HOLDEN AT LAGOS
BEFORE HIS LORDSHIP, HON. JUSTICE MUSTAPHA TIJJANI THURSDAY, NOVEMBER 26, 2020
SUIT NO. NICN/LA/657/2016
MR. FRANCIS OTOLO
1. CONSTRUCTION SERVICES INTERNATIONAL
S.O Oziegbe for the Claimant.
Yinka Olatunji for the Defenadnt.
The Claimant, by a General Form of Complaint and Statement of Facts dated and filed on October 27th, 2016 claims against the Defendants as follows:
I. A declaration that the non-payment of the Claimant’s outstanding entitlements by the Defendants upon termination is unlawful.
II. The sum of N4,550,000 (Four Million Five Hundred and Fifty Thousand Naira) Only, being the outstanding entitlement due and payable to the Claimant by the Defendant upon termination of employment of the Claimant, which the Defendants has refused and/or neglected to pay despite repeated demands.
III. An order directing the Defendants to deliver to the Claimant the evidence of payment of the Claimant’s pension which amounts to the sum of
N3,816,000.00 (Three Million Eight Hundred and Sixteen Thousand Naira Only).
IV. An order directing the Defendants to deliver to the Claimant the Claimant’s Tax clearance showing deductions and remittance from August 2013 to July 2016 being the period which the Claimant was under the employment of the Defendants which amounts to N4,933,606.00 (Four Million, Nine Hundred Thousand and Thirty Three Thousand Six Hundred and Six Naira Only).
VI. Cost of this action including but not limited to Solicitors fees.
VII. General damages of N10, 000, 000.00 (Ten Million Naira) Only.
The Defendants filed a joint Amended Statement of Defence dated the 27th day of November 2018.
The claimant in support of his claims testified for himself and tendered 12 documents which were admitted and marked as Exhibits C1-C12. The Defendants in its defence and in proof of its case called one Mr Rajesh Parwani, the finance manager of the 1st Defendant, who gave evidence for the 1st and 2nd Defendants. The Defendants also tendered Exhibits D1, D2 and D3.
Upon the close of pleadings, trial commenced in the matter on the 23rd October 2019 and the Claimant opened his case. Trial was concluded on 12th November 2019 with the evidence of DW1 after which Parties filed and adopted their Final Written Addresses.
THE CASE BEFORE THE COURT
It is the case of the claimant that he was employed by the 1st and 2nd Defendants as a Quality Manager on the 14th August 2013 by an Employment Agreement (admitted as Exhibit C1); that the contract of employment between the parties was terminated by the Defendants on the 22nd July 2016 by a letter of termination admitted as Exhibit C2. It is also the case of the Claimant that in accordance with the Pension Reform Act 2014, the Defendants were required to make deposits for the Claimant’s Pension of which he fulfilled his obligation by furnishing the Defendants with the necessary information needed for the pension fund at the beginning of his employment; that the Defendants between July 2015 and January 2016 unilaterally modified the remuneration of the Claimant to ₦250,000.00 (Two Hundred and Fifty Thousand Naira) which was against the employment agreement and amounted to a breach of contract; and that he is entitled to the arrears of the remuneration shortfall. To the claimant, the employment agreement cannot be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought, and that in respect of rights and remedies provided by the contract and also by law, failure or delay in exercising any right or remedy shall not operate as a waiver thereof or modify the terms of the agreement.
The Claimant, he is entitled to sixty days salary in lieu of notice of termination; that he is entitled to the evidence of payment of personal income tax and his tax clearance for the period he was under employment by the Defendants; that he is entitled to payment of his pension and evidence of the payment for the period of time which he was employed by the Defendants; and that he is entitled to evidence of payment of the National Housing Fund.
It is the case the of the Defendants that the Claimant was not an employee of both the 1st and 2nd Defendants as the Employment Agreement, Exhibit C1, which solely governed his employment, was between the 2nd Defendant and the Claimant and the 1st Defendant was not a party to the agreement. The Defendants further averred that the Claimant’s employment commenced on 14th August 2013 and terminated on 13th August 2014 and thereafter, the agreement was extended for successive terms of one
(1) year unless the 2nd Defendant or the Claimant gave written notice of termination to the other party prior to the termination of the initial term of the employment or any renewed term thereof, or unless earlier terminated. The Defendants argued that the Claimant’s employment was terminated on 22nd July 2016 but their case is that from 22nd July 2016, the Claimant could not have been given a sixty-day notice which will extend beyond the expiry date of his employment agreement, 13th August 2016.
It is also the case of the defendant that as a result of low downturn in the business of the 2nd Defendant, the 2nd Defendant had no work. However, instead of declaring all the employees redundant, the 2nd Defendant decided to keep all the employees on the payroll, however, on reduced salaries. The Claimant’s salary was never stopped but only reduced and the Claimant was aware of the pay cut and acquiesced. To the defendant, the Claimant’s salaries were fully paid without any deduction and that no deductions of personal income tax, pension and National Housing Fund were made.
The Defendants stated that the Claimant’s claims are frivolous, vexatious and prayed that they should be dismissed with substantial costs.
THE SUBMISSIONS OF THE DEFENDANTS
Learned Counsel for the defendant formulated five issues for determination, which are;
3.1.1 Whether the Claimant is entitled to the declaration sought.
3.1.2 Whether the Defendants are liable to pay the Claimant the sum of ₦4,550,000.00 (Four Million Five Hundred and Fifty Thousand Naira only) as outstanding entitlements.
3.1.4 Whether the Claimant discharged the burden of proof of his claims in paragraphs 21c, 21d, 21e and 21f of his Statement of Facts.
3.1.5 Whether the Claimant is entitled to general damages.
Learned Counsel for the defendant argued issue 1 and issue 2 together, which is Whether the Claimant is entitled to the declaration sought and whether the Defendants are liable to pay the Claimant the sum of ₦4,550,000.00 (Four Million Five Hundred and Fifty Thousand Naira only) as outstanding entitlements.
In arguing the two issues, learned Counsel stated that the law places a heavy burden on a plaintiff to establish his declaratory relief to the satisfaction of the court. Where he fails to establish his entitlement to the declaration by his own evidence, the reliefs would not be granted even on the admission of the defendant. He referred this court to the cases of Inakoju v. Adeleke (2007) 4 NWLR (Pt. 1025) 423 and A.-G., Cross River State v. A.-G., Federation (2012) 16 NWLR (Pt. 1327) 452. Counsel argued that in a claim for declaratory relief, the claimant must adduce cogent, credible and reliable evidence to satisfy the court. Thus, he cannot rely on the weakness of the defendants’ case or his admission. Where the claimant has not adduced evidence, the defendant may choose not to offer evidence.
On the Claimant claims of seven (7) months arrears of remuneration shortfall from July 2015 to January 2016 in the sum of ₦3,150,000.00 (Three Million, One Hundred and Fifty Thousand Naira Only) and that of sixty (60) days salary in lieu of notice of termination in the sum of ₦1,400,000.00 (One Million Four Hundred Thousand Naira only). Learned Counsel for the Defendants argued that in law acquiescence occurs when a person knowingly stands by without raising any objection to the infringement of his or her rights, while someone else unknowingly and without any malice afterthought acts in a manner inconsistent with the rights. As a result of acquiescence, the person whose rights are infringed may lose the ability to make a legal claim against the infringer. The doctrine infers a form of permission that results from silence or passiveness over an extended period of time. Counsel submitted that the Claimant acquiesced to the reduction of salaries and their case is not one of waiver. Acquiescence imports tacit consent. It is the giving of an implied consent to a transaction to the accrual of a right or to any act, by one’s mere silence or without express assent or acknowledgment. Waiver, on the other hand, is the intentional or voluntary relinquishment of a known right, or such conduct as warrants an inference or voluntary relinquishment of such right or when one
dispenses with the performance of something one is entitled to exact or when one is in possession of any right, whether conferred by law or contract, with full knowledge of the material facts, does or forbears to do something the doing of which or the failure of forbearance to do which is inconsistent with the right, or his intention to rely upon it.
Counsel argued that the Claimant’s employment agreement, a yearly contract, was to end on 13th August 2016. Thus from 22nd July 2016, the Claimant could not have been given a sixty-day notice which will extend beyond the expiry date of his employment agreement.
Counsel went on to argue that the claimant in his pleadings and evidence before this court did not demonstrate how he is entitled to ₦1,400,000.00 (One Million Four Hundred only) as salary in lieu of notice of termination.
Learned Counsel contended that there is no provision for the payment of salary in lieu of notice in the employment agreement. He relied on Exhibit C1 Clause 4.4.1 of the agreement.
Counsel argued that if a notice period is required for an employer to terminate a contract, a payment in lieu of notice is immediate compensation at an amount equal to that an employee would have earned as salary or wages by working through the whole notice period. If there is a pay in lieu of notice clause in the employee’s contract, the amount the employee will get will normally be set out there. Often, the employment contract under which an employee is employed will provide that payment in lieu of notice should be made or can be made. If the employer makes a payment in lieu of notice in circumstances where the employment contract does not allow or provide for it, the employer will be in breach of the contract.
Counsel placed reliance on section 128(1) of the Evidence Act, 2011, and submitted that the contents of Exhibit C1 cannot be added to by oral evidence to include the term that the sum of ₦1,400,000.00 (One Million Four Hundred Thousand Naira only) or any sum at all shall be paid in lieu of notice.
Learned Counsel submitted that the law does not give this Court the license to factor into a written contract the terms that are absent from it, to do that will defeat the raison d’etre for the hallowed doctrine of the sanctity of contract. He referred this court to the cases of N.P.A. v. Ahmed (2017) 12 NWLR (Pt. 1578) 72 at 92, paras. F – G. S.P.D.C. Ltd. v. Emechuru (2007) 5 NWLR (Pt. 1027) 347, Agbare v. Mimra (2008) 2 NWLR (Pt. 1071) 378 at 415, paras. B-D.
Counsel submitted further that this court cannot grant the payment of the sum of ₦1,400,000.00 (One Million Four Hundred Thousand Naira only) or any sum at all
On issue 3, that is whether the 1st Defendant was a party to the Claimant’s employment agreement and if not, whether the reliefs sought by the Claimant can be awarded against the 1st Defendant.
Learned Counsel relied on exhibit C1 and submitted that by the doctrine of privity of contract, a stranger to a contract would not be liable. He relied on the case of United Bank for Africa v. Jargaba (2007) 11 NWLR (Pt. 1045) 247.
Counsel argued that in the instant case, the 1st Defendant is a stranger to Exhibit C1.
To learned Counsel for the Defendants, the general principle of the doctrine of privity of contract is that as a general principle, a contract affects the parties to it, and cannot by or against a person who is not a party, even if the contract is made for his benefit and purports to give him the right to sue or to make liable upon it. The justification for this is that a person should not, as a general rule, have contractual obligations imposed on him without his consent.
Counsel therefore, urged this court to find and to hold that the reliefs sought by the Claimant cannot be awarded against the 1st Defendant, not being a party to Exhibit C1.
On issue 4, that is Whether the Claimant discharged the burden of proof of his claims in paragraphs 21c, 21d, 21e and 21f of his Statement of Facts.
Learned Counsel argued that the claimant is not entitled to his claim in paragraphs 16, 17 and 18 of the Statement of Facts, the Claimant pleaded that payment of personal income tax by the Defendants is in accordance with the agreement and the Personal Income Tax Act and as such he is entitled to the evidence of the payment which amounts to ₦4,923,606.00 (Four Million, Nine Hundred and Twenty Three Thousand, Six Hundred and Six Naira only); that he is entitled to payment of his pension and evidence of the payment for the period of time which he was employed by the Defendants which amounts to the sum of ₦3,816,000.00 (Three Million, Eight Hundred and Sixteen Thousand Naira Only); and that he is entitled to evidence of payment of the National Housing Fund which amounts to ₦270,000.00 (Two Hundred and Seventy Thousand Naira Only).
Counsel went on to argue that these payments are based on deductions that would have been made from the Claimant’s salary ₦700,000.00 (Seven Hundred Thousand Naira only). They were not payments that could have made independent of the
Claimant’s salary by the 2nd Defendant. However, the Claimant did not adduce, apart from his mere averments, any iota of evidence that any such deductions were made from his salary, and that under cross-examination, the claimant was asked whether these deductions were made. He stated that the alleged deductions were not made. Counsel stated that when the Defendants’ witness was in the witness box, the Claimant did not also extract from him any evidence, as important and germane that such evidence is to his case, that any such deductions were made from his salary by the 2nd Defendant for the entire period he worked with the Company. Thus, the Claimant’s by his case wants to proverbially eat his cake and have it too. Having collected his salary of ₦700,000.00 (Seven Hundred Thousand Naira only) and enjoying the benefit during the course of his employment from 14th August 2014 to 22nd July 2016, he suddenly woke up, after the employment had been terminated, to realize he needed evidence of the payment of deductions that were in fact not made from his salary.
On the Claimant claims for cost of this action including but not limited to Solicitor’s fees. Counsel for the defendants argued that in the Statement of Facts, there is no fact pleaded on Solicitor’s fees. And, there is no evidence of payment of Solicitor’s fees before this Court. Thus the claim is in the nature of special damages which ought to be specially pleaded and strictly proved as required by law, which the claimant failed to do. He relied on the cases of Guinness Nigeria Plc. v. Nwoke (2000) 15 `NWLR (Pt. 689) 135 and Bluenest Hotels Limited v. Aerobell Nigeria Limited (2018) LPELR-43568(CA).
Finally on issue 4, learned Counsel submitted that the claim for solicitor’s fee cannot be granted. And in all, the Claimant failed to discharge the burden of proving his claims in paragraphs 21c, 21d, 21e and 21f of his Statement of Facts. On issue 5, that is Whether the Claimant is entitled to general damages.
Learned Counsel for the defendants placed reliance on the cases of Hadley v. Baxendale (1854) 9 Exch. 341, Balogun v. N.B.N (1978) 3 S.C. 11 and argued that the damages claimed by the Claimant is not such as may fairly and reasonably be considered as either arising naturally from the alleged breach of contract. It is also not one that was reasonably in the contemplation of the 2nd Defendant and the Claimant at the time they made Exhibit C1 as the probable result of the breach of it. This extent of the 2nd Defendant’s liability is not within contemplation.
Finally Counsel submitted that the sum claimed cannot be awarded as damages because the Claimant failed to show that the damages arose from the contract. He therefore, urged this court to dismiss the claims of the claimant against the Defendants and award substantial costs against the Claimant.
Learned Counsel for the claimant submitted two issues for determination, to wit;
1) Whether from the evidence led in this matter, the Claimant has proved his entitlement to all his claims.
2) Whether this honorable court should ascribe any probative value to exhibit D2.
On issue 1, that is whether from the evidence led in this matter the Claimant has proved his entitlement to all his claims. Counsel argued that parties are bound by the terms of contract. He relied on the case of ODIASE v. AUCHI POLYTECHNIC (1998) 4 NWLR, (Pt. 547) 477 @ 479, KATTO v. CENTRAL BANK OF NIGERIA
(1991) 9 NWLR (pt. 214) 126, OLANIYAN v. UNIVERSITY OF LAGOS (1985) 2 NWLR (Pt. 9) 599, CALABAR CEMENT CO. LTD v. DANIEL (1991) 4 NWLR 750, LARMIE v. DELTA PROCESSING MAINTENANCE & SERVICES LTD (2005) LPELR 1756 S.C, OSUN STATE GOVERNMENT v. DALAMI NIGERIA LIMITED. (2007) 3 S.C Pt. 131, S.P.D.C NIG. LTD v.
EMEHURU (2007) ALL FWLR PT.381.
Counsel also relied on Clause 21 of the Contract of employment, paragraph 11 of the 1st and 2nd defendants witness statement on oath and the cases of KAZAH v. HADEJIA (2016) LPELR C/A, AFRICAN INTERNATIONAL BANK LTD v. INTEGRATED DIMENSIONAL SYSTEM LTD (2012) 17 NWLR (Pt. 1328), MARYAM ISIYAKU v. ZWINGINA (2001) Pt. 72. See also GAMBAGA v. MBIU
& ORS (2014) LPELR -41079 (CA) and argued that the 1st and 2nd Defendants breached the terms of the contract of employment by unilaterally modifying the salary of the Claimant from N700, 000 (Seven Hundred Thousand Naira) to N250, 000 (Two Hundred and Fifty Thousand Naira).
It is the contention of leanered Counsel that by Exhibit C11, an email from Mike Strawn the Managing Director of the 1st Defendant and Exhibit C12, a letter authored by the same person to the Claimant, the Defendants had in both its email and letter to the Claimant informed the Claimant that his salary would not be affected while asking the Claimant to take on extra responsibilities. Thus, having done his duties to take on extra responsibilities, the act of the Defendant in unilaterally varying the salary of the Claimant without following the terms of Exhibit C1 amounts to a breach of contract.
In response to paragraphs 184.108.40.206 and 220.127.116.11, learned Counsel argued that Acquiescence is an equitable defence in law, it is purely equitable in nature and applies only to equitable claims. He referred this court to the cases of GIDADO v.
He argued further that all equitable defence of Laches and Acquiescence must be specifically pleaded and proved. He referred this court to the cases of LAMBE & ORS v. AREMU & ANOR (SUPRA), OYEDELE v. OGUN & ANOR (1975) 1 ALL NLR 340, ALABI & ANOR v. F.O DOHERTY & ORS (2005) C.A , NWAGU v. FADIPE (2012) LPELR 7960 C.A, OKEREKE & ANOR v. NWANKWO & ANOR (2003) LPELR 2445, TAIWO v. TAIWO (1958) 3. F.S.C 80 @ 82.
It is the argument of learned Counsel that the Defendants cannot hide under the defence of Laches and Acquiescence as it has nothing to do with this case. This case has a contract (Exhibit C1) which governs it. The defence of acquiescence relates to equitable reliefs, the Defendant has failed to fulfil the condition precedent necessary for proving acquiescence under the law. He therefore implores this Court to disregard the Defendants’ argument on acquiescence.
Counsel submitted that the Claimant is entitled to arrears of salary which the Defendants owe him from July 2015 to January 2016, the Claimant’s salary was unilaterally slashed from N700,000.00 (Seven Hundred Thousand Naira) to N250, 000.00 (Two Hundred and Fifty Thousand Naira Only) which means that from July 2015 to January 2016 (7 months) the sum of N450,000.00 (Four Hundred and Fifty Thousand Naira) was slashed from the Claimant’s salary. A calculation of N450, 000,00 (Four Hundred and Fifty Thousand Naira) by 7 months (July 2015 – January 2016) gives us the sum of N3,150,000.00 (Three Million, One Hundred and Fifty Thousand Naira Only).
Consequently, learned Counsel prays this Court to grant the payment of salary arrears from July 2015 – January 2016 amounting to the sum of N3, 150,000 (Three Million, One Hundred and Fifty Thousand Naira Only) owed to the Claimant by the Defendants, having varied the terms of the Contract of employment unilaterally. He relied on CLAUSE 4.1 of the contract of employment.
Counsel argued that parties are bound by the contract they voluntarily entered into. Again Counsel relied on the case of KAZAH v. HADEJIA (2016) LPELR C/A (SUPRA) and clause 4. 1 and submitted those parties are bound by the contract they voluntarily enter into. He went on to argue that the Defendants out rightly terminated the employment of the Claimant without giving the required notice as contemplated
by exhibit C1. Thus, the Defendants are in breach of exhibit C1. Counsel further relied on the cases of OBAJIMI V.ADEDIJI 2007 ALL FWLR PT.394, 335 @349, ADEOTI V. AYORINDE 2001 6NWLR Pt. 709.
LTD(1974) 4 S.C 33 ALL NLR Pt. 542, 4.27, OBANYE v. UNION BANK PLC2018 LPELR – SC 569/2015, OBOT v. C.B.N (1993) 9 SCNJ 368;SPRING BANK PLC v. BABATUNDE (2012) 5NWLR Pt. 1292, OLAREWAJU v.
AFRIBANK PLC (2001) FWLR Pt. 72 and argued that the Defendants breached the terms of exhibit C1 and so the Claimant is entitled to damages, the
damages claimed by the Claimant is not strange to law as it is trite law that where
a contract of employment stipulates expressly that it is terminated by the giving
of a stipulated period of notice, the damages recoverable for wrongful termination
will be the amount of wages or salary the employee would have earned for the stipulated period.
Counsel relied on Section 11(6) of the Labour act, Clause 4.4 of Exhibit C1 and schedule A of exhibit C1 and argued that the Claimant is entitled to 2months salary of N1.400.000.00 (One Million, Four Hundred Thousand Naira Only) in lieu of notice according to the Labour Act (LFN) 2004.
Counsel argued further that Exhibit C2 is headed TERMINATION OF EMPLOYMENT, thus it cannot serve as a notice of termination. He argued further that where the wordings of a document are clear and unambiguous, the Court shall give it their simple and ordinary meaning. He referred this court to the cases of
BREWTECH NIG. LTD v. AKINNAWO & ANOR (2016) LPELR, UNION BANK OF NIGERIA PLC v. OZIGI (1994) 3NWLR (Pt. 333) EGWUNEWU v. EGEAGWU (2007) 6 NWLR (Pt. 1031) 431
Counsel submitted that the Claimant is entitled to his claim for 2 months’ salary in lieu being N1.400.000.00 (One Million, Four Hundred Thousand Naira Only). He therefore, urged this court to hold that the termination of the Claimant is a breach of the contract agreement between parties, and the payment of N1, 400.000 (One Million, Four Hundred Thousand) Naira be made immediately to the Claimant as payment which the Claimant is entitled to.
In response to paragraphs 4.2 – 18.104.22.168 of the Defendant’s written address, Counsel submitted that the Claimant worked for the 1stand2nd Defendants, and he was employed by the 1st and 2nd Defendants as a quality manager on the 14th of August 2013.
Again learned Counsel relied on Exhibit C1 and argued that a document speaks for
itself. Thus, where a document is clear, the operative words in it are to be given their simple and ordinary grammatical meaning. One is not to read into the document
DINO & ORS (2008) C.A 4.39, GOVERNOR OF OGUN STATE v. MR ADEBOYEGA ADEBOLACOKER (2008) ALL FWLR (Pt. 406) 1900 @ 1913.
And DIVINE IDEAS LIMITED v. ADEBOLA COKER (2008) ALL FWLR (PT. 406) @1913.
It is the contention of Counsel for the claimant that the Defendant’s witness under cross-examination and in paragraph 3 of his written statement on Oath gave evidence that the Claimant worked for just the 2nd Defendant and was not an employee of the 1st Defendant. He referred this court to the introductory clause in
paragraph 1 of the contract of employment; Exhibit C1 and Exhibit C2, the termination letter dated 22nd July 2016.
Counsel submitted that documentary evidence is the best evidence, he referred this Court to the cases of EGHAREVA V. OSAGIE  18 NWLR [Pt1173] 299, OLAWOYE v. BELLO  LPELR –CA/L/318/2001, IKEMEFUNA AND ORS v. ILONDIOR AND ORS LPELR – CA /B/2/148/2008, OKHOMINA v. P.H.M.B (1997) C/A 2NWLR.
Counsel relied on Exhibit C7, C8, C9, and the case of EGHAREVA v. OSAGIE  18 NWLR [Pt 1173] 299. (SUPRA) and urged this court to hold that the Claimant worked for the 1st and 2nd Defendants and grant the claims of the Claimant, jointly and severally against the Defendants.
Counsel placed reliance on the case of MOMODU v. NATIONAL UNION OF LOCAL GOVERNMENT EMPLOYEES (1994) 8 NWLR, MARTINS & ORS v. KOLAWOLE (2011) LPELR 4475 C/A- CENTRAL BANK OF NIG. V. AMAO & ORS (2010) 15 NWLR, Exhibits C3, C4, C5& C6; Letters written by the Claimant to the Defendants and also letter written on behalf of the Claimant by the Claimant’s Solicitor and stated that the Defendants deducted monies from the Claimant salary while he was in their employment for Tax, Pension and National Housing Funds but failed to remit same and have until now refused to deliver to the Claimant evidence of any of such payment. Thus, the decision of the Defendants not to remit the Pension sum deducted over time from the salary of the Claimant, Tax and NationalHousing funds has caused the Claimant a lot of hardship. Furthermore, Counsel for the claimant contented that during cross examination, the witness of the Defendant conceded to paying tax but had said he doesn’t know if the said tax were remitted to the appropriate authorities.
Counsel referred this Court to paragraph 6 of Exhibit C10, dated the 2nd August 2016, the email correspondence between the Claimant and the Defendants and argued that documentary evidence is the best evidence. Counsel further referred this
court to the case of EGHAREVA V. OSAGIE  18 NWLR [Pt. 1173] 299. (SUPRA). Counsel went on to argue that Exhibit C10, the Email from the Defendant clearly shows that deductions were made from the salaries of the Claimant for Tax, Pension and National Housing Fund which the Defendants never remitted to the appropriate authorities, causing the Claimant untold hardship after his employment was terminated. Counsel therefore, urged this court to order
the Defendants to provide to the Claimant, his Tax Clearance showing deduction and remittance from August 2013 to July 2016 which amounts to N4, 933, 606,00 (Four Million, Nine Hundred and Thirty Three Thousand, Six Hundred and Six Naira Only), Pension, and the sum of N270, 000.00 (Two Hundred and Seventy Thousand Naira) being the National Housing Fund sum deducted from the Claimant’s salaries.
On issue 2, that is whether this honourable court should ascribe any probative value to exhibit D2.
Counsel submitted that even though Counsel by mutual consent allowed all documents into evidence at trial, this court in marking the exhibits said parties could contest the admissibility of documents in their Final written address. Counsel hereby challenges the Defendant’s Exhibit D2 Electronic mail with the subject “ALL TRANSACTIONS FOR FRANCIS OTOLO” and questions its admissibility and /or probative value.
Counsel submitted that exhibit D2 has no identity of the maker of the Document, no
authorship, no signature or seal of the company of the Defendants which he claims made it. He relied on section 83(4) of the Evidence Act 2011, and the cases
EGA BANK (NIG) PLC. V. O.B.C. LTD. (2005) 8 NWLR (PT. 928) P.547 Counsel submitted further that an unsigned document is a worthless piece of paper and therefore cannot confer any legal right or benefit on any party or the party who seeks to rely on it. Thus, the law requires that the identity of the person who purported to sign a document must be clearly and unambiguously disclosed. He referred this court to the cases of ADIGHIJE V. NWOSU (2010) 12 NWLR (PT. 1209) P. 419@ 418; A.G KWARA STATE V. ALAO (2000) 9NWLR (PT. 671) P.89 @104. Counsel urged this Court to be wary of the probative value it attaches to exhibit D2.
Finally, learned Counsel urged this court to grant the prayers of the Claimant as per the claim in this suit.
THE COURT’S DECISION
After careful consideration of the processes filed, the evidence led , the argument of counsel and the authorities cited in support in the final addresses, I shall adopt the
issues formulated by the Defendants for determination in their final address as they have, in my view, sufficiently captured the issues in controversy between the parties herein. I reproduced them hereunder:
1. Whether the Claimant is entitled to the declaration sought.
2. Whether the Defendants are liable to pay the Claimant the sum of ₦4,550,000.00 (Four Million Five Hundred and Fifty Thousand Naira only) as outstanding entitlements.
3. Whether the 1st Defendant was a party to the Claimant’s employment agreement and if not, whether the reliefs sought by the Claimant can be awarded against the 1st Defendant.
4. Whether the Claimant discharged the burden of proof of his claims in paragraphs 21c, 21d, 21e and 21f of his Statement of Facts.
5. Whether the Claimant is entitled to general damages.
Issues one and two will be taken together as they relate to reliefs one and two. The Claimant’s case is for outstanding entitlements; it is therefore in the nature of special damages. The Court of Appeal held in Alao v. VC Unilorin (200) 1 NWLR (Pt. 1069) 428 that claims for salaries, emoluments, allowances and benefits accruing to an office are in the nature of special damages for which strict proof is required. It is also the law that where a party seeks for a declaratory relief the burden is on him to succeed on the strength of his own case and not on the weakness of the defence (if any), Such a relief will not be granted even on the defendant's admission. See Nyesom V. Peterside & Ors. (2016) LPELR _ 40036 (SC). Okereke V. Umahi & Ors (2016) LPELR -- 40035 (SC) Omisore V. Aregbesola (2015) 15 NWLR (PE.1482) 297 -299 and Ucha V. Elechi (2012) 13 NWLR CpU317) 230.
This claim represents the 7 months arrears of the shortfall in the Claimant’s salary at the rate of N450,000 per month the total of which stands at N3,150,000 and the sum of N1,400,000 being the Claimant’s 60 days salary in lieu of notice of termination.
The Claimant averred at paragraph 8 (a) that his monthly remuneration as per the Employment Agreement is N700,000. The Claimant also averred at paragraph 11 that between July 2015 and January 2016, the Defendants unilaterally modified the remuneration of the Claimant to N250,000.00 against the Employment Agreement. The Claimant further averred at paragraph 13 that he is entitle to 7 months arrears of remuneration shortfall from July 2015 to January 2016 in the sum of N3,150,000. These averments are in exact terms as the Claimant’s depositions at paragraphs 8 (c), 11 and 13 of the Claimant’s witness written statement on oath. The Claimant tendered Exhibits C1; the Employment Contract between the parties herein, which
provides for the Claimant’s monthly remuneration in the sum of N700,000.00 in the schedule referred to at its paragraph 4. The Claimant admitted under cross examination that Exhibit C1, is the only document that governed his employment relationship with the Defendant and that his salary was N700, 000.00
Now, the Defendants in their statement of defence did not join issues with the Claimant on the averments at paragraphs 8, 11 and 13 of the statement of facts. In response to paragraphs 11, 12 and 13 of the Claimant’s statement of facts, The Defendants at paragraph 11 of the statement of defence averred that in July 2015, as a result of law downturn in the business of the 2nd Defendant, the 2nd Defendant had no work, that instead of declaring all the employees redundant, the 2nd Defendant decided to keep all the employees on the payroll but on reduced salaries from July 2015 to January 2016 which reduction affected all the Defendant’s employees and consultants, the Defendant admitted the reduction of the Claimant’s salary from N700,000.00 to N250,000.00 and averred that the Claimant was aware of the pay cut but acquiesced to it.
Now, it is not in dispute that the Claimant’s salary was N700,000.00. per month also not in dispute is the fact that the Defendants deducted the sum of N450,000.00 monthly from July 2015 to January 2016 from the Claimant’s salary.
The Defendants attributed economic downturn as the reason for the pay cut and argued that the Claimant was aware of the pay cut and has acquiesced to it. The Claimant’s contention is that the Defendants cannot hide under the defence of acquiescence as it has nothing to do with this case.
Now, on the application of the doctrine of laches and acquiescence, the Court of Appeal in GIDADO v. LAWAL (2014) LPELR-22903(CA) Per Abiru JCA held at Pages 41-42, paras. E-B thus:
“The doctrine of laches and acquiescence is an equitable defence that operates to bar a person who has slept over his right for a long time from asserting his said right against an innocent party. It has its roots in the equitable maxims that delay defeats equity and that equity aids the vigilant and not the indolent. It discourages stale demands in the interest of peace and orderly society and is thus rooted in public policy - Ageh Vs Tortya (2003) 6 NWLR (Pt 816) 385, Olaleye Vs Trustees of ECWA (2011) 2 NWLR (Pt 1230) 1, Atuchukwu Vs Adindu (2012) 6 NWLR (Pt 1297) 534. A claimant who sleeps on his right, if any, for a number of years without claiming same or taking steps to protect such interest cannot in later years make claim to same - Daniel-Kalio Vs Daniel-
Now, it is the law that the equitable defence of laches and acquiescence must be specifically pleaded together with the particulars thereof and proved. See Issac v. Imasuen ( 2016) LPELR 26066 (SC), Adeniran v. Alao (2001) 12 SCNJ 337 and Oke & Ors. v. Akinsoyinu (2019) LPELR- 48853 (CA).
I do not think this equitable defence can avail the Defendants in this case for a number of reasons. Firstly, the time spent between the pay cut in the Claimant’s salary and the institution of this action does not constitute stale demand, secondly, the agreement between the parties (Exhibit C1) herein did not provide for pay cut in any event.
The duty of this Court is to give effect to what the parties agreed upon in Exhibit C1. In Arjay Ltd. v.A.M.S. Ltd. (2003) 7 NWLR (Pt.820)577 Per Tobi,J.S.C. held at (P.67, paras.A-E) thus:
. “ It is elementary law that where parties have entered into a contract or an agreement, they are bound by the provisions of the contract or agreement. This is because a party cannot ordinarily resile from a contract or agreement just because he later found that the conditions of the contract or agreement are not favourable to him. This is the whole essence of the doctrine of sanctity of contract or agreement. The court is bound to construe the terms of the contract or agreement and the terms only in the event of an action arising therefrom. See Northern Assurance Co. Ltd. v. Wuraola (1969) 1 NMLR 1; (1969) NSCC 22; Aouad v. Kessrawani ([956) NSCC 33; Oduye v. Nigeria Airways limited (1987) 2 NWLR (Pt. 55) 126; Niger Dams Authority v. Chief Lajide (1973) 5 SC 207; Bookshop House v. Stanley Consultants (1986) 3 NWLR
(Pt. 26) 87."
Thirdly, in the realm of labour law, deduction of employee’s wages is not generally allowed. Section 5 of the Labour Act CAP. L1 LFN 2004, which provides thus.
1. Except where it is expressly permitted by this Act or any other law, no employer shall make any deduction or make any agreement or contract with a worker for any deduction from the wages to be paid by the employer
Provided that, with the prior consent in writing of an authorised labour officer, a reasonable deduction may be made in respect of injury or loss caused to the employer by the willful misconduct or neglect of the worker.
2. An employer may with the consent of a worker make deductions from the wages of the worker and pay to the appropriate person any contributions to provident or pension funds or other schemes agreed to by the worker and approved by the State Authority.
3. Upon the registration and recognition of any of the trade unions specified in Part A of Schedule 3 to the Trade Unions Act, the employer shall
a. make deductions from the wages of all workers eligible to be members of the union for the purpose of paying contributions to the trade union so recognized; and
b. pay any sum so deducted to the union, but a worker may contract out of the system, in writing, and where he has done so, no deductions shall be made from his wages in respect of contributions mentioned in paragraph (a) of this section.
4. No deductions shall be made from the wages and salaries of persons who are eligible members of any of the trade unions specified in Part B of Schedule 3 to the Trade Unions Act except if the person concerned has accepted, in writing, to make voluntary contributions to the trade union.
5. Deductions may be made from the wages of a worker in respect of overpayment of wages, but only in respect of any such overpayment made during the three months immediately preceding the month in which the overpayment was discovered.
6. An employer shall, when making a payment to a trade union under paragraph (b) of subsection (3) of this section, include with such payment a list of the employees from whom deductions were made pursuant to paragraph (c) of the said subsection.
7. Notwithstanding any other provisions of this Act, the total amount of deductions that may be made from the wages of a worker in any one month shall not exceed one third of the wages of the worker for that month.
1. Deductions from wages shall be permitted only under conditions and to the extent prescribed by national laws or regulations or fixed by collective agreement or arbitration award.
2. Workers shall be informed, in the manner deemed most appropriate by the competent authority, of the conditions under which and the extent to which such deductions may be made
It follows therefore from the foregoing provisions that an employer can only deduct money from employee’s wages under certain limited circumstances as follows:
1. When the deduction is required or authorized by statute.
2. If the employee has agreed to it.
3. When made in connection with disciplinary proceedings or by order of Court or Tribunal.
4. In order to reimburse the business in respect of an overpayment or to pay a debt to a third party.
5. For taking part in a strike or other forms of industrial actions under Section 43 of the Trade dispute Act.
The application of this principle can be gleaned from the decision of this Court in Mr Tolulope Olusoga V Grosvenor Intergrated Shirts Limited (unreported) Suit No: NICN/LA/555/2015 judgement delivered on February 11, 2019 where my learned brother Peters J held thus:
“Deduction of worker's salary safe for the statutory deductions can hardly be justified under the law. Salaries of employees are of critical interest to them. More often than not, an employee accepts an offer of employment having considered the financial returns to him from the employment in terms of salary and allowances. Thus the Court frowns at any means of short-changing an employee of his salary or any part of it. In Adebusola Adedayo Omole V Mainstreet Bank Microfinance Bank Ltd Suit No: NICN/LA/341/2012 Judgment of which was delivered on 3/4/14, in both its pleadings and witness statement on oath, the argument was that the deduction from the employee's salary was
'Defendant's policy during the period of economic recession to make reduction in the salary of staff for the Defendant to still remain a going concern'. This Court had no hesitation in finding in favour of the employee whose salary was deducted.
It is important for it to be said here and now that at the global level a unilateral reduction in the wages and salaries of workers is not acceptable. We must bear in mind that no nation can be an island to herself and any nation that seeks to do so will be doing so at its own peril. Thus the need to ensure that the Nigerian labour jurisprudence is in tandem with what is obtainable at the international scene found reflection in the National Industrial Court Act, 2006. Thus the Act in section 7(6) provides as follows:
'The Court (that is National Industrial Court of Nigeria) shall, exercising its jurisdiction or any of the powers conferred upon it by this Act or any other law, have due regard to good or international best
practice in labour or industrial relations and what amounts to good or international best practice in labour or industrial relations shall be a question of fact'.
More importantly, by section 254C1(h) Constitution of the Federal Republic of Nigeria, 1999 (Third Alteration) Act 2010 the court is endowed with power to have and exercise jurisdiction to the exclusion of any other court in civil causes and matters 'relating to or connected with or pertaining to the application or interpretation of international labour standards'. One method of gauging or determining international labour standards is an examination of Conventions of the International Labour Organisation. Indeed the International Labour Organisation has for a long time frowned at any act of unilateral deduction of workers' wages. Thus, the Protection of Wages Convention, 1949 No. 95 specifically provides in Article 8 …”
See also Ftola Samuel Olumuyiwa v. Bemil Nigeria Limited Suit No.
NICN/LA/308/2015, judgment of which was delivered on March 6th, 2020.
In the instant case, I find that the deduction made by the Defendants on the Claimant’s salary, having been made outside the purview of the law, is unlawful. Reliefs one and two are accordingly granted, I so hold.
Regarding the Claimant’s claim for the sum of N1, 400,000 being his 60 days salary in lieu of notice of termination, the Claimant argued that the Defendants breached the terms of exhibit C1 and so the Claimant is entitled to damages, that the damages claimed by the Claimant is not strange to law as it is trite law that where a contract of employment stipulates expressly that it is terminated by the giving of a stipulated period of notice, the damages recoverable for wrongful termination will be the
amount of wages or salary the employee would have earned for the stipulated period. The reaction of the Defendants in this regard is that there is no provision for payment of salary in lieu of notice in Exhibit C1, that the contents of Exhibit C1 cannot be added to by oral evidence to include payment in lieu of notice (PILON Clause) and that the Claimant had failed to establish his entitlement to the Declaration sought.
Now, clause 2.1 of Exhibit C1 provides thus:
The employment of the employee under this agreement shall commence as of 14th August, 2013 to 13th August 2014.Thereafter, this agreement may be extended for successive terms of One (1) year unless (i) the COMPANY or the EMPLOYEE shall give written notice of termination to the other party prior to the termination of the initial term of employment hereunder or any renewal term thereof, or (ii) unless earlier terminated as herein provided.
Clause 4.4 provides for the mode for terminating the contract; it stated thus: Termination: The Company reserves the right to terminate the agreement at any time, for any reason permitted by law, with or without notice.
The Company may terminate this Agreement by giving 60 days Written Notice without Couse.
The Company/Employee may terminate this Agreement by giving 30 days Written Notice with Couse.
Now Exhibit C2 is the letter by which the Claimant’s appointment was terminated by the 1st Defendant; it is dated July 22nd, 2016, I reproduce it hereunder for ease of reference:
Termination of Employment with Construction Services International
As you should be aware the Company is Experiencing financial hardship at this time due to no Project in Hand. It has become apparent that this situation will continue for an undetermined period. I regretfully have no choice but to make necessary reductions in overhead.
Please accept this letter as official notification that your employment is being terminated. I understand the hardship this may place on you and sincerely regret having no other choice at this time.
Please do not hesitate to contact Rajesh Parwani should you need
Construction Services International, NIG Ltd.
Now, what I gather from the relevant parts of Exhibit C1 reproduced above is that the duration of the employment contract between the parties herein was one year which commenced from August 13th, 2013 and ended on August 14th, 2014, the contract may however be extended for successive terms of one year unless the either party gives notice of termination before the end of the initial term of the contract or the where the contact has not been extended after the expiration of the initial term. Clause 4.4.1 put 60 days as the duration of notice the Defendants should give where they decide to terminate the contract without cause while clause 4.4.2 stipules that where either party intends to terminate the agreement with cause, 30 days’ notice must be given. In both occasions PILON clause was not provided in Exhibit C1.
Now, it is not in dispute that the employment contract was extended to successive terms of one year each after the expiration of the initial term on August 14th,2014. This presupposes that the last term of the contract was supposed to have ended on August 16th, 2016 but the contract was terminated on July 22nd, 2016 as per Exhibit C2. Now, it is clear that Exhibit C2 was issued in violation of Clause 4.4.1 which provides for 60 days’ notice period. The termination of the Claimant’s employment is therefore wrongful in the circumstance of this case. The Claimant can therefore claim for damages against the Defendant for the said breach.
Under common law, the measure of damages for wrongful termination of employment is the amount equivalent to the period of notice that the affected person ought to be given as stipulated by the contract which in the instant case, is 60 days’ salary which is the amount the claimant would have earned had the employment continued according to the contract of employment. See SPDC LTD v. OLAREWAJU (2008) LPELR-3046(SC).. The amount being claimed is granted as
damages for breach of contract. The absence of the PILON clause in the employment contract does not take away the responsibility on the Defendants to pay damages for breach of contract. For all the foregoing reasons, I find that reliefs (a) and (b) succeed and are hereby granted
Issue three is whether the 1st Defendant was a party to the Claimant’s employment agreement and if not, whether the reliefs sought by the Claimant can be awarded against the 1st Defendant.
Learned Counsel relied on exhibit C1 and submitted that by the doctrine of privity of contract, a stranger to a contract would not be liable. To the learned Counsel, the 1st Defendant is a stranger to Exhibit C1. Learned Counsel to the Claimant argued that the Claimant was employed by both the 1st and 2nd Defendants placing reliance on Exhibits C1, C7, C8 and C9.
Now, the Claimant averred at paragraph 4 of the statement of facts that the 1st and 2nd Defendants are members of CSI Group and both share their resources and labour between themselves. The Defendants did not join issues with the Claimant on this averment. It is the law that facts admitted need no proof. See the case of Narinder
Trust Ltd. v. N.I.C.M.B. Ltd. (2001) FWLR 1546 at 1558, Nwankwo v. Nkwankwo (1995) 5 NWLR (pt 894) 158. Olufusoye & Ors. v. Olorunfemi (1989) 1 NWLR (pt. 95) 26 and Bunge v. Governor Rivers State (2006) 12 NWLR (Pt. 995) 573.
Now, I have painstakingly examined Exhibit C1; it is said to be an employment agreement between the Claimant herein and CSI-FZE, the second defendant in this case, at its execution clause, Exhibit C1 was signed by Construction Service Int. Nigeria Ltd. the first defendant in this case. Exhibit C2 is the letter by which the Claimant’s employment was terminated; it bears the heading of the 2nd Defendant, it was signed by one Mike Strawn as the MD of the 1st Defendant in this case. Exhibit C7 is an ID card issued to the Claimant in the course of his employment; it bears the 1st Defendant’s name and at its back, there is a certification to the effect that the bearer was a staff of the 2nd Defendant.
Now, in the realm of labour law, it is not uncommon to find and employee employed by more than one employer. What I can take from all these is that the first defendant herein, having executed Exhibit C1, having signed Exhibit C2 and having issued Exhibit C7 to the Claimant coupled with the implied admission of paragraph 4 of the statement of facts in the Defendants statement of defence, is for all intent and purposes a core employer of the Claimant herein and is therefore not a stranger to Exhibit C1. Issue three is accordingly resolved against the Defendants herein. I so hold.
Issue four is whether the Claimant has discharged the burden of proof of his claims in paragraphs (c), (d), (e) and (f) of his Statement of Facts. These are reliefs for orders directing the Defendants to deliver to the Claimant evidence of payment of Claimant’s pension, Claimants Tax Clearance reflecting the deduction and remittance made and the evidence of payment for National Housing Fund Contribution. Now, to prove his entitlement to these reliefs, it behooves on the Claimant to lead evidence to show that deductions were actually made from his wages for these reliefs. As it is, the Claimant did not place anything before this Court to prove whether such deductions were actually made and if made, how much was deducted, in fact the Claimant even admitted under cross examination that he did not have any evidence of deduction made for pension and National Housing Fund Contribution. The Claimant however relied on Exhibit C9 under cross examination as evidence of tax deductions made from his salary. Now, Exhibit C9 is an email correspondence between the Claimant and one Rajesh Parwani dated August 2,2016 where in response to the Claimant’s request , Mr parwani confirmed to the Claimant that the company paid its employees’ taxes and that he could furnish the Claimant with the receipt of those payments. This I think falls short of the requirement for the proof of relief (d). I therefore find that the Clamant has failed to prove his entitlement to the grant of reliefs (c), (d), and (e) and I so hold.
Reliefs f and g are for the cost of this action and the sum of N10, 000,000.00 as general damages respectively, I will determine the issue of cost at the end of this judgment.
Regarding the claim for general damages, learned Counsel for the Defendants argued that the damages claimed by the Claimant is not such as may fairly and reasonably be considered as either arising naturally from the alleged breach of contract and that it is also not one that was reasonably in the contemplation of the 2nd Defendant and the Claimant at the time they made Exhibit C1 as the probable result of its breach. The Claimant’s contention in this regard is that he is entitled to damages because the Defendants breached Exhibit C1, that it is the law that where employment contract expressly stipulates the period of notice for its termination, the damages recoverable for wrongful termination will be the amount of wages or salary the employee would have earned for the stipulated period.
Now, it appears to me that the Claimant herein is claiming for general damages in addition to the specific claims he made which are in the nature of special damages. On the category of damages recoverable by a successful plaintiff in an action for breach of contract, the Supreme Court, in Ativie v. Kabelmetal (Nig.) Ltd. (2008)
10 NWLR (Pt.1095) 399 Per Onnoghen J.S.C. (Pp.29-30, Paras.D-A), held thus:
''It is also settled that the term "General" and "Special" damages are normally in apt in the categorization of damages for the purpose of awards in breach of contract cases; that apart from damages naturally arising or resulting from the breach, no other form of general damages can be contemplated. In other words, in an action for breach of contract, the plaintiff, where he succeeds, is not entitled to any award under the general damages head of claim in addition to the damages (special) fairly or reasonably expected to arise naturally from the breach which damage must have been in the contemplation of both parties at the time of entering into the contract as the probable result of the breach of same. In terms of breach of contract of employment therefore, the damages recoverable by the plaintiff are the losses reasonably foreseeable by the parties thereto at the time of entering into the contract.''
The above principle reaffirms the general principle under the Nigerian law that a Court will not award general damages where breach is alleged and proved. The correct assessment remains an award that compensates the injured party and restores it to the position it would have been had the breach or injury not occurred. As such, the courts would not award general damages which would amount to double compensation.
Applying the above principle to the case at hand, I am of view that the Claimant’s relief (e) is in apt in the circumstances of this case. The Claimant, having successfully recovered his outstanding salaries and the payment in lieu of notice resulting from the breach of contract of employment which are damages reasonably expected to arise naturally from the breach of the employment contract, cannot turn around to claim general damages for the breach of the same contract. I find and I so hold.
In the final analysis, I find that the Claimant’s case succeeds in part; in terms of reliefs a, b, and f. As a consequence, I make the following orders which shall be complied within 30 days from the date of this judgment:
1. The Defendants shall pay to the Claimant the sum of N3,150,000.00 which represents the arrears of the shortfall in the claimants salary.
2. The Defendants shall pay to the Claimant the sum of N1,400,000.00 which represents which represents the Claimant’s salary for 60 days as damages for breach of contract.
Failing any of the above shall attract an interest at the rate of 15% per annum until the judgment sum is fully paid.
Judgment is entered accordingly.
HON. JUSTICE MUSTAPHA TIJJANI