The NICN ruling in amugo & 93 ors v. SKYE BANK PLC is an Authoritative Essay on Redundancy, Collective Agreements, and Representative Actions in Nigerian Labour Law
The case of Enyinnaya Amugo & 93 Others v. Skye Bank Plc presents one of the most significant modern labour law rulings of the National Industrial Court of Nigeria (NICN). The matter touches on redundancy, enforceability of collective agreements, and representative actions within Nigeria’s evolving industrial relations framework.
At the core of the dispute lies the question: Do employees terminated under a mass restructuring exercise have enforceable redundancy rights under a collective agreement?
The Court’s ruling provides clarity on this issue and reshapes how Nigerian labour claims are to be approached in cases of organizational restructuring.
2.0 FACTUAL BACKGROUND OF THE CASE OF AMUGO & 93 OTHERS V. SKYE BANK PLC
2.1 Employment History and Bank Nationalisation
The claimants were employees of Afribank Nigeria Plc until its nationalisation. Following the 2011 financial restructuring of the banking sector:
Afribank’s operations were transferred to Mainstreet Bank,
and Mainstreet Bank was later acquired by Skye Bank Plc,which then became the successor employer.
Throughout these transitions, the claimants were not disengaged i.e their employment were not officially terminated at all, nor were they paid any terminal benefits.
2.2 Termination of Employment.
On 22 June 2012, Skye Bank issued letters terminating their employment. The claimants contended that:
the termination was actually a redundancy exercise, and
the applicable collective agreement between NEABIAI, ASSBIFI, and NUBIFIE governed their terminal benefits.
2.3 The Claims Before the Court
The claimants sought:
Redundancy payments,
what is a redundancy?. Redundancy happens when a worker loses their job not because they did anything wrong, but because:
the employer no longer needs their role.
business operations have changed.
the company is restructuring, merging, downsizing, or closing some branches
technology has replaced their job. Or
the employer is cutting staff to reduce cost
Now Among other claims sought By the claimant apart from redundancy are as follows:
three months’ salary in lieu of notice,long service benefits,productivity allowances,reversal of debits placed on their accounts, and ₦100 million general damages.
Originally four defendants were sued, but by court orders, only Skye Bank Plc remained as the sole defendant.
3.0 THE DEFENDANT’S PRELIMINARY OBJECTION
Instead of defending on the merits, Skye Bank filed a preliminary objection seeking to strike out the suit. The objections rested on several grounds:
3.1 Lack of Representative Authority.
Skye Bank argued that:
The claimants sued in a representative capacity without written authorization; and
employment contracts are individual in nature, making collective litigation incompetent.
They heavily relied upon the following cases:Okukuje v. Akwido; CCB v. Rose; Olasa v. Ezemuo.
3.2 Absence of Reasonable Cause of Action (issues of collective agreement).
Skye Bank submitted that:
the claimants’ case was based on a collective agreement;collective agreements are not binding unless incorporated into individual contracts (citing Osoh v Unity Bank);therefore claiming the suit disclosed no reasonable cause of action.
3.3 No Locus Standi / No Privity of Contract
The defendant insisted the claimants had no standing to enforce the collective agreement between unions and employers’ associations.
3.4 Claims Against a Dissolved Entity
Skye Bank argued that Mainstreet Bank, previously sued, was dissolved without winding up and could not be sued.(The Court had already struck out Mainstreet Bank before this ruling.)
4.0 THE MAIN ISSUES BEFORE THE COURT IN AMUGO & 93 ORS v. SKYE BANK PLC
From the preliminary objection, the NICN distilled three core issues:
i. Whether the claimants could validly sue in a representative capacity.
ii. Whether the suit disclosed a reasonable cause of action (Collective Agreement Argument).
iii. Whether the Court possessed jurisdiction over the dispute.
5.0 COURT’S ANALYSIS AND REASONING
5.1 On Representative Capacity.
The Court found that:all claimants suffered the same alleged redundancy,on the same date, andarising from the same corporate restructuring.
Thus, they shared a common interest and grievance.The NICN emphasised that representative actions are permitted where such commonality exists.
The Court distinguished the older authorities cited by Skye Bank (e.g., CCB v. Rose), noting that they arose under traditional civil procedure, not under the NIC’s modern labour jurisprudence.
Court Holding on Issue 1: Representative capacity was proper. The objection failed.
5.2 On Reasonable Cause of Action (Collective Agreement)
To determine whether a cause of action exists, the Court evaluated:whether the claimants’ statement of facts discloses a legal right;an identifiable obligation owed by the defendant; and an alleged breach.
The Court on issue 2 held that:redundancy benefits,termination procedures, andalleged breach of collective agreementsall constitute valid issues within the NIC’s jurisdiction.
Most importantly, the Court on issue of Collective Agreement IN AMUGO & 93 ORS v. SKYE BANK PLC held succinctly that:
Under Section 254C(1)(j) of the 1999 Constitution (as amended),the NIC can enforce collective agreements, even if not incorporated into individual employment contracts.
This provision effectively overrides earlier Supreme Court decisions that treated collective agreements as “gentlemen’s agreements.” Prior to third alteration of the 1999 constitution in 2010.
In the exact wordings of the court per Hon. Justice B. B. Kanyip, PhD of National Industrial Court (NIC) Lagos judicial Division
Today, under section 254C(1)(j)(i), this Court has jurisdiction in terms of the interpretation and application of any collective agreement. It is needless that a Court has jurisdiction to interpret and apply a collective agreement if the intendment of the law maker is not that the collective agreement is to be binding as such.
It should be noted that under section 7(1)(c)(i) of the NIC Act 2006, the jurisdiction of this Court was only in terms of interpretation of collective agreements; the issue of application was not included therein. So when the Third Alteration to the 1999 Constitution added application of collective agreement to the fray, this must mean that the law maker deliberately intended collective agreements to be enforceable and binding. I so hold.
The learned judge continued:
There is no gainsaying that this common law rule is not only rigid but harsh. Legal policy teaches that the rigidity and harshness of the common law is always ameliorated by the rules or principles of equity. In this regard, section 13 of the NIC Act permits this Court to administer law and equity concurrently; but where there is any conflict or variance between the rules of equity and the rules of common law, the rules of equity shall prevail. See section 15 of the NIC Act 2006. Incidentally, in the instant case, this harsh common law rule is not even being ameliorated by the principles of equity but by the 1999 Constitution itself. This is the state of the law under which the instant case is to be decided.
Accordingly, Osoh and cases like Soares are distinguishable from the instant case in terms of the state of the law under which the matter at hand calls for determination in this Court.
His Lordship Per Justice B. B. Kanyip, admitted the earlier position of Nigeria court as regards to the unenforceability of of collective agreement in Nigeria but these positions has automatically changed as at today. In his words:
The defendant’s argument as to the non-incorporation of the collective agreement into the contract of employment has been raised and rejected by this Court in Mr. Valentine Ikechukwu Chiazor v. Union Bank of Nigeria Plc unreported Suit No. NICN/LA/122/2014, the judgment of which was delivered on 12 July 2016.
This Court held such an argument to be a lazy form of analysis by the defence counsel in that case. The defence counsel in that case had relied on Union Bank of Nigeria Plc v. Emmanuel Aderewaju Soares [2012] 11 NWLR (Pt. 1312) 550; just like the instant case where the defence counsel relies on Osoh & ors v. Unity Bank [2013] 9 NWLR (Pt. 1358) 1 SC, a case also relied on by the claimants. I take the liberty to reiterate (repeat) the stance this Court took in Valentine. In both cases (Valentine and Osoh), the cause of action arose long before the Third Alteration to the 1999 Constitution was promulgated. The state of the law under which these cases were decided is certainly different from that under which the instant case is to be decided.
The law as to the applicability of collective agreements when these cases were filed is certainly not the same with the law in that regard today under the Third Alteration to the 1999 Constitution.
5.3 On the final third issue: Juristic Status of the Struck-Out Defendant
The Court noted that Mainstreet Bank had already been struck out earlier. This ground was therefore irrelevant.
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6.0 KEY CASES CITED IN AMUGO & 19 ORS v. SKYE BANK PLC AND THE COURT’S INTERPRETATION
The Court examined cases cited by Skye Bank, including:
Okukuje v. Akwido: Distinguishable; applies to civil procedure, not modern labour law.
CCB v. Rose: Employment contracts may be individual, but group claims are allowed where interests align.
Osoh v Unity Bank: Old law; overridden by Section 254C of the Constitution.
NUPENG v MWUN: Not applicable in NIC’s post-2011 jurisdiction.
Shell v Nwaka: The claimants sufficiently disclosed a cause of action.
