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IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA IN THE LAGOS JUDICIAL DIVISION HOLDEN AT LAGOS BEFORE HER LORDSHIP HON. JUSTICE O. A. OBASEKI-OSAGHAE DATE: July 30, 2012 SUIT NO. NIC/LA/91/2011 BETWEEN Prince James Bandele Ladega (For himself and other members of Nigeria Union of Pensioners NAOC Branch - Claimant AND 1. Nigerian Agip Oil Company Ltd 2. Petroleum and Natural Gas Staff Association of Nigeria (PENGASSAN – NAOC BRANCH) - Defendants 3. National Union of Petroleum and Natural Gas Workers (NUPENG – NAOC BRANCH) REPRESENTATION J. D. Rufai for claimant. Ladipo Soetan, with him Mr Ita Edet for 1st Defendant. No appearance for 2nd & 3rd Defendants. JUDGEMENT The claimant by an Originating Summons filed on the 19th August 2011 seeks the determination of the following questions: 1. Whether the claimant is entitled to the harmonization of the pensions of their members, comprehensive Medicare with spouses, and other welfaristic packages as stipulated by the collective agreement between the claimant and the defendants. 2. Whether the claimant being a trade union under the applicable law are entitled to have their check off dues deducted from source and remitted same to the appropriate quarters in line with Trade Union Act, Cap 437 LFN 1990 by the 1st defendant. a. Declaration that the claimant and other members of Nigeria Union of Pensioners (NAOC) Branch are entitled to harmonization of their pensions, comprehensive Medicare with their spouses, security and maintenance allowances 40th and 45th Anniversary package and other welfaristic provisions in line with the stipulations in the collective agreement existing between the claimant and the 1st Defendant. b. Declaration that refusal, failure and/or negligence of the 2nd and 3rd defendants from taking necessary steps to ensure that the 1st defendant comply with and implement the collective agreement executed by them for and on behalf of the claimant is wrongful and improper. c. Declaration that the refusal, failure and/or negligence of the 1st defendant to be deducting check off dues of the claimant’s union members Pensions from source and paying same to Nigeria Union of Pensioners headquarters account is wrongful and illegal. d. An order compelling the 1st defendant to fully comply with and implement provisions of the collective agreement together with the Federal Government directives guiding the relationship between the claimant and the 1st Defendant as regards welfaristic provisions thereof. e. An order directing the 1st Defendant to be deducting the claimant’s check off dues from source and paying same to the account of Nigeria Union of Pensioners Headquarters in Abuja. The originating summons is supported by a 51 paragraph affidavit sworn to by Prince James Bandele Lageda, the claimant to which is annexed copies of documents marked Exhibit A, B, C & CI, D, E – E4, F & FI, G, H, I, J – J5, K, L. In reaction, the 1st defendant filed a conditional appearance on 7 December 2011 and a Notice of Preliminary Objection challenging jurisdiction on the grounds that the conditions set down by the Rules of this court which invoke the jurisdiction have not been satisfied. In a considered ruling delivered on the 29th February 2012, the preliminary objection was dismissed. The 1st defendant then filed a counter affidavit to the originating summons which was sworn to by Popoola Christopher Awofaju, Senior Remunerations and Benefits Officer in the employment of the 1st defendant on the 13th March 2012. Annexed to the counter affidavit are the Exhibits NAOC 1, NAOC 2, NAOC 3, NAOC 4, NAOC 5, NAOC 6, NAOC 7, NAOC 8 and NAOC 9. In response, the claimant filed a further affidavit which was sworn to by him on the 27th April 2012 to which is annexed Exhibit M. Learned counsel were directed to file final written addresses. The claimant’s written address is dated 27th April 2012. The 1st defendant’s written address is dated 21st May 2012 but filed on the 23rd May 2012. The claimant’s reply on point of law is dated 4th June 2012 but filed on the 5th June 2012. The brief facts of this case are that the claimant in his personal and representative capacities is a retired staff of the 1st defendant and receives a pension from the 1st defendant. The claimant and others he represents are dissatisfied with the pension they currently receive and desire to have their pensions reviewed and harmonised with other retirees of the 1st defendant or other companies operating in the Oil Industry like Shell, NNPC or in accordance with Federal Government circulars. They are also unhappy that the 1st defendant has stopped payment of annual pension increase since 2009, that the 1st defendant is not providing sufficient medical care for them and their spouses, and that they do not enjoy the same benefits as staff of the 1st defendant who are still in service. The summary of their grouse against the 1st defendant, is that it has neglected to provide adequately for them in view of the economic realities in the country and that the 2nd & 3rd defendant have failed to fight their cause. The 1st defendant on the other hand insists that the pensions paid are in accordance with the provisions of the collective agreement with its staff associations and unions. Its position is that an increase in pension is dependent on availability of funding and generation of income by the Pension fund portfolio performance. The 1st defendant has also stated that its medical facilities are extended to the claimant and those he represents and that it is not uncaring about the welfare of the claimant and those he represents. Learned counsel to the claimant raised two issues for determination as follows: a. Whether the claimant is entitled to the harmonization of the pensions of their members, comprehensive Medicare with spouses, and other welfaristic packages as stipulated by the collective agreement between the claimant and the defendants. b. Whether the claimant being a trade union under the applicable law are entitled to have their check off dues deducted from source and remitted same (sic) to the appropriate channel i.e. C.L.O. in line with the Trade Union Act, Cap 437 LFN 1990 by the defendant (1st defendant). On issue 1, he submitted that the claimant is a trade union known and acknowledged as Nigerian Union of Pensioners (NAOC) branch. He referred to exhibit C, which is the collective agreement and the explanatory booklet titled “Your End of Service Benefits”, exhibit D & J which are letters written to the 1st defendant by the Nigerian Union of Pensioners (NAOC branch) and submitted that the Nigerian Union of Pensioners (NAOC branch) is entitled to periodic review of their pension based on economic factors as stipulated in exhibit C. It was his contention that the 1st defendant’s refusal to honour the collective agreement amounts to a breach and the 1st defendant is estopped from resiling from this position “which has affected the position of the claimant at the time of entering into the contract of employment”, citing Iga & ors v. Amakiri & ors [1976] 11 SC 1 at 12 -13, Lawal v. Union Bank [1995] 2 NWLR (Pt. 378) 407 at 420 – 421, Ondo State University v. Folayan [1994] 7 NWLR (Pt. 354) 1 at 25 and Ude v Osuji [1998] 13 NWLR (Pt. 580) 1 at 8. He referred to exhibit FI which is a comparative table for calculation of Pensions prepared by Nigerian Union of Pensions NAOC branch and submitted that “it is elaborately shown that the qualification of a competitive factor is not abided with by the 1st defendant in the mode of payment of the Pensions in terms of its calculation”. He then urged the court to answer this question/issue in the affirmative. Regarding issue 2, learned counsel submitted that the 1st defendant is legally bound to ensure payment of check off dues of individual members of the claimant association and remit same to the registered office of the claimant referring to section 5 of the Trade Unions (Amendment Decree 1999). He submitted that the failure of the 1st defendant to deduct and remit check off dues to the Nigerian Union of Pensioners is illegal and urged the court to order the 1st defendant to deduct comply with the provisions of the law. Learned counsel to the 1st defendant in response, raised three issues for determination as follows: 1. Is the claimant entitled to the harmonisation of the pensions of their members with those of newer retirees or in accordance with the Guidelines of the Federal Government of Nigeria or other companies in the Nigerian Oil Industry having regard to the provisions of the Collective Agreement between the 1st Defendant and other Defendants. 2. Whether the claim for Comprehensive Medicare for Pensioners and spouses is an issue in view of the evidence before the court? 3. Whether the claimant’s trade union is entitled to insist that 1st Defendant deduct check off dues from its pensioner’s pensions and remit same to the Claimant’s Union. He submitted that there is no collective agreement between the claimant and the 1st defendant either in fact or in law. He referred to section 48 of the Trade Disputes Act CAP T8 LFN 2004 and section 91(1) of the Labour Act CAP LI LFN 2004 for the definition of collective agreement and cited Rector Kwara Poly v. Adefila [2007] 15 NWLR (Pt. 1056) 42. He submitted that since the claimant represents Pensioners, it is legally impossible for the 1st defendant to enter into a collective agreement with them. He stated that the collective agreement is between the 1st defendant and the 2nd defendant. He submitted that only parties to an agreement can sue to enforce its provisions and that it cannot be enforced by or against a person who is not a party even if the contract is made for his benefit and purports to give him the right to sue or make him liable upon it. He cited Kenneth Nwuba v. Ignatius Ogbuchi & 2 ors [2008] 2 NWLR (Pt. 1072) 471, NUHPSW v. Whassan Everest (Nig) Ltd [1978 – 2006] DJNIC 361, NUHPSW v. Palisco (Nig) Ltd [1978 – 2006] DJNIC 547, Ironbar v. Federal Mortgage Finance [2009] 15 NWLR (Pt. 1165) 506 at 515 and Nwuba v. Ogwuchi [2008] 2 NWLR (Pt. 1072) 471 at 481. He submitted that exhibit C which is the collective agreement cannot apply to former employees of the 1st defendant, citing West African Distillers Ltd v. Food, Beverage and Tobacco Senior Staff Association [1978 – 2006] DJNIC 368. Learned counsel submitted that the jurisdiction of the NICN to determine a matter depends on the existence of a collective agreement and a party to the agreement must have filed the action as enjoined by section 15 of the Trade Disputes Act, citing John Ovoh v. Nigerian Dredging and Marine Ltd [1978 – 2006] DJNIC 516. He submitted further that the claimant’s pension is paid out of a Pensioners Fund account and that the actual amount is determined by the base rates and his terminal pay, citing Nigerian Union of Construction and Civil Engineering Workers v. Costain West Africa Ltd [1978 – 2006] DJNIC 64. He explained that employees who retire on a higher pay will have a higher pension and as such to harmonise pensions as sought by the claimant will mean that the pensioner fund account will be insufficient to meet the demands of the new retirees as well as the old retirees. He submitted that exhibit C1 is not a collective agreement but a mere explanatory booklet. It was his contention that the claimant cannot rely successfully on Federal Government circulars issued by senior civil servants and addressed to public officers as the intention of the circulars is not to extend its applicability to private companies. He argued that the claimant cannot rely on Federal Government circulars exhibits E – E4 neither is the 1st defendant bound by them, citing Cookey v. Fombo [2005] 15 NWLR (Pt. 947) 182. He contended that what obtains in other Oil companies is predicated on the agreements reached between the management of those companies and its relevant unions. It was his submission that the claimant’s claim for comprehensive medical care is not an issue before the court as an issue is the question in dispute between the parties necessary for determination by the court, citing Adeogun v. Fashogbon [2008] 17 NWLR (Pt. 1115) 188 paras C – D. He submitted that the 1st defendant has always concerned itself with the welfare of its staff, pensioners and their dependants alike and that the claimant has been a beneficiary of its comprehensive medical care relying on exhibits NAOC 3 – 9. He submitted that the claim for comprehensive medical care is frivolous as the evidence before the court shows that it is already in place and functional. He referred to clause 24 of exhibit C. On the issue of deduction of check off dues, learned counsel referred to section 5(3) of the Labour Act CAP LI LFN 2004 and submitted that there is an obligation on the 1st defendant to make deduction of check off dues in respect of the 2nd & 3rd defendants but that there is no obligation to make deductions from pensions. He argued that the claimant and those he represents are pensioners and the law enjoins the employer to make deductions from wages of all workers and not pensioners. He referred to section 17 of the Trade Unions Act CAP T14 LFN 2004 and section 91 of the Labour Act for the meaning of worker and submitted that the definition excludes retirees and pensioners. He cited Unipetrol (Nig) Plc v. ESBIR [2008] 8 NWLR (Pt. 983) 624 at 636 and Ehuwa v. OSIEC [2008] 18 NWLR (Pt. 1012) 544 at 588 for the interpretation of unambiguous provisions of a statute and referred to clause 5 of exhibit C which he submitted has construed check off dues in line with prevailing legislation. He finally submitted that the claimant having failed to establish his case, the originating summons is misconceived and the action should be dismissed. Replying on point of law, learned counsel to the claimant conceded to the general principle of law on privity of contract and submitted that there are exceptions to this principle. He submitted that the 2nd and 3rd defendant acted as Representative/Agent to negotiate exhibit C & N for and on behalf of the claimant and those he represents and yet took no steps to enforce the provisions on behalf of the claimant. That the claimant cannot sit back in the face of the refusal of 2nd & 3rd defendants to do so. He submitted that this constitutes one of the acknowledged exceptions to the general rule governing privity of contract and which has given the claimant the right to sue. He referred to Sasegbon’s “Laws of Nigeria” 1st Edition Vol. 5, Pg 396 - 397 Para 841, Anuruba v. V.E.C.B. Ltd [2005] 10 NWLR (Pt 933) 321 at 325, NBN Ltd v. Savol W.A. Ltd [1994] 3 NWLR (Pt 333) Pg 435 at 441, Makwe v. Nwukor [2001] 4 NWLR (Pt. 733) 356 at 360 and Seedorff v. Archbode Eng. Ltd [1996] 1 NWLR (Pt. 423) 223 at 224. He then submitted that the court has power to give effect to equitable principles when there is a conflict with the common law referring to sections 13 & 15 of the NIC Act 2006. It was his contention that exhibit C1 forms part of the collective agreement binding on both parties, citing PTF v. NPC Ltd [2007] All FWLR (Pt. 1055) 478 and Obajimi v. Adedeji [2007] All FWLR (Pt. 394) 335 at 338. He argued that the 1st defendant is attempting to alter the pensions of the claimants contrary to the provisions of section 173(2) of the 1999 Constitution. He submitted that the case of Cookey v. Fombo supra cited by the 1st defendant’s counsel does not support his submission that the 1st defendant is not bound by Federal Government circulars. On the issue of deduction of check off dues, he submitted that whether a worker earns a “salary” and a pensioner receives a “pension”, the end result is remuneration and the 1st defendant is under an obligation to deduct check off dues to enable the Nigerian Union Pension perform its legal obligation. He submitted that the claimants and those he represents are retired workers, citing Chief J. J. Madu & ors v. NUP & 2 ors [2001] 16 NWLR (Pt. 739) 346. He finally urged the court to discountenance the submissions of the 1st defendant’s counsel and grant all the claimants reliefs. I have carefully considered the processes filed, the documentary evidence, the written submissions and authorities cited. It is my view that the three issues formulated by learned counsel to the 1st defendant capture all the issues raised by the parties in this case. I, therefore, adopt the three issues as the issues for determination in this judgement. A preliminary issue to correct at this juncture is that the claimant’s counsel in the questions submitted for determination in the Originating Summons and his written address refers to the claimant intermittently as a trade union. The claimant is not the Nigerian Union of Pensioners (NUP) NAOC Branch. This is a representative action filed by Prince Bandele Ladega for himself and other members of the Nigeria Union of Pensioners NAOC Branch which is clearly stated on the Complaint. This does not translate to an action by the NUP. It is, therefore, a misnomer for counsel to refer to the claimant as a trade union. The claimant submits that the collective agreements made on the 1st May 1992 (Exhibit C) and the 1st June 2000 (Exhibit M), the explanatory booklet titled “Your End Of Service Benefits” (Exhibit C1), entitle the claimant and those he represents to periodic review of their pensions based on economic factors. Exhibit C is made between the 1st defendant and the Nigerian Agip Oil Company Branch of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) while Exhibit M is made between the 1st defendant, the Nigerian Agip Oil Company Branch of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Representatives of AENR Ltd. Clause 2 (a) of both agreements provides as follows: CLAUSE 2: SUBJECT MATTER (a) Conditions set out in this Agreement shall apply exclusively to all Senior Staff in the employment of Nigerian Agip Oil Company Limited who are financial members of the Association. I find that by the deposition of the claimant in paragraph 1 and 3 of the affidavit in support of the originating summons, he and those he represents are no longer in the employment of the 1st defendant and so do not belong to, neither are they financial members of, PENGASSAN (NAOC) branch. Therefore the provisions of the collective agreement which they seek to rely on do not apply to them and I so hold. Exhibit C1 is not a collective agreement but merely an explanatory booklet which is clearly stated on the cover page made by the 1st defendant to help answer staff questions regarding their end of service benefits. The evidence before me shows that the1st defendant by a Trust deed effective 1st January 1993 established a Trust fund set up for the provision of benefits under its Pension scheme and the Trust Deed has been amended twice. The first amendment was on 1st April 2000 and the second on May 25 2011 after the fund Managers, Nigerian Agip CPFA Limited obtained a license from the National Pension Commission to continue to manage the fund as a Closed Pension Fund administrator. This means that the administration of the Pension Fund must be in accordance with the provisions of the Trust deed and the Pension Reform Act 2004. Section 41 of the Pension Reform Act 2004 provides as follows: “Every employer licensed as a closed pension fund administrator to manage its pension funds and assets under section 40 of this Act shall be subject to supervision and regulation by the Commission and shall be deemed to be pension fund administrator and all provisions in this Act relating to the conduct and operations of a pension fund administrator shall apply to it”. This provision applies to the 1st defendant and the fund managers Nigerian Agip CPFA Limited and there must be compliance. The claimants want their pensions harmonized and are relying on circulars emanating from the Federal Government in 1999 and 2000 addressed to the Ministries, Extra-Ministerial Departments and Agencies, Federal Civil Service Commission, Secretaries to State Governments, Heads of Service, Chief Registrar of the Supreme Court and other Public Service Officers on the review of pension rates and harmonization. These circulars relate to public sector pensions. None of the circulars was addressed or directed to the private sector which the 1st defendant belongs to and so it is not bound by any of the circulars. As at the date of these circulars, the 1st defendant already had in place an existing pension scheme funded entirely by the 1st defendant with no contribution from members of staff. By the provisions of section 39 of the Pension Reform Act 2004, this scheme may continue to exist upon fulfilling the conditions prescribed by the regulator, the National Pension Commission. The claimant and those he represents have deposed to the fact that the 1st defendant’s pension accrual rates are the lowest in the Oil Industry and have made a comparative analysis with NNPC and Shell. The pension schemes in existence in these organizations are not before the court and even if they are, the 1st defendant is not bound to apply the same rates. The desire of the claimant and those he represents for harmonization of their pensions and periodic reviews in light of the economic and social realities is legitimate but it can only be embarked upon by the 1st defendant in accordance with the provisions of the Trust Deed; such review being based on actuarial valuation, ability of the fund to accommodate an increase and the provisions of the Pension Reform Act 2004. I so hold. The claimant has deposed to the fact that the 1st defendant has not provided sufficient medical care to him, those he represents and their spouses as it has failed to provide clinic facilities in all the areas they reside. The 1st defendant in reply has explained that its obligation with regard to medical care is as contained in Clause 24, paragraph 7 of exhibit C which provides that “All staff who retire at normal retirement date shall continue to enjoy comprehensive medical care. This benefit shall, however, be provided in company owned or retained clinics/hospitals and government owned hospitals”. The evidence before me shows that the 1st defendant has a wide range of hospitals retained by it for its staff and the claimant and his family receive medical care at one of these hospitals. On the 4th and 21st October 2011, the claimant received treatment at the Holy Family Hospital & Maternity Hospital which is one of the retained hospitals. The 1st defendant paid the medical bill of N53,740.00 and N29,350 respectively. He was admitted between the 26th and 30th 2011 at the same hospital and the 1st defendant paid the bill of N68,750.00. On the 10th and 26th October 2011, Ladega Risikat, a relation of the claimant received treatment at the same hospital amounting to N49,310.00 and N14,820.00 respectively which the 1st defendant paid. The total amount paid by the 1st defendant in respect of the claimant’s medical care for the month of October 2011 is a total of N215,970.00. I find that contrary to the claims of the claimant and those he represents, the 1st defendant provides adequate medical care for them wherever they reside. On the issue of check-off dues, the claimant seeks an answer as to whether the 1st defendant is not bound to deduct check-off dues from their pensions and remit same to the Nigerian Union of Pensioners (NUP). I had stated earlier that the claimant herein is not a trade union. However, he has deposed to the fact that he is the current vice chairman of the Nigerian Union of Pensioners (NAOC) branch and that he has the consent and authority of other members of the union to prosecute this matter. The jurisdictional scope of the NUP as provided in the Third Schedule Part B of the Trade Unions Act CAP T14 LFN covers private sector pensioners. Section 17 of the Trade Unions Act CAP T14 LFN 2004 provides as follows: 17. Deductions From Wages Of Union Members Upon the registration and recognition of any of the trade unions specified in the Third Schedule to this Act, the employer shall— (a) Make deductions from the wages of every worker who is a member of any of the trade unions for the purpose of paying contributions to the trade unions so registered; and (b) remit such deductions to the registered office of the trade union within a reasonable period as may be prescribed from time to time by the Registrar. This section contemplates active employment and consequently imposes the duty to make deductions only where there exits a subsisting employment relationship. Where this relationship is terminated including instances of retirement, the duty to deduct check-off dues ceases because the employee can no longer become a member of any of the unions. However, since the Trade Union Act makes provision for the Nigerian Union Of Pensioners (NUP), whose membership is drawn from workers who may have been members of former unions, the provisions of section 17 of the TUA cannot apply in relation to them. Therefore, any member of NUP desirous of continuing in that membership is required to make personal arrangements towards meeting check-off due obligations. This is because by the provision of section 17 of the TUA, the legal duty on the employer to make deduction from wages or salaries and remit same is in respect of its employees who are members of the trade unions. Notwithstanding the fact that the NUP is listed in Part B of the Third Schedule, the claimant and those he represents have retired from the services of the 1st defendant. It, therefore, follows that the 1st defendant is not their employer and so cannot make deductions from their wages or salaries because they do not receive wages or salaries from it. The provisions of section 17 are clear and unambiguous. See Obi v. INEC [2007] 11 NWLR (Pt. 1046) 449 and Unipetrol (Nig) Plc v. ESBIR [2008] 8 NWLR (Pt. 983) 624.The intendment of the legislature was to clearly exclude pensioners and their pensions as a source of trade union funds. I hold that the 1st defendant is not under any legal duty to make deductions from the pensions it pays to the claimant and those he represents and as such cannot remit same as check-off dues to the Nigerian Union of Pensioners as there is nothing to remit. For all the reasons given above, I find this suit to be frivolous and misconceived. It is hereby dismissed in its entirety with costs of N20,000.00 awarded in favour of the 1st defendant. Judgement is entered accordingly. ……………………..……………… Hon. Justice O. A. Obaseki-Osaghae