Introduction

Contracts of employment, also known as contracts of service have the effect and recognition of a simple contract. Simple contracts are governed by applicable legislations including limitation Laws or Act as the case may be.[i]

The Nigerian jurisprudence remains unwavering on the proposition that the legal right to approach a court for redress does not exist in perpetuity but is generally tampered by a statute of limitation.[ii] By necessary implication, causes of action including those arising from simple contracts must be instituted within a period stipulated in the applicable limitation law which usually varies between five to six years from the date on which the cause of action accrued. This proposition has been applied in Nigerian courts over the years and there was no controversy regarding the applicability of limitation laws to contracts of employment until fairly recently, (post July 2019) when the National Industrial Court started to place reliance on the case of National Revenue Mobilization Allocation & Fiscal Commission & Others (NRMAFC) v. Ajibola Johnson & Others[iii] in holding that limitation law does not apply to contracts of employment.

Current Position of the National Industrial Court

In at least three different cases, where the National Industrial Court was faced with the question of whether the employment matters before them were statute barred, the National Industrial Court seem to have shown consistency in holding that limitation law no longer applies to contracts of employment. They maintain that the position of the law changed since NRMAFC decision was delivered. This is how the National Industrial Court per Hon. Justice (Dr.) I. J. Essien put it in a Ruling delivered on 10 October 2019 in Suit No NICN/LA/402/2018 Lilian Nnenna Akumah v. First Bank of Nigeria Plc to wit:

While I agree with learned counsel that before July 2019 the decisions were unanimous that as regards limitation of action law, where an action is instituted outside the period stipulated for an action to be instituted such action is likely to be dismissed, see the case of Ibrahim V. Judicial Service Commission [1998] 14 NWLR (pt. 584) pg.1.  However the position of the law has since changed after the decision in the case of NRMAFC & 2 ORS V. Ajibola Johnson [2019]2 NWLR (pt. 1656) 247 at 270-271 the Supreme Court was emphatic that limitation of action does not apply to contract of service.

In this case, the claimant’s cause of action accrued on 21 October 2008, while the claimant instituted the suit on the 27 August 2018 i.e., four years after the claimant ought to have instituted this action by virtue of the provisions of Lagos State Limitation law which was the applicable legislation. By this decision, the National Industrial Court relying NRMAFC’s decision saved an action that was otherwise statute barred and ought to have been dismissed. We will see shortly how this case also became a precedent for another case that was caught by the statute of limitation.

Subsequently, and on a similar note, the National Industrial Court per Honourable Justice Ikechi Gerald Nweneka in a judgment delivered on 5^th March 2020 in Suit No. NICN/LA/553/2018 between Mr. Godson Ikechukwu Nkume vs. First Bank of Nigeria Limited followed the same path. Placing reliance on both NRMAFC and Akumah’s decisions, His Lordship held as follows:

Furthermore, statutes of limitation of actions have been held not to apply to contracts of service. See National Revenue Mobilization Allocation and Fiscal Commission & Ors. v. Ajibola Johnson & Ors. [supra] at pages 270-271. This decision was applied by this Court in the case of Lilian Nnenna Akumah v. First Bank of Nigeria Plc, Suit no. NICN/LA/402/2018, which ruling was delivered on 10^th October 2019. The objection was based on Section 8[1][a] of the Limitation Law of Lagos State. My learned brother, Justice Essien observed that:

 “The defendant counsel has [sic] tried to argue that the above cited Supreme Court decision does not apply to the present case because it was decided based on the S. 2[a] of the Public Officers Protection Act, while the present case is considered under S. 8[1][a] of the Limitation Law of Lagos State. That distinction is neither here nor there. Both statutes are statutes of limitation of action. The subject matter of what they deal is contract of employment. Therefore, both statutes stand side by side in so far as it relates to limitation of action in contract of employment. While one is a federal enactment the other is a state law. The decision of the Supreme Court on any of the statute[s] must of necessity guide a court of record in the application of any of those enactment[s] on the subject matter of limitation of action in contract of employment.”

 I completely agree and hold that claims [a][i], [b], [c] and [d] are not statute barred.

Clearly, at the time this judgment was delivered, it was not only relying on the NRMAFC’s decision, it was also relying on the rationale and explanation provided in Akumah’s case that first followed the NRMAFC decision. In this case, the Claimant commenced an action on 30 October 2018 for payment of compensation for personal injuries resulting from an armed robbery attack that occurred on the 14 December 2006 at the Defendant’s bank where he worked. The claimant claims that during his treatment at the hospital, he was advised by the doctors not to drive for about a year to help the injuries heal faster. Subsequently, the claimant asked the defendant for assistance in paying N20,000.00 per month to defray the salary of a driver he hired based on the medical advice. The Defendant approved the request by memo dated 9 July 2007 with effect from July 2007. The claimant claimed that in spite of the approval, the defendant refused, failed and or neglected to pay the driver’s salary. The Claimant also claimed that the Defendant failed to compensate him for the injuries sustained during the armed robbery attack amongst other claims which included his terminal entitlements. The defendant’s counsel, argued that the cause of action in respect of compensation for injury are statute barred by virtue of sections 8[1][a] and 9[1] of the Limitation Law of Lagos State because they arose in 2006 and July 2007, which is a period of 12 years and 11 years respectively when the limitation period is 6 years. In response, the Claimant’s counsel argued that the provisions of sections 8[1][a] and 9[1] of the Limitation Law of Lagos State are inapplicable and that, if there was any delay in making the claim, it was that of the defendant that had the responsibility to do so. Reacting to the arguments, the court made three significant holdings. Firstly, that the cause of action did not accrue in July 2007 but after the expiration of one year from that date and when it became evident that the Defendant was not ready to pay it[iv]. Secondly, that the Defendant’s approval of N20,000.00 monthly salary for the Claimant’s driver does not come within the provision of Section 8[1][a] of the Limitation Law, as it cannot be regarded as a simple contract, noting that it is a grant made to the Claimant arising from his temporary incapacity at the time. Thirdly, statutes of limitation of actions have been held not to apply to contracts of service, placing reliance on NRMAFC. The implication of the third holding is more significant and it trumps the two previous ones. This is because even if the court had resolved that the cause of action was a contract of service (to which the limitation law applies) and same was filed outside the limitation period of 6 years prescribed in the limitation law), it still would not have dismissed the suit as His Lordship had already adopted Akumah’s case in reaching the conclusion that “limitation laws do not apply” to contracts of service.

The third case in which the National Industrial case was faced with the question of whether limitation period applies to contracts of service is Suit No: NICN/IB/99/2016 – Olatunji v. British American Tobacco (Nigeria) Limited. In this case, the claimant filed an action in September 2016 claiming that he suffered some medical conditions while in the defendant’s employment between 2003 and 2009. The claimant also claims that after the termination of his employment, he was not paid his terminal benefits such as leave allowance commuted to cash, one month’s salary in lieu of notice, and taxes payable from his salaries for years 2007, 2008 and part of 2009 (“terminal benefits or entitlements”). The defendant filed a preliminary objection challenging the Court’s jurisdiction on grounds that the action was statue barred having been filed over seven years after the cause of action arose when the Limitation Law of Oyo State prescribes a limitation period of five years. Reacting to the preliminary objection, the National Industrial Court per J.D Peters held as follows:

“Learned Counsel to the Defendant/Applicant aptly and correctly stated the position of the law on the implication of the statute of limitation on employment matter i.e. that same is negatively affected if not brought within the time as permitted by the relevant statute. However, that was the position before 2019. For as ARIWOOLA JSC held in National Salaries and Wages Commission v. Ayoola [2019] NWLR (sic) statutes of limitation do not barred (sic) the institution of employment related matter. The state of the law has changed positively and equitably. It is no longer the position as argued by the learned Counsel to the Defendant/Applicant.”

It would appear that the court relied upon a different decision of the Supreme Court other than the famous NRMAFC decision. However, the case of “National Salaries and Wages Commission v. Ayoola [2019] NWLR” which the court cited does not exist. The court perhaps wrongly referenced the NRMAFC decision.

There may be many other decisions of the National Industrial Court that may have followed the three cases that we have just examined, however, we must quickly remember that our aim is not to compile a list of all the cases that have followed NRMAFC but to show a current interpretation trend or position that the National Industrial Court has taken vis-à-vis the question of whether limitation law applies to contracts of employment.

Analysis

The burning question which follows the trend of decisions of the National Industrial Court is whether NRMAFC decision indeed eradicates or intended to eradicate the applicability of limitation law to employment matters.

A convenient place to begin the analysis is the pronouncement of Hon. Justice (Dr.) I. J. Essien Akumah’s case (supra) where he held that – “before July 2019 the decisions were unanimous that as regards limitation of action law, where an action is instituted outside the period stipulated for an action to be instituted such action is likely to be dismissed.” The vital question therefore is – did NRMAFC actually change the position of the law as we have always known it to be? What exactly did the Supreme Court decide in NRMAFC?

In NRMAFC, the Respondents were appointed by the 1^st Appellant (NRMAFC), a Commission of the Federal Government of Nigeria. Shortly after the appointment, NRMAFC withdrew the respondents’ appointments, claiming that the new government frustrated them into taking this action when it suspended all appointments made within the period of the respondents’ appointment. Dissatisfied, the respondents commenced an action and asked for three reliefs namely, a declaration that they remain employees of the Applicant; an order directing the Appellants to pay their salaries, emoluments and entitlements and a declaration that the appellants unlawfully and unconstitutional denied them of the opportunity to serve their fatherland. The trial court granted only the second relief. Dissatisfied, both parties filed an appeal and cross-appealed respectively to the Court of Appeal. The appeal was dismissed and cross-appeal succeeded in part. Dissatisfied, the parties further appealed and cross-appealed to the Supreme Court.

One of the issues which the Court of Appeal decided and which the Supreme Court was also invited to decide was whether the Appellants do not enjoy the umbrella of Public Officers Protection Act in contract of service. The purpose of this issue was to inquire whether the Appellants can enjoy the protection accorded public officers under section 2 of the Public Officers Protection Act where actions against public officers are required to be brought within 3 months from the date of the cause of action.

In resolving this issue, the Supreme Court at the early part of its analysis reminded itself of the overall purpose of the Public Officers Act (hereinafter POPA) when it said[v] “Ordinarily, the purpose of the public officers protection law is to protect public officers in civil liability for any wrong doing that occasions damages to any citizen, if the action is instituted within three months after the act, default or neglect complained of.” With this in mind, it was very easy for the Supreme Court to find that the entire legislation will only apply when public officers are carrying out public duties. By necessary implication, the limitation period of three months set out in section 2 of the Act will only apply in respect of civil liabilities arising from the action of public officers in the discharge of their public duties. The Supreme Court therefore had a valid basis to hold that[vi] – “section 2 of the Public Officers Protection Act does not apply to cases of contract” (whether involving public officers or not). This because the entire legislation is inapplicable to contract and this much the Supreme Court noted when it cited with approval the decision of the Court of Appeal as follows – “In dealing with this issue, the court below had found that a party’s right of action and access to relief cannot be extinguished on the basis of the Public Officers Protection Act as it does not apply to cases of contract.”

Clearly, the decision of the Supreme Court has a logical sequence but it is extremely difficult to see how it logically translates into a conclusion that [limitation laws] do not apply to matters relating to contract of employment as interpreted by the National Industrial Court. If POPA and by extension the limitation period specified therein do not apply to contracts, how does that affect the applicability of other relevant legislations that apply to contracts i.e., Limitation Laws? How does the determination that the limitation period in POPA is inapplicable to contracts affect the validity and applicability of other legislations to contracts? Clearly, the implication of NRMAFC’s decision bothers on interpretation and the proper interpretation is that NRMAFC specifically prohibits the application of POPA to contracts and POPA alone. It does not prohibit the application of limitation periods in other legislations. This interpretation is consistent with the common law principle and maxim of interpretation – Expressio unius est exclusio alterius which posits that the express mention of one thing is the exclusion of the others. What the Supreme Court simply intended by this decision was to prevent NRMAFC from relying on POPA as a means of avoiding or escaping its contractual obligations because the Act was not created to protect Public Officers from their contractual obligations neither was it created to regulate their contractual relationships but to protect them from civil liabilities arising from acts done by them in pursuance of their public duties. At the risk of restatement, this is why the Supreme Court at the early stage of its analysis reminded itself that “…the purpose of the public officers protection law is to protect public officers in civil liability for any wrongdoing that occasions damages to any citizen…” In a nutshell, there was a specific reason why the Supreme Court held that POPA does not apply to contracts of service. This reason clearly does not extend to Limitation Laws. If the National Industrial Court had considered this perspective, perhaps they would have appreciated the fact that NRMAFC does not prohibit the application of Limitation Law to contracts of service or employment as the case may be. It is interesting to note that the many decisions in which the Supreme Court has prevented public officers from relying on the limitation period stipulated in POPA[vii]. Thus, the move made by the Supreme Court in NRMAFC is not new.

Indeed, the National Industrial Court’s interpretation that NRMAFC forbids the application of all limitation laws to contract finds no support under any recognised rule of interpretation or construction. When confronted with the argument that NRMAFC’s only prohibits the application of POPA to contracts particularly the provisions of section 2 of POPA and does not affect the application of Limitation law to contracts particularly the provisions of section 8 of the Limitation Law of Lagos State because they are different legislations, the National Industrial Court quickly dismissed the distinction, stressing that both POPA and the Limitation Law of Lagos State are statutes of limitation. This is how Hon. Justice Essien put it in Akumah’s case. “The defendant counsel has [sic] tried to argue that the above cited Supreme Court decision does not apply to the present case because it was decided based on the S. 2[a] of the Public Officers Protection Act, while the present case is considered under S. 8[1][a] of the Limitation Law of Lagos State. That distinction is neither here nor there. Both statutes are statutes of limitation of action. The subject matter of what they deal is contract of employment. Therefore, both statutes stand side by side in so far as it relates to limitation of action in contract of employment. With profound respect, POPA is not a statute of limitation. It only has a limitation provision namely section 2 which is only applicable to matters in respect of which the Act itself applies. As stated in the short title of POPA and confirmed by the Supreme Court, POPA is a legislation created to provide for the protection against actions of persons acting in the execution of public duties. Limitation laws on the other hand are applicable to contracts because they are designed to govern the enforcement of contractual rights and relations amongst other things. In NRMAFC, the Supreme Court held that POPA is inapplicable to contracts of service, thus the limitation provision in it is effectively inapplicable. The Supreme Court did not hold that limitation laws or other relevant legislations do not apply to contract and could not have held so. Furthermore, the Court of Appeal and the Supreme Courts were not confronted with the question of whether the provisions of section 8 of the Limitation Law of Lagos State could apply to the contract in issue and therefore did not decide on whether or not Limitation Laws apply to contracts. If they were confronted with the questions, they would definitely have reached a different conclusion because they would have found in the first place that Limitation Laws apply to contracts of service and employment and on this premise, they would have safely applied the relevant limitation period in the Limitation Law. There is therefore nothing in NRMAFC that prohibits the application of any relevant legislation that is otherwise applicable to contracts including Limitation Laws. They remain in force and will continue to govern contractual relations between parties, (including public officers and their counterparts). In other words, the Supreme Court’s decision about the non-application of POPA to contracts is as far as it goes. It does not nullify or affect the application of Limitation Laws specifically deigned to be applicable to contracts amongst others.

Alternative Argument – Laches and Acquiescence

Whilst a defendant can potentially rely on the foregoing analysis in arguing that NRMAFC does not prohibit the application of Limitation Laws to contracts of employment, it is also open to the defendant to canvass an alternative argument which the National Industrial Court accepted in the case of Olatunji v. British American Tobacco (Nigeria) Limited[viii]. The alternative argument which will be discussed briefly practically reinforces the position that employment matters cannot be enforced in perpetuity but within a limited and specific time frame.

This alternative argument was advanced by the defendant’s counsel[ix] in Olatunji’s case after the National Industrial Court had initially rejected his argument on a preliminary objection that the suit be dismissed for being statute barred. In rejecting the limitation law argument, the court placed reliance on NRMAFC and principles of equity. Given the fact that the Court had earlier taken the position that limitation laws do not bar the institution of employment related matters, Counsel first explained that the defendant is still entitled to raise the defence of laches and acquiescence despite its similarity[x] to the defence of limitation of action. He argued that both defences are different and can be raised independently even when one had been exhausted. Counsel explained that while the statute of limitation is determined based on a mathematical calculation of a prescribed time fixed by law, the defence of laches and acquiescence do not have any time prescription as they are determined by particular circumstances of each case rather than a generally prescribed time. Thus, once the delay and conduct of the claimant are sufficient to create the impression that the claimant has waived or slept on his right, the defence of laches becomes potent. Counsel cited the case of Davies v. Ajibona[xi] where the Court of Appeal discussed the conceptual distinction between both defences. Based on this premise, Counsel argued that the Court’s initial Ruling on the defence of statute of limitation does not preclude it from considering and applying the equitable principle of laches and acquiescence which the defendant duly pleaded and for which evidence were tendered before the court.

In persuading the Court to apply the equitable principles of laches and acquiescence, Counsel reminded the Court that it had relied on the principle of equity in its ruling as one of the basis for rejecting the application of limitation law to contract. Counsel therefore urged that since the Court had given credence to and applied the principle of equity, it should follow it through and through by considering in the same token relevant equitable defences like laches and acquiescence.

Counsel then proceeded to show that the defendant pleaded facts relating to laches and acquiescence and also demonstrated through evidence tendered and admitted in the case that there was lapse of time and delay by the claimant in asserting his perceived rights. Specifically, Counsel showed that the claimant was silent for a period of six years and seven months, stressing that this conduct amounted to laches.  In its judgment, the Court agreed with the Defendant’s argument that the Claimant’s case was caught by laches and acquiescence when it held as follows:

“It is not contested that the cause of action in this suit arose sometimes before 2009 when the employment of the Claimant was terminated. Now, there is no evidence of any communication between the Claimant and the Defendant, according to the evidence in chief of the Claimant, until sometime in 2006 when his Counsel, I.B. Batimehin wrote a letter dated 12/2/16 to the Defendant demanding for certain entitlement as contained in the letter. The question is between 2009 and 2016 what was the Claimant doing? Why did he not at least get in contact with the Defendant? In all of his 22 paragraphs witness deposition and the Reply to the Defence filed on 29/1/2020 none of these particulars of laches and acquiescence was challenged not even passively. I have carefully examined the facts of the case of the Claimant against the background of the defence of laches and acquiescence. I find that the period of 7 years is long enough for the court to find against the Claimant. The period is nothing short of undue delay to prosecute this case and seek the reliefs here sought. A consequence of this undue delay is that the Defendant was made to hold a belief by the Claimant that the latter was no longer interested in the pursuit of his alleged right. I hold that the case of the Claimant is caught by this twin principle of laches and acquiescence. Accordingly, I dismiss the case of the Claimant in its entirety.

One important point to note about the defence of laches is that lapse of time and delay by the claimant or the length of the delay by the claimant is not fixed. It may depend on the nature of the acts done by the claimant between the time the cause of action arose and the time the action was filed, i.e., actions which may cause the defendant to reasonably belief that the claimant is no longer interested in pursuing his perceived rights. In some other instances, the defence laches may become relevant and applicable when the delay is long enough to occasion loss of evidence, witnesses, and a fair chance for the defendant to defend himself after the passage of time from the date the wrong was committed.

Conclusion

The irony of this equitable principles laches and acquiescence is that it can be more devastating to claimants because unlike limitation law which has a fixed period of about five to six years for the filing of an action, laches is not. The implication is that delay of as little as one year[xii] by a Claimant depending on the circumstances i.e., delay coupled with actions by the claimant suggesting that he is not interested in asserting a right may constitute laches and acquiescence. It is hoped that the National Industrial Court will in its future decisions appreciate the fact that the Supreme Court did not disregard the application of Limitation Laws in NRMAFC.

[i] The courts have preferred the limitation law of the place of the proceedings, and have rejected an argument to apply the limitation law of the place where the contract was performed. See Etim v IGP [2001] 11 NWLR (Pt.724)

[ii] See the case of Lagos State Government vs. Martins (2015) ALL FWLR (Pt. 794) 27 @ 42 Paragraph E.

[iii] (2019) 2NWLR (Pt. 1656) 247

[iv] The court however did not identify a specific date which would have been used for the purpose of computation.

[v] at page 269

[vi] at page 270

[vii] They are mostly based on known exceptions i.e. abuse of public office, abuse of public trust, acting outside the scope of duty etc. See Kwara State Pilgrims Welfare Board v Alhaji Jimoh Baba (2018) 9 N.W.L.R Pt. 1623 Pg. 36; Godwin Nwankwere v. Joseph Adewunmi [1966] NSCC pg. 140. See also the decision of the Court of Appeal in Mr. Akiah Humphrey Okolie & Ors v. Independent National Electoral Commission (2017) LPELR 43405 CA.

[viii] (supra)

[ix] The author of this article, Joshua Abe

[x] They bother on delay.

[xi] (1994) 5NWLR (PT. 343) 234

[xii] Or a period less than the limitation law period.

[1] Joshua Abe is the Managing Partner and head of Dispute Resolution Practice at CM Advocates Nigeria.

[1] The courts have preferred the limitation law of the place of the proceedings, and have rejected an argument to apply the limitation law of the place where the contract was performed. See Etim v IGP [2001] 11 NWLR (Pt.724)

[1] See the case of Lagos State Government vs. Martins (2015) ALL FWLR (Pt. 794) 27 @ 42 Paragraph E.

[1] (2019) 2NWLR (Pt. 1656) 247

[1] The court however did not identify a specific date which would have been used for the purpose of computation.

[1] at page 269

[1] at page 270

[1] They are mostly based on known exceptions i.e. abuse of public office, abuse of public trust, acting outside the scope of duty etc. See Kwara State Pilgrims Welfare Board v Alhaji Jimoh Baba (2018) 9 N.W.L.R Pt. 1623 Pg. 36; Godwin Nwankwere v. Joseph Adewunmi [1966] NSCC pg. 140. See also the decision of the Court of Appeal in Mr. Akiah Humphrey Okolie & Ors v. Independent National Electoral Commission (2017) LPELR 43405 CA.

[1] (supra)

[1] The author of this article, Joshua Abe

[1] They bother on delay.

[1] (1994) 5NWLR (PT. 343) 234

[1] Or a period less than the limitation law period.