The National Industrial Court (NIC) sitting in Lagos has held that an employer is not at liberty to dismiss an employee without justifiable reason and observance of due process and fair hearing.
Justice Nelson Ogbuanya held that the standard remains the same, whether in statutory employment or master/servant employment governed by common law.
His Lordship made the pronouncement while quashing the summary dismissal of Mr. Valentine Nkomadu by Zenith Bank Plc.
Nkomadu was the erstwhile pioneer Branch Head of the bank’s Moloney branch in Lagos.
Declaring the dismissal as wrongful, the judge noted that the claimant’s summary dismissal without reason or due process emanated from the often confused interchange of dismissal and termination.
He said though both are legally recognised exit pathways for an employee, they differ markedly in their operations and implications.
Justice Ogbuanya held: “Termination is a contractual exit available to both employer and employee, and may go with or without reason, as it may not be for disciplinary purpose, but just for mere compliance with extant contract of service to bring the employment relationship to a lawful end.
“On the other hand, dismissal is solely a disciplinary measure available for only the employer with consequential denial of pecuniary entitlements of employee’s earned terminal benefits and image battering; casting doubt on future employability.”
According to the judge, “for the simple reason that dismissal has the adverse effect of taking away the employee’s earned terminal benefits, the employer is not at liberty to dismiss an employee without justifiable reason and observance of due process and fair hearing.”
He held that in any kind of employment regime (be it statutory or under common law), best practice is that dismissal must be for justifiable reason and due observance of extant contract of service and fair hearing.
“Accordingly, an employer who decides to dismiss the employee is not only obliged to provide reason(s) for the dismissal but also justify the reason(s) if challenged.
“Thus, the often adopted veiled reason of ‘services no longer required’ or muted reason is not applicable to dismissal but limited to only termination, subject to service of appropriate notice period or salary in lieu of notice. I so hold”.
The defendant, in the suit numbered NICN/206/2015 – Valantine Nkomadu vs Zenith Bank Plc, alleged that the claimant breached the bank’s credit policy which culminated in his indefinite suspension for 10 months without pay, and subsequent dismissal.
The bank’s case was that the claimant violated its credit policy when he made some recommendations to the management for loan approvals and disbursement and some violations on loans approved based on the claimant’s recommendation.
Defence counsel Obiajulu Konwa argued that the claimant’s dismissal was justified even though he was not given query or subjected to any disciplinary hearing, but only was summarily dismissed.
But, the claimant, through his counsel Casmir Anyanwu, submitted that his dismissal was wrongful due to the bank’s failure to observe due process.
He said he was not afforded any opportunity to defend him over allegation bordering on misconduct.
In the May 9 judgment, Justice Ogbuanya upturned the claimant’s dismissal as unjustified.
He held: “This act is not only in breach of the provision of the extant contract of service between the parties but also constitutes a flagrant breach of natural justice rule of fair hearing- audi alteram patem.”
He ordered the defendant to pay the claimant N13, 552.990.45 being his 10 months withheld salaries.
The judge ordered the bank to compute and pay his terminal benefits having served meritoriously for about 14 years, rising from the position of Executive Assistant II, to Senior Manager and pioneer Branch Head of the bank’s Moloney Branch, Lagos.
The court also awarded N2million in the claimant’s favour for the wrongful dismissal.
