The National Industrial Court sitting in Lagos has ordered Fidelity Bank Plc to pay over N162 million in outstanding retirement benefits to a group of its former employees.
The court held that the bank unlawfully withheld the entitlements of long-serving staff who were engaged through a third-party employment arrangements.
The claimants, Ann Nwabulu, Chidinma Fred Oka, Doris Alfred-Okhilua, Dayo Johnson-Olayemi, Julius Ubah, Obiageli Mbadiwe, Obasi Esobe, Sophia Milton, Yemisi Femifalade, Abiamuwe Sylvester, and Nnenna Ekwueme were represented by their lawyer, Chief Mike Ozekhome, SAN.
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They sought “A declaration that the bank’s failure to pay their retirement benefits constituted a breach of their employment contracts and violated established labour laws and practices. A declaration that the bank’s attempt to retroactively apply a new retirement policy to deprive them of their entitlements was unlawful. An order directing immediate payment of various sums owed to them.”
In a judgment delivered by Justice R.H. Gwandu, the court found that the claimants, including the 10th claimant who joined Fidelity Bank following its merger with FSB International Bank and Manny Bank, had sufficiently proven their employment and entitlement to the benefits claimed.
The court considered two key issues namely, “Whether it had jurisdiction to hear the 10th claimant’s case. Whether the claimants had established their entitlement to the retirement benefits and other reliefs.”
On jurisdiction, Justice Gwandu held that the court was competent to hear the 10th claimant’s case.
Although Fidelity Bank denied having a direct employment relationship with him, arguing that he was only seconded, the court found that he worked with FSB under Direct Resources Limited and continued with Fidelity Bank for 11 years post-merger until his retirement in 2016.
Evidence such as long service awards and letters of recognition issued by Fidelity Bank confirmed his status as a long-serving staff member. The judge stated: “It would be inequitable and unjust to hold that no employment relationship existed. The defendant cannot use technicalities to avoid its obligations when the facts are clear and uncontroverted.”
Regarding the substantive claims, the court ruled in favour of the former employees, who were employed through Fidelity Union Securities, a third-party firm, but served Fidelity Bank directly.
Justice Gwandu criticised the practice of using third-party entities to avoid labour obligations, noting that the bank acknowledged the claimants’ years of service through letters and service certificates.
“The practice of using third-party companies to avoid liability under the guise of privity of contract is one this honourable court has consistently frowned upon,” the court stated.
It further rejected Fidelity Bank’s argument that the claimants lacked the 15 years of unbroken service required under its retirement policy.
