A Lagos-based deposit money bank has been ordered by the National Industrial Court to pay over N162 million in outstanding retirement benefits to former employees, citing unlawful withholding despite third-party employment arrangements
[dropcap]T[/dropcap]he National Industrial Court sitting in Lagos has mandated a prominent deposit money bank to pay over N162 million in outstanding retirement benefits to a group of its former employees.
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The court’s decision highlighted that the bank had unlawfully withheld entitlements from long-serving staff, despite their engagement through third-party employment arrangements.
The claimants in the suit, including Ann Nwabulu, Chidinma Fred Oka, Doris Alfred-Okhilua, Dayo Johnson-Olayemi, Julius Ubah, Obiageli Mbadiwe, Obasi Esobe, Sophia Milton, Yemisi Femifalade, Abiamuwe Sylvester, and Nnenna Ekwueme, were represented by their counsel, Chief Mike Ozekhome, SAN.
They sought declarations that the bank’s failure to pay their retirement benefits breached their employment contracts and violated established labour laws, and that the bank’s attempt to retroactively apply a new retirement policy was unlawful.
They also sought an order for immediate payment of the owed sums.
In a judgment delivered by Justice R.H. Gwandu, the court found that the claimants, including the 10th claimant who joined the bank following its merger with another commercial bank and Manny Bank, had sufficiently proven their employment and entitlement to the benefits claimed.
The court specifically addressed two key issues: its jurisdiction to hear the 10th claimant’s case and whether the claimants had established their entitlement to the benefits.
On the matter of jurisdiction, Justice Gwandu affirmed the court’s competence to hear the 10th claimant’s case.
It would be inequitable and unjust to hold that no employment relationship existed. The defendant cannot use technicalities to avoid its obligations when the facts are clear and uncontroverted.
Although the bank denied a direct employment relationship with him, arguing he was only seconded, the court established that he had worked with FSB under Direct Resources Limited and continued for 11 years post-merger until his retirement in 2016.
Evidence presented, such as long service awards and letters of recognition issued by the bank, confirmed his status as a long-serving staff member.
Justice Gwandu stated, “It would be inequitable and unjust to hold that no employment relationship existed. The defendant cannot use technicalities to avoid its obligations when the facts are clear and uncontroverted.”
Regarding the substantive claims, the court ruled in favour of the former employees, who, despite being employed through a third-party securities firm, served the said bank directly.
Justice Gwandu strongly criticised the prevalent practice of using third-party entities to circumvent labour obligations.
The court noted that the bank itself had acknowledged the claimants’ years of service through various letters and service certificates.
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“The practice of using third-party companies to avoid liability under the guise of privity of contract is one this honourable court has consistently frowned upon,” the court stated, further rejecting the commercial bank’s argument that the claimants lacked the 15 years of unbroken service required under its retirement policy.
