Download PDF
IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA IN THE LAGOS JUDICIAL DIVISION HOLDEN AT LAGOS BEFORE HIS LORDSHIP HON. JUSTICE J. D. PETERS DATE: FEBRUARY 12, 2015 SUIT NO: NICN/LA/415/2013 BETWEEN Mr. Olaleye Emmanuel Babatunde - Claimant AND The Institute of Chartered Accountants of Nigeria - Defendant REPRESENTATION Theo .A. Aziegbemi with D.O. Kalu for the Claimant. Joseph Ikoro for the Defendant. JUDGMENT The Claimant’s claims as per his writ filed on 5/8/13 are as follows - 1. A Declaration that the purported termination of the Claimant’s employment with the Defendant vide a letter dated 24th August 2012 written and signed by Mr. Olutoyin A. Adepate the then Registrar/Chief Executive of Defendant Institute without following laid down procedure for terminating Top Management Staff is wrongful, illegal, unlawful and actuated by malice and extreme bad faith, null and void and of no legal effect whatsoever. 2. A declaration that the Claimant is still an Assistant Director/Top Management Staff in the Institute of Chartered Accountants of Nigeria and entitled to resume his duties and functions therein and to receive and/or enjoy the rights remunerations, benefits and privileges attached to this post and/or office until he retires on reaching the compulsory retirement age of 60 years or 35 years of service whichever is earlier in accordance with Defendant’s NEW RETIREMENT POLICY. 3. An order of this Honourable Court reinstating the Claimant to his post as Assistant Director with the Defendant Institute and to all his rights, remunerations, benefits and privileges. OR IN THE ALTERNATIVE 4. Payment to the Claimant the sum of N53,691.326.50 (Fifty-Three Million, Six Hundred and Ninety-one Thousand, Three Hundred and Twenty-Six Naira, Fifty kobo) which represents Claimant’s Basic Salary and Allowances for five years and ten months (5 years and 10 months) when the Claimant is due for compulsory retirement as calculated below: Particulars Calculation of Claimant’s Basic Salary and Allowances for five years and ten months (5 years 10 months) from September 2012 as in the pay roll are as follows: 1. Basic Salary per month - N319,819.75 Allowances per month - N347,179.00 Gross pay per month - N666,998.75 Gross pay per year - N666,998.75 x 12 TOTAL - N8,003,985.00 Gross pay for 5 years 10 months i.e. N8,003,985 x 5 years 10 months - N46,689,912.5 Less 3 months basic salary already paid in lieu (i.e. N959,459.25) i.e. N46,689,912.5 – N959,459.25 - N45,730,453.25 2. Calculation of Additional One Months’ salary by way of yearly bonus (i.e. 13th month) 13 month salary bonus for five years and ten months Basic Salary per month: N319,819.75 x 5 years. - N1,599,098.75 3. Calculation of Gratuity for Thirty-one years (31 years) of service based on the under-listed items on the payroll Basic Salary per month: - N319,819.75 Transport allowance per month - N63,399.00 Housing allowance per month - N118,463.00 Utility allowance per month - N8,775.00 TOTAL - N510,456.75 Calculation Gratuity for 31 years – N510,456.75 x 12 x 330% - N20,214,087.30 Less gratuity for 25 years already paid i.e. N20,214,087.3 – N16,538,798.70 - N3,675,288.60 Gratuity for 5 years 10 months (6 years approximately) - N3,675,288.60 4. Calculation of Leave Allowance for 5 years and 10 months (6 years Approximately) Basic Salary per annum: - N3,837.837.00 10% of basic salary - N383,783.7 Leave Allowance for 5 years 10 months (6 years approximately) = N383,783.7 x 6 years. - N2,302,702.2 5. Unpaid Leave Allowance for 2012 Calculation of Outstanding leave allowance for 2012 Annual Basic Salary - N3,837,837.00 10% of Annual Basic Salary - N383,783.70 Unpaid Leave Allowance for 2012 - N383,783.70 Grand Total - N53,691,326.50 6. An order for N20,000,000.00 damages for wrongful termination of Claimant’s appointment, shock and humiliation of the Claimant at the instant, instigation and/or prompting of the Defendant. 7. Any other reliefs the Court may deem fit and just to award. 8. Cost. The General Form of Complaint in this case was accompanied by a statement of facts, list of witness, statement on oath of the Claimant's witness, list and copies of the documents to be relied on at the trial. The Defendant entered an appearance and filed a statement of defence on 4/11/13. These processes were accompanied by Defendant's statement on oath, list and copies of documents to be relied on at the trial as well as list of witness. The Claimant subsequently filed a reply to the statement of defence on 31/1/14. The hearing of this case commenced on 25/2/14 when the Claimant testified as CW1. Witness adopted his witness deposition dated 5/8/13 as his evidence in chief and tendered 45 documents as exhibits. Some of the Documents were marked tendered and rejected while 41 documents were admitted and marked as Exh. C1 - Exh. C41. Claimant further adopted his additional statement on oath dated 31/1/14 as his additional evidence in chief and also tendered 11 additional documents as exhibits. The additional documents were admitted and marked as Exh. C42 - Exh. C52. Witness added that the Registrar of the Defendant has no power to terminate his employment. He urged the Court to grant his prayers as contained in his statement of facts. The case for the Claimant in brief as contained in his statement of facts is that he was an Assistant Director with the Defendant and a Top Management staff; that his appointment was terminated on 24/8/12 by the Registrar/Chief Executive Officer of the Defendant who had no such power and failed to follow due process; that the 2 Ad-Hoc Committees of the Council of the Defendant found that due process was not followed in the termination of his employment and that there was no immediate danger warranting the sudden termination of his employment with the Defendant. Under cross examination on 30/4/14, Claimant as CW1 testified that he was an Assistant Director before his appointment was terminated; that when he joined the Defendant he was given employment letter; that when he was employed in 1987 there was no Employee Handbook; that subsequently Defendant came up with Employee Handbook and gave same to staff ; that the Employee Handbook regulates the relationship between Defendant and him and that he was not aware of any other book that regulates their relationship. Witness stated further that as a management staff, he would be required to give 3 months’ notice should he desire to leave Defendant or pay 3 months’ salary in lieu; that this is vice versa in that the Defendant owed him the same obligation to give 3 months’ notice or pay 3 months’ salary in lieu and the Defendant paid him 3 months’ salary in lieu of notice. Witness stated that in the letter of termination Defendant requested him to return all their property in his custody but no time limit was indicated; that the official car and the Laptop are still with him; that he wrote a letter applying to purchase both the Car and the Laptop; that the letter of termination was dated 24/8/12 but given to him on 3/9/12; that he wrote to purchase his official car on the 5/9/12 and that he did not refer to the said letter in his statement of facts. Witness added that he was paid his terminal benefits in the sum of N15,292,005.94; that the cost of both the Car and the Laptop was deducted from his final entitlement; that he did not return the money paid to him because he regarded same as part payment of his entitlement; that he wrote a letter for reinstatement to Council of the Defendant but that the Council did not reinstate him and that that was the reason for his being in Court. On 30/4/14, the Defendant opened its case when it called one Abe Oluwatoyin as its DW1. DW1 adopted his witness deposition made on 6/11/13 as his evidence in chief. The defence however continued its case on 16/6/14 when it tendered 11 documents. The documents were admitted and marked as Exh. D1 - Exh. D11. The case for the Defendant is that the Claimant was an Assistant Director in its employment until 24/8/12 when his employment was terminated following it reorganisation. It was also the case for the Defendant that the Claimant was paid all that he was entitled to be paid including three months salaries in lieu of notice and final entitlement and that yet Claimant took out a writ against the Defendant making further claims. Under cross examination on 16/6/14, witness stated that the Claimant worked for over 25 years with Defendant before his appointment was terminated; that during the period the Claimant was not issued any query; that Claimant was Assistant Director with Defendant; that Claimant received awards from Defendant during the period; that Claimant lost his job because of re-organisation of Defendant which started in 2011; that the re-organisation is still ongoing and that the Registrar of Defendant has the power to terminate Claimant’s appointment subject to ratification by Council of Defendant. Witness added that though the Registrar did not follow due process in terminating Claimant’s appointment however it was subsequently corrected by Council of Defendant; that the Registrar as the Chief Executive Officer of the Defendant issues of appointment and discipline ends on his table and that it is only with respect to Senior Staff Assistant Director and above that Council’s ratification is required. At the close of trial, learned Counsel were directed by the Court to file their final written addresses in accordance with the Rules of Court for adoption. The Defendant filed its final written address on 4/7/14. In it, learned Counsel set down three main issues for determination. They are as follows - 1. Whether the Defendant is (sic) breach of contract of service entered with the Claimant by terminating his employment before retirement? 2. Whether the Registrar/Chief Executive is an Agent of the Defendant. If answered in affirmative, whether the Defendant can ratify the act of the Registrar/Chief Executive? 3. Whether the Claimant can challenge termination of his employment as wrongful after collecting three months salary in lieu, final terminal benefit, official car and Laptop without protest or without returning them to the Defendant? Arguing issue 1, learned Counsel submitted that where a contract of service provides for termination by either party giving a specified period of notice, there is no dispute over how the contract comes to an end when either party exercises his right to give notice of intention to bring the contractual relationship to an end or decides to pay salary in lieu of notice, citing Shena Security Co. Limited v. Afribank (Nig.) Limited (2008)18 NWLR (Pt. 1118)102. Citing Akinfe v. UBA (2007)3 FWLR (Pt. 385), Counsel further submitted that a Claimant alleging wrongful termination of his employment must establish the terms of his contract of employment and prove in what manner the said terms were breached by the employer. Counsel submitted that the Claimant has not pointed out categorically the breach he is referring to. According to learned Counsel, the law is that once there is a provision in the contract of service permitting termination and it is complied with, the fact of notification of pending retirement is irrelevant to the right of either party to determine the contract. Counsel urged the Court to resolve this issue in favour of the Defendant. On issue 2, learned Counsel pointed out that the Registrar/Chief Executive is the alter ego of the Defendant and thus an agent of the Defendant. Counsel submitted that in the instant case the Registrar/Chief Executive is the person saddled with the responsibility of carrying out the mind of the Governing Council of the Defendant; that the Registrar/Chief Executive is the only staff of the Defendant that sits with the Governing Council and acts as the Secretary at meetings of the Council. Counsel referred to Exh. D11 and urged the Court to hold that even if there is any defect in the act of the Registrar/Chief Executive in terminating the employment of the Claimant such defect has been cured by Exh. D11. According to Counsel, the effect of ratification of the Registrar/Chief Executive's act has put the Claimant and the Defendant in the same position as if the act ratified had been previously authorised, referring to Vulcan Gases Limited v. G.E. Ind. A. G (2001)9 NWLR (Pt. 719) 638. With respect to issue 3, Counsel submitted that where an employee accepts salary in lieu of notice of termination, he cannot be heard to complain later that his contract of employment was not properly determined. Counsel submitted that in the instant case, Claimant was paid three months' salary in lieu of notice including his terminal benefit and that he was also allowed to go with his official car and Laptop. Learned Counsel submitted that in the instant case, there is no basis upon which it could be said that the termination of the Claimant's employment was wrongful or actionable. Counsel referred to Umoh v. Industrial Training Governing Council (2001)4 NWLR (Pt. 703) 298 para. C-D; Odiase v. Auchi Polytechnic, Auchi (1998)4 NWLR (Pt. 546) 490 para. A-C. Counsel urged the Court to dismiss the claims of the Claimant. In the Claimant's final written address filed on 3/10/14, learned Counsel raised the following three issues for determination - 1. Whether the Registrar/Chief Executive of the Defendant has the power or authority to terminate the Claimant's appointment without recourse to Council. 2. Whether the Defendant Council can ratify an act which the Registrar/Chief Executive has no power to do. 3. Whether or not the Claimant is entitled to judgment against the Defendant. On issue 1, Counsel referred to Exh. C24 - the Employee Handbook as the law regulating the appointment and discipline of the employees of the Defendant and the law governing the employment with the Defendant and that the Defendant ''... is bound to comply strictly with the Employee Handbook, as it has created a special status as an employment with Statutory flavour''. In support of his position learned Counsel cited CBN v. Igwillo (2007)30 NSCQR (Pt. 2) 669 where at p. 689 Akintan JSC said - 'The 1st Appellant is a Federal Institute created by statute. It follows therefore that it must carry out its activities in line with its governing laws. The laws regulating the appointment and discipline of the workers must be complied with strictly as their employment is with Statutory flavour. Every action taken on behalf of the 1st Appellant is therefore expected to be done in good faith free of bias or nepotism'. According to learned Counsel, by paragraph 3(3), 32(C) and 33(E) of the Employees Handbook only the Council has the power to discipline and/or remove the Claimant from employment and that the Registrar/Chief Executive who has no power to appoint the Claimant can also not terminate his employment. Counsel submitted further that there are laid down procedures for the termination of appointment of the Claimant which procedures were not followed. According to Counsel, by Exh, C39 & Exh. D11, the Defendant admitted that the Registrar/Chief Executive did not follow due process as neither him nor Management have authority to terminate the Claimant's appointment. Counsel referred to Aigiro v. University of Lagos (1979)10-12 (CHCJ 9) 34. Counsel urged the Court to resolve this issue in favour of the Claimant. On issue 2, learned Counsel submitted that the Council could not ratify the termination of Claimant's appointment after declaring same illegal; that there was never any ratification and no instrument of ratification was placed before the Court. Counsel urged the Court to hold that the Registrar's act in terminating Claimant's appointment is unlawful, ultra vires his powers and Council cannot ratify an illegality, citing Ashibogun v. Afprint Nigeria Limited (1985) HCNLR 400. He submitted further that the employment of the Claimant is one with statutory flavour and that on the authority of Union Bank of Nigeria Limited v. Chukwuelo Charles Ogboh (1995)2 NWLR (Pt. 380) 64, 'Employment with statutory backing must be terminated in the way and manner prescribed by the statute and any other of termination inconsistent with the relevant statute is null and void and of no effect''. Issue 3 is whether or not the Claimant is entitled to judgment against the Defendant. Learned Counsel submitted that the Claimant has shown that the Defendant Registrar/Chief Executive has no power to terminate his appointment; that Exh. C39 and Exh. D11 showed that the Registrar/Chief Executive did not follow due process as neither the Registrar/Chief Executive nor the Management have authority to terminate the Claimant's appointment and that the Defendant's Council has nothing to ratify. Counsel cited the book Employment Law on Termination and Dismissal by Emeka Chianu where the learned author said on page 299 as follows - ''At the root of current social thinking is the concept of the right to work and Judges can contribute towards the movement by ensuring that; a single person especially where he is unauthorised does not unilaterally deprive his fellow employee his livelihood. The concept of ratification should have no application. Courts have authority to declare that what the unauthorised Officer does is not a legal determination, since it is not itself in the exercise of any legal power, there is nothing to ratify''. Learned Counsel also cited Petroleum Training Institute v. Nesimone (1995)6 NWLR (Pt. 402), Aigoro v. University of Lagos (1979)10-12 CCHCJ 9 at 34 and Ashibogun v. Afprint Nigeria Limited (1985) HCNLR 400. Counsel urged the Court to hold that the Claimant has provided sufficient evidence before the Court to warrant being granted all the prayers in his statement of facts and cited Longe v. First Bank of Nigeria Plc (2006) All FWLR (Pt. 313) 46 in support. He also urged the Court to hold that the payment of the Claimant's entitlement to him does not validate the invalid act of the Registrar, relying on Adeniyi v. Governinig Council of Yabatech (1993)6 NWLR (Pt. 300). Finally, Counsel prayed the Court to grant all the reliefs sought and any other relief the Court may fit and just. On 14/10/14, learned Counsel to the Defendant filed a 9-page reply on points of law. In it learned Counsel again set down three issues for determination. Learned Counsel submitted that the employment of the Claimant was not one with statutory flavour; that although the Defendant was established by a statute, its Rules and Regulations were made by the governing body and not the statute. Counsel relied on Olaniyan v. University of Lagos (1985)2 NWLR (Pt. 9) Shitta-Bey v. Federal Public Service Commission (1981)1 SC 40 & Idoniboye-Oba v. NNPC (2003)2 NWLR (Pt. 805) and submitted that the Claimant was not a Public Officer within the contemplation of the Constitution of the Federal Republic of Nigeria, 1999, (as amended); that Claimant could not be reinstated for reasons as contained in Item 40 page 14 of Exh. C24 and finally that a servant whose appointment has been terminated cannot claim his wages for services not rendered citing Co-Operative Bank Nigeria Limited v. Nwankwo (1993)4 NWLR (Pt. 286) 170 paras. C-D. Counsel urged the Court to dismiss the claims of the Claimant. This Judgment was initially slated to be delivered on 15/1/15. Unfortunately, the Judiciary Staff Union of Nigeria (JUSUN) embarked on an industrial action from 5/1/15 to 25/1/15. Although this Judgment was ready as at that date for delivery it could not be delivered due to the reason stated. Hence Hearing Notices were issued and served on Counsel to attend Court today for this Judgment. I read with understanding all the processes filed either side in this case. This is including all the final written addresses of both learned Counsel and the Reply on points of law filed by the Defendant. I equally listened with attention to the testimonies of all the witnesses called and watched their demeanour in the course of trial. Finally, I did review all the exhibits tendered and admitted. Having done all this, I have come to narrow the issues for the just determination of this case to be mainly three as follows - 1. Whether the employment of the Claimant was one with statutory flavor. 2. Whether Claimant's employment was properly and validly terminated. 3. Whether Claimant is entitled to a grant of all or some of the reliefs sought. The first issue is whether the employment of the Claimant was one with statutory flavour. The determination of this issue is both fundamental and germane. It goes to the root of the divergences between the parties. It was the argument of the Claimant that his employment has statutory flavour. He hinged his argument on Exh. C24 i.e The Employee Handbook. Now the question is when is an employment said to be with statutory flavour? An employment is said to be one with statutory flavour when the office concerned is one established or protected by a statute, see CBN v. Igwillo (2007) LPELR-835; or when though not established or created by a statute but the rules and regulation with respect to the particular office or employment were made pursuant to a statute, see University of Nigeria Teaching Hospital Management Board & Anor. v. Nnoli (1994) LPELR-3420 (SC). In other words, for a Claimant to successfully claim that his employment is one with statutory flavour he must establish a nexus between his employment and a particular legislation. In the instant case, the Claimant asserted that his employment has statutory flavour and that Exh. C24 is the law governing his employment. Now, is Exh. C24 a law? What clothes the said exhibit with the status and power of a statute? Which legislative body in this country passed Exh. C24 into law? A law is no law until it has passed through all the requisite legislative processes and hurdles including the assent of the assenting authority. In Nigeria as at today, a law is either made by a House of Assembly of a State for that State only or the National Assembly (comprising of the House of Representatives and the Senate) acting within its legislative competence. In the two cases, assent of either the Governor of a State or of the President and Commander in Chief of the Armed Forces as the case maybe is required, subject of course to the powers of the legislative bodies to override any veto by the Executive. Aside from this, Decrees and Edicts made under the Military, to the extent that they are not repealed remain laws. Exh. C24 does not fall into any of the categories stated above. Exh. C24 is not a statute. Exh. C24 cannot and does not confer a status different from that of a Master/Servant on the Claimant. I so hold. Now, the Court has responsibility and indeed duty to take cognisance of all existing laws. Thus, I take cognizance of the existence of Institute of Chartered Accountant of Nigeria Act, Cap. 112, Laws of the Federation of Nigeria, 2004. That is the statute establishing the Defendant in this case. See Section 1(1), ICAN Act. Unfortunately that legislation was not cited before me by any of the learned Counsel representing the parties in this case. Thus, I did not have the opportunity of listening to argument of Counsel on the applicability or non-applicability of that statute to the case of either side. I will therefore not comment on same. I thus find and hold that the employment of the Claimant is not one with statutory flavour but rather one of master/servant. The second issue is whether the employment of the Claimant was properly and validly terminated. In a master/servant relationship, the right to terminate same is vested in either party, see Ajayi v. Texaco Nigeria Limited & Ors. (1987) LPELR-293. Servant may terminate by simply tendering a letter of resignation and give the requisite notice or make payment in lieu. Servant may also resign with immediate effect and yet make no payment. Finally, servant may indeed opt to just walk away without resigning or giving notice. In any of these scenarios, it is up to the Master as to the course of action to take within the ambit of the terms and conditions entered into by the parties. On the other hand, a Master may bring such a relationship to an end either by termination of same with or without notice or payment in lieu; or via dismissal. Termination by Master without giving the requisite notice is not illegal. It is only wrongful with remedies being in damages and calculated on the monetary value of the length of notice required, see SPDC Limited v. Olanrewaju (2008) LPELR-3046 (SC). In the instant case, I have held that the relationship between the parties is one of master/servant. I have evidence before me that upon termination of the Claimant's employment by Exh. C11, the Claimant wrote Exh. D4 to express ''...interest to purchase my official car and my Laptop''. I have additional evidence that that request was granted by Exh. D5; that the Claimant was paid the sum of =N=959, 460.00 being three months salary in lieu of notice and additional sum of =N=15,292,005.94 as final entitlement on disengagement. Claimant was informed accordingly of these payments and indeed confirmed same during cross examination. What else ought to be done by the Defendant that is yet undone in the circumstance and within the ambit of the law? I find none. I hold that the employment of the Claimant was properly and validly terminated by the Defendant and that the termination was neither wrongful nor illegal. Before I draw a curtain on this issue, it is imperative that I make a comment on Exh. C39. That document was the ''Report of Council's Ad-Hoc Committee on Mr. O. E. Babatunde's Termination of Appointment''. Learned Counsel to the Claimant relied heavily on this exhibit as supporting his position that the Registrar/Chief Executive had no power to terminate Claimant's appointment as contained in Recommendation 1 of the Report. However learned Counsel chose to close his eyes to other recommendations in the same document. For, in Recommendation 2, the Committee specifically recommended thus - '2. The decision taken to terminate the appointment of Mr. Babatunde by the management should not be reversed. A reversal would amount to setting a dangerous precedent as he is not the only one whose appointment was terminated in recent times in the Institute''. The essence of adjudication is to seek out the truth of a cause or matter and to decide on same accordingly. That is the constitutional role of the Bench. That essence is achieved by learned Counsel as Ministers in the Temple of Justice through advocacy by presenting the true picture of both the facts and the law to the Court. That is the statutory role of the Bar. Thus where a Counsel quotes from a document, the tradition of the Bar dictates that he should refer to the contents including those portions that are not supportive of his case. In England where Nigeria receives her tradition of legal profession, such a conduct could attract sanction. I would rather stop at that and say no more. The third issue is whether Claimant is entitled to a grant of all or some of the reliefs sought. Having so resolved issues 1 and 2, it is apparent that this issue can and will only be resolved against the Claimant and I so do. The claim in the alternative is for payment of salaries and allowances of the Claimant for 5 years and 10 months when the Claimant would have retired from the services of the Defendant. This, invariably is in addition to the three months salary paid to the Claimant in lieu of notice of termination as well as the final entitlement which he also collected and of which there is no evidence that he has returned same to the Defendant. This claim is for payment for services not rendered and not intended to be rendered. The position of the law remains that in a situation as this, the staff concerned is not entitled to wages for services not rendered. See Co-Operative Bank Nigeria Limited v. Nwankwo (1993)4 NWLR (Pt. 286) 170 & Olatunbosun v. NISER Council (1988)3 NWLR (Pt. 80) 25. I find no proof of this claim. I hold that it has no basis in law, facts, logic and not even in commonsense. Same is therefore refused and dismissed likewise. Finally and for the avoidance of doubt, all the claims of the Claimant (including the alternative claims) fail for reasons stated in this Judgment and are dismissed accordingly. Judgment is entered accordingly. Hon. Justice J. D. Peters Presiding Judge