The Principle Of Constructive Dismissal Under The Nigerian Labour Law
By Patrick Emmanuel, Esq
A recurring antecedent of an employee-employer/servant-master relationship is the prerogative of an employer to hire and fire at will. The employee is primarily regarded as one of the factors of production which has no feelings or whose feelings are not taken into cognizance when a decision that would affect him or her is taken. The employer, who is like a demi-god, has unfettered right to terminate the employee’s employment. He may terminate for good or bad reason or even for no reason at all. What’s more, the motive for exercising the right does not render the exercise ineffective. What is essential is that the exercise of the right to fire an employee must be done in accordance with the terms and conditions of the contract of employment. The philosophy behind this timeworn principle of law is rather simple: a servant, though willing, cannot be foisted upon an unwilling master.
However, we are no longer in the Old Testament era, as this notion is increasingly changing in modern employment relationships. Labour is being recognized beyond a mere factor of production. The International Labour Organization (ILO) declarations are emphatic that “labour is not a commodity”; and the law is beginning to imply a duty of mutual trust, respect and cooperation between the employer and the employee. Labour has feelings and emotions. This therefore, requires that the employer treats the employee with due respect and consideration, be mindful of his needs and problems and be sympathetic with his difficulties.
There must be that mutual trust and confidence in the employment relationship. Thus, the obligation is on both parties not to break the mutual trust and confidence on which the relationship rests. The observance of this duty would require the employer to give the employee positive fair treatment and courtesy. The employee is also expected to render faithful service and to use his or her efforts to ensure the efficient running of the business. Both parties should treat each other with such degree of consideration and tolerance as would enable the contract to be carried out smoothly. Each party must avoid doing anything that would obstruct the other’s performance of the contract.
Despite the above, breaches of this duty (the terms and conditions of a contract of employment) still arise; especially when these terms are explicitly or implicitly violated by the employer. This disquisition will therefore interrogate the concept of constructive dismissal, its applicability in Nigeria, its remedies, and the recommendations for Nigeria’s legal jurisprudence. But first, a brief explanation of the types of employment under Nigerian labour law.
TYPES OF EMPLOYMENTS RECOGNISED UNDER NIGERIAN LABOUR LAW
There are two broad categories of employments recognized under Nigerian labour law. These are statutory and private employments.
Statutory employments, also known as employments with “statutory flavour”, are employments in which the terms and conditions of service are regulated directly by statute or by subsidiary legislation made pursuant to a statute. Such employments are said to enjoy special privilege which covers them with legal protection over and above that which is available to private employments.
In other words, statutory employees are vested with a legal status that is higher than that which is available to private employees. Employers cannot validly terminate statutory employments without complying strictly with the statute or subsidiary legislation regulating the employment. The remedies available to statutory employees who have been wrongfully dismissed by their employers include reinstatement of their employment and damages, representing their salaries during the period of the purported dismissal. This was the decision of the Supreme Court in the cause celebre case of Olaniyan v University of Lagos.
Private employments, on the other hand, are employments in which the terms and conditions of service are regulated by private contracts alone without statutory or legislative back-up.
The main distinction between statutory employments and private employments is that while the former attracts reinstatement upon wrongful termination (in addition to damages representing the employee’s salaries during the period of the wrongful dismissal), the latter only attracts damages for wrongful dismissal – as it is settled law in Nigerian jurisprudence that the courts will not force a willing private employee on an unwilling private employer.
CONCEPT ANALYSIS: CONSTRUCTIVE DISMISSAL
Constructive dismissal (CD), also known as constructive discharge, is where an employer has committed a serious breach of contract, entitling the employee to resign in response to the employer’s conduct. The employee is entitled to treat himself as having been “dismissed” and the employer’s conduct is often referred to as a “repudiatory breach”. In other words, constructive dismissal occurs when an employee resigns as a result of the employer creating a hostile, intolerable, or unfavourable work environment. Because the resignation is not truly voluntary, it is, in effect, a termination.
This should not be confused with normal dismissal which usually refers to a situation where an employer without notice terminates the contract of employment with an employee. This usually arises as a result of the conduct of the employee (whether good or bad), which prompts the employer to summarily terminate the contract of employment with the employee. This is anchored on the doctrine of termination-at-will.
Constructive dismissal, on the other hand, takes place where the employer makes life so difficult for the employee that the employee has to leave the service, yet the employer would escape liability since it has not actually terminated the employee’s contract of employment.
The common law recognizes the concept of constructive dismissal and right of the employee to resign in reaction to the employer’s behaviour. Thus, an employee can successfully make a claim and seek legal redress for wrongful termination against the employer for constructive dismissal when an employer commits a breach of the fundamental terms and conditions of the contract of employment, or where an employer makes a unilateral change to the terms and conditions of the contract of employment without notice to the employee or the latter’s consent.
THE APPLICABILITY OF CONSTRUCTIVE DISMISSAL UNDER NIGERIAN LABOUR LAW
The concept of constructive dismissal is not only applicable in foreign climes, but also under Nigerian labour law. To better illustrate this concept, this article will employ judicial authorities to drive home its points. In the case of Ebere Ukoji v Standard Alliance Life Assurance Co. Ltd, the National Industrial Court Nigeria (NICN) explained the meaning of constructive dismissal and its application in Nigeria thus:
“Globally, and in labour/employment law, constructive dismissal, also referred to as constructive discharge, occurs when an employee resigns because his/her employer’s behaviour has become intolerable or heinous or made life difficult that the employee has no choice but to resign. Given that the resignation was not truly voluntary, it is in effect a termination. In an alternative sense, constructive dismissal or constructive discharge is a situation where an employer creates such working conditions (or so changes the terms of employment) that the affected employee has little or no choice but to resign. Thus, where an employer makes life extremely difficult for an employee, to attempt to have the employee resign, rather than outright firing the employee, the employer is trying to create a constructive discharge. The exact legal consequences differ from country to country, but generally a constructive dismissal leads to the employee’s obligations ending and the employee acquiring the right to seek legal compensation against the employer. The employee may resign over a single serious incident or over a pattern of incidents.”
This case has established that constructive dismissal or involuntary resignation usually arises under two circumstances:
• When the employer advises or requests the employee to resign; or
• When by conduct (calculated actions or deliberate omissions), the employer is creating or has created a hostile work environment to force the employee out of the job.
In Patrick Obiora Modilim v United Bank for Africa Plc, the defendant forced the claimant to resign his employment with the bank by demanding his resignation, after refusing to pay him the agreed salary increase upon confirmation of his appointment – which led to a dispute between the parties. The claimant brought the action in the NICN claiming several reliefs against the defendant for constructive dismissal. The NICN held that the fact of non-voluntariness in the claimant’s resignation from the defendant’s employment shows that the claimant had made out a case for constructive dismissal against the defendant. In reaching this decision, the NICN relied on the provisions of section 7(6) of the NICN Act and section 254C(1)(f), (h) and (2) of the Constitution of the Federal Republic, 1999 (as amended), to hold that the NICN is generally permitted to apply international best practices in labour relations, when adjudicating employment disputes brought before it. The NICN also specifically held that, although the exact legal consequences of constructive dismissal differ from country to country, it generally leads to the employee’s obligations ending and the employee acquiring the right to seek legal compensation against the employer.
While In Amaechi Lauretta Onyekachi v Stanqueen Investment Ltd, the claimant was advised to resign her employment by the employer, because she had sought maternity leave on account of her pregnancy. When the claimant refused to resign her employment as advised by the employer, the employer issued her a notice of redundancy and proceeded to terminate her employment on that ground. The claimant brought the action in the NICN claiming several monetary reliefs against the defendant for constructive dismissal. The NICN took jurisdiction to hear and determine the suit and proceeded to find in favour of the claimant.
SOME EXAMPLES OF CONSTRUCTIVE DISMISSAL
The constructive dismissal of an employee by an employer can take many forms. Below are some examples:
• Indefinite suspension of an employee without pay amounts to constructive dismissal of the employee and grounds an enforceable cause of action against the employer in favour of the employee;
• Workplace bullying and harassments, which may be sexual or non-sexual, physical or verbal;
• Placing ridiculous, extraordinary and unreasonable work demands/ expectations on an employee to pressure him/her into resigning;
• Unilateral variations to the terms and conditions of the contract of employment without any notice to the employee and/or without the consent of the employee;
• Significant reduction of employee’s compensation and/or demoting employee for unjustifiable reasons;
• Exposing employee to danger and unreasonable hostility;
• Disciplinary proceedings which are manifestly unjust.
Most cases of constructive dismissal reflect the legal maxim– where there is a right; there is a remedy (ubi jus, ibi remedium). Although, the strict common law rule of remedy for wrongful dismissal is generally limited to payment in lieu of notice; however, the courts have taken up the role to award reliefs that is just, fair and equitable in the circumstances, having regard to the loss sustained by the claimant, in so far as that loss is attributable to the employer’s actions.
The exact legal consequences of constructive dismissal differ from case to case; from country to country but in Nigeria, remedies for constructive dismissal are enshrined in the common law decisions in wrongful termination or unfair dismissal actions. In Ebere Ukoji case (supra), the NICN laid bare what constructive dismissal entails by pointing out that it brings to an end, the employment of the employee, leaving that employee only with the right of recompense. On this premise, the Court in another case refused to make: a declaration that the Claimant’s employment subsists, an order setting aside the letter of resignation, an order of reinstatement and an order for payment of the outstanding salaries until retirement, because “…in the instant case, there is no employment relationship between the Claimant and the Defendant that is subsisting as to warrant the grant” of those reliefs.
In addition, the Court rightly further affirmed the fact that an employee could potentially have an employment up to retirement age, is no guarantee that that employment will last that long; the time stipulated for retirement only set out the maximum duration possible for the employment under the existing contract. Consequently, the court will not grant a claim for payment of salary up to the retirement age of the employee in a claim of wrongful dismissal.
Under English law, remedies for constructive dismissals include re-instatement and reengagement, but in Nigeria, the only available remedy is damages by way of monetary compensation (section 19D NICN Act, 2006). Damages may either be general damages (basic award) or compensatory award.
As a first recommendation, the remedy for constructive dismissal in terms of monetary compensation limited to the contract price and agreement only is insufficient, and does not guarantee job security; and equally falls short of international standards and best practices. There is, therefore, the need to embrace the remedies of reinstatement, re-engagement, reemployment and the enhanced compensatory damages as the case may be. This is the international standard and the position of the law and practice in some jurisdictions like the United Kingdom and South Africa.
Also, to protect employees in private employments, the Nigerian Labour Act must be amended by the National Assembly to reflect this new concept through legislative intervention as has been done in some jurisdictions. The judiciary should also do more to come to the aid of private employees who see the courts as the last hope of the common man, and who are usually vulnerable and the most downtrodden members of the society.
Additionally, some forms of constructive dismissal like workplace bullying and harassments, which may be sexual or non-sexual or even physical have criminal elements, so the National Assembly need to be proactive in criminalizing some of these acts to deter employers from engaging in them.
Finally, employers found to have engaged in constructive dismissal should be made to pay, amongst other damages, punitive damages to deter other employers from constructive dismissal and protecting the dignity of employer-employee relationships.
As stated earlier, we are no longer in the Old Testament era, thus the trend is changing as employers’ unhealthy conducts and substantial unilateral alterations of employment contracts are now being challenged. This, without doubt, will reduce the likelihood of constructive dismissals under Nigerian labour law. Hence, the NICN should further widen the scope of reliefs for constructive dismissals stated in our recommendations to discourage constructive dismissals and encourage employers to abide by the terms and conditions of their contract of employment.
Patrick Emmanuel, Esq. is an Associate at Kayode Ajulo & Co. He is a Litigation/Dispute Resolution Expert. He enjoys writing about different areas of law, and has authored articles ranging from criminal law, commercial law, labour law, etc.
He can be reached via his mail: firstname.lastname@example.org and phone number: 07038225513
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