The Court of Appeal has ordered Outsourcing Services Limited (OSL), an outsourcing company for Chevron Nigeria Limited, to pay N7,611,904,325.32 leaving gratuity, annual increment of 7.5% basic salary for year 2011 and overtime earnings to its former workers from 1st November, 2002 till date.

CITY LAWYER gathered that the amount is only a part of the total judgment sum awarded to 1,793 former staff, as the total number of claimants are in excess of 2,300. The court is yet to compute the judgment sum for the outstanding ex staff numbering about 600.

The landmark judgment, viewed by many jurists as the locus classicus on enforceability of collective bargaining agreements as employment contracts, was secured by the appellants following an appeal against the decision of Justice Osatohanmwen Obaseki-Osaghae of the National Industrial Court which threw out their original claim dating back to 2011.

The case borders on enforceability of collective agreements between an employer and its employees. While the Appellant, National Union of Hotel and Personnel Service Workers (NUHPSW) had argued on behalf of its members that “collective agreement” executed by NUHPSW and OSL was binding and enforceable, OSL contended that the agreement was non-justiciable, having not been incorporated into its employees’ contract of employment.

At all material times, OSL (Respondent) had an outsourcing contract with Chevron Nigeria Limited at various locations in the country where it engaged the appellant’s members. While the workers were duly employed and issued letters of employment, it was not until June 2008 that a “Collective Agreement” was jointly executed by both parties. The Appellant’s grievance stemmed from the Respondent’s refusal to implement the terms of the “Collective Agreement.”

In coming to its unanimous decision, the Appeal Court reformulated a sole issue for determination, namely “Whether or not the Collective Agreement entered into between the Appellant and the Respondent in June 2008 is justiciable and enforceable ab initio, and whether it is still operative.”

In his submissions, the Appellant’s Counsel, Mr. Francis Yekovie, who initiated the claim at the lower court while barely two years at the Bar, argued inter alia that the trial court fell into error when it failed to adopt a community reading of the various clauses of the collective agreement.

On its part, the Respondent queried the justiciability and enforceability of the Collective Agreement, adding that the Collective Agreement was never incorporated into the contract of employment of the workers as to make in binding on the outsourcing company and by extension Chevron Nigeria Limited, its principal.

But in the lead judgment by Justice Muhammad Ibrahim Sirajo, the Appeal Court held that “It is instructive to note that the contention of the appellant was that its individual member’s contract of employment has been replaced by the collective agreement in the instant case. Having taken considerable time to look into the terms contained in the collective agreement executed by the parties from the standpoint of the provision of Section 254C (j)(i) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), (the 3rd Alteration Act), relied on by the learned trial Judge, I am of the respectful opinion that the collective agreement is both enforceable as well as justiciable.”

The court held that the Respondent must have been oblivious to the sweeping constitutional power with which the National Industrial Court of Nigeria is clothed, to the exclusion of any other court, to hear and determine the nature of the instant question, adding that the constitutional dispensation moved the jurisdiction of the lower court past the realm of mere interpretation to include enforcement, id est, the determination of the question as to the “interpretation of any collective agreement”. See Section 7 Subsection (1) (C)(i) of the National Industrial Court Act, 2006.

The court observed that the statutory provision and the majority of the decisions relied upon by the Respondent were pre-Third Alteration positions of the Law when the provision of Section 7 of the NICN Act, 2006 held sway. Putting the matter beyond debate, the Appeal Court held that the advent of the Alteration Act of the 1999 Constitution “could be validly likened to a game changer” when the hitherto unenforceable agreement becomes justiciable, noting that prior to the Alteration Act, the doctrine of privity robbed collective agreements of their enforceability, except and until such time as the terms of the agreement are incorporated into individual members’ contracts of employment. See Osoh & Ors v.Unity Bank Plc (supra), also reported as (2013) LPELR-19968 (SC).

This power of the lower court to interpret and apply terms in a collective agreement is further reinforced by Section 254C(1)(b) of the Third Alteration Act of the 1999 Constitution, as amended, over civil matters or causes that relate to or arise from the Factories Act, Trade Disputes Act, Trade Unions Act, Labour Act, Employees’ Compensation Act, or any other Act or Law relating to labor, employment, industrial relations, the workplace, or any other enactment replacing the Acts or Laws. See Osoh & amp; Ors vs. Unity Bank Plc, and Rector, Kwara Poly vs. Adefila (supra).

The court also noted that the Third Alteration to the 1999 Constitution placed high premium on aligning Nigeria’s labour law and practices with international best practice, adding that Section 254 (1) (f) of the Third Alteration Act references issues “(f) relating to or connected with unfair labour practices or international best practices in labour, employment and industrial relation matters; (h) relating to, connected with or pertaining to the application or interpretation of international labour standards.”

It held that, given this intendment of the drafters of the Third Alteration, the lower court ought to have taken a proactive stance in ensuring that the nation is not left out in the reckoning of comity of nations with robust labour practices that align with global standards. See the case of Sahara Energy Resources Ltd vs. Olawunmi Oyebola (2020) LPELR-51806(CA), per Ogakwu, JCA, even as “The Court hereby reiterates that the clarion call is to the stakeholders in labour and industrial relations, to strive in order to conform with the international best practices as obtainable in the field.”

The court stated that Nigeria has entered into several international commitments which pre-determine for her, the way collective agreements are to be regarded, including the Convention on the Freedom of Association and Protection of the Right to Organise, Convention No 87 of 1948, ratified by Nigeria in October 17, 1960; Collective Agreements Recommendation No. 91 of 1951, Collective Bargaining Convention No. 154 of 1981, Right to Organise and Collective Bargaining Convention No. 98 of 1949 ratified by Nigeria on 17th October, 1960. It noted that “The Collective Agreements Recommendation provides that collective agreements should bind the signatories thereto, and those on whose behalf the agreement is concluded. This recommendation, though not a convention, is evidence of international best practice. This Court is able to apply international conventions and treaties, even where not nationalized by virtue of Section 254C (2) ….”

Conclusively, the court held as follows: “As stated earlier, I am sufficiently persuaded by the argument canvassed in favour of the applicability of the Collective Agreement dated June 2008, and duly executed by the parties in the appeal, I find the argument of the Respondent weak and unsustainable, I hereby discountenance it. I resolve the first leg of the reformulated issue in this appeal in favour of the Appellant and I find that the collective agreement of the parties is enforceable and justiciable as well, I so hold.“

Turning to the second issue as to whether the collective agreement has become inoperative, the Appeal Court held that the trial court erred when it held that the collective agreement was no longer operative, saying: “With due respect to the learned trial Judge, the line of reasoning towed together with the decision arrived at by His Lordship was not borne out of sound principle of law. I maintain this line of opinion based on the verdict of the court that the Collective Agreement is valid and enforceable. Whereas the line of difference drawn by the trial Judge was merely vide the interpretation section of the Labour Act, section 91, the difference in the definition between the two; the contract of employment and the collective agreement, in my opinion, is not cast in iron….”

The court further held that “In the absence of any allegation of fraud, misrepresentation, mistake and/or other vitiating factors, the contract, which was freely signed by the party, binds the respective parties and same inures and spans with the parties’ contractual relationship. It is a settled law that parties are bound to honour, with the performance, the terms of the contract they freely entered into; this is aptly captured in the Latin maxim, Pacta Sunt Servanda. See: A. G. Rivers State v A. G. Akwa Ibom State & Anor (2011) LPELR-633 (SC); A. G. Nasarawa State v A. G. Plateau State (2012) LPELR-9730 (SC).

“I have taken another look at the Collective agreement, it is my opinion that had it been that the learned trial Judge interpreted the whole 56 Articles as a whole, rather than at a convenient instalment as he has done, he would have arrived at a different verdict altogether. Courts are enjoined to interpret the contractual agreement submitted for it to determine and as made by the parties, and not to supplant its term in replacement for parties’ intentions. See Standard Nig. Engr Co. vs. Nigerian Bank for Commerce and Industry (2006) 25 NSCQR 654.”

The court noted that the Appellant “has contended that its members have suffered a miscarriage of justice occasioned on them both by the lower Court’s decision said to be perverse by not considering total evidence placed before it at trial and also by the Respondent, who is said to be forcing the bitter pill of waiver down their throat, with the sole aim of shortchanging its members.”

In also resolving the second issue against the Respondent, the appellate court held that “The lower court was wrong in failing to consider the provisions of the Collective Agreement as a whole, which renders its judgment perverse and liable to be set aside. Consequently, the second leg of the issue for determination is equally resolved in favour of the Appellant.

“In sum, flowing from the foregoing reasons, I find that the appeal is meritorious and I hereby allow it. The judgment of the National Industrial Court delivered on 18/01/2013 by Hon. Justice O. A. Obaseki-Osaghae, which held that the Collective Agreement between the parties has lapsed and is not in operation, is hereby set aside. In its place, judgment is entered in terms of the Appellant’s Amended General Form of Complaint and the Statement of Facts thereto filed before the lower Court. That is to say, members of the Appellant, on whose behalf the action was filed, are entitled to the leaving gratuity as contained in the Collective Agreement; annual increment of 7.5% basic salary for the year 2011; and overtime payment of N264.00 per hour for four hours per day from 01/11/2002 till the date of filing the suit on 22/12/2011. The Respondent is accordingly mandated to pay the leaving gratuity, annual increment and hourly overtime aforesaid into the Appellant’s Solicitors’ Account No. xxxxxxxxxxxxx domiciled with Diamond (Access) Bank, with Account name: Francis O. Yekovie & Co.”

It was unclear at press time whether OSL/Chevron have complied with the court order.

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