The history of the employment contract dates back to the ancient Rome, according to the book “The employment contract and the changed world of work”1. It marked the beginning of the relationship between employer and employee. Contract made fundamental distinction between employment for work
NATURE OF CONTRACT OF EMPLOYMENT.
The basis of modern employment is the contract of
employment. The contract of employment is a specie of contracts and is
therefore governed by the general principle of the law of contract; there must
be offer and acceptance, a definite agreement between the parties; this being
often expressed in the maxim “consensus ad idem” that is the meeting of
the minds1.
A contract of employment is a
contract of service, by which a F person is engaged to work for another for a
specified or an unspecified period, It is a central element in the structure of Labour Law. At
Common Law, the assumption is that the parties who are equal freely establish
the terms of contract.2
The bargaining power of the employer and employee is
not equal, except in rare cases where the employee can match the bargaining
power of the employer. This has always placed the employer to be on top of the
labour market. The terms of employment
are usually offered to employees on the basis of “take it or leave it” knowing fully well that their choices are highly limited. In contract of employment, it is still not settled whether a repudiatory act of one party to the contract of employment automatically brings it to an end or whether, in accordance with the general principle of the law of contract, the innocent party has an option either to accept the breach or waive it. 3
are usually offered to employees on the basis of “take it or leave it” knowing fully well that their choices are highly limited. In contract of employment, it is still not settled whether a repudiatory act of one party to the contract of employment automatically brings it to an end or whether, in accordance with the general principle of the law of contract, the innocent party has an option either to accept the breach or waive it. 3
Contract of employment follows the normal legal
procedure for formation of contract in ordinary transactions. Thus, a contract
of employment may be in writing, under seal, or verbal or partly in writing and
partly oral. It may be by conduct. An oral contract, no matter the status of
they person so employed, is as valid as a written contract, but there is no
doubt that an oral contract presents greater problems of proof both of its
existence and of its terms.4
This contract, like any other contract is subject to
the general principle of contract law, therefore for it to be va1idl made,
those essential elements necessary for the validity of contracts must be
present, namely5:
a) Agreement.
b) Consideration.
c) Intention to create legal relations.
Agreement: a contract
is an agreement by which two or more persons agree to regulate their legal
relationships recognized and, generally speaking, enforced by the law. Before
the law will recognize an agreement as a contract, certain essential conditions
must be fulfilled. They are as follows;
i) One party must agree expressly or implicitly to
perform an undertaking and the other party must agree to accept such
performance, that is to say, there must be offer and acceptance. Offer was
defined in Omega Bank Nig Plc v O.B. C Ltd6
“As a definite undertaking made with the intention
that it shall become binding on the person making it as soon as it is accepted
by the person to whom it is addressed.”
While in Benue Cement Company Plc v Sky Inspecon
Nig Ltd & Anor7, an
acceptance was also defined as:
“An
indication, express or implied, by the offeree made, whilst the offer remains
open and in the manner requested in that offer, of the offeree’s willingness to
be bound unconditionally to a contract with offeror on the terms stated in the
offer. And where an offeror makes more than one offer, the offeree must state
which offer he is accepting.”
ii) The
agreement must be supported by consideration or entered into according to
certain prescribed forms.
iii) Both
parties must be persons whom the law acknowledge as competent to enter
contracts, they must have capacity.
iv) The
objective of the contracts must be legal.
v) Both
parties must intend that the agreement shall give rise to a legally recognized
obligation8.
In Jimoh Ikhile v Federal Airport Authority Of
Nigeria9, the court made it clear that if
termination is carried out in a manner that is contrary to the terms of the
agreement between the parties, the employer must pay damages for the breach of
the agreement. The employee, however, is not entitled to general damages as in
a claim for tort. He is only entitled to what he would have earned over a
period required to lawfully terminate his employment.
b) Consideration: this may take the form of promises exchanged by the contractual parties, or the duty undertaken by one party on
account of the promise of the other. In Currie v Missa,10 Lush J as defined consideration10b
b) Consideration: this may take the form of promises exchanged by the contractual parties, or the duty undertaken by one party on
account of the promise of the other. In Currie v Missa,10 Lush J as defined consideration10b
“A
valuable consideration in the eyes of law may consist either in some right,
interest, a profi or benefit accruing to the one party o some forbearance,
detriment, loss or responsibility, given, suffered or undertaken by the other.
This consideration does not only consist of profit by one party, but also
exists where the other party abandons some legal right in the present or limits
his legal freedom of action in the future as an inducement for the promise of
the first.”
In Sam Fam Financiers Ltd v. Mr. Charles S .B Ama,11 the court observed that: when two
parties exchange promises that are voluntarily made, it is no duty of the court
to evaluate their adequacy. This is so because, the promises can be shown to
have some value in the eyes of the law. As long as either party to the contract
can show that some benefit has been conferred to the other party, or some detriment
has been suffered by the other, the court effectuate their transaction, without
requirement of considering the relative values of the detriment and benefit.
This follows that in the instant case, the scheme of arrangement entered by the
two parties are binding on both parties.
In a
contract of employment, the consideration for work is wages and the
consideration for wages is work.12
i) Intention To Create Legal Relations: the question in contract of employment is “did the parties intend that legal consequence should flow from their agreement”? If the answer is negative, there is no contract. If on the contrary, the contract subsists. The law presumes that social or domestic agreements are not contracts.
Thus in the case of Total Nigeria Plc v Ajayi13, the court held inter alias:
“In considering illegality or voidance of a contract, a court is bound to consider the contract itself and the contemplated action, which the parties have intended to be bound by and not acts or omissions of parties to the contract which do not arise from the terms of the contract.”
i) Intention To Create Legal Relations: the question in contract of employment is “did the parties intend that legal consequence should flow from their agreement”? If the answer is negative, there is no contract. If on the contrary, the contract subsists. The law presumes that social or domestic agreements are not contracts.
Thus in the case of Total Nigeria Plc v Ajayi13, the court held inter alias:
“In considering illegality or voidance of a contract, a court is bound to consider the contract itself and the contemplated action, which the parties have intended to be bound by and not acts or omissions of parties to the contract which do not arise from the terms of the contract.”
According to the case of Akinyemi v Governor Of Oyo
State14, where a contract or a transaction
appears ex fade illegal or void, the
.
.
court would invoke the old and well known maxim of exturpi
causa non oritur actio(no action can be found on illegality) and would not
enforce it even if the transaction has been completed. In such a case where the
facts sufficiently disclose illegality, the courts would even raise the issue suo
moto, pronounce on it, and decline to enforce the contract.
Factors such as illegality, mistake, lack of capacity, misrepresentation, duress, undue influence vitiates a contract.15
Factors such as illegality, mistake, lack of capacity, misrepresentation, duress, undue influence vitiates a contract.15
1 idd
1 EE
UViaghara, Labour Law In Nigeria, Malthouse, Lagos
Nigeria
1st (ed) 2001 P. 12
2 Tony
Nwazuoke, Introduction To Nigerian Labour Law. The Department Of Public Law and
Jurisprudence Ogun State..
1st (ed) 2011 P 12
3 During the
Second republic, Oct 1979- Dec 1983, many states government failed to pay wages
and salaries for several months; although this certainly was a breach, none of
the civil servants and teachers concerned left their employment on this ground.
Indeed, many were happy to survive the massive retrenchment that also took
place
4 EE
Uviaghara, Labour Law In Nigeria, Malthouse, Lagos
Nigeria
1st (ed) 2001 P 13
5 E I Sagay, Nigeria Law of Contract 1985 P 6
6
7 2003 FWLR
(pt 142) P 109 @ 111
8 Smith &
Wood’s, Industrial Law Butterworths, London Dublin 6th (ed) 1996, P.
66
9 (2003) FWLR (pt 181) 1726
10
10b Tony
Nwazuoke, Introduction To Nigerian Labour Law, The Department of Public Law and
Jurisprudence Ogun State.
1st (ed) 2001 p. 13
11 (2003) FWLR Pt 159 1482 C.A
12 E.I Sagay, Nigeria Law Of Contract, 1988 P 82
- 83
13 (2004) FWLR (PT 218) 887 @ 890
14 (2003)
FWLR (pt 140) 1821 at 1824
15 Tony
Nwazuoke, Introduction To Nigerian Labour Law, The Department Of Public Law and
Jurisprudence Ogun State.
1st (ed) 2001 P 14, where the factors were elaborately discussed.