Download PDF
IN THE NATIONAL INDUSTRIAL COURT HOLDEN AT LAGOS BEFORE THEIR LORDSHIPS Hon. Justice B. B. Kanyip - Presiding Judge Hon. Justice V. N. Okobi - Judge Hon. Justice F. I. Kola-Olalere - Judge Hon. Justice O. A. Obaseki—Osaghae - Judge Hon. Justice J. T. Agbadu—Fishim - Judge DATE: Wednesday 15th July, 2009 SUIT NO. NIC/8/2008 BETWEEN 1. Lateef Alao Adesigbin, 2. F. Akinwumi & 260 ors - Claimants AND Nigerian Breweries Plc - Respondent REPRESENTATION Mr. Olusola Kazeem Salawu, for the claimants Mr. Uche C. Ihediwa, with him is Miss Rosemary Ubajaka, for the respondent J UIDGMENT On the 1 8 of February, 2008, the claimants filed this complaint and a thirty- paragraphed statement of facts claiming the following reliefs against the respondent: a. A declaration that the purported Management/Union agreement dated the 25th of May 2004 is null and void and, therefore, not binding’ on the claimants having been fraudulently executed malafide and without regard to due process. b. A declaration that the purported agreement dated 25th of May 2004 is not binding on the claimants, same having been executed without the consent and input of the affected employees and at the same time being below the accepted standard in the industry. c. A declaration that the agreement of 25th of May 2004 is not binding on the claimants whose employment was determined by a letter dated 24th of May 2004 incorporating the claimants’ redundancy benefit which was calculated on the bases of a non-existing agreement contrary to article 27 of the employees’ Handbook. d. A declaration that the agreement of 10th of September 2001 being the only valid Management/Union agreement existing at the time the employment of the claim was determined is binding on the claimants and should be used in the calculation of the claimants’ redundancy allowance. e. A declaration that. the c1aim are entitled to be paid 26 weeks’ wages for each completed year of service or annual basic salary multiplied by the number of years left to clock retirement age whichever is lower as full redundancy benefits due lo the claimants in line with the agreement of 10th of September, 2001. f. An order of Court directing the respondent to pay the claimants the 20 weeks’ wages for every year of service which is the shortfall of the claimants’ redundancy benefit which is due to the claimants pursuant to the 10th of September, 2001 agreement. The claimants in addition attached to the complaint, the list of witnesses they intend to call and list of documents they rely on. These attachments indicate that the claimants have six witnesses to call and the documents they rely on are: 1. Exit benefit scheme, an information booklet of Nigerian Breweries Plc end of the service arrangement Employees handbook. 2. The September 10, 2001 collective agreement between National Union of Food Beverages and Tobacco Employees and Nigerian Breweries Plc Management. 3. The agreement dated 24th May, 2004 Nigerian Breweries letter to one Mr. J. I. Ojero out placement letter. The claimants’ position is that they were employees of the respondent, a public liability company, who is into the business of brewing beer and other non alcoholic drinks. That in the year 2004, the respondent introduced new job improvement through operating computerized machines as a result of which there was reduction in staff strength needed in the company. The company, therefore, out-placed the claimants and disengaged them from its services. The claimants stated that they had put in the respondent’s service between ten to thirty years. They pointed out that the disengagement package for such outplacement is usually contained in the collective agreement between the management and the workers’ union of the company. That on the 10th of September 2001, the management/union of the company had the last collective agreement executed when (230) two hundred and thirty staff were out-placed. That on the 24th of May, 2004 they were disengaged but that their disengagement terms did not reflect the September 10th 2001 agreement. Instead, they were paid only six (6) weeks for every year spent in the respondent’s service as redundancy allowance and not twenty six (26) weeks as per the September 10, 2001 agreement. They went further to state that even their year of retirement ought to be sixty (60) years according to article 25 of the handbook. The respondent’s defence is that they admitted reducing their staff strength but that they did that through retirement and redundancy. An example given by the respondent is that the 1st claimant and some other claimants were retired while the 2nd claimant and some other claimants were declared redundant. That the law requires the respondent to duly inform the ‘workers’ representatives’ of the reasons and extent for the redundancy while this is not required for cases of retirement. They went further to state that the collective agreement in operation between the parties at the material time was that of 13th January 2000 and that the claimants’ disengagement benefits were calculated according to that agreement and the Labour Act; after passing adequate information to the union on redundancy. In reply to the respondent’s defense the claimants stated that the agreement of 13th January 2000 relates to the National agreement for enhanced welfare of workers between Association of Beverages & Tobacco Employers and that of the union of Employees. That that agreement was not on severance package for out-placed or prematurely retired employees. Both parties agreed and argued this matter on record. The claimants in addition replied to the respondent’s address on points of law. On the 13th of May, 2009, both counsel adopted their written briefs of argument. Adopting his brief on behalf of the claimants, Mr. O. K. Sa1aM of counsel orally informed the court that their reliefs 1, 2 & 3 in the statement of facts are no longer in contention and so the said reliefs are abandoned by them. He referred the court to paragraph 3(1) of their written address. 1-le also informed the court that on issue 2 in their address they are contesting only the ex-gratia payment. That their position is that what the respondent paid them as ex gratia is less than what was agreed upon as per the agreement of 10th September 2001. He referred the court to paragraphs 2 & 3 of that agreement. He urged the court to award the claimants ex gratia payment on the basis of the remainder of 20 weeks per year of service because only six weeks for each year spent was paid to them. Mr. Uche Ihediwa of counsel adopted his written address on behalf of the respondent. In the course of this adoption, he agreed with the claimants that this court is not called upon to pronounce on reliefs 30(a), (b) and (c) of the claimants’ statement of facts. He informed the court that the respondent too is abandoning its issue 1 in its address dealing with question of representative capacity of the claimants. He then urged the court to hold in its favour on the respondent’s remaining prayer in its written address. Responding orally, Mr. Salawu submitted that the payment of fifteen months ex gratia to the claimants by the respondent, having not been based on the agreement of 10th September 2001 between Management and the union, should be discountenance and the balance should be awarded to them. Regarding the claimants’ written address, counsel proffered three issues for determination by this court. Issue 1 is whether by virtue of the provision of article 27 of the terms and conditions of service of the claimants’ contract of employment as manifested in the industry’s handbook, the collective agreements executed between the parties are enforceable. The claimants pointed out that both parties agreed that the claimants’ exit benefits were calculated in accordance with the collective agreement of 13th January 2000 and not that of 10th September 2001. They submitted that article 27 of their handbook provides that any employee who looses his job on ground of redundancy would have his terminal benefit ca1culat as per existing management/union agreement on redundancy. That this means that that existing agreement is incorporated into the contract of employment between the parties before the court. See Emmanuel Nwobosi v. ACB Ltd [1995] 6 NWLR (Pt. 404) 658. They submitted that based on the parties’ pleadings, parties’ conduct and article 27 of their handbook, the collective agreement executed by the parties in this case is enforceable and urged the court to so hold. Issue two is whether in view of the provision of article 27 of the handbook, it is the agreement of 10th September 2001 as alleged by them or that of the 13th January 2000 as alleged by the respondent that is enforceable between the parties as at the time the claimants’ appointments were determined. They urged the court to give literary meaning to article 27 of the handbook and referred the court to the following cases to assist in the interpretation of the article: Daodu v. UBA Plc [2004] 9 NWLR (Pt. 878) 276 at 292 — 293 and Adegbite v. College of Medicine, University of Lagos [1973] 5 SC 149. They submitted that a management/union agreement presupposes an agreement s between the management of Nigeria Breweries Plc and the labour union in the company and not an agreement between Association of Food Beverages and Tobacco Employees and the National Union of Food Beverages and Tobacco Employees. They went further to submit that the above reasoning informed the execution of the May 2000 Management/Union agreement which took care of those rendered redundant in year 2000 while that of 10th of September 2001 took care of those rendered redundant in year 2001. The claimants contended that the collective agreement between the Employers’ Association and the National Union of Food Beverages and Tobacco Employees is not in the widest contemplation of article 27 of the handbook. Therefore, it was wrong for the respondent to have used it in calculating their exit benefits. They submitted that the only existing and enforceable agreement between management/union as at 24 May 2004 when the claimants’ employment was determined is the one of 10 September 2001. They submitted that even if the court is mindful of considering the agreement of 13 January 2000; though they are not conceding, the agreement of 10th September 2001, being the latter in time shall prevail. See Afolayan v. Bamidele & ors [3 NWLR (Pt. 595) 454 at 463. They urged the court to uphold their position on this issue. Issue three is whether the claimants are entitled to their claims as per reliefs 4, 5 and 6. They pointed out that paragraph two of the agreement between management/union on 10th September 2001 provides that every non- management staff out-placed for redundancy shall be paid 26 weeks ex-gratia per each completed year of service or annual basic salary for his remaining year of service, whichever is lower, That the respondent by their paragraphs 10, 11, 14, 16 and 18 of their statement of defense did not pay full exit benefit to the claimants as agreed in the 10th September 2001 agreement. Hence they are in breach of a valid and enforceable agreement. They submitted that they are entitled to 26 weeks ex-gratia for every year they spent in the respondent’s service. The claimants pointed out that their ex-gratia was calculated by the 13th January 2000 agreement; hence only 6 weeks per year completed in service were paid to them. They, therefore, asked for the 20 weeks per year spent in service short fall by using the 10th September 2001 agreement. The respondent’s position as per its written address is that on the 24th May, 2004, it carried out an outplacement exercise in its operations. That this involved early retirement of some of its staff who had attained 50 years of age like the claimant; and by declaration of redundancy in respect of some staff like the 2nd claimant because they were surplus to requirement. To those who were retired, the respondent stated that they paid them their retirement benefit in accordance with article 25 of the handbook while those who were rendered redundant were paid their redundancy benefit according to article 27 of the handbook. In essence, the respondent is contending that the outplacement of all the claimants fell under two categories and their outplacement benefits were calculated under two difference articles depending on the group they belonged. The respondent then postulated four issues for determination. As noted earlier in this judgment they abandoned the issue which borders on the claimants’ representative capacity. Therefore, all the submissions on that issue are hereby disregarded. Issue two is what mode of severance was adopted in the termination of the claimants’ employment. They pointed out that by paragraphs 4, 5, 9 and 15 of their statement of facts, the claimants conversed that all of them were out- placed due to redundancy, but that they were able to puncture this in paragraphs 4, 5 and 9 and their statement of defense as pointed out above. That these were not denied nor controverted by the claimants in their reply. Hence the averments were deemed admitted. See UBA v. Akinrinnade [2000] 2 NWLR (Pt. 645) 466, Eke v. Okwaranyia [2001] 12 NWLR (Pt. 726) 181 and NNPC V. Sele [2004] 5 NWLR (Pt. 866) 379. The respondent referred the court to paragraph 17 of the statement of facts where the claimants averred that ‘and for those who retired early, they were not paid for the period between the date of actual retirement and when they have attained the age of 60 years contrary to article 25 of the handbook’. The respondent urged the court to hold that in out- placing the claimants from its services, the respondent retired some and rendered some of the claimants redundant. Issue three relates to what benefits accrued to the claimants in cases of redundancy or early retirement. The respondent referred the court to articles 25(2) and 26 of the handbook. It submitted that if a retiring staff puts in 20 years or more for instance, he will be entitled to gratuity. It submitted that the court cannot invoke collective agreement or management union agreement in computing the entitlement of a retired staff, because his outplacement is governed by article 25 of the handbook. it submitted further that the court is enjoined to construe terms of the agreement between the parties in accordance with its terms. See Omenka v. Morison Ind. Plc [2000] 13 NWLR (Pt. 683) 147 and Adams v. LSDPC [2000] 5 NWLR (Pt. 656) 291. The respondent pointed out that it has been able to show the court that the claimants were out-placed for two different reasons. That even if the court is minded to make pronouncement in respect of those rendered redundant, the claimant and his group who were retired cannot benefit from it. The respondent submitted that redundancy means permanent loss of employment caused by excess manpower. See Peugeot Automobile Nigeria Ltd v Saliu Oje & 3 ors [1997] 11 NWLR (Pt 530) 625 especially per Mohammed JCA at 635. The respondent pointed out that by clause 3 of the agreement of 10 September 2001 relied upon by the claimants, it has nothing to do with redundancy because it says that redundancy benefit would be paid in accordance with the existing rate agreed with the National Joint Industrial Council. it submitted that redundancy benefits are justiciable because they are prescribed by statute, while ex gratia payment connotes something given out of grace, favour, indulgence or gratuitously. See PAN v. Oje, supra, at 635 paragraph 1-1 and Blacks Law Dictionary 17 Edition by B.A. Garner at page 594. That it is something that is not legally required. See Union Beverages Ltd v. M. A. Owolabi [1998] 1 NWLR (Pt. 68) 128 per Nnaemeka Agu JSC. The counsel submitted that article 27 of the handbook talks of legally enforceable redundancy agreement entered into between management/union and not ex-gratia payment. That the collective agreement of 13th January 2000 spelt out the prevailing practice in respect of redundancy. That it is this agreement that remains in force when the claimants were out placed. The respondent submitted that the claimants’ assertion that what article 27 envisages is a management/union agreement and not an agreement between union of Employers and Union of workers, ignores the well known principle of law that a collective agreement is binding and enforceable. See the dicta in Nwajagu v. BAICO Nig. Ltd [2000] 14 NWLR (Pt. 687) 356, Abalogu v. SPDC [2003] 13 NWLR (Pt. 837) 308 and Dauclu v. UBA [2004] 9 NWLR (Pt 878) 276. it submitted further that that assertion of the claimants again ignores the fact that the 13th January 2000 agreement is the only agreement governing redundancy in the industry. On this issue; the respondent urged the court to hold that there was retirement and redundancy in relation to the outplacement of the claimants from its industry and that the applicable agreement in case of retirement is the handbook while the collective agreement is for outplacement on ground of redundancy. The last issue raised by the respondent is whether the claimants have established any of their claims so as to entitle them to judgment. It pointed out that after abandoning their claims a, b and c in paragraph 30 of their statement of facts which the respondent conceded to, the claimants’ remaining claims are: I. a declaration that the management/union agreement of 10th September 2001 is the valid agreement between the parties for calculating their redundancy benefits; and 2. an order directing the respondent to pay 20 weeks wages for every completed year in their service. The respondent pined that if the court allowed the agreement of 10th September 2001 to apply to redundancy in the claimants’ instance, it means for instance that by clause 3 of that agreement, the claimants would be entitled to 26 weeks pay for each year spent and also another six weeks redundancy benefit agreed to by the National Joint Council. It submitted that this is preposterous and urged the court to refuse it. it submitted further that since the claim is for redundancy that has its own procedure, the combined effect of article 27 of the handbook and the collective agreement of 13th January 2000 is that the claimants are entitled to 6 weeks for each completed year in the respondent’s service. The respondent pointed out that even if the court is minded to grant the claimants’ prayer 30(e), it will still be difficult to make the order because:- a. the court will not know how many of the claimants were affected by retirement and how many of them were affected by redundancy. b. the claim is in the nature of special damages and no particulars were pleaded nor evidence given in its support. It again submitted that the claimants’ action is seeking declaration from the court; therefore, it cannot in the same action seek to enforce an order against the respondent. It went on to state that the nature of a declaratory action’ was aptly elucidated by the Supreme Court in Western Steel Works Ltd. v. Iron & Steel Workers Union [1987] NSCC (Pt. 1) at 33 per his lordship Karibi-Whyte JSC in the following words: It is merely a judicial statement confirming or denying a legal right of the applicant, it merely declares and does no further in providing a consequential relief to the applicant. The respondent quoted from two books, which are: Fidelis Nwadialor’s Civil Procedure in Nigeria 2 Edition page 1128 to the effect that — A declaratory judgment is one that merely proclaims the existence of a legal relationship and does not conl.ain any order which may be enforced against the defendant. Prof. M. T. Abdul-Rasaq’s treatise captioned ‘Judicial Review in Nigerian Taxation’ stated: A declaratory judgment, unlike an injunction is not self executing or self enforceable. Thus a declaratory judgment may in this sense be said to be a law without coercion, a remedy without a substance’ See also Adigun v. Attorney General, Oyo State [1987] 1 NWLR (Pt. 53) 678, Okoyci v. Sanili [1990] 2 NWLR (Pt. 131) 172 and Government of Gongola State v. Tukur [1989] 4 NWLR (Pt. 117) 517. The respondent finally urged the court to dismiss the suit. The claimants’ reply on points of law relates to the 1 issue postulated by the respondent, which bothers on the claimants’ representative capacity. Given that the respondent abandoned that issue, the claimants’ reply on it is of no relevance and so is equally disregarded for present purposes. We have carefully considered the facts of this case, the parties’ documentary evidence and the submissions of counsel to both parties and their cited authorities, both statutory and decided ones. In its statement of defense and written brief of argument, the respondent seriously canvassed that contrary to the assertion of the claimants, it was not all of them that were rendered redundant by the respondent. That while 1st claimant and some of the claimants were retired; the 2nd claimant and some of the claimants were rendered redundant. Therefore, the outplacements are of two different categories and are governed by articles 25 and 27 of the handbook respectfully. The claimants did not controvert this assertion but confirmed it in paragraph 17 of their statement of facts. We, therefore, agree with the respondent’s submission and hold that it is not correct to say that all the claimants were out-placed from the respondent’s service by way of redundancy. We note that none of the two parties exhibited the collective agreement of 13th January 2000. The claimants exhibited two documents with their reply on points of law. The two documents are dated 2nd and 5th May 2000 respectively. The 1st is addressed to one A. Chicks and the 2nd is addressed to one Mr. P. N. Omomia. The two documents are letters of outplacement are a result of retirement and redundancy respectively. They are not collective agreements neither is either of them of general application to all employees of the respondent. We, therefore, hold that these two documents are neither re1evant nor useful for the just decision on this matter because they are only relevant and applicable to the persons to which they are addressed. The respondent submitted in its address that what the claimants are seeking from the court is a lec1aratory order; hence they cannot in the same action seek to enforce an order against the respondent. It referred the court to Karibi Whyte’s pronouncement to that effect in Western Steel Works Ltd v. Iron & Steel Workers Union [1987] NSCC (Pt. 1)33. Oputa JSC in the same case in [1987] 1 NWLR (Pt. 49) 284 at 303 went further to hold in his concurring judgment that a Court may, however, make consequential orders in such actions. Both parties agreed that the claimants’ contemplated right as it relates to redundancy stems out of a collective agreement between them. They also agreed that the collective agreement in question is enforceable because it was embedded in their contract of employment by virtue of article 27 of the handbook. In part, Article 27 provides:-. In cases of redundancy occasioned by improvement of method, effort shall be made to absorb surplus staff where possible. Employees whose appointments are terminated on grounds of redundancy will be paid redundancy benefit as per the existing management/union agreement on redundancy in force at the time. By this Article 27, an existing or subsisting management/union agreement between the parties is enforceable in respect of outplacernent on ground of redundancy. We agree with the claimants’ submission that the phrase “the existing management/union agreement” in article 27 of the handbook presupposes an agreement between the management of Nigeria Breweries Plc and the union in the company and not the agreement between the Association of Food Beverages and Tobacco Employees and the National Union of Food Beverages and Tobacco Employees. The general rule is that a collective agreement should be embedded in a contract of employment before it is enforceable. See Abalogu v. SPDC Ltd and Daudu v. UBA Plc, all supra. However, given that this court is statutorily given the power to interpret collective agreements in section 7 of the National Industrial Court Act 2006, it presupposes that a collective agreement may be binding and enforceable depending on its terms. To the claimants then, the agreement applicable to their, claims is that dated 10th September 2001, while the respondent insisted that it is the one of 13th January 2000. As pointed out earlier, the collective agreement of 13th January 2000 was not exhibited before us, so we cannot, make any comment on it. That of 10th September 2001 is before the court. It is titled, Conc1usions reached at a meeting held on Monday September 10th, 2001 …between the National Union... and NB Plc Management’. By the document, both parties agreed on seven itemized issues after the management had briefed the workers of the industry’s intention to out-place some of its staff. The document indicates that it affects a total of 230 employees. The present case before the court is brought on behalf of 260 staff. By its last paragraph, the contents of the document cease to be enforceable after 14 of September 2001. This means that the document dated September 10, 2001 could not have been meant for and so cannot be applicable to the 260 staff in this suit. From our careful perusal of this document, we find that it is no longer in force and, therefore, cannot be applicable to the outplacement of the claimants which was carried out on the 24th May 2004. We hold that this document of 10th September 2001 is not applicable to this matter at hand because the agreement is no more subsisting; it has gone into extinction after 14th of September 2001. The claimants canvassed intensely on the fact that they are entitled to additional ex-gratia payment of twenty or eleven weeks salary for every year spent in the respondent’s industry. In PAN v. Oje, supra, at pages 635 636, ex-gratia is defined as a term applied to anything accorded as a favour as distinguished from that which may be demanded ex-debito as a matter of right. It also connotes something given out of grace, indulgence or gratuitous. Ex- payment, without more, recognizes no legal obligation to pay. Thus ex payment simplicita and in the instant case, in our considered opinion, is not such that this Court can compel to be paid because it has no legal obligation and we so hold. On the whole, we hereby hold that: 1. The Management/Union agreement in existence between the parties is enforceable according to article 27 of the handbook. 2. The agreement of September 10th 2001 does not qualify as the one contemplated in article 27 of the handbook; because it is no longer subsisting, it has gone into extinction after 14th September, 2001. Therefore it is not a to the claimants’ outplacement that was carried out on the 24th of May, 2004. 3. The claimants are not entitled to be paid their exit b in accordance with paragraph 2 of the agreement of 10th of September 2001 since it is an expired document. 4. The claimants are not entitled to be paid additional wages as ex-gratia given that they have not established any entitlement to it. The claimants’ claims are hereby dismissed. We make no order as to cost. Judgment is entered accordingly. Hon. Justice B. B. Kanyip Presiding Judge Hon. Justice V.N Okobi Hon. Justice F.I Kola-Olalere Judge Judge Hon. Justice O.A. Obaseki-Osaghae Hon. Justice J. T. Agbadu-Fishim Judge Judge