I. O. Olaniyonu V. British American Insurance Co. Ltd (1974)

LawGlobal-Hub Lead Judgment Report

SOWEMIMO, JSC. 

 In Suit No. I/104/68 tried in the Ibadan High Court, the Plaintiff claimed against the Defendants as follows:-

PAGE| 2 “The Plaintiff’s claim against the Defendants is for the sum of £8,000 (Eight Thousand Pounds) being special and general damages for the wrongful termination of the Plaintiff’s employment by the Defendants on the 13th of April, 1968 at Ibadan. The Plaintiff was up to and including the 13th of April, 1968, a Staff Manager under the Defendant at its District Office at Ibadan in the Western State of Nigeria. Summons £50. Service 2/- Mileage 4/- Trpt. 1/- £50 7/- Pd.CR. 167467/28/6/68.” PAGE| 3 In the Plaintiff’s statement of claim he averred inter alia as follows:-

“The termination of the Plaintiff’s employment with the Defendant as a Staff Manager is unreasonable and wrongful. The unreasonable and wrongful termination of the Plaintiff avers that no monetary payment “in lieu of notice” was made to him by the Defendant.  

That the Plaintiff as Staff Manager and by the nature of his duties in his employment with the Defendant is entitled to not less than six months notice of the termination of his employment. The damages suffered by the Plaintiff are itemised as follows:- (a) Salary from week )  commencing from ) £701 13s 7d  15/4/68 to 15/10/68 ) (b) Alternatively to (a) above or salary up to and inclusive of the date of judgment.

PAGE| 4 (c) Leave pay from ) November 9th, 1964, to ) April, 1968, at 2 weeks ) £155 12s 8d per year ) (d) Commission already accrued due £233 12s 5d (e) General Damages £6,909 1s 4d £8,000 0s od   The defence of the Defendants as set out in the statement of defence reads as follows:- “With further reference to paragraph 10 of the Statement of Claim, the Defendants will contend at the trial of this action that there was in existence a contract of service between the parties and that the letter of termination complained about was in accordance with the letter and spirit of the said contract of service.

The Defendants deny the allegation of wrongfulness and unreasonableness contained in paragraphs 11 and 12 of the Statement of Claim, and will contend at the trial that the termination of the Plaintiff’s employment was in accordance with agreement between the parties. Paragraphs 13, 14 and 15 of the Statement of Claim are denied by the Defendants.”

PAGE| 5 The learned trial judge, Ayoola, J., in his judgment said as follows:- “I hold the view that although the Plaintiff was promoted to the rank of Staff Manager in July, 1965, he still remains an ‘Agent’ of the Defendant Company within the meaning, spirit and contemplation of Exhibit K.

It has not been shown that the duties of a Staff Manager are not within the duties required of an “Agent” as set out in Exhibit K.   On the contrary the plaintiff testified that for “Sales” made, which shows that the Staff Manager also can solicit new applications for premium. At least there is no evidence before me that he cannot do so. Exhibits C & M are mere Circulars informing Staff Managers of the rate of Compensation to be paid for the particular Fiscal year to which they referred, and they are so headed.

They are some sort of “Practors” E Edict “issued by the Vice President of the Company as “Management memorandum” for the year. Such “Edicta” can vary from year to year.”   The Plaintiff, not satisfied with the judgment of Ayoola, J., appealed to the Western State Court of Appeal. After hearing arguments, judgment was entered in favour of the appellant. It was held that Ex. K executed in January, 1965, setting out the conditions of service between the parties was no longer subsisting when the Plaintiff was promoted in July, 1965.

It was also held that Exs. C & M created a new agreement which that court regarded as a yearly contract. The Western State Court of Appeal in its judgment stated inter alia:-  

PAGE| 6 “To our mind, Exs. AC KM are relevant in regard to the relationship between the parties, and to this end we agree with Mr. Odofin’s submission Ex. A was the first agreement between the parties whereby the Appellant was appointed as ‘a home service Agent’. His basic salary was £260 per annum, and he was to receive commission as stipulated in the agreement.

He was also entitled to two weeks vacation leave, with pay. That agreement further stipulates that to determine his contract of service with the Respondent a week’s notice would be sufficient on either side. However, as the Appellant pleaded and as Respondent admitted (the Appellant also gave evidence on this point in the court) he was, in July, 1965, promoted to the post of Staff Manager, Ex.C, which deals with the basic compensation payable to Service Managers makes his basic pay to be “weekly base pay in lieu of weekly premium and ordinary collection commission”.

He would also as Staff Manager be entitled to weekly premium, quarterly bonus and annual bonus, Under termination of agreement it is stipulated that the agreement was for fiscal year 1967 only. Exhibit M makes that agreement relate to the fiscal year 1966 only.   When the Appellant was cross examined by learned counsel representing the Respondent he said that he was promoted in July, 1965, he signed Ex. K in January, 1965.