Union Bank of Nigeria Limited V. Francis E. Okenwa (1994)
LawGlobal-Hub Lead Judgment Report
EMMANUEL OLAYINKA AYOOLA, J.C.A.
By a letter dated 7th February 1980 the appointment of the respondent with the appellant was terminated without notice or payment of salary in lieu on notice by reason of an alleged involvement in fraud which caused the appellant a loss of N71,500.00 sometime in September 1979. As a result of the alleged fraud the respondent was apprehended by the police and charged to court along with two other persons. While the case was still pending before the court the appellant having first suspended the respondent later dismissed him from its employment by the letter earlier mentioned. On 23rd November, 1984 the respondent was discharged by the Chief Magistrate’s Court before which he was charged on the ground that the prosecution had not made out a prima facie case against him. In April 1984 the respondent’s solicitors demanded that the appellant reinstates the respondent in his former position and in addition pay him his arrears of salaries. The appellant neither reinstated the respondent nor paid him the arrears of salary. By writ issued in November 1985 the respondent commenced the action which led to this appeal against the appellant claiming that he be reinstated to his employment and damages for wrongful dismissal. He also claimed interest on damages at the rate of 13% from the 7th February 1980 until judgment.
In its defence to the action the appellant’s case is that the respondent’s employment was determined in accordance with the contract of employment by giving one month’s notice to the respondent or paying him salary in lieu of notice. The appellant was willing to pay the entitlements of the respondent which included a month’s salary in lieu of notice and arrears of salary and allowances up to February 1980.
The total sum it was willing to pay to the respondent was N790.26. By letter dated 5th June 1986 its solicitor communicated the offer to pay this sum to the respondent’s solicitors. Nevertheless the case proceeded to trial and Hotonu J who heard the case gave judgment for the respondent and ordered that the appellant should reinstate the respondent as its reference clerk. He also ordered that the appellant should pay the respondent the sum of N38,630.00 as special damages with interest thereon at 13% from 5th November 1985 to 6th January 1987 and interest at an unspecified rate from the date of the judgment i.e. 7th January 1987 until the whole amount is liquidated. From that decision arose this appeal by the appellant.
The learned judge (Hotonu J) held that the respondent was dismissed from the appellant’s employment and that this was not a case of termination as alleged by the appellant. He found that there was no reason at all for dismissing the respondent and held that the dismissal as conveyed in the letter of 7th February 1980 (Exh. 3) was wrongful and that he was therefore entitled to damages. He awarded the respondent special damages in the sum claimed, i.e. N38,630.24 representing salaries from December 1979 to October 1985 and ordered that he be re-instated to his former employment because, as he held, the dismissal was wrongful null and void.
On this appeal from that judgment the parties do not agree as to the exact wording of the issues for determination I would therefore set out the grounds of appeal, omitting particulars with a view discerning what the real issues are. Where issues formulated by a party and argued do not arise from the grounds of appeal such issues and argument should be ignored for the purpose of determining the appeal. The grounds of appeal are as follows:
(1) The learned judge erred in law and exceeded his jurisdiction in making a declaration that the contract of employment by the Defendant is invalid null and void
X X X
(2) The learned judge erred in law in making an Order for reinstatement of the Plaintiff.
(3) The learned judge erred in law in making a declaration that Clause 6 of the contract entered into between the parties contravenes section 32(4) of the Constitution and is therefore unconstitutional null 2nd void.
X X X
(4) The learned judge erred in law in awarding N38,630.24 damages for wrongful dismissal at the same time ordering reinstatement and the plaintiff was thereby unjustly enriched.
X X X
It was on these grounds that the appellant had in its brief of argument formulated one main issue for determination for determination as follows:-
Whether having regards (sic: regard) to the express contract terms/provisions the learned trial judge was right in declaring the dismissal wrongful and whether he was right in proceeding to invalidate it and order re-statement.
That main issue was argued in the appellant’s brief under two heads as follows:
1. Termination in accordance with the terms of employment.
2. Court’s jurisdiction to invalidate termination and order reinstatement.
The respondent, by his counsel formulate what he conceived to be the issues for determination. Several of those issues do not at all arise from the grounds of appeal. Some of the issues formulated by the respondent are however different ways of stating the issues that properly arise for determination. Such issues are: whether the letter of 7th February 1980 was a dismissal or termination and if a dismissal whether it was proper and valid; and whether the High Court could properly make an order of reinstatement in a purely private contract of employment having found that the Respondent’s dismissal was wrongful null and void.
In my view the issues that are determinative of this appeal really fall within a narrow compass. Some of the grounds of appeal as worded do not arise from the judgment. Thus the impression created by grounds 1 and 3 that the learned judge granted certain declaratory reliefs are not correct. The two issues which arise on this appeal are:
(1) Whether the judge was right in law in making an order for reinstatement of the respondent, and
(2) Whether assuming he could make such an order, he was right to have awarded damages as well or put another way, whether assuming he has jurisdiction to order a reinstatement he should have exercised that jurisdiction having awarded special damages.
It is expedient before these issues are considered to observe that in my view the judge was right to have held that this was a case of summary dismissal and not one of termination, of the contract of employment by notice. The dismissal was for an alleged misconduct which the discharge of the respondent on 2 criminal charge arising from the facts on which the alleged misconduct was based, has shown could not be substantiated. On the totality of the evidence before him the learned judge was right to have held there was no justification for the respondent’s dismissal and that it was wrongful. The judgment however went too far when it described the dismissal as null and void. On a purely master and servant situation where no issues of public law is involved termination of an employment may be wrongful but it does not by that fact become null and void. It may be wrongful, but it nevertheless operates to bring the contract to an end. The normal remedy for such wrongful dismissal is damages.
The question whether the learned judge could order a reinstatement of the respondent is well covered by authorities.
It is because he misapplied the authorities and did not advert to one which should have guided him that he came to a wrong conclusion. The law is clear that in an ordinary master and servant relationship when no public law element is involved specific performance of a contract of service cannot be ordered should an employer terminate the contract of service in breach of its terms. The law has been well stated by Lord Reed in Ridge v. Baldwin (1963) 3 All ER 66, 71 as follows:
“The law regarding master and servant is not in doubt” These cannot be specific performance of a service and the master can terminate the contract with his servant at any time and for any reason or for none. But if he does so in a manner not warranted by the contract he must pay damages for breach of contract. So the question in a pure case of master and servant does not at all depend or whether the master heard the servant in his own defence it depends on whether the facts emerging at the trial prove breach of contract.”
View in similar vein were expressed by Viscourt Kilmuir LC in Vine v. National Dock Labour Board (1957) AC 488, 500 as follows:
“… if the master wrongfully dismisses the servant either summarily or by giving insufficient notice the employment is effectively terminated albeit in breach of contract.”
In that case Lord Keith of Avonholn said at p. 507;
“Normally, and apart from the intervention of statute there would never be a nullity in terminating an ordinary contract of master and servant. Dismissal might be in breach of contract and so unlawful but could only sound in damages.”
This sound principle of the common law has been received into our law by several authorities of which Olaniyan v. University of Lagos (1985) 2 NWLR 599 is among the most recent. The learned judge in purporting to apply the case of Shitta-Bey v. The Federal Civil Service Commission (1961) 1 SC 40 somehow overlooked the vital distinction that in Shitta-Bey’s case there was “a status which makes (the appellant’s) relationship with the respondent and the Government although one of master and servant and servant certainly beyond the ordinary or mere master and servant relationship.” I feel no hesitation holding that the learned judge should not have ordered a reinstatement of the respondent in this case.
On the view I hold that the learned judge should in this case not have ordered a reinstatement of the respondent the question whether he should have ordered payment of damages in addition to reinstatement becomes academic. It is only pertinent to observe that distinction must be drawn between payment due under the contract and damages resulting from its breach. Arrears of salaries claimed upon a wrongful dismissal of an employee is a claim for monies due under the contract. Award limited to that cannot be inconsistent with an order, where such is permitted, reinstating the employee. In this case the learned judge regarded the employee. In this case the learned judge regarded the contract of service as not having been determined. What he described as special damages were therefore in reality monies payable under a subsisting contract.
This appeal must succeed on the limited question argued before us which is confined to the propriety of the order reinstating the respondent. There has been no challenge to the award of N38,630 as special damages even though if they wrongful dismissal had on 7th February 1980 effectively terminated the contract of employment the damages to which the respondent would have been entitled to is what he would have earned during the period of notice, in this case that is month’s salary and allowances for that period. For reasons best known to him counsel for the appellant has not taken up this point on this appeal and the award of N38,630 to the respondent as special damages must in the circumstances be left undisturbed.
In the result, for the reasons which I have given, I would allow the appellant’s appeal. I would set aside the order of the High Court directing that on or before 1st February 1987 the appellant (then defendant) should reinstate the respondent (then plaintiff) as its reference clerk. I would dismiss the respondents claim that he be reinstated to his employment. The rest of the judgment of the High Court stands. The appellant is entitled to costs of this appeal which I assess at N1000.00.
Other Citations: (1994)LCN/0187(CA)