How MTN Restricted Sacked Staffs From Securing Related Job For Four Years
The telecommunication giant, MTN Nigeria, sacked 63 of its employees in 2009 and barred them from securing a job in the sector for four years, court documents obtained by PREMIUM TIMES has shown.
Last year, the National Industrial Court in Lagos, in a 2013 suit filed by the dismissed employees, delivered a judgment condemning the act and ordering the company to pay the workers four years gross salaries.
“Terminating the employment of the claimant and (at) the same time restricting them from seeking employment from the sector generally and preventing them to be acting as agents, advisers, or to engage in any of their concern directly or indirectly for four years is clearly unreasonable in the light of global economic challenges occasioned by recession which has resulted in mass unemployment,” Justice Peter Lifu stated in his judgement delivered on October 26, 2016.
“Consequently, I am satisfied that the claimant has proved their claims before the court as to the oppressive and unreasonableness of the restraint of trade covenant for four years for making and leaving the claimant hard and dry for four years.
“I hereby order that they are entitled to be paid their gross last salary per annum for the period of four years covering the period of restraint of trade as reflected in the salary review letters admitted as exhibit in this case.
“I also award a cost of N10,000 each in favour of the claimant as against the defendant in this action.”
But the company, in a response to inquiries, said claims that the employees were sacked were a misrepresentation because MTN merely exercised its right to terminate contract of employment.
Out of job
The suit against MTN Nigeria Communication Limited was instituted in 2013 by Harrison Ossai, Gabriel Ameh, and Stephen Mahaja on behalf of themselves and 60 others.
The claimants had sought an order of the court compelling the defendant to pay each of them N10 million as damages for trade restriction by the company from taking up employment from 17th November, 2009, to 17th November, 2013.
They also demanded a payment of N20 million from the company as cost of the court action.
Mr. Ossai, 43, a Higher National Diploma holder in Mass Communications, said he worked as a Call Centre Executive at MTN for six years before his dismissal.
He said he had found it impossible to work anywhere else afterwards because of a restraint on trade covenant, adding that his job interviews at Airtel and Globacom were unsuccessful because of his MTN background.
While Mr. Ossai said MTN did not state the reasons for his dismissal, he insisted that a N100 million suit instituted by the company against a former employee, Yinusa Bello, for breaching the restraint on trade clauses was responsible for other telecom firms’ inability to employ him.
In their testimonies, Messrs Ameh, 53, and Mahaja, 43, said the restraint of trade clause was responsible for their failure at gaining employment after dismissal by MTN.
Nwamaka Okey-Aguoru, MTN’s witness in the suit, said she had not been employed by the company when the claimants were sacked.
Mrs. Okey-Aguoru said she doesn’t know about a matching order given to the claimants, who all worked in Customer Services department, to leave MTN’s premises on November 17, 2009, but added that she saw the letter of dismissal of the claimants.
Mrs. Okey-Aguoru, a senior manager, stated that the restraint of trade clause in MTN’s contract targets the company’s direct competitors such as Glo, Etisalat, and Airtel and covers a period of 48 months.
She said employees, who are under the clause, are not allowed to deal with MTN’s competitors when they leave the company.
Court documents showed that after Mr. Bello left MTN and secured a job in another telecom firm, the company slammed a N100 million suit on him for revealing market strategy, trade secret and design and confidential company information.
But the case was struck out at Lagos High Court, and later at the National Industrial Court.
Clause of controversy
In the 2013 suit, the claimants maintained that they were terminated and restrained, for four years, from seeking employment in any telecommunications company in the same line of business with MTN Nigeria Limited.
They had worked for the company for a period that ranged from five to nine years before the termination of their contract.
According to the Restraint of Trade Clause 17.3 in their contract with MTN: ‘You are required to sign the MTN Nigeria confidentiality agreement and any restraint agreement in existence from time to time.’
Paragraph 17.3.3 says, ‘The restraint set out in this agreement shall apply in the territories of the Republic of Nigeria, the Republic of Rwanda, South Africa, Uganda, the Kingdom of Swaziland or any other countries that MTN has investment in.’
Paragraph 17.3.4 says:
‘You shall not during the existence of your employment with the company and for a period of 48 months after the termination of your employment for any reason whatsoever, be directly or indirectly interested, engaged or concerned in, whether as a principal agent, representative, shareholder, director, employee, consultant, advisor, financier, administrator or in any competitor situated in the Federal Republic of Nigeria with whom the employee is involved or was involved in carrying out an assignment.’
Adeniyi Adegbomire, a senior advocate of Nigeria, who represented MTN Nigeria Limited argued that the claimants willingly entered into the agreement with the company.
“There is no existing evidence visibly to demonstrate that any of the claimants was denied employment at any time because of the restraint of trade clause,” he said.
Moreover, Mr. Adegbomire added, the clause never prevented the claimants from securing employment in other organizations in the telecommunications industry, except MTN’s competitors – Airtel, Etisalat, and Globacom.
But the judge disagreed with the lawyer.
Judge Lifu said four years is “a long time” and that Clause 17.3.4 in the claimants’ employment contract is an all-embracing and wide covenant on restriction of trade.
“The claimants also stated that they have not been able to get any employment in the telecommunications section which they have interest in to enable them consolidate their career but was prevented from doing so due to the restraint of trade clause which has kept them jobless for the period of four years,” Mr. Lifu said.
“Given that telecommunication is an emerging sector and given that young men and women are now restrained for four years as in the instance case, after termination, can a reasonable man say that such restrictive contract is not onerous?
“A man or woman should be free to exercise his skill, experience, expertise and knowledge to his own advantage, his family and the entire society. I think this accords with public policy.”
The judge noted that the claimants alleged their inability to pay rents and had incurred huge debts, but did not provide evidence to buttress their claim.
“There is therefore no evidence of untold hardship before the court,” he said.
“However, the law is clear as to the fact that where there is a right, there is a remedy.
“The claimants’ rights to exercise their skill, aptitude and knowledge have been breached by this repugnant, oppressive and unreasonable clause as contained in paragraph 17.3.4 of their letters of employment.”
The judge further stated that terminating the claimants employment and at the same time restricting them from seeking employment from the sector for four years “is clearly unreasonable in the light of global economic challenges occasioned by recession which has resulted in mass unemployment.
“Consequently, I am satisfied that the claimants have proved their claims before the court as to the oppressive and unreasonableness of the restraint of trade covenant for four years for making and leaving the claimants hard and dry for four years.”
After ordering the payment of the claimants’ yearly gross salaries for four years, the judge said the judgment should be complied with within 30 days, from October 26, 2016, or attract an interest of ten percent per annum.
No settlement in sight
In the course of the suit, the judge advised both parties to explore an out-of-court settlement, Adetunji Adedoyin-Adeniyi, who represented the dismissed employees, said.
“I went to the office of the (MTN) lawyer, that was in 2014… even while in London I was calling him, but the man was of the opinion that MTN has nothing to offer, that he cannot force them and what have you. So based on that position, we went through the case, thick and thin.”
Mr. Adedoyin-Adeniyi said he contacted MTN Nigeria Limited after the judgment.
“I wrote a letter to the MD of MTN and their Human Resource (Manager), that we have a judgment, please do this. Despite the fact that they were fully heard in court, for the three years we were in court, MTN still went ahead to say they are appealing the case,” he said.
“And what do you say you are appealing? You are appealing the judgment of the National Industrial Court when under Section 243 of Third Amendment, they don’t even have a right to appeal the judgment except on grounds of fair hearing, that you can now say I was not heard.”
Mr. Adedoyin-Adeniyi said despite MTN not responding to their letters, they are still willing to explore an out-of-court settlement with the company.
“We don’t want to belabour this thing, all we are interested is just give them something and let’s move on. Nothing has been fruitful, maybe God in heaven will see to it.”
But MTN Nigeria Limited said they had entered a formal appeal at the Court of Appeal.
“It should be noted that contrary to misrepresentation around the ‘sack’ of employees, the correct position remains that MTN had exercised a right to terminate contract of employment which said right was also readily available to all its employees,” Funso Aina, PR and Protocol Manager, Corporate Services Division, MTN Nigeria said in an e-mailed response.
“MTN had also, as required by law, paid salary in lieu of notice and for the record, paid over and above the required one-month salary in lieu of notice by paying three months’ salary to the concerned employees. This was in addition to waiving all outstanding financial obligations owed MTN by the employees.”
Mr. Adedoyin-Adeniyi said immediately after the National Industrial Court judgment, he filed an application to garnishee the company’s bank account.
“Because when we did our calculation, we realized that the money, it’s about N850 million they were supposed to pay; MTN now filed an application for stay of execution and the court granted it,” he added.
The garnishee case at the National Industrial Court has been adjourned until further notice because of the notice of appeal filed by MTN Nigeria Limited.
The Court of Appeal is yet to give a hearing date.
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