FOOD, BEVERAGE AND TOBACCO SENIOR STAFF ASSOCIATION AND PREMIER BREWERIES LIMITED ONITSHA (NATIONAL INDUSTRIAL COURT) HON. JUSTICE (CHIEF) P.A. ATILADE - PRESIDENT M.A. BORISADE, ESQ. - MEMBER B.N. OBUA, ESQ - MEMBER SUIT NO: - NIC/1/89 DATE OF JUDGMENT - FRIDAY, 2ND JUNE, 1989 INDUSTRIAL RELATIONS - Industrial relations – Unfair industrial relations practice -Effect of breach collective agreement on redundancy – Non-compliance with section 9(1), Labour Decree, 1974 on redundancy - Whether amount to unfair industrial relations practice. LABOUR LAW - Industrial relations – Unfair industrial relations practice -Effect of breach collective agreement on redundancy – Non- compliance with section 19(1), Labour Decree, 1974 on redundancy - Whether amount to unfair industrial relations practice. LABOUR LAW - Redundancy - Where prevailing circumstances in a company justify same- Duty on court to hold that termination was ground of redundancy. LABOUR LAW - Severance pay - Service of six months but than one year for purpose of severance pay -How reckoned. LABOUR LAW - Termination of employment - Parties contract of employment - Right of to terminate same at common law. ISSUES: 1. Whether the termination of appointment of the Appellant's members on 27th July, 1988 was wrongful. 2. Whether the allegation of victimization of the Appellant's members, leveled against the Respondent, was proved. 3. Whether there was a breach of Article 5 of the Procedural/Collective Agreement dated 8th February, 1980 between the Appellant and the Respondent, as well as the Agreement reached between the parties on 24th May, 1988. 4. Whether there has been a violation of section 19 of the Labour Decree, 1974 by the -Respondent. FACTS: The Respondent scaled down its production lines from 3 to 1 due to lack of essential raw material as a result of dwindling fortune. About the same period, it terminated the appointments of some of its of some of its workers, including some members of the Appellant. The Respondent did not, however, terminate the appointments on ground of redundancy. The Appellant was dissatisfied with the company's action and declared a trade dispute, which was referred to the Industrial Arbitration Panel (IAP). The IAP duly heard the parties and made its award. Not happy with the IAP award, the Appellant objected to it, and the dispute Was referred to the National Industrial Court. HELD: (Allowing the appeal and awarding compensation to affected staff): 1. Right of parties at common law to terminate contract of employment- At common law, either party to a contract of employment has the right to terminate the contact, by giving the appropriate notice in writing or by payment in lieu of notice to the other party. In this case, therefore, the Respondent had the legal right to terminate the appointment of the workers concerned. 2. On When court will treat termination of employment to be on ground of redundancy- Where workers' appointments are terminated because of the dwindling fortune of the company which necessitated the scaling down of the production lines due to lack essential raw materials, the court will treat the retrenchment of the workers affected as termination on ground of redundancy. 3. On Effect of breach of collective agreement on redundancy and non-compliance with section 19(1), Labour Decree, 1974 - The breach of procedural/collective agreement on redundancy, and in¬compliance with the provisions of section 19(1) of the Labour Decree No.21 of 1974, by a company amount to unfair industrial relations practice for which the company is liable to payment of damages to all workers whose appointments were terminated, including those who might have collected their entitlements. 4. On How service of six months but less than one year calculated for purpose of severance pay - In calculating the severance pay of employees, the court reckons any service of six months but less than a year as one year.