Can An Employee Be Punished Twice For The Same Misconduct? A Review Of Skye Bank Plc v. Adegun (2024) 15 NWLR (Pt. 1960) 1

Introduction

An employment relationship may be terminated at any time by either party in accordance with the contract of employment, subject to applicable notice requirements. However, when an employer dismisses an employee for gross misconduct, special rules apply. Nigerian courts have long held that an employer has an inherent right to dismiss for gross misconduct even if this right is not expressly stated in the contract of employment. See: Simon Ansambe v. Bank of the North Ltd (2005) 8 NWLR (Pt. 928) 650.

In Skye Bank Plc v. Adegun (2024) 15 NWLR (Pt. 1960) 1, the Supreme Court of Nigeria considered whether an employer could validly dismiss an employee for misconduct for which the employer had earlier imposed sanctions. This article reviews the Supreme Court's decision and highlights key lessons for employers and employees on managing disciplinary matters properly.

Summary of the Facts of Skye Bank Plc v. Adegun

The Respondent was an accounting clerk with Cooperative Bank Plc, which later changed its name to Skye Bank Plc, and was later promoted to the position of officer.

During an audit exercise at Cooperative Bank's Oyo Branch between August 2004 and December 2005, the inspectors discovered that N16,800,000.00 (Sixteen million eight hundred thousand) was fraudulently withdrawn from Cooperative Bank and paid by the Respondent to unidentified beneficiaries.

As a result of the fraud, the Cooperative Bank issued a query dated 6 December 2005 to the Respondent, asking him to respond to 10 questions regarding the fraud. The Respondent responded to the query the same day. Although he denied participating in the fraud, he apologised for his conduct and promised to be more vigilant and to report any irregularities to the bank. Remarkably, while Cooperative Bank was still reviewing the Respondent's response to the query, the Bank wrote a letter dated 15 December 2005, thanking the Respondent for 10 years of meritorious service and presenting him with a gift.

Following its review, Cooperative Bank then issued a letter dated 30 December 2005 indicting the Respondent and cautioning him "to be more alive" to his responsibilities.

Subsequently, Cooperative Bank merged with other financial institutions to form Skye Bank Plc. As a result of the merger, the Respondent attended the Resident Internal Control Officer course and was later transferred to the inspectorate department as a Resident Internal Control Officer.

A few months after his redeployment, Skye Bank wrote a letter dated 29 March 2006 summarily dismissing him from the service of the bank for the same fraudulent conversion of stolen cheques that Cooperative Bank had already investigated and sanctioned. Skye Bank also stated in the dismissal letter that the Respondent was "fraudulent, untrustworthy and no longer fit to work in a financial establishment."

Consequently, the Respondent instituted an action at the High Court of Oyo State seeking orders to nullify his dismissal, his salary for several months and other allowances. Skye Bank also counterclaimed for N209,572.62 (Two hundred and nine thousand, five hundred and seventy-two naira, sixty-two kobo), which it advanced to the Respondent as its employee.

The High Court granted judgment in the Respondent's favour by holding that his dismissal was wrongful but effective, and it awarded him damages of one month's salary in lieu of notice. The Respondent was dissatisfied with the High Court's judgment, and he appealed to the Court of Appeal.

The Court of Appeal upheld the Respondent's appeal and held that Skye Bank was estopped (legally prevented by its prior conduct) from dismissing the Respondent from its employment since it had already cautioned him and also granted him a long service award. In addition, the Court of Appeal set aside the award of one month's salary in lieu of notice and ordered that the Respondent be paid his salary from April 2006 to April 2008 in the sum of N6,600,000.00 (Six million, six hundred thousand naira) and N550,000.00 (Five hundred and fifty thousand naira) from May 2008 until the Court delivers its judgment.

Skye Bank was dissatisfied with the Court of Appeal's decision and appealed to the Supreme Court.

Summary of the Supreme Court's Decision

The Supreme Court dismissed Skye Bank's appeal and upheld the Court of Appeal's decision that Skye Bank was estopped from dismissing the Respondent after it had earlier cautioned him for his negligence. Ogunwumiju, JSC at Pages 37-38 Para H-B of the judgment, held as follows:

"I agree with the court below and share the view that the appellant was estopped from changing the status quo at the point it did. The respondent had been made to believe that he had been left off the hook and told to sin no more. Even if he had been given fair hearing by the Integration Committee, it would be unconscionable and too late in the day to "re-discipline" the respondent for the same offence on the same facts. The law is that a party cannot be allowed to mislead another person into believing in a state of affairs and then turn around to say that person's disadvantage that the state of affairs which he represented does not exist at all."

Although Skye Bank contended that the Court of Appeal ought to have only awarded one month's salary in lieu of notice as damages to the Respondent, the Supreme Court agreed with the Court of Appeal that this case was one of the few cases in which damages beyond one month's salary could be awarded to the employee because his reputation was badly battered by the dismissal letter. Agim, JSC, at Pages 29-30 Paragraph G-C of the judgment, held as follows:

"Where a contract of employment is brought to an end by the employer contrary to the terms agreed therein, the quantum of damages awardable therefore cannot be based on the remuneration of the employee during the period of notice prescribed in the agreement for either party to terminate the agreement. The employer cannot enjoy the benefit he would have enjoyed if the contract had been brought to an end in accordance with the contract. Having brought the contract to an end in breach of contract, the damages payable by it cannot be restricted to only one month salary in lie notice, which is what it would have been liable to pay if it had terminated the employment as prescribed in the contract. To limit the damages payable by the employer to one month salary in lieu notice in this case, would amount to enabling it to benefit from its wrongful act in breach of the contract. It is an inveterate rule of equity of great antiquity that equity will operate to prevent a party from benefiting from his or her wrongful act. It would be oppressive and unjust to the employee to award him or her damages on a basis prescribed in the contract of employment for termination of his employment in breach of that contract."

Instructively, the Supreme Court also acknowledged the existence of a new labour jurisprudence in Nigeria and confirmed that it would not hesitate to award a substantial sum as damages for the wrongful dismissal beyond one month's salary in favour of deserving employees. Ogunwumiju, JSC at Pages 48-49 Paragraph G-A of the judgment, held as follows:

"The new labour jurisprudence with the 3rd Alteration to the 1999 Constitution and the provisions of the law in that regard, particularly section 7(6) of the National Industrial Court Act mandates that every court in the land shall have recourse to good or international best practices in labour or industrial relations. I do not think the courts should continue to use the former settled position of the law which is that no matter how hurtful, unreasonable or wrongful the termination of appointment is, the employee is only entitled to one month's salary in lieu of notice to determine the quantum of damages. Every case must be determined on its facts."

Key Takeaways from the Supreme Court's Decision

1. An employer cannot impose a sanction for misconduct, close the matter, then later impose a more severe sanction for the same misconduct. Once an employer has concluded a disciplinary process with a specific sanction (such as a warning, caution, or reprimand), it cannot reopen that matter and impose dismissal based on the same facts.
2. An employee whose character was badly damaged in the course of their dismissal, and whose ability to secure another job has been greatly diminished, would be entitled to a substantial sum as damages beyond the regular salary in lieu of notice contained in their contract of employment.
3. The Courts would not hesitate to go beyond awarding damages of one month's salary in lieu of notice in favour of employees whose employment was wrongfully terminated in deserving cases.
4. The Courts would not hesitate to have recourse to good or international best practices in labour or industrial relations when determining employment or labour disputes.

Conclusion

This landmark decision establishes that employers cannot sanction employees twice for the same misconduct. Therefore, employers must ensure they do not make hasty decisions to impose sanctions on their employees, as the law will not allow them to sanction an employee twice for the same infraction.

Finally, employees who intend to claim damages beyond the usual one month's salary in lieu of notice must establish to the courts that they have suffered more damages or embarrassment beyond the normal employee and that their reputation has been significantly destroyed as a result of their unwarranted dismissal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.