Examination Of Remedies For Wrongful Termination
Of Contract Of Employment
Wrongful termination happens
when an employee’s is discharged from employment for illegal reasons if company
policy is violated when the employee fired. In many cases, unless there is a contract or bargaining
agreement employees are considered
covered under employment at will which means your employer doesn’t need a
reason to fire you. However an employee an employee can be wrongful terminated
If discrimination is involved in the termination, if public policy is violated,
or if company policy states guidelines for termination. Other reasons that
could be construed as wrongful termination include retaliation i.e. being fired
for being a whilstle blower or complaining, or for not being willing to commit
an illegal act when asked to by an employer.
Discriminatory reasons that can be considered wrongful
termination include firing an employee because of race, nationality, religion,
gender, or age.
WRONG TERMINATION
If you believe termination was wrongful or you have not
been treated according to the law or company policy, you can get help. The US
department of labour, for example, has information on each law hat regulates
employment and advice on where and how to file a claim.
In addition, local bar associations often have a referral
service and may even have a lot line you can call to find an employment lawyer.
Keep in mind that you will need to pay for an attorney’s service.
TERMINATION AND UNEMPLOYMENT
When you are terminated you may not be eligible for
unemployment compensation. If you are not sure whether you are eligible for
unemployment, check with your state unemployment office to determine your
eligibility for unemployment compensation. If your claim is denied you will be
able to appeal and explain the circumstances of your termination.
REMEDIES
FOR WRONGFUL TERMINATION OF CONTRACT EMPLOYMENT
Under the law of contract, the rule, generally, is
that contracts of employment will not be specifically enforced. Special
circumstances must be shown before the courts will exercise their equitable
jurisdiction to specifically enforce the contract in favor of an employee
wrongfully dismissed, and its exercise will be at the discretion of the courts.
Several reasons have been adduced for this rule. In De Francesco v Barnum,1 Fry U declared2:
“For
my own part, I should be vary unwilling to extend decisions the effect of which
is to compel persons who are not desirous of maintaining continuous personal
relations with one another to continue those personal relations. I have a
strong impression and a strong feeling that it is not in the interest of
mankind that the rule of specific performance should be extended to such cases.
I think the courts are bound to be jealous, least, they
should
turn contracts of service to contracts of slavery, and therefore, speaking for
myself, I should lean against the extension of the doctrine of specific
performance and injunction in such a manner.
Thus, where an employee’s appointment is wrongfully
terminated, his remedy lies in an action for damages, because, the court cannot
force an employer to keep an employee in his service if the employee’s services
are no longer required. The normal measure of damages that the employee would
be entitled to is what he would have earned over the period of notice required
to lawfully terminate his employment. This is consistent with the contract
between the parties that have stipulated the measure of damages.3
4.2 Damages
Where an employee is wrongfully removed, either by a summary dismissal that has not been
justified or by giving of insufficient notice, the normal remedy to which he is
entitled is damages. As we have seen, his reinstatement will not normally be
ordered.
Put in another way, the remedy for breach of contract
of personal service save in exceptional circumstances is damages. It is not
open to the respondent to proceed on the basis that his contract of employment
was still subsisting and claim for loss of salary and other perquisites of his
employment for the period he did not work. This is in consequence of the
general principle of law that the court will not grant specific performance of
contract of service5,
As a general rule, the measure of damages is the
amount the employee would have earned under the contract for the period until
the employer could validly have terminated it, less the amount the employee
could reasonably be expected to earn in other suitable employment. This is because
the dismissed employee, like any innocent party following a breach of contract
by the other party, must take reasonable steps to minimize his loss. This is in
consonance with another rule of the common law that, where a party sustains a
loss by reason of a breach of contract, he is, so far as money can do it, to be
placed in the same situation, with respect to damages, as if the contract had
been performed.
Thus, the Appeal Court, in the case of Osumah Edo
Broadcasting Service6 stated:
“Where
an employee’s appointment is wrongfully terminated, his remedy lies in an
action for damages, because, the court cannot
force
an employer to keep an employee in his service if the employee’s services are
no longer required. The normal measure of damages the employee would be
entitled is to be what he would have earned over the period of notice required
to lawfully terminate his employment. This is consistent with the contract
between the parties that have stipulated the measure of damages.”
Where employment is for a fixed period, and it is
wrongfully terminated, the damages for the loss of earning are limited to the
period that the courts deem reasonable to enable the plaintiff to secure
alternative employment7a. And
what period is reasonable depends on the fact and circumstance of each case7b. In Haider v Barini (Nig) Bank Ltd8, the plaintiff was an alien. His
contract with the defendant bank was for a fixed period of three years, as from
24th October 1959. The plaintiff was wrongfully dismissed on 1st
June 1960.
The trial court gave the plaintiff damages on the
basis of three months’ notice. On appeal the plaintiff argued for an amount
equivalent to his salary for the unexpired period of contract.
The Supreme Court held that a contract for a fixed
period ceased to exist from the date of its wrongful termination; and
that the plaintiff was only entitled to damages for breach of contract and not
to his salary for the unexpired period. In awarding damages to the plaintiff,
the court ohserved8b
“One has to bear in mind that he was an alien in
Nigeria, brought here as an employee of the bank by leave of the Imrnigration
Authorities, and that factor was overlooked by trial judge when assessing
damages. It may be reasonable in the normal case to award damages on the basis
of three months’ notice in the case of Nigerians dismissed by a bank; they can
seek other employment, and they should; but an alien like the plaintiff is in a
different position. There is no evidence on the possibility of his finding
other employment…
In the light of the above consideration I am of the opinion that the damages should include salary to the end of January, 1961... plus salary for one month thereafter to allow the plaintiff time to arrange for appeal against the judgment and return to Beirut and settle down there plus salary for another three months in which to seek suitable employment-which means twelve months in all.”
In the light of the above consideration I am of the opinion that the damages should include salary to the end of January, 1961... plus salary for one month thereafter to allow the plaintiff time to arrange for appeal against the judgment and return to Beirut and settle down there plus salary for another three months in which to seek suitable employment-which means twelve months in all.”
The salary or wages for the unexpired period of
employment are recoverable as damages. Akintan JCA explaiis the principle this
way:8
“The
position in law is that where a contract of employment is for a specific period
and the employee was wrongfully dismissed or removed from office, then an award
of damages in the full amount of salary, allowances and other entitlement which
the employee would have earned, if the contract of service had run up full
course, is the maximum amount may be reduced slightly in respect of being
payable immediately instead of due dates.”
In the assessment of damages for losses, other than
the loss of wages or salary, the measure of damages is, generally limited as in
cases of damages for a loss of wages to the notice period9. There is no basis for an award of
general damages n a breach of employment contract, or for injured or ruffled
feelings as a result of the loss of job10
Also, the courts take into consideration the legal obligation to mitigate loss
arising from a breach of contract. A wrongfully removed employee is expected to
take reasonable steps to obtain another suitable employment and if he does,
whatever he earns at that employment will be deducted from the damages
otherwise recoverable. The onus is on the employer to prove that the employee
has or ought reasonably to have obtained an alternative employment.
4.2 Declaration
and Injunction.
At
common law, the remedy of damages was the only relief for breach of contract.
And as we have seen, this remedy is hardly an adequate compensation to an
employee wrongfully dismissed. Declaration and injunction are court orders by
which a defendant is directed or compelled to perform the contract in
accordance with its terms. Whenever the court grants specific performance in
favour of an employee wrongfully dismissed, the effect is that the dismissal is
invalid and employee reinstated or restored11
to his employment.
The Appeals Court in the case of National
Electric Power Authority v Olagunju12
stated that a court of law could not make a declaration to order the
reinstatement of a staff or an employee when it has not been established by
evidence that such employment exists. The terms of the employment and the
nature of the appointment are necessary proof to clothe the court with
jurisdiction.
Additionally, in N.E.PA. v Olagunju (supra)13, the court held as follows, on what a
plaintiff, seeking declaration that termination or dismissal is null and void,
should prove:
“In an
action by an employee which seeks a declaration that the termination of his
employment or his dismissal is null and void, he must plead and prove not only
the appointment but also the terms and conditions of appointment or contract of
service constitute the foundation…”
Thus it is only when special circumstances exist, that
a declaratory judgment would be given. An order of certiorari or even
mandamus may also become available although its effect will be to specifically
enforce the contract.
What Circumstances Amount To Special Circumstances?
1) Statutory
Status:
The Supreme Court has said that such special
circumstances has been held to arise where the contract of employment has a legal
or statutory flavor, thus putting it over and above the ordinary master and
servant relationship.14 This
is so where the procedure for the determination of the employment is regulated
either directly by statute or by rules or regulations made by virtue or
statutory power. ‘It is now well established’ said Uwaifo JCA,
“That
an office or employment has a statutory flavor in the sense that its conditions
of service are provided for by statute or regulations made there under. Any
person in that office or employment enjoys a special status over and above the
ordinary master and servant relationship15.
Also in Okarafor v Minister Of Internal
Affairs16, It was held that
where the laid down procedure in the relevant laws and regulations are not followed, the plaintiff would be entitled to automatic reinstatement.
where the laid down procedure in the relevant laws and regulations are not followed, the plaintiff would be entitled to automatic reinstatement.
However, it is not enough merely that the employer is
a statutory body. The fact that the employer is a statutory body does not mean
that the condition of service of its employees must be of a special character
ruling out the relationship of mere master and servant17 As Uwaifo JCA has said:
“It is
unattainable to conclude that simply because the defendant is a statutory body
the condition of service of its employment must be presumed to be of a special
character making it necessary to rule out the relationship of mere master and
servant between the defendant and its employee, it must be ascertained, that is
to say, through evidence adduced, that there are rules and regulations which
govern the employment to give it a statue of a particular tenure.”18
On the other hand, where a plaintiff claims a
declaratory order that his employment subsists or that he was wrongfully
declared redundant by his employer but fails to adduce evidence of the terms of
his employment in proof of his assertion, he would not be entitled to the
declaratory order sought.19
2. Termination for Misconduct:
Where an employer states that an employee was
dismissed for misconduct, if challenged he must prove the misconduct, otherwise
that may be a ground for decreeing specific performance against him.20a The Nigerian supreme court has held
that where the employee is a civil servant with a permanent and pensionable
appointment, the employer must not only prove the misconduct, but he also gave
the employee a fair hearing.20b
In A. C. B. Ltd v Ewarami,21 the appellant/employers failed to
discharge their averment that the respondent was dismissed from service for his
refusal to go on transfer. The appellant alleged that the order to proceed on
transfer was contained in a letter dated 3rd August 1973, addressed to the
respondent. However, there was no proof from the appellants that the said
letter was served on the respondent.
The plaintiff/respondent claimed not only that his
dismissal was wrongful, but also declaration that he was still in the
employment of the appellant. His prayers where granted by the trial court and
affirmed by the Supreme Court.22
3. Where
the Contractual Provision is Exhaustive on Grounds for Termination:
In McClelland v Northern Ireland General Health
Service23, the appellant held a permanent
and pentionable employment. By the Clause 12 of the conditions of employment,
the respondent board could dismiss an officer only for gross misconduct,
inefficiency and unfitness to merit continued employment, and where dismissal
was for misconduct, the board had to give at least one month’s notice. The
board gave the appellant six months’ notice
, and terminated her appointment on the ground of redundancy. The
English House of Lords held that the appellant’s employment had not been
validly terminated. Since it was terminable only as provided for by Clause 12
of the conditions of employment, which was exhaustive in that respect. The
House, therefore, granted the appellant a declaration that her employment still
subsisted.24
4. The
Existence of Mutual Confidence:
The plank upon which the English Court of Appeal, in Hill
v C. A. Parson & Co. Ltd,25 founded
its jurisdiction to grant injunction restraining the employers from treating a
wrongful dismissal as terminatory of the plaintiffs employment was the
continued existence of mutual confidence between the parties. As once judge has
remarked: “The defendant had been unwilling to dismiss the plaintiff and were
induced to do so by organized industrial pressure. They were quite willing to
re-employ him if they could legitimately and practically do so.”26
1 (1890) 45 Ch D 430 @ 435
2 Tony Nwazuoke, Introduction To Nigerian
Labour Law, The Department Of Public Law And Jurisprudence Ogun
State. 1st
(ed) 2001 p 89
3 Osumah v
Edo Broadcasting Service (2005) ALL FWLR (Pt 253) 773 at 778.
5 EE
UViaghara, Labour Law In Nigeria,
malthouse, Lagos Nigeria 1st (ed) 2001 P.
94
6 (2005) ALL
FWLR (Pt 253) p. 773 @ 778
7a Haider v
Barini (Nig) Bank Ltd (1963) SCNL 242
7b Tony
Nwazuoke, Introduction To Nigerian Labour Law, The Department of Public Law And
Jurisprudence Ogun State.
1st (ed) 2001 p 91
8 Supra
8b Tony
Nwazuoke, Introduction To Nigerian Labour Law, The Department Of Public Law And
Jurisprudence Ogun State, 1st
(ed) 2001 p 92
8 David
Osuagwu v A.G Anambra State
(1993) 4 NWLR 13, 45
9 See for
example, Bold v Brough Nicholso Ltd (1964) 1 WLR 2001, a case dealing with
pension’s right under a contributory
pensions scheme. Damages for loss of pension rights were limited to the notice
period necessary for the valid termination of employment; In Manubens v Leon
(1919) k.B 208 where the plaintiff was awarded damages for loss of tips which
under the contract he would have been entitled to over the period of notice had
the contract not been terminated in breach.
10 Nigerian
– Arab Bank Ltd v Shuaib (1991) 4 NWLR 450
11 According
to Thomas Kobling and Tamara Lewis, Employment Law (Legal Action Group 2nd
(ed) 1994 P 175 & 176: Reinstatement is where the court ordered that the
worker returns to his/her old job, whereas re-engagement is where the worker
returns to a similar job either with the employer or an associated employer
12 (2005) 3 NWLR (Pt 913) P 603 @ 612
13 (2005) 3
NWLR (Pt 913) P 603 @ 612
14
Chukwuma v Shell Petroleum Company Of Nigerian Ltd (1993) 5 KLR 93, 111.
15 University of Nigeria Teaching Hospital Management Board
v Nnoli (1992) 6 NWLR 725, 968
16 (2004) ALL FWLR PT 209 P. 1108 @ 1110
17 Per Kutigi, JSC in the leading judgment of
the supreme court in Fakuade v OAUTH (1995) 5 NWLR 47, 57.
18 Udemah v Nigeria Local Corporation (1991) 3
NWLR 477 @ 487.
19 Yusuf v Dornier Aviation (Nig) Ltd (2004) 10
NWLR (PT 880) P. 1 @ 5.
20a Tony
Nwazuoke, Introduction To Nigerian labour Law, The Department Of Public Law and
Jurisprudence Ogun State.
1st (ed) 2001 P 103/
20b Ibid;
Olatunbosun v N.I.S.E.R. Council (1988) N.S.C.C. 1025. per Oputa, J.S.C. at P.
1046
21 (1978)
S.C. 99
22 Tony
Nwazuoke, Introduction To Nigerian Labour Law, The Department of Public Law and
Jurisprudence Ogun State.
1st (ed) 2001 P 104
23 (1957) 2
ALL E R. 129; Ibid
24 Tony
Nwazuoke, Introduction To Nigerian Labour Law, The Department of Public Law And
Jurisprudence Ogun State.
1st (ed) 2001 P104
25 Supra
26 Gunton v Richmond