CORAM

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Hon. Justice Sanusi Kado JCA

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PARTIES

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MR. UBONG HILARY SILAS

APPELLANTS 

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MR. ITEM ISONGENWONGO DONALD

RESPONDENTS 

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AREA(S) OF LAW

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EMPLOYMENT LAW, PENSION LAW, RETIREMENT BENEFITS, GRATUITY, TERMINAL BENEFITS, EVIDENCE, BURDEN OF PROOF, DECLARATORY RELIEF, BREACH OF CONTRACT, GENERAL DAMAGES, COSTS, PRACTICE AND PROCEDURE, PENSION REFORM ACT

 

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SUMMARY OF FACTS

The 1st Claimant, Mr. Ubong Hilary Silas, served the Defendant as a driver from June 2014 to November 2023, a period of 9 years. The 2nd Claimant, Mr. Item Isongenwongo Donald, served the Defendant as an Assistant Production Manager for approximately 14 years, from October 2009 to November 2023. Both Claimants’ employments were confirmed by the Defendant.

The Claimants alleged that the Defendant informed them that 20% of their monthly salaries would be deducted every month and remitted into their pension fund accounts opened with NLPC Pension Fund Administrators Limited. They alleged that initially these deductions were remitted, but subsequently the Defendant continued deducting the amounts while refusing to remit them into the pension accounts. Upon resigning from the Defendant’s employment and contacting NLPC Pension Fund Administrators, the Claimants were allegedly told that the Defendant had not remitted their pension funds for a period of two years.

The 1st Claimant placed his monthly salary at N37,000 (later increased to N50,000), while the 2nd Claimant placed his at N65,000 (later increased to N75,500). Following their resignation in November 2023, the Claimants wrote to the Defendant demanding payment of the unremitted pension contributions and their gratuity entitlements under the Defendant’s Employee Handbook. The Defendant responded on the 21st of December 2023 requesting time to make the requisite calculations, but the Claimants proceeded to file this suit on the 13th of February 2024.

The Defendant denied deducting 20% of salary as pension contribution, asserting instead that it had opened an insurance pension scheme for the Claimants and paid fixed monthly sums of N3,920 for the 1st Claimant and N6,000 for the 2nd Claimant into their pension accounts in compliance with the Pension Reform Act 2014 — which prescribes 10% employer contribution and 8% employee contribution. The Defendant further asserted that all retirement benefits had been remitted, and that the 1st Claimant’s final monthly gross salary was N49,000 (not N50,000) while the 2nd Claimant’s was N75,500.

On terminal benefits, the Defendant did not deny the obligation but averred it had merely requested time to compute the entitlements before the Claimants prematurely filed suit. The Defendant’s Employee Handbook (Exhibit A), Clause 6.5, expressly provided for a gratuity of 20% of gross salary multiplied by the number of years served, for employees who resigned after a minimum of 5 years of service. Both Claimants exceeded the 5-year minimum.

A critical evidential dispute arose regarding the salary figures used to compute the terminal benefits. The Claimants produced no pay slips. The Defendant tendered Exhibit DW1E — the payroll for October 2023 — showing the 1st Claimant’s gross salary as N49,000 and the 2nd Claimant’s as N75,500. The court accepted the Defendant’s figures in the absence of contrary documentary evidence from the Claimants, treating Exhibit DW1E as evidence against the Defendant’s interest on those amounts.

The court found that the Claimants failed entirely to prove the alleged 20% deductions and non-remittance — there were no pay slips, no bank statements, no documentary evidence from NLPC Pension Fund Administrators, and no officials of NLPC were called as witnesses. The testimony of the Claimants regarding what the pension administrators told them amounted to inadmissible hearsay. However, the court found that the Claimants proved entitlement to terminal benefits under Clause 6.5 of the Employee Handbook, computed the correct figures using the Defendant’s own salary figures, and awarded N1,058,400 to the 1st Claimant and N2,536,800 to the 2nd Claimant. General damages were refused as double compensation. Costs of N500,000 were awarded. Interest at 10% per annum was imposed on the judgment sum if not settled within 30 days.

 

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HELD

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Judgment was entered partly in favour of the Claimants.

On the pension deduction claims, the court held that the Claimants woefully failed to prove the alleged 20% deduction and non-remittance. No pay slips, bank statements, or documentary evidence from NLPC Pension Fund Administrators were tendered. The testimony that the pension administrators told them of non-remittance was inadmissible hearsay. The court further held that the Pension Reform Act 2014 authorises deductions of 8% from the employee’s salary and 10% employer contribution — not 20% as claimed. Reliefs 2 and 3 accordingly failed.

On terminal benefits, the court held that the Defendant’s own handbook unequivocally entitled employees who had served more than 5 years and resigned to a gratuity of 20% of gross salary multiplied by the number of years of service. The Defendant’s admission in its pleadings that it had not paid the gratuity (having only requested time to compute it) was decisive. The court rejected the Claimants’ salary figures for lack of documentary support and accepted the Defendant’s figures from Exhibit DW1E. The court independently computed the terminal benefits at N1,058,400 for the 1st Claimant (9 years at N49,000 per month) and N2,536,800 for the 2nd Claimant (14 years at N75,500 per month). Reliefs 4 and 5 were accordingly granted.

On general damages, the court held that since the terminal benefit claims had been granted, an award of general damages would amount to double compensation. Relief 6 was refused.

On costs, the court held that cost follows events; since the Claimants partially succeeded, costs assessed at N500,000 were awarded. Monetary judgment to be settled within 30 days, failing which 10% simple interest per annum would apply.

 

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ISSUES

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1. Whether the Claimants proved their declaratory relief that the Defendant breached the agreement it had with them.?

2. Whether the Claimants proved their pension claims against the Defendant.?

3. Whether the Claimants proved their claims of gratuity/terminal benefit entitlement against the Defendant.?

4. Whether the Claimants proved their claim for cost of action.?

 

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RATIONES DECIDENDI

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BURDEN OF PROOF IN CIVIL CASES – PARTY WHO ASSERTS EXISTENCE, OCCURRENCE OR CONDITION OF ANY FACT MUST BEAR BURDEN OF PROVING WHAT HE ASSERTS; CLAIMANT MUST SUCCEED ON STRENGTH OF OWN CASE AND NOT ON WEAKNESS OF DEFENDANT’S CASE

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“The cardinal and sacrosanct principle of law of evidence demands that any person who asserts the existence, occurrence, or condition of any fact must bear the burden of proving what he asserts. This has been codified in relation to civil matters in Section 131 (1) & (2) of the Evidence Act, 2011. To entitle the person to judgment of the Court he must not only prove what he asserts but must succeed on the strength of his case not on the weakness of the defendant’s case or upon admission on pleadings. See Alhaji Balogun v. Alhaji Labiran (1988) 3 NWLR (Pt.80) 66; Egbunike v. A.C.B Ltd. (1995) 2 NWLR (Pt.375) 34.” – Per Hon. Justice Sanusi Kado, J.

 

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CLAIM FOR NON-REMITTANCE OF PENSION DEDUCTIONS – FAILS WHERE CLAIMANT TENDERS NO PAY SLIP, BANK STATEMENT OR DOCUMENTARY EVIDENCE FROM PENSION FUND ADMINISTRATOR AND FAILS TO CALL OFFICIALS OF PENSION ADMINISTRATOR AS WITNESSES; BARE ASSERTION IS INSUFFICIENT

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“I have scrutinized exhibits A to M tendered by the claimant in support of their case, but there is no iota of evidence adduced by the claimants to support their claim for 20% deductions from their salary for 2 years and non-remittance of same into their respective retirement savings account. The claimants would have succeeded if they had tendered their pay slip or bank statement of accounts or any other document to show that there was an agreement between the claimants and the defendant for 20% to be deducted from their salary and same to be remitted into their respective retirement savings account. Alas there was no such evidence before the court.” – Per Hon. Justice Sanusi Kado, J.

 

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TESTIMONY THAT PENSION FUND ADMINISTRATOR INFORMED CLAIMANT OF NON-REMITTANCE – AMOUNTS TO INADMISSIBLE HEARSAY WHERE ADMINISTRATOR’S OFFICIALS ARE NOT CALLED AS WITNESSES AND NO DOCUMENTARY EVIDENCE IS TENDERED FROM THE ADMINISTRATOR

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“The claimants have also failed to call the officials of NLPC, pensions fund administrators, that told them the defendant has not been remitting their contribution into their savings accounts. Exhibit L cannot be of any assistance to the claimants’ case as the said statement of account was for the quarter ending 31st March, 2018. Exhibit L is also evidence in proof of 10% and 8% contribution to the claimant’s retirement savings account.” – Per Hon. Justice Sanusi Kado, J.

 

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PENSION CONTRIBUTIONS UNDER PENSION REFORM ACT 2014 – LAW AUTHORISES 8% DEDUCTION FROM EMPLOYEE’S SALARY AS HIS CONTRIBUTION AND MANDATES EMPLOYER TO CONTRIBUTE 10%; THESE AMOUNTS ARE PAID INTO EMPLOYEE’S RETIREMENT SAVINGS ACCOUNT WITH PENSION FUND ADMINISTRATOR

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“Let me say that the Pension Reform Act, 2014, is in support of the position of the defendant on 10% contribution by the employer and 8% contribution by the employee, 8% is what the law has authorized to be deducted from the salary of employee as his contribution to be deposited into his retirement savings account. The employer and employee’s contribution as provided for by pension reform Act are paid into the retirement savings account of the employee with pension fund administrator. See section 4(1) (a) and (b) of the Pension Reform Act, 2014.” – Per Hon. Justice Sanusi Kado, J.

 

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REMEDY FOR PROVED NON-REMITTANCE OF PENSION DEDUCTIONS – WHERE NON-REMITTANCE IS PROVED, PROPER ORDER IS TO DIRECT PAYMENT OF UNREMITTED AMOUNTS DIRECTLY TO EMPLOYEE’S RETIREMENT SAVINGS ACCOUNT FOR EMPLOYEE TO CLAIM FROM PENSION ADMINISTRATOR IN LINE WITH PENCOM GUIDELINES

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“Let me make it very clear that if the claimants have succeeded in proving non-remittance of 20% deduction, which they have not, the order the court would have made is to order such unremitted amounts which the claimants are entitled are to be paid directly to their retirement savings account for them to claim same from their pension administrator in line with PENCOM guideline on accessing retirement savings funds with the administrator. The law imposes a duty on employers to keep record of employees’ pension remittances. See UAC RESTAURANT LTD v. MR AFOLABI ASIMIYU (2022) LPELR-59237(CA).” – Per Hon. Justice Sanusi Kado, J.

 

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CASES CITED

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STATUTES REFERRED TO

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• Evidence Act, 2011 (as amended) (Sections 37, 38, 131, 132, 133)

• Pension Reform Act, 2014 (Section 4(1)(a) and (b))

• National Industrial Court of Nigeria (Civil Procedure) Rules, 2017 (by implication — governing originating processes and trial procedure)

• Hi-Quality Bakery Ltd Employee Handbook (Clause 6.5 — terminal benefits/gratuity provisions)

 

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OTHER CITATIONS

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COUNSEL

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HI-QUALITY BAKERY LTD