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IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA IN THE CALABAR JUDICIAL DIVISION HOLDEN AT LAGOS BEFORE HER LORDSHIP HON. JUSTICE O.A. OBASEKI-OSAGHAE DATE: February 27, 2015 SUIT NO. NICN/CA/97/2013 BETWEEN 1. ALEXANDER O. EJAH 2. ECHEMI A. ECHEMI 3. EKPEI UKAM ELOT 4. ERIM ERO KANU 5. OKU BASSEY ITA 6. RAPHEAL E. ONANG 7. GEORGE A. BASSEY 8. EDET E. ITU 9. ETTAH I. EGBE 10. ETIM B. TOM CLAIMANTS 11. EMMANUEL MFON 12. ETIM O. EWA 13. OKU O. DUKE 14. DAVID A. EFFEM 15. OFFIONG AQUA EDEM 16. ETIWE EDADI IKRI 17. OKON E. EFFIO-EKPO 18. EFFIOM INAMETI 19. ETIM O. INYANG 20. EDEM OUT IYA AND NIGER MILLS COMPANY LIMITED - DEFENDANT REPRESENTATION Ituen Ukpono (Senior Legal Aid Officer) for claimants. Adesoji Adebola, with D.B.Arikpo for defendant. JUDGMENT The claimants filed this complaint on the 15th May 2013. By an amended statement of claim they sought the following reliefs: a) A declaration that the termination of the claimants’ employment by the defendant through a letter dated the 17th day of April, 2009 is unlawful, illegal and unjust and that such was done with bad faith, as it did not follow the rule of redundancy of “last in first out” captured in the employees handbook of the company. b) A declaration that the defendant’s failure/or neglect to reinstate the claimants as agreed between the defendant and the claimants in a resolution passed by the Cross River State House of Assembly dated the 29th January 2010 is tortious. c) An order directing the defendant to reinstate the claimants and pay all their entitlement from the date of laying off till date without delay. d) The sum of N650,000,000.00 (Six Hundred and Fifty Million Naira) as general damages and compensation to the claimants. Accompanying the complaint and amended statement of claim are the witness statements on oath and copies of documents to be relied upon. The defendant entered appearance on the 18th July 2013 and filed its statement of defence, witness statement on oath and copies of documents to be relied upon on the 6th August 2013. The parties joined issues and the matter went to trial. The claimants case on the pleadings is that they were in the employment of the defendant till the 17th April 2009 when the defendant carried out a corporate restructuring exercise and terminated their employment. They pleaded that their termination was wrongful as the laid down rules were not followed in laying them off; and that the defendant did not at anytime pay them any of their legitimate benefits, compensation or severance pay. The claimants pleaded that immediately after they were terminated, the defendant hurriedly employed other people to take up their jobs. That they engaged Barrister Emmanuel Esu Irem to write a letter demanding for their re-instatement which was ignored by the defendants; that he also wrote a Petition to the Chairman House Committee on Judiciary, Public Service Matters, Public Petition, Human Right and Ethics, Cross River State House of Assembly. The claimants pleaded that both parties were invited to the House of Assembly. That the defendant submitted itself to the authority of the Committee, attended the meeting from the inception and accepted, adopted and signed the resolution ordering it to reinstate them. The claimants pleaded that the defendant has refused to do so. The claimants averred that the defendant flagrantly ignored the principle of last in first out in the company's employee's handbook and that the action of the defendant has caused untold hardships, pains and embarrassment to them. The claimants called Erim Ero Kanu (CW1), Alexander Okon Ejah (CW2), Echemi Alobo Echemi (CW3) and Ekpei Ukam Eliot (CW4) to testify in support of their claims. Each of them adopted his statement on oath which was in the exact terms of the pleadings as his evidence in chief. CW1 told the court that he was employed in June 1988 with his Ordinary National Diploma qualification. He said he was store supervisor when his employment was terminated. CW1 told the court that the defendant has three Mills A, B & C; that A & B Mills are manually operated while C is automated. He said it was not correct that Mill C uses fewer staff than the A & B Mills. CW1 told the court that the Company is owned by Mr Coumantoros and that he does not know if the Cross River State House of Assembly has Shares in the Company or takes part in the decision making process. CW1 told the court that he knows that members of the House of Assembly are Politicians and their duty is to make laws but he does not know if they make laws for the running of privately owned companies. CW2 told the court he was employed in November 2002 as a cleaner and that his qualification at point of entry was Senior School Certificate. He said he was promoted to Assistant Grinder in 2007 and that he is not aware that the purpose of the restructuring exercise was to reduce manual labour and replace with higher skilled staff. CW2 told the court he was aware that skill, ability, length of service and other factors will be taken into consideration in the decision of who to retain or lay off. CW2 said he had not rendered any service to the defendant since he was laid off. CW3 told the court that he was employed as a welder in March 2004 and that his qualification at entry point was primary six school leaving certificate. He said the principle of last in first out does not apply to him because he was the only welder in the defendant company. CW4 told the court that he was employed in November 2002 as a factory operative but he was a Packer and his job was to pack flour. He said his qualification at entry point was Senior School Certificate. CW4 told the court that the Mill was running two shifts 8am to 8pm everyday and there was no day off unless a staff was ill. CW4 told the court that their letters of employment states that they are to work 40 hours a week and outside 40 hours is overtime. He said they were never paid overtime. He said he was a member of the National Union of Food, Beverages and Tobacco Employees (NUFBTE) and that the management rejected their elected representatives. The claimants then closed their case. The case of the defendant on the pleadings is that the claimants were its employees until the 17th April, 2009 when they were affected by the corporate restructuring policy and were paid their entitlements. The defendant averred that the letter HR/P.170/325/2009 only contained the termination of employment and what the person affected was to do and had nothing to do with any other persons newly employed. The defendant pleaded that it never employed any other persons to take the position of the claimants and neither did it have any knowledge of any letter to the Chairman, Cross River State House Committee on judiciary, Public Service Matters, Public Petition, Human Rights and Ethics. It averred that its Solicitors replied their Solicitors letter. The defendant stated that whatever resolution was passed or reached by the Cross River State House of Assembly or its House committee on Judiciary, Public Service Matters, Public Petition, Human Right and Ethics was neither adopted or ratified by it and therefore not binding on it or enforceable. The defendant averred that she no longer required the services of the claimants and therefore declared them redundant and terminated their employments in accordance with the terms and conditions of their respective employment and the labour laws. That the declaration of the claimants as redundant and the termination of their employment is not wrongful and they are not entitled to damages or any of the reliefs sought. The defendant pleaded that it had paid the claimants all their legitimate benefits and entitlements through their respective bank accounts at the time the exercise was carried out which they received without complaint. That this was done urgently to avoid unnecessary hardship on the claimants, their families and dependants. The defendant pleaded that the contract of service of the claimants is without statutory f1avor and the termination of their services was proper being a direct result of the decision of the defendant’s management. That the exercise affected all her companies all over the country and was aimed at repositioning the company for effective service delivery to meet the challenges in the industry which led to the mechanization, modernization and automation by the defendant of her business. The defendant averred that the declaration of redundancy and termination of employment of the claimants was devoid of any ethnic coloration or consideration and the defendant properly informed the claimants through their representatives of the reason for and the extent of the redundancy. That management exercised utmost care in selecting those declared redundant having regard to factors such as merit, reliability, skill, ability, etc as it affected the different categories of the claimants, and in accordance with Labour Laws. The defendant stated that this action is frivolous and brought malafide. The defendant called one witness Okorie N.Egu (DW) Assistant Human Resource Manager in support of its case. His evidence in chief was by witness statement on oath which he adopted and was in the exact terms of the pleadings. DW told the court that the claimants are former employees of the defendant. He said in 2009 there was a corporate restructuring as a result of the company changing from manual to automated processes. DW told the court that both senior and junior staff were affected during the restructuring exercise and that the claimants have been paid their severance benefits. He told the court that their terminal benefits were paid into their bank accounts. The claimant then closed its case. The parties were directed to file their final addresses. The defendant’s final address is dated 8th July 2014 and filed on the 9th July 2014. The claimants’ final address is dated and filed on 18th August 2014. Learned counsel to the defendant adopted each of the reliefs sought by the claimants as issues for determination: 1. Whether the claimants are entitled to a “declaration that the termination of the claimants employment by the defendant through a letter dated the 17th day of April 2009 is unlawful illegal and unjust and that such was done with bad faith as it did not follow the rule of redundancy of "last in first out" captured in the employees handbook of company”? 2. Whether the claimants are entitled to “a declaration that the defendant’s failure or neglected (Sic: neglect) to reinstate the claimants as agreed between the defendant and the claimant (Sic: claimants) in a resolution passed by the Cross River State House of Assembly dated the 29th January 2010 is tortious”? (Sic: tortious) 3. Whether the claimants are entitled to “an order directing the defendant to reinstate the claimants and pay all their entitlements from the date of laying off till date be without delay”? 4. Whether the claimants are entitled to “the sum of N650,000,000 (Six Hundred and Fifty Million Naira) as general damages and compensation”? He contended that where a court is called upon to make a declaration of a right it is incumbent on the party claiming to be entitled to the declaration to satisfy the court on the evidence led before the court. That such a declaration will not be made even in the total absence of a defence or by admissions in the pleading of the defendant; the claimant must rely on his evidence before the court citing Bello v. Eweka [1981] N.S.C.C. (VOL. 12) 48 at 56. He submitted that where parties have reduced the terms and conditions of service into an agreement the conditions must be observed and that a master is entitled to dismiss his servant from his employment for good or for bad reasons or for no reason at all citing Chukwumah v. Shell Petroleum [1993] 4NWLR (pt. 289) 512 at 560. Learned counsel argued that once the party terminating the appointment gives adequate notice or pays adequately in lieu of the notice then the termination cannot be unlawful illegal and unjust irrespective of the motive. It was his submission that the claimants did not lead any evidence that the defendant did not pay them adequately in lieu of notice. Rather, the defendant led evidence that it had paid the claimants all their legitimate benefits and entitlements through their respective bank accounts at the time the exercise was carried out and they received same without complaints. Learned counsel submitted that the application of the principle of Last in First out contained in section 20(I)(b) of the Labour Act is made subject to certain stated factors of relative merit, including skill, ability and reliability. That the section preserves the rights of long serving employees to remain in their employment during a general retrenchment exercise by their employer where such employees have shown relative superiority in terms of merit, skill, ability and reliability than other employees in their category citing Guiness Nig. Ltd. v. Agoma [1992] 7 NWLR (Pt. 256) 728, 741 paras B-D. He argued that none of the four claimants’ witnesses led any evidence of developing his skill or acquiring any further qualification over and above his entry skill or qualification; neither was there evidence that any of the claimants had better skill ability or reliability than any staff whose employment was retained by the defendant. He submitted that evidence of the defendant was not challenged under cross-examination citing Adejumo v. Ayantegbe [1989] 3 NWLR (Pt. 110) 417, Guiness Nig. Ltd. v. Agoma [1992] 7 NWLR (Pt. 256) 728 at 741. Learned counsel referred to the Black’s Law Dictionary 6th Edition at page 1310 for the definition of a ‘resolution’ and the distinction between a ‘resolution and law’. He submitted that the resolution of the Cross River State of Assembly on which the claimants have based this relief/ declaration, not being a law but a mere formal expression of the opinion or will of the Cross River State House of Assembly is neither binding on the defendant nor on the Court as it is not justiciable. He further submitted that the resolution cannot give rise to a cause of action in favour of the claimants against the defendant or be the basis of a court declaration. He referred to Management of Nipol Ltd Ibadan v. National Union of Chemical & Non Metallic Products Workers [1978- 2006] DJNIC 131, 133 11 Learned counsel submitted that the claimants are not entitled to an order of reinstatement or payment of any sum. He argued that the defendant is a privately owned enterprise and the claimants’ employment with the defendant was a mere master and servant relationship with no statutory flavour. He submitted that a servant even though willing and able, as the claimants in this case, cannot be imposed on an unwilling master as the defendant citing Dudusola v. Nigeria Gas Company Limited [2013] 10 NWLR (Pt. 1363) 423, 436 Paras B-E. He submitted that an employee who upon termination duly proceeds to collect all his just entitlements from his employer, has acquiesced to the termination and cannot thereafter be heard to challenge his termination, because the collection of entitlements has laid to rest any contract, real or imagined, between the parties. He cited Guiness Nig. Ltd. v. Agoma (supra), Morohunfola v. Kwara State College of Tech [1990] 4 NWLR (Pt. 145) 506. He submitted that on the pleadings and evidence adduced, the claimants are not entitled to the sum of N650,000,000 (Six Hundred and Fifty Million Naira) as general damages and compensation. He urged the court to dismiss this claimants’ suit in its entirety for lack of merit and award appropriate costs against the claimants in favour of the defendant. Learned counsel to the claimant submitted the following issue for determination: Whether the claimants has (sic) established their claims and entitled to the reliefs sought in this suit. He submitted that evidence adduced shows that the defendant failed to follow the laid down procedures in the defendant’s employee handbook for laying off the claimants. He further submitted that parties to an agreement or contract are bound by the terms and conditions of the contract they signed and cannot operate outside it terms and conditions. That where an employer dismisses his employee, the duty of the court is to determine whether due process was followed having regards to the terms of the contract of employment and that the employee is paid his or her entitlements in the circumstances as stipulated. He cited Electricity Corporation of Nigeria v. George Nicol [2007] 7 NLLR (Pt. 19) 85 at 88, Isheno v. Julius Berger (Nig) Plc [2008] 6 NWLR (pt.l084) p.609. It was learned counsel’s submission that the evidence shows that the principle of Last In First Out (LIFO) was not followed in laying off the claimants. Counsel submitted that the House of Assembly resolution mandating the defendant to reinstate the claimants is binding on the defendant as its representatives signed it and the defendant cannot approbate and reprobate at the same time. Learned counsel submitted that when an employee is able to establish that his appointment was wrongfully terminated as in this case, he or she would be entitled to damages. He referred to Isievore v. NEPA [2004] 1 N.L.L.R. 99 at 1l3 paragraphs E-F. He submitted that the defendant has not discredited any of the averments made in the claimants pleadings. He submitted that evidence that directly affects the matter in controversy and that is neither attacked nor successfully discredited is good and credible evidence that can be relied upon by the court. He cited Nigeria Social Insurance Trust Fund Management Board v. Klifco Nig. Ltd. [2010] Vol. 186 LRCN 1 at 4, Adejumo v. Aayantegbe [1989] 3 NWLR Pt. 110 page 417 at 424. He urged the court to grant all the claimants reliefs. Now, this judgement was initially scheduled to be delivered on January 17, 2015. It could not be delivered on that day due to the industrial action carried out by the Judiciary Staff Union of Nigeria (JUSUN) in January. The file was locked in the court until the industrial action was called off. It is for this reason the judgement is now being delivered today outside the three months statutory period. Both counsel agree that it will not occasion a miscarriage of justice. I have carefully considered the processes filed, the evidence led, written submissions and authorities cited. The issue for determination is whether on the pleadings and evidence the claimants ought to be entitled to the reliefs sought. There is no dispute between the parties that the defendant terminated the employment of the claimants on the 17th April 2009 in its corporate restructuring exercise. They were each given similar letters. It is at this juncture pertinent to reproduce one of the letters of termination as follows: April 17, 2009 Mr Erim Ero Kanu 4, Atekong Street Big Qua Town Calabar. Dear Sir, CORPORATE RESTRUCTURING The Company has recently reviewed its business units structure and functional organograms, as a result of which some jobs have been discontinued. As you are one of those affected by this exercise, your appointment with the Company terminates on Friday, April 17, 2009. In recognition of your past contribution to the growth of the business, an ex-gratia package has been arranged to cushion the effect of sudden loss of job in addition to your entitlement. Please surrender all company property in your possession to your Head of Department. By a copy of this letter, the Finance Director is advised to arrange payment of your entitlement on the 24th of April, 2009. Management wishes you good luck in your future endeavours. Yours Faithfully NIGER MILLS COMPANY LTD JULIE BASSEY (MRS) Human Resources Manager. The reason for the termination of employment of the twenty claimants as stated in their letters is a re-structure based on the operational requirements of the defendant company. This is confirmed in the evidence of DW that the defendant is changing from a manual to an automated process and is corroborated by the evidence of CW1 that Mill C is automated and has a 500 production capacity unlike Mills A & B which are manual with a capacity of 250. It stands to reason that an automated process will require fewer staff than a manual process. I find that the claimants were retrenched due to automation of the defendant’s processes. I also find the reason given by the defendant for the retrenchment exercise to be a justifiable one necessitated by economic and technological reasons. The termination of the claimants’ employment was not unlawful or done in bad faith and I so hold. Section 20 (3) of the Labour Act CAP L1 LFN 2004 defines redundancy as an involuntary and permanent loss of employment caused by an excess of manpower. Section 20 (1) (a) (b) & (c) of the Act lays down the procedural steps for the employer in the event of a redundancy. They are as follows: a. The employer shall inform the trade union or workers’ representative concerned of the reasons for and the extent of the anticipated redundancy; b. The principle of ‘last in, first out’ shall be adopted in the discharge of the particular category of workers affected, subject to all factors of relative merit, including skill, ability and reliability; and c. The employer shall use his best endeavours to negotiate redundancy payments to any discharged workers who are not protected by regulations made under subsection (2) of this section. Section 20 (a) and (b) has been incorporated into the defendant’s handbook. In addition, the handbook also provides that “in case of redundancy arising from technological changes or automation, the terms of the redundancy will then be subject to negotiations unless another equivalent post with similar terms is offered by the company”. The defendant has adduced evidence as seen in exhibits CW3 and CW6 that its management informed and had consultations with the representatives of the National Executive officers of National Union of Food, Beverage and Tobacco Employees (NUFBTE) on the 24th and 26th March 2009 of its intention to reduce the staff strength due to global economic recession. At the end of the consultations, the defendant and the union agreed on the extent of the redundancy, the severance and terminal benefits and the date the exercise would be implemented. However, I find from exhibits CW3 and CW6 that there was no consultation and/or discussion on the selection criteria to be used in the retrenchment exercise by the parties. The claimants by this action have challenged the fairness of the selection process by alleging that they were unfairly selected for retrenchment because the defendant did not follow the principle of ‘last in, first out’ (LIFO). In civil cases, the burden of proof is cast on the party who asserts the affirmative of a particular issue whether claimant or defendant. The burden is not static but shifts from side to side. See Section 131 (1) and (2) of the Evidence Act 2011, Ibrahim v Ojomo [2004] Vol 4, MJSC 143 at 160, Fadallah v Arewa Textile Ltd [1997] 8 NWLR (Pt 518) 546 at 556. The claimants did not lead any shred of evidence to prove that the defendant did not apply the principle of LIFO. The burden of proof therefore did not shift to the defendant. Consequently this claim must fail. Section 20 (b) of the Act indicates that the principle of LIFO should be given priority but is subject to the relative factors of merit, skill, ability and reliability. DW in his deposition has stated that the defendant’s selection criteria was done having regard to the factors of merit, reliability, skill, ability. This evidence was unchallenged by the claimants. Indeed, under cross-examination of the claimants’ witnesses, they gave their qualifications at entry point as Primary Six School Certificate, Senior Secondary Certificate and Ordinary National Diploma; and they admitted they had not obtained additional qualifications during their years of service. None of the claimants has shown the court that he is relatively better in merit, skill, ability than the other workers who are in the same category with him and retained by the defendant. By relying on the factors of merit, skill, ability and reliability, I find that the defendant has justified its selection criterion and so hold. The Indian Supreme Court in the case of Om Oil and Oil Seeds Exchange Ltd, Delhi v Their Workmen, 1966 (II) LLJ 324, 338 justifying the Managerial discretion selection criterion stated: The rule of “first come, last go” is intended to secure an equitable treatment to the employees when, having regard to the exigencies of the business, it is necessary to retrench some employees. But in the application of the rule, the interests of the business cannot be overlooked. The rule has to be applied where other things are equal and the management must act fairly to the employees. Where however the management bona fide retains staff possessing special aptitude in the interests of its business, it cannot be assumed to have acted unfairly merely because the rule “first come, last go” is not observed. I hold that the defendant complied with the provisions of Section 20 (b) of the Labour Act and the defendant’s handbook in the selection process. The resolution of the Cross River State House of Assembly is not a Law. It is not binding on the defendant and cannot give rise to a cause of action. The function of the State House of Assembly is to make laws for the State. It is not to interfere and seek a reversal of internal policy decisions made by a private company to ensure its economic survival. I must state that it is wrong in an employment dispute for workers to begin to solicit the intervention of the House of Assembly. The claimants ought to have brought their complaints and grievances to their trade union NUFBTE and not the State House of Assembly. I hold that the resolution of the House of Assembly is not justiceable and as such there can be no declaratory relief. See Management of NIPOL Ltd Ibadan v National Union of Chemical & non Metallic Products Workers [1978-2006] DJNIC 131. The claimants are seeking an order of reinstatement. There are two main instances where the courts will order reinstatement. The first is where the employment is one with statutory flavor and the statutory process for disengagement was not followed. The second is a worker whose employment is terminated for trade union activities. See Shitta-Bey v Federal Public Service Commission [1981] 1 SC 40, NUFBTE v Coca Industries Limited Ikeja [2005] 3 NLLR (Pt 8) 206. The claimants do not belong to any of these categories and are therefore not entitled to an order for reinstatement. The claimants allege that they have not been paid their entitlements. The evidence before the court is that the defendant has paid their severance/terminal benefits into their respective Bank accounts. The claimants are not entitled to the sum of N650,000.00 as general damages and compensation. For all the reasons given above, the claimants have failed to prove their case. This action is misconceived and frivolous. It is hereby dismissed. Each party is to bear its own costs. of N10,000.00 awarded in favour of the defendant. Judgement is entered accordingly. __________________________ Hon Justice O.A.Obaseki-Osaghae