On appeal by the defendant-

HELD:

The trial Judge erred by applying the principle of law governing a contract which makes no provision for its termination during its tenure: on a proper construction of clause 6 of the agreement, all the plaintiff was entitled to was the amount already paid into court, viz. two weeks salary plus leave entitlements.

Jackson v. Hayes Candy & Co. Ltd. [1938] 4 ALL. E.R. 587, distinguished.

De Stample v. Dunkels [1973] 2 ALL E.R. 215, 252.

Western Nigeria Development Corp. v. Jimoh Abimbola (1966) N.M.L.R. 381, 382.

Nigeria Produce Marketing Board v. A.I. Adewunmi (1972) 1 ALL N.L.R. (Part 2) 433, 437

Appeal allowed; damages reduced.

D.I.A. Popo for the appellants.

A. Uzuazebe for the respondents.

Obaseki AG. J.S.C. (delivering the judgment of the Court)-This is an appeal against the judgment delivered by Ovie-Whiskey, J., sitting at Warri in the High Court of the Mid-Western State of Nigeria, on the 20th day of October 1972, wherein he awarded the plaintiff, now respondent, the sum of £535:6:3d as special damages for wrongful dismissal against the defendants now appellants. Against this decision, the defendants/appellants have brought this appeal on 5 grounds which read as follows:-

(1)     The learned trial Judge erred in law when he held that the plaintiff was wrongfully dismissed.

(2)     The learned trial Judge erred in law when he construed exhibit A (The Service Agreement) by applying a general principle of law relating to a yearly contract having no provision for its termination during its tenure, whereas the parties to exhibit A have expressly provided that it could be terminated at any time during its currency.

ALTERNATIVELY

The learned trial Judge erred in law and did not rightly construe clause 6 when he held that the two weeks pay in lieu of notice could not be given before the end of the period of a year service.

(3)     The learned trial Judge erred in law when he held that the plaintiff was entitled to more than two weeks pay in lieu of notice.

(4)     The learned trial Judge erred in law when he awarded £535:6:3d special damages to the plaintiff because the calculation was based on a wrong premise.

(5)     The judgment is against the weight of evidence.

The facts of the case disclosed in the pleadings and the evidence may be stated as follows:-

The plaintiff/respondent was employed by the defendants/appellants on the 16th day of January 1971 as a camp boss on a salary of £40: =: = a month under a service agreement exhibit A which provided, inter alia, in clause 6 that the agreement may be terminated at any time during its tenure by either party giving to the other two weeks notice of termination in writing or on payment of two weeks wages in lieu of notice by the employers. The plaintiff/respondent served till March 17, 1972 when the defendants/appellants served him with a letter of dismissal exhibit C, effective from March 16, 1972. In the last paragraph of the letter, he was advised to report at the payroll department for his final settlement and documentation. He did report and was offered two weeks salary in lieu of notice without other accrued benefits. He rejected the offer and, however, took out a writ of summons claiming the sum of £2,395: =: = whereof £2,350: =: = was claimed as special damages and £35: =: = as general damages.

The defendants/appellants on being served with the writ of summons in this case paid £44:12:3d into court in satisfaction of the claim.

Of this £44:12:3d, £20 was for two weeks salary in lieu of notice, £4:12:3d was proportionate leave pay for 3 days at £1:10:9d per day and the balance of £20 was to cover leaving gratuity calculated at 2 weeks salary on half basic monthly salary (after about one year's service).

Earlier on the day he was served with the letter of dismissal he had been given exhibit B, an ante-dated letter of posting to Tender III as camp boss with effect from 13th March 1972. The letter was dated 11th March 1972. It was while he was waiting to report to his boss about the new posting that the letter of dismissal was served on him.

The grounds for the dismissal is apparent on the face of the letter which reads:-"Dear Mr Ajijala,

In view of your past actions and conduct on Rig 52, we have decided to dispense with your services and therefore, effective March 16, 1972, your services are no longer required by the International Drilling Company (Nigeria) Limited.

But it has been decided that after a period of approximately one month, the Drilling Superintendent will review your case as to whether we can offer you another position with this Company. Upon receipt of this letter you should report to the Payroll Department for your final settlement and documentation."

But Mr David Owivri, the Personnel officer of the defendants/appellants, who was the only witness called to testify by them, gave a different ground for the plaintiff/respondent's dismissal from their service which the learned trial Judge rejected in the following terms in his judgment:-

"Before proceeding further with this matter, I would like to put in on record that I do not believe the evidence of the only witness called on behalf of the defendant Company when he said that the appointment of the plaintiff was terminated because he disobeyed the orders of his employers by refusing to be transferred to an oil rig by the name "Tender III" stationed at Enerhen. This piece of evidence is wholly untrue because exhibit C, the letter of termination, did not make mention of it."

The learned trial Judge after a detailed review of the evidence, held that the plaintiff/respondent was entitled to be paid what he would have earned from 16th March 1972 to 15th January 1973 less any sum that be in fact earned between these dates and tabulated the entitlements as follows:-

                                                                                                                                                                                                              £         s.      d.

(a) Basic salary at £40 per month from 16/3/72 to 31/3/72                                                                                20          =      =

(b) Basic salary at £40 per month from April 1972 to December 1972                                                              360          =      =

(c) Basic salary at £40 per month from 1st to 15th January 1972                                                                      20          =      =

(d) Basic allowance at £5 per month from 16th to 31st March 1972                                                                   2        10      =

(e) Basic allowance at £5 per month From April to December 1972                                                                   45          =      =

(f) Basic allowance at £5 per month from 1st to 15th January 1973                                                                   2        10      =

(g) Overtime for 218 days other than Saturdays and Sundays from 10th March 1972 to 15th January 1973    250       250      14

at 4 hours per day at the rate of 5/9d per hour

(h) Overtime for 44 Saturdays from March 16, 1972 to January 15                                                                      101          4      =

1973 at 8 hours per Saturday at the rate of 5/9d per hour

(i) Overtime for 44 Sundays from 16th March 1972 to 15th July, 1973 at                                                             180          8      =

12 hours per Sunday at the rate of 6/10d per hour

(j) Proportionate leave pay for 3 days at £1/10/9d per day                                                                                     4        12      3

(k) Leaving gratuity, 2 weeks at half basic (after about 1 year's service)                                                               20          =      =

                                                                                                                                                                                                       £1006        18s      3d

From this amount, the learned trial Judge deducted the sum of £471:12/- which he stated, represented the total amount of wages, allowances and benefits earned and expected to be earned by the plaintiff/respondent in alternative employments between May 1972 and January 15, 1973 and then arrived at the amount of £535:6:3d which he awarded.

It is to this award that Mr Popo, learned Counsel who appeared for the defendants/appellants, seriously objected. In canvassing grounds 2, 3, 4, and 5, learned Counsel submitted that the learned trial Judge wrongly applied the principles of law governing award of damages in cases of wrongful dismissal after giving a correct statement of it.

We will at this stage set out and refer to paragraphs 5,6,8,20,21 and 22 of the statement of claim and paragraphs 3,5,9, and 12 of the statement of defence which raised the issue of liability to pay the claim.

Paragraphs 5,6,8,20,21 and 22 of the amended statement of claim read as follows:-

"5.     The plaintiff was employed partially on an oral contract and also on a written contract and the written terms of the plaintiff is set out in the conditions of employment memorandum of agreement dated the 16th of January 1971. The said agreement shall be founded (upon) at the trial.

6.      The plaintiff avers that he shall inter alia rely on all the contents of the contract stated in paragraph 5 above.

8.      The plaintiff states that by a letter dated 17th March 1972, the defendants dismissed him from employment. The said letter shall be founded (upon) at the trial.

20.     The plaintiff avers that he is dismissed in a wrongful manner and against the terms of his agreement with the defendants.

21.     Wherefore the plaintiff claims against the defendants, the sum of £2350:8/- (two thousand, three hundred and fifty pounds, eight shillings) being special and general damages for wrongful dismissal.

22. Special Damages

                                                                                                                                                      £        s.          d.

(1) Basic for two years                                                                          960         =            =

(2) Allowances for two years Overtime                                                 120         =            =

(a) 540 ordinary days for 4 hours at the rate of 5/9d per hour                621         =           =

(b) 96 Saturdays for 8 hours at the rate of 5/9d per hour                       220        16          =

(c) 96 Sundays for 12 hours at the rate of 6/10d per hour                     393        12          =

(d) Proportionate leave 3 days at £1:10:9d                                          4       12           3

(e) Leave gratuity 2 weeks at half basic salary 1 year                           20        =           =

General damages                                                                             £2340        =          3d

Grand Total                                                                                       35              =            =

                                                                                                                                        £2395         =           =

We observe that the correct grand total by addition is £2,375:0:3d and not £2,395:0:3d as claimed in paragraph 21 above.

Paragraphs 3,5,11 and 12 of the statement of defence wherein issues were joined with plaintiff read as follows:-

"3.     As regards paragraphs 5 and 6 of the statement of claim, the defendants aver that the plaintiff was employed wholly on the terms of the written contract dated the 16th January 1971 referred to in paragraph 5 of the statement of claim and that there are no oral contract. The defendants will rely on the terms of the said contract especially paragraphs 4 to 7 thereof.

5.      In answer to paragraph 8 of the statement of claim, the plaintiff's services were terminated in conformity with this contract of employment herein before referred to because they were no longer required by the defendants company. In the letter dated 17th March 1972 terminating the services of the plaintiff he was requested to report to the Payroll Department to collect his final pay which includes, by virtue of clause 6 of his contract of service, "two weeks wages in lieu of notice." As at the date of the letter referred to above, the said final pay is ready for plaintiff to collect any time he wishes.

11.     The conduct of the plaintiff stated above would have justified the defendants in summarily dismissing him without pay under clause 7(d) of his contract of employment but the defendants have chosen to relax the rules or have exercised a liberal attitude by enforcing the less stringent clause of the contract of service which gives the plaintiff two weeks' pay and his other entitlements.

12.     As regards paragraphs 21 and 22, the defendants aver that the plaintiff is not entitled to more than he has been offered by the defendants and which he has refused to collect to date, namely:-

                                                                                                                                 £            s            d

(1) Salary in lieu of notice 2 weeks at half basic                                         20          =           =

(2) Proportionate leave 3 days at £1:10:9d                                                 4            12          3

(3) Leaving gratuity at half basic (after about 1 year service)                     20          =           =

                                                                                                                   £44         12          3d

It is pertinent at this stage to refer to the Service Agreement exhibit A, clauses 4,5 and 6 of which we regard as material to this case and which read as follows:-

"(4)    The duration of this Agreement shall be in the first instance for a period of 1 year calculated from the 16th day of January 1971, but for a period of the first three months of such longer period of the first three months or such longer period as the employer may deem advisable, the employee shall serve a period of probation during which period either party shall have the right to terminate this agreement by giving to the other two weeks notice in writing on the employee's part or on the part of the employer two weeks payment of wages in lieu of such notice.

(5)     This Agreement unless or until either party shall give notice of termination to the other in writing, notice of termination in accordance with section 4 or 6 shall be deemed to have been renewed on a yearly basis.

(6)     This Agreement may be terminated at any time during its tenure by either party giving to the other such notice of termination in writing. The period of notice after the probationary period has expired shall also be two weeks on the employee's part or payment of two weeks wages in lieu of notice on the employer's part."

(Italics are ours).

The learned trial Judge, rightly in our view, found that the contract of service, except for the 3 months period of probation, was a yearly hiring and that two weeks notice of termination was required by either party to terminate it. Having correctly interpreted the provisions of the Agreement, he went on to comment on its application to the case before him now on appeal as follows:-

"In this case, two weeks notice should have been so given that it would end on the 15th of January 1973, or two weeks salary in lieu of the said notice could be paid to the plaintiff by the defendant company in addition to his salary for the rest of 1972 up to the 2nd of January 1973."

With respect, this conclusion does not arise from the facts before him and is not supported by the principles of law he correctly stated in his judgment. We also find that the facts of the case in Jackson v. Hayes Candy & Company Ltd., (1938) 4 ALL E.R. 587 followed by the learned trial Judge are distinguishable from and not on all fours with this case. With regard to the statement of the law applicable in that case, Du Parcq, C.J., delivering the judgment of the Court of Appeal said at page 587:-

"The law with regard to the duration of contracts between master and servant is set out in Halsbury's Laws of England, Hailsham Vol. 22 page 144 paragraphs 235. The only words I need read from it are these:-

"If a contract of hiring and service is a general hiring, that is to say, without limitation of time, there is a presumption that the hiring is for a year whether the contract is oral or in writing. This presumption exists not only when the original contract was a general hiring, but also when, at the expiration of a contract for a definite period of service, the service is continued under a second contract which is indefinite as to time ........ The presumption of a yearly hiring is capable of rebuttal-it is not an inflexible rule and must be considered in connection with the circumstances."

And Slessor L.J. in the case of De Stempel v. Dunkels (1937) 2 AL E.R. 215 commented on that statement on the law at page 252 as follows:-

"There is no doubt in my mind that the law is correctly summarised in Halsbury's Law of England, Hailsham Edition Vol.22 page 144."

The emphasis was on the duration of the contract of service in that case which did not make provision for termination.

On termination of general contract of hiring which operates as a hiring for a year, the law is summarised in paragraphs 943 at page 489 for Vol. 22 Halsbury's Laws of England 3rd Ed. as follows:-

"A general hiring which operates as a hiring for a year can only be terminated with the current year unless there is a stipulation to the contrary or a custom or some other circumstance is established enable the parties to determine the contract at some other date by notice or there is good ground for summarily ending the relation of master and servant."

(Italics are ours).

In our view, as there are express provisions in clauses 5 and 6 of the written contract of service (exhibit A) in the case in hand, that the contract should operate as a yearly contract of service until termination, by giving two weeks notice or by payment of two weeks salary in lieu of such notice, the presumption arising from general hiring does not arise. Indeed, it is outside the province of the learned trial Judge to look anywhere for terms of termination of the contract other than in the Agreement, exhibit A.

The words "at any time" in the sentence-"This Agreement may be terminated at any time during its tenure" cannot by any stretch of the imagination be construed to mean only the end of the year of contract.

We are therefore satisfied with the contention of learned Counsel for the defendants/appellants that clause 6 of the Agreement was not given its correct construction by the learned trial Judge. We therefore think there is merit in ground 2 of the grounds of appeal.

Learned Counsel, canvassing ground 1, submitted that there was no wrongful dismissal established to entitle the plaintiff/respondent to judgment and award damages.

On this point, we would observe that there was no payment of two weeks wages in lieu of notice before the action in court commenced and the claim filed. The contract was terminated by notice.

We, therefore, find no substance in this ground of appeal. The arguments in support of ground 2 covered the points raised in grounds 3, 4 and 5 of the grounds of appeal and the only point remaining for consideration is the issue of the proper entitlement of the plaintiff/respondent on his dismissal.

The principles of law governing the award of damages was stated recently by this Court in:-

(1)     Western Nigeria Development Corporation v. Jimoh Abimbola (1966) NMLR 381 at 382; and

(2)     Nigeria Produce Marketing Board v. A.I. Adewunmi (1972) 1 ALL NLR (Part 2) 433 at 437.

In the latter case, we stated the law as follows at p.437:-

"In a claim for wrongful dismissal, the measure of damages is prima facie the amount that the plaintiff would have earned had the employment continued according to contract. (See Beckham v. Drake (1849) 2 H.L. Cas 579 at pages 607-608). Where, however, the defendant, on giving the prescribed notice, has a right to terminate the contract before the end of the term, the damages awarded, apart from other entitlements, should be limited to the amount which would have been earned by the plaintiff over the period of notice, bearing in mind that it is duty of the plaintiff to minimise the damage which he sustains by the wrongful dismissal."