By Olubayo Durojaye
On January 30 2020, the World Health Organization (WHO) declared Corona Virus (COVID-19) also known as SARS Cov-2 a Public Health Emergency of International Concern (PHEIC).
The sudden arrival of Corona Virus (COVID 19) in the human space has changed the landscape of human relationships, affected economies globally, disrupted human activities and has caused sudden, unexpected and damaging changes across the human race and also disrupted human space.
The effect of Corona Virus (COVID 19) outbreak will be felt on global and local trade, employment, contract, financing, governmental as well as private establishments and arrangements.
The International Labour Organization (ILO) has predicted that almost 25million Jobs could be lost worldwide as a result of Corona Virus (COVID-19) on the global workplace which will be far reaching on the workplace globally.
It must be noted that there is no longer only a global health crisis; it is also a major labour market and economic crisis that is having a huge impact on people. Let us turn now to legal issues arising from the effect of corona virus (COVID 19) in the workplace.
However, this short article is focused on examining the legal implications of the pandemic on employment and labour relations.
The extant laws that basically governs labour and employment law in Nigeria is the Constitution of the Federal Republic of Nigeria, (1999) as amended, the Labour Act CAP L1 LFN (2004), Factories Act CAP F1 LFN (2004), National Health Insurance Scheme Act CAP N42 LFN (2004), Pension Reform Act 2014, Principles of Law of Contract, Decided Judicial Authorities, International Instruments such as Ratification of International Labour Organization (ILO) Convention and of course the Insurance Act and Employee Compensation Act, 2010 and many other laws and guidelines for special and specific industries. This short article shall only look at the legal implications on employment and labour relations in Nigeria in particular.
A closer look at the provisions of the Labour Act CAP L1 LFN (2004), shows that a mammoth legal responsibility is placed on employers and as such at this moment of disruption in the workplace the employers of labour needs to speedily react to legal issues proactively and at the same time strategically solve and resolve matters arising as a matter of urgency.
In this article, we shall examine a number of legal issues that may arise in respect of relationship between employers and employees caused by the unanticipated global pandemic Corona Virus (COVID 19) also known as SARS Cov2.
In the present precarious situation, the employers of labour has a lots of legal issues to resolve in other not to run against the governing laws thereby creating a floodgate of court actions, legal and labour disagreement.
The question many employers are now asking is whether COVID – 19 allows them to invoke the force majeure clauses in their employment contracts to excuse their inability to perform their contract obligation.
Also to what extent is the employee’s liable or excused by law for their inability to carry out any work as may be provided by the employers of labour. For example, in accordance to Section 17 of the Labour Act CAP L1 LFN (2004), it is the duty of employers to provide work except for where owing to a temporary emergency or other circumstances beyond the employer’s control (the period of which shall not exceed one (1) week or such longer period as an authorized labour officer may allow in any particular case.
The question then is how does this section and many other sections of the Labour Act L1 LFN (2004) and other relevant laws apply in the present situation and how far will the law protect parties to a contract of employment based on the disruption that COVID-19 has created.
As with most things in the legal world, the devil is in the details, the implication is whether an employer will be able to excuse himself from liability, the answer then depend on the way and manner in which the Contract of Employment is prepared and crafted as envisaged by Section 7 of the Labour Act CAP L1 LFN (2004) which provides for written particulars of terms of employment, of course for those employees who have received a formal written contract of employment one can say the content of the contract gives the court a bit of direction.
Furthermore, the question is what will be the fate of those employees who have not executed formal contract of employment with the employers having spent three months as required by the law but there is no substantial formal contract of employment.
The following under listed questions are important as far as employers of labour are concerned and if these questions as under listed are legally answered then it may cover for any other question yawning for legal answers.
- Is Covid-19 an act of God or an Act of Man?
- What is the effect of Contract of Employment in this given time?
- Will the doctrine of Force Majeure avail and exempt employers and employees from legal obligations and duties?
- What is partial breach of contract, immaterial and material breach of contract
- What are the Legal remedies available to parties?
The foundation of every form of employment whether employment with statutory flavors or not is an implied or express contract of employment as envisaged by Section 7 of the Labour Act CAP L1 LFN (2004).
The decision of the court in the case of Festus Opeoluwa Daodu V. United Bank for Africa Plc. (2004) 9 NWLR (Pt.878) 276 is to the effect that the duty of determining the nature of a contract of employment whether it is governed by statute or it is under common law, creating a master and servant relationship is the exclusive preserve of the courts. See also the case of Iloabachie V. Philips (2002) 14 NWLR (Pt. 787) 264.
The court goes further to state that under a contract of employment, the court and parties have their duties, rights and obligations in the determination of such contract depending on whether it is an employment with statutory flavour or under the common law.
A contract of employment is the document that spells out the basics of the relationship between employers and employees. It most times spells out the terms and conditions of service from experience it is observed that most employers need to pay attention to the content and crafting of contract of employment owing to changes and emergencies that is now frequent to operations in the workplace.
It must be noted however that most times, contract of employment are not usually comprehensive enough. In most cases it is the weakness of the contract that is exploited by opposing party to a contract of employment. The question therefore is “does most contract of employment spells out the implication of unforeseeable circumstances or a sudden change or calamity that comes whether as an act of God or an act of man. Another legal question that beg for an answer is whether or not corona virus (COVID19) can be classified as an of God or an act of man given the situation through which (COVID -19) emerged.
WHO IS AT FAULT, GOD OR MAN, IS COVID-19 AN ACT OF GOD OR AN ACT OF MAN
An act of God in law are such acts or actions that does not involve man but clearly can be seen as direct, unaided, supernatural act of God or an act by violence of nature.
Is COVID-19 an act of man, an act of God or can the principle of force Majeure be invoked in respect of employment contract? Acts of God are often defined as event that occurs due to the natural causes which cannot be avoided through the use of caution and preventive measures.
Examples of an act of God are natural disaster like earthquakes, tornadoes, floods. Though it must be noted that some contract does specifically sees an outbreak of epidemic or pandemic as an act of God in that case the particularization of the outbreak brings any epidemic or pandemic into an act of God but when such is not specified in a contract of employment then an outbreak such as Corona Virus (COVID -19) cannot be read into any contract especially contract of employment.
Also some act of God provision differentiates between naturally occurring disasters and government actions. Without much ado, in my own opinion it is safe to conclude that the outbreak of Corona Virus (COVID -19) is an act of God because the pandemic has been occasioned exclusively by violence of nature without the interference of any human agency, this submission is informed by the information by experts’ immunology scientist. The clear distinction between the act of God and the act of Man is that the act of God is completely without the involvement of man and the act of man is without the involvement of God.
Scientist in the cause of research has disclaimed that the analysis of public genome sequence data from SARS – COV 2 otherwise known as Corona Virus (COVID-19) and related viruses found no evidence that the virus was made in laboratory or otherwise engineered.
Scientist has said by comparing the available genome sequence data for known corona virus strains we can firmly determine that SARS-COV 2 originated through natural processes especially through bats or pangolins.
Based on the above submission, (COVID – 19) can be regarded for the time being as an act of God and not an act of man until the contrary is proved. If then corona virus (COVID – 19) is an act of God or pandemic that has no interference of human agency, then it means that conclusively COVID-19 can be classified as an act of God and not an act of man.
If we agree that (COVID – 19) is an act of God, then to what extent is the principle of Force Majeure (FM) applicable to contract of employment in respect of employment and labour relation?
Having answered our first question in the affirmation, then it is pertinent to know the nature and form of the contract of employment.
CONTRACT OF EMPLOYMENT
The court in Ishemo .Julius Berger Nig Plc. (2008). 6 NWLR (t. 1084) 582 SC has held that terms and conditions of service in a labour agreement are concise and process and so started in the agreement. Therefore, a court of law will not find it difficult to grant a relief based on the labour agreement if their plaintiff pleads. In the same vein the court had held in Longe V. FBN (2010)6 NWLR (PT1189) 1 SC that every contract of employment contains the terms and condition that will regulate the employment relationship such terms on determination, notice, wages, benefits are usually contained in the expressed contract of service or implied with it by common law and custom.
Nature of Employment generally affect the terms of the contract of employment, the whole gamut of employment stands on the principle of contract, however experience has shown that contract of employment captures far less than what it should ordinarily capture though contract of employment cannot be expected to state virtually all the aspects of the relationship from expressly however with the recent event in the rise of global epidemic and pandemic the draftsman of contract of employment should be more pragmatic in respect of important issues that must be captured in a contract of employment.
Contract of Employment may be in any form and it may be inferred from the conduct of parties if it can be shown that such a contract may be in blended although not expressed. See Johnson. V. Mobil Production (Nig.) Ltd (2010) 7 NWLR (PT. 1194) 462.
In summary and by virtue of several judicial authorities cited above, the content of a contract of employment, the usual practice and the inference that can be draw will be useful at the time which will ably help the court to determine employment status, labour relation and related issues as affected by Corona Virus, (COVID 19) also known as SARS Cov 2.
THE EFFECT OF FORCE MAJEURE AND OR FRUSTRATION ON CONTRACT OF EMPLOYMENT
The origin of the doctrine of Force Majeure lie in French jurisprudence, with the civil code there containing express provisions that halt contracts when events occur which make it possible to continue with normal performance of the contract with the conditions that such events must have been unforeseeable and unavoidable.
Flowing from the above, we have been able to ascertain that the outbreak of corona virus (COVID – 19) pandemic is an act of God, it is also clear that parties will have to resort to the provision or content of the Contract of Employment between parties, the question is should the contract of Employment fail to protect parties, what happens. Can the common law principle of force majeure avail parties and most importantly the employers to renege on their duty to pay wages as provided in Section 1 of the Labour Act CAP L1.
The purport of the principle of force majeure is to protect parties from being liable from frustration of the contract due to no fault of any of the parties.
Black’s Law Dictionary defines Force Majeure as an event or effect that can be neither anticipated nor controlled. The implication of force majeure or frustration is that parties will personally and independently bear risks, embrace liabilities, count their loses and move on from where the parties stopped.
So largely, what are the rights and remedies of parties in the event of nonperformance caused by COVID- 19? It is clear that work is always available for the employee to carry out by the employers, it is also clear that employers are under duty to pay wages to the employees though the employees has been frustrated from performing their duties as may have been assigned before the disruption by COVID-19 and even during the continuous disruption by COVID-19. Employers may ask to what extent are they liable to pay wages for services not renders or work not done by employees. To what extent are the employers liable for medical bills of their employees whether infected by COVID-19 or not.
The best approach at this tough time is to manage contractual crises and not create further disagreement by way of legal tussles and by way of legal tussles and court action.
How should business owners reserve legal rights and remedies while managing relationships with each other and mitigating impacts especially with employees? The following are some of my few suggestions as to what parties in these precarious and perilous times should do.
- Parties need to identify the key contractual rights/ obligations.
- Also I suggest that the vast majority of (COVID – 19) related employment issues should be dealt with through a business discussion and not legal proceedings.
- Remedies for the effect of the disruptions could be payment of damages, specific performance of contract of duties or cut in salary or redefined terms and conditions for the time being.
- Also the effect of formal notices in this period cannot be overemphasized on anticipating breach, fundamental breach, material breach or nonperformance breach of contract.
- Furthermore, it is necessary at this point to ascertain the legal status of the employees and employers in this given situation. The importance and urgency of including pandemic outbreak clause in contract generally especially in contract of employment.
- The frequency of force majeure clauses became more common in employment agreements after Hurricane Katrina especially in the health care industry. I believe other industries will follow suit after this pandemic.
- Constitution of the Federal Republic of Nigeria 1999 as Amended
- Labour Act CAP L1
- Employee’s Compensation Act, 2010
- Casebook on Labour & Employment Law
- National Law Review.com
- Nigerian Industrial Law Reports Vol 1 (2012) 1 NILR
- Nigerian Weekly Law Reports (NWLR)
- ESQ Legal Practice Magzine
The article is written by Olubayo Durojaye Esq (Lead Partner) Officium Legis (Legal Practioners & Consultants) [email protected], www.officiumlegislegal.conm.ng, 07030244279, 08180244279.