MEASURE OF DAMAGES FOR WRONGFUL TERMINATION OF EMPLOYMENT

Wrongful termination of employment means termination of employment without giving the period of notice required for termination and stipulated in the contract of employment. Once the required period of notice is given, the termination is lawful no matter the motives of the employer. The employer is not required to state any reason in the letter of termination. Therefore, the measure of damages for wrongful termination of employment is basically the remuneration of the employee for the period of notice required but which was not given by the employer.

Wrongful dismissal, on the other hand, means dismissal for an act of fraud or gross misconduct and no period of notice is required, provided the employee was given fair hearing before dismissal. However the reason for dismissal must be stated by the employer in the letter of dismissal. Therefore, the measure of damages for wrongful dismissal is at large and for this reason it is advisable for companies to seek legal advice before the dismissal of an employee.

In Idufueko v Pfizer Products (2014), the respondent wrote a letter terminating the appointment of the appellant who therefore commenced an action against them claiming the sum of N2,883,727 as general and special damages arising from the unlawful termination of his employment. The trial court held that the termination was wrongful and awarded the sum of N21,135.34k. The appellant was dissatisfied and appealed against the award of damages. The Supreme Court, per Galadima JSC said,

“The standard set by law for assessment of damages to a party whose employment has been unlawfully terminated has been established in a plethora of decisions of this court. The position of the law is that where the termination of a contract of service was found to have been wrongful, the measure of damages that the plaintiff could be entitled to would be the salaries for the length of time during which notice of the termination would have been given in accordance with the contract of employment. He would, in addition, be paid other legitimate entitlements due to him at the time his employment was terminated.” See also, Geidam v NEPA (2001), Shell PDC v Olanrewjau (2008).

In Osisanya v Afribank (2007) the Supreme Court deliberated on the measure of damages for wrongful termination of employment and held per Ogbuagu JSC,

“In a master and servant relationship, the damages available to the employee, is the payment of his salary and other entitlements already lawfully accruable and payable for the period for which the employee should have been given notice of termination. The damages will be the amount he would have earned if his employment was properly and validly determined.” See also, Chukwuma v Shell Petroleum (1993), International Drilling Company Nig. Ltd v Ajijola (1976), Imoloaeme v WAEC (1992).

Many employees rush to court to challenge wrongful termination of employment, claiming huge sums of money, without proper knowledge of the settled law on the subject and often come away disappointed. This only serves to buttress the need for genuine legal advice.