The National Industrial Court in Port Harcourt has ordered Shell Petroleum Development Company of Nigeria Limited and Shell Nigeria Exploration and Production Company Limited to jointly pay a former employee, Oworo, N14.9 million as compensation for wrongful termination of his employment.
Justice Faustina Kola-Olalere of the Port Harcourt Judicial Division of the National Industrial Court awarded the claimant two years’ salary at the rate of N7.423 million per annum, in addition to N500,000 in legal costs.
The court directed the Shell companies to make the payment within 30 days.
Justice Kola-Olalere also held that SPDC was Oworo’s primary employer, while Shell Nigeria Exploration and Production Company was his secondary employer, establishing a triangular employment relationship between the parties.
According to the judgment, Oworo was employed by SPDC to work for Shell Nigeria Exploration and Production Company.
The Shell companies had argued that SPDC remained Oworo’s employer and had a contractual right to terminate his employment. They maintained that the claimant was paid three months’ salary in lieu of notice alongside his other terminal benefits.
The defendants also argued that Oworo’s employment was a private contractual relationship governed by the applicable terms and conditions of service. They contended that he had no contractual right to remain employed until 2037 and that the reason or motive for the termination was irrelevant once the contractual termination provisions had been complied with.
However, counsel to Oworo, George Ogara, argued that the termination was wrongful because the Shell companies failed to provide a valid reason connected to his capacity, competence or conduct.
Court Invokes International Labour Standards
In its judgment, the court held that the Shell companies wrongly determined Oworo’s employment because his letter of release did not state the reasons for the termination.
Justice Kola-Olalere said the development of labour jurisprudence in Nigeria, alongside the constitutional mandate of the National Industrial Court to apply international best practices and international labour standards, made International Labour Organisation Convention No. 158 relevant to the dispute.
The court held that termination of employment should be based on a valid reason connected with an employee’s capacity or conduct, or the operational requirements of the employer.
It consequently found that, in the circumstances of Oworo’s case, the reasons for determining his employment ought to have been stated in his letter of release.
“Consequently, I hold that the employment of the Claimant in this instance, was wrongfully determined by the Defendants,” the judge ruled.
“For this wrongful determination of the Claimant’s employment, the Defendants are to jointly pay him his two years’ salary as a model compensation at the rate of N7,423,002.00 per annum.”
Court Rejects N275.9m Gratuity and Pension Claims
While finding the termination wrongful, the court rejected Oworo’s claims for N273.8 million in gratuity and N2.1 million in pension.
Justice Kola-Olalere held that the gratuity claim constituted a special claim that required strict proof, adding that Oworo had failed to establish his entitlement to the amount claimed.
The court therefore limited the monetary relief for the wrongful termination to two years’ salary, alongside N500,000 awarded as costs.
The judgment highlights the increasing role of the National Industrial Court in applying international labour standards when determining employment disputes, particularly where the circumstances surrounding the termination of an employee are contested.
