The Power of the National Industrial Court - A Review of ALOYSIUS v DIAMOND BANK
The last has not been heard of the monstrosity created by the Third Alteration to the 1999 Constitution- the National Industrial Court (NIC). The decision of the Court in ALOYSIUS v DIAMOND BANK PLC (2015) 58 N.L.L.R (Pt.199) 92 calls for a rekindling of the argument on the propriety or otherwise of vesting ambiguous jurisdictions on the NIC and the creation of a court of unquestionable jurisdiction by the constitution. A fundamental principle of our labour law is (except in cases where an employment has statutory flavour) an employer or the employee can terminate the employment with or without reasons subject to appropriate notices or payment in lieu. Dismissal on the other hand must be justified because it results in the loss of terminal benefits and public opprobrium. This common law position has been restated by the Supreme Court in many cases and is given some statutory expression in sections 7 (1) (e) and 11 of the Labour Act which provide that the only requirement for termination is serving the appropriate notice on the employee and that employment contracts must state the notice period. It is also settled law that the terms of employment form the basis of the consideration of the rights of the parties including issues such as termination and dismissal.
The Aloysius’ case has however introduced a new dynamic to our labour law. In that case, the NIC per F.I. Kola-Olalere held that the practice of terminating employment without stating reasons is contrary to ‘International Best Practices and Labour Standards’. The court consequently invoked section 254C (1) (f) and (h) of the 1999 Constitution as amended which confers jurisdiction on the NIC in matters relating to or connected with unfair labour practice or international best practices in labour, employment and industrial relation matters and relating to, connected with or pertaining to the application or interpretation of international labour standards.
For a better understanding of the issues, it is necessary to set out the decision of the court. At page 134 and 135 paras. A-B the court held:
“…the Termination of Employment Convention, 1982 (No. 158) and the Recommendation No. 166 regulates termination of employment at the initiative of the employer. Article 4 of this Convention requires that the employment of an employee shall not be terminated unless there is a valid reason for such termination connected with his capacity or conduct or based on the operational requirements of the undertaking, establishment or service. The Committee of Experts has frequently recalled in its comments that; the need to base termination of employment on a valid reason is the cornerstone of the Convention’s provisions. This is the global position on employment relationship now. It is the current International Labour Standard and International Best Practice. Although this convention is not ratified by Nigeria; but since March 4, 2011 when the Constitution of the Federal Republic of Nigeria, 1999 (Third Alteration) Act, 2010 came into effect, this Court has the power under the Constitution to apply International Best Practice and International Labour Standard to matters like this by virtue of section 254C (1) (f) and (h) of the constitution as amended ...I find that it is now contrary to international labour standard and international best practice and, therefore, unfair for an employer to terminate the employment of its employee without any reason or justifiable reason that is connected with the performance of the employee’s work….I hold that it is no longer conventional in this twenty first century labour law practice and industrial relations for an employer to terminate the employment of its employee without any reason even in private employment”
It is conceded that our labour laws are archaic and that there is urgent need for review. Could the framers of the constitution have intended to vest this responsibility on the NIC without restrictions? To what extent can the provisions of section 254C (1) (f) and (h) be relied on by the court to achieve this end? Does this provision give a blanket cheque to the NIC to fish out any ‘International Best Practice and International Labour Standards’? The decision of the court seems to erroneously suggest the affirmative.
The decision of the court represents an audacious attempt at providing remedy to the inadequacy of our labour law particularly as it relates to unfair dismissal. However, it is faulty on many grounds. In the first place, throughout the trial and arguments of the parties in the case, the concepts of International Best Practice or Labour Standards were not in issue. The court introduced the terms in its judgment. The court’s invocation of the concepts violated a fundamental bulwark of our law which is to the effect that a court must afford the parties fair hearing when it raises an issue suo motu. The implication of this is that without hearing arguments on the concepts vis a vis their application to the case before it, the court attempted to change the frontiers of our labour laws as we know it. This is a great disservice to our legal jurisprudence.
Secondly, it is submitted that for the court to have jurisdiction to consider International Best Practice and Labour Standards under the constitution, the claim before it must have been made on those grounds. The matter must be related to or connected to or pertaining to the said international best practice or labour standards. It must be appreciated that the provisions of section 254c (1) which confers jurisdiction on the court cannot be exercised when the parties or the matter before it has not activated it. This is important because it will afford the parties the opportunity to address the court on the applicability of best practices or labour standards relied on. The claimant in this case did not predicate any of his claims on international best practice and labour standards. The court obviously misread the import of section 254C (1) (f) and (h) in introducing the concepts and making a finding on it. International Best Practice or International Labour Standards within the section and our law generally are matters of fact which must be proved and not law.
The above posture of the NIC in this case poses dangers to the sovereignty of Nigeria and the powers of the National Assembly to make laws. It is unthinkable that the framers of the constitution intended to vest the NIC with jurisdiction to make laws on labour by invoking international best practice or labour standards which may be contrary to our law or the contract between the parties. A vague reference to international best practice or international labour standards cannot elevate a court to the pedestal of a law-making institution.
More importantly, the decision of the court is not founded on the Constitution when read as a whole. This is because the court in purporting to apply the concepts of international best practice and labour standards relied on a Convention which it found was not ratified. Under section 254 (2) of the Constitution as amended, the NIC can only apply the provisions of conventions which have been ratified and enacted into law by the National Assembly in line with section 12 of the constitution. Section 254C (1) (f) and (h) cannot by any stretch of imagination confer jurisdiction on the NIC to ratify and domesticate international Conventions that Nigeria as a sovereign nation has chosen not to ratify. No Industrial court has that power in the world. A contrary interpretation will result in the absurd conclusion that the NIC has unfettered powers to apply conventions which have not been ratified and enacted into law or which are contrary to the interest of Nigeria. The interest of Nigeria can only be determined by the National Assembly during the processes of domestication.
Another problem with the decision is that it has the effect of introducing uncertainty to the law. The court can choose any convention or international best practice which the parties did not avert their minds to at the time of entering into employment contract. Employers and employees must be able to predict the law governing their relationship. Indeed foreign investors may be scared away if they are unsure of what the court will do in the event of employment disputes. This is a serious issue in the administration of justice in cases of employment particularly in the light of the question whether or not the decision of the NIC (outside fundamental human rights and criminal cases) is subject to appeal. See the conflicting decisions of the Court of Appeal on the issue in the cases of SHERATON HOTELS AND TOWERS v HOTEL AND PERSONAL SERVICES SENIOR STAFF ASSOCIATION (2014) LPELR0-23340 (CA) and ZENITH BANK PLC. v DURUGBOR (2015) LPELR – 24898 (CA); LOCAL GOVERNMENT SERVICE COMMISSION & ANOR v BAMISAYE (2013) LPELR-20407(CA); LOCAL GOVERNMENT SERVICE COMMISSION, EKITI v OLAMIJU (2013) LPELR – 20409 (CA);; LOCAL GOVERNMENT SERVICE COMMISSION, EKITI v ASUBIOJO (2013) LPELR – 20403 (CA);; LOCAL GOVERNMENT SERVICE COMMISSION, EKITI v JEGEDE (2013) LPELR – 21131 (CA);; LOCAL GOVERNMENT SERVICE COMMISSION, EKITI v AJAYI (2013) LPELR – 21133 (CA); FEDERAL MINISTRY OF HEALTH v TRADE UNION MEMBERS OF THE JOINT HEALTH SECTORS UNION (JOHESU) & ORS (2014) LPELR – 23546 (CA).
Now what is the international best practice and labour standards referred to by the court as the ‘global position on employment relationship now’? The Termination of Employment Convention, 1982 (No. 158) and the Recommendation No. 166 is a convention by the International Labour Organisation. As at 2013, it had been ratified by only 36 countries. Brazil has denounced it! How can this kind of convention form the basis of a conclusion by a court that termination without reason is contrary to International Best Practice and International Labour Standards?
Interestingly, the Committee of Experts referred to by the court had explained that Article 4 of the convention excludes termination freely negotiated by the employer and employee in an agreement. The terms of employment between parties in the 21st Century normally have clear provisions on termination. The sweeping decision and over-generalisation of the court does grave violence to the sanctity of contract which is recognised by the convention. If anything, the International Best Practice in this regard would be the enforcement of agreements freely entered into by parties.
For an International Best Practice or Labour Standards to be worthy of consideration under section 254 C (1), (apart from the fact that it must form the basis upon which the claim was made by the claimant and proved as mentioned above), it must be accepted internationally. The court did not refer to persuasive authorities or practices in respectable and comparable jurisdictions where the provisions of the Convention have been accepted to be the practice in the 21st Century. The casual review of a convention culled from the internet and elevating it to the status of international norm betrays the forensic analysis required by a court in reaching a momentous decision such as this.
In any event, there is no global consensus on the issue of termination of employment. Globally, the competition is between At-Will vs Job Security. These two philosophical divides explain the way labour laws have developed on termination of employment across the world. In At-will countries led by the United States, an employer may terminate an employment with or without reasons so long as the termination is not based on discrimination or retaliation on grounds protected by law. This position is substantially the same in Canada, India, Singapore, Nigeria etc. In 2008, an Accra Fast Track Court ruled that the 2003 Labour Act of Ghana does not compel employers to provide reasons for termination despite the fact that their Labour Act leans more towards the job security philosophy.
On the other hand, in job security nations led by Europe, termination must be with reasons prescribed by law. There are however variants of the practice of this doctrine and many countries have reduced the restriction because of its effect as a disincentive to job creation. Under the Employment Rights Act, 1996 of the United Kingdom (UK) as amended, an employee is entitled to a written statement giving particulars of the reason for termination only if he makes request for one. In Germany under the Employment Protection Act, termination may be without reasons if the employer employs not more than 10 staff or if the employment has been for a period not more than six months. The flexibility adopted by these countries is captured in their enactments and not left to the whims and caprices of a court who has not considered the social, economic and financial considerations which may have informed it.
Nigeria needs a law of unfair dismissal but it cannot be achieved through the backdoor on the premise of section 254C (1) (f) and (h). The issue must be dispassionately considered against social and economic factors and many questions must be raised and answered. For example, what will be the effect of restricting termination of employment in a country with a high rate of unemployment? Should the restriction be applicable to all employers? What is the role of employment contracts in termination? What are the circumstances that would constitute unfair dismissal? This is not what a court like the NIC can do.
The NIC experience seems to have introduced more ambiguity to our labour law. There is need for a means of resolving disputes between employers and employees that is fairly quick and inexpensive and where there is no fair hearing, or the tribunal is hostage to a particular interest group or government, the appeal power has to be invoked to prevent injustice. Clarity and fairness of our law are the anchors for growth. Aloysius’s case and the conflicting decisions of the Court of Appeal on the right of appeal underscore the need for the National Assembly to urgently review and amend sections 243 (2) and (3) 254 C of the constitution on the right to appeal against the decisions of the NIC and its jurisdiction respectively. It is not in the interest of Nigeria to have a court with unquestionable and vague power to change the law without regards to the National Assembly. In the words of the Supreme Court in PETER OBI v INEC (2007) 11 NWLR (Pt. 1046) 560, 669, para. E:
”The jurisdiction of a court or a tribunal ought to be conferred in a very clear and unambiguous language which does not admit of any controversy. The jurisdiction of a court or tribunal is not something you employ a searchlight to discover. It ought to be plain for all to see”