The bedrock of contract of employment is the free will of the employer and employee to determine the terms and conditions of their employment relations. The Nigerian courts have decided in several cases that where a contract of employment provides for a mode of termination, the contractual parties must strictly adhere to the agreed mode. Under Nigerian law, one way in which an employment contract can be brought to end by either party is by notice. A contract of employment can be terminated by a party giving a notice to the other. For example, in the case of University of Benin v. Andrew Erinmwionren (2001) 17 NWLR (Pt. 743) 548 at 563 paragraph F, the court held that: “it is well settled that where there is a contract of service, there is an implied term that the contract of employment can be terminated by notice.”
A resignation is a verbal or written statement of intention by an employee notifying his the employer that he wishes to leave the employment immediately or at a stated date. A resignation with immediate effect means resignation without a notice period i.e. the employee resigns and leaves immediately. Under Nigerian law, when an employee resigns his employment with immediate effect, different consequences may apply to his rights from and obligations to the employer and vice versa. Such situation may also throw up different questions such as: Can an employee disregard the notice clause in his employment contract by resigning without notice? Can employee leave the service of an employer who has refused to accept the resignation? Can an employee who resigns with immediate effect claim employee benefits from the employer? Will such employee be obliged to pay up all his indebtedness (if any) to the employer as a result of his resignation with immediate effect?
It is impossible to contemplate all the different issues that may be thrown up in every employment relationship. Hence, every employee or employer should seek the guidance of an employment lawyer on the best approach to their case. We have nonetheless raised some relevant questions and answered them in simple ways to help employees and employers in Nigeria to understand some rights and obligations that may arise when an employee resigns without notice.
Can an employee or employer disregard the notice clause in his employment contract?
Generally, parties are bound by the terms of their employment contract. So, they are naturally required to comply with the provisions of their contract on the procedure for termination by giving the agreed notice of resignation or termination. However, an employee or employer may choose to disregard the agreed notice period by resigning with immediate effect or terminating the contract without notice notwithstanding the terms of the employment contract. This is because of two reasons, namely:
(1) an employee has absolute power to quit his job at any time, and
(2) the law does not force an unwilling worker to work for a willing employer or vice versa.
Please note, however, that such disregard of the agreed notice period may be treated as a breach of the contract and may attract some unpleasant consequences to the defaulting party.
Where parties to an employment contract agree expressly that their contract is to be terminated by giving a period of notice and a party terminates the contract with immediate effect, i.e. without giving the agreed notice, such termination constitutes a breach of the terms of the contract. This was echoed in the case of Al – Bishak v. National Productivity Centre & Anor. (2015) 57 N.L.L.R (Pt. 194) 1 at 60 the Court unanimously held per Samuel Chukwudumebi Oseji JCA and stated thus:
“Without much ado I will refer back to the finding of this Court while considering issue 1 and 2 that the content of Exhibit P1 regulates the contract of employment between the appellant and respondents and this he equally concedes to. In this regard I draw attention to paragraph 5 therein which stipulates that the termination of appointment shall be with one month’s notice or payment of one month’s salary in lieu of notice by either side. This Court had also resolved that the appellant was still on probationary appointment when it was terminated as also reflected in Exhibit P3 (Termination of Probationary Appointment). However, in terminating the Appellant’s appointment, the 1st respondent did not comply with the terms of content of exhibit P1, but rather got the appointment terminated with immediate effect. The act of the 1st respondent in this regard constitutes a breach of the terms of the contract of employment which provides for one month’s notice or one month’s salary in lieu of notice on either side.”
When an employee resigns with immediate effect, he is entitled to exit the employment without any hindrance. It does not matter what reason the employee gives for the resignation. In fact, where the notice period given by an employee is less than the agreed notice, the court will usually not nullify the defective notice but regard such notice as a resignation with immediate effect and all the relevant consequences under the law will follow.
Can employee leave the service of an employer who has refused to accept the resignation?
In practice, it is common for an employee who is facing disciplinary proceedings to resign before investigation is concluded by the employers. Many employers are usually at sea as to what to do or how to proceed in the face of such pre-emptive resignation. Well, the simple answer is that the disciplinary proceedings must end right there and the reasons for this will be discussed in another article. Any further step to dismiss or impose any disciplinary measure on the employee who has resigned will be unlawful.
There are plethora of superior courts’ decisions reaffirming the now settled position of the law that an “employee has an immutable right to end a contract of employment by resignation”. This was echoed in the cases of W.A.E.C. v. Oshionebo (2006) 12 NWLR (Pt. 994) 258 CA, where the court dwelt extensively on the legal implications of both employee’s resignation with immediate effect and employee’s notice of retirement,and Yesufu v. Gov. Edo State (2001) 13 NWLR (Pt. 731) 517 SC. The right of an employee to resign at will is founded on the principle of law that the law cannot foist an unwilling servant over a master and vice versa, and in effect, a resignation automatically takes effect upon the delivery or receipt of the letter of resignation to the employer.
The Supreme Court in Yesufu v. Gov. Edo State [2001] 13 NWLR (Pt. 731) 517 SC held that a notice of resignation of an employment becomes effective and valid the moment it is received by the employer or authority to whom it is addressed. This is because there is absolute power to resign and no discretion to refuse to accept; and it is not necessary for the person to whom the notice of resignation is addressed to reply that the resignation is accepted. And, for completeness, an employer cannot reject or refuse to accept a resignation letter because it falls short of the required notice stipulated in the employment contract or for any other reason at all.
Can an employee who resigns with immediate effect claim employee benefits from the employer?
Resignation with immediate effect carries with it three (3) legal implications: the right to exit the service immediately, the forfeiture of the employee’s benefits and the obligation to settle all outstanding salaries or debts. The case of Dr. Ebele Felix v. Nigerian Institute of Management (NICN/LA/321/2014) delivered 4th July 2017 by Justice B. B. Kanyip PhD (now President) of the National Industrial Court is of utmost importance here. In that case, my lord Justice Kanyip held as follows:
“Resignation with immediate effect by an employee carries with [it] three legal effects: the right to leave service automatically; the employee’s forfeiture of any benefit; and the employee paying any indebtedness to his employer. The justification for having to allow the resigning employee to leave immediately and automatically is the fact that [he/she] thereby forfeits [any] benefit he/she may be entitled to as well as the duty to pay off all indebtedness that [he/she] may [have] towards the employer; as such, the forfeiture of benefits inures as contractual consideration for the immediate and automatic separation of contractual relationship as per the employment in issue. So it cannot be that an employee who resigns with immediate effect is allowed to also benefit from such immediate separation by claiming benefits from the employer.”
The three (3) legal implications are further buttressed below:
(a.) The Employee’s Right to Leave the Employment Automatically and Immediately
A resignation with immediate effect gives the employee the right to leave an employment automatically and immediately. The right is automatic because there is nothing else the employer needs to do to activate the employee’s right to leave. The employer cannot prevent the employee from leaving the employment or the work premises. In the Unreported Case of Dr. Dave Nwabor v. Oilflow Services Ltd (SUIT NO. NICN/LA/552/2015), the court held that: “the tendering of the resignation letter by the claimant and the receipt of same by the defendant was immediately effective and he ceased to be an employee of the employer”.
Also, in the case of W.A.E.C. v. Oshionebo (supra), per Aderemi, J.C.A., the court held that “a notice of resignation is effective not from the date of the letter, or from the date of any purported acceptance, but from the date on which the letter was received by the employer or his agent. Tendering of a letter of resignation carries with it the right to leave the service automatically without any benefit subject to his paying of any of his indebtedness his employer.”
Apart from the above, there are other cases such as Osu v. P.A.N. Ltd. (2001) 13 N.W.L.R. (Pt. 731) 627, and Benson v. Onitiri (1960) SCNLR 177, where the courts arrived at similar conclusion that irrespective of the defect in the letter of resignation, the employee still has the right to leave immediately.
(b.) The Employee will Forfeit all Employee’s Benefits
An employee who resigns with immediate effect will forfeit all his employee’s benefits except earned salary, if any. For clarity, where a contract of employment requires an employee to give notice of resignation to the employer for a specific period and the employee abruptly ends the contract, the employee will forfeit all claimable benefits except accrued outstanding salaries. The foregoing is consistent with decision in the case of W.A.E.C. v. Oshionebo (supra), where the Court of Appeal made the pronouncement that an employee’s notice of resignation with immediate effect carries with it the right to leave the service immediately and forfeit any employee’s benefits.
It is worthy to note that the ability to distinguish between employee’s benefits and earned salaries in an employment litigation is key to determining the scope of claims an employee who resigns with immediate effect can make from the employer. Please note that employee benefits are non-salary compensation that can vary from one organization to another, often indirect and non-cash payments within a remuneration package. In this sense, earned salary would not qualify as benefit, as benefits are add-ons to salary. So, resignation with immediate effect cannot affect or disentitle an employee to his earned salary.
(c) The Payment of any Indebtedness or Earned Salary
The employee is under obligation to pay the employer any indebtedness, and the employer paying any earned salary(ies) owed to the employee. The deduction that can be gleaned from the many pronouncements of the courts is that an employer whose employee resigns with immediate effect still has the duty in law to pay the employee all his earned salaries. Conversely, the employer has a right in law to withhold other fringe benefits such as bonuses and allowances accruable to the employee as the consideration for all other obligations of the employee under the contract of employment. See also the case of W.A.E.C. v. Oshionebo (supra), where the court cited the earlier cases of Osu v. P.A.N. Ltd. (2001) 13 N.W.L.R. (Pt. 731) 627, and Benson v. Onitiri (1960) SCNLR 177, with approval and held that “Tendering of a letter of resignation carries with it the right to leave the service automatically without any benefit subject to his paying of any of his indebtedness his employer.”
The Court in the case of Dr. Ebele Felix v. Nigerian Institute of Management (supra) restated the timeless position of the law on the implications of resignation with immediate effect and the rationale for such legal implications when the Court held thus:
“There is, however, the further issue of the effect of the claimant’s resignation with immediate effect especially given the holding in WAEC v. Oshionebo [2006] 12 NWLR (Pt. 994) 258 CA that tendering of a letter of resignation by an employee carries with it the right to leave the service automatically without any benefit subject to the employee paying any of his indebtedness to his employer, a position that Mr. Beloved Patrick Anokwuru v. Omatek Ventures Plc & anor (supra) reiterated and then justified thus: The justification for having to allow the resigning employee to leave immediately and automatically is the fact that [he/she] thereby forfeits [any] benefit he/she may be entitled to as well as the duty to pay off all indebtedness that [he/she] may [have] towards the employer; as such, the forfeiture of benefits inures as contractual consideration for the immediate and automatic separation of contractual relationship as per the employment in issue. So it cannot be that an employee who resigns with immediate effect is allowed to also benefit from such immediate separation by claiming benefits from the employer.”
The rational for the forfeiture of benefits upon resignation without notice is that forfeiture of employee benefits serves as the contractual consideration for the immediate and automatic separation of the contractual relationship so that an employee who resigns with immediate effect cannot also benefit from such immediate resignation by claiming benefits from the employer. Unless there is a claim for unpaid salaries, any claim brought by the employee against the employer will most likely fail.
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