Damages for Unlawful Termination of Employment

In law, wrongful dismissal, also called wrongful termination or wrongful discharge, is a situation in which an employee’s contract of employment has been terminated by the employer, where the termination breaches one or more terms of the contract of employment, or a statute provision or rule in employment law.

All employment has its terms. The terms may be written in a single contract, several documents, custom and usage or inferred from the conduct of the employee and his employer. The terms of employment usually stipulates the procedure, notice and termination package in which the employer would pay to the employee upon termination of the employee’s employment.

It therefore behooves of the employer to terminate the employee’s employment in line with the provisions of the employee’s terms of employment. Consequently, termination of the employee’s employment is said to be unlawful, if the employer fails to terminate the employee’s employment in line with the provisions of the employee’s terms of employment.

What then are the damages which will accrue to the employee for unlawful termination of his employment by the employer?

(a) Employment with statutory flavour

An employment with statutory flavour is an employment which is provided by an extant statute. Civil servants fall under this category. The law is settled that where the employment of an employee with statutory flavour is terminated without recourse to the laid procedure in the relevant statute or statutes as the case may be, the court would order that the employee be reinstated.

The employer in such a case is liable to pay the employee all outstanding salaries and allowances during the entire period which his employment was unlawfully terminated.

(b) Employment by contract

Unlike an employment with statutory flavour, where the employment of an employee by contract is unlawfully terminated, the employer is liable to pay only what he would have paid had the employment of the employee been properly terminated.

The employee is not entitled to reinstatement because the court cannot force an employee on an unwilling employer and vice versa. This means if for instance the employee’s terms of employment stipulates that the employee is entitled to pension, gratuity and 3 months’ notice for termination of his employment, upon the court arriving at a decision that the termination of the employee’s employment is unlawful, it can only order the employer to pay the employee his pension, gratuity and 3 months’ salary in lieu of notice and nothing else.

(c) Employment at will

An employer under common law has the right to hire and fire. An employee at the will of the employer can be summarily dismissed with or without reason. However, if an employee’s employment is terminated on allegation of crime, a competent court must hold the employee guilty of the crime; otherwise the termination of the employee’s employment on allegation of crime is unlawful.

Can a Nigerian court grant damages for psychological, emotional pain and distress claims for unlawful termination of contract of employment?

Unlike in the UK and other commonwealth jurisdictions, a Nigerian court would not grant damages for psychological, emotional pain and distress claims of an employee for unlawful termination of his contract of employment by the employer.