How to Compensate for Mental Stress at Our Workplaces

workplace-stress

By Michael Dugeri

Work-related mental stress has been described as the adverse reaction experienced by workers when workplace demands and responsibilities are greater than the worker can reasonably manage or are beyond the workers’ capabilities. Therefore, it has been advocated that employers need to balance both demands and resources in the workplace in order to manage work-related mental stress.  This is because high levels of job demand and low levels of job resources could easily result in mental stress for the workers.

Mental health is an integral component of Occupational Safety and Health (OSH), which is a primary concern of labour and employment law. A safe workplace is not only about physical safety – it’s about the worker’s psychological safety too.  This means that employers have a duty of protecting the safety, health and welfare of their workers. The enjoyment of these standards at the highest levels is a basic human right that should be accessible by each and every worker. Regardless of the nature of their work, workers should be able to carry out their responsibilities in a safe and secure working environment, free from all forms of hazards.

The law provides for compensation to workers who have experienced mental stress in the course of their employment. The Employee’s Compensation Act, 2010 (“ECA”) provides that compensation is available to an employee who suffers mental stress, where the mental stress is an acute reaction to a sudden and unexpected traumatic event arising out of or in the course of the employee’s employment; or if the employee has been diagnosed by a medical practitioner as suffering from mental stress arising out of the nature of work or the occurrence of any event in the course of the employee’s employment. See section 8 ECA.

Section 8 (2) of the ECA provides that where the mental stress is caused by the decision of the employer to change the work or the working condition in such a way as to unfairly exceed the work ability and capacity of the worker (thereby leading to mental stress), such situation shall be liable to compensation to the degree as may be determined under any regulation made by the Nigeria Social Insurance Trust Fund (NSITF). The NSITF is the statutory body charged with the responsibility of administering the Employee’s Compensation Scheme (ECS) established under the ECA.

It is pertinent to note that the ECS is a social security/welfare scheme that provides comprehensive compensation to employees who suffer from occupational diseases or sustain injuries arising from accidents at the workplace or in the course of employment. The basis for ‘compensation’ is the employer’s duty of care. The idea of compensation suggests that someone has suffered a wrong for which he has to be compensated monetarily. This implies that another person has a duty to prevent the occurrence of the wrong suffered. Payment of compensation by the employer to the worker is rooted in the accepted common law principle that the employer has a duty of care, a duty to protect the health, welfare and safety of the workers. Where the worker sustains injuries, gets ill or dies under work-related circumstances, the employer is liable to pay compensation to the worker or to his dependents, in the event of death. The ECS is funded by monthly contributions from employers for the purpose of this compensation, as may be required from time to time by deserving workers.

The system of compensation for occupational mental stress established under the ECA is laudable, even though it also poses certain challenges for affected workers. First, having to prove that the worker’s mental stress actually relates to his/her work is tough, especially in an environment like Nigeria that is plagued with many other intervening factors. Second, it is doubtful if monetary compensation is adequate for victims of occupational mental stress or if full rehabilitation of the victim is possible in all cases. It is against the foregoing that it is argued that a better system of compensation is the type that mirrors contemporary frameworks for OSH, which are designed to be proactive rather than reactive to the physical, social and mental aspects of the workers’ health. Just like physical infirmities, mental health problems in the workplace are a global phenomenon. In Nigeria, the typical work environment is full of precipitating factors such as:

  1. High quantitative and qualitative workload,
  2. Inconsiderate work schedules,
  3. Poor remuneration, deficient welfare package, delayed/unpaid salaries.
  4. Neglect of safety measures, etc.

All these translate to an increase in the risk of mental health problems in the workplace. Unlike the ‘loud’ nature of physical health problems, mental health problems in employees is a ‘silent’ phenomenon, which goes unnoticed and may be confused with lack of commitment to the job. Unrecognized mental health problems in the workplace can affect performance and productivity, hence the need for organizations to be proactively pre-occupied with promoting and ensuring both the physical and mental health of its employees. Beyond the issue of high quantitative and qualitative workload, closer attention should also be paid to physical features of the workplace like lighting, ventilation, work space, sanitation and noise levels.

Organisations can manage and prevent stress by improving conditions at work. While the common treatment for mental health problems is prescriptive medication, employers have a role in making adjustments and helping the affected individual to manage the problem at work. Some of the suggestions that have been advanced by experts in the field of OSH include the following:

  1. Having senior management committed to  reduce  workplace stress;
  2. Consulting with workers to create and promote a mentally healthy workplace culture;
  3. Use validated risk assessment processes;
  4. Ensuring the organisation has appropriate policies and procedures in place and workers are aware of these;
  5. Managing workplace psychosocial risk factors and stressors;
  6. Providing regular and respectful performance feedback;
  7. Having a ‘Harassment Contact Officer’ in place for workers to speak to;
  8. Provide training around managing workplace and individual stress levels;

Mental health is an intricate but pressing workplace issue with multiple consequences. Occupational demands can be highly stressful and many jobs make severe demands in terms of responsibility, time, and performance. Rather than continuing with a culture of indifference, denial and evasion, there is need for Nigerian workplaces to recognize mental health as a realistic and legitimate concern, as well as display total commitment to the implementation of policies and practices that will ensure a supportive framework for workers.

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Safeguards against Breach of the Lawyer’s Duty of Confidentiality

By Michael Dugeri

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It is commonly understood by lawyers that they are under a duty to protect confidential information relating to their relationship with clients. The law imposes on lawyers a strict obligation to safeguard client’s confidential information.

Section 19 (1) of the Rules of Professional Conduct for Legal Practitioners 2007 (“the Rules”) is explicit that “all oral or written communications made by a client to his lawyer in the normal course of professional employment are privileged”. Sub-section (2) goes on to provide that a lawyer shall not knowingly:

  1. reveal a confidence or secret of his client;
  2. use a confidence or secret of his client to the disadvantage of the client; or
  3. Use a confidence or secret of his client for the advantage of himself or of a third person unless the client consents after full disclosure.

 It is to be noted that, like all rules of law, there are also exceptions to this rule. For instance, disclosure is permissible when required by law or a court order, or with the client’s consent. See section 19 (3) of the Rules.

The lawyer’s duty of confidentiality has broad application. It continues after the representation ends and applies to information received about prospective clients as well. The duty not only forbids revealing information, but also proscribes a lawyer’s use of confidential information about a client to the disadvantage of that client. With regard to former or prospective clients, a lawyer may not use confidential information to the disadvantage of a former or prospective client unless that information has become “generally known.”

Generally, both the duty of confidentiality and the lawyer-client privilege encourage clients to trust their lawyers. The lawyer-client privilege, especially, encourages clients to tell his or her lawyers everything, though the duty of confidentiality does this as well. With complete information, lawyers can provide the best and most appropriate advice.

Notwithstanding its importance, few lawyers and law firms have put in place safeguards against the breach of this fundamental duty. It is often taken for granted by most lawyers and law firms that this duty would enforce itself, which is hardly the case.

As a lawyer or law firm, it is necessary to do a self-appraisal of the systems you have in place for managing clients’ confidential information and consider how you might improve them to create greater confidence from your clients and insulate yourself against potential liability for breach of the duty of confidentiality.

The following are some pointers to remember about client confidentiality:

  1. Don’t discuss business outside the office.
  2. Never discuss one client’s business with another client.
  3. Beware of water cooler conversations. Can your chatter with the client at court premises be overheard by other clients or lawyers?
  4. Don’t talk to the press about your client’s business. Decline to answer if a reporter or blogger calls to ask if your firm is representing a particular person. Decisions about what to say to the press should be made by the client.
  5. Remember the law is a profession, not merely a business. Clients pay good money for help with their problems. They deserve respect for their privacy.
  6. Be especially cautious in office sharing arrangements. Beware “gossip” with employees of other firms. Keep case files segregated.
  7. Remember that your duty of confidentiality continues even after the case is closed. It also continues after you leave the law firm.
  8. Be wary when non-staff members want to use your office for ‘short meetings’ or ‘quick research’. Make sure no client files or documents are lying about carelessly or visible.
  9. Never release information to callers such as a client’s accountant or business associates or partners without authorization.
  10. Be careful when disposing of confidential papers, including rough drafts or duplicates. Use shredders or other secure disposal methods for sensitive materials.
  11. Never forget that the attorney-client relationship is built on mutual trust and confidence. Clients come to you expecting a form of sanctuary. You must honour that.
  12. Put in place secured means of storage of clients’ files and communication with clients.

The law office is an exciting place. The lawyers and support staff are privy to information others don’t have. You learn interesting things about prominent people. Resist the temptation to share this information with outsiders, including friends and family. The duties of client confidentiality are broad. It is not limited to merely what the clients tell you. It also precludes unauthorized discussions of case strategy or evidence.

Loose lips sink ships – and might well lead to ethical and malpractice problems. Every member of a law firm, from senior partner to the litigation clerk, is under a strict obligation to protect the privacy and secrets of clients. Rule 19 (4) provides that:

“A lawyer shall exercise reasonable care to prevent his employees, associates and others whose services are utilized by him from disclosing or using confidences or secrets of a client, but a lawyer may reveal the information allowed by sub-rule (3) through his employee.

A good idea is for firms to require all employees to sign confidentiality forms, which are placed in their personnel files. A blank copy of the form should be included in the office manual. It should be very clear to every member of staff that disclosure of a client confidence is a serious offence punishable with termination/dismissal. Breach of client’s confidentiality may prove very costly to the lawyer’s business and reputable, and leave him open to liability from the client and other third parties. It is better to be safe than sorry.

 

 

 

 

 

No-Work-No-Pay Policy V. Right Of Workers To Industrial Action

To begin with, is it reasonable to refuse a worker his pay simply because of the decision of a union of his class of employees, who never sought his individual opinion? But then, seeing that this said decision invariably affects the business of his employer, does it also make sense for an employer to pay his employee unearned wages for simply sitting at home? Admittedly, it is very tasking to strike a balance between these two conflicting rights.

The Federal Government of Nigeria on October 11, 2017 announced its resolution to enforce a “No Work No Pay Policy”. This resolution, though couched in the shape of a government policy, is in fact already contained in an existing law as encapsulated in Section 43 of the Trade Disputes Act, which empowers an employer to withhold the employee’s wages for the said duration.

Internationally, strikes are in fact recognised as almost sacred, inalienable rights of workers. Part 111, Paragraph 7 of the International Labour Organisation Convention (No 151) of 1957 provides that “No provision of this convention may be interpreted as limiting in any way whatsoever, the right to strike”. Article 3 and 10 of ILO Freedom of Association and Protection of Right to Organised Convention 1948 (No 87) recognise the rights of workers to organize activities for the furtherance and defence of the interests of the workers. Thankfully, Nigeria is a signatory to the ILO.

In Nigeria though, strike action is highly restricted. For instance, Section 30 of the TDA outlaws strike actions except as in the manner provided for under sub-section 6. Again, a union is required to first comply with the requirement of arbitration under the TDA before embarking on a strike. In what appears to be a stringent clog on the right to industrial action, Section 1 of Trade Disputes (Essential Services) Act Cap 433, LFN 1990 empowers the President to proscribe any Trade Union or Association that embarks on a strike action. Continuous disobedience to the said proscription is an offence punishable by a N10,000 fine or six years imprisonment.

What then is the fate of a Nigerian worker in the event that the Federal Government decides to implement section 43 of TDA? The judicial authorities at the disposal of the writer do not seem to be on the side of the workers. In Adams Oshiomhole and National Labour Congress v Federal Government of Nigeria and Attorney General of the Federation (2007) 8 NWLR (Pt. 1035) at page 58, the Court of Appeal held that the Labour Union as well as other civil society organisations had no right to call out strikes in response to general economic and political decisions of the Federal government as it had nothing to do with the individual contracts of employment these workers had with their various employers as envisaged in the TDA.

On the construction of section 43 of TDA, Justice B.B Kanyip while delivering his judgement in Oyo state Government v Alhaji Bashir Apapa (Chairman Nigeria Labour Congress Oyo state chapter) & Ors in Suit No: NIC/36/2007, held that “section 42(1)(a) of the TDA is self-executory. Its implementation, without more, does not depend on a further enquiry…. A strike, whether legal or not, falls squarely within the ambit of the said section and for which the strikers are disentitled from wages and other benefits envisaged by the section…..” 

From all indications, it appears that implementation of No Work No Pay Policy will be justified by law. Whether same is reasonably justifiable in a democratic state, will be a question for another day.

 

Source: Greymile

Confirmation of employment after probation can be implied by the conduct of the employer.

tumblr_onkbqiRgvE1vdur62o1_1280The Court of Appeal in the recent case of Reliance Telecommunications Limited v. Mr. Olaore Olufemi Adegboyega (reported at (2017) 8 CLRN) held that the employer is deemed to have waived its rights in insisting on issuance of a formal letter of confirmation to its employee if the said employee is allowed to continue in his employment beyond the stipulated probationary period and he is regarded and treated as an ‘several months after the end of the probationary period’. The employment is deemed confirmed by conduct.

This decision is important to check the habit of some employers who, out of negligence or malice, fail or refuse to confirm some deserving employees, only to later turn around and rely on the employee’s probationary status in claiming certain obligations from the employee or denying him some benefits.

Facts of the Case 

In 2004, the respondent entered into a contract of employment with the appellant. The terms of contract indicated that the respondent would be on probation for a period of three months and either party could immediately terminate the employment during the period of probation. Furthermore, the contract of employment stipulated that after three months, the employment of the respondent would be confirmed and that three months’ notice will be required to be given by each party in case of termination of the employment. After the expiration of the three months probationary period, the appellant failed to confirm the employment of the respondent but continued to retain his services, paying him his entitlements and making representations to third parties suggesting that the respondent was in its employment. The relationship between the parties continued until sometime in 2005 when the appellant terminated the employment of the respondent without giving him any notice. The respondent was aggrieved and filed a suit against the appellant at the High Court of Lagos State alleging wrongful dismissal and claiming damages. After the conclusion of trial, the judge gave judgment in favour of the respondent and held that the appellant was liable in damages to the respondent. The trial court however, failed to consider and make pronouncement on the counter-claim incorporated into the statement of defence of the appellant.

The appellant was dissatisfied with the judgment of the trial court and filed a notice of appeal at the Court of Appeal, Lagos Division urging the court to reverse the decision of the trial court. One of the issues formulated for determination was whether the trial court was right in holding that the respondent’s employment was deemed confirmed immediately after the probation period without meeting the other conditions precedent and in the absence of a formal confirmation letter.

Arguing the issue, learned counsel for the appellant submitted that it is trite that parties are bound by the terms of contract freely entered into. Reference was made to a term of the contract of employment stating that the offer of employment is subject to a satisfactory medical examination, satisfactory completion of a three months’ probation period to take effect from date of assumption of duty and that the offer is subject to other terms as set out in the letter of employment and conditions of service as may be determined by the board from time to time. Learned counsel posited that since the employment of the respondent was not confirmed by the appellant before the termination, a condition precedent was not fulfilled and as such the respondent was not entitled to the three months’ notice. Counsel urged the court to resolve the issue in favour of the appellant.

Responding to the argument of the appellant, learned counsel for the respondent relied on the decision in Kablemetal Nigeria Limited v. Gabriel Ativie to submit that in an action for wrongful termination of employment, the claimant is under obligation to plead and prove not only the appointment but also the terms and conditions for it to constitute the foundation of the action. Counsel submitted further that even though the contract of employment stipulated that the employment of the respondent must be confirmed after three months, the fact of non-confirmation was inconsequential and that the trial court was right in holding that the employment of the respondent was deemed confirmed since the appellant allowed the respondent to continue to work beyond the three months’ probationary period stipulated in the contract. Learned counsel relied on Obafemi Awolowo University v. Dr. A.K. Onabanjo and urged the court to discountenance the argument of the appellant and resolve the issue in favour of the respondent.

In resolving the issue, the court held thus:

The Appellant having allowed the Respondent to continue in his employment beyond the three months’ probationary period, paying him all his entitlements and further making representation via Exhibit C5 to third parties affirming that the Respondent is its employee several months after the end of the probationary period must be deemed to have waived its rights in insisting on issuance of a formal letter of confirmation to the Respondent. In such circumstances as obtained in the instant case Estoppel by conduct/representation can readily be invoked.

See: Military Government of Lagos State & Ors v. Adeyiga & Ors (2012) LEPLR 7836 (SC)

Issue is resolved in favour of the respondent.

M.T Odechima with V. I. Okafor for Appellant
TS. Adewuyi with T. O. Shittu Miss for Respondent

This summary is fully reported at (2017) 8 CLRN

The measure of damages in an action for breach of contract

FOXGLOVE NIGERIA LIMITED v. MTN NIGERIA COMMUNICATIONS LIMITED

COURT OF APPEAL LAGOS DIVISION

(SANKEY; OTISI; EKANEM, JJ.CA)

In 2002, the appellant entered into a distribution agreement with the respondent. The agreement stated that the respondent was to distribute and sell the respondent’s products which included starter packs, handsets, recharge vouchers and accessories. By the agreement, the appellant was entitled to be paid a commission known as On-going Revenue Service Commission (ORSC) upon meeting its monthly performance target. Furthermore, the contract between the parties provided that on a monthly basis, the respondent shall calculate and pay a discount of 5% as ORSC on post-paid starter packs which were activated within the month and the discount credited to the appellant’s account at the end of every quarter. It was also included in the contract agreement that the respondent shall pay to the appellant a credit to the value of 1% which was referred to as back end commission, of the total invoiced amount of purchases of the physical and logical recharge vouchers and virtual airtime for every month, which shall be credited into the appellant’s account at the end of each year.

The business relationship between the parties continued until June 16th, 2008 when the respondent informed the appellant that Guaranty Trust Bank Plc had terminated its bank guarantee and there was need for a replacement before June 30th, 2008. The appellant complied with the respondent’s request by delivering another bank guarantee. However, on the same date, the respondent relying on certain clauses of the agreement, sent another letter in which it terminated the distribution agreement with the respondent. The respondent was alleged to have violated the procedure agreed upon by the parties before a termination could be effected. By the said clause, a 14 days’ notice was required to be given by the respondent indicating the nature of the breach where it occurs for the first time and a termination if the breach reoccurred within the preceding 12 months after the initial notice had been given to the appellant. Yet, the respondent in spite of the termination which took effect on July 1, 2008, continued its business relationship with the appellant until mid-July 2008 and accumulated a total sum of N29,000,000.00 (Twenty Nine Million Naira) but refused to pay the agreed ORSC including the back-end commission for the period.

The appellant was aggrieved and filed a claim against the respondent at the High Court of Lagos State claiming among several reliefs, a declaration that the contract termination by the respondent was unlawful having not complied with the procedures laid down in the agreement. However, the appellant also sought damages which were general and special in nature. At the end of trial, the court gave judgment in parts in favour of the appellant and dismissed the reliefs of the appellant which bordered on special damages which, according to the court were not pleaded and proved. The appellant was dissatisfied with the court’s judgment and consequently filed a notice of appeal at the Court of Appeal, Lagos Division.

One of the issues raised for determination was whether the trial court properly evaluated the evidence before dismissing the appellant’s claim for damages.

Arguing the issue, counsel for the appellant submitted that the damages sought but not granted by the lower court were within the contemplation of the parties and that even though what was claimed by the appellant was less than the correct amount, the court ought to have granted it. Counsel posited that the lower court was in error and he urged the court to resolve the issue in favour of the appellant.

Responding to the argument of the appellant, learned counsel for the respondent noted that the items claimed by the appellant are at best special damages which do not arise from any particular or specific loss suffered by the appellant as a result of the breach by the respondent. Counsel further argued that losses which do not directly flow from the breach cannot be pleaded as special damages. He urged the court to discountenance the argument of the appellant and resolve the issue in favour of the respondent.

Resolving the issue, the court held thus:

The position of the law however is that in an action for damages for breach of contract, the terms general and special damages are inappropriate. The dichotomy between special and general damages in an action for contract, unlike in tort, has been described as one without a difference; G.F.K. Investment Nigeria Ltd v. Nigeria Telecommunications Plc (2009) LPELR-1294 (SC). The Supreme Court has made definite pronouncements on the nature of damages that may be considered and granted by a court in an action for breach of contract. Musdapher JSC (as he then was) in G. Chitex Industries Ltd v. Oceanic Bank International (Nig) Ltd (2005) 7 S.C. (Pt. 11) 50; (2005) LPELR-1293 (SC):

“I shall now consider the measure of damages in a case of a breach of contract. Now, generally the amount of damages to be paid to a person for breach of contract is the amount it will entail to put the person in the position he would have been if there had not been any breach of contract… In cases of breach of contract a plaintiff is only entitled to damages naturally flowing or resulting from the breach… The measure of damages, in such cases of breach of contract, is in the terms of the loss which is reasonably within the contemplation of the parties at the time of the contract.”

The Supreme Court therein relied on its earlier decision in Wahabi v. Omonuwa (1976) 4 SC 37 at 41, per Idigbe, JSC thus:

“… In cases of breach of contract the aggrieved party is only entitled to recover such part of the loss actually resulting as was at the time of the contract reasonably foreseeable as liable to result from the breach. What was at that time reasonably so foreseeable depends on the knowledge then possessed by the parties or, at all events, by the party who later commits breach…”

Issue resolved in favour of the respondent.

Olusegun Olaiya, Esq., for the Appellant
Afolabi Kuti, Esq. for the Respondent

This summary is fully reported at (2017) 6 CLRN

The Court of Appeal is the final arbiter in employment, trade and labour related matters adjudicated upon by the NIC – Supreme Court

The Director General of Consumers Protection Council (CPC) Mr. Babatunde Irukera has secured a N17 million judgment against Coca-Cola International Company at the Supreme Court for wrongfully terminating the employment of a Nigerian, Mrs. Titilayo Akisanya. In the judgment delivered on June 30, 2017, the Supreme Court affirmed the decision of the Court of Appeal to the effect that the Court of Appeal is the final arbiter in employment, trade and labour related matters adjudicated upon by the National Industrial Court (NIC). Again, the Supreme Court, in interpreting Section 254(C)(1) of the Third Alteration Act to the 1999 Constitution (as amended) also held that the jurisdiction of the National Industrial Court extends to all employment-related disputes including private employment contracts.

Mr. Irukera took up the case of Mrs. Akisanya on February 10, 2012 when he filed a civil action before the National Industrial Court, Lagos therein challenging her wrongful dismissal by Coca-Cola Nigeria Ltd. Mr. Irukera was then a Partner in SimmonsCoopers Partners, a reputable law firm in Nigeria that had the incumbent Acting President, Pro. Yemi Osinbajo (SAN) as its Principal Partner.

SimmonCoopers Partners is renowned for representing individuals, corporations and government in public interest litigation. The law firm successfully challenged Pfizer, an international pharmaceutical company over its testing of an antibiotic drug (Trovan) in Kano State, Nigeria, a situation that led to over 100 children developing meningitis. The firm also successfully represented about one million investors in a significant securities litigation arising from the First Bank of Nigeria Hybrid Offer of 2007.

Mrs. Akisanya was employed by the respondents as Human Resources Manager on December 11, 2001. In May 2007, she was promoted as the Human Resources Director, Commercial Product Supply (CPS) Pan Africa, while she still doubled as the Human Resources Manager at its Ota, Ogun State Plant.

In the claim she filed before the National Industrial Court, she claimed that she received several awards and commendations for her industry and significant contributions to the growth of the company in the course of her duties.

Things however turned sour when, in the course of her duties, she incurred some travel costs and expenses which she submitted for reimbursement. The travel expenses were however not paid to her despite repeated demands. Rather than paying her, Mrs. Akisanya was directed to forward the original copies of the expenses to the corporate auditors of the company. She complied. She was later invited to a meeting with the internal auditors of Coca Cola.

At the meeting, she answered the questions posed to her by the auditors and even promised to send a detailed report to them. She promptly submitted her written report to the audit panel. The panel advised her to wait for their report which they would send to the ethics and compliance (ECC). She did not get a response from the ECC, neither was she shown the final report of the audit panel.

The next move she got from the company was a letter dismissing her from the employment of the company. The later was dated December 6, 2010. The letter was signed by Mr. Sheriff Tobala on behalf of the company. She was accused of violating the company’s code of business conduct by submitting non-business related expenses for reimbursement and disclosing company’s confidential information to a third party.

Dissatisfied with her wrongful dismissal, Mrs. Akisanya commenced a legal action against the company before the National Industrial Court (NIC) on February 10, 2012. In the suit filed before Hon. Justice B.B Kanyip, Mrs. Adesanya sought for declarative and injunctive reliefs nullifying her dismissal. She also claimed forN100million general damages, and N50million as exemplary damages. Sued as Defendants in the suit are the local company- Coca-Cola Nigeria Ltd, the Coca-Cola Company (the foreign company) and Mr. Tobala who signed the letter of dismissal.

Coca-Cola through its lawyer, Mr. A. Candide-Johnson SAN however objected to the claimant’s suit by arguing that the suit is a private employment contract, or at most an executive management contract and therefore the National Industrial Court lacks jurisdiction to entertain private employment contracts. The Learned Silk argued that no issue of labour relations, trade union relation, or industrial relations has arisen from the Claimant’s suit to confer jurisdiction on the National Industrial Court (NIC). The Learned Silk for Coca Cola argued that Section 254(c)(1) of the 1999 constitution as amended by the Third Alteration Act ousts the jurisdiction of the National Industrial Court in relation to private employment contracts.

Essentially, the Learned Silk invites the National Industrial Court (NIC) to determine whether its jurisdiction, as contained in section 254(c)(1) of the Constitution of the Federal Republic of Nigeria, 1999 (Third Alteration) Act No 3 of 2010 extends to all cases of private individual contractual employment or is limited to disputes arising from collective agreements, labour, trade and industrial relations.

On April 7, 2016, Hon. Justice Kanyip dismissed the defendants’ preliminary objection on the basis that the question formulated by the defendants did not raise any substantial question of law to warrant the case stated. The trial judge held that the jurisdiction of the NIC extends to all employment contracts including private employment contracts. Dissatisfied with the ruling of the trial judge dismissing the preliminary objection, the Defendants appealed to the Court of Appeal, Lagos. Whilst the Appellants’ appeal was pending at the Court of Appeal, the trial judge proceeded to determine the case on the merit. In his judgment, the trial judge granted about N17.4 million as damages/compensation to Mrs. Akisanya (the claimant) for wrongful termination of her employment contract by the Defendants. The damages/compensation was to be paid by the defendants within 30 days of judgment delivery failing which the sum shall attract interest at 10 per cent (10%), per annum until fully paid.

Interestingly, whilst trial was ongoing at the NIC, the Court of Appeal had determined the Defendants’ interlocutory appeal challenging the ruling of the trial court on the preliminary objection. On July 4, 2013, the Court of Appeal unanimously affirmed the decision of the trial judge to the effect that the National Industrial Court has jurisdiction over all employment contracts including private employment contracts.

Again, dissatisfied with the decision of the Court of Appeal, the defendants proceeded to the Supreme Court even while trial was on-going before Hon. Justice Kanyip at the National Industrial Court. The Defendants also articulated the same issues and arguments presented before the Court of Appeal to the Supreme Court.

The Claimant (now Respondent before the Supreme Court) filed a preliminary objection contending that “having regard to Section 243(4) of the constitution of the Federal Republic of Nigeria, 1999 (Third Alteration) Act No 3, 2010, which expressly limits the finality of any appeal arising from any civil jurisdiction of the National Industrial Court to the Court of Appeal, whether the Supreme Court has jurisdiction to entertain the appeal”. In his argument before the Supreme Court, Mr. Irukera contended that whenever the jurisdiction of a court is challenged, the relevant statute establishing the court will be examined in the light of the relief been sought, since the question of jurisdiction must be confined to the enabling statute. In the instant case, he argued, the Court of Appeal as a creation of the constitution has its jurisdiction delineated and circumscribed by the 1999 constitution (as amended). He argued that the appellate jurisdiction of the Court of Appeal cannot be inferred, interpreted, and applied outside its enabling statute and if done otherwise, the exercise will be a nullity. Section 243(4) of the constitution is emphatic that in respect of any appeal arising from any decision in exercise of the civil jurisdiction of the NIC, the decision of the Court of Appeal is final. He therefore urged the apex court to dismiss the appeal preliminarily.

With respect to the substantive appeal, Mr. Irukera argued that a literal interpretation of the Section 245(c) of the Constitution does not, in any way, oust the jurisdiction of the National Industrial Court with respect to private employment contracts. In fact, citing relevant provision of the Trade Disputes Act, LFN, 2004 and the Employees’ Compensation Act, 2010, Mr. Irukera argued that the jurisdiction conferred on the National Industrial Court applies to all employment disputes.

The Learned Silk for the Appellants, Mr. Candide-Johnson, in response to Mr. Irukera’s position, argued that the jurisdiction of the apex court is not ousted in this particular suit. He argued that the issue in this appeal falls within Section 233(2) of the constitution and the sui generis nature of the constitutional responsibility of this court must be taken into consideration. The Learned Silk argued that the court has a duty to step-in in this particular case to interpret Section 254(c) of the 1999 Constitution as the suit has raised a very serious and novel question. He argued that Section 243 of the 1999 Constitution should not be invoked to deny the Supreme Court of its role and responsibility in constitutional interpretation.

On June 30, 2017, a full panel of the Supreme Court, comprising of Hon. Justice Ejembi Eko JSC; Hon. Justices Mary Ukaego Peter-Odili JSC; Hon. Justice Musa Dattijo Muhammad JSC; Hon. Justice Clara Bata-Ogunbiyi JSC; Hon. Justice Kumai Bayang Aka’ahs JSC; Hon. Justice Kudirat Motonmori Olatokunbo Kekere-Ekun JSC and Hon. Justice Chima Centus Nwezeh JSC, delivered judgment in the appeal. In the Lead Judgment read by Hon. Justice Ejembi Eko, the apex Court upheld the Claimant/Respondent’s preliminary objection and accordingly dismissed the appeal preliminarily.

Hon. Justice Eko said: “In this instant case, the question to ask and answer is whether the enactment of Section 243(4) of the 1999 Constitution by the National Assembly, in its power of amendment, through Section 5 of the Act No 3, 2010 is valid. In other words, how far has the National Assembly, in the enactment of Section 243(4) of the Constitution through the Third Alteration in 2010, eroded the basic structure of the 1999 Constitution?”

The apex Court traced the history of Section 243(4) of the Constitution and concluded that the intendment of the drafters of the constitution is to make the Court of Appeal a final appellate court over matters that relate to labour and employment matters. He Justice held that: “It is clear from their unambiguous language that the legislature intends that the matters of elections to the National Assembly, and States Houses of Assembly, like the matters the National Industrial Court has been specially vested jurisdiction over should, as a matter of public policy, be expeditiously disposed of and therefore should not be matters of further appeal to the Supreme Court. The presumption is that the parliament knows the state of affairs existing at the time of legislation and that the parliamentary policy or attention is directed towards that state of affairs”.

Justice Eko further held that: “The judex neither make laws nor does it possess any power to amend any statute”, he held, adding that “it is not the function of the court, in its interpretative jurisdiction, to interpret a particular provision of the statute or constitution by addition or importation thereto words not contained therein”. Since the parliament, in its power of amendment, knows the state of the law existing before and at the time it is amending the law; I want to believe that in enacting Section 243(4) of the constitution the law makers, in their wisdom knew very well, and indeed legislated, not to bother the Supreme Court with issues over master and servant relationships.”

The Supreme Court sustained Mrs. Akisanya’s preliminary objection and accordingly dismissed the Appeal filed by the Appellants (i.e. Coca-Cola Nigeria Ltd. and 2 others).

Interestingly, the Supreme Court also seized the opportunity to consider the substance of the appeal, that is, whether the jurisdiction of the National Industrial Court extends to private employment contracts. Hon. Justice Eko held that:

The law, as it stands by virtue of Section 254(C)(1) of the Constitution does not demarcate between public and private employment status. . Section 254(1) of the Constitution has, of course, expanded the jurisdiction of the National Industrial Court to cover all employment related matters including those arising from private contracts of employment”.

Continuing he said: “Section 254(1) of the Constitution does not mince words that the scope of the jurisdiction it has vested in the National Industrial Court extends to the exclusion of any other court in civil cases and matters relating to or connected to any labour, employment,- the conditions service- of labour, employee, worker and matters incidental thereto or connected therewith… The preliminary objection succeeds. The appeal being incompetent is hereby struck out. The Orders made by the lower court remain extant and inviolate. Costs at N500,000.00 shall be paid to the Respondent by the Appellants”.

Source: The Nigeria Lawyer

 

Fundamental Breach is a Valid Ground for Repudiating a Contract

IBEON ENERGY NIGERIA LIMITED v. WILBROS (OFFSHORE) NIGERIA LIMITED
 
COURT OF APPEAL LAGOS DIVISION

(GARBA; OTISI; EKANEM, JJ.CA)

The appellant is in the business of providing various categories of skilled and unskilled labour to service companies. The respondent entered into a Service Agreement with the appellant to provide workers for the respondent’s facility along East-West Road, Isiolu in Rivers State.

The agreement made provisions for termination with ninety days’ notice which must be given by parties before termination can be effective. The agreement also provided for cases of strike action by the workers and stated inter alia that the appellant shall take all measures to prevent a strike, provide adequate warning to the respondent and that the appellant shall take immediate steps to bring about resumption of normal work.

The workers at the respondent’s facility embarked on a strike, and without complying with the termination provision of the agreement, the respondent immediately terminated the contract on the ground that the appellant had committed a fundamental breach by not complying with its obligations to the respondent with respect to the provision dealing with strike.

The appellant was aggrieved and filed an action against the respondent at the Lagos State High Court. After trial, the court gave judgment in favour of the respondent. The appellant appealed to the Court of Appeal, Lagos Division. One of the issues raised for determination was whether from the facts of the case and evidence admitted and a proper construction of the service agreement, the contract can be terminated outside the contemplation of the relevant provisions.

In his argument in support of the issue, learned counsel for the appellant referred to clause 8(iii) of the service agreement and posited that under the provision of the clause the parties had agreed that under no circumstance shall a party to the agreement rescind or terminate the contract without giving the other party a 90 days’ notice or payment in lieu of notice. Learned counsel further contended that the termination of the agreement by the respondent is not valid having violated the clause. Learned counsel submitted that the trial court was wrong to have held that the termination of the contract by the appellant was valid by virtue of other clauses of the contract. He cited and relied on Union Bank Nigeria Limited v. Ozigi to submit that parties are bound by the terms of their contract and therefore urged the court to resolve the issue in favour of the appellant.

Responding to the argument of the appellant on the issue, learned counsel for the respondent referred to and quoted several clauses of the service agreement indicating that the appellant was under a duty to notify it and do everything possible in its powers to prevent any strike action by the workers and to notify the respondent within a reasonable time of any impending strike. Counsel posited that failure of the appellant to do all in its power to prevent the strike and its failure to notify the respondent of the impending strike is a fundamental breach of the contract giving the respondent the choice to terminate the contract. Furthermore, learned counsel for the respondent cited and relied on the cases of Coker v. Ajewole and Balogun v. Alli-Owe to submit that if a party who is entitled to put an end to a contract by reason of a fundamental breach does not exercise that right on becoming aware of the breach, he loses the right and cannot afterwards exercise that right without giving notice of his intention to do so. The respondent acted timeously by rescinding the contract in order to mitigate its losses. He posited that the respondent had the option of either suing for damages for breach of contract or rescinding the contract and that the respondent cannot be liable in damages by reason of not giving the required notice. He urged the court to resolve the issue in favour of the respondent.

In resolving the issue, the court held thus:

The effect of a fundamental breach of a contract by a party thereto has been the subject of pronouncements by courts over the years. In Dantata v. Mohammed (2000) 7 NWLR (Pt. 664) 176,198-199 Ayoola, JSC, stated as follows:

“Where one party has committed a serious breach of contract the innocent party has a right to rescind the contract. It has been said that the contract is in such circumstances rescinded de futuro (See Halsbury’s laws of England, (4th edn.) Vol 9(1) Par. 989 … When there is a serious breach of contract, one of the consequences is that the innocent party who has elected to rescind de futuro the contract is released from further obligations under the contract. The law is put succinctly thus in Halsbury’s (op. cit) par. 1003 as follows:

“If the innocent party (B) can and does elect to rescind the contract de futuro following a breach by the other party (A), all the primary obligations of the parties under the contract which have not yet been performed are terminated.

… Thus the innocent party is released from further liability to perform …”

In Bekederemo v. Colgate -Palmolive (Nig) Ltd (1976) 6-12 SC 24, 27 Sowemimo, JSC, as he then was, put it this way;

“… the learned trial judge was justified in refusing the appellant’s claim on the ground that he had committed a breach of an essential condition, which had the effect of putting the contract itself at an end”.

See also Rank Xerox (Nig) Ltd v. Centrex (Nig) Ltd (1995) 1 NWLR (Pt 374) 703, and Savannah Bank Plc v. Ibrahim (2000) 6 NWLR (Pt 662) 585.

Issue is resolved in favour of the respondent.

O.J. Ajakpovi, Esq. with Messrs O. A. Adenaike and O.B. Oduntan for the appellant.
Respondent’s counsel absent.

This summary is fully reported at (2017) 5 CLRN