Whether A Collective Agreement Is Justiciable And Enforceable

CASE TITLE: NUHPSW v. OUTSOURCING SERVICES LTD (2023) LPELR
60683(CA) JUDGMENT DATE: JULY 17, 2023 JUSTICES : OBANDE FESTUS OGBUINYA, JCA
FREDERICK OZIAKPONO OHO, JCA
MUHAMMAD IBRAHIM SIRAJO, JCA DIVISION: LAGOS PRACTICE AREA: LABOUR LAW

FACT: This is an appeal against the decision of the Lagos Division of the National Industrial Court, Coram: Obaseki-Osaghae, J.

The Appellant, a registered trade union, initiated the action on behalf of some of its members who were employed by the Respondent. At the time, the Respondent had an outsourcing contract with Chevron Nigeria Limited at various locations in the country, and these members were engaged to work under that contract. They were duly employed and issued letters of employment to confirm their status. This situation persisted until June 2008, when a “Collective Agreement” was jointly executed by representatives of both parties. The Appellant’s grievance stemmed from the Respondent’s alleged refusal to implement the terms agreed upon in this agreement.

The Respondent countered this claim by arguing that the agreement had expired, a stance that the trial Court adopted. The trial judge sided with the Appellant’s position, concluding that the collective agreement had ceased to be in effect. Consequently, the Court found that there was no valid collective agreement between the parties to interpret, leading to the dismissal of the suit. Displeased by the judgment of the Court, the Appellant appealed.

ISSUES: The appeal was determined on:
“Whether or not the Collective Agreement entered into between the Appellant and the Respondent in June 2008 is justiciable and enforceable ab initio, and whether it is still operative.”

COUNSEL SUBMISSIONS:

The Appellant had argued that the trial court made an error by not adhering to the fundamental rule of interpreting instruments when reaching its decision. They contended that the various clauses of the collective agreement between the parties should have been harmoniously interpreted to align with the intention of the drafters. They cited legal authorities and pointed out that the trial court failed to consider Article 6.2 of the Collective Agreement, creating a conflict in the parties’ relations.

Furthermore, the Appellant stated that not all its members had received their cheques, and some members had not consented to the waiver proposed by the Respondent. They emphasized that the Collective Agreement remained the contract of employment for their members, and the trial court misunderstood its nature.

The Appellant argued that the members suffered a miscarriage of justice due to the trial court’s failure to consider Article 6.2 of the Collective Agreement. They cited legal precedents to support their argument and urged the court to set aside the trial court’s judgment.

In response, the respondent contested the justiciability and enforceability of the Collective Agreement. They relied on relevant legal provisions and a Supreme Court decision to argue that the Agreement was not justiciable or enforceable. The Respondent also pointed out that the Appellant failed to appreciate the distinction between a contract of employment and a collective agreement.

The Appellant, in their reply, distinguished the Supreme Court decision relied upon by the Respondent and asserted that the collective agreement remained the contract of employment. They argued that they had complied with the Trade Dispute Act and urged the Court to recognize the agreement’s validity.

DECISION/HELD: The appeal was allowed.

RATIO:

LABOUR LAW – COLLECTIVE AGREEMENT: Whether collective agreement is enforceable and justiciable

“It is instructive to note that the contention of the appellant was that its individual member’s contract of employment has been replaced by the collective agreement in the instant case. Having taken considerable time to look into the terms contained in the collective agreement executed by the parties from the standpoint of the provision of Section 254C (j)(i) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), (the 3rd Alteration Act), relied on by the learned trial Judge, I am of the respectful opinion that the collective agreement is both enforceable as well as justiciable.

I find the said constitutional provision apt and am hereby paraphrased hereunder:

“The National Industrial Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters relating to the determination of any question as to the interpretation and application of any collective agreement.

In the said provision, the jurisdictional frontiers of the lower court, the National Industrial Court of Nigeria, were expanded to, inter alia, hear and determine questions bordering on “Collective Agreement” as in the instant case. It is important to note that this power granted the lower Court is “to the exclusion of any other Court”. The learned trial Judge recognized and took the liberty of it when it held thus:

“The defendant has argued that a collective agreement is not justiciable. Section 254C(j)(i) of the 1999 Constitution, as amended, has conferred this Court with exclusive jurisdiction “relating to the determination of any question as to the interpretation or application of any collective agreement”. The power of interpretation and application of Collective Agreements approximates the power to declare as to the nature of rights, privileges, and obligations existing under the collective agreement. By virtue of constitutional powers of interpretation and application, a collective agreement is justiciable and enforceable.” In the argument canvassed on behalf of the Respondent, in this regard, counsel must have been oblivious to this sweeping constitutional power with which the National Industrial Court of Nigeria is clothed, to the exclusion of any other Court, to hear and determine the nature of the instant question.

The constitutional dispensation moved the jurisdiction of the lower court past the realm of mere interpretation to include enforcement, id est, the determination of the question as to the “interpretation of any collective agreement”. See Section 7 Subsection (1) (C)(i) of the National Industrial Court Act, 2006.

It needs to be unequivocally stated that the above statutory provision and the majority of the decisions on which the Respondent placed its reliance were pre-alteration positions of the Law when the provision of Section 7 of the NICN Act, 2006, held sway. The advent of the Alteration Act of the 1999 Constitution could be validly likened to a game changer when the hitherto unenforceable agreement becomes justiciable. But prior to the Alteration Act, the doctrine of privity robbed collective agreements of their enforceability, except and until such time as the terms of the agreement are incorporated into individual members’ contracts of employment. See Osoh & Ors v.Unity Bank Plc (supra), also reported as (2013) LPELR-19968 (SC).

This power of the lower court to interpret and apply terms in a collective agreement is further reinforced in Section 254C(1)(b) of the Third Alteration Act of the 1999 Constitution, as amended, over civil matters or causes that relate to or arise from the Factories Act, Trade Disputes Act, Trade Unions Act, Labour Act, Employees’ Compensation Act, or any other Act or Law relating to labor, employment, industrial relations, the workplace, or any other enactment replacing the Acts or Laws. See Osoh & amp; Ors vs. Unity Bank Plc, and Rector, Kwara Poly vs. Adefila (supra).

The provision of Section 3 (3) of the Trade Dispute Act, in my opinion, is an administrative approach set in place to compel adherence to terms of an agreement freely entered into by parties, especially in the Pre-Third Alteration Act era, as it relates to labour matters. The Court takes judicial notice of countless labour-related animosities which may hamper industrial relations if left to fester, hence the enactment.

Let me say at this juncture that part of the novel idea introduced in the third alteration is in the area of international best practices, which Section 254 (1) (f) of the Third Alteration Act makes provision for. The section provides:

“(f) relating to or connected with unfair labour practices or international best practices in labour, employment and industrial relation matters;

(h) relating to, connected with or pertaining to the application or interpretation of international labour standards.”

It becomes imperative to state the foregoing as the contemplation of the drafters appears more in their preference for the lower Court, the National Industrial Court of Nigeria, to take a proactive stance in ensuring that the nation will not be left out in the reckoning of the comity of nations in the area of robustly flourishing labour practices and industrial relations. This Court, while expatiating the Law in this regard in the case of Sahara Energy Resources Ltd vs. Olawunmi Oyebola (2020) LPELR-51806(CA), per Ogakwu, JCA., held that:

“The above provisions enjoin the National Industrial Court in the exercise of its jurisdiction, to “have due regard to good or international best practices in labour or industrial relations”. The importance of this novel provision, in my deferential view, is that the National Industrial Court in considering the measure or quantum of damages is to do so in accordance with “good or international best practices in labour or industrial relations”, which shall be a question of fact. It will be stating the obvious to say that prior to the Third Alteration, when employment and labour matters were handled by the High Courts, there was no obligation to apply and follow good or international best practices. It is an innovative provision which seems to be directed at enthroning an entirely new employment and labour jurisdiction…”

The Court, in the cited case, was determining a different head of legal question, the measure of damages awardable in the event of a breach. The Court hereby reiterates that the clarion call is to the stakeholders in labour and industrial relations, to strive in order to conform with the international best practices as obtainable in the field.

My Lords, in the course of preparing the instant judgment, I came across and digested, albeit, with a persuasive mindset, the judgment of Oji, J., of the Lagos Division of the lower Court which bore some similar question of law, I find it relevant and am inclined to curl out some portion of the said judgment herein. In that case, the learned Judge was determining the legal question of enforceability and justiciability of a collective agreement having regard for international best practices, where he stated that:

“Once a valid collective agreement is shown to have been entered into between legal parties; that agreement becomes applicable, in favour of those expressed to be covered by the said instrument. In the interpretation and application of collective agreements, this Court is enjoined to go beyond itself, and apply international law and practices. The power, having been granted prior to Section 254C(1)(j) by Section 254(1) (f & h). The two sub-paragraphs provide as follows:

(f) relating to or connected with unfair labour practices or international best practices in labour, employment and industrial relation matters;

(h) relating to, connected with or pertaining to the application or interpretation of international labour standards.

Without finding the need to consider the implications on ‘unfair labour practice’, as this was not addressed by parties; what then is the international best practices and the international labour standards, in the application of collective agreements? Nigeria has entered into several international commitments which pre-determine for her, the way collective agreements are to be regarded. For instance, the Convention on the Freedom of Association and Protection of the Right to Organise Convention No 87 of 1948, ratified by Nigeria in October 17, 1960, Collective Agreements Recommendation No. 91 of 1951, Collective Bargaining Convention No. 154 of 1981, Right to Organise and Collective Bargaining Convention No. 98 of 1949 ratified by Nigeria on 17th October, 1960. The Collective Agreements Recommendation provides that collective agreements should bind the signatories thereto, and those on whose behalf the agreement is concluded. This recommendation, though not a convention is evidence of international best practice. This Court is able to apply international conventions and treaties, even where not nationalized by virtue of Section 254C (2) which provides that:

Notwithstanding anything to the contrary in this Constitution, the National Industrial Court shall have the jurisdiction and power to deal with any matter connected with or pertaining to the application of any international convention, treaty or protocol of which Nigeria has ratified relating to labour, employment, workplace, industrial relations or matters connected therewith.”

The learned judge, cited and quoted extensively the decision of this Court in Sahara Energy Resources Ltd vs. Oyebola (supra).

As stated earlier, I am sufficiently persuaded by the argument canvassed in favour of the applicability of the Collective Agreement dated June 2008, and duly executed by the parties in the appeal, I find the argument of the Respondent weak and unsustainable, I hereby discountenance it. I resolve the first leg of the reformulated issue in this appeal in favour of the Appellant and I find that the collective agreement of the parties is enforceable and justiciable as well, I so hold. “Per SIRAJO, J.C.A.