1.
Suspension of employees in a nutshell
An employer’s power to
suspend a worker at any time, during probation or after confirmation, is
without a doubt, whether or not it is expressly stated in an employment
contract. No court of law will deny an employer of this inherent power, if
utilized properly. Suspension is a powerful tool to an end and not an end in
itself. Suspension puts an employment relationship in limbo as the worker lives
in anticipation of either being recalled or laid off. A worker cannot seek
another employment in the course of suspension until the suspension is
converted to termination of employment or dismissal. It is therefore important
for a company to investigate a suspended worker, make its findings and
communicate its decision to the worker. A suspended worker needs to know
whether his service is still required by his employer or has been (technically)
terminated!
A striking difference
between suspension and termination of service or dismissal is that suspension
is neither terminal nor requires any procedure like dismissal and termination
of employment which are both terminal and usually follow an agreed procedure to
end a working relationship. Suspension is a prelude to termination/dismissal
but not all suspensions result in dismissal or termination of employment.
Suspension does not bar the affected worker from his normal employment
benefits. Unless a company’s disciplinary procedures have been conducted and
the worker has been indicted to his/her knowledge, he stands entitled to his
wages and other relevant benefits.
Notwithstanding the
impression that Nigerian labour law leans more in favour of the workers, our
law recognizes the power of an employer to suspend workers pending
investigation of allegations. It is extremely difficult, except in few special
cases recognized by law, for a suspended employee to rush to court and succeed
on a claim based on his suspension. There are many clear judicial
pronouncements to the effect that a worker will be jumping the gun by rushing
to court based on suspension from employment without waiting for the conclusion
of any investigation by the employer. For instance, there are reported cases
against First City Monument Bank Plc and First Bank
Plc, in which the courts denied the workers’ claims for compensation on the
ground that the workers were rightly suspended (and subsequently dismissed) for
gross misconduct. Also, the Court in Shell Petroleum Dev. Co. v. Lawson
Track (citation available) held that suspension of employee pending
investigation is an acceptable labour practice even if the employee is
suspended without fair hearing.
2. Suspension without
salary
As already pointed out,
suspension does not imply an end to an employment relationship unless it has
proceeded for such length of period that it evinces an intention to impliedly
terminate the service of a worker. So, naturally, unless otherwise stated in an
employment contract, the law implies that a suspended worker should be entitled
to all the benefits which he/she would have enjoyed if the service had not been
suspended. In other words, unless an employee is indicted under an agreed
disciplinary procedure which provides for loss of benefits, all employment
benefits ought to be paid as at when due during suspension or, cumulatively,
upon the end of suspension.
In all relevant employment
cases, there are always questions to be answered by an employer who suspends a
worker without pay if the contract of service does not provide for suspension
without salary. In most cases, the question is always resolved in favour of the
affected worker. Even in cases in which the employment contract provided for
power to suspend without pay, such as the one filed against Jemmtek
Resources Limited, though this case has its own peculiar twists, the issue
was nevertheless resolved in favour of the suspended employee notwithstanding
the company’s allegation that the worker had taken up an employment in another
company during the period of his suspension. Also, the Court of Appeal held in Olafimihan
v. Nova Lay-Tech Nig. Ltd. (citation available) that suspension of a
worker without pay with a restriction on the worker from entering the premises
of the company was a clear intention of the company to dispense with the
services of the worker and, as such, the worker must be paid all his
entitlements.
The onus will always be on
the company to prove its power to suspend its workers without pay and that the
investigation was concluded (indicting the affected worker) to justify its
defence against any employment litigation. The issue of proof is a matter of
evidence at trial in which the letter of employment, terms and conditions of
service or employee’s handbook and disciplinary procedures must all be
presented to the court for scrutiny and must be unambiguous as to their
contents, as any ambiguity will be resolved in favour of the employee.
3. Indefinite suspension
of worker
Indefinite suspension of
an employee appears to be a common feature in some organizations, especially in
matters bordering on allegations of crime against a worker. Whilst suspension
is a veritable tool for effective investigation of any allegation, its length
and other ramifications can result in either gain or loss to the company unless
the management proceeds with proper guidance of employment law advice. There is
a mix of two complex propositions that usually confront a judge in any labour
case that is founded on an indefinite suspension of worker.
The first approach is to
treat the employment as having been constructively terminated by the employer.
This would be consistent with judicial precedent. Popular judicial decisions
are to the effect that an indefinite suspension is a constructive or implied
(though unlawful) dismissal. That is to say, where an employee is suspended
indefinitely without recall or eventual letter of termination, the employee’s
service is deemed to have been constructively or impliedly terminated, though
wrongfully. It is however not clear and, therefore, arguable on the facts of
each employment dispute what length of suspension will be regarded as
sufficient to evince an intention of the employer to dispense with the worker’s
service. This point is more appreciated if one considers the difficulty an
indefinitely suspended worker faces in determining when to initiate a
compensation claim against the employer during the period of suspension without
jumping the gun.
The other approach is to
treat the employment relationship as subsisting to ensure a greater
compensation for the employee. In this respect, the court deems the worker to
still be in the service of the employer in order to entitle him/her to the
salaries for the period of suspension. This option would meet the justice of
the case of an employee who has fought a long litigation battle to redress
his/her grievance, especially where the length of period between the suspension
and conclusion of litigation results in fairly huge compensation from the award
of all salaries in arrears to the worker. It appears that there is no express
provision of law for this approach except to subsume it in the provision of
section 254C(1)(h) of the Constitution which grants the National Industrial
Courts powers to apply and interpret international best labour practices in any
employment litigation brought before them. The courts have held that an indefinite
suspension of worker is inconsistent with international best labour practices.
It is instructive to note
that Justice F. I. Kola-Olalere of the National Industrial Court held in a case
decided on 16th October 2014 that an employee who was suspended without salary
for a long period (more than three (3) years in that particular case) would be
deemed to still be in the service of his employer till the date of judgement
and, therefore, entitled to his monthly salaries from the date of suspension
(13th June 2011) till the date of judgement (16th October 2014). In other
words, the Court held that the indefinite suspension of the worker for more
than three years without pay meant that the termination of his employment was
with effect from the date of judgement. The Court took the foregoing position
notwithstanding the provision of clause 15 of the staff handbook of the
defendant company which permitted the company to suspend workers with or
without pay. As already stated above, the decision may appear to be at variance
with popular judicial decisions of superior courts on the point but it is one
that is consistent with the spirit and letters of the provision of section
254C(1)(h) of the Constitution. In any event, it is my view that such option is
not available to a judge in an employment litigation in which the worker has
not specifically pleaded and prayed for a declaratory order that his employment
contract subsists in the face of an indefinite suspension.
4. Calculation of the
entitlement of a worker who has been indefinitely suspended
Lawyers and judges, of
course, do some mathematics in a labour case whenever it is necessary. Unless
the facts of a case involve complex accounting principles, employment lawyers
are at liberty to establish during trial, by simple mathematical calculation of
figures in frontloaded witness statement on oath, pay slips and other
admissible documents, the total amount payable to a successful employee in
labour litigation. In few special cases, the help of an accountant is useful as
an expert witness to guide the court and the parties and, when necessary, the
onus to call an accountant as an expert witness or obtain and tender an
accountant’s opinion, lies on the party who will suffer in the absence of such
accounting evidence.
Now, let us do some
mathematics on compensation, as the court does in most employment cases, in
which an indefinitely suspended worker is successful, to arrive at what the
worker would be entitled to as damages. Suffice to say that if the matter is
resolved in favour of the company, it will be accordingly dismissed (sometimes
with costs against the worker) for lacking in merit.
(a) Claim for
salaries in arrears
In order to found a claim
for salaries in arrears, the worker must specifically seek a declaratory relief
that his employment still subsists with the employer. Notwithstanding the power
of the court under section 254C(1)(h) of the Constitution, a court will not
grant a relief that is not sought by the claimant. In addition, the worker must
plead and prove his/her monthly salary by credible evidence. Additionally,
there must be factual pleadings and proof of the last payment by the employer
and the number of months or years which are outstanding. All applicable
deductions based on any staff loan, law or any prior agreement must be
considered by a court in arriving at what is due to the worker.
For instance, in the
decision by Justice Kola-Olalere, mentioned above, the worker’s pay slip for
the month of March 2011 was tendered and admitted in evidence showing the
worker’s total earning was N280,511.20. His total deduction was N59,127.24,
while his net pay was stated as N221,383.96. The facts of the case showed that
the employee was suspended by a letter dated 13th June 2011 till the date of
judgement, 16th October 2014, which equals to forty (40) months and three (3)
days in all! Now to translate the foregoing to monetary figure, the Court
multiplied the worker’s net pay, N221,383.96, by 40 months to arrive at
N8,855,358.40. For the extra three (3) days in October, the net pay
(N221,383.96) was divided by 31 days in the month of October, the result of
which (approximately N7,141.42) was multiplied by 3 to arrive at N21,424.25 as
the salary for the three (3) days. Consequently, the worker was awarded
N8,876,782.65 (i.e. the result of N8,855,358.40 plus N21,424.25) as his salary
arrears for the period of suspension! That was a huge but avoidable consequence
to the company, a growing company as at 2014!
(b) Pension
contributions
Pension contribution is
one of the applicable deductions an employer makes from the earnings of a
worker to be credited, in addition to its own statutory contribution, to the
pension fund account of its workers. In Essang v. Akwa Ibom State
Government & Ors[1] (2015) 55 N.L.L.R. (Pt. 186) 93,
the National Industrial Court held that the Pension Reform Act 2004 (as amended
in 2014) does not regulate the employment relationship of an employer and
employee but only establishes the contributory pension scheme for employees in
public and private sectors. The jurisdiction of the National Industrial Court
on pension is limited to adjudging what is due and payable as pension
contributions in favour of a worker. An employee is entitled to judgement on
all outstanding contributions from the employer. However, even in the absence
of any express pronouncement in a judgement for a worker, the employer is at
liberty, without any additional liability, to remit the contributions to the
pension fund administrator of the worker in compliance with the law. Documents
showing the company’s remittal of the worker’s pension contributions are
admissible at trial to disprove a claim for pension benefit. A worker cannot
seek an order of the court to compel the employer to pay to him all his
outstanding pension contributions which are due from the employer, as this will
be contrary to the provisions of the Pension Reform Act.
(c) Terminal
benefit, gratuity or severance package
Terminal benefit, gratuity
or severance package is a common feature contract of service in Nigeria. The
contract of employment must specifically provide for these benefits before a
claim can be founded on any of them. Any of these benefits is grantable if it
is provided in the employment contract and specifically prayed, pleaded and
proved in an employment litigation.
(d) Annual
leave, maternity, transport, telephone and other allowances
The award of an allowance
will depend on the facts and evidence in each case. Annual leave is a right
guaranteed by law and, as such, will be due to worker in any employment.
However, leave allowance must be contained in an employment contract before it
can be claimed. In most employment contracts, leave allowance is payable to an
employee who has worked for a year as part of his/her annual package. Although
annual leave or maternity leave is a right derived from law, it is nonetheless
arguable whether an annual or maternity leave allowance is grantable to an
indefinitely suspended worker even if the contract provides for allowance but
without any express exclusion of staff on suspension. Transport or telephone
allowance appears to be payable to working staff as part of working expenses.
Transport or telephone allowance will not be appropriate in a judgement for an
indefinitely suspended worker unless otherwise proven by evidence. It is my
view that an employment contract must clearly provide for an allowance before a
claim can be founded on same.
(e) Claim for
unlawful interference with the worker’s employment
Suspension is, no doubt,
an interference in a worker’s service, particularly if it denies him/her the
opportunity to make earnings, exercise his/her professionalism and grow in
his/her career. Whether suspension is a justifiable or unjustifiable
interference in a worker’s employment is a question of facts or mixed question
of facts and law. In my view, it is plausible for an employee to contend that
his/her suspension has negatively affected his/her chance of promotion and
career growth, particularly if his/her previous performance appraisals have
been favourable. Of course, I am aware of a decided case of an indefinitely
suspended worker whose claim for an alternative relief of N50,000,000 as
damages for unlawful interference with his employment was refused because the
court had awarded to him all his salaries in arrears. It is however not clear
whether the court would have granted a relief for exemplary damages to the
worker (if specifically prayed, as compared to seeking it as an alternative
relief) if same had been sought on the basis that his suspension interfered
with his employment and impaired his chance of promotion or career growth. In
my opinion, having strongly condemned the act of the employer in suspending the
worker indefinitely, the court, in that case, might have been inclined to grant
exemplary damages to punish the company on the ground of either being
sufficiently outrageous to merit punishment or being in flagrant disregard of
the parties’ contract and the law on best international labour practice.
(f) Cost
of litigation
Cost of litigation is not
a straightforward relief that can be sought and granted, as a matter of course,
to a worker who is successful in an employment dispute. Generally, the
courts have held that it is unethical to attempt to pass on the burden of
counsel’s fees to the opposing party. However, there are provisions of the
National Industrial Act and the Rules of the Court that grant discretion to the
judge to award costs in employment litigation. Nevertheless, cost of action is
one which, if ever recoverable, lies in special damages which must be
specifically pleaded, strictly proven by cogent and compelling evidence and, of
course, prayed as a distinct relief. So, if supported by pleadings and
evidence, costs of litigation are grantable relief at the discretion of the
court.
(g) Pre-judgement
and post-judgement interests
The National Industrial
Court appears not to have power to grant pre-judgement interest in accordance
with the provision of Order 47 Rule 7 of the 2017 Rules of the Court except
post-judgement interest. Order 47 Rule 7 of the 2017 Rules of the
Court permits the court to order interest a rate not less than 10% per annum
upon any judgement sum. What is clear is that 10% is the minimum rate a worker
can claim as interest on a judgement sum whilst the maximum is at the
discretion of the judge which, from experience, is usually not exceeding 20%
per annum.
5. Conclusion
From the above, it goes
without saying that suspension of a worker, however simplistic it appears given
that it has no procedure to follow, deserves to be taken seriously,
nevertheless, particularly if one considers the possible sum of the monetary
awards that are grantable against a company in favour of a worker under the
sub-headings above, namely: (a) arrears of salaries, (b) pension contributions,
(c) terminal, gratuity or severance package, (d) annual leave, maternity leave,
transportation, telephone and other allowances, (e) unlawful interference in the
worker’s employment, (f) cost of litigation, and (g) interest on judgement sum.
Therefore, suspension
should be followed by immediate investigation. Investigation should be thorough
and concluded timely, one way or the other. Report should always result from
all investigations, informing the affected worker as to whether he is indicted
or not indicted, and may contain recommendations for improvements to all the
parties concerned. After the report, the company should take a definite
position with regard to a suspended worker. All of these should be well
documented. None of these should be done by persons in the company who do not
have a thorough understanding of the company’s disciplinary procedures and the
guidance of legal advice.
Associate at Udo Udoma & Belo-Osagie
[1] Delivered
Obaseki-Osaghae J. NIC, Calabar, 1st December 2014.
Ed’s Note – This article was first published here
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