The Supreme Court of Nigeria upheld the dismissal of a lawsuit according to the Nigerian Weekly Law report brought by Mr Eniwomake Richard Ovive and others against Delta Steel Company Ltd.
The case, representing the staff of Delta Steel who were made redundant, questioned the legality of their redundancy and sought recognition of statutory employment protections.
This was presided over by Justice Musa Dattijo Muhammad, with a panel that included Justices Chima Centus Nweze, Uwani Musa Abba Aji, Mohammed Lawal Garba, and Helen Moronkeji Ogunwumiju, who confirmed the employment terms and upheld the decisions of the lower courts.
Case background and key issues
Ovive and the redundant employees contended that their employment should have statutory protection, given Delta Steel’s ownership by the Nigerian government.
They argued that this relationship implied their positions held a “statutory flavour,” granting them additional rights under Nigerian employment law. They also argued that their redundancy breached Section 20 of the Labour Act, which stipulates the “last in, first out” principle to guide redundancies.
Legal implications and findings
The Court’s deliberations centred on whether the employees’ contracts held statutory flavour, a status typically afforded to employment bound by statutory provisions rather than standard contracts.
The Court analysed the employees’ specific terms, noting that their employment was governed by the “Approved Conditions of Service for Federal Government-Owned Steel Companies 1989,” rather than any explicit statutory provisions like the Labour Act.
The Supreme Court emphasised that employment is inherently contractual and that only specific employment contracts have statutory protections, based on enabling statutes.
It found that while Delta Steel was a government-owned entity, the employees’ contract terms did not inherently bring them under statutory protection. Therefore, the Labour Act’s redundancy provisions did not automatically apply to them.
Court’s position on employment terms and redundancy
The justices reinforced that in cases of redundancy, the court must confine itself to the terms outlined in the employment contract.
Redundancy rules require employers to negotiate with trade unions or representatives and apply fair selection criteria, such as the “last in, first out” principle. However, the Supreme Court concluded that Delta Steel’s contract with the employees superseded these rules as it allowed the company flexibility in declaring redundancy.
Redundancy procedures in Nigeria are governed by the Nigerian Labour Act, the decisions of the courts; that is, case law, the employment contracts of the affected and employees and employment handbook, the provisions of any collective bargaining agreement between an employer and the representatives of a trade union as well as applicable international best practices.
Dispute resolution and final judgment
The Court dismissed the appeal unanimously, affirming that the terms and conditions explicitly stated in Exhibit C, the employees’ contract, governed the redundancy process.
It ruled that since the Labour Act’s provisions were not incorporated into this contract, the employees could not claim redundancy entitlements beyond what was stipulated in their agreed terms.
The judgment reaffirms that government ownership alone does not automatically convert a company’s employment into one with statutory flavour.
In their decision, the justices highlighted that while employers must generally observe redundancy protocols, these must align with the specific contractual terms.
Through this ruling, the Court underscores the Nigerian Supreme Court’s stance on employment contracts, particularly regarding redundancies in government-owned companies. By upholding the sanctity of agreed employment terms, the Court established a clear boundary between contractually governed redundancies and those protected by statute.
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