Evolving Legal Landscape: Nigerian Courts Now Recognize General Damages in Wrongful Employment Termination Cases
A significant shift has occurred in Nigerian employment law regarding compensation for wrongful termination, marking a departure from traditional common law principles. This development grants employees broader rights to claim general damages beyond mere salary in lieu of notice.
Prior to 2017, courts strictly adhered to the common law position that limited compensation in wrongful termination cases to what an employee would have earned during their notice period. However, this restrictive approach has been superseded by constitutional amendments and landmark court decisions.
The transformation began with the Third Alteration (2010) to the 1999 Constitution of the Federal Republic of Nigeria. Section 254(C) granted exclusive jurisdiction over labor relations to the National Industrial Court, while Section 19(d) of the National Industrial Court Act provided judges discretionary powers in awarding damages.
This legal evolution was reinforced by several pivotal court decisions. In MEKWUNYE v. WAEC [2020] 6 NWLR [Pt 1719] 1 at 22, the court affirmed the principle of “Ubi jus ibi remedium” (where there is a wrong, there is a remedy). The Court of Appeal’s December 2020 ruling in Sahara Energy Resources Limited v Mrs. Olawunmi Oyebola (Appeal No. CA/L/1091/2016) further solidified this shift.
Most recently, the Supreme Court’s decision in SKYE BANK PLC v. ADEGUN [2024] 15 NWLR [Pt 1960] 1 delivered a definitive stance. Justice Agim emphasized that employers who terminate contracts unlawfully cannot restrict damages to the notice period compensation specified in the employment contract. Instead, courts must consider broader factors, including: – Monthly wages – Employee’s current age – Expected retirement date – Consequential losses
This principle was subsequently applied in the National Industrial Court’s January 2025 ruling in MS BINTA OLUWATOSIN ADEJOH v ARIK AIR LIMITED (NICN/LA/290/2020).
The current legal position reflects law’s dynamic nature in addressing societal needs. Employees whose employment is unlawfully terminated can now claim general damages for actual and potential losses resulting from such termination, providing greater protection for workers’ rights in Nigeria’s evolving employment landscape.
This transformation represents a significant departure from traditional employment law principles, aligning Nigerian jurisprudence with modern labor protection standards while ensuring more comprehensive remedies for wrongfully terminated employees.
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