The Presiding Judge, Port-Harcourt Judicial Division of the National Industrial Court, Hon. Justice Faustina Kola-Olalere has ordered Madrik-Uju Company Limited to pay Mr Joseph the sum of N1.0m, being outstanding hazard, gratuity and ex-gratia allowances from November 2019 to June 2020 and N500k cost of action within 30 days.
However, Justice Kola-Olalere stated that Mr. Joseph is not entitled to hazard allowance, gratuity and ex-gratia allowances from Madrik-Uju Company from November 1, 2020, to July 31, 2021, under his expired Contract of Employment, and that the withdrawal of his Allowances by the company on the suspension of payment of bonuses & allowances as a result of the Covid-19 Pandemic is understandable.
From the facts, the claimant, Mr Friday, submitted that he was employed by Madrik-Uju Company under a one-year contract in November 2019, with stated salaries, bonuses, and allowances, and that the Defendant failed to pay his entitlements despite his continued employment until July 31, 2021.
Mr Friday stated that although his contract expired in October 2020, he continued working under the MD’s directive pending renewal, but was only paid salaries without allowances or bonuses.
He asserted that the failure of the Company to pay his allowances and bonuses as contained in his employment letter amounts to a breach of contract and that the internal memo relied upon by the Company did not extinguish his accrued rights.
In defense, the defendant, Madrik-Uju Company, contended that in the absence of any ingredient establishing the existence of a renewed contract in writing, the Mr Joseph case would regrettably be without a reasonable cause of action and that it is liable to be dismissed.
Consequently, the company submitted that Mr Joseph’s cause of action founded on the expired terms and conditions, is like placing something on nothing, and that due to the COVID-19 pandemic, allowances were suspended while employees were given the option to accept salary only or resign.
In opposition, learned counsel to Mr Friday argued that the directive to continue working under the same terms constituted a valid continuation of the contract and that his client is entitled to all outstanding allowances, and urged the court to grant the reliefs sought.
Delivering the judgment, the presiding Judge, Justice Faustina Kola-Olalere held that the Contract of Employment between the parties is for a period of one year, and further that after its expiration in October 2020, the said contract was not renewed in writing.
The Court stated that Madrik-Uju Company’s memo suspending allowances cannot operate retrospectively and therefore Mr Friday is entitled to his allowances from November 2019 to June 2020.
However, Justice Kola-Olalere commended the magnanimity of Madrik-Uju Company, a private company to have undertaken to continue paying its employees’ salaries while they were not working or making any profit during the pandemic; even though it was not the fault of either of the parties, and held that Mr Joseph is bound by the withdrawal of his Allowances by the circular on the suspension of payment of bonuses & allowances as a result of Covid-19 Pandemic.
The Court stated that “In situation like that, I find that equity demands that both parties share the adverse effect of the pandemic as the Defendant rightly portioned it in this case. Consequently, I hold that the parties in this case are bound by the content of Exhibit D.7.”
