Employees’ internal disciplinary proceeding is not codified in any law
Kayode Omosehin is the Managing Partner of the law firm of Koriat & Company. In this interview with Assistant Editor, Law and Foreign Affairs, JOSEPH ONYEKWERE, he examines contemporary issues in labour and employment law, unfair labour practices, mass retrenchment as well as employment litigations and arbitration among others.
What are the contemporary issues in labour and employment law today?
Employment Law in Nigeria is currently witnessing some new challenges and trends with which a lot of Human Resources (HR) managers are struggling to keep pace. The country’s economy is not in a good state, and the trickle-down effects are that there are no job opportunities around and those in employment are either subjected to unfair contract terms or losing their jobs on a mass scale. This is very clear from the volume of employment litigations filed at the National Industrial Court (NIC). Unfortunately, most employers do not seek legal advice before entering into or terminating employment contracts. This results in avoidable legal battles and expenses to the employers’ business.
A cursory review of the cases recently decided by the NIC will reveal that most of the issues for determination centre on unfair contract terms, labour practices and disregard for international best practices. Interestingly, there has been a shift in the old common law principle, which gave the employer the power to hire and fire a worker for good, bad or no reason. Many employers and HR managers are not abreast of the recent developments in employment law, particularly, the huge implications of the 2010 Third Alteration to the 1999 Constitution of Nigeria on employment relationship. For instance, employers can no longer fire an employee for bad or no reason. Any termination of employment without stating a reason that is connected to poor performance or gross misconduct now amounts to and will be declared by the NIC as unfair labour practice.
Another interesting thing is that the NIC has not only adopted an expansive interpretation approach to what amounts to unfair labour practice, but has also viewed such a practice as both a possible breach of employment contract and the 1999 Constitution (as amended) to provide the court with a basis to award aggravated damages beyond what would have been obtainable as a remedy at common law.
A lot of foreign companies in Nigeria have been accused of unfair labour practices. What actually constitutes unfair labour practices?
The phrase “unfair labour practice” is novel but it is now with us in Nigeria. But the meaning of unfair labour practice is better appreciated in practice than in theory. Sadly, there has been a dearth of information and awareness process to educate HR managers and other employment and labour stakeholders on the ways to avoid unfair labour practices at workplaces. Unfair labour practice was introduced into the Nigerian Labour Law jurisprudence in 2010 through the Third Alteration. Section 254(C)(1)(f) of the 1999 amended Constitution confers exclusive jurisdiction on the NIC to adjudicate “over matters relating to or connected with unfair labour practices or international best practices in labour, employment and industrial relation matters…” Because of the novelty of this constitutional provision on unfair labour practice, there has been a checkered approach to judicial interpretation and enforcement of the law. On 2 April 2000, a panel of judges of the NIC defined unfair labour practice as any practice that does not conform with best practices in labour circles as seen in foreign countries. The question of whether or not an act amounts to an unfair labour practice is a question of facts to be determined by the court. Interestingly, all decisions of the NIC on questions of facts are not subject of any appeal and, therefore, cannot be upturned anywhere else unless such decision breaches a party’s right to fair hearing. So, unfair labour practice is what the NIC says it is. Period!
The adoption of international labour standards is to meet the need to make Nigerian labour jurisprudence in tandem with what is obtainable at the international scene. So, as an employment lawyer and HR manager, it is important to keep tabs on the judicial decisions in America, England, Canada, Australia and other civilised jurisdictions to document the labour law trends, which may be used to test the fairness or unfairness of a labour practices in Nigeria.
Foreign courts’ decisions are persuasive authority. But by virtue of 254(C)(1)(f) of the 1999 Constitution (amended), there is no limit to the NIC’s discretion to agree or disagree to be persuaded by a single foreign court’s judgment as a parameter for determining what amounts to unfair labour practices in Nigeria. The category of unfair labour practices is never closed. For instance, the NIC declared in Babalola v SSS that the termination of an employment because of a worker’s bodily tattoo was an unfair labour practice.
Also, the NIC has also declared, in different cases, as unfair labour practice any termination of employment without stating reason connected to poor performance or misconduct; or withholding of employee’s terminal benefits; an employer’s policy which compels an employee to open a salary account with a particular bank; unilateral deductions from workers’ salaries as penalties for infractions without fair hearing; unfair prohibition against the use of social media and many more. The above are few examples of unfair labour practices, which, unfortunately, are what employers and HR managers still engage in regularly. It is shocking that in 2019, employers still erroneously believe that they have the power to hire and fire with or without reasons. No. The law has since changed and just a few are aware.
There is labour law against casualisation but this is still practised by many manufacturing companies in the country. Can you elucidate the provisions of the law?
Casualisation is an arrangement to engage a worker on temporary and probationary terms, usually without confirmation of the worker’s employment, job security, benefits or legal protection associated with a permanent employment. This kind of precarious arrangement is employed by some companies to perpetually keep affected workers on probation to terminate the employment relationship at will. It is my view that such an arrangement is wrongful and may be successfully challenged at the NIC under the provision of Section 254(C)(1)(f) of the amended constitution, already mentioned above, and Section 7(1) of the Labour Act, which requires the employer to give every worker a written statement specifying the terms and conditions of a worker’s employment, not later than three months from the date of employment. The implication of the foregoing legal provisions is that failure to provide the mandatory written terms and conditions of employment is a breach of the law.
Also, the written terms and conditions of employment provided by an employer must comply with international labour standards and best practices. Where the court deems the terms of engagement as having created a perpetual casualisation, the NIC reserves the jurisdiction to declare such perpetual casualisation as an unfair labour practice.
How can workers be protected from mass retrenchment?
I have always said that every employee needs a legal adviser as much as the company does. Having a lawyer to review your employment contract before taking up a job helps a long way in making the right decision before and during the employment. Also, proper record keeping is key to avoiding unlawful retrenchment without compensation. Record of contract documents, emails and other internal memos, evidence of good performance and satisfactory appraisal records are essential in dealing with employer’s decision on mass retrenchment. My advice is that each employee should save the foregoing record in places where he or she can access it after exiting the employment. Most times, upon termination of employment, there is little or no time to take any record out of a company’s building. The best time to start to create an external file of such record is when the employment relationship is still rosy. I must add that such efforts must respect any confidentiality agreement on information acquired in the course of the employment.
There are arguments about the function of the NIC as the final arbiter in labour and employment matters. Would you support an appellate jurisdiction over NIC’s decisions?
Yes. But to an extent. The finality of NIC’s decisions is helpful and recommendable for many reasons. First, labour matters are special kinds deserving special skills of judges trained in labour and industrial relations. However, appellate justices of the Court of Appeal and the Supreme Court are constituted from among judges elevated from different civil and criminal divisions of the Federal and State’s High Courts, the Sharia Court of Appeal, the Customary Court of Appeal, etc., who may not possess the requisite skills in industrial and labour relations.
Secondly, litigation is expensive and the impact can be heavy on the company’s business and on the employee’s pocket. Also, litigation can be unduly protracted if a right of appeal to appellate courts exists in favour of an unsuccessful party. However, to the extent of safeguarding a party’s constitutional right of fair hearing, I will support an appellate jurisdiction over NIC’s decisions that has been made in breach of a party’s right to fair hearing. This is because fair hearing is a sacred right protected by the constitution and the law is very clear that any decision violating the right to fair hearing cannot stand.
What do you have to say about employment litigations and arbitrations generally?
Employment litigation in Nigeria, like general litigations, is prone to undue delays and huge attendant cost to both parties. Arbitrating employment matters, however, is not as cheap as people think, though it is relatively faster than litigation. Surprisingly, a lot of employees are not even interested in pursuing any claim against their employers for wrongful termination or other unfair labour practices partly because they lack knowledge of their legal rights or the resources to seek justice.
Notwithstanding the choice of dispute resolution, the employer’s business must continue and so, the employee, too, is advised to move on with his or her life while the legal representatives of both parties continue to explore ways to resolve their dispute. My advice is that companies should include arbitration agreement in the dispute resolution clause of their staff handbook and other employment contract documents. I must mention that if an arbitration agreement is not well drafted, the dispute between a company and its employees will sadly result in litigation. Because employment disputes generally involve small claims, a sole arbitrator is recommended for all disputes arising from employment contract. Also, the power to appoint an arbitrator should be ceded to a third party institution. It is futile to think the parties, who are in dispute, will agree on who to appoint as a sole arbitrator. The seat of arbitration, the responsibility for arbitral expenses, and other related matters should be well spelt out in the arbitration agreement. Bad drafting of an arbitration agreement results in unwanted litigation. Also, unwillingness of either party to submit to arbitration as well as any challenge raised against the decision of an arbitral panel are other reasons an employment contract, having arbitration agreement, ends up in court.
Do we have international best practices in internal disciplinary proceedings of employees?
Yes, though not codified in any law. However, from the combination of constitutional provisions, the Labour Act, international best practices and judicial decisions, there are certain minimum requirements that must be complied with in conducting unassailable disciplinary proceedings against an employee. For instance, the provisions of the staff handbook, if any, should be followed. The focus of the company should be on the employee’s act of misconduct or gross misconduct but not a crime, even if the same act amounts to both misconduct and crime.
An employer should appoint a disinterested staff member (possibly an external person) to investigate an allegation of misconduct to avoid bias, which may nullify the entire disciplinary proceedings. Also, a reasonable opportunity must be given to the concerned worker to respond to any allegation against him or her before imposing any penalty. For instance, unilateral deduction from employee’s salaries in the name of imposing a penalty is an unfair labour practice. Suspension with salary during investigation is in order, but the length of suspension should not exceed two months to avoid implied dismissal. The outcome of any disciplinary enquiry should be recorded in the staff’s file and communicated to him or her. If the employee is found culpable, the decision to terminate or dismiss (as the case may be) should be made in accordance with the employment contract. If, however, the investigation process does not establish the employee’s culpability, no decision to terminate his or her employment should be made. It would be a wrongful termination if the employee is let go without proof of complicity in the alleged misconduct. It is also an unfair labour practice for an employer to penalise a worker for a past misconduct or to single out an employee in respect of an allegation against a number or group of workers. I will like to add that every case will always be reviewed on its merits to determine if there is any act or omission in the disciplinary proceedings that does not conform with international best practices.
Why do some firms find it difficult to comply with labour laws on employees’ welfare?
Every smart employer knows that the employee’s welfare is very crucial to the well-being of the employer’s business. It is interesting to note that a good number of local and multinational companies in Nigeria have welfare policies that are in tandem with international labour standards and best practices. However, there is still much work to do in terms of regulatory enforcement and enlightenment of the HR managers and employees of their rights and obligations.
That is why an employment law summit coming soon is highly recommended. If we must be honest to ourselves, there are no job opportunities out there and the employees are willing, unfortunately, to the knowledge of the employers, to forego their rights to demand their entitled welfare packages. So, there is need for a more determined approach to regulatory enforcement. Also, trade unions and other civil societies are veritable agents for engendering higher level of compliance with labour laws on employees’ welfare. Employees should be encouraged to speak up against workplace discriminatory practices, violence and other forms of injustices.
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