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Watch: Employment issues in Mergers and Acquisitions

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Topic : Employment issues in Mergers and Acquisitions

Date held : 21th August 2018

Speaker: Mary Ekemezie

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WINDFALL FOR WRONGFUL TERMINATION OF EMPLOYMENT: A REVIEW OF THE POWER OF THE NATIONAL INDUSTRIAL COURT TO AWARD EXEMPLARY DAMAGES

Elvis E. Asia is the Managing Partner of Law Future Partners.  He may be contacted on: 09017163850, elvis.easia@gmail.com, elvis.easia@lawfuturepartners.com Introduction Buoyed by the National Industrial Court Act, 2006 and Third Alteration of the Constitution[1] which expanded the scope of its jurisdiction and vested it with the power to apply International Best Practices and Labour Standards[2], the National Industrial Court of Nigeria (NICN) is rewriting the rule book on employment and related rights. This is exemplified in the drastic deviation from established norms and precedence in adjudicating over employment rights and obligations. For example, the court has struck down the old notion that employers have the power to hire and fire without reasons by holding that it was contrary to International Labour Standards for employers to terminate the employment of their employees without stating reasons[3]. It has accordingly treated ‘services no longer required’ as redundancy which attracts redundancy payment under the employer’s redundancy policy[4]. The court has also held that proper notices must be given and that salary in lieu of notice must be paid on the employee’s last working day or contemporaneously with termination, otherwise, the termination will be invalid and wrongful[5].  Employees are entitled to gross salary in lieu and not basic salary unless the terms of employment expressly states otherwise[6]. The court has also come to the aid of outsourced staff by implying the existence of a contract of employment between an outsourced staff and the end-user, thereby regarding both the out-sourcing agency and the end–user as co-employers[7]. On indefinite suspension, the court has held that indefinite suspension without pay in the absence of an express provision in the terms of employment is wrongful and entitles the employee to claim of arrears of salaries and other benefits until the date of judgment in an action filed by the employee[8]. One main vestige of the old era when even case law used terminologies reminiscent of slavery like ‘master’ and ‘servant’ to describe the relationship between employer/employee  is the nature of damages that may be awarded for wrongful termination of employment. The general principle of law was that damages for wrongful termination was limited to salary in lieu of notice and accrued entitlements and benefits as agreed under the contract. This was a major obstacle to labour justice. The NICN has moved away from merely awarding payment in lieu of notice as damages; the court is instead awarding substantial general damages to reflect the unlawfulness of a termination or dismissal[9]. In one case, the court awarded about N77m against United Bank for Africa for constructive dismissal[10] and another case went to the extreme of ordering reinstatement of the employee[11]. The court of appeal in Sahara Energy Resources Limited v Oyebola[12] endorsed the award of two years’ salary as general damages for wrongful termination of employment[13] and approved the application of international best practices by the NICN[14]. A recent decision of the court in Mr. Abdul-Hakeem A. Olasewere v. Airtel Networks Limited[15] highlights the current position of the court as it relates to the award of damages for wrongful termination of employment. The case typifies a drastic move away from the status quo. In the case, the court awarded the sum of N100m as exemplary damages for wrongful termination of employment in addition to N60m general damages[16]. This is not the first time the court will be awarding exemplary damages[17] but it appears to be the most momentous both in terms of the amount involved and the nature of the complaint which necessitated the award. Against the background of this windfall for the ex-employee, this article takes a look at the power of the court to award exemplary damages for wrongful termination of employment. It must be pointed out that this article is a general thought on the power of the NICN to award exemplary damages, it is not the intention of the writer to discuss whether or not the award of exemplary damages was proper in the peculiar circumstance of the Airtel case or whether the amount was reasonable or amount to double compensation considering that general damages was also awarded. These are issues that may already be subject to an appeal.  Nature and Circumstances for the Award of Exemplary Damages Exemplary damages, also known as punitive or vindictive damages, is awarded by the court where the conduct of the defendant merits punishment, and this may be considered to be so where such conduct is wanton, as where it discloses fraud, malice, cruelty, insolence or the like, or where the Defendant acts in disregard of the law and the claimant’s rights[18]. Exemplary damages is awarded under strict conditions and being an attempt to punish the defendant for a grievous wrong, the law is that it is never awarded as damages recoverable  for breach of contract. This makes it all the more significant when awarded for wrongful termination of employment.  In EMEGHARA v.  STERLING BANK[19], the Court of Appeal adumbrated this fact thus: “On the issue of exemplary damages, the appellant’s counsel contended that the respondent’s conduct in this case deserved punishment and the learned trial Court did not award adequate, compensatory and exemplary damages. It should be noted that in an action for breach of contract, the plaintiff is mainly entitled to general and special damages or specific performance, (as the case may be). Exemplary and punitive damages do not fall into the realm of damages recoverable for breach of contract, except of course if for instance, it is an action founded on breach of promise to marry; tort; specified by statutes or where the defendant’s conduct has been calculated by him to make profit for himself, which may well exceed the compensation payable to the plaintiff. See the cases of Allied Bank of Nig. V. Akubueze (1997) 6 NWLR (Pt. 509) 374 and Odogu v. Attorney General of the Federation (1996) 6 NWLR (Pt. 456) 508. ….” See also NSITF v. ACCESS BANK PLC [20] where the court held: “…, generally, exemplary damages are not awarded in an
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IMPLICATIONS OF PRORATION OF SALARIES TO THE ACADEMIC STAFF UNION OF UNIVERSITIES ON INDUSTRIAL HARMONY – SIMILOLUWA DARAMOLA

IMPLICATIONS OF PRORATION OF SALARIES TO THE ACADEMIC STAFF UNION OF UNIVERSITIES ON INDUSTRIAL HARMONY – SIMILOLUWA DARAMOLA The recent payment of prorated salaries to members of the Academic Staff Union of Universities (ASUU) has stirred up several reactions from the public. While it comes with several questions as to its justification. The flip side is that the Federal Government on one hand views its decision in conformity with the ‘no work, no pay principle’ under the Trade Disputes Act while ASUU views it as an aberration and breach of trust which is at the core of any negotiation process. Nigeria over the years has had a chequered history of hiccups in its educational sector’s trajectory right from the days of military administration due to incessant industrial actions which has adversely affected the advancement of research and quality of graduates being churned out yearly. The principle of ‘no work no pay’ is a principle applicable in industrial action wherein employers adopt the principle as a shield to discourage industrial actions from its employees. The principle is entrenched in the Nigerian law particularly under Section 43 of the Trade Disputes Act which states that ‘where any worker takes part in a strike, he shall not be entitled to any wages or other remuneration for the period of the strike’. However, that the principle exists is not to make it straitjacket in its applicability because the gravamen of industrial relations is negotiation which allows for variation of rights and responsibilities. The decision of the National Industrial Court in Abe Babalola v Equinox International Resources Limited NICN/LA/166/2015 on proration is that pro-rata payment salaries is not applicable to periodic employments but only applicable to daily paid workers. This decision was also reiterated in the case of Grant Mpanugo v CAT Construction Nigeria Ltd NICN/LA/660/2015 where the court held that fractional salaries should not be made to employees in periodic employment. Since this decision is yet to be upturned by a superior court, this remains the position of the law in Nigeria. The Federal Government’s approach to the strike since its commencement in February 2022 has been a display of lack of trust, absence of emotional intelligence to current economic realities, and aloofness to education as a cardinal objective for nation building through human capital development. These traits are evident in its registration of a parallel union Congress of University Academics (CONUA) and mannerisms during negotiations. Objectively, in obedience to the rule of law through the Court’s order that members of ASUU returned to classrooms without any clear-cut model on resolving the underlying causes of the industrial action which stemmed from non-payment of outstanding allowances and upward review of salaries to reflect inflationary trends only speaks to the unrealistic attitude of the FG towards industrial harmony. Industrial actions are not designed to be disruptive but to improve the employment conditions of employees who have the right to demand decent working conditions as this is what social justice connotes. Decent wages for work done under a contract of employment and ordinarily the government as an entity should be seen blazing this trail for the private sector to borrow cues from. While the discourse on minimum wages is gravitating towards living wages in other climes. It brings to bear the journey of Nigeria in reducing social inequality because decent work remains central to any discourse on poverty reduction. It is bewildering to see lecturers who have dedicated their time towards impacting knowledge being subjected to unfair labour practices. The payment of full salaries to the parallel union, CONUA and prorated salaries to ASUU raises questions on the commitment of the government towards industrial harmony and its constitutionality in line with the provisions of Section 42 of the 1999 Constitution of the Federal Republic of Nigeria which prohibits discrimination against any citizen by reason of birth or other circumstances. The National Assembly is currently in the process of passing The Employees Unpaid Wages Prohibition Bill into law to ensure timely remuneration of employees in the public or private sectors and to also prohibit the withholding of payment due to employees by employers in the guise of using same to cover the cost of employee’s negligence. While this is a welcome development, it raises the issues of enforceability so that the provisions of this bill when passed into law does not become a White Elephant after all charity begins at home. The wave of ‘Japa’ keeps increasing with brain drain being on the rise. The Federal Government should ensure that it lives up to its responsibilities entrenched under the social contract. Education is crucial to the development of any country and should not be left unattended to. The Federal Government can do better in guaranteeing the welfare of ASUU and its demands to build a stalwart educational sector with competitive employment conditions for retention of human capital without transforming our universities into ivory towers. admin Member since September 3, 2024 Loading + Follow Following
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  1. Media & News

IMPLICATIONS OF PRORATION OF SALARIES TO THE ACADEMIC STAFF UNION OF UNIVERSITIES ON INDUSTRIAL HARMONY – SIMILOLUWA DARAMOLA

The recent payment of prorated salaries to members of the Academic Staff Union of Universities (ASUU) has stirred up several reactions from the public. While it comes with several questions as to its justification. The flip side is that the Federal Government on one hand views its decision in conformity with the ‘no work, no pay principle’ under the Trade Disputes Act while ASUU views it as an aberration and breach of trust which is at the core of any negotiation process. Nigeria over the years has had a chequered history of hiccups in its educational sector’s trajectory right from the days of military administration due to incessant industrial actions which has adversely affected the advancement of research and quality of graduates being churned out yearly. The principle of ‘no work no pay’ is a principle applicable in industrial action wherein employers adopt the principle as a shield to discourage industrial actions from its employees. The principle is entrenched in the Nigerian law particularly under Section 43 of the Trade Disputes Act which states that ‘where any worker takes part in a strike, he shall not be entitled to any wages or other remuneration for the period of the strike’. However, that the principle exists is not to make it straitjacket in its applicability because the gravamen of industrial relations is negotiation which allows for variation of rights and responsibilities. The decision of the National Industrial Court in Abe Babalola v Equinox International Resources Limited NICN/LA/166/2015 on proration is that pro-rata payment salaries is not applicable to periodic employments but only applicable to daily paid workers. This decision was also reiterated in the case of Grant Mpanugo v CAT Construction Nigeria Ltd NICN/LA/660/2015 where the court held that fractional salaries should not be made to employees in periodic employment. Since this decision is yet to be upturned by a superior court, this remains the position of the law in Nigeria. The Federal Government’s approach to the strike since its commencement in February 2022 has been a display of lack of trust, absence of emotional intelligence to current economic realities, and aloofness to education as a cardinal objective for nation building through human capital development. These traits are evident in its registration of a parallel union Congress of University Academics (CONUA) and mannerisms during negotiations. Objectively, in obedience to the rule of law through the Court’s order that members of ASUU returned to classrooms without any clear-cut model on resolving the underlying causes of the industrial action which stemmed from non-payment of outstanding allowances and upward review of salaries to reflect inflationary trends only speaks to the unrealistic attitude of the FG towards industrial harmony. Industrial actions are not designed to be disruptive but to improve the employment conditions of employees who have the right to demand decent working conditions as this is what social justice connotes. Decent wages for work done under a contract of employment and ordinarily the government as an entity should be seen blazing this trail for the private sector to borrow cues from. While the discourse on minimum wages is gravitating towards living wages in other climes. It brings to bear the journey of Nigeria in reducing social inequality because decent work remains central to any discourse on poverty reduction. It is bewildering to see lecturers who have dedicated their time towards impacting knowledge being subjected to unfair labour practices. The payment of full salaries to the parallel union, CONUA and prorated salaries to ASUU raises questions on the commitment of the government towards industrial harmony and its constitutionality in line with the provisions of Section 42 of the 1999 Constitution of the Federal Republic of Nigeria which prohibits discrimination against any citizen by reason of birth or other circumstances. The National Assembly is currently in the process of passing The Employees Unpaid Wages Prohibition Bill into law to ensure timely remuneration of employees in the public or private sectors and to also prohibit the withholding of payment due to employees by employers in the guise of using same to cover the cost of employee’s negligence. While this is a welcome development, it raises the issues of enforceability so that the provisions of this bill when passed into law does not become a White Elephant after all charity begins at home. The wave of ‘Japa’ keeps increasing with brain drain being on the rise. The Federal Government should ensure that it lives up to its responsibilities entrenched under the social contract. Education is crucial to the development of any country and should not be left unattended to. The Federal Government can do better in guaranteeing the welfare of ASUU and its demands to build a stalwart educational sector with competitive employment conditions for retention of human capital without transforming our universities into ivory towers. 'no work no pay' ASUU strike CONUA Industrial Action Periodic employment Prorated remuneration of lecturers Trade Dispute Act admin Member since September 3, 2024 Loading + Follow Following
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SOCIO-ECONOMIC EFFICACY OF MINIMUM WAGE IN NIGERIA: MATTERS ARISING

SIMILOLUWA T. DARAMOLA[1] ABSTRACT The International Labour Organization (ILO) constitution of 1919 emphasized the provision of an adequate living wage as a major improvement in the labour market conditions which was re-affirmed by the ILO 1944 Philadelphia Declaration, where it was reiterated that countries should adopt a minimum living wage to protect the poor employed workers. As part of the Sustainable Development Goals of the United Nations in eradicating poverty and creating a better world for humanity, minimum wage remains the least earning that can accrue to any individual working in any country. Since all fingers are not equal, minimum wage connotes that due to the existence of opportunism and exploitation in the field of labour and industrial relations, no individual is expected to earn below an earmarked amount particularly for those below the social cadre so as to promote social protection. While any amount could be pegged as the least remuneration to be paid to employees by employers, the effectiveness and impact of minimum wage is still hinged majorly on good governance, just employment conditions, and the state of the economy of any country. Nigeria recently increased its minimum wage from N18,000 to N 30,000 and its potency in the light of the prevailing economic realities and trends is questionable. This paper analyzes the impact of the national minimum wage in Nigeria in comparison with selected jurisdictions. This paper further argues that while minimum wage as a general rule is key in improving standard of living of citizens, its potency in terms of its socio-economic dimension is largely hinged on good governance. Key words: Minimum Wage, Decent Work, Social Protection, Sustainable Development Goals.   1.0       INTRODUCTION Minimum wage remains a veritable weapon in the improvement of the standard of living of citizens of different countries across the world because its existence in the arsenal of humanity is needed in the eradication of poverty particularly in developing countries like Nigeria. This is as a result of the relative discrepancies in the standard of living of several citizens in developing countries compared with their contemporaries in developed societies. Living in the post Covid-19 economy comes with a need to evolve emergency social protection policies of which minimum wage plays an integral role in reducing inequality and creating decent jobs needed for sustainable development. Minimum wage has never been a guarantee for wealth but only affords citizens a decent standard of living by setting citizens free from the shackles of poverty. While this narrative on minimum wage appears to be the tale of citizens in ideal climes, for Nigeria, the reverse is the case due to the empirical implications of minimum wage. This is owing to the fact that minimum wage has never been a top for government to fulfill its cardinal roles but has rather remained a grudging concession to organised labour without any commitment to implementation. The aphorism that there is dignity in labour cannot be justified if wages are not equitable, fair, and crafted such that it creates an egalitarian society. A progressive society is one that provides justice for all irrespective of class, creed or means and minimum wage is that tool needed to bridge the gap between the rich and the poor. As Martin Luther King Jnr once said ‘the arc of the moral universe is long, but it bends towards justice’. Minimum wage is that arc which must do justice to the basic necessities of life to all particularly those below the social cadre. This paper critically examines the landscape of minimum wage in Nigeria holistically from the legal and socio-economic framework. 2.0 LEGAL FRAMEWORK FOR MINIMUM WAGE IN NIGERIA The 1999 Constitution of the Federal Republic of Nigeria is the springboard from which all other laws derive their validity. This implies that the Constitution under the social contract theory reflects the aspirations of the citizens. However, chapter two of the Constitution which provides for the fundamental objectives and directive principles of state policy has been expressed as being unjustifiable. This means that the government has no legal obligation to comply with the provisions contained in the Chapter.[2] Item 34 of Schedule 1 of the exclusive legislative list of the 1999 Constitution states that the federal government has the exclusive prerogative to prescribe a national minimum wage for the federation. This power has been exercised over the years through the enactment of the Minimum Wage Act. The Minimum Wage Act 2019 is the major legislation governing matters relating to the minimum wage.  Section 3 (1) of the Minimum Wage Act pegs the minimum earning of an employee to N30, 000 monthly. Although certain employees employed on a part time basis, seasonal period, commission or piece rate, employees in an organization with less than twenty five employees are not mandated to pay the minimum wage. Section 37 of the Personal Income Tax Act states that minimum tax shall not apply to persons earning the National Minimum Wage or less. This is to the effect that minimum wage earners have been exempted from personal income tax so as to promote social protection. 3.0 MINIMUM WAGE AS A TOOL FOR SUSTAINING DECENT WORK The formulation of policies geared towards the tenets of decent work is essential in creating equitable and just employment opportunities for all. This is because minimum wage bridges the unemployment gap in developing countries by encompassing three out of the seventeen Sustainable Development Goals of the United Nations namely decent work and economic growth, reduction in inequalities, and partnership. Well-designed and effective minimum wages can contribute to the realization of these goals. Imperatively, while minimum wage never holds the magic wand in transforming any individual to a billionaire overnight, ensures that the standard of living of the average citizen is reasonable through access to the basic necessities of life. Poorly-designed minimum wages, by contrast, can put workers’ well-being at risk, undermine effective implementation, and risks encouraging informality.[3] There is a strong relationship between minimum wage and decent work because the impact of a rise in
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THE LEGAL STATUS OF GIG WORKERS UNDER NIGERIAN EMPLOYMENT LAW – SIMILOLUWA DARAMOLA

Gig economy is an emerging concept in modern day employment law. The gig economy accommodates all those doing business through digital platforms. Are gig workers independent contractors with a service contract remains a bugging question in the employment and labour law space. Similoluwa Daramola explores how advantageous the gig economy is in the creation of jobs and avenue for  building  relevant professional skills. Read More Here     admin Member since September 3, 2024 Loading + Follow Following
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THE NIGERIAN DATA PROTECTION ACT 2023: SAFEGUARDING PRIVACY IN THE DIGITAL AGE – NATHALIA ODIDIKA-ESEZOBOR

The Nigerian President recently passed the Nigerian Data Protection Bill into law. This new law recognizes the significance of data protection in this digital era. In line with international best practices and to align with the European Union’s General Data Protection Regulation (GDPR), Nigeria passed the Data Protection Act in 2019. In this article, we will delve into the key provisions of the Nigerian Data Protection Act 2023, its objectives, and its potential impact on individuals, organizations, and the overall data protection landscape in Nigeria. Read here admin Member since September 3, 2024 Loading + Follow Following
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EMPLOYMENT PERSPECTIVE FROM NIGERIA’A FUEL SUBSIDY REMOVAL

The Fuel subsidy removal has raised a lot of questions and uncertainty in the minds of Nigerians. Some have argued that a partial removal would have been implemented considering the biting inflation, rise in the cost of living, low minimum wage and working condition. Some have argued still that it is a good development but measures should have been put in place to cushion the effects of the subsidy removal and ensure a better transition. We have in this paper raised vital strategies that the government and employers can deploy to alleviate the effects of the subsidy removal on the citizens in both the formal and informal sector. Click here to read    effects of subsidy removal fuel subsidy removal variation of employment terms admin Member since September 3, 2024 Loading + Follow Following
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Ellan COVID-19 publication- issued version 130420

Employment and Labour Relations Issues Arising from COVID-19The outbreak of the novel Coronavirus Disease- (COVID-19) – has brought about a global economic downturn and negative impact on global commercial activities with economies at the brink of a recession. Generally, labour relations are governed by the labour legislation in different countries and more specifically by contracts of employment, which spell out the terms which have been agreed to by both employers and employees to govern their relations during the term of employment. Click the button below to download full publication covid ellan admin Member since September 3, 2024 Loading + Follow Following
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