January 22, 2021

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A Curious New Rule on Reinstating Sacked Workers

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It used to be a hard set principle that except for a very limited exception, a court would not order specific performance of a contract of personal service, a principle having its origin in the abhorrence of any semblance of enforced labour. Section 34 of the constitution which prohibits forced or compulsory labour enshrined this principle. Fry L.J. at the English Court of Appeal explained the reasoning for this rule: “For my own part, I should be very unwilling to extend decisions the effect of which is to compel persons who are not desirous of maintaining continuous personal relations with one another to continue those personal relations. I have a strong impression and a strong feeling that it is not in the interest of mankind that the rule of specific performance should be extended to such cases… lest they should turn contracts of service into contracts of slavery.” In this, what was good for the goose was good for the gander; if a worker would not be forced to work, an employer would not be forced to employ. The only exception to this principle was where the employment was “clothed with statutory flavor”. But in his verdict in Bello Ibrahim v. Ecobank PLC (Suit No: NICN/ABJ/144/2018 delivered 17th December 2019), Hon. Justice Sanusi Kado of the industrial court removed the distinction that existed on this point between a simple master-servant contract as so-called and employment clothed with statutory flavor.

The Case
In Ibrahim v. Ecobank, the employee (of non-director cadre) made a case that his many years of dedicated service was terminated abruptly after he had reported misconduct and improprieties discovered within his department. He tendered in evidence emails to prove this act of whistleblowing. In its judgement, the court highlighted the fact that the defendants gave no reason for terminating the claimant’s employment beyond stating that the bank was exercising its legal right to terminate, and rejected as an afterthought, the defendant’s testimony that its reason for terminating Ibrahim’s employment was due to internal reorganization. It was undisputed that he was paid terminal entitlements (although the court opined that it was not paid on time).

Propounding its jurisdiction from the amended 1999 constitution of Nigeria, the establishing Act of the court, and the applicability of international conventions (particularly Article 4 of convention No. 158 of ILO and recommendation 166 of the said convention) the court concluded that it had the power and indeed the duty to maintain international best practices in labour and employment matters, and this empowered it to depart from established common law principles which may have become outdated. Relying on recommendation 166 above, the termination was held wrongful for failure to state “justifiable” reason for termination; consequently specific performance by reinstatement of the claimant was ordered.

Previously, in private sector employment only directors could seek reinstatement by the court because their appointment, tenure and removal is regulated in statute. Deviation from the statutory procedure would invalidate the termination. In Longe v. First Bank (2010) 6 NWLR (1180) 1 SC, Oguntade JSC conveyed the attitude of the court: “Let me say with all the necessary force and emphasis that when the law vests a right on a citizen, a court of law will resolutely resist any attempt and by whatever method to deny the citizen the enjoyment of the right conferred by law”; in that case, that right was a director’s right by statute to prior notice of a meeting where his removal was to be discussed. Thus reinstatement was a privilege unique to such employment clothed with statutory flavor. Can it be justifiable to extend this remedy to servants not currently seen as endowed with such status?
For most workers, the principle that an employer could terminate for good or bad reasons meant just that. That even if the reason was “bad”, i.e., immoral, unconscionable, occasioning distress, hardship or empathy for that employee, that termination or dismissal would not be reversed, though damages may be awarded. Justice Kado has adjudged that that is no longer good law, and an employer dismissing for bad reasons, or even without the courtesy of stating a reason, can be ordered to reinstate the employee.
Is there acceptable ground to expand the time-tested restriction on reinstatement? Whistleblower protection laws abound, and society collectively deprecates unfair labour practice and discrimination. How far should the courts go to establish concrete protections to discourage these practices? The ICPC Act, the Freedom of Information Act, and the SEC’s code of corporate governance, require protection of whistleblowers and conscientious disclosers of fraudulent or improper conduct. It should be an imperative that a person whose employment is terminated for making such disclosure may be reinstated if he seeks it, to forestall any mocking at those laws. An extension of the “clothes” of statutory flavor, on the principle in Longe, can be made to all contracts of employment where there is a statute expressly prohibiting the wrong or unconscionable practice that leads to termination, bearing in mind that in most cases the award of damages may not be adequate deterrence or compensation, especially where justice is systematically slow.

Unfortunately, with great respect to the court, it missed an opportunity to extensively propound a principle along these lines. The judgement pivoted on the defendant’s lack of a satisfactory reason for terminating Ibrahim’s employment; the court did not base its decision on a finding that the termination was wrongly punitive. But is “no reason given” enough reason for the grave option of reinstatement? The only leg this new rule has to stand on is the ILO recommendation; the court did not weigh for consideration the evidence of whistleblowing which allegedly suggested that the termination was punitive and retaliatory. The court did not build this as a basis for the judgement, or explore the questions arising from the issue. The sole ratio for the judgement was lack of a satisfactory reason for the sacking.

The effect of this decision is that – protected by s.34 of the constitution – an employee is free to work or quit at will, but an employer may no longer “hire and fire at will”; not unless he gives a good reason to fire his worker. But what constitutes a “good” reason? Good enough for whom, the employee or the court? While an unexplained termination may be wrongful (by regard to the ILO recommendation), the remedy that the law gives must be proportional. However if a termination is clearly in malicious disregard of a statutory policy, for example, of whistleblower protection, then adapting the logic of the Supreme Court in Longe, that would have made a solid case for extending the frontiers of the law by an order reinstating the employee.

While it remains to be seen how this decision will hold up to appellate review, one cannot but lament the lost opportunity for a robust judicial interrogation of the emerging policy of whistleblower protection vis-à-vis the once settled doctrine against employee reinstatement.

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