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The Employer's Right To Hire And Fire: A Paradoxical Principle In The Nigerian Oil And Gas Industry

By tiitucker on Tuesday 14th of April

434


By Oluwatobi Adetona Esq.

It is a well settled principle of law that an employer who has a right to hire, also has the right to fire. The employer has unfettered right to terminate the employee’s employment. He may terminate for good or bad reason or even for no reason at all.

Also, the motive for exercising the right does not render the exercise ineffective. What is essential is that the exercise of the right to fire an employee must be done in accordance with the terms and conditions of the employment. The rationale behind this principle of law is that a servant, though willing, cannot be foisted upon an unwilling master.

However, in cases where the employment is governed by the agreement of the parties, removal by way of termination of appointment or dismissal must be in accordance with the terms agreed upon. Failure to comply with the terms renders the termination a breach of the agreement, but not void.

The extant law regulating employment and labour relationship in Nigeria is the Labour Act CAP. L1, Laws of the Federation of Nigeria, 2004. The employment recognized under the labour Act in Nigeria is categorized below:
Employment which is governed by statute;
Employment by written contract of employment;
Employment at will or servant holding an office at pleasure of employer or Master and servant relationship.

Modern employment is governed by a contract of employment. A contract of employment is defined in Section 91 of the Labour Act as-
" any agreement, whether oral or written, express or implied whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker".

Further, Section 54 of the National Industrial Court Act, defines the word: "employee" to mean "a person employed by another under a written contract of employment whether on a continuous, part time, temporary or casual basis and includes a domestic servant who is not a member of the family of the employer. In same vein, the apex Court in IYERE V. BENDEL FEED & FLOUR MILL LTD (2008) LPELR-1578 (SC) held inter-alia that “…although much of modern employment law is contained in statutes and statutory instruments, the legal basis of employment (by whatever means) remains the contract of employment between the employer and the employee. The contract of employment is important in itself, in that it may give rise to a common law action for its enforcement or for damages for its breach. I should add that an employee, except where a different meaning is given in the context of the employment, means an individual who has entered into or works under, or where the employment has ceased, worked under a contract of employment…” Per Muhammad, J.S.C. (P. 21, Paras. B-E).

An employer’s right to hire and fire is however limited in the oil and gas industry despite the fact that parties are governed by a contract of employment. The oil and gas sector is one of the most highly regulated industries in Nigeria and the release of employees in this sector is governed by the regulation made pursuant to Regulation 15A of the Petroleum (Drilling and Production) Regulations 1969 (as amended) which are made pursuant to Section 9 of the Petroleum Act , Cap P10 LFN, 2004, which is to the effect that before any worker is released, a prior approval of the Minister of Petroleum through the Director of Petroleum Resources (DPR) must be sought and obtained.

Accordingly, the DPR on the 18th of October 2019 released a new guideline for the release of staff in the oil and gas industry 2019. These 2019 guidelines repealed the 2015 guideline earlier regulating the release of staff in the oil and gas industry.

Further, an employer who wishes to release a staff in this sector must not only seek the consent of the Minister in writing, Paragraph 4.0 of the Guidelines mandates the employer to also state the manner of release, reasons for the release and compensation due to the worker. A staff release under Paragraph 3 of the 2019 Guideline includes dismissal, retirement, termination, redundancy, release on medical grounds, resignation, death and abandonment of post. Where the release is by involuntary retirement, dismissal, termination, redundancy, or on medical grounds, the DPR shall conduct an enquiry into the circumstances of the proposed staff release and make a decision on whether to convey the minister’s approval or otherwise.

Any employer who fails to comply with these guidelines is liable to a penalty issued by the DPR in an amount not exceeding Two Hundred and Fifty Thousand United States Dollars (USD) ($250,000.00); and in addition, any permit, license or lease granted to that person may be withdrawn or cancelled by the DPR.
While the guidelines may be trying to curb or rectify some anomalies in the oil and gas industry, especially with regards to the arbitral release of employees, it is safe to say that this Guideline is more or less foisting a willing employee on an unwilling employer. It is my humble submission that in as much as the Minister has the power to make regulations by the power conferred on him, the regulations should not re-write the contract freely entered into by parties, neither should it interfere with, nor usurp the performance of the respective parties’ obligations under the contract of employment. Since the courts in Nigeria with all its might lacks the power to re-write a contract freely entered into by parties, neither should the Minister of Petroleum resources have that power.


Oluwatobi Adetona Esq. is a private legal practitioner based in Lagos, and can be contacted via her email-

Oluwatobijuadetona@gmail.com




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