Funmilayo Odude, Legal Practitioner, Damod Law Practice

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Why small claims procedure is needed for the National Industrial Court 16 Aug 2021

The National Industrial Court of Nigeria (“NICN” or “NIC”) is gaining a reputation as a progressive and liberal court, although some of its decisions have been received with scepticism. It has fought very hard for its status and seems determined to make its mark on Nigeria’s judicial plane, both jurisprudentially and in its administration and processes.  From a court that was treated like a tribunal, to becoming a superior court of record with at least 24 judicial divisions, the NICN has come a long way since its establishment.

The NIC was established in 1976 under the Trade Disputes Decree of 1976 and it began operations in 1978. Its non-inclusion in the list of superior courts of record under the 1963 constitution, which was later amended to reflect the existence of the NIC after its creation, greatly hampered its status and operations. An attempt was made to rectify this with the Trade Disputes (Amendment) Decree No 47 of 1992, which declared the court as a superior court of record with exclusive jurisdiction over trade disputes as well as inter- and intra-union disputes. Ironically, the 1999 Constitution also omitted to list the NIC as a superior court of record.

The first attempt to restructure the court after the country returned to democracy in 1999 was through the National Industrial Court Act of 2006. The Act re-established the court as a superior court of record; however, its powers under the Act, especially its exclusivity to determine trade disputes derived from Decree No 47 of 1992, were short-lived, having not been granted through an amendment to the constitution.

In a judgment delivered in February 2010, the Supreme Court in the case of National Union of Electricity Employees vs Bureau of Public Enterprises, stated that “…Decree No 47 of 1992 arrogating to the National Industrial Court a superior court of record does not by that token make the National Industrial Court a superior court of record without due regard to the amendment of the provisions of section 6(3) of the 1999 Constitution which has listed the only superior courts of record recognized and known to the 1999 Constitution and the list does not include the National Industrial Court. Until the constitution is amended, it remains a subordinate court to the High Court.” The court consequently declared Decree No 47 that vested exclusive jurisdiction in trade disputes on the NIC as null and void for being inconsistent with section 272 of the 1999 Constitution, which granted unlimited subject-matter jurisdiction to the state high courts.

The NIC finally came into its own through the Third Alteration Act No 3 of 2011 which amended the 1999 Constitution. The Act conferred special and exclusive jurisdiction on the NICN to hear and determine matters with respect to labour and employment. The language of the constitution leaves no doubt as to the intention to create a specialized court, and section 254(d) of the amended constitution clearly states that “for the purposes of exercising any jurisdiction conferred upon it by this constitution, or as may be conferred by an act of the National Assembly, the National Industrial Court shall have all the powers of a High Court.”

Upon the constitutional re-birth of the court, the new status of the NICN has been confirmed by appellate courts in a myriad of cases. The Supreme Court has now deviated from its earlier position and in the case of Coca-Cola Nigeria Limited vs Akinsanya in which judgment was delivered in June 2017, the court stated that: “By virtue of section 254C(1) of the 1999 Constitution (as amended), the National Industrial Court has jurisdiction to the exclusion of any other court in civil cases and matters relating to or connected to any labour, employment, the conditions of service of labour, employee, worker and matters incidental thereto or connected therewith. Under the sub-section, the jurisdiction of the National Industrial Court covers all employment related matters, including those arising from private contracts of employment. And the sub-section does not demarcate between private and public employment status. On the status of the NICN, the apex court stated in the case that “the National Industrial Court, the Court of Appeal and the Supreme Court are all superior courts of record by virtue of section 6(5) (a) and (b) of the 1999 Constitution (as amended).”

The subject-matter jurisdiction of the NICN was also not left in doubt. It covers all matters relating to labour, employment, trade unions, industrial relations, workplace and conditions of service including health, safety and welfare of employees. The language of the constitution in this regard was recently liberally interpreted by the Court of Appeal in a controversial judgment to include maritime labour claims involving wages of crew members and or seamen under the exclusive jurisdiction of the NICN. This was done in the case of MT Sam Purpose vs Amarjeet Singh Bains. Prior to the judgment delivered by the Court of Appeal in March 2021, such maritime labour claims by the definition of admiralty claim/jurisdiction in the Admiralty Jurisdiction Act was vested exclusively in the Federal High Court under its exclusive admiralty jurisdiction as provided in section 251(1)(g) of the constitution.

The NICN is no doubt a powerful court positioned to create a stable mechanism for settling labour and employment disputes. It seeks through its decisions to create a labour market that upholds international best practices. The market now recognizes that the court applies international labour conventions and best practices to labour disputes before it. For example, the Nigeria Employers’ Consultative Association (NECA) issued a memo, dated 1st of April 2021, to its members informing them of the shift the NIC has taken with respect to termination of employment without cause. Contrary to previous legal precedents on the issue, the NICN in recent judgments has applied the International Labour Organization (ILO) convention on termination of employment 1982 (No 158) and recommendation No 166 to the effect that employers must give a valid reason to terminate the employment of their employees.

However, when one goes through the cases filed by aggrieved litigants at the NICN, one notices that the bulk of the cases are filed by aggrieved members of middle and senior management levels in their previous organizations or by unions and collective groups. The reason is not farfetched. The processes at the NICN, like all superior courts of record in Nigeria, are formal with procedural and evidential tasks that require legal expertise. It is, therefore, not accessible and or affordable for lower income earners who may feel aggrieved by their current or previous employers. The same applies for Micro, Small and Medium Scale Enterprises (MSMEs) who would rather not spend their capital instituting actions pursing breach of terms in employment contracts. Thus, while the NICN is gaining reputation for its development of labour practices and standards in Nigeria, there is a class of persons who are structurally cut off. Hence, my submission that it is time to introduce the small claims court to the NICN.

Small claims courts are courts that are empowered to determine disputes that do not involve large sums of money. They are used in many developed jurisdictions for simplified and speedy resolution of claims involving small amounts of money. The courts usually have a maximum monetary limit they can award in their judgments. Furthermore, the rules of procedure and evidence are so simplified such that litigants are better suited to represent themselves and conduct their cases without lawyers.

The small claims court was first introduced in Nigeria in Lagos State in April 2018 with a monetary limit of five million naira. It is housed under the magistrate courts system. Kano State began to operate the small claims court in January 2019, and Ogun State small claims court began operations in 2020 with a monetary limit of five hundred thousand naira.

While the small claims court has its challenges, its success around providing a speedy and less formal process of resolving disputes involving smaller monetary claims cannot be denied. It has provided access to the courts and, therefore, to justice in situations where the costs and process would have left litigants denied access to justice.

Employment and labour related matters cannot be brought under the already existing small claims courts in the states practicing it for constitutional reasons. There are many aggrieved employees and employers who cannot ventilate their grievances because of the costs of doing so vis-à-vis their claims. Small claims procedure under the NICN would grant access to the courts to such people.

The challenges of introducing the small claims procedure to a federal court such as the NICN, especially one still cementing its status as a superior court of record, cannot be disregarded. However, a specialized court for labour and employment matters must be accessible to those who need it the most. The benefits of establishing the small claims procedure under the NICN far outweighs the costs of doing so.

Funmilayo Odude, a Financial Nigeria columnist, is a Lagos-based legal practitioner, and a public affairs analyst.