Disguised Employment Relationships, Primacy of Facts, and Unfair Labour Practice under Nigerian Law: Odah Ezekiel Ogah & 3 ORS -vs-Total E & P Nigeria Limited & 5 Ors [Suit No. NICN/LA/663/2016] delivered by Hon. Justice (Prof.) Oji on 30th January 2024

Introduction 

This decision of the National Industrial Court of Nigeria (NICN) represents a significant judicial intervention in the protection of workers’ rights within complex and disguised employment structures. The Court confronted the growing corporate practice of outsourcing and labour contracting in a manner that obscures true employment relationships and enables employers to evade statutory obligations. 

Applying the doctrines of primacy of facts, international labour best practices, and anti-avoidance principles, the Court firmly reasserted the centrality of substance over form in determining employment relationships and imposed substantial sanctions for unfair labour practices. 

Facts of the Case 

The Claimants assert that they were recruited in 2001 through a process coordinated by the 2nd Defendant, trained, and thereafter deployed to work exclusively as security guards for the 1st Defendant in Lagos. They contend that despite the absence of formal employment letters, the 1st Defendant exercised full control over their employment, including postings, supervision, training, and discipline. 

Supervisory roles were subsequently transferred among the 2nd to 6th Defendants, whom the Claimants maintain acted merely as agents, while the 1st Defendant remained their true employer. This was evidenced by the 1st Defendant’s direct intervention in disciplinary matters and sponsorship of training programmes. In 2015, following their disengagement, the Claimants demanded severance benefits similar to those paid by the 1st Defendant to their Abuja counterparts. The 1st Defendant denied liability, directed them to the supervisors, and threatened arrest. After unsuccessful intervention by the Ministry of Labour, the Claimants filed the instant suit, alleging unfair labour practice, unlawful disengagement, and violation of labour laws and international standards, and seeking appropriate relief. 

Issues for Determination 

The Court distilled the dispute into key legal issues, notably: 

1. Whether the Claimants qualified as “workers” under the Labour Act.
2. Who their true employer was.
3. The legal effect of the absence of written employment contracts.
4. Whether the conduct of the 1st Defendant amounted to unfair labour practice.
5. Whether the representative action was properly constituted.
6. The applicability of prior Court of Appeal authorities on triangular employment relationships.

Decision and Reasoning1. Employment Status and Definition of “Worker” 

The Court held that the Claimants fell squarely within the statutory definition of workers under Section 91 of the Labour Act. Their engagement as security guards did not qualify under any statutory exemptions. Crucially, the Court reaffirmed that employment may be established orally or by conduct, and not solely by written contracts. 

2. Determination of the True Employer – Primacy of Facts 

Rejecting the outsourcing narrative, the Court applied the doctrine of primacy of facts, holding that the actual working relationship, rather than contractual labels, determines employment status. On the evidence, the Claimants: 

• Worked exclusively on the 1st Defendant’s premises,
• Were trained, supervised, and operationally controlled by the 1st Defendant,
• Had no valid employment contracts with the alleged contractors.

The Court concluded that the relationship was bilateral, not triangular, and that the 1st Defendant was the sole employer, deliberately masking the relationship to avoid legal obligations. 

3. Failure to Issue Employment Letters 

The Court held that the failure to issue letters of employment violated Section 7 of the Labour Act, which mandates issuance within three months of engagement. This statutory breach rendered the employer liable under Section 21 of the Act and could not be exploited to deny workers’ rights. 

4. Unfair Labour Practice 

Relying on its constitutional jurisdiction and international best practices, the Court found that the prolonged denial of written employment terms, stagnation of wages over many years, arbitrary supervision transfers, and refusal to pay terminal benefits constituted systemic unfair labour practice. The Court described the conduct as oppressive, exploitative, and unconscionable, amounting to a grave violation of human dignity. 

5. Representative Action 

The Court upheld the validity of the representative action, reaffirming that: 

• Only those represented may challenge authority to sue.
• No individual Claimant disputed representation.
• The Defendant lacked locus standi to object.

6. Distinguishing Prior Appellate Decisions 

The Court distinguished earlier Court of Appeal authorities on triangular employment, holding that unlike in those cases, no valid outsourcing or co-employment structure existed here, making those precedents inapplicable. 

Reliefs Granted 

The Court granted the following: 

• Declaration that failure to issue employment letters constituted unfair labour practice.
• Declaration that refusal to pay terminal benefits was wrongful.
• Award of ₦50 million as exemplary damages against the 1st Defendant.
• Costs of ₦5 million against the 1st Defendant.

While affirming entitlement to terminal benefits, the Court declined to award specific sums due to evidentiary deficiencies. 

Significance of the Decision 

This judgment is a landmark in Nigerian labour jurisprudence for several reasons: 

1. Strengthening Worker Protection: It reinforces judicial intolerance for disguised employment arrangements designed to defeat labour rights.
2. Expansion of Unfair Labour Practice Jurisprudence: The Court robustly applied international best practices, widening the scope of unfair labour practice beyond statutory definitions.
3. Primacy of Substance Over Form: The decision underscores that factual working relationships override contractual labels and outsourcing claims.
4. Corporate Governance and Compliance Implications: Employers must ensure transparency, proper documentation, and statutory compliance or risk heavy punitive damages.

Conclusion

This decision serves as a stern warning to employers who adopt opaque employment structures to evade statutory responsibilities. By prioritising fairness, transparency, and international labour standards, the Court reaffirmed its role as a guardian of decent work and labour justice in Nigeria.