By Michael Dugeri
Sometimes, an employee that is deserving of summary dismissal is
given a soft landing by being asked to resign instead. This may be
for a variety of reasons, such as to save the employee the
unfavourable consequences of a dismissal (as against voluntary
resignation). What if such employee later sues the employer for
‘constructive dismissal’, and claims that he/she was hounded out of
the job by being ‘asked’ to resign?
In employment law, constructive dismissal (also called
constructive discharge or constructive termination) occurs when an
employee resigns as a result of the employer creating a hostile
work environment. Since the resignation was not truly voluntary, it
is in effect, a termination that might entitle the employee to
remedy.
A case study of Mrs Vivien
Folayemi Asana v. First Bank of Nigeria Ltd
The doctrine of constructive dismissal/discharge has been
applied by Nigerian courts, with approval, in a number of cases,
such as the case of Mrs Vivien Folayemi Asana v. First
Bank of Nigeria Ltd (SUIT NO. NICN/LA/184/2016) the
judgment of which was delivered on 09 October 2018. In the case the
claimant claimed that she was forced to resign her employment, on
account of which her resignation amounted to constructive dismissal
from her defendant. The evidence of the claimant was that she was
called on phone to a meeting with the Relief Executive Director in
the Human Capital Management and Development of the defendant and
“coerced, compelled, threatened and forced” to write a resignation
letter or be handed a letter of termination. The claimant’s
resignation letter read as follows:
Further to the request that I should resign, by Management
of First Bank of Nigeria Ltd.
I hereby tender my letter of resignation.
Thank you for the opportunity to have served in First
Bank.
The court believed her testimony and held that, based on the
evidence, the claimant’s resignation amounted to constructive
dismissal. She was accordingly awarded damages in the sum of Two
Million Naira to be paid by the defendant, her former employer. The
court noted that the award was exclusive of other terminal
entitlements that the claimant may have against the defendant as a
result of her disengagement.
General Comments on the
Asana Case
By way of general comments on the court’s judgment, it is
curious that the court in this case appeared to have based its
belief that the claimant’s resignation amounted to a constructive
dismissal from the defendant because the claimant herself noted in
her resignation letter that she was resigning on the “request” of
management of the defendant to do so. In my humble view, evidence
that is needed to support a claim of constructive dismissal should
be deeper than a mere statement from the claimant to that effect.
What if the claimant deliberately worded her resignation letter in
a manner to suggest that she was being forced to resign, even if
such was not quite the case? Also, in some cases, an employee that
is truly deserving of a dismissal is “requested” to resign as a
favour from his/her employer, for a variety of reasons. It will be
unfair that the benevolence of such former employer is allowed to
be taken advantage of by a mischievous employee.
Key Takeaways from the
Asana Case on Constructive
Dismissal
The above arguments notwithstanding, the court noted the
following interesting general points on the doctrine of
constructive dismissal:
- The law as to constructive dismissal/discharge has been stated
by the National Industrial Court in number of its decisions, such
as Mr Charles Ughele Access Bank Plc unreported
Suit No. NICN/LA/287/2014, the judgment of which was delivered on
10th February 2017; Miss Ebere Ukoji v. Standard Alliance Life
Assurance Co. Ltd [2014] 47 NLLR (Pt. 154) 531 and Mr.
Patrick Obiora Modilim v. United Bank for Africa Plc
unreported Suit No. NICN/LA/353/2012 the judgment of which was
given on 19th June 2014. These cases all agree that to attempt to
force the employee to resign, rather than outright firing the
employee means that the employer is trying to create a constructive
discharge and for which a case of constructive dismissal is
made.
- Although a claim for constructive dismissal failed in
Joseph Okafor v. Nigerian Aviation Handling Company Plc
unreported Suit No. NICN/LA/29/2016, the judgment of which was
delivered on 25th April 2018, the court, held on the requirements
for a successful plea of constructive dismissal thus: “…to be
able to succeed in a claim for constructive dismissal, the claimant
must show that he resigned soon after the incident(s) he is
complaining about. See Miss Ebere Ukoji v. Standard Alliance Life
Assurance Co. Ltd (supra). The claimant himself agreed with the
defendant that for the claimant’s case to succeed, he must prove as
enumerated in Western Excavations v. Sharp [1978] 1 All ER 713 that
there is a repudiatory breach (actual or anticipatory) on the part
of the employer, which must be sufficiently serious to justify the
employee resigning; the employee must resign in response to the
breach; and the employee must not delay too long in acting on the
breach…”.
- In Miss Ebere Ukoji v. Standard Alliance Life Assurance Co.
Ltd [2014] 47 NLLR (Pt. 154) 531 NIC, the court laid bare what
constructive dismissal/discharge entails, and the fact that
constructive dismissal/discharge brings to an end the employment of
the employee constructively dismissed or discharged by the employer
leaving the employee with only the right of recompense. In the
words of this Court: “Globally, and in labour/employment law,
constructive dismissal, also referred to as constructive discharge,
occurs when an employee resigns because his/her employer’s
behaviour has become intolerable or heinous or made life difficult
that the employee has no choice but to resign. Given that the
resignation was not truly voluntary, it is in effect a termination.
In an alternative sense, constructive dismissal or constructive
discharge is a situation where an employer creates such working
conditions (or so changes the terms of employment) that the
affected employee has little or no choice but to resign. Thus where
an employer makes life extremely difficult for an employee, to
attempt to have the employee resign, rather than outright firing
the employee, the employer is trying to create a constructive
discharge. The exact legal consequences differ from country to
country, but generally a constructive dismissal leads to the
employee’s obligations ending and the employee acquiring the right
to seek legal compensation against the employer. The employee may
resign over a single serious incident or over a pattern of
incidents. Generally, the employee must have resigned soon after
the incident. See generally Western Excavating v. Sharp [1978] 1
All ER 713 and Oladosu Ogunniyi’s Nigerian Labour and Employment
Law in Perspective (Folio Publishers Limited: Ikeja), 2004, 2nd
Edition, at pages 462 – 464.” - In a claim of constructive dismissal, the remedy available to a
successful claimant is damages, but not reinstatement. In Miss
Ebere Ukoji v. Standard Alliance Life Assurance Co. Ltd
(supra), having found for the claimant in terms of
constructive dismissal, damages were assessed and awarded.
Effect of Constructive Dismissal on recovery of
employee loans
It is pertinent to note that a successful plea of constructive
dismissal has the effect of vitiating a pending obligating of the
claimant to the defendant. Hence, a successful claimant, in the
circumstances, can no longer be held liable for repayment of
subsisting employment loans advanced by the defendant and repayable
by deductions from the employee’s salary. Please see my earlier
article “Litigation of Employee Loans as a Labour Dispute”.
In the instant Asana case, the
defendant counterclaimed N17.3 million Naira owed by the claimant
by the defendant as employee loan. In her defence against this
counterclaim, the claimant argued that the defendant frustrated the
repayment plan of the loan advanced to her by the very act of
constructively dismissing her employment contract. There is a long
line of cases that have handled the issue of whether the doctrine
of frustration applies to subsisting employment obligations (such
as employee loans) when the employment contact is terminated. It is
however, beyond the purview of this article to cover such
arguments. The pertinent thing to note however is that constructive
dismissal can potentially trigger frustration, depending on the
facts.
In court in this case of Asana relied
on cases such as Lewis v. UBA Plc [2016] 6 NWLR (Pt. 1508)
329; Lagos State Govt. v. Toluwase [2013] 1 NWLR
(Pt. 1336) 555 and Mazin Eng. Ltd v. Tower
Aluminum [1993] 5 NWLR (Pt. 295) 526, to arrive at
the conclusion that, based on the facts of the instant case, the
claimant was constructively dismissed/discharged for no fault of
her. In the particular circumstances of the facts, it would be
inequitable to allow the defendant benefit from its wrongfulness;
and legal policy frowns on this. In its words, the court stated
thus: “…the goal of labour law is to ensure that no employer
can be allowed to impose – and no worker can be allowed to accept –
conditions of work which fall below what is understood to be a
decent threshold in a given society at a given time”. The defendant
should not, indeed cannot, be allowed to impose on the claimant a
fair accompli – entice the claimant with an employment loan at a
low rate, then turn around and constructively dismiss her and
convert the low rate loan to one of a higher rate. Head of tail,
the employer benefits much against the interest of the claimant.
This cannot be.”
Conclusion
In the final analysis, legal advice is always needed to safely
bring closure to an employment relationship. Like marriages,
employment relationships are often easier to contract than to end.
This needs to be constantly borne in mind by the parties in order
to minimise exposure of potential legal dispute.
By Michael Dugeri
Sometimes, an employee that is deserving of summary dismissal is
given a soft landing by being asked to resign instead. This may be
for a variety of reasons, such as to save the employee the
unfavourable consequences of a dismissal (as against voluntary
resignation). What if such employee later sues the employer for
‘constructive dismissal’, and claims that he/she was hounded out of
the job by being ‘asked’ to resign?
In employment law, constructive dismissal (also called
constructive discharge or constructive termination) occurs when an
employee resigns as a result of the employer creating a hostile
work environment. Since the resignation was not truly voluntary, it
is in effect, a termination that might entitle the employee to
remedy.
A case study of Mrs Vivien
Folayemi Asana v. First Bank of Nigeria Ltd
The doctrine of constructive dismissal/discharge has been
applied by Nigerian courts, with approval, in a number of cases,
such as the case of Mrs Vivien Folayemi Asana v. First
Bank of Nigeria Ltd (SUIT NO. NICN/LA/184/2016) the
judgment of which was delivered on 09 October 2018. In the case the
claimant claimed that she was forced to resign her employment, on
account of which her resignation amounted to constructive dismissal
from her defendant. The evidence of the claimant was that she was
called on phone to a meeting with the Relief Executive Director in
the Human Capital Management and Development of the defendant and
“coerced, compelled, threatened and forced” to write a resignation
letter or be handed a letter of termination. The claimant’s
resignation letter read as follows:
Further to the request that I should resign, by Management
of First Bank of Nigeria Ltd.
I hereby tender my letter of resignation.
Thank you for the opportunity to have served in First
Bank.
The court believed her testimony and held that, based on the
evidence, the claimant’s resignation amounted to constructive
dismissal. She was accordingly awarded damages in the sum of Two
Million Naira to be paid by the defendant, her former employer. The
court noted that the award was exclusive of other terminal
entitlements that the claimant may have against the defendant as a
result of her disengagement.
General Comments on the
Asana Case
By way of general comments on the court’s judgment, it is
curious that the court in this case appeared to have based its
belief that the claimant’s resignation amounted to a constructive
dismissal from the defendant because the claimant herself noted in
her resignation letter that she was resigning on the “request” of
management of the defendant to do so. In my humble view, evidence
that is needed to support a claim of constructive dismissal should
be deeper than a mere statement from the claimant to that effect.
What if the claimant deliberately worded her resignation letter in
a manner to suggest that she was being forced to resign, even if
such was not quite the case? Also, in some cases, an employee that
is truly deserving of a dismissal is “requested” to resign as a
favour from his/her employer, for a variety of reasons. It will be
unfair that the benevolence of such former employer is allowed to
be taken advantage of by a mischievous employee.
Key Takeaways from the
Asana Case on Constructive
Dismissal
The above arguments notwithstanding, the court noted the
following interesting general points on the doctrine of
constructive dismissal:
- The law as to constructive dismissal/discharge has been stated
by the National Industrial Court in number of its decisions, such
as Mr Charles Ughele Access Bank Plc unreported
Suit No. NICN/LA/287/2014, the judgment of which was delivered on
10th February 2017; Miss Ebere Ukoji v. Standard Alliance Life
Assurance Co. Ltd [2014] 47 NLLR (Pt. 154) 531 and Mr.
Patrick Obiora Modilim v. United Bank for Africa Plc
unreported Suit No. NICN/LA/353/2012 the judgment of which was
given on 19th June 2014. These cases all agree that to attempt to
force the employee to resign, rather than outright firing the
employee means that the employer is trying to create a constructive
discharge and for which a case of constructive dismissal is
made.
- Although a claim for constructive dismissal failed in
Joseph Okafor v. Nigerian Aviation Handling Company Plc
unreported Suit No. NICN/LA/29/2016, the judgment of which was
delivered on 25th April 2018, the court, held on the requirements
for a successful plea of constructive dismissal thus: “…to be
able to succeed in a claim for constructive dismissal, the claimant
must show that he resigned soon after the incident(s) he is
complaining about. See Miss Ebere Ukoji v. Standard Alliance Life
Assurance Co. Ltd (supra). The claimant himself agreed with the
defendant that for the claimant’s case to succeed, he must prove as
enumerated in Western Excavations v. Sharp [1978] 1 All ER 713 that
there is a repudiatory breach (actual or anticipatory) on the part
of the employer, which must be sufficiently serious to justify the
employee resigning; the employee must resign in response to the
breach; and the employee must not delay too long in acting on the
breach…”.
- In Miss Ebere Ukoji v. Standard Alliance Life Assurance Co.
Ltd [2014] 47 NLLR (Pt. 154) 531 NIC, the court laid bare what
constructive dismissal/discharge entails, and the fact that
constructive dismissal/discharge brings to an end the employment of
the employee constructively dismissed or discharged by the employer
leaving the employee with only the right of recompense. In the
words of this Court: “Globally, and in labour/employment law,
constructive dismissal, also referred to as constructive discharge,
occurs when an employee resigns because his/her employer’s
behaviour has become intolerable or heinous or made life difficult
that the employee has no choice but to resign. Given that the
resignation was not truly voluntary, it is in effect a termination.
In an alternative sense, constructive dismissal or constructive
discharge is a situation where an employer creates such working
conditions (or so changes the terms of employment) that the
affected employee has little or no choice but to resign. Thus where
an employer makes life extremely difficult for an employee, to
attempt to have the employee resign, rather than outright firing
the employee, the employer is trying to create a constructive
discharge. The exact legal consequences differ from country to
country, but generally a constructive dismissal leads to the
employee’s obligations ending and the employee acquiring the right
to seek legal compensation against the employer. The employee may
resign over a single serious incident or over a pattern of
incidents. Generally, the employee must have resigned soon after
the incident. See generally Western Excavating v. Sharp [1978] 1
All ER 713 and Oladosu Ogunniyi’s Nigerian Labour and Employment
Law in Perspective (Folio Publishers Limited: Ikeja), 2004, 2nd
Edition, at pages 462 – 464.” - In a claim of constructive dismissal, the remedy available to a
successful claimant is damages, but not reinstatement. In Miss
Ebere Ukoji v. Standard Alliance Life Assurance Co. Ltd
(supra), having found for the claimant in terms of
constructive dismissal, damages were assessed and awarded.
Effect of Constructive Dismissal on recovery of
employee loans
It is pertinent to note that a successful plea of constructive
dismissal has the effect of vitiating a pending obligating of the
claimant to the defendant. Hence, a successful claimant, in the
circumstances, can no longer be held liable for repayment of
subsisting employment loans advanced by the defendant and repayable
by deductions from the employee’s salary. Please see my earlier
article “Litigation of Employee Loans as a Labour Dispute”.
In the instant Asana case, the
defendant counterclaimed N17.3 million Naira owed by the claimant
by the defendant as employee loan. In her defence against this
counterclaim, the claimant argued that the defendant frustrated the
repayment plan of the loan advanced to her by the very act of
constructively dismissing her employment contract. There is a long
line of cases that have handled the issue of whether the doctrine
of frustration applies to subsisting employment obligations (such
as employee loans) when the employment contact is terminated. It is
however, beyond the purview of this article to cover such
arguments. The pertinent thing to note however is that constructive
dismissal can potentially trigger frustration, depending on the
facts.
In court in this case of Asana relied
on cases such as Lewis v. UBA Plc [2016] 6 NWLR (Pt. 1508)
329; Lagos State Govt. v. Toluwase [2013] 1 NWLR
(Pt. 1336) 555 and Mazin Eng. Ltd v. Tower
Aluminum [1993] 5 NWLR (Pt. 295) 526, to arrive at
the conclusion that, based on the facts of the instant case, the
claimant was constructively dismissed/discharged for no fault of
her. In the particular circumstances of the facts, it would be
inequitable to allow the defendant benefit from its wrongfulness;
and legal policy frowns on this. In its words, the court stated
thus: “…the goal of labour law is to ensure that no employer
can be allowed to impose – and no worker can be allowed to accept –
conditions of work which fall below what is understood to be a
decent threshold in a given society at a given time”. The defendant
should not, indeed cannot, be allowed to impose on the claimant a
fair accompli – entice the claimant with an employment loan at a
low rate, then turn around and constructively dismiss her and
convert the low rate loan to one of a higher rate. Head of tail,
the employer benefits much against the interest of the claimant.
This cannot be.”
Conclusion
In the final analysis, legal advice is always needed to safely
bring closure to an employment relationship. Like marriages,
employment relationships are often easier to contract than to end.
This needs to be constantly borne in mind by the parties in order
to minimise exposure of potential legal dispute.
