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CALABAR CEMENT CO. LTD.
COURT OF APPEAL (ENUGU DIVISION)
TUESDAY, 3RD APRIL, 1991
BEFORE THEIR LORDSHIPS
ALOYSIUS IYORGYER KATSINA-ALU, J.C.A. (Presided and Read the Leading Judgment)
EMANUEL OBIOMA OGWUEGBU, J.C.A.
NIKI TOBI, J.C.A.
Kanu G. Agabi, ESQ. – for the Appellant
Chief H.O. Nsefik, – for the Respondent
PRACTICE AND PROCEDURE – COURT – Contract of employment – Duty on court to give effect to manifest intention of parties thereto.
PRACTICE AND PROCEDURE – DAMAGES -Proof of-Defendant not challenging plaintiffs claim for damages – Effect.
PRACTICE AND PROCEDURE – DAMAGES – Wrongful termination of employment – Measure of damages.
PRACTICE AND PROCEDURE – DOCUMENTS – Construction of document – Guiding principle.
INTERPRETATION OF DOCUMENTS – Construction of document – Guiding principle.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT- Contract of employment – Duty on court to give effect to manifest intention of parties thereto.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT – Contract of employment – Onus on party alleging wrongful dismissal or termination of – How discharged.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT – Contract of employment – Right of termination of- On whom lies.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT – Contract of employment – Termination of – Motive thereof-Whether relevant.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT – Contract of employment – Termination of – Period of notice required.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT-Contract of service – Terms of-Bindingness on parties thereto.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT – Contract of service – Whether court can compel unwilling employer to retain employee.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT – Contract of service – Whether employer or employee can compel performance of.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT -Dismissal and termination of contract of employment -Distinction.
EMPLOYMENT AND LABOURT – MASTER AND SERVANT -Dismissal of servant -Who can exercise power thereof -Need to give reasons therefor.
EMPLOYMENT AND LABOUR – MASTER AND SERVANT – Wrongful termination of employment – Measure of damages.
PRACTICE AND PROCEDURE – EVIDENCE-Proof-Wrongful dismissal or termination of employment-On whom onus lies – flow discharged.
WORDS AND PHRASES – Dismissal and termination of contract of employment – Distinction.
KATSINA-ALU, J.CA. (Presided and Read the Leading Judgment):
This appeal is from a judgment of Its J. of the Cross River State High Court sitting at Calabar given on August 19, 1986. The Plaintiff in that court claimed against the defendant the sum of N40,000.00 general damages for wrongful termination of appointment Judgment was given against the defendant in the sum of N29,433.11 with N200.00 costs.
The facts are not in dispute. The plaintiff was an employee of the defendant company from 1968 until his removal from service in May, 1979. He was employed as a security staff. His appointment was terminated by a letter dated 25th May, 1979 which was admitted in evidence as exhibit I. Thereafter the plaintiff instituted this action against the defendant claiming N40,000.00 general damages for wrongful termination of appointment Pleadings were filed and exchanged. The case then proceeded to trial.
The plaintiff testified on oath and called no witness. The defendant did not testify but rested its case on the plaintiff’s case. Counsel for the parties addressed the court The learned judge found for the plaintiff and awarded him special and general damages totalling N29,433.11 with N200.00 costs.
The appellant raised four issues for determination at page 2 of its Brief of Argument. These are:
The Respondent raised three issues and these are:
(a) Whether having regard to Exh. 5 (conditions of service), Plaintiff/ Respondent’s termination was proper, that is done legally.
(b) If the answer to (a) above is in the negative, which we say it is, whether the Plaintiff/Respondent is estopped from going to the courts of the land to ask for proper compensation therefore (sic) because terminal benefits with no basis for calculation had been paid to him.
(c) Whether the correct principles were applied and followed by the learned trial judge in the assessment and award of damages.
Having regard o the facts of this case, it seems plain o me that the employment of the plaintiff under the defendant company is not one especially protected by statute; it is an ordinary master/servant relationship. The distinction between the two was succinctly brought out in Shitta-Bey v. The Federal Civil Service Commission (1981) 1 S.C. 40 and Olaniyan v. University of Lagos (1985) 2 NWLR (Pt. 9) 599. The parties herein agreed that Exhibit 5 – Conditions of Service – governs the plaintiff s appointment with the defendant company. This being so, I think the issue to be resolved is whether the termination of the plaintiffs appointment is in accordance with the conditions of his employment.
Exhibit 1 is the letter of termination. It is dated 25th May, 1979. The letter reads:
25th May, 1979
Mr. Abiodun Daniel,
Termination of Appointment
I regret to inform you that your services in Calabar Cement Company Limited are no longer required. Your appointment is therefore terminated with effect from Friday 25th May, 1979.
You will be paid one month (sic) salary in lieu of notice in addition to your dues in the Company’s Provident Fund (if you are a member). You will be required to settle your indebtedness (if there is any) to the Company and hand over all the Company’s property now in your possession to the head of your section who will certify that that is done before you are paid your entitlements.
for. CALABAR CEMENT COMPANY LIMITED,
(Sgd) P. B. Uwah
It will be observed that no reason for the termination of appointment was stated in Exhibit’ 1′. In addition the plaintiff was paid one month’s salary in lieu of notice. Whether the termination of appointment of the plaintiff is in accordance with his conditions of employment will depend on the provisions of the Junior Staff Conditions of Service (exhibit 5). Article 29 thereof states:
“TERMINATION OF APPOINTMENT
An employee who successfully completes his probationary period as set out in Article 6 above may terminate his employment by giving 2 weeks’ notice or forfeiture of wages amounting to not more than 2 weeks’ pay. The company may terminate any employee’s service by giving 2 weeks’ notice of the intention to terminate his employment or by paying 2 weeks’ basic pay in lieu of notice. This payment will not be made in the case of summary dismissal.
Similar conditions shall also apply to staff. In either case, one month’s notice shall be given or payment of salary in lieu of notice. It is clearly understood that neither the Company nor employee is obliged to give or assign any reason whatsoever for termination of appointment.”
Thus Article 29 gives either party the right to terminate the contract by giving the other one month’s notice of intention to do so or upon paying one month’s salary in lieu thereof. It states quite plainly the length of notice which the employee is obliged to give and entitled to receive to determine his contract of employment. And neither party is obliged to give any reason for such termination of employment. It is now settled law that the motive which compels an employer to terminate lawfully a contract of employment is not relevant. See Olaniyan & Ors. v. University of Lagos (1985) 2 NWLR (Pt.9) 599 at 602 and 604; Taiwo v. Kingsway Stores Limited (1950)19 NLR 122 at 123. Once the contract is lawfully determined the court is under a duty to give effect to the manifested intention of the parties: See Nwangwu v. Nzekwu & Anor (1957) 2 FSC. 36 at 37 (1957) SCNLR 61.
In the course of his judgment the learned trial judge said:
“Accordingly, I hold that the employer’s power to determinate the employment of staff is a power of discipline which in the case to which Exhibit 5 applies can only be lawfully carried out by proceeding under Article 22 of Exhibit 5.”
The learned judge was clearly in error here. Article 22 envisages a different situation. It envisages a situation where the employer exercises his power of discipline over an erring staff. This may however lead to the employee’s dismissal if he remains recalcitrant and impervious to correction. It is a power which only the master can exercise to the exclusion of the servant. In proceeding under Article 22, the master is obliged to state the reason or reasons for the dismissal. The master is under no such obligation under Article 29. Put shortly, the right to terminate can be exercised by both parties to the contract and when they do so no reasons need be given. The power to dismiss can only be exercised by the employer and in the exercise of that power, the employer must state his reasons and follow the procedure laid down in Article 22. Therein lies the distinction. The Learned judge seems to have appreciated this situation for he rightly observed in his judgment:
“That the Defendant is not obliged by the contract to state any reason for action taken by it …………”
In the same manner a staff can by virtue of Article 29 determine his contract of employment by simply giving one month’s notice or paying a month’s salary in lieu of notice. He, like his master, is under no obligation to state any reason for wishing to terminate the contract. So long as the termination is lawful the motive therefor is not relevant. The party seeking to determine the contract by giving adequate notice as prescribed under the contract does not have to justify his action because he is not guilty of breach of contract
The aim of Article 29 is plain. An employee cannot compel the employer to retain him no matter how desirable that may be on humanitarian or other grounds. In much the same way an employer cannot compel an employee to remain in his service no matter how indispensable his services may be to the employer. Neither can the Court force an unwilling employer to retain an employee whose services are no longer required regardless of his impeccable character.
The introduction by the learned judge of Article 22 into this case led to a consideration of irrelevant issues. As I have already indicated, the defendant did not state any reason for the determination of the plaintiff’s appointment. The plaintiff however led evidence to show that he had come under suspicion for theft, that an Administrative Enquiry had taken place behind his back and that this led to his appointment being terminated. That an enquiry was held over the defendant’s lost property is not in dispute. It must be pointed out that the plaintiff was invited to appear and did appear before the Lost Assets Committee to explain the steps he had taken to safeguard the Company’s property. After all he was in charge of security. But this was not an issue before the lower court. The defendant did not and was not obliged to give any reasons for terminating lawfully a contract of employment A similar issue came up for decision in Taiwo v. Kingsway Stores Ltd (1950) 19 NLR 122. At p. 123 the Court said:
“It is not disputed that an enquiry was made by certain members of the staff into a question of bottle stoppers which plaintiff was supposed to have received for sale. Put shortly, the plaintiff states that he was suspected of having misappropriated a number of stoppers which he denied (and still denies) having received, and that this led to his employment being terminated. No witnesses were called by the defendants and I accept plaintiffs contention on this point. This however, does not, in my view, affect the case before me because the motive which impels an employer to terminate lawfully a contract of employment is not relevant. The case of Baker v. The Denkera Ashanti Mining Corporation Limited 20 TLB 37, may be quoted in support of this view.” (Italics mine)
See also Sobowale v. Statutory Corporations Service Commission (1974) NCLR 221 at 228. In the light of the foregoing the learned trial judge was in error when he held:
.It seems to me fundamental in the process of laying staff off under Article 29 that he should be proceeded against first under Article 22.” It is settled practice that the two provisions i.e. for dismissal and termination of a contract of employment operate independently of each other. The reason is obvious. As I have earlier on in this judgment pointed out, termination gives the parties the right to determine the contract at any time by giving the prescribed period of notice. Where there is no written agreement as to the period of notice of termination of a contract of employment, the notice given must be reasonable notice. See Daniels v. Shell-BP Petroleum Development Co. of Nig. Ltd. (1962) 1 All NLR 19; (1962) 1 SCNLR 19.
Dismissal, on the other hand, is a disciplinary measure not entitling the affected staff to any notice and/or benefits. The power to dismiss is a power exercised by the employer without a corresponding power in the servant; See Adamo Gbolade Adeko v. Ijebu-Ode District Council (1962) 1 All NLR 220 at 222-223; (1962) 1 SCNLR 442.
I turn now to the issue of damages. In a claim for wrongful termination of appointment, all that the plaintiff is entitled to as damages is the salary, apart from other entitlements if any, which he would have received during the stipulated period of notice. See Nigerian Produce Marketing Board v. A. O. Adewunmi (1972) 1 All NLR (PL2) 433; P. Z. & Coy. Ltd. v. Ogedengbe (1972) 1 All NLR (Pt. 1) 202; Abimbola v. W.N.D.C. (1966) 1 All NLR 159. In Abimbola’s case the Supreme Court held inter alia at P. 161 thus:
“The plaintiffs appointment was governed by the contract into which he entered at the time of his appointment if he had been given one month’s notice before the termination of his appointment he would have had no claim whatever on the Corporation. But he was not given and he is entitled to one month’s salary in the absence of notice. This is all he can get as damages. Other matters which the Judge considered are irrelevant.”
In the case in hand, both parties agree that the plaintiff’s appointment was governed by the Junior Staff Conditions of Service- – Exhibit 5. There is provision in Exhibit 5 (Article 29) whereby either party could determine the contract by giving one month’s notice or paying one month’s salary in lieu of notice. The defendant complied with this requirement. It paid the plaintiff one month’s salary in lieu of notice. See Exhibit. l. That being so, the plaintiff, in my view, has no claim whatever on the defendant. All the other matters considered by the learned Judge are irrelevant.
In the course of his judgment, the trial Judge observed that the claim for damages had not been challenged by the Defendant. He took this position, no doubt because of the fact that the defendant did not testify at the trial but rested on the plaintiff’s case. I think this view is erroneous. It is implicit in the denial of liability which the defendant had clearly done in its statement of defence and in the address of its counsel before the High Court, that the amount of damages claimed by the plaintiff was also being denied: See Nigerian Produce Marketing Board v. Adewunmi (supra). In Mandrides v. A.J. Tangalakis & Co. (1932) 11 NLR 62 where the appellant’s pleadings contained no reference to the question of damages and their counsel did not address the court on the point, the Court held that these facts did not constitute an admission that the damages claimed were reasonable or that the appellants were thereby deprived of their right to have the damages against them judicially assessed.
In the light of the reasons I have given, this appeal succeeds and is allowed. The judgment of the lower court together with the damages awarded i s accordingly set aside. There shall be costs in the court below assessed at N300.00 and in this Court at N500.00 in favour of the defendant/appellant.
OGWUEGBU, J.C.A.: I agree
NIKI TOBI, J.C.A.: I agree with the judgment of my learned brother, Katsina-Alu, J.C.A. just delivered. I want to add this bit in support.
The crux of this appeal lies basically on the interpretation of Exhibit 5, the Junior Staff Conditions of Service for CALCEMCO, particularly Articles 22 and 29, vis-à-vis Exhibit 1, the letter of termination. I say so because in a contract of service, parties are bound by the terms of the contract. Where the terns of the contract are clear and unambiguous, the parties cannot move out of them in search for more favourable terms or greener pastures. However, where the terms of the contract are not clear and unambiguous, a court of law can move out of them and invoke the general rules of contract applicable to the nature of the contract of service. See generally Olaniyan and others v. University of Lagos and Another (1985) 2 NWLR (PL 9) 599; IDC. v. Ajijala (1976) 2 SC. 115.
The onus is on the party alleging wrongful dismissal or termination of appointment to so prove. See College of Medicine v. Adegbite (1973) 5 SC. 149.
And he has to discharge the onus by relying on the contract of service and the notice of wrongful dismissal or termination. The law will not allow the party to vegetate on general common law provisions which are not contained in the contract or anticipated therein.
I mentioned earlier that Articles 22 and 29 of Exhibit 5 are the real determinants of this appeal. I should now go into them. Article 22 prescribes the procedure for the enforcement of discipline. The Article is divided into a number of disciplinary stages. I need not go into the different stages. I should however make the point that the article is exclusively the preserve of the defendant/ appellant.
On the other hand, Article 29, in its generic wording, is common to both the defendant/appellant and the plaintiff/respondent. In other words, both parties can invoke the provisions of the Article, as and when it is necessary to do so. It is the termination of employment clause.
The main point of dispute is whether there is a legal nexus between the two Articles. Learned counsel for the defendant/appellant says there is none. Learned counsel for the plaintiff/respondent says there is. The learned trial Judge also saw a nexus between the two articles. He said.
“On whether Article 29 of Exhibit 5 can alone be resorted to or only after proceeding under Article 22 of that Exhibit, I have to say that the whole of Exhibit 5 must be read as one document so as properly to place any particular Article thereof in its proper selling.”
I entirely agree with the learned trial Judge. It is a well established canon of statutory interpretation that in order to fully appreciate and understand the intention of the parties, the document should be read as a whole and not disjunctively or in isolation. Where a document is read in pockets of isolation, or some portions treated in some ‘quarantine’, the court will be in so much difficulty to get at the real intention of the parties. A court which creates artificial barriers in a document for purposes of interpretation will never get at the real intention of the parties. There cannot be any watertight barriers in a document, to the extent that one aspect cannot relate to the other aspect.
In the circumstances of the present case, it is clear that Article 29 applies. The learned judge should have interpreted it as it is without introducing other elements into it. I think when he tried to do this, he erred. I therefore allow this appeal and set aside the decision of the lower court. I abide by the order for costs.