The employment relationship between an employer and an employee is usually governed by the terms upon which both parties have agreed to work together. Though, as a general rule, a contract of employment may be oral, written or even implied from the circumstances of each case, Section 7 of the Labour Act provides that not later than three months after the beginning of a worker’s period of employment, the employer is to give the worker a written statement specifying the names of the employer and the worker, the nature of the employment, the expiry date of the contract if it is for a fixed term, the period of notice required to terminate the contract, wages payable to the worker, etc. An employer who fails to give the written statement to his worker within the stipulated time frame commits an offence under Section 20 of the Labour Act.

The terms of an employment could therefore be found in a letter of offer of employment, Terms and Conditions of Employment, Staff Manual, formal Contract of Employment, Statutes or Regulations made pursuant thereto (in the case of employments with statutory flavour), or other memoranda between the parties. The terms of employment would usually specify in what circumstances the employment relationship could be brought to an end, and the length of notice required to terminate the employment. Any termination of employment or dismissal which does not conform to the requirements of the terms of employment is liable to be declared wrongful or unlawful as the case may be, by the courts.

In other words, where an employer terminates the employment of an employee in a manner inconsistent with the terms of employment, the employee reserves the right to challenge the purported termination before a court of competent jurisdiction and claim damages for wrongful termination, or reinstatement in the case of employments with statutory flavour. By virtue of the 3rd Alteration Act, 2010, which amended the 1999 Constitution of the Federal Republic of Nigeria, the National Industrial Court is vested with exclusive jurisdiction to entertain all such matters.

However, there are instances where an employer terminates the employment of a worker in a manner inconsistent with the worker’s terms of employment, but nevertheless pays the worker his arrears of salary, terminal benefits or other entitlements. A good example is where an employer fails to serve the requisite length of notice on the worker before termination, or where an employer unilaterally terminates a contract expressed to be for a fixed term before the due date. In such circumstances, a worker who collects the payment made by the employer would be prevented from subsequently challenging the propriety of his termination.

This position of the law was aptly restated by the National Industrial Court in the case case of Egbe V. Union Bank Plc. & Anor (2015) 58 NLLR (Pt.200) 192 at 297, paras. D-G, as follows:

“Where an employee accepts salary or other payment like his gratuity after employment is brought to an end he cannot be heard to complain later that his contract of employment was not properly determined”.

In the case of Odiase V. Auchi Polytechnic (2015) 60 NLLR (Pt. 208) 1, at 29, paras. B-E, the Court of Appeal, relying on the Supreme Court decision in the earlier case of Morohunfola V. Kwara State College of Technology (1990) 4 NWLR (Pt. 145) 506 equally echoed the same position in the following words of Ige JCA:

“An employee having accepted his entitlements cannot thereafter bring an action for wrongful termination or be heard to complain that his contract of employment was not validly or properly determined. Such a conduct renders the determination mutual”.

A good understanding of the above reality would certainly guide both the employer and the employee in taking steps to bring their employment relationship to an end.