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CHEMICAL & NON-METALLIC PRODUCTS SENIOR STAFF ASSOCIATION AND BENUE CEMENT COMPANY PLC (NATIONAL INDUSTRIAL COURT) HON. JUSTICE M.A BORISADE - PRESIDENT AMB. M.S. SALEH - MEMBER CHIEF M.G DABIBI - MEMBER PROF. B.B. KANYIP - MEMBER MRS. V.N OKOBI - MEMBER SUIT NO: - NIC/7/2000 DATE OF JUDGMENT - JULY 24, 2001 COMPANY LAW Board of Directors -Powers of - Scope of Delegation of- Limit thereto. LABOUR LAW Conditions of service -Where negotiated by management on behalf of directors - Status of - Whether complete and effective without ratification by the Board of Directors. LABOUR LAW Employment of staff -Where staff laid off-Whether employer obliged to employ new staff to replace those laid off. LABOUR LAW National Industrial Court - Jurisdiction of Whether has jurisdiction to entertain allegation of forgery of conditions of service. LABOUR LAW Redundancy -Meaning of-Procedural rules governing under labour law Section 20, Labour Act. LABOUR LAW Reinstatement -When National Industrial Court can order same - Instances and circumstances of. LABOUR LAW Safety of workers - Paramountcy of under labour law. LABOUR LAW Salaries - Deductions from by employer - Complaints that they are not remitted to appropriate organs of government - Locus standi of workers to make - Basis of. LABOUR LAW Trade dispute - Individual disputes - Group disputes - Difference between - Respective courts to entertain - Authorities dealing with individual disputes - Whether applicable and relevant to group disputes. NATIONAL INDUSTRIAL COURT Jurisdiction of National industrial Court -Whether has jurisdiction to entertain allegation of forgery of conditions of service. TRADE DISPUTE Salaries - Deductions from by employer - Complaints that they are not remitted to appropriate organs of government – Locus standi of workers to make - Basis of. TRADE DISPUTE Individual disputes - Group disputes - Difference between - Respective courts to entertain - Authorities dealing with individual disputes - Whether applicable and relevant to group disputes. WORDS AND PHRASES Redundancy - Meaning of. ISSUES 1. Whether the conditions of service negotiated between the parties is binding without more or is binding only after the ratification of the Board of Directors of the Respondent company. 2. Whether the Appellant can complain of non-remittance to the appropriate organs of government statutory deductions from her members’ salaries, that is, staff contributory pensions, National Housing Fund, NSTTF, PAYE, etc. 3. Whether the staff rationalization exercise conducted by the Respondent is in truth redundancy exercise carried out in another name. 4. Whether the safety measures taken by the Respondent were adequate. FACTS The dispute between the parties was first referred to the Industrial Arbitration Panel (LAP). The IAP, after hearing the parties and considering the matter, gave its award, whereupon the Appellant objected to the award. Hence a referral of the matter to the National Industrial Court by the Minister of Labour and Employment. The issues in dispute were: tampering with agreed conditions of service, non- remittance to appropriate authorities of statutory deductions, attempt to dislodge the Association, and intimidation of members of the Respondent. In presenting their respective cases, the parties filed memoranda and written briefs. Held: (Allowing the appeal in part): 1. On Whether National Industrial Court has jurisdiction to entertain allegation of forgery of conditions of service An allegation of forgery in relation to the conditions of service of a company is clearly outside the jurisdiction of the National Industrial Court, and so the court cannot entertain it or even look at it. 2. On Scope of powers of Board of Directors of a company and limit to delegation of such powers - The control and management of registered companies is vested in the Board of Directors. Section 244 (1) of the Companies and Allied Matters Act, 1990, for instance, defines “directors” as persons duly appointed by the company to direct and manage the business of the company. Consequently, while every registered company must have at least two directors, any company whose number of directors falls below the minimum of two shall within one month fill in the vacancy, otherwise it shall not carry on business after the expiration of the one month. In recognizing that the Board is the alter ego of the company, the law however permits that the directors delegate any of their powers to a managing director or to committees consisting of such member or members of their body as they think fit and the managing director or any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be made by the directors. And by section 283 (1) of CAMA, 1990, directors are trustees of the company’s moneys, properties and their powers, and as such must account for all the moneys over which they exercise control and shall refund any moneys improperly paid away, and shall exercise their powers honestly in the interest of the company and all the shareholders, and not in their own or sectional interests. What all this presupposes is that the management and control of a registered company is firmly the concern of the board or directors. Even when the board is permitted under section 263 (5) of CAMA, 1990 to delegate its powers, this can only be to a managing director or a committee comprising of member(s) of the board. In the instant case, therefore, when the board advised that management of the Respondent and the Appellant should go back to the negotiating table and come out with a final position on the question of end of service benefits that would be acceptable to both parties and therefore seal the conditions of service, this cannot be said to qualify as a delegation under the said section 263 (5) as none of the representatives of the management negotiating team was a director or member of the board. Appropriately, therefore, whatever was agreed upon in relation to the end of service benefits ought to have been submitted to the board for consideration and approval. That this was not done means that the negotiated conditions of service were incomplete and so not effective. To be effective and binding, the ratification of the board of the company was required. 3. On Sacredness of salaries and locus standi of workers to complain where deductions therefrom are not remitted to appropriate authorities- The law treats the issue of salaries with such sacredness that, except expressly permitted by law or the worker, no employer is permitted to make any deduction from a worker’s salary. So when deductions are enjoined for a purpose, it is only fair that that purpose is met. In any event, since the question of salaries, and hence deductions therefrom, is an integral part of the terms of an employment which is at the root of the conception of a “trade dispute”, it presupposes that workers have the locus standi to complain that deductions made from their salaries have not been remitted to appropriate organs of government. (NURTW V. Ogbodo (1998) 2 NWLR (Pt. 537) l89 referred to). 4. On Difference between individual employment disputes and group employment disputes and respective courts with jurisdiction thereon - There is a difference between individual employment disputes and group employment disputes. While the former rightly belongs to the province of the regular courts, the latter is properly the concern of the National Industrial Court. Therefore, authorities dealing with individual employment disputes are not tenable and hence not relevant to the instant case of group employment disputes. The Appellant was consequently in the right court to lay her complaints. 5. On Instances and circumstances when the National Industrial Court can order reinstatement- A statutory employee, that is an employee whose conditions of service are regulated by statute, can in appropriate circumstances be reinstated where his employment was terminated contrary to the statute governing his employment. To this can be added where workers’ employment are terminated because of union activities, and once this fact is established, the termination is illegal and unlawful, and so the National Industrial Court can order reinstatement. 6. On Procedural rules governing redundancy under labour law- The law regulating the question of redundancy in Nigeria is section 20 of the Labour Act, Cap. 198, Laws of the Federation of Nigeria, 1990. Subsection (3) of that section defines redundancy to mean “an involuntary and permanent loss of employment caused by an excess of manpower”. Section 20 does not require a formal declaration of redundancy, as the Respondent would want the court to believe, before it can be termed as such. Neither does section 20 decree reinstatement as the remedy where the rules on redundancy are flouted. All the section does is to lay down the procedural rules governing a state .of redundancy in an employment, namely, that the employer shall inform the workers’ representatives concerned of the reasons for and the extent of the anticipated redundancy; the principle of “last in, first out” shall apply in the discharge of the particular category of workers affected, subject to all factors of relative merit, including skill, ability and reliability, and the employer shall use his best endeavours to negotiate redundancy payment to any discharged workers. In the instant case, the staff reduction (rationalisation) exercise conducted by the Respondent pursuant to the recommendations of the consultants it set up to conduct a personnel audit, was redundancy in another name. Consequently, the Respondent ought to have followed the processes laid down in section 20(1) of the Labour Act, which enjoins it to take its workers into confidence in the exercise. The fact of redundancy does not take away the right of the employer to terminate. Instead, it is exercisable subject to the settlement of all entitlements of the workers. What, therefore, makes the exercise redundancy is the share number of the workers affected and whether or not they constitute excess manpower. The consultants’ recommendation confirmed that the Respondent had excess manpower, which needed to be reduced. So when the Respondent laid off 201 workers in one fell swoop, it certainly was the result of its excess manpower. As indicated earlier, section 20 (1) of the Labour Act, does not contemplate reinstatement. Instead, it contemplates the payment of appropriate severance benefits. Consequently, the court ordered the Respondent to pay the 201 affected staff of the Respondent their full redundancy benefits in accordance with section 20(1) of the Labour Act. 7. On Whether employee obliged to employ new staff to replace those laid off- An employer is not obliged to employ new staff to replace those laid off. Thus, in the instant case, the court rejected the argument of the Appellant that the Respondent terminated the appointment of its members without replacement. 8. On Paramountcy of safety of workers under labour law - The safety of workers is of paramount importance, not just to the company but also to the country at large. Consequently, in the instant case, the National Industrial Court confirmed the IAP award in this regard and ordered that the management of the Respondent company should ensure that all safety and health equipment in the plant are functioning. Secondly, that Appellant members be issued with all the relevant safety gears such as boots, overalls, helmets, goggles, gloves, respirators and welding jackets on regular basis.