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COVID-19 pandemic: Implications on employment relations

By: R. Juwah & N. Dele-Alufe- Associates in Pinheiro LP

INTRODUCTION

The corresponding adverse pressure of measures to fight Covid-19 on business revenues will mean that businesses may not be able to sustain current payroll costs.  Employers will therefore, have to take tough decisions to wit, pay cuts, downsizing, retrenchment, etc to manage this challenge. This trying time which definitely, is going to impact on employment relationships, will be based on the kind of services required by employers and rendered by employees. 

Basically, there are two kinds of services provided by the labour force namely; essential services and non-essential services. To understand the impact of the pandemic on employment relations, it is important to distinguish between essential services employments and non-essential services employments. 

EMPLOYEES PROVIDING ESSENTIAL SERVICES: 

Essential services employees fulfil a wide variety of roles in the economy, including health care services, energy provision, food service, etc. With the exemption of these employees which allows for them to continue to work and earn from the comfort of their respective offices, these employees are unaffected by the worry of loss of cash flow, remuneration and job insecurity. Notwithstanding, as they continue to fulfil their duties, they risk contracting the disease and dying. As at 6th April 2020, 16% of the COVID-19 cases reported in Ohio involved health care workers while in Spain at least 12,298 health care workers had tested positive for the disease. In Nigeria, 3 of the 13 deaths recorded are those of health officials.  In addition, these employees experience the cost and risk of maintaining their own health while interacting with the public. Besides the risk to life and health, there is the issue of safety. As the lockdown extends, crime is beginning to erupt and is creating an impending threat to the ability for essential workers to continue their jobs safely. Instances have been recorded in Lagos and Abuja, Nigeria.

A pertinent question that lingers as it relates to this class of employees is what happens to them in the event that they contract the virus and probably lose their lives? 

By virtue of Section 4 of the Employee Compensation Act 2010, essential service workers or their dependants may claim from employers, compensation for any injury, occupational disease and death suffered by such workers in the course of their employment provided 14 days’ notice from the occurrence or receipt of the information of occurrence is given to the employer. The employer is obliged upon receipt of the notification by the employee to report to the Board and the nearest office of the National Council for Occupational Safety and Health in the State within 7 days.

It is noteworthy that not all injuries suffered by an employee during the period of his employment entitle an employee to compensation. In Afrab Chem Ltd. v Owoduenyi (2014) LPELR-23613 (CA) the court held that:

“It is settled law that it is not every injury suffered by an employee during the period of his work for the employer that entitles the employee to damages or compensation. It is only the injury suffered out of and in the course of his employment that the employer will be liable for… In effect the employment must be the cause of the injury and the injury must have occurred in relation to that employment or incidental to the employment… Any injury sustained by an employee which occurs by a mere coincidence to the currency of the employment cannot be an injury arising out of and in the course of employment. Per WAMBAI, J.C.A. (Pp.31-32,paras.B-B)”

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From the above court decision, an employer would only be liable where injury suffered by the employee, occurred out of and was in the course of employment only. Therefore, once an essential services employee can establish that while in the course of his employment, he suffered injury or occupational disease and the employment was the cause of or was incidental to such injury, such employee is entitled to compensation from his employer.

EMPLOYEES PROVIDING NON-ESSENTIAL SERVICES 

This class of employees are those whose services do not impact lives, health, and public safety. By reason of the kind of services rendered, this class is mandated to observe the lockdown and movement restrictions in places affected by COVID-19. Whilst some offices offering this type of employment are completely shut out of doing business, some others are resorting to working from home. In any event, the impact of the pandemic on this type of employment will relate to the incidences resulting from the observation of the measures in place to fight it. 

The International Labour Organization (hereinafter referred to as the Organization) has stated some responses to the pandemic by virtue of the International Labour Standards the essence of which is to protect the Labour force and most importantly, non-essential employment relationships from the hazards and incidents of the pandemic. Indeed some countries as America and Germany have keyed into these responses to preserve the relationship as they possibly can by mandating employers to provide paid sick leave, paid family and medical leave along with tax credits for the paid leave and expansion of unemployment insurance or by funding around two-thirds of employees’ salary.

In Nigeria, amidst the fast spread of the pandemic and the search for a solution,  Lawmakers are yet to respond to the International Labour Standards and accordingly, there are several questions borne out of the impact of the pandemic that linger around nonessential services employment relations which shall be answered based on the subsisting laws in the Country. These questions include:

 

  • WHETHER EMPLOYEES ARE ENTITLED TO REMUNERATION DURING THE LOCKDOWN/ISOLATION PERIOD?
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With the lockdown imposed by the Federal Government and State Governments in affected areas within Nigeria, a lot of businesses, companies, firms and the like have either completely stopped work or resorted to working from home. Regardless of the decision opted for, it is not farfetched that income has grossly reduced and same is starting to pique employers to seek out ways to maintain some level of balance between earnings and remuneration of employees. 

Where no work is done, is an employee justified to expect remuneration from the company or organization? The answer to this is found in Section 7(1) (f) Labour Act 2004, where the method of calculation of wages is stated to be an integral part of the written contract/terms of employment. According to the court in Chemical & Non Metallic Products Senior Staff Association vs. Benue Cement Co. Ltd (2006) 5 NWLR (Pt.14)1, payment of salaries are so sacrosanct that an employee is entitled to wages even during temporary incapacitation period once he is willing to work. This principle of law is very elementary as employment is a form of contract based on the agreements of parties involved and Courts have consistently upheld same. See: Union Bank of Nigeria Plc V Soares (2012) LPELR-8018 (CA).

 

  • CAN THE PANDEMIC SERVE AS A GROUND FOR LAYOFF OR TERMINATION OF EMPLOYMENT?

The relevant statute is silent on the grounds that may warrant the layoff or termination of employment. It is therefore safe to state that employers may rely on the pandemic were necessary, to lay-off employees. In any event, no court will compel an unwilling employer to retain employees or force an employer to give any reasons for termination. See Okwara Agwu & Ors. vs. Julius Berger Nig. Plc. (2019) LPELR-47625(SC); Obanye V. Union Bank (2018) LPELR-44702 (SC).

 

  • IS THE NOTICE OF TERMINATION OF EMPLOYMENT REQUIRED?

By virtue of Section 11(2) of the Labour Act 2004, before an employment is terminated there are minimum notice periods expected to be given by either party to the contract of employment. The notice is subject to the duration of employment and can be abridged or waived by either party. 

A pertinent question related to this issue is, whether notice of termination of employment would run during the period of the lock down/isolation. Section 11 Labour Act 2004 provides for notice to be duly given to the other party before termination. The section however does not provide for instances where there is a state of emergency as we are facing now due to the pandemic. It is our view therefore, that contracts of employment most likely do not include such a clause. However, where such clause is in the contract of employment, the employer would be bound by its content. 

 

  • IS AN EMPLOYER LEGALLY JUSTIFIED FOR DEDUCTING AN EMPLOYEE’S REMUNERATION FOLLOWING SICK LEAVE AMID LOCKDOWN?
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By the provision of Section 16 Labour Act 2004, an employee is entitled to sick leave and to remuneration during that period. Thus, an employee is entitled to sick leave and remuneration during this period of lockdown where, prior to same, he/she has not exhausted the sick leave. An employer is not allowed in this instant to reject the application or whilst accepting same, to deduct from such employee’s remuneration as it would amount to an illegality except where expressly permitted by the Act or any other law. See Section 5 Employers Compensation Act 2010.

Also, where an employee has exhausted his/her sick leave but happens to suffer from an illness as Covid-19 which causes such employee to be absent from employment or unable to render services during the lockdown, it is our view that the employer will also have no legal justification to deduct from the salary payable. This is because, the Act only permits deduction from wages with the consent of the employee for contributions to provident or pension schemes or other schemes agreed to by the employee and approved by the relevant Authority. Absence from work or inability to fulfil the employment obligations as in this scenario is not an instance permitted by the Act for any deduction in wages. See: Adebusola Adedayo Omole v. Mainstreet Microfinance Bank (Unreported) NICN/LA/341/12.

 

  • WHETHER EMPLOYEES CAN CLAIM COMPENSATION FOR INJURY SUFFERED DURING LOCKDOWN: 

 

This question relates to employees who currently work from home. In the event that an employee who works from home during the lockdown suffers injury or dies, can such employee or his/her dependants claim compensation? Interestingly, by the provisions of section 11 of the Employee Compensation Act 2010, a non-essential service worker may claim entitlement to compensation. The section provides for compensation for injuries occurring outside normal workplace if;

  1. the nature of the business of the employer extends beyond the usual work place;
  2. the nature of the employment is such that the employee is required to work in and out of the workplace; or 
  3. The employee has the authority or permission of the employer to work outside the normal workplace.

The implication of the above is that employers will be held liable for compensation of an employee who suffers injury whilst working from home during the lockdown. However, the employee is expected to establish that such injury occurred out of and was in the course of his employment. See: Afrab Chem Ltd. v Owoduenyi (2014) LPELR-23613 (CA). It must also be noted that injury suffered by an employee by mere coincidence to the currency of the employment cannot be an injury arising out of and in the course of employment. See: Afrab Chem Ltd. v Owoduenyi (supra)

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