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Industrial Court orders firm to pay Ex-staff 20, 875 USD Un-Remitted Pension fund, awards 500,000 damages

571 Friday 26th March 2021

His Lordship Hon. Justice Nelson Ogbuanya of the National Industrial Court sitting in Lagos has ordered ASC Limited to pay its former staff, Mr. Jorge Traquini sum of 20, 875.00 USD directly into his domiciliary account as three years un-remitted contribution pension fund; 13, 287.36 United States Dollars for monetized un-used holiday leave and vacation, and the sum of 11, 000.00 USD Dollars October salary

The Court also awarded the sum of Five Hundred Thousand Naira as general damages against the firm for the wrongful withholding of Jorge's accrued salary, allowance, and pension fund contribution, and the sum of N500,000.00 cost of action within 2 months.

However, Justice Ogbuanya dismissed the firm counter-claim for lacking merit.

From facts, the claimant- Jorge Traquini had submitted that despite the termination of his employment, the firm failed to pay him his two-month salaries, and also the agreed 5% annual basic salary contribution for his pension scheme, sought an order compelling the firm to pay him directly the said accumulated sum since it was not remitted into any RSA. 

In defense, the firm disputed both the computation of the sum due as the pension fund and also the propriety of paying Jorge directly the sums due.

The firm counsel contented that Jorge claim is liable to be struck out being improperly constituted for failure to join a necessary party that the dispute in the instant suit would not be resolved effectually, and further that Jorge obligation to choose a pension scheme and communicate to the firm is both contractual and statutory that the law forbids the company from making direct payment of pension to the Claimant. 

In opposition, learned Claimant’s counsel contented that non-joinder of the said parent company is not fatal to the suit, also that failure to provide or choose a scheme would not deny his client entitlement to the pension fund contribution. 

Delivering the judgment after careful evaluation of the submissions of both parties, the presiding Judge, Justice Nelson Ogbuanya dismissed the objection and held that the suit was properly constituted that the dispute between the parties can be effectually determined without the necessity of making a joinder.

Justice Ogbuanya declared that the Claimant has led sufficient evidence to be entitled to the agreed five (5) % un-remitted contribution pension fund due.

“The pertinent question remains- will the Defendant be allowed to keep the money belonging to the Claimant who is no longer its employee, in the absence of any provision in the extant law guiding how to open an RSA, while parties are no longer in any employment relationship? There is an observed lacuna in the Pension Reforms Act 2014 in this regard.” 

“It seems to me that the said pension sum could be treated as constituting terminal benefit of the Claimant for which he is entitled to be paid directly in the circumstance of the suit, as such deduction from earned sum constitutes terminal benefit which would eventually be paid over to the Claimant as the amount due as an entitlement from his employment.

“Thus, the pension scheme under the Act does not apply automatically to the private business employer, such as the Defendant, unless there is evidence of minimum threshold of three employees in the organization. 

Justice Ogbuanya held that the Defendant Company cannot be automatically classified as an employer within the purview of the pension regime under the Pension Reforms Act 2014, without laid evidence of its number of employees being shown to be at least three.  

Click on this link to read full judgment via the judgment’s Portall