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IN THE NATIONAL INDUSTIUAL COURT HOLDEN AT LAGOS BEFORE THEIR LORDSHIPS Hon. Justice B. A. Adejumo President Hon. Justice B. B. Kanyip Judge Hon. Justice V. N. Okobi Judge DATE: FEBRUARY 14, 2007 SUIT NO. NIC/9/2000 BETWEEN National Union of Banks, Insurance and Financial Institutions Employees……Appellant AND Nigeria Industrial Development Bank (NIDB) …………….. Respondent REPRESENTATION Yinka Sunmola, for the appellant Kola Bello Afolayan, with him Mrs. Amaka Nnah, for the respondent. JUDGMENT This is a matter referred to this court by the Honourable Minister of Employment, 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 19th September, 2000 with Ref. No. ML.HE/777/CON.I/I/37 and a referral instrument simply dated June 2000. By the referral instrument, this court is called upon to look into the trade dispute between the parties over the following issues: 1. Non-implementation of Management approval of 6th November, 1997 on gratuity based on total emolument as contained in the Federal Government Circular of 15th June, 1992, and the collective agreement of 1993. 2. Recall of Union Executive Members purportedly terminated, namely, A. A. Aliyu (Vice-Chairman), F. B. Shekarau (Ex-Co), F. O. Ogbili (Member), E. Edern (Member), S. B. Omale (Member), J. O. Ewache (Member), C. U. Chikwendu (Member) and C. Ukpakwu (Member). 3. Rescind the transfer/disengagement of Messrs R. K. Asekorneh and S. O. Akindileni who are Chairman and Treasurer of the Domestic Unit respectively from NIDB to another legal entity. 4. Recall of Union Executives transferred to Area Offices in the course of the crisis to the Headquarters. 5. NIDB has never complied with any agreement because of the following: a) Remuneration reviews of 1993, 1995, and 1997 have not been implemented. b) The agreement of 2nd September, 1997 has been breached e.g. the termination of six Executive Members has not been revised, namely, J. K. E. Abiola (Vice-Chairman), A. B. Adebisi (Member), H. S. Ekanem (Member), O. J. Adesanya (Member), I. Jacob (Member) and E. Erefa (Member). 6. The status quo before the crisis of 24th April, 1998 should be returned to and that there should not be any victimization by the NIDB Management such as transfer, disengagement, termination, etc. The Industrial Arbitration Panel (IAP) had earlier heard the matter and made its award. It is this IAP award that the appellant objected to that led to the present referral of the matter to this court. This matter actually commenced in this court when Honourable Justice M. A. Borisade was President of the court with the parties tiling their respective memorandum. The demise of His Lordship, Honourable Justice Borisade, meant that the case had to start de novo. The appellant had first filed its memorandum on May 2, 2001, which was latter amended and the amended version was filed on June 28, 2002. The respondent filed its memorandum on December 5, 2001, which memorandum was not amended even when the appellant amended its memorandum. In addition to these memoranda, the parties filed written addresses - that of the appellant on June 2, 2005 and that of the respondent on October 10, 2005. There was no reply on points of law from the appellant on the respondent's written address. In all the processes filed by the appellant, the appellant narrowed its claims before this court to only two, namely, interpretation of the effective date of application of gratuity based on the concept of total emolument; and the recall of Union Executives purportedly terminated. On the first claim, the appellant's case is that the respondent, which since 23rd October, 2001 is now known as Bank of Industry Limited, is bound to implement the Federal Government Circulars dated 13th September, 1991 and 29th June, 1992 (Appendix IA and II respectively, attached to the appellant's amended memorandum). While Appendix IA provides that the computation of gratuity shall be based on 'Total Annual Emolument' with the effective commencement date of 15th January, 1991, Appendix Il merely reduced the qualifying service years for gratuity from 10 to 5 years. The pertinent question then is whether the respondent is bound to implement these circulars in such a way that members of the appellant union in the employment of the respondent would benefit from them. The appellant argued in the affirmative submitting in the process that the respondent is fully owned by the Federal Government in terms of 60% of its shares held by the Federal Ministry of Finance Incorporated and 40% of the shares held by the Central Bank of Nigeria (CBN). In any event, that the activities of the bank are regulated and supervised by the Federal Ministry of Industry, with other Federal government bodies like the Public Complaints Commission and the Presidency addressing letters on government issues to it now and then. To the appellant, therefore, staff of the bank affected by the wrongful computation of their gratuity between 1997 and 2000 should have their gratuity properly calculated based on the two circulars, Appendix IA and II. In any case, that the bank has started to implement the said circulars since June 2000. On the second claim, the recall of Union Executives (Messrs A. A. Aliyu and F. B. Shekarau), the appellant argued that their termination was wrongful as they were not served with the purported letters of termination, neither were they queried, cautioned or warned prior to the purported termination. Furthermore, that the termination was as a result of union activities. But that given the lapse of time since the termination, the appellant alternatively prayed for the payment of a fair severance benefit in lieu of reinstatement and that this should apply to all the union members in the employment of the bank terminated or retired from 1997 to date. The appellant then prayed the court to grant it its reliefs. In reply, the respondent argued that the commencement date of the payment of gratuity based on total emolument is 27th August, 1998 on the basis of an agreement reached on that date between the parties and under the auspices of a conciliator appointed by the Federal Ministry of Labour and Productivity (Appendix KBA 1 attached to the respondent's memorandum). On this agreement, the appellant had maintained that it is not binding as it formed the basis of the matter being referred to the IAP in the first place. The respondent further contended that it had at no time received Appendix IA and II neither of which, in any event, is addressed to it. And that as a limited liability company with separate legal personality as sanctioned by the case of Salomon v. Salomon (1897) AC 22 HL, it is not an agent or parastatal of the Federal Government and so is not bound or affected by Federal Government circulars. The respondent then cited the case of NIDB v. Fembo [1997] 2 NWLR (Pt. 480) 543 at 564 where the Court of Appeal stated that given the distinct legal personality of NIDB, NIDB could not be held to be an agency of the Federal Government even if all its shares are owned by that Government. On the second claim of the appellant, the respondent contended that it reserves the unqualified right to dispense with the services of any of its employee whose services it no longer requires and that the court cannot force an employee on an unwilling employer, relying on the cases of Olanrewaju v. Afribank [2001] 13 NWLR (Pt. 731) 691 and Chukwumah v. SPDC [1993] 4 NWLR (Pt. 289) 512. Consequently, that the two staff in issue are not entitled to reinstatement. That their terminal benefits have been paid to them, for which this court is precluded from looking into the issue as it is foreclosed, relying on the case of Angel Spinning Ltd v. Ajah [2000] 13 NWLR (Pt. 685) 532. We have carefully considered all the processes filed by the parties in this matter. Given that the appellant had restricted itself to just two issues, the court will likewise restrict itself to just the two issues. The first issue relates to the question whether the respondent is bound to implement the two Federal Government circulars, Appendix IA and II. While the appellant contends that the respondent is bound to implement them, the respondent contends otherwise. A look at the contents of both circulars will reveal that they deal with issues relating to pensions and fringe benefits of those in the employment of the Federal Government. The question then becomes whether those in the employment of the respondent can be said to be employees of the Federal Government so as to also benefit from Appendix lA and II. The respondent's argument is that the respondent is a limited liability company with distinct personality, which makes it not to be an agency of the Federal Government. This view, to our minds, is taken without due regard to relevant constitutional provisions. Section 159(1) of the 1979 Constitution, which was the operating Constitution when this matter was first referred to the IAP on 20th October, 1998, provides that subject to the provisions of the Constitution, the right of a person in the public service of the Federation to receive pension or gratuity shall be regulated by law. Section 159(2) then provides that any benefit to which a person is entitled in accordance or under such law as is referred to in subsection( 1) shall not be withheld or altered to his disadvantage except to such extent as is permissible under any law, including the code of conduct. The phrase, 'public service of the Federation', is then defined in section 277(1) of the 1979 Constitution as "the service of the Federation in any capacity in respect of the Government of the Federation, and includes service as ... (f) staff of any company or enterprise in which the Government of the Federation or its agency owns controlling share or interest .... " Sections 159(1) and (2), and 277(1) of the 1979 Constitution are presently sections 173(1) and (2), and 318(1) respectively of the 1999 Constitution. The import of these provisions is that when it comes to pension and gratuity, persons in the public service of the Federation are all grouped together and treated alike; and the definition of 'public service of the Federation' includes companies where the Government of the Federation owns controlling shares. The respondent fits this description given that both parties agreed that the Federal Government actually owns the controlling shares in it. This means that staff of the respondent qualify as 'persons in the public service of the Federation'. The case of NIDB v. Fembo, supra, cited by the respondent was not one dealing with the issue of pension and gratuity in the sense presently before this court; and so on that basis, it is distinguishable. Because staff of the respondent are also staff in the public service of the Federation, they come within the: regulatory ambit of Government on the said issues of pension and gratuity. This means that Appendix IA and II are binding on the respondent. Consequently, we agree with the appellant that all staff of the respondent bank affected by the wrongful computation of their gratuity between 1997 and 2000 should have their gratuity properly calculated based on the two Federal Government circulars, namely, Appendix IA and II. We, therefore, hold that the respondent is bound to implement Appendix IA and II in the manner prayed by the appellant. On the issue of recall of Union Executives, the appellant's prayer is for reinstatement, and in the alternative a fair severance benefit in lieu of reinstatement arguing that this court had previously done so in the case of Mix & Bake v. NUFBTE [2004] 1 NLLR (Pt.2) 247 at 279F - H. While it is true that this court had granted such a prayer in the past, it has been on the basis that a case for it was made out. We cannot say that a case for it has been made in the present suit. For a fair severance benefit to be ordered by this court as prayed by the appellant, a case for reinstatement has to be made first with the fact of time lapse being the determining factor justifying the fair severance benefit. In other words, the appellant must first establish that it justifiably merits reinstatement. The appellant can do this in the instant case by showing that the termination was actually as a result of union activities. This burden of proof the appellant has not successfully discharged. In the case of NUFBTE v. Cocoa Industries Ltd [2005] 3 NLLR (Pt.8) 206 at 218 - 219, this court explained the conditions necessary for it to be said that termination on the basis of union activities has been established. For a prayer in this regard to succeed, the claimant must bring his/her case within the ambit of section 42 of the TDA 1990 or section 9(6)(b)(ii) of the Labour Act Cap. 198 LFN 1990. This the appellant did not do. We cannot, therefore, hold that the termination of the employment of Messrs A. A. Aliyu and F. B. Shekarau was a product of union activities. In which event, there can be no talk of a fair severance benefit as prayed by the appellant. The claim, by the appellant, for reinstatement, and in the alternative for a fair severance benefit, must, therefore, fail; and we so hold. Judgment is entered accordingly ……………………………. Hon. Justice B.A. Adejumo President …………………………….. ………………………….. Hon. Justice B.B. Kanyip Hon. Justice V.N. Okobi Judge Judge