Is an Employer Bound to Give Reasons for Dismissing an Employee?

CASE TITLE: DAMISA v. UBA (2025) LPELR-80096(SC)

JUDGMENT DATE: 17TH JANUARY, 2025

JUSTICES: UWANI MUSA ABBA AJI
ADAMU JAURO
CHIOMA EGONDU NWOSU-IHEME
OBANDE FESTUS OGBUINYA
HABEEB ADEWALE OLUMUYIWA ABIRUR

DIVISION: ABUJA

PRACTICE AREA: LABOUR LAW

FACTS:

This appeal borders on Labour Law.

This appeal emanated from the judgment of the Court of Appeal, Kaduna Division (coram Mohammed, Ba’Aba, Alagoa JJCA) delivered on the 10th day of May, 2005, affirming the judgment of the trial High Court of Kaduna State dismissing all the claims of the Plaintiff, now Appellant and granting the counterclaim of the Defendant, now Respondent.

The Appellant was the Senior Manager (Commercials) at the Kaduna branch of the Respondent. While in that position, the Appellant was found guilty of gross negligence in the handling of the account of Nasara Properties, where the value of third-party cheques of Tanko Kokwain and Anthony Sule of N3.5 million and N2.5 million, respectively, were converted, allegedly by one Aliyu Odoh, the alter ego of the said Nasara Properties. The Appellant negligently authorized the opening of the account without a search being conducted. When the irregularity was discovered, the Appellant was queried. In his answer (Exhibit 10), the Appellant admitted his negligence as a result of which he was dismissed. The Appellant took out a writ claiming as follows:

a) A DECLARATION that the purported suspension and dismissal of the plaintiff by the Defendant vide its letters dated 21st January, 1996, and 17th June, 1997, respectively, are ultra vires, null and void, and unconstitutional in that they deprived the plaintiff of his right to a fair hearing as required by law and the Senior Staff Conditions of Service of the Defendant.

b) A DECLARATION that under the Defendant’s Senior Staff Condition of Service applicable to the plaintiff, the plaintiff is entitled to retire from the Defendant’s employment on attaining 55 years.

c) AN ORDER setting aside the Defendant’s letters dated 21st January, 1996 and 17th June, 1997, suspending and dismissing the plaintiff from the Defendant’s employment.

d) AN ORDER directing the Defendant to forthwith reinstate the plaintiff to his employment and paying to the plaintiff all accrued salaries, allowances, and promotions due to the plaintiff as of October 21, 1996.

e) ALTERNATIVELY, special and aggravated damages against the Defendant for unlawful dismissal constituted as follows:

i. SPECIAL DAMAGES

The Plaintiff claims Six Hundred and Fifty-Seven Thousand, Two Hundred and Fifty Naira (N657, 250:00) being Annual Income inclusive of all allowances from date of purported suspension (21st October, 1996) to judgment on a yearly basis.”

ii. AGGRAVATED DAMAGES

The sum of Six Million Naira (N6, 000, 000:00) only as aggravated damages for unlawful dismissal.

f) Cost of the action.

At the conclusion of trial, the trial Judge dismissed all the claims of the Appellant, and granted the counterclaim of the Respondent. The Appellant appealed to the Court of Appeal, which in its judgment of 10 May 2005 dismissed the appeal.

Dissatisfied, the Appellant approached the Supreme Court.

ISSUES FOR DETERMINATION:

In determination of the appeal, the Court adopted the issues raised by the Respondent as follows:

“1. Whether the Court of Appeal was right when it affirmed the dismissal of Appellant’s reliefs 1-3 by the trial Court?

2. Whether the Court of Appeal was right when it affirmed the trial Court’s decision that, based on the evidence and pleadings on record, the Appellant was not entitled to any form of damages in this case

3. Whether the Court of Appeal was right when it affirmed the trial Court’s decision awarding the sum of One Million, Five Hundred and Eighty-Eight Thousand, Three Hundred and Thirty-Six Naira, Sixty-Five Kobo (N1, 588, 336.65) to the Respondent in respect of its counterclaim.”

COUNSEL SUBMISSIONS:

Learned Counsel for the Appellant argued that the distinction drawn between ‘unlawful dismissal’ upon which the declarations were hinged and ‘wrongful dismissal’ which the trial Judge found should have been the basis of the declarations was so insignificant as not to cause the collapse of the appellant’s case. According to him, what was important is that he has clearly shown that he had a right that had been breached and thus was entitled to a remedy. He relied on Mrs. Risi Shuaibu v. Union Bank of Nigeria Plc [1995] 4 NWLR Pt. 381 Pg. 163 at 184.

Counsel submitted that the Appellant nowhere in Exhibit 10 admitted gross negligence but rather repudiates negligence. Submitted, that an admission must be clear and unequivocal. He relied on Narindex Trust Ltd v. NICMB Ltd [2001] 10 NWLR Pt. 721 Pg. 321 at 333. Counsel further submitted that an appellate Court can only hear and decide issues raised on the grounds of an appeal filed before it. As such, the lower Court had no basis to consider the issue of gross negligence raised by the Respondent. He cited Katto v. CBN (1999) 5 S.C.N.J. 1 at 19/20.

It was also the submission of the Appellant that for an employer to exercise the power of dismissal or termination in a contract of employment that is not regulated by statute, the dismissal must be in accordance with the agreement of the parties. And where the dismissal is not in accordance with the agreement of parties, although a declaration that the contract of service still exists will rarely be made, the authority did not say that such a declaration will never be made. See UBN Ltd v. Ogboh [1995] 2 NWLR Pt 380 Pg. 647 at 661/671.

Learned counsel for the Respondent submitted that the Court of Appeal considered relief 1 and stated that the term ‘ultra vires’ means without power or authority, and that the invitation to declare the termination as an ultra vires act is not tenable in law because “the Appellant was without doubt employed by the Respondent who as a hirer also had a right to fire him.”.

The Respondent posited that the Appellant created the misleading impression that the trial Court dismissed the reliefs 1-3 merely because the remedy sought was for “unlawful dismissal” as opposed to “wrongful dismissal.”. That was not correct. The Appellant’s reliefs 1-3 were dismissed because the trial Court found the same as untenable in law and offensive to judicial policy laid down by the Supreme Court to the effect that termination of a simple contract of employment contrary to the form agreed by parties can only be declared “wrongful” termination or dismissal but not to declare such dismissal as null and void. The Appellant’s contract is one without statutory flavor and declaring the dismissal as ultra vires or null and void suggests that it is invalid, and the Appellant would be deemed to still be in the service of the Respondent.

The failure of the Appellant to seek the right relief was very consequential and fatal to his case. Counsel cited the cases of Union Beverages Ltd. v. Owolabi (1988) 1 NWLR (Pt. 6) 128, Ajayi v. TEXACO (1987) 3 NWLR (Pt. 62) 577, and P.T.I. v. Nesimone (1995) 6 NWLR (Pt. 402) 474 at 488 to submit that it is settled law that in all other cases governed by the agreement of parties and not by statute, the remedy of the person wrongfully dismissed is a claim for damages and no more.

DECISION/HELD:

In conclusion, the Court dismissed the appeal.

RATIO:

LABOUR LAW –    DISMISSAL OF AN EMPLOYEE: Whether an employer is bound to give reasons for dismissing an employee

“Indeed, a master is entitled to dismiss his servant from his employment for good or bad reasons or for no reason at all. See Olafimihan v. Nova Lay Tech Nigeria Ltd. (1998) 4 NWLR (Pt. 547) 608 at 621. The trial Court considered this issue and came to the following conclusion: “In the circumstances, what determines the wrongfulness, or otherwise, the plaintiff’s dismissal, is the contract of service and not any notion of a fair hearing. See Osakwe v. Nigerian Papermill (1998) 7 SCNJ 222 at 231. It is therefore not the law, as claimed by the plaintiff, that his suspension and dismissal should be declared null and void and unconstitutional because he was deprived of the right to a fair hearing. The said suspension and dismissal can only be declared wrongful by the above authorities since the contract is one without statutory flavor. It cannot be declared null or void on the basis of purported Senior Staff Conditions of Service of the Defendant. If it did not comply with the Senior Staff Conditions of Service of the Defendant that would only constitute wrongful suspension and dismissal.” Per NWOSU-IHEME, J.S.C.

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