Must an Employer Give Reason(s) for Terminating an Employee’s Employment?

CASE TITLE: LIGHTENING NETWORKS LTD v. NYADA & ORS (2023) LPELR-61010(CA)
JUDGMENT DATE: 27TH JUNE, 2023
PRACTICE AREA: LABOUR LAW
LEAD JUDGMENT: ONYEKACHI AJA OTISI, J.C.A

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on Labour Law.

FACTS:

This appeal was lodged against the decision of the National Industrial Court, Lagos Judicial Division, Coram J.D. Peters, J., delivered on November 24, 2021, in favor of the 1st Respondent, who was the claimant before the trial Court.

The 1st Respondent’s case as a claimant before the trial Court was that he was employed as a contract lawyer by the Appellant on behalf of the 2nd Respondent on 3/8/2013. He was interviewed in July 2013 by the 2nd Respondent in its Abuja office prior to the issuance of a letter of employment to him by the Appellant. The employment of the 1st Respondent was to last through the duration of the E.M.T.S. project being handled by the 2nd Respondent at the time. The 1st Respondent claimed that he performed his responsibilities to the best of his ability and was even made to perform duties beyond his employment terms. But on November 22, 2013, the 1st Respondent received a letter via email stating that he had been disengaged by the 2nd Respondent due to poor performance. When his attempts to be reimbursed for outstation allowances were unsuccessful, the 1st Respondent instituted a suit before the Abuja Judicial Division of the trial Court in which the Appellant and the 2nd and 3rd Respondents were the 1st, 2nd, and 3rd defendants, respectively.

The Appellant, as well as the 2nd and 3rd Respondents denied the claims of the 1st Respondent in their respective pleadings. At the conclusion of trial, the trial Court delivered judgment in favour of the 1st Respondent, granting reliefs including general damages of N7 million to be paid equally by the Appellant and the 2nd Respondent.

Aggrieved by this decision, the Appellant lodged this appeal.

ISSUE(S) FOR DETERMINATION:

The appeal was determined on the following issues:

“1. Whether the Lower Court, putting into consideration the evidence before the Court, was right when it held that the termination of the Claimant’s (i.e., 1st Respondent) employment with the 1st Defendant (i.e., Appellant) was wrongful and without justifiable reason?

2. Whether the Lower Court judiciously and rightly evaluated the documents placed before it before arriving at its judgment that the 2nd and 3rd Defendants (i.e., the 1st and 2nd Respondents) are liable to the Claimant (i.e., the 1st Respondent) and thereby jettison the sanctity of the doctrine of privy of contract?
3. Whether from the facts pleaded and evidence adduced the Claimant (i.e. 1st Respondent) is entitled to the award of damages in the sum of N7, 000, 000.00 (Seven Million Naira) against the 1st and 2nd Defendants (i.e., Appellant and the 2nd Respondent)?
4. Whether the statement of the learned trial judge that “the 1st Respondent was faced with having to perform the duties of an engineer when he was not so trained leaves a sour taste in the mouth It is no doubt a reflection of the nose-diving nature and state of the Nigerian economy. ” did not amount to the Judge conducting the 1st Respondent’s case?”

DECISION/HELD:

The appeal was allowed and the judgment of the trial Court was set aside.

RATIOS:

• LABOUR LAW – TERMINATION OF EMPLOYMENT – Whether an employer is bound to give reasons for terminating the employment of his employee; duty on an employer where he gives reasons
• LABOUR LAW – TERMINATION OF EMPLOYMENT – Whether the motive for exercising the right to fire employee renders a valid exercise of same ineffective
• LABOUR LAW – WRONGFUL TERMINATION OF EMPLOYMENT – Onus on the claimant in an action for wrongful termination of employment
• LABOUR LAW – CONTRACT OF SERVICE/CONTRACT OF EMPLOYMENT – Nature and importance of a contract of employment
• LABOUR LAW – CONTRACT OF SERVICE/CONTRACT OF EMPLOYMENT – Whether parties and Courts are bound by the terms of a contract of employment
• ACTION – PLEADINGS – Effect where an averment in a statement of defence is not denied in a reply
• DAMAGES – GENERAL DAMAGES – Position of the law as regards general damages
• DAMAGES – GENERAL DAMAGES – Whether the award of general damages is at the discretion of the court; how such discretion is exercised
• LABOUR LAW – CONTRACT OF SERVICE/CONTRACT OF EMPLOYMENT – Nature and importance of a contract of employment
• CONTRACT – PRIVITY OF CONTRACT – Doctrine of privity of contract
• COURT – DUTY OF JUDGE – Duty of a Judge to be impartial
• APPEAL – ISSUE(S) FOR DETERMINATION – Whether issues for the determination of an appeal must arise from the grounds of appeal

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