Working or rendering services for paid wages is a concept as old as human race. From working in cocoa farms and sugarcane plantations to fixing cars or building computers or developing Apps and software or managing public image of celebrities or promotion of brands and products of a company for remuneration is called Employment which is regarded as the status of having paid work in a company or by private individuals for a particular skill set or abilities within a given period of time.
In this article, we explore the legal perspectives of what an employee must prove in cases of wrongful dismissal from employment with the sole aim enlightening the labour force with relevant laws and related cases.
What is employment?
Employment is regarded as the status of having paid work in a company, the act of which involves two parties who are:
- The employer and
- The employee
Who is an employer?
By virtue of section 91 of Labour Act, CAP.L1, Laws of the Federation of Nigeria, 2010; an employer means any person who has entered into a contract of employment to employ any other person as a worker either for himself or for the service of any other person, and includes the agent, manager or factor of that first-mentioned person and the personal representatives of a deceased employer;
Who is an employee?
An employee is referred to as a “worker”, pursuant to section 91 of Labour Act, CAP.L1, Laws of the Federation of Nigeria, 2010 which means any person who has entered into or works under a contract with an employer, whether the contract is for manual labour or clerical work or is expressed or implied or oral or written, and whether it is a contract of service or a contract personally to execute any work or labour, but does not include:-
- Any person employed otherwise than for the purposes of the employer’s business; or
- Persons exercising administrative, executive, technical or professional functions as public officers or otherwise; or
- Members of the employer’s family; or
- Representatives, agents and commercial travelers in so far as their work is carried on outside the permanent workplace of the employer’s establishment; or
- Any person to whom articles or materials are given out to be made up, cleaned, washed, altered, ornamented, finished, repaired or adapted for sale in his own home or on other premises not under the control or management of the person who gave out the articles of the material; or
- Any person employed in a vessel or aircraft to which the laws regulating merchant shipping or civil aviation apply;
The employee is the person who is hired for a salary or fee to perform work or task for the employer under which circumstances; the employee usually negotiate terms and conditions of employment with the employer either orally or by written agreement generally referred in law as “Contract of Employment”. See the case of Union Bank of Nigeria Ltd v. Edit (1993) 4 NWLR (Pt. 287) p.288 where the court held that:
“A contract of employment means any agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker whereby terms and conditions are stipulated”.
In Nigeria, there are Labour Laws and Regulations which cover common issues regarding protection of wages, terms and conditions of contract of employment, employee rights and privileges in the workplace as well as employee representation and industrial relations to guard against discrimination and unfair treatment within the workplace, and ultimately setting up sanctions and resolution mechanisms where conflict arises between the employer and the employee.
Meaning of Contract of Employment
Generally, a contract of employment is an agreement between an employer and employee whereby the terms and conditions of employment are stipulated. See the case of Union Bank of Nigeria Ltd v. Edit (1993) 4 NWLR (Pt.287) p.288.
Thus, a contract of employment means any agreement, whether oral or written, express or implied, whereby one person agrees to employ another worker and that other person agrees to serve the employer as a worker and this is by the definition of the Labour Act (CAP.198) Laws of the Federation, 1990 which applies to workers strictly defined to the exclusion of the management staff. See the cases of Iyere v. Bendel Feed & Floor Mill Ltd. (2009) All FWLR (Pt. 453) 1217, Latimer v. AEC Ltd (1953) AC 643, Paris v. Stepney Borough Council (1951) AC 367 at 384 per Lord Oakley.
A contract of employment can be divided into two broad categories as follows:
- Master and servant employment,
- Employment where the office is held at pleasure,
- Employment protected by statute
It will be very important to analyze these categories of employment one after the other as follows:
- Master and servant employment:
The court held in the case of Olarewaju v. Afribank (2001) 13 NWLR (Pt.731) 691, that a master and servant employment is one in which a contract of service is between an employer and an employee, where the service terms do not contain a statutory flavour. In this form of employment the master is under no obligation to give reasons for terminating the appointment of his servant.
In the case of Daodu v. U.B.A Plc. (2004) 9 NWLR (Pt. 878) 276 at 279, per Adekeye, J.C.A held that in master and servant contract of employment, the master can terminate the contract with his servant at any time and for any reason or for no reason where he held:
“An officer’s appointment can lawfully be terminated without first telling him what is alleged against him”.
Under master and servant employment, either of the parties can abrogate the contract on a week’s or month’s notice, or upon payment of wages in lieu of such notice.
- Employment where the office is held at pleasure of the employer:
In determining if an employment is held at the pleasure of the employer, recourse should be had to the contents of the letter of appointment of the employee. Where the office is held at pleasure of the employer, then there is a written contract of employment between the employer and the employee.
Employment where the office is at the pleasure of the employer, the employment covers the common law and ordinary master and servant relationship governed by written law and not subject to any statutory restrictions or limitations in which case the duty of the court is to apply the terms, conditions and provisions of the contract as they appear without resort to any provisions of statute regulating such employment. See the case of N.I.I.A v. Ayanfalu (2007) 2 NWLR (Pt. 1018) p.246.
In essence, employment where the office is at the pleasure of the employer, the relationship is that of master and servant under the common law which appointment is terminable with or without reason at the will or pleasure of the master. See the case of N.E.PA v. Ango (2001) 15 NWLR (Pt.737) 627.
Again under common law ordinary mode of employment, the contract is basically oral, but where the contract is reduced into writing, the courts are enjoined to determine the rights, duties and obligations of the parties by references to the written agreement only.
- Employment protected by statute:
An employment with statutory flavour is one where the procedure for employment and discipline are governed by statute. A contract of employment with statutory flavour occurs when the contract of service is governed by statute or where the conditions of services are contained in regulations derived from statutory provisions. Such statutory provisions invest the employee with a legal status higher than an ordinary master and servant relationship. See the case of Shitta-Bey v. Federal Public Service Commission (1981) 1 SC 40.
An employer of an employee whose appointment has statutory flavour has no right to terminate his appointment at will because he does not hold the appointment at the pleasure of such an employer and to determine the appointment, the employer has a duty to comply with the conditions precedent laid down in the conditions of appointment failing which such termination will be held ineffectual or invalid.
Where an employment is protected by statute, such an employee does not hold his office at the mercy of the employer. The employer has no right to terminate his appointment without first complying with conditions set down for his removal under the contract of service. Employment protected by statute is contract of a special character and this differentiates the contract of employment under the public service from one under common law where the appointment is a mere master and servant relationship where termination of employment is at the mercy of the employer. See the cases of Iderima v. R.S.C.S.C (2005) 7 SC (Pt. 111) 135 (2005) 16 NWLR (Pt. 951) 378 and Olaniyan v. University of Lagos (1985) 2 NWLR (Pt. 9) 599.
Ways of Terminating Employment
Having considered the various categories of employment under common law and statutory protection, it is considered necessary to discuss methods of terminating employment as follows:
- Employment with statutory protection must be terminated in the manner prescribed by the statute and any other manner of termination of employment with statutory flavour which is inconsistent with the relevant statute is null and void and of no legal effect. See the cases of Iderima v. R.S.C.S.C (2005) 16 NWLR (Pt. 951) 385 and NEPA v. Ango (2001) 15 NWLR (Pt. 737) 627 at 631.
- Under the common law, an employer is entitled to bring the appointment of his employee to an end for any reason or for no reason at all so long as the employer acts within the terms of the employment, his motive for doing so is irrelevant. See the case of Commissioner for Works, Benue State v. Devcon Ltd (1988) 3 NWLR (Pt. 83) 407 at 423. An employer who hires under the common law has the corresponding right to fire him at anytime, even without assigning any reason for so doing. He must however fire him within the four walls of the contract between them. Where the employer fires an employee in compliance with the terms and conditions of their contract of employment, there is nothing the court can do as such termination is valid in the eyes of the law. It is only where the employer in terminating or dispensing with the services of an employee, does so without due regard to the terms and conditions of the contract of employment between the parties that problems arise as such a termination is usually not tolerated by the courts and are, without hesitation, usually declared wrongful and appropriate measure of damages awarded to employee. See the cases of Isheno v. Julius Berger (Nig.) Plc (2008) All FWLR (Pt. 415) 1632 at pg. 1654, paras. A-D.
Whether a master is entitled to dismiss his servant from employment for good or for bad reason or for no reason at all?
At common law, the well established principle is that ordinarily, a master is entitled to dismiss his servant from his employment for good or for bad reason or for no reason at all and consistent with this principle, is also the law that the court will not impose an employee on the employer as hardly does the court order for specific performance of contract of employment.
In order words, it is an aberration that is rarely made, but often, the only remedy the servant has is to claim for the wrongful act of his master, because the master has the right to hire and fire for good or for bad reason and the court cannot compel the employer to continue to keep an employee it does not want.
On the other hand no employer could prevent an employee from resigning from his employment to seek elsewhere for “greener pastures”, but where the termination is wrongful; the servants’ remedy lies in a claim for damages. See the cases of Garuba v. Kwara Investment Co. Ltd (2005) NWLR (Pt. 917) 160, and Osisanya v. Afribank (Nig.) Plc (2007) 6 NWLR (Pt. 1031) 565.
Consequences of Termination of Employment
The law is well settled that where a contract of employment is terminable on notice and the employee is not given the requisite notice, what the employee could have earned during the period of the notice is the damages that the employee can get. See the case of I.D.C v. Ajijola (1976) 2 S.C 115 at 119-120 per Oguntade J.S.C at p.17, paras B-C.
However, if the master terminates the contract with his servant in a manner not warranted by the contract, he must pay damages for breach of contract. The remedy is in damages as the court cannot compel an unwilling employer to re-instate a servant it has dismissed. The exception to the general rule is in cases where the employment is especially protected by statute and in such cases, the employee who is unlawfully dismissed may be re-instated to his position. See the case of Shitta-Bey v. Federal Public Service Commission (1981) 1 SC 40.
Exceptions that an employer has to follow when terminating a contract of employment:
Although an employer is not bound to follow a proper procedure in summarily dismissing an employee, there is a long line of judicial authorities identifying some exceptions where to properly and effectively terminate a contract of employment, the employer has to follow the proper procedure. The following are the exceptions:
- Where the contract itself has made provisions for a procedure to be followed, that procedure has to be followed to effectively determine the contract;
- Where a statute regulated the appointment and dismissal of a servant, the requirements of the statute must be complied with and in that instance, the master and servant relationship has what is known as a “statutory flavour”;
- The other third category affects holders of offices involving public function and here the rules of natural justice must be complied with in the dismissal.
See the cases of Imoloame v. WAEC (1992) 9 NWLR (Pt. 265) 303 and Audu v. Petroleum Equalization Fund (Management) Board & Anor. (2010)LPELER-CA/A/274/2007.
What an employee needs to prove when complaining of wrongful termination of employment:
Generally, an employee who seeks a declaration that the termination of his appointment was wrongful must prove the following material facts:
- That he is an employee of the employer;
- The terms and conditions of his employment; and
- The way and manner and by whom he can be removed.
In Nigeria, there are three types of contracts of employment with different consequences as follows:
- Under the common law, where in the absence of a written contract, each party could abrogate the contract on a week’s notice or month’s notice or on payment of wages for a week or month or whatever the agreed period for payment of wages.
- Where there is a written contract of employment between the employer and employee, in such a case the court has a duty to determine the rights of the parties under the written contract; and
- Where the employment is covered with statutory flavour as in the case of public servants, the conditions of service or agreement will guide termination. See the cases of Olaniyan v. Unilag (1985) 5 NWLR (Pt. 9) 599 and Shitta-Bey v. Federal Public Service Commission (1981) 12 NSCC 28, (1981) 1 SC 40.
It has also been firmly established that when an employee complains that his employment was wrongfully terminated, he has the onus of proving the following:
- To place before the court the terms of the contract of employment and;
- To prove in what manner the said terms were breached by the employer.
It is not the duty of the employer as a defendant in an action brought by the employee to prove any of these facts. See the cases of Okomu Oil Palm Co. v. Iserhienrhien (2001) 5 NSCQR 802.
Measurement of damages to be awarded in cases of wrongful dismissal and termination of employment:
The law as it relates to the remedy available to an employee, whose employment is wrongfully or unlawfully determined by the employer in contravention of the terms or conditions of service between the parties is now very settled. It is that in cases of ordinary employment where the terms provides for a specific period of notice before termination or salary in lieu thereof, the only remedy awardable to an employee whose employment was wrongfully terminated is the award of salary for a period of notice and other legitimate entitlements due to the employee at the time the employment was brought to an end. In other words, such an employee is neither entitled to an award of general damages nor a decree of reinstatement and the rationale for this is that the employee cannot be imposed by the court on an unwilling employer. See the case of Ativite v. Kabel Metal Ltd (2008) 10 NWLR (Pt. 1095) 399 at 415.
Again, dwelling on the damages recoverable in cases of wrongful dismissal and termination of employment in the case of Shena Security Co. Ltd v. Afropak (Nig.) Ltd & Ors (2008) 4-5 SC (Pt. 11) 117, the Supreme Court said thus:
“The damages recoverable usually in cases of wrongful dismissal and termination have been pronounced upon by our courts in several decided cases, such damages are said to be the losses reasonably foreseeable by the parties at the time of the contract as inevitable arising if one breaks faith with the other. Certainly, they do not include or take account of speculative or sentimental values. The court in awarding damages will certainly not include compensation for injured feelings or the loss that may have been sustained from the fact that the employee having been dismissed makes it more difficult for him to obtain fresh appointment.” See the case of Ajolore v. Kwara State College of Technology & Anor (1980) FNLR 414.
Lastly, in the case of Osisanya v. Afribank (Nig.) Plc (2007) 6 NWLR (Pt. 1031) 565 and Ifeta v. SPDC of Nigeria Ltd. (2006) All FWLR (Pt. 314) 305; the Supreme Court dwelling on the measure of damages in an action for wrongful termination of employment held to the effect that in a claim for wrongful dismissal, the measure of damages, prima facie is the amount which the employee would have earned had the employment continued according to the contract of employment. That the measure of damages in situation where the employer on giving the prescribed notice has a right to terminate the contract before the end of the term apart from other entitlements should be limited to the amount the employee would have earned over the period of the notice bearing in mind that the employee has a duty to minimize the damages he sustains by the wrongful dismissal.
It is settled law that under common law, an employer can summarily dismiss an employee in all cases of gross misconduct or for no reason at all provided that the affected employee is given fair hearing and this is so whether the affected employee is in private employment or statutory employment. See in this regard the cases of Ziideeh v. Rivers State Civil Service Commission (2007) All FWLR 243 at 265 – 266 and Annam v. Benue State Judicial Service Commission (2006) All FWLR (Pt.296) 843.
Before an employer can dispense with the services of his employee, all he needs to do is to afford the employee an opportunity of being heard before exercising his power of summary dismissal even when the allegation for which the employee is being dismissed involves accusation of crime. See the cases of Jirgbagh v. UBN Plc (2001) 2 NWLR (Pt. 396) 11 at 28-29; Yusuf v. Union Bank of Nigeria Ltd. (1996) 6 NWLR (Pt. 457) 632.
It is trite that the rules of fair hearing is not a technical doctrine but are of substance and the question is not whether injustice has been done because of lack of fair hearing, but whether a party entitled to be heard before a decision had in fact been given an opportunity of fair hearing and in this instance, several cases need be referred to for guidance such as Dangote v. Civil Service Commission of Plateau State (2001) 9 NWLR (Pt. 717) 132 SC.
Where there is an accusation of the commission of criminal offences, the burden of proof to be established by the accuser before a criminal a criminal tribunal established by law is that the commission of the offence has been proved beyond reasonable doubt and no matter the fairness of the findings of a tribunal of inquiry, an administrative body cannot usurp the constitutional functions of the courts by making a finding of guilt in such cases. See the cases of F.C.S.C v. Laoye (1989) 2 NWLR (Pt.106) 652, Garba v. University of Maiduguri (1986) 1 NWLR (Pt. 18) 550 and UNTHMB v. Nnoli (1994) 8 NWLR (Pt. 363) 376.
Thus, once an appellate court comes to the conclusion that a party was entitled to be heard before decision was reached but was not given the opportunity of a fair hearing, the decision of the tribunal is liable to be set aside.