CORAM

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HON. JUSTICE (PROF) ELIZABETH A. OJI

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PARTIES

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OLADAPO OYENIYI

APPELLANTS 

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CHRIS EJIK GROUP OF COMPANIES LIMITED

RESPONDENTS 

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AREA(S) OF LAW

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EMPLOYMENT LAW, LABOUR LAW, CONTRACT LAW, MASTER AND SERVANT, RESIGNATION, TERMINAL BENEFITS, LEAVE ALLOWANCE, PENSION CONTRIBUTIONS, PENSION REFORM ACT, FRAUD ALLEGATIONS IN CIVIL PROCEEDINGS, COUNTERCLAIM, BURDEN OF PROOF, EVIDENCE LAW, FORCED LABOUR, PRE-JUDGMENT INTEREST

 

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SUMMARY OF FACTS

The claimant, Oladapo Oyeniyi, was employed by the defendant, Chris Ejik Group of Companies Limited, as an Accountant pursuant to a letter of appointment dated 7 February 2008 (Exhibit C1) and a letter of confirmation of appointment dated 12 December 2008 (Exhibit C2). His annual emolument at commencement was N2,160,000.00 (N180,000.00 per month), which was increased in January 2013 to N3,000,000.00 (N250,000.00 per month). His contract entitled him to two weeks of annual leave on full pay per year and seven days of casual leave per year.

The claimant worked for nine years, until 20 January 2017, when he tendered a letter of resignation (Exhibit C3). The defendant refused to accept the resignation, stating that it needed the claimant to remain available for recovery of funds allegedly stolen from the company’s offshore bank account with Habib Bank UK. The defendant alleged that upon returning from Christmas break in early January 2013, the claimant, in his capacity as Accountant, presented a forged bank statement showing a healthy account balance of US$1,118,617.76, when the real balance at that time was US$568,838.76. When the defendant attempted transactions in February 2013, it discovered the account had been completely drained through approximately fifteen fraudulent transactions between 24 December 2012 and 28 January 2013, totalling US$1,317,252.00. The defendant alleged that the transactions were authorized by forged letters of instruction bearing the signature of the company’s CEO, and that the claimant and a Mr. Kunle Ayotoye (Procurement Officer) were the internal actors who orchestrated, aided, and abetted the theft. A London-based forensic company, Forensic Control, was engaged and reportedly confirmed that the email and bank statement presented by the claimant were fictitious and that the claimant masterminded the fraud.

The claimant was arrested and arraigned before the Magistrate Court of Lagos State. However, Exhibit C7, being a certified true copy of the order of the Magistrate Court dated 8 May 2017, showed that the criminal charge was struck out. There was no evidence of any further pending criminal charge against the claimant.

Upon resignation, the claimant sought the payment of outstanding terminal entitlements totalling N3,463,050.11. These comprised: leave allowances commuted to cash for nine years of unutilised annual and casual leave amounting to N1,425,000.00; and unremitted pension contributions and accumulated growth amounting to N2,038,050.11. The defendant denied the cash commutation of leave on the ground that no such clause existed in the contract of employment. On the pension contributions, the defendant admitted the failure to remit but attributed it to the claimant himself, who as Accountant was the officer responsible for making such remittances.

In its counterclaim, the defendant sought the recovery of US$1,317,252.00 as the funds allegedly stolen by the claimant, interest thereon, the return of all company documents and equipment allegedly in the claimant’s possession, and costs.

The court found in favour of the claimant on the pension contributions claim but dismissed the leave encashment claim and the counterclaim in its entirety.

 

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HELD

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The court resolved the issues as follows.

On resignation, the court held that the defendant’s refusal to accept the claimant’s resignation had no legal effect. Resignation takes effect from the date the notice is received by the employer or its agent, and there is an absolute and unfettered right to resign that admits of no discretion on the part of the employer to refuse. Any attempt to prevent an employee from disengaging would amount to forced or compulsory labour.

On entitlement to terminal benefits, the court held that absent a disciplinary proceeding pending against the claimant within the defendant’s organisation, and in the absence of any conviction for a crime relating to his employment, no cause had been shown to deprive the claimant of his entitlements. The court also held, however, that the non-payment of the claimant’s entitlements was wrongful rather than unlawful, since the claimant had not cited any statute breached by the non-payment.

On the leave commutation claim, the court dismissed it entirely. The contract of employment contained no clause permitting unused leave to be converted to cash, and Section 18 of the Labour Act did not create such a right upon resignation.

On pension contributions, the court upheld the claim. The defendant admitted the failure to remit contributions, and the court held that the claimant, in not making the remittances, was acting in his capacity as the defendant’s accountant and agent. The defendant’s attempt to blame the claimant personally did not relieve the defendant of its primary obligation. The claimant was held entitled to N2,038,050.11 representing unremitted pension contributions and growth, to be remitted to the claimant’s pension managers.

On pre-judgment interest, the court refused the claim for want of any evidence establishing the contractual or statutory basis for it.

On the counterclaim, the court dismissed all four reliefs. The defendant tendered no evidence, administrative or judicial, establishing that the claimant caused the loss of US$1,317,252.00. The forensic evidence adduced through Exhibits D1 to D3 did not, on the court’s review, directly attribute the loss to the claimant. Reliefs for interest, return of documents, and costs all fell away.

The court ordered the defendant to remit N2,038,050.11 to the claimant’s pension managers within thirty days, failing which interest would accrue at 20% per annum until full liquidation. Costs were assessed at N1,000,000.00.

 

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ISSUES

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1. Whether the claimant’s resignation was effective notwithstanding the defendant’s refusal to accept it, and whether such refusal had any legal consequence on the claimant’s entitlement to terminal benefits?

2. Whether the claimant established a contractual or statutory right to commute unutilised annual and casual leave to cash upon resignation, in the absence of an express provision in the contract of employment?

3. Whether the defendant’s admitted failure to remit pension contributions to the claimant’s Retirement Savings Account entitles the claimant to recover the unremitted sums together with the growth component claimed, notwithstanding that the claimant himself, as Accountant, was the officer responsible for making such remittances?

4. Whether the claimant’s entitlement to terminal benefits was extinguished or suspended by the pending or concluded criminal allegations against him in connection with the fraudulent withdrawal of funds from the defendant’s account?

5. Whether the defendant established its counterclaim for the recovery of US$1,317,252.00 alleged to have been fraudulently stolen by the claimant, by proof beyond reasonable doubt as required in civil proceedings where a crime is directly in issue?

6. Whether the claimant proved the basis for pre-judgment interest on the outstanding entitlements claimed?

 

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RATIONES DECIDENDI

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RESIGNATION – ABSOLUTE AND UNFETTERED RIGHT OF EMPLOYEE – EMPLOYER HAS NO DISCRETION TO REFUSE OR REJECT NOTICE OF RESIGNATION – REFUSAL AMOUNTS TO FORCED OR COMPULSORY LABOUR

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“In the case of Ibrahim v. Abdallah (2019) LPELR (48984) 1@ 21-22, (2019) 17 NWLR (Pt. 1701) 293 (SC), Abba-Aji reiterated as follows: Resignation need not be formally accepted before it took effect. See Per Kalgo, J.S.C. in Yesufu v. Governor of Edo State & Ors (2001) LPELR-3526 (SC), (2001) 13 NWLR (Pt. 731) 517. A notice of resignation is effective, not from the date of the letter or from the date of the purported acceptance, but from the date the letter was received by the employer or his agent. See W.A.E.C. v. Oshionebo (2006) 12 NWLR (Pt. 994) 258. Resignation takes effect from the date notice is received by the employer or its agent. Resignation dates from the date notice was received. There is absolute power to resign and no discretion to refuse to accept notice.” – Per Elizabeth A. Oji, J.

 

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EMPLOYER’S NON-ACCEPTANCE OF RESIGNATION – INEFFECTIVE IN LAW – ATTEMPT TO PREVENT EMPLOYEE FROM DISENGAGING CONSTITUTES FORCED OR COMPULSORY LABOUR

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“From the above, it is clear that the Defendant’s non-acceptance of the Claimant’s resignation, does not affect the effectiveness of the act of resignation. Unless cause is shown, an employee is entitled to be paid his entitlements, upon exiting an employment relationship. The Defendant has not shown cause why the Claimant should not be paid his entitlements. There is no disciplinary procedure pending against the Claimant, in the Defendant. There is no conviction against the Claimant, for any crime, relating to the Claimant’s employment.” – Per Elizabeth A. Oji, J.

 

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TERMINAL BENEFITS UPON RESIGNATION – NON-PAYMENT CHARACTERISED AS WRONGFUL RATHER THAN UNLAWFUL WHERE CLAIMANT FAILS TO CITE A SPECIFIC STATUTE BREACHED BY THE NON-PAYMENT

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“In the circumstance, I find no reason why the Claimant should be deprived of any entitlement due to him. Therefore, I declare that any non-payment of the Claimant’s outstanding entitlements by the Defendant, would be wrongful, not unlawful; since the Claimant has not referred to any statute which was breached in the non-payment of the outstanding entitlements.” – Per Elizabeth A. Oji, J.

 

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COMMUTATION OF UNUTILISED LEAVE TO CASH – NO ENTITLEMENT IN ABSENCE OF EXPRESS CONTRACTUAL PROVISION – COURT CANNOT CREATE RIGHT NOT CONTAINED IN CONTRACT OF EMPLOYMENT

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“I have gone through the Claimant’s evidence given in this case, and do not see any provision that any leave not taken, has to be encashed, and paid to the Claimant. The Claimant relies on paragraph 5 of exhibit C1, in making this claim. I have gone through paragraph 5 of exhibit C1. While exhibit C1 provides for entitlement to two weeks’ holiday on full pay each year, and casual leaves for a period of time not exceeding seven working days a year, it has no clause allowing unused leave to be converted to cash. In the circumstance, the relief seeking to commute the Claimant’s un-used leave to cash, cannot succeed.” – Per Elizabeth A. Oji, J.

 

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EMPLOYER’S LIABILITY FOR UNREMITTED PENSION CONTRIBUTIONS – EMPLOYER CANNOT ESCAPE LIABILITY BY BLAMING EMPLOYEE-ACCOUNTANT – EMPLOYEE ACTING AS AGENT OF EMPLOYER IN MAKING REMITTANCES

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“The Defendant admitted this failure but blamed the Claimant who as accountant, failed to make the remittances. This means that this relief is proved. The Claimant, in not making the remittances, was acting on behalf of the Defendant. Out of the claimed N3,463,050.11 (Three Million, Four Hundred and Sixty-Three Thousand, Fifty Naira, Eleven Kobo) claimed, the Claimant has established his entitlement to N2,038,050.11, being unremitted pension contribution. This is to be remitted to the Claimant’s pension managers.” – Per Elizabeth A. Oji, J.

 

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COUNTERCLAIM FOR FRAUDULENT LOSS – NOT ESTABLISHED WHERE DEFENDANT FAILS TO PROVE BY ADMINISTRATIVE FINDING OR JUDICIAL DETERMINATION THAT CLAIMANT WAS RESPONSIBLE FOR THE LOSS CLAIMED

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“I have gone through the evidence led by the Defendant and find no proof that it was established by either an administrative panel of the Defendant, or a Court of Law, that the Claimant was responsible for the loss as stated in this relief. I have gone through exhibits D1 to D3, and find nothing there, indicating that the Claimant caused the said loss of US$1, 317, 252.00 (One Million, Three Hundred and Seventeen Thousand, Two Hundred and Fifty-Two US Dollars). In the circumstance, this relief of the counter claim, is not proved.” – Per Elizabeth A. Oji, J.

 

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PRE-JUDGMENT INTEREST – CLAIMANT MUST LEAD EVIDENCE ESTABLISHING THE BASIS FOR ENTITLEMENT – CLAIM FAILS WHERE NO CONTRACTUAL OR STATUTORY FOUNDATION IS PROVED

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“Relief three – Interest on the said sum of N3,463,050.11 (Three Million, Four Hundred and Sixty Three Thousand, Fifty Naira, Eleven Kobo) at the rate of 10% per annum from 20th February, 2017 until judgment is entered and thereafter at the rate of 5% per annum until the judgment is fully liquidated. Only N2,038,050.11 has been proved by the Claimant. This represents unremitted pension, as shown in Claimant’s evidence. This relief is for pre-judgment interest. The Claimant did not lead evidence to establish the basis for the pre-judgment interest. This relief therefore fails.” – Per Elizabeth A. Oji, J.

 

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RESIGNATION EFFECTIVE UPON RECEIPT – DATE OF EFFECTIVENESS IS DATE OF RECEIPT BY EMPLOYER OR AGENT – NOT DATE OF LETTER NOR DATE OF PURPORTED ACCEPTANCE

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“The NIC has held that an employee has an absolute/unfettered right to disengage from work, and there is no discretion on the part of the employer to refuse to accept the notice to resign. See Yesufu v. Gov. Edo State [2001] 13 NWLR (Pt. 731) 517 SC, Adefemi v. Abegunde [2004] 15 NWLR (Pt. 895) 1 CA, Abayomi Adesunbo Adetoro v. Access Bank Plc unreported Suit No. NICN/LA/293/2013, the judgment of which was delivered on 23 February 2016 and Taduggoronno v. Gotom [2002] 4 NWLR (Pt. 757) 453 CA. Thus, any attempt to stop an employee from disengaging by an employer would be interpreted as forced or compulsory labour.” – Per Elizabeth A. Oji, J.

 

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COUNTERCLAIM FOR RETURN OF COMPANY PROPERTY – FAILS WHERE DEFENDANT LEADS NO EVIDENCE THAT DOCUMENTS OR EQUIPMENT ARE IN UNLAWFUL POSSESSION OF THE CLAIMANT

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“With respect to relief three for ‘All the documents, equipment, tool, etc. belonging to the Defendant which are currently in unlawful possession of the Claimant or the monetary value of same’, the Defendant led no evidence to prove that any documents, equipment, tools, etc, belonging to them, are currently being unlawfully withheld by the Claimant. Relief three of the counter claim, fails as a consequence.” – Per Elizabeth A. Oji, J.

 

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PENSION CONTRIBUTION – STATUTORY DUTY OF EMPLOYER TO REMIT – EMPLOYER’S ADMISSION OF NON-REMITTANCE CONSTITUTES PROOF OF BREACH – EMPLOYEE’S RSA STATEMENT SUFFICIENT DOCUMENTARY EVIDENCE OF SHORTFALL

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“The second component of relief two has to do with failure to remit pension contributions for some months. The Claimant tendered his Trustfund Retirement Savings Account Statement as at 3rd January 2018 in support of his evidence that the Defendant made incomplete remittances. The Claimant tabulated the months wherein remittances were not made, in his evidence. The Defendant admitted this failure but blamed the Claimant who as accountant, failed to make the remittances. This means that this relief is proved.” – Per Elizabeth A. Oji, J.

 

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CRIMINAL ALLEGATION IN CIVIL PROCEEDINGS – DISMISSAL OF CRIMINAL CHARGE BY MAGISTRATE COURT – IN THE ABSENCE OF PENDING CRIMINAL PROCEEDINGS OR INTERNAL DISCIPLINARY ACTION, NO CAUSE EXISTS TO WITHHOLD EMPLOYEE’S ENTITLEMENTS

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“Exhibits C7 shows that the criminal charge against the Claimant, before the Magistrate Court of Lagos State, was struck out on the 8th of May 2017. There is no evidence of any further criminal charges pending against the Claimant. In the circumstance, I find no reason why the Claimant should be deprived of any entitlement due to him.” – Per Elizabeth A. Oji, J.

 

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SECTION 18 OF THE LABOUR ACT – DOES NOT AUTOMATICALLY CREATE A RIGHT TO CASH PAYMENT IN LIEU OF UNUTILISED LEAVE UPON TERMINATION FOR EMPLOYEES WITH MORE THAN ONE YEAR OF CONTINUOUS SERVICE – PRO-RATA PROVISION UNDER SECTION 18(4) APPLIES ONLY TO SHORT-TERM SERVICE

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“The Defendant replied that the Claimant’s reliance on Section 18 of the Labour Act, CAP L1, LFN 2004 is a ‘complete misapplication.’ That Section 18(1) grants a right to a paid holiday (minimum six days), which the Defendant provided (two weeks) and Section 18(3) prohibits cash payment in lieu of holiday while the contract is subsisting and that this does not automatically create a right to cash upon termination. Section 18(4), which provides for pro-rata cash payment, applies only to employees who cease employment after 6 months but less than 12 months of continuous service and that since the Claimant resigned in January after many years, this subsection does not apply to him.” – Per Elizabeth A. Oji, J.

 

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CONTRACT OF EMPLOYMENT GOVERNS RIGHTS AND OBLIGATIONS OF PARTIES – CLAIMANT WHO FAILS TO TENDER FULL EMPLOYMENT CONTRACT OR ESTABLISH HOW ITS TERMS WERE BREACHED CANNOT SUCCEED ON CLAIMS FOUNDED ON THAT CONTRACT

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“I have considered the processes filed in this matter, the evidence led, the exhibits admitted and the arguments of Counsel. The Defendant argued that the Claimant failed to (a) tender the full employment contract and (b) prove how its terms were breached. The Defendant submits that the Claimant admitted under cross-examination that his letter of employment (Exhibit C1) contains no clause allowing unused leave to be converted to cash.” – Per Elizabeth A. Oji, J.

 

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CASES CITED

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STATUTES REFERRED TO

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Constitution of the Federal Republic of Nigeria 1999 (as amended)

Labour Act (CAP L1 LFN 2004), Sections 18(1), 18(3), 18(4), and 73(1)

Pension Reform Act 2014, Sections 4, 11, 106(1), 107(1), and 107(2)

Evidence Act 2011, Sections 131, 132, 133, and 138

ILO Convention Concerning Forced or Compulsory Labour 1930 (No. 29), ratified by Nigeria on 17 October 1960

 

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OTHER CITATIONS

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CLICK HERE TO READ FULL JUDGMENT 

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COUNSEL

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1. Abiodun Olabanpe for the Claimant

2. J A Eboigbe with M O Ola for the Defendants