Is an Employer Obligated to Provide Reasons for Terminating an Employee’s Contract of Employment?

CASE TITLE:  SKYE BANK PLC v. ADEGUN (2024) LPELR-62219(SC)

JUDGMENT DATE: 27TH FEBRUARY, 2024

PRACTICE AREA: LABOUR LAW

LEAD JUDGMENT: EMMANUEL AKOMAYE AGIM, J.S.C.

SUMMARY OF JUDGMENT: 

INTRODUCTION:

This appeal borders on Labour Law.

FACTS:

This is an appeal against the judgment of the Court of Appeal Ibadan Judicial Division .

The respondent who was employed on 3rd July, 1995 as an account clerk by Cooperative Bank Plc had progressed by promotions to the position of officer on the Bank’s salary Group 12 from 1st April, 2005. On the 29th November, 2005, inspectors came from the Head office of the said bank to the Oyo Branch of the Bank, respondents work station from 2003. After inspecting the bank books in that Branch, the inspectors discovered that between 2004 and 2005, when the respondent was acting Treasury Officer of Oyo Branch of the bank, some senior officers of the bank including the respondent defrauded the bank of sums of money amounting to 16.8 million naira. 

As a consequence of the fraudulent withdrawals, the Appellant queried the Respondent’s participation in the illegal withdrawals via a letter dated 6/12/2005, wherein it raised 10 questions for the Respondent to answer. The Respondent by his letter dated 6/12/2005 attempted an explanation in his own defence, but he failed to give direct responses to the 10 questions put forward by the Appellant. However, the Respondent Apologized for his conduct and promised to be more alive to his responsibilities.

The said Cooperative Bank Plc subsequently indicted the Respondent and by a letter dated 30/12/2005, it issued a caution against the Respondent. Following a Central Bank order, the said Cooperative Bank Plc merged with other financial institutions to form Skye Bank (the Appellant). The Appellant constituted an Integration Team which reviewed the claimant’s case and similar other cases. Thereafter, the Appellant issued a letter dated 29th March, 2006 summarily dismissing him from service.

Dissatisfied with his summary dismissal by Skye Bank PLC, the respondent filed Suit No. 1/556/06 in the High Court of Oyo State at Ibadan claiming for –

1. “Declaration that the letter of summary dismissal dated 29th March, 2006 issued and served on the plaintiff by the defendant is illegal, unconstitutional, null, void and of no effect.

2. An order of this Honorable Court setting aside the said letter.

3. Declaration that until his employment is validly and properly determined, the plaintiff is still in the employment of the defendant.

4. Payment of N6,600,000.00 being plaintiff’s basic salary and allowance from April 2008.

5. Payment of N550,000.00 per month from March 2006 until judgment is delivered in this case and

6. Payment of N550,000 per month from the date of Judgment until the appointment of the plaintiff is properly determined by the defendant.

7. Payment of N600,000.00 being the unpaid leave bonuses of the plaintiff for 4 years that this is for years 2004, 2005, 2006 and 2007 at the rate of N150, 000.00 per annum.

8. Payment of N521,000.00 being the gratuity payable to the plaintiff from the defendant upon transfer of the plaintiff’s service from the defunct Co-operative Bank to the service of the defendant.”

The appellant herein counter-claimed for the sum of N209,572.62 being sums advanced to the respondent as its employee.

Following the conclusion of pleadings, evidence, and address the trial Court rendered its judgment on 20-3-2012 holding that the respondent’s dismissal is wrongful but albeit effective, that he is entitled to damages in terms of salary for one month in keeping with the agreement of the parties that the contract can be terminated by either party following one month notice and that the counterclaim is dismissed not having been proved.

Dissatisfied with the judgment of the trial Court, the respondent herein on 3-9-2012 filed a notice of appeal against it to the Court of Appeal, commencing Appeal No. CA/IB/277/2012 in that Court. 

The Court of Appeal affirmed the finding of the trial Court that the summary dismissal was unfair and wrongful for failure to afford the respondent a hearing before he was further punished by summary dismissal. 

The Appellant being dissatisfied with the judgment of the Court of Appeal appealed to the Supreme Court.

ISSUE(S) FOR DETERMINATION:

The appeal was determined on the following issues:

1. “Whether there was any (material) basis whatsoever for the lower Court to have upturned and set aside the assessment of damages made by the trial Court which assessment was based on proper evaluation of evidence led before the trial Court. 

2. Whether having raised the issue of estoppel suomotu which issue did not arise from the pleadings, the lower Court was not obliged to hear the Appellant and failing which the judgment predicated on it ought not to beset aside in its entirety. 

3. Whether having agreed with the finding of the trial Court as to the effect of the letter of dismissal, the lower Court appropriately applied the case of ILODIBA VS NCC in awarding the claims of the Respondent which were neither in accord with the findings of the trial Court nor supported by evidence led at the trial.”

DECISION/HELD:

On the whole, the appeal was dismissed.

RATIOS:

• APPEAL- UNAPPEALED FINDING(S)/DECISION(S): Effect of unappealed finding(s)/decision(s) of court
• CONTRACT- AGREEMENT: Whether parties are bound by the terms of their agreement
• CRIMINAL LAW AND PROCEDURE- DOCTRINE OF CONDONATION: Meaning and application of the doctrine of condonation
• DAMAGES- MEASURE OF DAMAGES: Measure of damages in a claim for wrongful dismissal
• EVIDENCE- BURDEN OF PROOF/ONUS OF PROOF: On whom lies the burden of proving wrongful dismissal from employment
• EVIDENCE- ISSUE ESTOPPEL: Doctrine of issue estoppel
• LABOUR LAW- DISMISSAL OF AN EMPLOYEE: Requirement of fair hearing in the dismissal of an employee
• LABOUR LAW- WRONGFUL DISMISSAL OF AN EMPLOYEE: Principles guiding wrongful dismissal of an employee
• LABOUR LAW- TERMINATION OF EMPLOYMENT: Whether an employer is bound to give reasons for terminating the contract of employment of his employee
• LABOUR LAW- WRONGFUL TERMINATION OF EMPLOYMENT: Whether a Court can order reinstatement of a person whose employment was wrongfully terminated; appropriate remedy thereof
• LABOUR LAW- CONTRACT OF SERVICE/CONTRACT OF EMPLOYMENT: Law that governs contracts of employment
• LABOUR LAW- SALARY IN LIEU OF NOTICE: Mode of payment of salary in lieu of notice in a contract of employment
• LABOUR LAW- WRONGFUL TERMINATION OF EMPLOYMENT: Measure of damages recoverable for wrongful termination of employment

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