Festus Opeoluwa Daodu V. United Bank for Africa Plc. (2003)
LawGlobal-Hub Lead Judgment Report
OLUFUNLOLA OYELOLA ADEKEYE, J.C.A.
This is an appeal against the Judgment of the Osun State High Court of Justice, Osogbo Judicial Division, delivered on the 16th of October, 2000. The facts of the case before the lower court by way of summary are that the plaintiff, Festus Opeolu Daodu was employed by the United Bank for Africa Plc – a Banking Institution with branches all over Nigeria, and was posted to the Osogbo branch, in April 1986. The appointment was confirmed by the defendant in October, 1986.
The plaintiff worked with the Osogbo branch of the bank for a period of 12 years, before he was transferred to the Iresi branch. Early in his employment as at June, 1986, the plaintiff earned poor probation report. As between 1987 – 1996 – the plaintiff was served with queries by the establishment for various offences bordering on insubordination, negligence of duty, disregard for his superior, non-challant attitude in the performance of his duties. The queries issued to him were ended up by way of caution or warning. Regardless of the shortcomings in the performance of his duties, he earned promotions and enjoyed increments. Even during his transfer to Iresi, his conduct and performance of his duties between 1998 to 1999 continued to earn him queries, cautions and warnings which culminated to a formal enquiry being set-up at the bank’s headquarters – Lagos against the plaintiff on the 30th of June, 1999.
The decision of the Panel of Enquiry, led to a letter of termination of his employment dated the 1st of July, 1999. He was paid a month’s salary in lieu of notice and all his entitlements as worked out by the defendant less his indebtedness was paid into his savings account at the Iresi branch of the defendant. The plaintiff felt that the termination of his appointment was wrongful in that he was diligent and efficient in the discharge of his duty, which earned him promotion to the post of a supervisor as at the time the appointment was terminated. He was not afforded fair trial during the enquiry at the defendant’s headquarters, and finally that he was denied all his entitlements as prescribed and laid down under the main collective agreement between the Nigerian Employers Association of Banks (NUBIFE). The plaintiff decided to seek redress in court by filing claims as endorsed on the writ of summons and paragraph 24 of the statement of claim as follows:
(i) Declaration that the sum total due to the plaintiff as the entitlement from the defendant is N7,534,784.00 –
particulars of which are set out as follows:
(a) Gratuity for 30 years service calculated at the rate of 300% of terminal salary/allowances … N364,200.
(b) Annual salary and allowance as spelt out in paragraph 8 above for 23 years which is 60 years that is compulsory retirement age N5,170,584.
(c) General damages N2, 000,000.00.
(ii) Declaration that the plaintiff is entitled to the sum of N7,534,784, being all the salaries and other emoluments that would have accrued to the plaintiff from the date of his unlawful/premature termination of appointment that is 12th July, 1999, to the date of his retirement that is 23 years (year 2022).
(iii) An order directing the defendant to pay the plaintiff the sum of N5,534,784 (Five million, five hundred and thirty four thousand, seven hundred and eighty-four Naira) being all the salaries and other emoluments that would have accrued to the plaintiff from the date of his unlawful premature termination of appointment to the date of his retirement.
(iv) An order directing the defendant to pay the plaintiff the sum of N2 million representing the damages suffered by the plaintiff as a result of his wrongful termination.
Parties filed and exchanged pleadings. The plaintiff in establishing his case gave oral evidence supported by vital documents tendered as exhibits A-K2. Of particular importance and worthy of note are the undermentioned:
Letter of appointment dated 9/4/86 – as exhibit A Letter of termination as exhibit G
Service agreement as exhibit B.
The procedural and main collective agreement – as exhibit K
A handbook of U.B.A. Plc Pension Fund Rules as exhibit K1.
U.B.A. Plc junior staff handbook dated March, 1993, exhibit K2
The bank as defendant called two witnesses and tendered queries and replies, letters of caution and warnings as exhibits AB-AB2, AC-AC1, AD-AD1, AE-AE1, AF-AF2, AG-AG8, AH-AH6, AJ-AJ1, AK-AK3, AL-AL5, AM-AM7, AN-AN2, notice of disciplinary committee meeting and report of disciplinary committee dated 24/6/99 as AO-AO3, UBA deposit slip as exhibit AR, debit account No. S/A 1677, dated 23/7/99 as exhibit AS. In his considered judgment, the learned trial Judgment endorsed the payment of a month’s salary in lieu of notice, the gratuity, salary and allowances for the period of service, and his employment having being terminated at the age of 37 due to his fault, under the Pensions Fund Rules exhibit K. The calculation of the benefit paid to him will be at the rate of 155% of his basic salary. In the penultimate paragraph of his judgment, the learned trial Judge held that:
“On the whole, besides the payment of the salary for the eleven days i.e. 1st – 11th July, 1999, unpaid to the plaintiff, all his claims on all legs are dismissed in their entirety for lack of substance with cost of N2,000 to the defendant”.
The plaintiff was dissatisfied with the judgment of the trial court and he thereby lodged an appeal to this court. According to the rules of this court records were settled, grounds of appeal filed and parties proceeded to exchange briefs. When the appeal came up for argument – the plaintiff henceforth, to be referred to as appellant relied on the appellant’s brief deemed filed by the Order of this court on the 25th of March, 2003. The appellant settled two issues for determination from the seven grounds of appeal filed. The issues for determination read as follows:
(1) Whether the respondent’s bank, can validly terminate the appointment of the appellant without the required warning letter as contained in the collective agreement and UB.A. Plc. Junior Staff Manual that regulates the contract of service.
(2) Whether the respondent’s bank can retry the plaintiff/applicant having been tried by his A.G.M. BOC (South) Benin to whom the branch manager at Iresi, reported as evidenced by exhibit F caution letter of 26th of April, 1999, on the same offence and/or can the defendant/respondent constitute a management panel to try criminal allegation of threat to life thereby terminating the appointment of the plaintiff/appellant.
The respondent relied on the brief of argument filed 2/6/2003, in which two issues like the appellant’s were distilled for determination by this court as follows:
(1) Whether or not, the appellant’s employment with the respondent was justifiably and validly terminated in the circumstances of this case. The issue covers grounds 1, 2, 3, 4, 5 and 6 of the grounds of appeal- and issues one and 2 raised in the appellant’s brief.
(2) Assuming without conceding that the appellant’s employment was wrongfully terminated, what is the measure of damages for the wrongful termination and is the appellant entitled to his claim before the trial court.
Since the issues raised by both parties are similar, I shall contend with the issues raised by the appellant as those to be considered by this court in this appeal.
On issue No.1, the appellant argued that the respondent cannot validly terminate the appointment of the appellant without the required warning letter as contained in the collective agreement and U.B.A. Plc junior staff manual handbook that regulates the contract of service. The appellant mentioned that the contractual relationship of the parties and the conditions of service is governed by the documents tendered as exhibits in the course of this trial, main collective agreement between Nigerian Employers Association of Banks, Insurance and Allied Financial Institutions NEABIFI and NUBIFIE – exhibit K, United Bank For Africa Plc Pensions Funds Rules -exhibit K and United Bank for Africa Ltd. junior staff handbook exhibit K2. In order to properly terminate the appellant’s appointment, the defendant needs to comply with the collective agreement between the Nigerian Employers Association of Banks, Insurance and Allied Institutions and the National Union of Banks, Insurance and Financial Institutions Employees which stipulate that:
(1) Termination may only be effected after warning letters for more than three occasions of committing similar offences.
(2) Caution letters are issued in connection with minor offences which do not attract termination.
The appellant held that the warning letter is paramount and a condition precedent before termination of the plaintiff’s/appellant’s employment. The appellant was in the circumstance not appropriately or effectively put on notice. The interpretation of the learned trial Judge as regards warning and caution letters also went under siege by the appellant. The learned trial Judge misinterpreted a warning letter and a caution letter as being synonymous. The interpretation ascribed to caution by the trial Judge is that which obtains in criminal law – where caution means warning. The interpretation of the learned trial Judge fell short of the principles of legal interpretation in civil cases – particularly in contracts and documents related to them. The duty of a Judge is to ascertain the law and apply it to the facts when it is clear and unambiguous. Where the words of an enactment are clear the court should give them their literary or ordinary meaning. The word warning used in the collective agreement is not ambiguous in the con and should have been given its ordinary meaning.
The appellant finally said that “in a contract of service parties are bound by the terms of the contract. Where the terms of the contract are clear and unambiguous, the parties cannot move out of them in search of more favourable terms or greener pastures.” The appellant relied on a number of cases to back up the forgoing submission particularly – Adewunmi v. A.-G., Ekiti State (2002) 2 NWLR (Pt. 751) 474, (2002) FWLR (Pt. 92) 1851 at 1865; Mohammed Ibrahim v. Judicial Service Committee, Kaduna State (1998) 14 NWLR (Pt.584) 1, (2001) 37 WRN 114 at pages 128 -129; Strabag Construction (Nig.) Ltd. v. Johnson Adeyefa (2001) 15 NWLR (Pt. 735) 1, (2001) FWLR (Pt. 60) 1538 at 1554; U.B.N. Ltd. v Edet (1993) 4 NWLR (Pt. 287) 288; New Nigeria Bank Plc v. Egun (2001) 7 NWLR (Pt.711) 1, (2001) 22 WRH 37 at page 48.
The respondent by way of reply to issue No.1 categorized the relationship between the appellant and respondent as that of ordinary master and servant.
The employment was governed by exhibit A – the letter of appointment collective agreement between the Nigerian Employers Association of Banks, Insurance and Financial Institutions Employees exhibit K, handbook of UBA Plc Pension Fund Rules exhibit KI, UBA Ltd. junior staff handbook exhibit K2.
Article 3(4) (1) and (2) of exhibit K2 stipulates the mode of termination of an appointment after confirmation. The appointment may be terminated by either side by giving one months notice in writing or payment of one month’s salary in lieu of notice”. There are no preconditions set out before either party could exercise the right to terminate the employment. The respondent had properly exercised that right by terminating the appellant’s employment and paying him one month’s salary in lieu of notice as per exhibit G.
The appellant’s argument that his employment could only be terminated after he must have been given 3 warnings is misconceived – as Article 4 (1) (a) of exhibit K provides that-
“Where the services of an employee have proved unsatisfactory he may be given written warning.”
The word ‘may’ used there is not mandatory. It is not therefore mandatory that a written warning must necessarily precede termination of an employee’s appointment. The appellant received series of queries and warnings during the course of his employment tendered as exhibits AA, AB-AF2, AG and AH-AH6 and AQ. The respondent submitted that even if the appellant could only be validly terminated after service of three warning letters it is submitted that exhibits AC, AF2, AD7 and AH6, AM 4 and F should be regarded as warning letters. As giving the ordinary dictionary meaning or definition of the word caution or warning both can be used interchangeably – a warning has been defined to mean caution. Under Article 4 (11) of exhibit K a query is made mandatory before a written warning. The contents of exhibit K ought to be construed as a whole and not in isolation. The respondent referred to the case of Artra (Nig.) Ltd. v NBC1 (1998) 4 NWLR (Pt. 546) 357 at 379. The respondent concluded that the appellant’s employment was terminated by his employer going by exhibit G and no reason was stated for the termination of the appointment. Under the common law – a master is allowed to terminate the employment of his servant at any time for any reason or for no reason at all. So long as the employer acts within the terms of the employment, its motive for doing so is irrelevant. The respondent cited the cases of Chief St. Idoniboye-Obu v. Nigerian National Petroleum Corporation (2003) 2 NWLR (Pt. 805) 589, (2003) 1 SCNJ 87 at 105; Dr. B. O. Chukwumah v. Shell Petroleum Development Company of Nigeria Ltd. (1993) 4 NWLR (Pt. 289) 512, (1993) 5 SCNJ 1 at 50; S. B. Olanrewaju v. Afribank (Nig.) Plc, (2001) 13 NWLR (Pt. 731) 691, (2001) 7 SCNJ 493 at 502. The court is urged to hold that termination of the appointment of the appellant was justifiable and the learned trial Judge was right to have held so.
The grouse of the appellant under issue No.1 is that the learned trial Judge misinterpreted certain words in exhibit K which govern the contractual relationship of master and servant between the appellant and the respondent. The appellant concluded that the respondent’s bank cannot validly terminate the appointment of the appellant without the required warning letter as contained in the collective agreement and U.B.A. Plc, junior manual book which regulated their contract of service. The appellant sees the warning letter as paramount and condition precedent to termination of his employment. Therefore, the appellant was not appropriately, and effectively put on notice as to termination of his appointment. The interpretation ascribed to caution by the trial Judge equating same with warning relates to criminal law and does not conform with the principles of legal interpretation in civil cases. The word warning should have been given its literary and ordinary meaning. The evidence at the disposal of the trial Judge both in the pleadings and directly from the parties and witness strongly established that the contractual relationships of the parties was based and governed by the letter of appointment of the appellant exhibit A, and:
(a) Main collective agreement between the Nigerian Employers Association of Banks, Insurance and Allied Financial Institutions (NUBIFIE) tendered as exhibit K.
(b) United Bank for Plc Pensions Funds rules – exhibit K1.
(c) United Bank for Africa Ltd. Junior Staff Handbook exhibit K2.
(d) Exhibit B confirming the plaintiff’s appointment.
Exhibits A and B did not state the manner in which each party can cause the appointment to cease. However, exhibit K2 the UBA Ltd. Junior Staff Handbook wherein at paragraphs 3, 4, 1, 2 on termination of appointment stipulates that:
“After confirmation, employment may be terminated by either side giving one month’s notice in writing or payment of one month’s salary in lieu of notice”.
In the document referred to as procedural and main collective agreement exhibit K – breaches of rules and regulations and other cases of indiscipline carry the sanctions of:
(1) Letter of caution – for minor cases of conduct committed repeatedly.
(2) Letter of warning for major cases of misconduct.
(3) Before the letter of warning, the employee shall first be given a written query and an opportunity of stating his case in writing.
(4) The letter of warning may be followed by termination of appointment – where the employee had been guilty on three occasions of committing any act of misconduct for which a warning letter has been issued (vide article 4) of exhibit K under the caption disciplinary procedure. Article 4 (d) also states that:
“Any employee whose services have been terminated under the provision., of this paragraph shall never the less be entitled to one month’s notice or salary in lieu in addition to any other terminal benefits that may be due to him.”
The duty of determining the nature of a contract of employment, whether it is governed by statute or it is under the common law, creating a master and servant relationship is the exclusive preserve of the courts. Iloabachie v. Phillips (2002) 14 NWLR (Pt.787) 264.
Under a contract of employment the court and parties have their duties, right and obligations in the determination of such contract depending on whether it is an employment with statutory flavour or under the common law.
A court is not entitled to look outside the contract of service as to the terms and conditions. These must be gathered there from and/or from other sources which can be incorporated by reference to the contract as the case may be, A court has no jurisdiction to interprete or construes contractual documents more favourably to a party outside the terms and conditions provided in the documents. Parties are bound by the four walls of the contract and the only duty of the court is to strictly interprete the document that gives right to the contractual relationship. The court is bound by the original terms of the contract and will interprete them in the interest of justice. Adegbite v. College of Medicine University of Lagos (1973) 5 SC 149; International Drilling Co. Ltd. v. Ajijala (1976) 2 SC 115; Idoniboye Obu v. NNPC (2003) 2 NWLR (Pt.805) 589; Fakuade v O.A.U.T.H. Management Complex (1993) 5 NWLR (Pt.291) 47; Nigerian Produce Marketing Board v. Adewunmi (1972) 1 All NLR (Pt.2) 433; Sule v. Nigerian Cotton Board (1985) 2 NWLR (Pt.5) 17; Abalogu v. SPDC Ltd. (2003) 13 NWLR (Pt. 837) 308.
The trial court in construing the contractual relationship of the appellant and respondent, looked into their written agreements exhibits A and B, exhibits K – K2. Exhibits K and K2 specified the provision that either party may determine the contract by a specified notice or payment of a prescribed sum of money, in the instant case giving a month’s notice in writing or payment of one month’s salary in lieu of notice. This has to be complied with in strict accordance by the parties. The notices in the documents did not depend on the performance of any condition precedent, which makes it imperative that the party exercising his right of determining the contract must first establish that the prescribed condition precedent was fulfilled.
The learned trial Judge also interpreted Article 4 of exhibit K relating to disciplinary procedure. He engaged in plain and literary dictionary meaning of the words caution and warning and concluded that they can be used interchangeably.
It is trite that the courts in construing the relationship of the parties to a written agreement must confine itself to the plain words and meanings which are derivable from their rights and obligations thereunder. Where words are clear and unambiguous the court should give them their literary and ordinary meaning. Adewunmi v. A.-G., Ekiti State (2002) 2 NWLR (Pt. 751) 474, (2002) FWLR (Pt. 92) pg. 185 1; Artra Industries (Nig.) Ltd. v. NBC1 (1998) 4 NWLR (Pt. 546) pg, 357; Mohammed Ibrahim v. Judicial Service Committee, Kaduna State (1998) 14 NWLR (Pt. 584) 1, (2001) 37 WRN pg. 114 at pages 128 – 129.
Where a collective agreement is incorporated or embodied in the conditions of a contract of service whether expressly or by implication, it will be binding on the parties. In these case, the collective agreements exhibits K – K2 were binding on the parties. Chukwumah v. Shell Petroleum Development Company of Nigeria Ltd. (1993) 4 NWLR (Pt. 289) 512.
In the view of the appellant about serving three letters of warning before salary in lieu or one month’s notice of termination of appointment, I hold that the word ‘may’ in the con is only directory and not compulsory. It confers only a discretionary power. It was not mandatory to serve the appellant three warnings in writing before the one month’s notice or salary in lieu of notice of termination of appointment. Amaefule v. State (1988) 2 NWLR (Pt.75) 156; Ibrahim v. Osim (1988) 3 NWLR (Pt.82) 257; Kotoye v. CBN (1989) 1 NWLR (Pt. 98) 419; Emokpae v. University of Benin (2002) 17 NWLR (Pt.795) 139.
Under the common law, an employer is entitled to bring the appointment of his employer to an end for any reason or no reason at all. So long as he acts within the terms of his employment his motive for doing so is irrelevant.
Where an employee does not give any reason for the termination of an employee in accordance with the terms and conditions of the employment, the employer is not bound to give evidence as to any reason or reasons for the termination of the appointment. The trial Judge has no right to use a possible proximate conduct on the part of an employer or employee to read into the letter of termination what is not there – and most especially when the letter complies strictly with the conditions of service. The letter of termination of the appointment of the appellant exhibit G, issued on the 1st of July, 1999, did not propound any reasons for the termination which kept strictly within the terms of the agreement of the parties. Commissioner for Works, Benue State v. Devcon Ltd. (1988) 3 NWLR (Pt. 83) 407; WNDC v. Abimbola (1966) 1 All NLR 159; Nigerian Produce Marketing Board v. Adewunmi (1972) 1ANLR (Pt. 2) 433, 11 SC 111; Chukwumah v. Shell Petroleum Dev. Co. of Nigeria Ltd. (1993) 4 NWLR (Pt. 289) 512. Issue No.1 fails and it is thereby resolved in favour of the respondent.
Issue No.2 is whether the respondent bank can retry the plaintiff/appellant having been tried by his AGM BOC South Benin, to whom the branch manager of Iresi reported as evidenced by exhibit F. Caution letter of 26th of April, 1999, on the same offence and/or can the defendant/respondent constitute a management panel to try criminal allegation of threat to life thereby terminating the appointment of the plaintiff/appellant. The appellant argued that the respondent must serve him with warning letters before terminating his appointment. Emphasis was laid on the appearance of the appellant, before the disciplinary committee in Lagos for trial in criminal allegation of threat to life of Mr. Babatunde. The complaint of the appellant was that he was denied fair hearing by the panel. The complaint of threat to Mr. Babatunde’s life is criminal in nature – the tribunal was not competent to try him for same – he must first be tried in a law court. The allegation must be proved beyond reasonable doubt. It was the conclusion of the appellant that his employment was wrongfully terminated and that the respondent was liable in damages.
The appellant cited the cases of Garba v. University of Maiduguri (1986) 1 NWLR (Pt.18) 550; FCSC v. Laoye (1989) 2 NWLR (Pt.106) 652; Olaniyan v. University of Lagos (1985) 2 NWLR (Pt.9) 599; Olanrewaju v. Afribank Plc (2001) 13 NWLR (Pt. 731) 691, FWLR (Pt. 72) 2012; Iwuoha v. Okoroike (1996) 2 NWLR (Pt.429) 231; Michael Arowolo v. Chief T. Ifabiyi (2002) 4 NWLR (Pt. 757) 356, (2002) 3 SCNJ 1 at 15; Chukwumah v. Shell Petroleum (1993) 4 NWLR (Pt. 289) 512 at 563; Okongwu v. N.N.P.C. (1989) NWLR (Pt. 115) 296.
The respondent replied that the appellant was a persistent offender, who was issued with queries and letters of warnings in line with the agreement of the parties – and the exhibits before the court. The respondent further held that the appellant’s appearance before the committee in Lagos was not for threatening Mr. Babatunde’s life, but for dereliction of duty. The recommendation of the committee was to terminate the appellant for dishonesty – and not because he threatened Mr. Babatunde’s life. Exhibit G did not give any reason for terminating his appointment. The respondent had an option to prosecute him or dismiss him summarily Olanrewaju v. Afribank Plc (2001) 13 NWLR (Pt. 731) 691, SCNJ 493 at 502.
Where an employer breached the contract in terminating the employee’s appointment – the employee’s remedy lies in damages calculated on the basis of what the employee could have earned for the period of notice agreed upon for ending the employment where it has no statutory flavour. Exhibit K Article 4 and exhibit K2 Articles 3, 4, 12 stipulates the mode of termination of the agreement between the parties. Where the termination was wrongful the appellant would be entitled to damages. The respondent cited the cases of P.C. Imoloame v. West African Examinations Council (1992) 9 NWLR (Pt. 265) 303; Adewunmi v. Nigerian Produce Marketing Board (1972) 11 SC 111 at 122.
The 2nd issue for determination appears to be reproaching the respondent for exercising the right under the collective agreement Article 4 of exhibit K for invoking the disciplinary procedure embodied in the document. As I have remarked earlier on – where a collective agreement is incorporated or embodied in the conditions of a contract of service – whether expressly or by necessary implication – it will be binding on the parties and not otherwise Abalogu v. SPDC Ltd. (2003) 13 NWLR (Pt.837) 308; Chukwumah v. Shell Petroleum Development Company of Nigeria Ltd. (1993) 4 NWLR (Pt. 289) 512.
The evidence before the court portrays the appellant, as an insubordinate, recalcitrant offender who was served with many queries and letters of warning – for his behaviour during the period of his employment. Article 4 of exhibit K provides for termination after warning. Constituting a committee to try him depended on the gravity of his misconduct. The committee set up both by the regional management and in Lagos – inquired into different offences. He could not have been tried by the same panel for different offences so as to rule out bias. The court had no evidence to sustain the issue of breach of fair hearing. The appellant admitted while giving evidence that on each occasion he was alleged of any wrong doing, he was confronted in writing and asked to explain himself. He admitted testifying before the panel that recommended him for termination on 30th June, 1999, Adeniran v. NEPA (2002) 14 NWLR (Pt.786) 30; Garba v. University of Maiduguri (1986) 1 NWLR (Pt.18) 550. It is the duty of the Judge to strictly interprete the document that gives rise to contractual relationship of master and servant. The court is not expected to look outside the contract of service as to the terms and conditions.
A servant who complains that his employment has been wrongfully brought to an end must found his claim on the contract of service and show in what manner the wrong was done. He has to prove the contract of service which is the bedrock of his case. It is not the duty of the employer as defendant to prove that the termination was not wrongful. Amodu v. Amode (1990) 5 NWLR (Pt. 150) 356; Katto v. CBN (1999) 6 NWLR (Pt. 607) 390; Okomu Oil Palm Co. Ltd. v. Iserhienrhien (2001) 6 NWLR (Pt. 710) 660.
I agree with the learned trial Judge – that at the termination of this contract of employment the appellant was only entitled to payment of one month’s salary in lieu of notice, salary for eleven days from 1st – 11th July, 1999, a sum of N190,498.22 less N140,940 40 as terminal benefits – all the claims on all legs are dismissed for lack of substance. Issue No.2 is resolved in favour of the respondent. This appeal fails for lacking in merit, and it is hereby dismissed. Judgment of the lower court is hereby affirmed. N5,000.00 is awarded in favour of the respondent.
Other Citations: (2003)LCN/1343(CA)