new shall be drawn up. There is a bit of inelegance this provision when the terminal date for the collective agreement is said to be 31st June, 2002 if it is noted that the month of June has 30 days and not 31. So, the reference on 31st day of June 2002 must be read to mean 30th day of June 2002. This point made, it remains to be seen what construction can be given to the provision. In the first place, in determining the limitation period of 18 months, Article 35 utilizes the calendar month. This presupposes that in determining the one month’s notice required as notice for the intention to resume negotiations for a new collective agreement, what is contemplated is the calendar month, not, say, four weeks. If this is the case, the letter of 3rd June, 2002 from the appellant to the respondent (Appendix 3 in the list of documents submitted by the appellant) intimating that negotiations be started on a new collective agreement is out of time. This being so, the last sentence of Article 35 becomes applicable given that a vacuum should not be created regarding the rights and obligations of the parties to the collective agreement. In this sense, the IAP was right in holding that the collective agreement should continue to be in force. But should this be until a new core investor takes over the company? We do not think so, because I will be presumptuous that a new core investor will actually be gotten to take over the company. There is always the chance that no investor will want to take over the company; or that even of those negotiating for the take over of the company, none may be successful. To this extent, negotiations need not await a new investor. What this means, therefore, is that MOU of 19th September, 2002, though validly entered between the parties, is presumptuous in content and almost everlasting in time and so cannot stand. Collective agreements usually have a limited application time. If a new agreement had been entered into in 2002 in the present case and was made to run two years, we would have been talking of two separate collective agreements by now. It is our view, therefore, that the parties need to commence negotiations of a new collective agreement immediately. In negotiation a new collective agreement, the parties are at liberty to negotiate the terms and conditions of work including, of course, severance benefits. It is our order, therefore, that the parties in this matter should immediately commence the negotiations of a new collective agreement. Judgment is entered accordingly. ………………………………… Hon. Justice B.A. Adejumo President ………………………….. ……………………….. Prof. B.B. Kanyip Barr. M.B. Dadda Member Member