Justice Elizabeth Oji of the Lagos Division of the National Industrial Court has ruled that the sale of Direct on Data Ltd, failure to absorb Mr. Essien Aquaisua by the new company, and denial of access to his office and online company portals constitute termination of Mr. Essien’s employment by conduct.
The Court has directed Direct on Data Ltd and its Director to pay Mr. Essien the sum of N914,143.1 as compensation, which includes one month’s salary in lieu of notice of termination, salary for the period of December 1, 2019, to December 9, 2019, and N200,000.00 as the costs of action, all within 30 days.
Background
Mr. Essien Aquaisua, the claimant, asserted that Direct on Data Ltd terminated his employment by conduct when it sold its assets to another company and denied him access to his office and the company portal.
He argued that his constructive discharge warranted entitlement, which he communicated to the company’s director and new owner during his duties. This communication was admitted as exhibits, and Mr. Essien urged the court to grant the reliefs sought.
In response, the defendant contended that Mr. Essien failed to prove that Direct on Data Ltd and its Director terminated his employment.
They argued that his allegations lacked supporting evidence and suggested that he abandoned his employment without proper notice or justification, as stipulated in his appointment letter.
The defendants argued that Mr. Essien was not entitled to any terminal benefits from Direct on Data Ltd or its Director due to lack of proof of termination.
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As per the doctrine of corporate personality, the Director cannot be held liable for Direct on Data Ltd’s debt to Mr. Essien in relation to his employment. The defendants argued that the Director should not be held accountable for such obligations.
In rebuttal, Mr. Essien stated that he did not abandon his employment and highlighted the company’s actions, including shutting down its website and mail servers, taking over his office, and denying him access to the premises, as evidence of termination by conduct perpetrated by the firm and its director.
Court’s decision
Justice Elizabeth Oji, the presiding Judge, determined that the sale of Direct on Data Ltd to another company altered the circumstances of Mr. Essien’s employment.
She rejected the Director’s claim that Mr. Essien remained a staff of Direct on Data Ltd without being absorbed by the new company, despite its absorption of others.
The Court endorsed Mr. Essien’s argument that his employment was effectively terminated by Direct on Data Ltd through constructive termination, necessitating the company to fulfill its obligations to him as if he had been formally terminated.
Justice Elizabeth concluded that Direct on Data Ltd failed to demonstrate how Mr. Essien abandoned his employment when there was no alternative employment available.
Regarding the lifting of the veil of incorporation to hold the Director jointly liable in the contract between Mr. Essien and Direct on Data Ltd, the Court asserted that justice required piercing through the veil of incorporation to identify the individuals who acted on behalf of the company in this matter.
Drawing on the admitted exhibits, the court affirmed that the Director is the primary decision-maker of Direct on Data Ltd and should be held accountable to Mr. Essien, along with the company.
