CHAPTER ONE

CONTRACTS OF EMPLOYMENT: MEANING AND NATURE

1.1     Introduction

A contract of employment is an agreement between two or more persons relationship established by contract, creating an obligation to do a particular thing in a contract of employment.

1.2     Meaning and Nature

The nature of contract of employment is the relationship between an employer and his employee comes into existence as a result of a contract between them generally referred to a contract of service, which means any agreement whether oral or written, expressed or implied, where by one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker as contained in Labour Act[1]

Generally, the contract of employment is an off-shoot of our general law of contract where the essential ingredients of the contract must be found present before it’s enforceability.

1.2.1  Offer and Acceptance

In every contract of an employment, there is a meeting of the minds of the parties before the enforceability of the contract. That is to say, an offer must be made by one party called (offeror) as in Callil v. Carbolic Smoke Ball Co.[2]and the acceptance of the offer by the other party called (offeree) as in the case of Afolabi v. Polymera Ind. Nig. Ltd.[3]  This principle of offer and acceptance entails freedom of both parties to offer and accept unconditionally the terms of employment.

1.2.2  Consideration

In a contract of employment, where there is an offer and acceptance by both parties to the contract of services, there must be a consideration to furnished the contract, describing some rights, interest, profit or benefit occurring to one party or some fore-bearance detriment, loss or responsibility given, suffered or undertaking by the other.[4] The above explanation was illustrated in the case of Currie v. Misa[5]  Therefore, consideration in the contract of employment is the salary and other fringe benefits which an employee earns on one part and services which an employer receives on the other part.

1.2.3  Intention to create Legal Relation

The relationship between an employer and employee is established by contract. Where both parties agreed on the terms of the contract of employment, creating a common intention of both parties to enter into a legal obligation that is contained in the employment agreement Rose and Frank v. Crompton[6]

1.2.4  Capacity

The law is settled that parties to a contract of employment must possess the capacity of contract as recognized by law at common law.  Certain categories of persons namely; infants, mentally infirm and disordered person and drunkards in certain circumstance are incapable of entering into a contract.[7]  This has been specified in our statute Nigeria Labour Act 2004.

In the case of an infant, the law forbids to engage a person (child) below the age of sixteen years from entering into any contract of employment except that of an apprenticeship.  But the Act provides in Section 19(1) of the Labour Act 2004 that a child under twelve years of age can be employed only by a member of his family and even then, subject to his rights, agricultural, horticultural or domestic work approved by the Minister of Labour as stated in Section 91(1) (a) Labour Act.

However,Section 59 of the Act is an exception apparently to enable a youth receive his education in a technical school. In respect of working on a ship in general, Section 61 (3) of the Act provides that even when the non-adult is allowed to be so employed, he can work only on a vessel in which only members of the same class are employed.

Under Section 59 of the Act,the Minister of Labour has power to notify an employer in writing that the kind of work in which a young person is employed is injurious to his health, immoral or otherwise unsuitable.

Finally on mentally infirm and disordered person are persons who are insane, unsound minds incapable of being conscious and rational thinking on the obligation of the terms of the contract of employment.

1.3     Parties to a Contract of Employment

A contract of employment or services is entered into and enforceable by the employers and the employees, which automatically forms or constitute the major parties to a contract of employment in Nigeria Labour Law.

A person who is in a contract of employment with another cannot be transferred to another employer without his consent. This is in conformity with the provision Section 10 (1) of the Act which provides as follows

“The transfer of any contract from one employer to another shall be subject to the consent of the worker and the endorsement of the transfer upon the contract by an authorised labour officer”.

1.3.1  Employer

An employer is the person by whom the employee is or was employed. Rights can only be acquired against the one employed.  See the case of Harold Fielding Ltd. v. Mansi[8]

A person who exercises sufficient control over employee may be regarded as being the employer for some purposes as illustrated in the case of Road Transport Industry Training Board v. Ongaro[9]

1. Employee

According to Section 55 of the Trade Union Act 1974 defines an employee or worker as “any member of the public service of the federation or of a state or any individual (other than a member of any such public service) who has entered into or works under a contract with an employer.

In N.A.L.G.O. v. Bolton Corporation,[10] the House of Lords decided that an employee or worker includes manual labourers, clerks, apprentices, and persons in a contract personally to execute work or labour.

1.4     Independent Contractor

An independent contractor is an employee, employed by an employer to carry out a specific contract in the contract of employment.

According to Salmond in Nigeria Law Reform Act 1961, Section 7 (4) (b), that the liability of the independent contractor is not vicarious. A person is not generally liable for the tort of his independent contractor or the servant of such a contractor committed in the discharge of the contractual obligations.

1.5     Why an Employee Needs Protection?

A contract of employment like any other contract comes into existence by an agreement between the parties (i.e.) the employer and employee.

The agreement must be free and voluntary neither party compels the other to accept any terms or conditions in the agreement.

The vouched freedom and volunteerness of the agreement raised the inequality of bargaining power between the two parties. The number of people applying for work is too much for the number of jobs the employer have. Because of these factors, there is a brake down in the negotiation and the employer continues to negotiation until he gets what he considers favourable terms and conditions for the employment.

Technically, he agrees to the terms and conditions of the contract but in realization of this situation, Professor Adeogun made the following observation in line with the legal framework of Industrial relations in Nigeria[11] thus:

The resumption of equality between two parties tends to ignore other social and economic consideration which may make this equality and its underlying freedom, fictitious and hollow.  Indeed, the so-called bargaining power of the individual worker is important in practice, especially in a country like Nigeria where there are more workmen than the jobs available and where the employer can choose freely whom to employ[12]

[1]Nigeria Labour Act Cap L1 LFN 2004.

[2] (1893) 1 QB 256.

[3] (1967) N.S.C.C. 158.

[4] Sagay, I.E., Nigerian Law of Contract. Ibadan: Spectrum, 1985, 59

[5] (1875) L.R. 10.

[6] (1923) 2 K.B. 261.

[7] Uvieghara, E.E., Labour Law in Nigeria.Lagos, Mathouse Press, 2001, 14-21.

[8] (1974) 1 RLR 79.

[9] (1943) A.C. 166.

[10] (1943) A.C. 166

[11] (1970) 3 NL. 13.

[12] Adeogun A.A., Termination of Contract of employment (A note on Nigeria Case Law) parts 1 and II Nigeria Journal of contemporary law (Vol. II) 1970.