Understanding Employment Laws in Nigeria: A Guide to Wrongful Termination vs. Unlawful Termination
Navigating employment-related issues can be challenging for both employers and employees, especially when it comes to termination. In Nigeria, employment law governs the relationship between employers and employees, ensuring fairness in employment practices. One key aspect of this legal framework is the protection against wrongful termination and unlawful termination. While both terms may seem synonymous, they have distinct legal meanings and implications; understanding these terms is crucial for protecting one’s right. This article provides a clear breakdown of employment laws in Nigeria as they pertain to wrongful and unlawful termination.
Wrongful Termination
Wrongful termination of employment in Nigeria occurs when either the employer or the employee terminates his employment otherwise than in accordance with the contract or agreement. In most cases, this occurs when an employer fails to provide proper notice or payment in lieu of notice. For example, if an employment contract stipulates a one-month notice period but the employee is dismissed without such notice, the termination is considered wrongful.
Employment laws in Nigeria outline that wrongful termination does not necessarily violate the law but breaches the terms agreed between the employer and employee. Wrongful termination arises when the terms of the employment contract are breached during the termination process. Here, the focus is on the specific provisions of the employment contract rather than statutory law.
Examples of Wrongful Termination:
– Termination without giving the contractually agreed notice or payment in lieu of notice.
– Firing an employee without following due disciplinary procedures set out in the contract.
– Termination in bad faith, especially in contracts with implied terms of fairness and equity.
Remedies For Wrongful Termination or Dismissal
– The employee can sue for damages or financial compensation for the breach of the employment contract, typically calculated as the wages and benefits they would have earned during the notice period.
A victim of wrongful dismissal or termination can get a remedy from the court.
The remedy, which an employee that considers that his employment has been wrongfully terminated either because he was given insufficient notice or by failure to justify his dismissal may seek includes:
(i) Specific damages, which includes payment of salary arrears and entitlements.
(ii) Damages
(iii) An employee with government or any government agency may be entitled to reinstatement
In the case of Western Development Corporation v. Jimoh Abimbola (1972) ANLR, Pt. 2433, it was held that the measure of damages for wrongful dismissal is prima facie, the amount the plaintiff would have earned had he continued with the employment up till the period of judgment.
Damages are awarded to restore the plaintiff as far as money can, to the position he would have been if there had been no breach.
Regarding officer that are wrongfully terminated or dismissed during the course of public employment or statutory employment, in addition with damages as a remedy that can be claimed for such wrongful dismissal, such officer can still be entitled to specific performance or reinstatement.
The general principle is that specific performance will not be ordered in respect of an obligation to perform personal services. Specific performance in this context will mean restoration or reinstatement of an employee to his former job where the court is persuaded that his employer has wrongly determined the employment. This remedy has normally been granted to persons holding offices in the public service whose employment enjoys statutory backing.
In Olaniyan v. University of Lagos (1985) 2 NWLR (Pt.9) 599 (SC), the court held in its ruling that where the employment of an employee is protected by statute, the employee who is unlawfully dismissed may be reinstated.
Employment which is protected by statute must be terminated in the way and manner prescribed by the relevant statute and any other manner of termination inconsistent with the statute will be null and void and of no effect.
In closing, where the provisions of a statute govern the contract of employment or where the conditions are derived from statutory provisions, it invests the employee with a legal status than the ordinary one of master and servant.
Guide to Handling Wrongful Termination
For Employees:
- Understanding Nigerian Labor Laws: Start by acquainting yourself with the relevant labor laws in Nigeria. Key legislations include the Labor Act, Trade Disputes Act, and Employee Compensation Act, which provide essential guidance on termination procedures, employee rights, and dispute resolution.
- Reviewing Your Employment Contract: Scrutinize your employment contract to grasp the terms and conditions of your employment. Pay particular attention to clauses related to termination, notice periods, and disciplinary procedures specified in the contract.
- Identifying Grounds for Wrongful Termination: Recognize the grounds on which you can claim wrongful termination. Common reasons include termination without notice, termination in violation of the employment contract, or termination on discriminatory grounds.
- Document Everything: Maintain detailed records of your employment, including performance reviews, emails, and any communication pertaining to your termination. This documentation serves as valuable evidence in potential disputes.
- Consulting the HR Department: If applicable, engage in a dialogue with the Human Resources (HR) department. They may offer insights into the reasons behind your termination and potential resolutions.
- Mediation and Conciliation: In Nigeria, the Ministry of Labour and Employment provides mediation and conciliation services. Consider filing a complaint with the Ministry to explore the possibility of resolving the issue before resorting to legal action.
- Seeking Legal Advice: Consult with an employment lawyer well-versed in Nigerian labor laws. They can assess the specifics of your case, offer guidance on the best course of action, and help you understand your legal rights.
- Submitting a Complaint to the Industrial Arbitration Panel (IAP): In cases where mediation falls short, you have the option to file a complaint with the Industrial Arbitration Panel, a body responsible for settling industrial disputes in Nigeria.
- Legal Action: If all else fails, be prepared to take legal action through the National Industrial Court. Ensure you have appropriate legal representation and adhere to the court’s procedures.
- Damages and Compensation: In the event of a successful claim, you may be entitled to damages or compensation, which can include reinstatement, back pay, or compensation for any harm suffered due to wrongful termination.
- Time Limitations: Be aware of the time limitations for filing a complaint. In Nigeria, there are specific time limits within which you must submit a complaint following a wrongful termination.
For Employers:
- Understanding Nigerian Employment Laws: Begin by familiarizing yourself with the relevant employment laws in Nigeria. The primary legislation governing employment relationships is the Labor Act. Additionally, there may be industry-specific regulations.
- Documenting Employment Relationships: Ensure that all aspects of the employment relationship are well-documented. This includes maintaining the employment contract, job descriptions, performance evaluations, disciplinary actions, and any communication related to termination.
- Grounds for Termination: Grasp the legal grounds for termination. Nigerian employment law generally recognizes termination for justifiable causes, such as misconduct, poor performance, redundancy, or a breach of employment terms.
- Follow Due Process: If there are valid grounds for termination, adhere to the due process outlined in the employment contract and relevant laws. This process may involve issuing written warnings, conducting investigations, and allowing the employee to present their side of the story.
- Notice or Severance Pay: If termination becomes inevitable, ensure compliance with notice periods or payment in lieu of notice as stipulated in the employment contract or the Labor Act. Certain situations may also require severance pay.
- Consulting with Legal Professionals: Seek legal advice before terminating an employee to ensure compliance with all relevant laws and regulations. Legal professionals can guide you on the best approach to handle the termination, minimizing legal risks.
- Maintain Records: Keep meticulous records of the reasons for termination, communication leading up to it, and any evidence supporting your decision. This documentation is crucial if legal action ensues.
- Engaging in Mediation: Mediation can be a cost-effective and less adversarial means of resolving disputes. Consider mediation before resorting to formal legal proceedings.
- Responding to Legal Notices Promptly: If the terminated employee engages legal representation and serves you with legal notices, respond promptly and professionally. Ignoring legal notices can have adverse consequences.
. Be Prepared for Legal Proceedings: In the event of a wrongful termination claim, be ready to defend your decision in court. Present evidence of justifiable termination and demonstrate that due process was followed.
Employee Assistance Program: Consider implementing an employee assistance program that supports employees facing termination, helping them transition to new employment smoothly.
- Continuous Review and Compliance: Regularly review your employment practices and policies to ensure ongoing compliance with Nigerian labor laws. Stay informed about any changes in legislation that may impact employment relationships.
Key Differences:
– Legal Basis: Unlawful termination is based on violations of labor laws, while wrongful termination is based on breaches of the employment contract.
– Remedies: Unlawful termination may result in statutory penalties or reinstatement, while wrongful termination generally leads to claims for damages.
Both terms are critical in employment law, but the remedies and procedures for addressing each violation differ based on the nature of the breach.
Contract of Employment
A contract of employment is an agreement of service between an employee and an employer. This generally would be regarded as a contract of service, which connotes any agreement whether oral or written, expressed or implied, whereby a party agrees to employ another as an employee and the other party agrees to serve the employer as a worker usually as contained in the LABOUR ACT, CAP L1 LFN (2004).
Going from the above, where there is a contract of employment in place, the court will be guided by such contract particularly the terms and condition of such contract where the issue of wrongful termination or any other right or obligation calls for determination.
However, the position of the law that has been upheld by Nigeria appellate court has always been that an employer can terminate the employment of his employee without giving any reason at all.
By established principles, an employer has the right to terminate employment without stating any specified reason in so far all laid down procedures are followed in terminating the employment. Where the laid down procedures are not followed especially where there is a contract of employment, such will amount to wrongful termination.
Section 7 of the Labour Act requires that within three (3) month of the engagement of an employee, an employer must give to the employee a written contract of employment which must specify among other things a description of the parties to the contract of employment, the nature of the service(s) to be rendered under the contract, the tenure of the contract, remunerations which must be paid, hours of work, the period of notice to be served before the contract can be terminated, possible grounds for dismissal of the employee etc.
Section 11 of the Act went further to make provision(s) as to the termination of the contract by a notice which includes the time within which to give such notice depending on the duration of the contract. The Section also stipulates that any notice for a period of one week or more shall be in writing. The Section also went further to state that either party to a contract can still waive his right to such notice in any occasion or from accepting payment in lieu of notice.
Unlawful Termination
This occurs when the termination of employment violates statutory provisions or labor laws. In Nigeria, employment contracts may be governed by various labor statutes, including the Labour Act (for certain classes of workers) or sector-specific laws (for public officers or employees of regulated industries).
Examples of Unlawful Termination:
– Termination on discriminatory grounds (e.g., due to race, gender, or disability).
– Termination in violation of constitutional rights (such as freedom of association or the right to unionize).
– Failure to comply with statutory procedures for termination (e.g., not providing the required notice period or severance benefits under the Labour Act).
Remedies:
– The employee may be entitled to reinstatement or compensation under labor laws.
– Statutory penalties could also be imposed on the employer.
Dismissal of Employment
Under Nigerian labour law, dismissal refers to the termination of an employee’s contract by the employer due to misconduct, breach of contract, or other justifiable reasons. Dismissal differs from termination because it is often a result of fault on the employee’s part and may not entitle the employee to benefits such as notice or severance pay.
Key Points About Dismissal Under Nigerian Labour Law:
1. Grounds for Dismissal: Common grounds include misconduct, fraud, negligence, insubordination, or other serious breaches of duty.
2. Procedure: Employers are generally expected to follow a fair procedure, which includes giving the employee a chance to defend themselves (sometimes referred to as fair hearing) before dismissal. This aligns with the rules of natural justice.
3. Right to Fair Hearing: The employee should be given an opportunity to respond to allegations before the dismissal is finalized.
4. Immediate Effect: In cases of gross misconduct, dismissal can be with immediate effect, meaning no notice period is required.
5. Loss of Benefits: Dismissal typically results in the employee losing entitlements such as severance pay, gratuity, or accrued benefits, unless otherwise stipulated in the employment contract.
6. Legal Redress: If an employee believes the dismissal was wrongful or unfair, they can seek redress through the National Industrial Court of Nigeria (NICN), which handles employment disputes.
Dismissal is considered a punitive action, distinguishing it from termination, which is more neutral and often involves the employer simply ending the contract without fault.
Termination and dismissal have the same effect of bringing a contract of employment to an end. The distinction between the two concepts is discernible from the definition and meaning attached to each. A comparison of the two concepts will depict that:
Key Differences Between Wrongful and Unlawful Termination
(i) Termination is a condition attaching to the contract of employment under the law while dismissal is not a condition of the contract of employment agreed upon by parties
(ii) While a contract of employment may be terminated without reason, dismissal usually arises from the employee’s misconduct; reason for dismissal, where it is not stated may be demanded;
(iii) Either party can terminate a contract of employment but only the employer can dismiss;
(iv) A requisite notice must be given before to terminate employment but no notice is required for dismissal;
(v) While laid down procedures and processes must be followed to effect dismissal, no format is required to terminate employment; provided due notice or payment in lieu thereof have been complied with;
(vi) Whereas dismissal may be wrongful on account of breach of procedures, termination could on only be wrongful for failure to give proper notice or payment in lieu of notice;
(vii) Whereas, as in the case of Ajolore v. Kwara state College of Technology and Ors (1996), NMLR, 34, p. 29 and 46, an employer must pay indemnity to his employee for unlawful dismissal, no indemnity is payable for termination
It is evident from the case law that an employee who has been wrongfully dismissed may be entitled to certain reliefs. In Western Development Corporation v. Jimoh Abimbola (1972) ANLR, Pt. 2433 it was held that the measure of damages for wrongful dismissal is prima facie, the amount the plaintiff would have earned had he continue with the employment up till the period of judgement. This is otherwise known as the principle of restitution in integrum.
Nigerian Labour Law on Resignation
To terminate the contract by resignation is also one of the means to bring employment to an end but at the instance of the employee. In this case, the employee is to give one month notice or one month salary in lieu of notice where it is so required. An employee who resigns from his employment cannot bring any action for claims; rather, he may lose some of his entitlements. Rule 020804 (a) of Public Service Rule (PSR) 2008, specifically provides that an officer who resigns will be liable to:
(i) Forfeit all claims to vacation leave; any vacation leave or all passage privileges granted will be ex-gratia
(ii) Refund to the employer in full any sum of money which he may be owing to the employer or which under any provision or other rules or agreement entered into with the employer, is refundable to the employer for his not discharging the obligation set out in such agreement; provided that any or all of such refunds may be waived by the employer
However, if his resignation is as a result of the employer’s disgusting and unfriendly conduct, he cannot be said to have resigned but rather constructively dismissed. One example of this is where the employee resigned because the employer has treated him unfairly by denying him basic benefits.
Labour and Employment Laws in Nigeria
Under the Nigeria legal system, different legislations are responsible for the regulation and administration of employment and labour. The applicable statutes include:
1. The Labour Act
2. Trade Dispute Act
3. Trade Union Act
4. Employee Compensation Act
5. Factories Act
6. Pension Reform Act
7. Housing Act
8. Industrial Training Fund Act
9. National Health Insurance Scheme
10. Immigration Act.
11. National Industrial court Act
12. National Industrial court Rules
13. the Public Service Rule
The Labour Act, however, is the principal legislation governing employment relation in Nigeria. Its application extends to employees engaged under a contract of labour or clerical work in both the private and the public sector.
Employees exercising administrative, executive, technical, or professional functions are governed by their respective contract of employment.
The National Industrial Court (NIC) has exclusive jurisdiction in civil and criminal matters relating to or connected with labour, employment, trade unions, industrial relations, the condition of service including health, safety, the welfare of labour employee, workers and matters incidental thereto or connected therewith.
The NIC also has jurisdiction to entertain matters connected or relating to Factories Act, Trade Dispute Act, Trade Union Act, Labour Act, Employee Compensation Act, or any other Act or Law relating to labour, employment or industrial relations.
In conclusion, employment laws in Nigeria provide a robust framework for regulating the relationship between employers and employees. The distinction between wrongful and unlawful termination is crucial for understanding the legal remedies available in cases of employment disputes. While wrongful termination is primarily a breach of the employment contract, unlawful termination involves violations of statutory labor protections. Employers must follow due process and ensure compliance with labor laws to avoid legal consequences. Conversely, employees should familiarize themselves with their contractual rights and statutory protections to seek redress when wrongfully or unlawfully terminated. Effective legal recourse, through mechanisms like mediation, conciliation, and the National Industrial Court, reinforces the balance of fairness in Nigerian employment relations.
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