The National Industrial Court sitting in Lagos has dismissed a suit filed by a former Union Bank employee, Mr. Reginal Chukwuma Onwe, who alleged that the bank underpaid his entitlements after 25 years of service.
Delivering judgment, Justice Isaac Essien held that Mr. Onwe failed to prove his claims as required by law and that his pension and gratuity had been correctly computed.
The court ruled that Mr. Onwe, who worked with the bank from October 1980 until his resignation in November 2009, was not entitled to any additional payments or to include his period of leave of absence in the computation of his benefits. Justice Essien noted that the bank’s calculation had properly reflected his 25 years of service, adding that Mr. Onwe “can no longer claim any additional payment in respect of pension and gratuity.”
According to court records, Mr. Onwe joined Union Bank as a management trainee in 1980 and rose to the position of senior manager. He told the court that he was granted a two-year leave of absence in 2005 after being appointed as a commissioner, which was later extended following his reappointment in 2007. He argued that upon his resignation in 2009, the bank had wrongly calculated his gratuity and denied him a long service award despite completing 25 years in service.
Union Bank, in its defence, maintained that Mr. Onwe’s computation of his terminal benefits was incorrect and that his resignation effectively took place when he began his unpaid leave of absence. The bank also contended that he had been fully paid all his entitlements and that the case was statute-barred under the Lagos State Limitation Law, which requires actions based on simple contracts to be filed within six years.
Counsel to the claimant, however, argued that an employment contract cannot be categorised as a simple contract and is therefore not subject to the limitation law. He further contended that terminal benefits are protected under Section 173(1)–(3) of the 1999 Constitution, urging the court to uphold his client’s claims.
In his ruling, Justice Essien dismissed the bank’s preliminary objection, holding that employment contracts are distinct from simple contracts under Nigerian law.
“It is inconceivable that Section 8(1)(a) of the Limitation Laws of Lagos or any other state can apply to contracts of employment, given their complexities,” he said.
Nonetheless, the judge decided against Mr. Onwe on the substantive issue, ruling that a period of leave of absence without pay cannot be included as part of an employee’s service years.
“The only instance where the period of leave of absence can be included is where the leave was with pay,” Justice Essien stated.
The court consequently dismissed all of Mr. Onwe’s claims against Union Bank.
