SECURITY OF TENURE
This topic is core to the issue of wrongful termination of contract of employment. The fundamental question which continues to be asked each time a case comes before the courts on wrongful termination of employment is whether an employee or worker can be said to have security of tenure in his or her job.
Termination in Public Sector
At common law, security of tenure of employment of employees is governed by the contract of employment, and numerous cases have made it clear that an employee enjoys a security of tenure commensurate with the length of notice required to terminate the employment. An employment described as permanent or pensionable does not mean what it says; it does not mean that it continues until the employee reaches the retirement age or drops dead on the job (ABUKOGBO v AFRICAN TIMBER & PLYWOOD). However, in exceptional circumstances, there may be an employment for life where the terms of the employment state so. This will be the case, for example, where right to termination by notice is excluded (Karibi-Whyte in OLANIYAN v UNILAG).
Under the Labour Act, S. 9(7) states the methods of termination of employment as performance, frustration (employee’s death) and by notice in accordance with S. 11 of the Act. By S. 11, a contract lasting less than three months gets one day’s notice; one week’s notice for a contract lasting between three months and two years; two weeks’ notice in respect of 2-5 years’ employment, and one month for five years’ service or more. This means the termination of employment is governed by the terms of the contract between the parties. This is commonly done by notice or by payment of the appropriate wage or salary in lieu of notice.
a. Performance: A contract is lawfully terminated by full performance. If the obligations under the contract are expressed to be time-bound, the expiry of the term fixed terminates it. Even where the contract is not for fixed duration, the parties can terminate it by mutual agreement which may correspond with the terms of the contract or may serve as a variation of same.
b. Frustration: Frustrating circumstances are those occurrences beyond the control of either party. They make the performance of the contract either impossible or fundamentally different from what the parties had assumed under the contract. They include outbreak of war (Brown v Haco), subsequent change in the law, imprisonment (Hare v Murphy Bros) but an employment contract isn’t frustrated where the imprisonment was self-induced (London Transport Executive v Clarke).
c. Notice: This could be by either party according to the terms of the contract otherwise it would amount to wrongful termination. In Longe v First Bank, the notice requirement was not observed before the decision was taken to relieve the plaintiff of his appointment. The court held that the termination was wrongful. In Porter v Nestle Products, the plaintiff’s employment was terminated by one month’s salary in lieu of notice plus other benefits. The court held that the termination was not unlawful.
It is important to note the distinction between suspension and dismissal/termination. Unlike termination and dismissal, suspension operates to suspend the contract rather than terminate the contractual obligations of the parties to each other (Longe v First Bank). Once the contract of employment gives the employer the power to suspend, the exercise of that power must comply with the terms of the contract. Also, where an employee is handed a letter of suspension but an intention to terminate his employment can be read into it, the employer will be deemed to have lost his contractual power. Where an employer fails to comply with the provision of statute in terminating the employee’s contract, the former will be held to have exceeded his powers (Longe’s case). It may be with or without pay. Under common law, an employer who wishes to reserve the right to suspend an employee must do so by express terms (WARBURTON v TAFF VALE RAILWAY).
Termination & Dismissal
According to Professor Adeogun, there is no difference between termination and dismissal. The difference if any at all is where the words ‘qualified termination’ or ‘wrongful dismissal’ come to bear.
Some of other writers believe there is a key distinction between the two. According to them, termination gives the parties the right to determine the contract at any time by giving the prescribed period of notice or payment in lieu. Dismissal on the other hand, is a disciplinary measure, which carries no benefits and can only be exercised by the employer. Thus, the distinction between ‘dismissal’ and ‘termination’ centres on whether in determining a contractual relationship recourse is had to the terms of the contract.
Unlike termination, in cases of dismissal, the employer is required to give reason for the action. In the case of George Abomeli v. Nigerian Railway Corporation, the court held that while it is settled that an employer is not bound to give any reason for lawfully terminating a contract of service he must give reasons for summarily dismissing the employee. In essence, termination means bringing the contract of employment to an end in accordance with the provision of law and the contract. Dismissal means removal by virtue of a breach of either an express or implied term of the contract of employment. In Nigeria, an employer can terminate the contract of employment with his servant at any time and for any reason or for no reason at all provided that the terms of the contract of service between them are complied with. The motive which led an employer to lawfully terminate the employment is normally irrelevant. See Olaniyan v. University of Lagos and Opuo v. NNPC. The employer need not mention the reason for terminating the employee’s employment in the letter of termination. In Dudusola v Nigeria Gas Company, the letter of termination stated no reason for the termination, it merely stated that the services of the employee were no longer required. The employee stated that the termination was based on an unproven allegation against him. The SC reiterated the trite law that a master has the unfettered right and liberty to terminate his servant’s employment at any time and for any reason or for no reason at all provided the terms of the contract of service between them are complied with. The only obligation on the employer when terminating the contract of employment is notice or payment in lieu. Once this is done, the termination would be deemed valid in the eyes of the law. It is pertinent to note however, that while an employer is not obliged to state reasons for terminating a contract of employment, where the employer gives a reason, the burden rests on him to establish that reason. In such cases, the employee must be given a fair hearing as enshrined under the law.
Another distinction between ‘dismissal’ and ‘termination’ is that in the latter, the employee is usually entitled to his benefits and entitlements including notice or payment in lieu but a dismissal is usually without notice and salary. In Irem v Obubra District Council, the court held that a dismissal carries with it a connotation of infamy on the part of the employee which allows him to be dismissed without any entitlement to benefits. But in practice, employers would rather terminate employments and give employees their entitlements rather than take the risk of being sued. Thus, even where an employee deserves to be dismissed, they terminate the employment in order not to incur expenses of defending actions in court.
Under Common Law, there were a host of reasons an employer could decide to dismiss an employee. This common law formulation is part of the received English law in Nigeria. Categories of conduct which may entitle an employer to summary dismissal are fairly well established. They include cases of ‘gross misconduct’ even though it has been quite herculean defining what amounts to gross misconduct; incompetence of the employee in a professed skill; wilful disobedience of lawful orders; conduct incompatible with the good faith and fidelity obligation of the employee to his master’s business such as taking bribes and secret profits and illness of a protracted or permanent nature often resulting in the frustration of the contract. The primary legal safeguard in the existence of this right by the employer is that it must be justified on any of the aforesaid grounds. The reason for summary dismissal is therefore subject to judicial review and in appropriate cases, the courts will insist on the observance of the rules of natural justice by the employer. Outside these situations where a dismissal is justifiable at common law, the boundaries of what constitutes unfair dismissal are blurred. Basically, it is said that an employer can terminate for good cause, bad cause or for no cause at all. The law would not foist a willing employee on an unwilling employer. Whatever remedies are available for wrongful termination are dependent on the contract of employment. But please note that where the alleged misconduct is criminal in nature, the rule in Garba v Unimaid must come to mind. This means that the employer can’t relieve the employee of his duties until a pronouncement has been made by a competent court or tribunal or where the court has given consent. The new rule as deduced from Arinze v First Bank and Yusuf v Union Bank is that where an employee is accused of gross misconduct involving dishonesty bordering on criminality, the employer need not wait for the employee to be tried before summarily dismissing him. Gross misconduct has been described as conduct that is of a grave and weighty character as to undermine the relationship of confidence which should exist between the employee and his employer. Working against the deep interest of the employer amounts to gross misconduct which entitles the employer to summary dismissal of the employee without notice and without wages. However, the employer must not couch the dismissal using criminal terms known to law. The courts also noted that in dismissing an employee, he must be given fair hearing even where the allegation involves accusation of crime.
Termination in the Private Sector
The common law position is that termination has its foundation in the contract of employment and the court will uphold the terms provided there exists no vitiating element. The rule as pronounced in Ajayi v Texaco and Chukwuma v Shell is that where an employment has been properly terminated in terms of the contract of service, intention or motive of the termination become irrelevant. The law has always been that the master can terminate the contract of employment at any time for good or no reason at all. Note therefore that motive is irrelevant in terminating a contract of employment provided the requirement of notice is complied with. See Araromi Rubber Estates v Orogun where the court noted that malice or improper motive won’t vitiate an employer’s right to terminate a contract. But the court in Ahuruonye v The University College, Ibadan has pointed out that where an employee in the private sector is dismissed, reasoned must be given. In that case, plaintiff was employed with no formal contract of employment, he was dismissed with no reason. The court held that his annual salary signified the contract of employment and he was entitled to a month notice as well as salary in lieu of termination.
The NIC has also upheld the common law rule stating that an employer can ‘fire’ for any or no reason at all. In the twin sister cases of National Association of Hotel Services Workers v Capital Hotel and Senior Staff of Capital Hotel v Capital Hotel, the NIC reiterated that motive of termination was irrelevant and the termination of the employment was valid. It is the view of Mr Folarin that the decisions of the court in these cases are simply preposterous.
Prior to 1981, the fate of employees in the public sector was in no way different from the position in the private sector. This means that employees in the public sector prior to 1981 owed their employments at the pleasure of the state/crown who could fire for any or no reason at all (Graham Douglas v A-G., Rivers State).
The turning point came in 1981 via the case of Shitta-Bey v Federal Public Service Commission, where the SC stated that the Civil Service Rules governing the conditions of service of Federal public servants invest the public servants with a legal status making their relationship with the state more than a mere master and servant relationship. The court would only grant reinstatement: a. where the employment has statutory flavor b. where a person is terminated for his involvement in trade union activities provided such involvement was not within work hour. In Olaniyan v Unilag, the court noted that S. 17 of the Unilag Act provides for disciplinary measure against certain categories of officers and staff. The Act sets out the procedure that must be followed to remove such employees from service. When the mandatory procedure is not complied with, any disciplinary action taken against them will be declared null and void. The section vests them with legal status making it impossible to remove them without following due process. In University of Nigeria Teaching Hospital Management Board v Hope Nnoli, similar protective statutory provisions were applied also to nullify improper dismissal. But please note that once due process as enshrined in the law is followed by the employer, the termination is valid.
For the sake of emphasis, it is important to state again that the fact that a person works with a public institution does not mean his employment can’t be terminated. All that is required is due process. In Ideh v Unilorin, the court noted contracts of employment are by and large determinable by the agreement of the parties. The fact that the fact that an employer is a creation of statute does not elevate all its employees beyond master and servant relationship; it doesn’t mean their employment must necessarily have a statutory flavour. It therefore seems clear from this case similar statutory provisions like S. 17 Unilag Act are specifically for the protection of some senior cadres of officers and staff and not the generality of the staff. Thus, such protection cannot be enjoyed by junior cadres. In Fakuade v OAU Teaching Hospital, the plaintiff, a nursing sister in the employment of the defendant, received a query accusing her of a missing stainless steel bowl. She replied the defendant stating all she knew about the missing bowl. Thereafter, her employment was terminated. She then filed the action stating that her employment was terminated as a result of the allegation of the missing bowl. The employer on the other hand stated that the termination was not for the allegation or any misconduct rather it was as a result of a retrenchment exercise it found necessary to carry out that year. Having found that the employment was without statutory flavour, the court held that the termination was lawful as a master can terminate his servant’s employment for any or no reason at all without regard to motive.
ILO Standards on Termination of Employment
Article 2 of the ILO Convention 158 states that its provisions ‘apply to all branches of economic activity and to all employed persons’. No distinction is drawn between employees in the public and private sectors or between small and big employers. In contrast, the Nigerian law and practice on unfair dismissal preserves a clear dichotomy with regard to the private and public sectors of the economy. It is the submission of this writer that there exists no genuine reason for the continued existence of this dichotomy in Nigerian law.
Article 4 of the ILO Convention provides that the employment of a worker shall not be terminated unless there is valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service. This simple but forceful statement grants working people a guarantee of elemental fairness at the workplace. The employer may terminate employment, but not arbitrarily or capriciously. In order to obviate the possibility of a narrow interpretation being given to the phrase ‘valid reasons for such termination’, it further lists several reasons member nations should not accept as a valid basis for termination. Among these were dismissal based on union activity or filing complaints against the employers with governmental bodies, or grounds of a worker’s race, colour, sex, national origin, or religion. This provision has not been adopted in Nigeria either by law, custom or executive action. The Nigerian Government has not felt the need to act in this direction. For the common law rule is that an employer may fire for any reason, good or bad or for no reason at all.
Article 7 ILO Convention supports the notion that discharged workers should have a right to defend themselves before punishment is imposed. It states that a dismissal based on the employee’s conduct or performance should not take effect until the employee has had an opportunity to respond to the allegations unless the employer can’t reasonably be expected to provide this opportunity. At present, there is no right to pre-discharge disciplinary interview in Nigeria.
Article 8 ILO Convention provides that workers who believe they have been unfairly discharged should be able to challenger their discharge before an ‘impartial body’ such as a court, tribunal, or arbitrator.
Article 9 ILO Convention is to the effect that the worker may not bear the burden of proof that his termination was not justified. The ratifying nation may put the burden of proof on the employer or on neither of the parties but such burden may not be placed on the employee.
Having had a cursory look at some of the provisions of the ILO Convention, we now move to consider the applicability of the ILO standards in Nigeria. Simply put, despite the ratification of the ILO Convention by the Nigerian government, it is important to state that the convention hasn’t been domesticated. This means that the Convention is simply unenforceable unless and until it has been domesticated by the National Assembly in accordance with S. 12 of the 1999 Constitution. However reference is made to the Convention in this paper to highlight the development in other member nations of the ILO who have ratified this convention for the protection of their work force.
Whilst Nigeria has not ratified Convention 158, its provisions are not devoid of legal effect. In the absence of explicit legislative guidance, some judicial activism may be a ready way of dispensing justice according to international standards. Inspiration may be drawn from the South African case of Modise v Steve’s Spar. In that case, the court had to decide whether in the event of an illegal strike, the employer was nonetheless required to comply with the rule of hearing the workers or their representatives before terminating their employment contracts. The court relied on the provisions of the ILO Convention 158 on termination of Employment in the majority decision despite the fact that South Africa had not ratified that convention. Similarly, the Industrial Court of Botswana in Gaborone, Joel Sebonego v Newspaper Editorial & Management Services, had to consider whether the dismissal of a newspaper editor on medical grounds was unfair. Having noted that Botswana legislation did not contain any provision on dismissal for medical reasons, the court had recourse to the provisions of the ILO Convention. In these two decisions, the concepts of ‘fair hearing’ and ‘justifiable termination’ were employed as precepts of internationally guaranteed rights that should underline national legislations. Also are the cases of Punch Nig v A-G., and Dow v A-G., where the courts placed reliance on the Bangalore principles in applying the provisions of the ILO Convention to the matters presented before them.Asides the above means of applying the provisions of the Convention, the provision of S. 254C (1) (f), Third Alteration Act to the 1999 Constitution (as amended) is also instructive in this regard. The section has introduced the concept of unfair labour practice in Nigeria’s labour law. The aforesaid section however doesn’t define what the concept is. But the provision notes that the concept includes labour practices which are unfair and unjust to the employees as well as employers. Also the provision of S. 7(6) National Industrial Court Act which enjoins the court to have regard to international best practices when exercising its jurisdiction is also relevant in this regard.