Unfair Termination’ of Employment in Nigeria

Edited by: Asykobi

All employees have the right not to be unfairly or wrongfully dismissed. However, Nigerian labour laws make no provision for the concept of ‘unfair termination or dismissal’. In Nigeria, Termination or dismissal could be wrongful but not necessarily ‘unfair’. This is more so for employment contracts that do not enjoy ‘statutory flavour’.

An employment contract is said to be wrongfully terminated where it is done in breach of the terms of the employment contract between the parties, which usually prescribes a notice period or payment in lieu of notice. Termination or dismissal could be said be ‘unfair’ where, though valid by the terms of the employment contract, is without reason or it is for reasons unconnected with the employee’s capacity or conduct, or operational requirements of the undertaking.

There is a difference between termination of a contract of employment and a dismissal. 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. Also, unlike termination, in cases of dismissal, the employer is required to give reason for the action. See Union Bank of Nigeria Plc v. Soares(2012) 11 NWLR (Pt. 3112) 550. In the case of George Abomeli v. Nigerian Railway Corporation (1995) 1 NWLR (Pt. 372) 451 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 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 (1985) 2 NWLR (Pt. 9) 599 – 685 and Opuo v. NNPC (2001) 14 NWLR (Pt. 734) 552.

Decided cases on the above stated principle of law are inexhaustive and they all show a resolute stand by Nigerian courts not to delve into the motive for terminating a contract of employment. As a result, it is almost impossible to prove a case of unfair termination under Nigerian law. The employer may base his reasons for terminating on almost anything no matter how unfair the circumstances. All he needs to do is simply to avoid mentioning it in the letter of termination!

In the case of G. O. Dudusola v. Nigeria Gas Company Limited (2013) 10 NWLR 423 – 441 the letter terminating the Appellant’s appointment did not give any reason for the action taken against him. It merely stated that the Appellant’s services were “no longer required”.  The Appellant sued and alleged that the Store Officer of the Respondent had recommended his dismissal on the unproven allegation that he was responsible for missing items in the Respondent’s warehouse and that the Respondent acted on the allegation of the Store Officer without investigation. The Supreme Court dismissed the Appellant’s case, while reiterating 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 case of G. O. Dudusola demonstrates the attitude of our courts to the issue of motive for termination of a contract of employment. In Sobowale v. Statutory Corps Service Commission (1974) NCLR 221 at 228 there was evidence before the court that the termination of the employment of the plaintiff was not unconnected with his ill-health, which made him not amenable to go on a transfer. And in Nigerite Limited & Anor v. Rasaki Oremosu (2003) 31 WRN 64 it was clear from the evidence presented before the court that the retrenchment of the plaintiff was as a result of malice on the part of the employer. In both cases, the courts upheld the right of the employer to terminate for whatever reason, and decline to delve into the motive for the termination.

A corollary of the foregoing is that damages for wrongful termination cannot include compensation for the manner of the employee’s termination and for his injured feelings or for the loss he may sustain from the fact that the termination of itself makes it more difficult for him to obtain fresh employment. See the cases of Baker v. The Denkera Ashanti Mining Corporation Ltd 20 T.L.R 37 and Addis v. Gramophone Co. Ltd (1909) A.C 488. The commonplace remedy for wrongful termination is the net payments which the employee would have received during the balance of his notice period.

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. See the case of UBA Plc v. Oranuba(2014) 2 NWLR (Pt. 1390) 1 at 21 where the Court of Appeal reiterated this principle of law. However, HR and labour law practitioners have found a way around this by not stating the reason for terminating in order to avoid the burden of having to justify the reason.

Unlike Nigeria, UK labour laws recognize the concept of ‘unfair dismissal’. The Employment Rights Act (ERA) provides that employees are entitled to a fair reason before being dismissed, based on their capability to do the job, their conduct, redundancy, on grounds of a statute, or some other substantial reason. Hence under the ERA, termination or dismissal would be unfair if it is for a reason related to discrimination, pregnancy, or unionism. This means an employer may only terminate an employee’s job lawfully if the employer follows a fair procedure, acts reasonably and has a fair reason.

Furthermore, if a claim for unfair dismissal is brought under the ERA, the employer has the duty to establish that the reason for the dismissal is one of the designated reasons set out under the law and the employment tribunal would further determine whether the dismissal or termination was fair in all the circumstances. This is contrary to our law, which places the burden of proof on an employee who alleges wrongful dismissal or termination to substantiate same.

The provision of the ERA is in tandem with the ILO Termination of Employment Convention 158 of 1982, and accord more with modern labour law and practice. 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. It has been suggested that better labour laws should be enacted in Nigeria to provide security of tenure of employment of workers in ordinary master-servant relationships. A stopgap measure, however, is for Nigerian courts, especially the National Industrial Court (NIC) to adopt more proactive and progressive stance in determining cases of unfair dismissal or termination of employment. The 1999 Constitution, as amended by the Third Alteration Act 2010, vests the NIC with exclusive jurisdiction over labour disputes. This includes cases relating to or connected with “unfair labour practice or international best practices in labour, employment and industrial relation matters”.

Labour is the most important factor of production and thus deserving of a special legal attention to achieve optimal and sustainable productivity. Labour law and practice have moved beyond the common law position to provide security of tenure of employment for workers in even ordinary master-servant relationships. We need to put our act together and move on with the times.