Oluwapelumi Obisesan

INTRODUCTION

There have been some debates and controversies among Nigerian legal practitioners on the jurisdiction of the National Industrial Court (hereinafter referred to as ‘NIC’) over both contract of service and contract for service matters, as they are work-related disputes. The debate is premised on the interpretation of the Constitution of the Federal Republic of Nigeria and the National Industrial Court Act granting jurisdiction to the court on labour and workplace-related issues. The literal reading of the provision has resulted in multiple interpretations of the intent of the lawmakers.

It is noteworthy that the NIC’s jurisdiction is not automatically applicable to all employment or work-related disputes, as clarified by the Constitution of the Federal Republic of Nigeria (Fifth Alteration) Act 2023. The Nigerian Courts, in multiple instances, have laid distinctions between both services, and outlined the form of disputes which confer jurisdiction on the NIC. Thus, it is crucial to distinguish between the two contracts to ascertain whether a dispute falls under the NIC’s jurisdiction.

The ambit of this article examines the jurisdiction of the NIC, the intricacies of contract of service and contract for service, and the distinction between both service contracts. The article further determines the nature of disputes conferring jurisdiction on the NIC.

NATIONAL INDUSTRIAL COURT AND ITS JURISDICTION

Jurisdiction is a fundamental and bedrock issue in any judicial proceedings. It is a serious procedural issue which determines the authority of a court to sit over any case. Jurisdiction can be challenged at any point and the non-existence of jurisdiction will automatically strip away the powers of a court to consider the issue.

Accordingly, the Black’s Law Dictionary defines ‘jurisdiction’, within the context of judicial proceedings, to mean ‘a court’s power to decide a case or issue a decree’.

In the locus classicus case of Madukolu v. Nkemdilim: The ingredients of jurisdiction of a Court have, generally, been stated as follows: that a Court has the necessary competence to exercise jurisdiction in a cause or matter if: (a) it is properly constituted with respect to the number and qualification of its membership (b) the subject matter of the action is within its jurisdiction; (c) the action is initiated by due process of law; and (d) any condition to the exercise of its jurisdiction has been fulfilled.

Therefore, before a court of law entertains any matter brought before it for adjudication, it must satisfy itself that it possesses the jurisdiction to entertain the matter; the lack thereof renders the proceedings null and void, no matter how well conducted. Procedurally, the jurisdiction of the court does not exist in vacuum, the court’s authority or jurisdiction is a product of the constitution or other specific statutes. Hence, no court of law can assume jurisdiction without being statutorily empowered to do so.

The National Industrial Court of Nigeria, also known as NIC, is a court empowered to adjudicate trade disputes, labour practices, matters related to the Factories Act, Trade Disputes Act, Trade Unions Act, Workmen’s Compensation Act, and appeals from the Industrial Arbitration Panel.

Section 254 C (1) (a) of the Act Provides that:

the National Industrial Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters (a) relating to or connected with any labour, employment, trade unions, industrial relations and matters arising from workplace, the conditions of service, including health, safety, welfare of labour, employee, worker and matters incidental thereto or connected therewith”.

Similarly, Section 7 of the National Industrial Court Act, 2006 conferred on the NIC exclusive jurisdiction to adjudicate civil causes and matters relating to labour, industrial trade union and industrial relations and environment and conditions of work, health, safety and welfare of labour and matter incidental thereto amongst others.

The above provisions imply that the NIC has exclusive jurisdiction over employment and labour-related matters. Nonetheless, the question remains on whether the NIC has jurisdiction over matters relating to both the contract of service and contract for service.

CONTRACT OF SERVICE AND CONTRACT FOR SERVICE

To properly understand the NIC’s jurisdiction, it is imperative to distinguish between a contract of service and a contract for service. Both the contract of service and contract for service connotes an employment relationship between the parties, however, they differ in their nature and the legal consequences. Understanding the difference between both service contracts is important for two main reasons; first, the nature of each party’s respective obligations, and second, the court conferred with jurisdiction in the event of dispute between the parties.

A Contract of Service is an agreement between an employer and an employee in an organisation with specific time, place and conditions where the employee is bound by the decisions of the employer and gets all the benefits that arrive from it. In general, these service contracts are proof that the employees are under the control and supervision of the employer, and they must abide by all the rules and regulations that integrate the business operations. Employees under contract of service are deemed to have employment contract with the organisation which entitle them to employment benefits such as wages and salary, pension, medi LLP hical insurance and other similar employment benefits. Also, this contract can stay for longer terms, unless the service of the employee is terminated or such employee retires.

On the other hand, a Contract for Service is an agreement whereby an independent, self-employed individual is contracted to provide a specific service for the organisation in return for a fee. Under the outsourcing arrangement, a third-party independent company is engaged to provide services using its personnel for a fee. There is no employer-employee relationship between the organisation and the employees of the contractor or outsourcing company. Additionally, contracts for service are often offered for shorter terms and are limited to specific tasks or projects.

JUDICIAL PRECEDENTS AND THE NIC’S JURISDICTION

The NIC has held in numerous cases that its jurisdiction is strictly limited to disputes arising from a contract of service. This implies that matters involving a contract for service, which primarily concerns independent contractors, do not fall within its jurisdiction.

In Shena Security Co. Ltd v. Afropak (Nig.) Ltd & 2 Others, T. MUHAMMAD, J.S.C. stated thus:

“Where there is a dispute as to which kind of contract the parties enter, there are factors which usually guide a court of law to arrive at a right conclusion. For instance:

(a) if payments are made by way of “wages” or “salaries” this is indicative that the contract is one of service. If it is a contract for service, the independent contractor gets his payment by way of “fees”. In alike manner, where payment is by way of commission only or on the completion of the job, that indicates that the contract is for service.

(b) where the employer supplies the tools and other capital equipment there is a strong likelihood that the contract is that of employment or of service. But where the person engaged has to invest and provide capital for the work to progress that indicates that it is a contract for service.

(c) in a contract of service/employment, it is inconsistent for an employer to delegate his duties under the contract. Thus, where a contract allows a person to delegate his duties there under, it becomes a contract for services.

(d) where the hours of work are not fixed it is not a contract of employment/of service. See Milway (Southern) Ltd v. Willshire [1978] 1 RLR 322.

(e) it is not fatal to the existence of a contract of employment/of service that the work is not carried out on the employer’s premises. However, a contract which allows the work to be carried on outside the employer’s premises is more likely to be a contract for service.

(f) where an office accommodation and a secretary are provided by the employer, it is a contract of service/of employment.”

Also, in the case of Bukonla Abimbola (trading under Bukky Joy-Bright Ventures) v. Nigerian National Petroleum Corporation, the NIC deliberated on the nature of the contractual relationship between both parties to ascertain the jurisdiction of the court and found that the contract entered by both parties was a contract of employment.

In the case, the claimant had submitted that she entered into an employment service contract agreement with the Nigerian National Petroleum Corporation for cleaning, gardening and waste disposal of the NNPC office and environment; and she further averred that the purported letter of termination of her employment was done in bad faith and not in accordance with the terms and conditions of service.

On the contrary, the defendant argued that the agreement between the NNPC and Bukky Joy-Bright Ventures was for “a contract for service” and not “a contract of service”; the claimant was never at any time whatsoever an employee, staff or worker of the NNPC, and no employer/employee relationship exists between Abimbola and the NNPC, and urged the court to dismiss the case for lack of jurisdiction.

The Presiding Judge, Justice Elizabeth Oji affirmed the jurisdiction of the Court and held that applying the primacy of facts, there is an employment relationship between Abimbola and NNPC. She stated thus:

“The principle of primacy of facts in my view, is also consistent with the definition of contract of employment in section 91 of the Labour Act which recognised agreement, whether oral or written, express or implied, whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker. The implication of this definition is that it is the facts that determine when a person is in a contract of employment or not, and not only the presentation of a contract document. Having had the benefit of considering the facts of this case, and applying the primacy of facts in this case, I find that there is an employment relationship between the Claimant (trading in the name of Bukky Joy-Bright Ventures).”

Furthermore, in the case of Engr. Jude Ononiwu (Trading under the name of Judeson Chemical and Engineering Co. Ltd) v. National Directorate of Employment & Anor, the claimant had entered a contract as a trainer with the 1st defendant under the 1st defendant’s National Open Apprenticeship Scheme of Skill Acquisition Programme. As a result, the 1st defendant sent trainees to the claimant for training. Between 1996 and 2000, the claimant trained for the 1st defendant a total number of 2204 trainees at the training cost of N6,000.00 per trainee bringing the total debt owed to N13,776,000.00 only. When the 1st defendant refused to pay this sum after repeated demands, the claimant accordingly sued for it at the Federal High Court. The Federal High Court transferred the matter to the Owerri Division of the NIC on the ground that the issue is a labour issue in respect of which it had no jurisdiction given the provision of section 254C (1) of the 1999 Constitution, as amended.

The NIC, not certain as to whether it had jurisdiction either, decided to refer the case to the Court of Appeal to determine if the NIC has jurisdiction over contracts for service. In reaching its conclusion, the Court of Appeal considered the facts of the case and held that the State High Court has jurisdiction over the matter, and not the Federal High Court nor the NIC.

The Court of Appeal based its decision on the fact that the case arose from a simple contract between the claimant and the 1st defendant/respondent; and that the relationship between the parties was contractual, the contract being one of contract for service as opposed to a contract of service. The Court of Appeal then considered section 254C (1) in terms of the jurisdiction of the NIC, section 251(1) in terms of the jurisdiction of the Federal High Court and section 272(1), (2) and (3) in terms of the jurisdiction of the State High Court, and then concluded that the claims of the claimant in the case do not relate to the sections dealing with the jurisdiction of the NIC and the Federal High Court. the Court of Appeal held that neither the NIC nor the Federal High Court had jurisdiction over the matter.

Conclusively, in the case of Lawrence Igwegbe v. Standard Alliance Life Assurance Limited the NIC had to determine on the facts before it, if the relationship between the Claimant and the Defendant was one of an employment relationship (contract of service) or one in which the claimant was an independent contractor (contract for service). The court held that the fact that the Claimant was on commission and not on salary was very suggestive that the relationship was one of a contract for service.

CONCLUSION

As decided by plethora of legal cases, jurisdiction is the engine room of the court. It is the fundamental right of the court to hear and determine a suit. Any court without jurisdiction has no power to proceed in that regard as any decision and act done will be null and void and of no effect.

From the analysis above, it is evident that the National Industrial Court of Nigeria (NIC) has exclusive jurisdiction over disputes arising from a contract of service and not a contract for service. Consequently, it is pertinent for legal practitioners and litigants to properly categorize employment relationships before approaching the NIC. Misfiling cases could lead to wasted judicial time and unnecessary dismissals due to lack of jurisdiction.

Miss Obisesan is currently at the Nigerian Law School, Lagos Campus

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