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NICN - JUDGMENT

IN THE NATIONAL INDUSTRIAL COURT NIGERIA

IN THE ABUJA JUDICIAL DIVISION

HOLDEN AT ABUJA

BEFORE HER LADYSHIP HON. JUSTICE O.A. OBASEKI-OSAGHAE

DATE: OCTOBER 29, 2025                                    SUIT NO: NICN/ABJ/376/2024

BETWEEN                                

 

NIGERIA SOCIAL INSURANCE TRUST

FUND MANAGEMENT BOARD                                            CLAIMANT                                                                           

 

 

 

 

AND

 

THE DAUGHTERS OF CHARITY OF

ST. VINCENT DE PAUL OF NIGERIA                                  DEFENDANT

 

REPRESENTATION

 E.R. Okenwa (Mrs) for the Claimant, with A.A. Aromire (Mrs).

No representation for the Defendant.

 

JUDGMENT

Introduction and Reliefs

[1] The Claimant commenced this action by originating summons on October 18, 2024 praying for the determination of the following questions;

1)     Considering the extant provisions of Sections 33 (1); 39 (1) (a) and (b) (i) (ii) (iii); 40 (1) (a) (b), and 73 of the Employees’ Compensation Act, 2010 whether the Defendant is an employer within the meaning of the Employees’ Compensation Act, 2010 and by so doing obligated to make a minimum monthly contribution of 1.0 percent of her total monthly payroll into the Employees’ Compensation Fund established under the Act and managed by the Claimant.

 

2)     If the answer to question 1 above is in the affirmative does the Defendant have an option whether or not to register and key into the Employees’ Compensation Scheme or cause to be furnished to the Claimant an estimate of her probable amount of her payroll, and whether or not to make a minimum monthly contribution of 1.0 percent of her total monthly payroll into the Employees’ Compensation Fund managed by the Claimant.

 

 

3)     Having regard to the provisions of Section 39 (2) of the Employees’ Compensation Act, 2010 where the Defendant fails to cause to be furnished to the Claimant her estimate of the probable amount of the Defendant’s payroll whether the Defendant is liable to pay as a penalty for the default, a percentage of the assessment determined by the Claimant, and the Claimant may make its own estimate of the payrolls, assess and levy on that estimate and the Defendant is bound by it.

 

4)     If an employer within the meaning of the Employees’ Compensation Act, 2010, and considering the provisions of Section 39 (4) of the Employees’ Compensation Act, 2010 where the Defendant does not furnish a complete and accurate particulars of her payroll to the Claimant, or if the particulars of the payroll is not true and accurate, the Defendant, for every failure to comply and for every such particulars of the payroll shall be liable to imprisonment or fine, or both imprisonment and fine.

 

5)     Having regard to the combined provisions of Sections 53 (1) (2) (3) (4) (5) (6) and (7), and 54 (a) (b) (c) (d) (e) (f) and (g) of the Employees’ Compensation Act, 2010 whether an officer of the Claimant or any person authorized thereby can, at any time and at all reasonable hours, enter the Defendant’s workplace with or without warrant or notice and require the production of the Defendant’s payrolls and account records for inspection or examination of same with a view to ascertaining the accurateness of the Defendant’s payroll and assessing same.

 

6)     If the questions above are resolved in favour of the Claimant what order or orders is appropriate or deemed fit and necessary to make in the circumstances of this case.

 

7)     Whether, having regard to the combined provisions of Sections 33 (1) and 39 (1) of the Employees’ Compensation Act, 2010 the Claimant is entitled to be furnished by the Defendant estimates of the probable amount of the Defendant’s payroll from July, 2011 up to Date, and is entitled to 1.0 percent of Defendant’s total monthly payroll from July, 2011 up to Date.

 

[2] Upon the determination of the above questions in its favour, the Claimant is seeking the following reliefs:

1)     A declaration that the Defendant is an employer within the meaning of the Employees’ Compensation Act, 2010 and by so doing obligated to make a minimum monthly contribution of 1.0 percent of Defendant’s total monthly payroll from July, 2011 up to Date and thereafter into the Employees’ Compensation Fund managed by the Claimant.

 

2)     A declaration that the Defendant being an employer within the meaning of the Employees’ Compensation Act, 2010 is obligated to cause to be furnished to the Claimant complete and accurate particulars of the Defendant’s total monthly payroll from July, 2011 up to Date and thereafter.

 

3)     An order compelling the Defendant to keep, at all times, with the Claimant complete and accurate particulars of the Defendant’s payrolls from July, 2011 up to Date and thereafter.

 

4)     An order compelling the Defendant to compute/calculate and make a minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to Date and thereafter into the Employees’ Compensation Fund managed by the Claimant.

 

5)     An order granting entry to officers of the Claimant into the workplace of the Defendant situate at Ozor Joseph Ejike, Plot 505, Cadastral Zone, F01, Kubwa Extension, Abuja, FCT for purposes of inspecting and examining Defendant’s payrolls and other documents necessary for assessment of Defendant’s minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to Date and thereafter.

 

6)     An order compelling the Defendant to grant officers of the Claimant access to Defendant’s total monthly payrolls from July, 2011 up to Date and thereafter for purposes of assessing the Defendant of the minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to Date and thereafter.

 

7)     An order directing the Defendant to pay into the Employees’ Compensation Fund 40% of the total monthly payroll from July, 2011 up to Date as penalty for default in failing to cause to be furnished to the Claimant complete and accurate total monthly payroll from July, 2011 up to Date, and for failure to make minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to Date into the Employees’ Compensation Fund managed by the Claimant.

 

8)     An order directing the Defendant to pay 10% interest on the Defendant’s total monthly payroll from July, 2011 up to Date.

 

9)     An order directing the Defendant to pay the sum of Two Million Naira (N2,000,000.00) only as cost of the action covering the Legal fees (N1,000,000.00), cost of service of notices (N400,000), cost of production and service of court processes (N400,000) and other ancillary costs (N200,000).

 

10) An order directing the sealing up of the business premises of the Defendant nationwide until all unpaid contributions, penalty and interest have been fully remitted/paid.

 

11) Any such further order(s) as this Honourable Court may deem fit and expedient to make in the circumstances of this case.

[3] The Originating Summons is supported by an affidavit of 23 paragraphs deposed to by Ijeoma Okpanku Principal Manager in the Claimant, to which is annexed one exhibit NSITF 1, and a written address. The Defendant did not file a memorandum of appearance or any defence processes but was represented by counsel A.A. Sadiq at the proceedings of 11th February 2025. This is therefore an undefended suit.

Facts

[4] The facts upon which the Claimant has premised the questions for determination and the reliefs it is seeking are as contained in the supporting affidavit. The Claimant is a statutory body vested with the management and administration of the Employees’ Compensation Fund established under the Employees’ Compensation Act, 2010. The Fund consisits of a minimum mandatory monthly contribution of 1% of the total monthly payroll by employers in the private and public sector into the Employees Compensation Fund for purposes of providing compensation to workers who suffer injury, death, or diseases arising out of or in the course of their employment. The Claimant states that employees contemplated under the Employees’ Compensation Act, 2010 are employees of private and public sectors employers.

[5] Upon the commencement of the Employees’ Compensation Act, 2010, the Claimant and other stakeholders the Nigeria Labour Congress, and Nigeria Employers Consultative Association held a meeting and agreed that as part of the full implementation of the Act, the payment of contributions by employers into the Employees’ Compensation Fund as prescribed by the Act should commence in July, 2011. The Claimant states that the Defendant is a Company incorporated under the Company and Allied Matters Act and operates the business of a Hospital with employees she pays on a monthly basis at Ozor Joseph Ejike, Plot 505, Cadastral Zone, F01, Kubwa Extension, Abuja, Federal Capital Territory, Nigeria. The Defendant has been operating the said business since 08 May, 1989 with Doctors, Nurses and Administrative Staff under a contract of employment.

[6] The Claimant staes that since after introduction of the scheme to the Defendant, it has wilfully neglected to register and key into the Employees’ Compensation Scheme, and has also refused to furnish it with Defendant’s complete and accurate total monthly payroll from July, 2011 up to Date, and failed to make minimum monthly contribution of 1.0 percent of her total monthly payroll from July, 2011 up to Date into the Employees’ Compensation Fund despite several visits by its officers and repeated demands. The Claimant states that following the default by the Defendant it imposed a penalty of 40% of the Defendant’s total monthly payroll from July, 2011 up to Date and an interest of 10% on the Defendant’s total monthly payroll from July, 2011 up to Date.

Claimant’s submissions

[7] The Claimants issues are the six questions submitted for determination reproduced below  for ease of reference:

1.      Considering the extant provisions of Sections 33 (1); 39 (1) (a) and (b) (i) (ii) (iii); 40 (1) (a) (b), and 73 of the Employees’ Compensation Act, 2010 whether the Defendant is an employer within the meaning of the Employees’ Compensation Act, 2010 and by so doing obligated to make a minimum monthly contribution of 1.0 percent of her total monthly payroll into the Employees’ Compensation Fund established under the Act and managed by the Claimant.

 

2.      If the answer to question 1 above is in the affirmative does the Defendant has an option whether or not to register and key into the Employees’ Compensation Scheme or cause to be furnished to the Claimant an estimate of her probable amount of her payroll, and whether or not to make a minimum monthly contribution of 1.0 percent of her total monthly payroll into the Employees’ Compensation Fund managed by the Claimant.

 

3.      Having regard to the provisions of Section 39 (2) of the Employees’ Compensation Act, 2010 where the Defendant fails to cause to be furnished to the Claimant her estimate of the probable amount of the Defendant’s payroll whether the Defendant is liable to pay as a penalty for the default, a percentage of the assessment determined by the Claimant, and the Claimant may make its own estimate of the payrolls, assess and levy on that estimate and the Defendant is bound by it.

 

4.      If an employer within the meaning of the Employees’ Compensation Act, 2010, and considering the provisions of Section 39 (4) of the Employees’ Compensation Act, 2010 where the Defendant does not furnish a complete and accurate particulars of her payroll to the Claimant, or if the particulars of the payroll is not true and accurate, the Defendant, for every failure to comply and for every such particulars of the payroll shall be liable to imprisonment or fine, or both imprisonment and fine.

 

5.      Having regard to the combine provisions of Sections 53 (1) (2) (3) (4) (5) (6) and (7), and 54 (a) (b) (c) (d) (e) (f) and (g) of the Employees’ Compensation Act, 2010 whether an officer of the Claimant or any person authorized thereby can, at any time and at all reasonable hours, enter the Defendant’s workplace with or without warrant or notice and require the production of the Defendant’s payrolls and account records for inspection or examination of same with a view to ascertaining the accurateness of the Defendant’s payroll and assessing same.

 

6.      Whether, having regard to the combine provisions of Sections 33 (1) and 39 (1) of the Employees’ Compensation Act, 2010 the Claimant is entitled to be furnished by the Defendant estimates of the probable amount of the Defendant’s payroll from July, 2011 up to Date, and is entitled to 1.0 percent of Defendant’s total monthly payroll from July, 2011 up to Date.

[8]  Learned counsel reproduced the provisions of Sections 32 (1) (a) (b) and (c); 33 (1); 34 (1) (2) (a) (b) and (3); 36 (1) and (2); 39 (1) (a) (b) (i) (ii) (iii) (2) (3) and (4); 40 (1) (a) (b) (2) and (5); 53 (1) (2) (3) (4) (5) (6) and (7); and 54 (a) (b) (c) (d) (e) (f) and (g); and 73 of the Employee Compensation Act. She submitted  that from the affidavit evidence, the Defendant has operated as a business since the 8th May, 1989 with Doctors, Nurses and Administrative Staff working under a contract of employment. Counsel submitted that the Defendant being an employer within the meaning of the Act is mandatorily required to make a minimum monthly contribution of 1.0 percent of her total monthly payroll into the Employees’ Compensation Fund established under Section 56 (1) of the Employees’ Compensation Act, 2010.

[9] Learned counsel stated that officers of the Claimant have consistently been refused entry into the Defendant, and access to the Defendant’s payrolls and books of accounts for inspection in breach of the provisions of Sections 53 and 54 of the Employees’ Compensation Act, 2010. She urged the Court to resolve the issues for determination in favour of the Claimant and grant all the reliefs sought.

Decision

[10] I have earlier stated that this suit is undefended. The records of the Court show that the Defendant was served with the originating processes and hearing notices, and failed to enter appearance or defend this action. The effect of the Defendant’s failure to file a counter affidavit is that the facts deposed to by the Claimants in the supporting affidavit to the originating summons are unchallenged and therefore deemed admitted, see Mato v Hember (2018) 5 NWLR (Pt 1612) 258 SC, Inakoju v Adeleke (2007) 4 NWLR (Pt 1025) 427 SC, Governor Kogi State v Mohammed (2009) 13 NWLR (Pt 1159) 491 CA. An unchallenged affidavit must be accepted as true and correct and acted upon by the Court, see Ogoejeofo v Ogoejeofo (2006) 1 SC (Pt 1) 157, A-G Platean State v A-G Nasarawa State (2005) 4 SC at 55; Unity Bank v Denclaff Ltd (2012) 18 NWLR (Pt 1332) 293 SC. I am satisfied that the Claimant has adduced credible affidavit evidence.

[11] I now proceed to the questions for determination. I will reproduce the provisions in the Employees’ Compensation Act, 2010 that the Claimant has submitted for interpretation:

32- ‘The Board shall-

(a)   carry out assessment of the amounts to be paid into the Fund by employers under this Act;

(b)  undertake regular actuarial valuation of industries, sectors and workplaces and determine the rates of contributions by employers into the Fund by such industry, sector or workplace;

(c)   receive and credit into its account, all moneys payable into the Fund under this Act’;

 

33- (1) ‘Every employer shall, within the first two years of the commencement of this Act, make a minimum monthly contribution of 1.0 percent of the total monthly payroll into the Fund’.

 

34- (1) ‘The Board shall assess employers for such sums in such manner, form and procedure as the Board may, from time to time, determine for the due administration of this Act’.

(2) ‘Assessments shall, in the first instance, be based upon estimates-

(a) of the employer’s payroll for the year provided under section 41 of this Act; or

(b) as determined by the Board under section 43 of this Act.

(3) The Board may, by order, establish a minimum assessment’.

 

36- (1) ‘The Board shall have a cause of action for any unpaid assessment and shall be entitled to the cost of any action to recover the unpaid assessment’.

(2) ‘If, for any reason, an employer liable to assessment is not assessed by the Board, the employer shall be liable for the amount for which the employer should have been assessed, or as much as the Board considers reasonable, and payment of that amount may be enforced as if the employer had been assessed for that amount’.

            39- (1) ‘Every employer shall-

(a)   ‘keep, at all times at some place in Nigeria, the location and address of which the employer has given notice to the Board, complete and accurate particulars of the employer’s payrolls’;

(b)  ‘cause to be furnished to the Board-

(i)                when the employer becomes an employer within the scope of this Act, and

(ii)              at other times as required by any regulation made by the Board of general application or any decision of the Board limited to specific employer, an estimate of the probable amount of the payroll of each of the employer’s industries within the scope of this Act, together with any further information required by the Board; and

(iii)           provided signed copies of the employer’s payrolls, not later than the 31st December in each year or at such other times and in the manner required by the Board’.

(2)’ where the employer fails to comply with sub-section (1) of this section, the employer is liable to pay as a penalty for the default, a percentage of the assessment prescribed by regulations or determined by the Board, and the Board may make its own estimate of the payrolls, assess and levy on that estimate and the employer is bound by it’.

(3) ‘In computing the amount of the payroll for the purpose of assessment, regard shall be had only to that portion of the payroll that represents workers and employment within the scope of this Act’.

(4) ‘If an employer does not comply with sub-section (1) of this section, or if a statement made in pursuance of its requirements is not true and accurate, the employer, for every failure to comply and for every such statement shall be liable to imprisonment for a term not exceeding one year or fine of not less than N100,000 or to both imprisonment and fine for an individual or a fine of not less than N1,000,000 for a body corporate and in addition, each director, manager or officer of the body corporate shall be deemed to have committed the offence and shall be liable on conviction to imprisonment for a term not exceeding one year or a fine of N100,000 or to both such imprisonment and fine’.

40.- (1) ‘Every employer shall, not later than the last day of February in each year or at such other time as may be required by the Board, provide, in a manner to be determined by the Board, a statement-

(a) of the total amount of all earnings paid to its employees in the preceding year;

(b) estimating the earnings that will be paid to its employees in the current year or any part of it as directed by the Board;

(2) ‘If the statement is found to be incorrect, the Board shall reassess the employer for each year that the statement was incorrectly made and may charge the employer interest, at a rate determined by the decision of the Board, on any assessment that was not paid’.

(5) ‘Unless satisfactory evidence of an employer’s actual payroll for any period is provided to the Board, the payroll estimated by the Board under this section or under section 40 (1) shall be deemed to be the actual payroll of the employer’.

53.- (1) ‘Any person authorized by the Board may examine the books and accounts of any employer as the Board deems necessary for administering this Act’.

(2) ‘For the purposes related to the administration of this Act, any person authorized by the Board may, at all reasonable hours, enter any part of the establishment of any employer or person who may be an employer’.

(3) ‘An employer shall produce, within 30 days of receiving notice, all documents, deeds, papers and computer records which are in the possession, custody or power of the employer that relate to the subject matter of an examination under this section’.

(4) ‘For the purposes of an examination or inquiry under this section, the Board or any person authorized by it, shall have all the power of a Board of Inquiry appointed under this Act’.

(5) ‘Every person authorized by the Board to make an examination under this section may require and take a statement respecting the subject matter of an examination under this section’.

(6) ‘An employer or other person who obstructs or hinders the making of an examination under this section or who refuses to permit it to be made or who neglects or refuses to produce such documents, writings, books, deeds and papers or make statement required in the notice under this section, commits an offence’.

(7) ‘In this section, an employer includes a person who the Board considers to be an employer or a principal’.

54. ‘An officer of the Board may, for the purposes of carrying out his or her duties under this Act and any regulation made thereunder or pursuant to any enactment or law-

(a)  enter in any workplace at any time with or without warrant or notice;

(b) require the production of any license, document, record or report, inspect, and examine a copy of the same;

(c) remove any license, document, record or report, inspected or examined for the purpose of making copies or extracts and upon making such copies or extracts, shall promptly return same to the person who produced or furnished them;

(d) in any inspection, examination or inquiry, shall be accompanied and assisted by a police officer or other person or persons having special, expert or professional knowledge of any matter in respect of which inspection is been carried out;

(e) make enquiries of any person who is or was in a workplace either separate or in the presence of any other person who may be relevant to an inspection, examination or inquiry;

(f) require that records or documents in a workplace or part thereof may not be disturbed for a reasonable period of time for the purpose of carrying out an examination, investigation or inquiry; and

(f) the report arising out of any enquiry, inspection or examination shall be the property of the Board and shall be held in confidence.’

73. In this Act-

‘employer’ includes any individual, body corporate, Federal, State, or Local Government or any of the government agencies who has entered into a contract of employment to employ any other person as an employee or apprentice;

[12] By virtue for Section 73 of the Employees’ Compensation Act 2010, the Defendant is an Employer, having contracted some persons as staff of its organization. It is therefore under a statutory obligation pursuant to Section 33(1) of the Act to make minimum monthly contribution of 1.0 percent of its total monthly payroll into the Employees’ Compensation Fund managed by the Claimant. It is settled law that whenever the word “shall” is used in an enactment, it connotes imperativeness and mandatoriness and it leaves no room for discretion at all, see John v Igbo-Etti Local Government Area (2013) 7 NWLR (T.1352). Being an Employer, the Defendant is statutorily obligated to comply with the provisions of Sections 39(1) and 40(a) and (b) of the Employees’ Compensation Act 2010 to cause to be furnished to the Claimant an estimate of the probable amount of the Defendant’s payroll together with any further information required by the Claimant.

[13] Where the Defendant fails to comply with the provisions of Sections 39(1) of the Employees’ Compensation Act 2010, it is liable to pay a penalty for the default, a percentage of the assessment prescribed by the regulations or determined by the Claimant, and the Claimant may make its own estimate of the payrolls, assess and levy on the estimate. The Defendant is bound by it pursuant to Section 39 (2) of the Employees’ Compensation Act 2010. In light of the provisions of Section 39(4) of the Act, where the Defendant does not furnish complete and accurate particulars of its payroll to the Claimant, or if the particulars of the payroll are not true and accurate, the Defendant, for every failure to comply and for every such particulars of the payroll shall be liable to imprisonment or fine, or both imprisonment and fine.

[14] In respect of the provisions of Sections 53 (1) (2) (3) (4) (5) (6) and (7), and 54 (a) (b) (c) (d) (e) (f) and (g) of the Employees’ Compensation Act, 2010, An officer of the Claimant or any person authorized is empowered at any time and at all reasonable hours to enter the Defendant’s workplace with or without warrant or notice and require the production of the Defendant’s payrolls and account records for inspection or examination of same with a view to ascertaining the accurateness of the Defendant’s payroll and assessing same.

[15] The answer to questions 1, 3, 4, 5, and 6 are Yes. The answer to question 2 is No.

[16] For all the reasons given above, I hereby declare and make the following orders:

1.      It is Declared that the Defendant is an employer within the meaning of the Employees’ Compensation Act, 2010 and is mandated by law to make a minimum monthly contribution of 1.0 percent (1%) of its total monthly payroll from July 2011 up to date, and thereafter into the Employees’ Compensation Fund.

 

2.      It is Declared that the Defendant being an employer within the meaning of the Employees’ Compensation Act, 2010 is mandated to cause to be furnished to the Claimant complete and accurate particulars of the Defendant’s total monthly payroll from July, 2011 up to date and thereafter.

 

3.      The Defendant is ordered to keep, at all times, with the Claimant complete and accurate particulars of the Defendant’s payrolls from July, 2011 up to date and thereafter.

 

4.      The Defendant is ordered to immediately compute/calculate and make a minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to date and thereafter into the Employees’ Compensation Fund.

 

5.      An Order is made granting the Claimant’s Officers immediate entry into the the Defendant’s workplace premises situate at Ozor Joseph Ejike, Plot 505, Cadastral Zone, F01, Kubwa Extension, Abuja, FCT for purposes of inspecting and examining the Defendant’s payrolls and other documents necessary for assessment of its minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to date and thereafter.

 

6.      An Order is made granting the Claimant’s officers access to the Defendant’s   monthly payrolls from July 2011 up to date, and thereafter for the purpose of assessing the Defendant the minimum monthly contribution of 1.0 percent of the total monthly payroll from July 2011 up to date, and thereafter.

 

7.      The Defendant is ordered to within 30 days pay into the Employees’ Compensation Fund 40% of the total monthly payroll from July 2011 up to date, as penalty for default in failing to furnish the Claimant complete and accurate total monthly payroll from July 2011 up to date, and for failure to make minimum monthly contribution of 1.0 percent of the total monthly payroll from July, 2011 up to date into the Employees’ Compensation Fund.

 

8.      The Defendant is to pay 10% simple interest on its total monthly payroll from July 2011 up to the date of this judgment.

 

9.      Costs in the sum of N300,000.00 (Three Hundred Thousand Naira) awarded the Claimant.

Judgment is entered accordingly.

 

______________________________

                                                Hon Justice O. A. Obaseki-Osaghae