Peugeot Automobile Nigeria Limited V. Saliu Oje & Ors. (1997)

LawGlobal-Hub Lead Judgment Report

MUHAMMAD, J.C.A. 

Peugeot Automobile Nigeria Limited is an automobile plant based in Kaduna and specialized in assembling and sale of Peugeot cars. The respondents who were the plaintiffs at the Kaduna State High Court, instituted an action for themselves and on behalf of over 1000 co-workers against the appellant/defendant who relieved them of their employments as a result of declaring their posts redundant. Each of the respondents was employed by the appellant under a separate agreement. Dates of employment varied ranging from 1975 to 1986.

In their joint statement of claim, the respondents/plaintiffs in paragraph 18 asked for the following reliefs:

“(18.1) A declaration that each of the plaintiffs who has completed 5 years of service with the defendant, is entitled under the defendant’s terms and conditions of service to payment of gratuity based upon the number of years served in the defendant’s service and an order for payment of same.

2. An order declaring the action by the defendant in its failure to pay the said entitlements to the plaintiffs as a breach of its undertaking to pay same.
3. An order that the plaintiffs and the other members of the ex-skilled employees of Peugeot Automobile Nigeria Ltd. whom the plaintiffs represent should be paid all their entitlements.”

Pleadings were settled and the case went on full trial. Three witnesses testified in favour of the respondents whereas the appellant had one witness. Learned counsel for the respective parties addressed the lower court. After reviewing the evidence and the addresses of learned counsel, the learned trial Judge delivered his judgment on the 28th day of January, 1994 wherein he allowed plaintiffs/respondents claims on gratuity and ex-gratia but dismissed the claim of one month salary in lieu of notice. The defendant/appellant was dissatisfied with the lower court’s decision and appealed to this court on four grounds. The reliefs asked from this court by the appellant included an order setting aside the judgment of the lower court with all the declarations granted therein and another order dismissing the plaintiffs/respondents suit.

Parties filed and exchanged briefs of arguments. Learned counsel for the appellant formulated the following issues for determination:

“1. Whether or not the learned trial Judge was right in holding that the respondents are entitled to gratuity.

2. Whether the respondents had discharged the burden of strict proof as required by law having regard to the nature of their claims which amounted to special damages.
3. Whether or not the learned trial Judge was right in awarding ex gratia to the respondents.”

Learned counsel for the respondents adopted the issues formulated by the appellant. He however added the following issue:

4. Whether the respondents on salary grade levels 1-3 are entitled to gratuity computed on the basis of page 1 paragraph C of Exhibit 4 OR on the basis of page 2 paragraph C of Exhibit 4.”

In his submission, learned counsel for the appellant, on issue No. 1, argued that the terms and conditions of service of the respondents with the appellants are governed by clause 8 of Exhibit 2. The Learned Trial Judge was therefore in error when he awarded gratuity to the respondents when the clause provided that only those employees who retired or resigned were to be entitled to gratuity benefit. It was his submission that since the respondents neither retired nor resigned but declared redundant, the benefits payable to such category of staff were clearly provided by clause 11 of Exhibit 2 and that such benefits had already been paid to the respondents. Exhibit 4 provided only details or mode of computing entitlements and could not be a separate term or condition of service between the parties. Thus, it was argued, award of gratuity to staff declared redundant could only amount to double compensation. Argued further is that there was uncertainty or contradiction as to the exact number of the respondents who had put in 5 years service as required by Paragraph C of Exhibit 4 in order to entitle them to gratuity benefits.

On issue No. 2 learned counsel argued that the entire claims of the respondents were in the province of special damages which must be proved specifically. He cited Nitel v. Ogunbiyi (1992) 7 NWLR (Pt. 255) 543. He submitted further that the law, in such a situation, required the respondents to plead and particularise any item of damages suffered by them. Even where that was done, as no evidence was led on it, it was deemed abandoned. It was thus clear that the standard of proof set was not attained by the respondents. On the exact number of the respondents and whom they represented, who were declared redundant by the appellant, the issue was contradictory. It was also not established who among them were on grade levels 1, 2 and 3. The burden of proving such facts squarely rested on the respondents. In his last issue, learned counsel for the appellant submitted that the learned trial Judge was in error when he awarded to the respondents ex-gratia for the year, 1986 on the basis that the respondents had worked for 10 months in the year and that it would be unjust to deprive them of the ex-gratia payment while clause 17 of Exhibit 2 has stipulated when such a benefit is payable and to whom. The stipulated period of entitlement to ex-gratia benefit is the end of year i.e the 31st day of December. The respondents, he argued further, were no longer staff of the appellant in December, 1986. It was also argued that there was no evidence before the lower court to show how much each of the respondents was entitled to be paid as ex-gratia and thus the lower court had no basis for awarding ex-gratia to the respondents. Ex-gratia benefit was special in nature and ought be treated as a special claim.

Learned counsel for the respondents on the other hand, while arguing issue No.1, submitted that it was common ground between the parties that Exhibits 2 & 4 governed the payment of gratuity to the respondents and not specifically clause 8 of Exhibit 2 as contended by learned counsel for the appellant. It was his further submission that clause 11 of Exhibit 2 provided for payment of redundancy benefits and that this clause did not specifically or by any implication exclude staff declared redundant from enjoying gratuity benefits. It was submitted further that clause 11 of Exhibit 2 accorded with section 20(1)(c) of the Labour Act, Cap. 198, Laws of the Federation, 1990 which provided for negotiated redundancy payments for discharged workers. The payment of redundancy benefit was therefore both a statutory and contractual obligation on the appellant. Learned counsel cited and relied on Paragraph C of Exhibit 4 which entitled each of the respondents who spent five years in the service of the appellant to payment of gratuity. On the 2nd issue for special damages requiring special proof and particularization of the claim learned counsel for the respondents, referred to paragraphs 1-6 of the statement of claim and paragraph 1 of the statement of defence, paragraphs 10 of the statement of claim and 11 & 12 of the statement of defence to show that the claims of the respondents were special and were particularized. He cited the cases of Ratcliffe v. Evans (1892) 2 QB 524 and Odulaja v. Haddad (1973) 11 SC 357 at 363; Nitel v. Ogunbiyi (supra). Learned counsel argued further that the issue of strict liability has to do with tortuous liability and not contractual as in this case. He cited Oshinjirin & Ors. v. Elias & Ors. (1970) 1 All NLR 153 at 156. The principle involved in the present case is that of breach of terms of contract of employment and not tortuous. On the ex-gratia award, learned counsel submitted that the right to ex-gratia as provided by clause 17 of Exhibit 2 must have accrued before same is paid at the end of the year based on meeting the production target of the year. Since the respondents were part of the production up to October, 1986, they were part of the achievement of the production target and were ipso facto entitled to such ex-gratia payment. There was therefore nothing in clause 17 of Exhibit 2 which could suggest that the respondents had to be in service of the appellant by December, 1986 to entitle them to the ex-gratia payment. The additional issue formulated by learned counsel for the respondents which is their fourth issue, is on the method of computing the respondents gratuity. He argued that by reference to paragraph 1 of the statement of claim and paragraph 1 of the statement of defence the parties were agreed in their pleadings that all the respondents were on salary grade levels 01 – 03. By this fact and in accordance with Exhibit 4, the computation of the gratuity due to the respondents would be based on Paragraph C of Exhibit 4 i.e one month basic salary for staff who completed five years of service with the Company. Learned counsel submitted that what appeared in the Judgment, P. 26 lines 36-41 and P. 27 lines 14-21 and 38-41 all of the record, were a slip from the learned trial Judge as he referred to page 2 paragraph C of Exhibit 4 instead of page 1 Paragraph C of Exhibit 4. This mistake, he argued further, can be corrected by this Court under its powers conferred by section 16 of the Court of Appeal Act, 1976.

I think I should start by re-stating the well settled principle of law relating to contracts of employment and that is: where parties have agreed to be bound in their relationship by written agreements, such a contract must be governed by the terms of the contract. See Union Bank (Nig.) Ltd. v. Ogboh (1991) 1 NWLR (Pt. 167) 369; Amodu v. Amode (1990) 5 NWLR (Pt. 150) 356; Union Bank (Nig) Ltd. v. Ozigi (1994) 3 NWLR (Pt.333) 385; (1994) 3 NACR Page 1.

In the appeal at hand, it is clear from the pleadings that the parties intended to be bound by the terms and conditions they entered into. The respondents as plaintiffs, stated in their statement of claim:

“4. The plaintiffs on their various dates of employment were each given a letter of employment and conditions of service which were meant to regulate the contract of employment of the parties of (sic) this suit”