Sometimes, an employee that is deserving of summary
dismissal is given a soft landing by being asked to resign instead. This may be
for a variety of reasons, such as to save the employee the unfavourable
consequences of a dismissal (as against voluntary resignation). What if such employee
later sues the employer for ‘constructive dismissal’, and claims that he/she
was hounded out of the job by being ‘asked’ to resign?
In employment law, constructive dismissal (also called
constructive discharge or constructive termination) occurs when an employee
resigns as a result of the employer creating a hostile work environment. Since
the resignation was not truly voluntary, it is in effect, a termination that
might entitle the employee to remedy.
A case study of Mrs Vivien Folayemi Asana v. First Bank of Nigeria
Ltd
The doctrine of constructive dismissal/discharge has been
applied by Nigerian courts, with approval, in a number of cases, such as the
case of Mrs Vivien
Folayemi Asana v. First Bank of Nigeria Ltd (SUIT NO. NICN/LA/184/2016) the judgment of which was
delivered on 09 October 2018. In the case the claimant claimed that she was
forced to resign her employment, on account of which her resignation amounted
to constructive dismissal from her defendant. The evidence of the claimant was
that she was called on phone to a meeting with the Relief Executive Director in
the Human Capital Management and Development of the defendant and “coerced,
compelled, threatened and forced” to write a resignation letter or be handed a
letter of termination. The claimant’s resignation letter read as follows:
Further to the
request that I should resign, by Management of First Bank of Nigeria Ltd.
I hereby
tender my letter of resignation.
Thank you for
the opportunity to have served in First Bank.
The court believed her testimony and held that, based on
the evidence, the claimant’s resignation amounted to constructive dismissal.
She was accordingly awarded damages in the sum of Two Million Naira to be paid
by the defendant, her former employer. The court noted that the award was
exclusive of other terminal entitlements that the claimant may have against the
defendant as a result of her disengagement.
General Comments on the Asana Case
By way of general comments on the court’s judgment, it is
curious that the court in this case appeared to have based its belief that the
claimant’s resignation amounted to a constructive dismissal from the defendant
because the claimant herself noted in her resignation letter that she was
resigning on the “request” of management of the defendant to do so. In my
humble view, evidence that is needed to support a claim of constructive
dismissal should be deeper than a mere statement from the claimant to that
effect. What if the claimant deliberately worded her resignation letter in a
manner to suggest that she was being forced to resign, even if such was not
quite the case? Also, in some cases, an employee that is truly deserving of a
dismissal is “requested” to resign as a favour from his/her employer, for a
variety of reasons. It will be unfair that the benevolence of such former
employer is allowed to be taken advantage of by a mischievous employee.
Key Takeaways from the Asana Case on Constructive Dismissal
The above arguments notwithstanding, the court noted the
following interesting general points on the doctrine of constructive
dismissal:
a. The law as to constructive dismissal/discharge has been
stated by the National Industrial Court in number of its decisions, such as Mr Charles Ughele v. Access Bank Plc
unreported Suit No. NICN/LA/287/2014, the judgment of which was delivered on
10th February 2017; Miss Ebere Ukoji v. Standard Alliance Life Assurance Co.
Ltd [2014] 47 NLLR (Pt. 154) 531 and Mr. Patrick Obiora Modilim v.
United Bank for Africa Plc unreported Suit No. NICN/LA/353/2012 the
judgment of which was given on 19th June 2014. These cases all agree that to
attempt to force the employee to resign, rather than outright firing the
employee means that the employer is trying to create a constructive discharge
and for which a case of constructive dismissal is made.
b.
Although a claim for constructive
dismissal failed in Joseph Okafor v. Nigerian Aviation Handling Company Plc
unreported Suit No. NICN/LA/29/2016, the judgment of which was delivered on
25th April 2018, the court, held on the requirements for a successful plea of
constructive dismissal thus: “…to be able to
succeed in a claim for constructive dismissal, the claimant must show that he
resigned soon after the incident(s) he is complaining about. See Miss Ebere Ukoji v. Standard Alliance Life
Assurance Co. Ltd (supra).
The claimant himself agreed with the defendant that for the claimant’s case to
succeed, he must prove as enumerated in Western
Excavations v. Sharp [1978] 1 All ER 713 that there is a repudiatory
breach (actual or anticipatory) on the part of the employer, which must be
sufficiently serious to justify the employee resigning; the employee must
resign in response to the breach; and the employee must not delay too long in
acting on the breach…”.
c.
In Miss Ebere Ukoji v. Standard
Alliance Life Assurance Co. Ltd [2014] 47 NLLR (Pt. 154) 531 NIC, the court
laid bare what constructive dismissal/discharge entails, and the fact that
constructive dismissal/discharge brings to an end the employment of the
employee constructively dismissed or discharged by the employer leaving the
employee with only the right of recompense. In the words of this Court: “Globally, and in labour/employment law, constructive dismissal,
also referred to as constructive discharge, occurs when an employee resigns
because his/her employer’s behaviour has become intolerable or heinous or made
life difficult that the employee has no choice but to resign. Given that the
resignation was not truly voluntary, it is in effect a termination. In an
alternative sense, constructive dismissal or constructive discharge is a
situation where an employer creates such working conditions (or so changes the
terms of employment) that the affected employee has little or no choice but to
resign. Thus where an employer makes life extremely difficult for an employee,
to attempt to have the employee resign, rather than outright firing the
employee, the employer is trying to create a constructive discharge. The exact
legal consequences differ from country to country, but generally a constructive
dismissal leads to the employee’s obligations ending and the employee acquiring
the right to seek legal compensation against the employer. The employee may
resign over a single serious incident or over a pattern of incidents.
Generally, the employee must have resigned soon after the incident. See
generally Western Excavating v. Sharp
[1978] 1 All ER 713 and Oladosu Ogunniyi’s Nigerian Labour and Employment Law in Perspective (Folio
Publishers Limited: Ikeja), 2004, 2nd Edition, at pages 462 – 464.”
d.
In a claim of constructive dismissal,
the remedy available to a successful claimant is damages, but not
reinstatement. In Miss Ebere Ukoji v. Standard Alliance Life Assurance Co.
Ltd (supra), having found for the claimant in terms of constructive
dismissal, damages were assessed and awarded.
Effect of Constructive Dismissal on recovery of employee
loans
It is pertinent to note that a successful plea of
constructive dismissal has the effect of vitiating a pending obligating of the
claimant to the defendant. Hence, a successful claimant, in the circumstances,
can no longer be held liable for repayment of subsisting employment loans
advanced by the defendant and repayable by deductions from the employee’s
salary. Please see my earlier article “Litigation of Employee Loans as a Labour
Dispute”.
In the instant Asana case, the defendant
counterclaimed N17.3 million Naira owed by the claimant by the defendant as
employee loan. In her defence against this counterclaim, the claimant argued
that the defendant frustrated the repayment plan of the loan advanced to her by
the very act of constructively dismissing her employment contract. There is a
long line of cases that have handled the issue of whether the doctrine of
frustration applies to subsisting employment obligations (such as employee
loans) when the employment contact is terminated. It is however, beyond the
purview of this article to cover such arguments. The pertinent thing to note
however is that constructive dismissal can potentially trigger frustration,
depending on the facts.
In court in this case of Asana relied on cases such as Lewis v. UBA Plc [2016] 6
NWLR (Pt. 1508) 329; Lagos State Govt. v.
Toluwase [2013] 1 NWLR (Pt. 1336) 555 and Mazin Eng. Ltd v. Tower Aluminum [1993] 5 NWLR (Pt. 295) 526, to arrive at the conclusion that, based on the
facts of the instant case, the claimant was constructively dismissed/discharged
for no fault of her. In the particular circumstances of the facts, it would be
inequitable to allow the defendant benefit from its wrongfulness; and legal
policy frowns on this. In its words, the court stated thus: “…the goal of labour law is to ensure that no
employer can be allowed to impose – and no worker can be allowed to accept –
conditions of work which fall below what is understood to be a decent threshold
in a given society at a given time”. The defendant should not, indeed cannot,
be allowed to impose on the claimant a fair
accompli – entice the claimant with an employment loan at a low rate,
then turn around and constructively dismiss her and convert the low rate loan
to one of a higher rate. Head of tail, the employer benefits much against the
interest of the claimant. This cannot be.”
Conclusion
In the final analysis, legal advice is always needed to
safely bring closure to an employment relationship. Like marriages, employment
relationships are often easier to contract than to end. This needs to be
constantly borne in mind by the parties in order to minimise exposure of
potential legal dispute.
Michael Dugeri
Barrister & Solicitor
Lagos
Nigeria
www.mikedugeri.wordpress.com