The National Industrial Court in Lagos has dismissed a N29.6 million retirement benefit claim filed by a former employee, Mr Obi, against Fidelity Bank Plc. The court ruled that the claim was without merit, as it was based on a discontinued retirement policy and the claimant had not fulfilled the conditions required to qualify for benefits.
Delivering the judgment, Justice Gerald Nweneka held that Mr Obi could not benefit from a policy that had already been terminated, and that there was no legal basis to apply it retroactively.
According to court documents, Mr Obi claimed he was entitled to retirement benefits, having completed 15 years of uninterrupted service with the bank. He cited formal acknowledgements from Fidelity Bank, including certificates and cash rewards for 10 and 15 years of continuous service.
However, he noted that the bank had discontinued its retirement and gratuity policy on 23 December 2016. He argued that since he had completed 15 years of service by December 2015, he was eligible for benefits totalling N29,659,572.
In its defence, Fidelity Bank maintained that Mr Obi was initially employed by Fidelity Union Securities Limited (FUSL) on 6 December 2000 and only became a core employee of Fidelity Bank after his conversion on 1 July 2004. The bank contended that his earlier years were spent on secondment and therefore could not be counted towards retirement eligibility.
Counsel for the bank, Chukwudi Eze, Esq., stated that Mr Obi’s claim relied on version 2.8 of the bank’s Personnel Policies and Procedures Guide, which had been withdrawn as of 15 December 2016. He argued that clause 7.20 of the document specified that only staff with 15 years of continuous service before the policy ended were eligible for retirement benefits.
Mr Obi’s counsel countered that the bank was estopped from denying his employment status, given its issuance of long service awards. He argued that the 2004 conversion letter did not constitute a new employment but was procedural, as the claimant had never served as temporary staff.
Justice Nweneka ruled that a seconded employee remains under the employment of the originating institution. He concluded that Mr Obi was an FUSL staff member until his formal conversion to Fidelity Bank staff on 1 July 2004.
Referring to clause 3.12.1 of the policy guide, the judge explained that permanent employment terms, including service recognition, only apply from the conversion date. As such, Mr Obi had not completed 15 years of service with Fidelity Bank by the time the retirement policy was scrapped in December 2016.
Moreover, the court noted that by the time Mr Obi exited the bank on 1 August 2017, the voluntary retirement scheme had already been discontinued.
Justice Nweneka added that even if Mr Obi had completed 15 years of service before the policy was scrapped, he would still not have qualified for retirement benefits, as he failed to provide the mandatory three-month notice of retirement.
The case was dismissed in its entirety.
