Industrial Court Lifts Veil of Incorporation, orders Director, 1 other to pay Staff N914k, Awards Costs

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Hon. Justice Elizabeth Oji of the Lagos Judicial Division of the National Industrial Court has declared that the sale of Direct on Data Ltd, non-absorption of Mr. Essien Aquaisua by new company and withdrawal of access to his office and online sites of the company, amounted to a termination of Mr. Essien’s employment by conduct.

The Court ordered Direct on Data Ltd and its Director to pay Mr Essien the sum of N914,143.1(Nine Hundred and Fourteen Thousand, One Hundred and Forty-Three Naira Ten Kobo) being one month salary in lieu of notice of termination, and salary for 1 December 2019 to 9 December 2019 and the sum of N200,000.00 as the costs of action within 30 days.

From facts, the claimant- Mr. Essien Aquaisua had submitted that his former company Direct on Data Ltd terminated his employment by conduct when it sold off its assets to another company and denied him access to his office and the portal.

Mr. Essien argued that upon his constructive discharge without due process, he established his entitlement which was calculated and sent to the company’s director and new owner in the course of his duty and the same was admitted as exhibits and the evidence was not contradicted, urged the court to grant the reliefs sought.

In defence, the defendant averred that Mr Essien failed to establish that Direct on Data Ltd and its Director terminated his employment and that since Mr Essien has failed to support his entire allegation with evidence, and it shows that Mr Essien abandoned his employment without giving any valid reason or notice of resignation as required by the letter of appointment.

The Defendants urged the Court to hold that Mr Essien has failed to prove wrongful termination of his employment, and in the absence of any termination; Mr. Essien cannot be entitled to any terminal benefit from the Direct on Data Ltd and/or its Director whatsoever.

The Defendants further posited that based on the doctrine of corporate personality, the Director cannot be held liable for any obligation the Direct on Data Ltd owes to Mr. Essien under the employment relationship and neither can those obligations be imputed to the Director.

In opposition, Mr Essien replied that he never abandoned his employment that the company’s website and mail servers were shut down, his office taken over, and all facilities therein and he was denied all access (including access to the premises), that the conduct of the firm and it director amounted to termination of his employment by conduct.

Delivering Judgement, the presiding Judge, Justice Elizabeth Oji held that the sale of Direct on Data Ltd to another company had changed the circumstances of Mr Essien’s employment, and did not see the practicability of the Director’s assertion that Mr Essien still regarded as a staff of the Direct on Data Ltd without the new company absorbing Mr. Essien even though it absorbed others.

The Court agreed with Mr. Essien’s submission that his employment is deemed terminated by the act of the Direct on Data Ltd through constructive termination, requiring the company to still fulfil its obligations to Mr. Essien, as it would have, had the Claimant been issued a letter of termination.

Justice Elizabeth Oji held that Direct on Data Ltd did not prove how Mr Essien abandoned his employment when there was no employment to go to.

On whether the veil of incorporation should be lifted to hold the Director jointly liable in the contract between Mr Essien and Direct on Data Ltd, the Court held that justice cannot be done in the case, without piercing through the veil of incorporation of the Direct on Data Ltd, to see the character(s) who acted on its behalf, in relation to the case at hand.

Relying on the admitted exhibits, the court affirmed that the Director is the sole directing mind of the Direct on Data Ltd and should be held liable to the Claimant; alongside the company.

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