Udom Ufok Obot v. Communication Network Support Services Ltd
4/7/2024- Justice (Prof.) E.A. Oji
Main Issue of law
Arbitration of employment disputes under the Arbitration and Conciliation Act, now Arbitration and Mediation Act
Summary of facts
The Claimant was employment by a Contract of employment dated 5th June, 2007 which provides that in the event of dispute the parties shall proceed to arbitration under the Arbitration and Conciliation Act. In defence to the Claimant’s claim for his entitlement on redundancy and pension, the Defendant contended, inter alia, that the court lacks jurisdiction because of the arbitration clause.
Decision
The court held that though it does not agree that the arbitration clause was smuggled into the employment because the Claimant signed it and is relying on the letter for other claims; arbitration under the Arbitration and Conciliation act was not suitable for employment as employment is not a commodity. The court also found that the arbitration clause was vague.
Arbitration of employment disputes under the Arbitration and Conciliation Act, now Arbitration and Mediation Act
a). In as much as parties are bound by their agreement, the NICN Court is now hesitant to refer parties to arbitration under the Arbitration and Conciliation Act. That Act being applicable to commercial disputes, is not best suited for employment disputes in the light of the ILO position on labour. “Labour is not a commodity” is the principle expressed in the preamble to the International Labour Organization’s founding documents. It expresses the view that people should not be treated like inanimate commodities, capital, another mere factor of production, or resources or as items of commerce.
b). Where parties agree on arbitration under other conditions, outside the Arbitration and Conciliation Act, the Court can and do refer the parties to arbitration.
Review
This decision provides a veritable guide for the use of arbitration in employment contract. As a matter of public policy, employment relationships and disputes are not simple commercial undertakings to which simple commercial rules apply. This is why the relevant law dealing with reference of commercial disputes in Nigeria does not contemplate employment disputes as commercial disputes in respect of which section 5 of the Arbitration and Mediation Act, 2023 applies. A combined reading of sections 1(1) (5) and 91 (1) of the Act on the definition of the words ‘commercial arbitration’, ‘commercial’ and ‘court’ shows that the parliament intended to exclude expressly employment related disputes from the application of the Act. If the parliament intended to include employment disputes and relationships as part of ‘commercial arbitration’, it would have said so expressly. A review of the Act in this regard in the light of the Constitutional provision in section 254C of the 1999 Constitution vesting all jurisdictions on the National Industrial Court including the power to review arbitration awards leaves one in no doubt that employment disputes are not commercial disputes to which the Act applies. Employment disputes are a special class of disputes which can be termed statutory disputes that are in arbitrable under commercial arbitration.
Though not referenced, the position had earlier been affirmed by Honourable per Justice Kanyip in Giuseppe Francesco E. Ravelli v. Digitsteel Integrated Services Limited 2 . In that case, one of the parties to a contract had approached the NICN requesting that the Court exercise its discretion in appointing arbitrators to resolve the parties’ dispute. The Honourable Court held clearly that the Arbitration and Conciliation Act, now the Arbitration and Mediation Act, does not contemplates disputes arising from labour and employment issues and that such disputes cannot be referred to arbitration.
It must however be noted that despite the fact that this authority was cited by the author in Charles Oluwoye v Envivo Communications Limited & Ors 3 , the court per Hon. Justice J. A Damachi decided on June 13, 2024 differently without substantively considering the underlying issues. In fact, the court held strangely without justification that it was ‘upsetting’ to make such an argument. This demonstrates the inconsistency in major important decisions of the court. However, the majority view is obviously more in tune with the legal philosophy and jurisprudence of employment law.
The hint of the court in the case under review for the benefit of stakeholders is to the effect parties willing to have arbitration clauses enforceable should predicate it on the legal framework for alternative dispute resolution of the NICN under the 2017 Rules as endorsed by section 254C (1), (3) and (4) of the 1999 Constitution.
2 NICN/LA/599/2016 delivered on February 16, 2018
3 SUIT NO:NICN/LA/285/2023
