Court orders bank to pay ex-employees unused leave allowances, gratuities

Web Editor | ConsumerConnect

That their labour may not be in vain, the National Industrial Court, Lagos Division, in Nigeria, has ordered Unity Bank Plc to convert the backlog of unused annual leave of 25 of its former employees to cash and pay same to them.

The court made the pronouncement in a judgement by Justice R.H. Gwandu.

Vanguard reports that the court dismissed the bank’s contention that the Labour Act forbids the conversion of unused annual leave to cash for employees.

Interpreting Section 18(3) of the Labour Act, Justice Gwandu held that non-conversion of annual leave to cash was “only applicable to an employee who is still in the service of the employer.”

He said since the claimants, who filed 25 separate suits, which were consolidated before him, were no longer in the employ of Unity Bank Plc. The bank was bound to commute their various unused backlog of annual leave to cash and pay them.

The Justice gave the judgment in favour of Mr. John Taiwo, a former Senior Manager with the bank, sequel to his suit marked NICN/LA/84/2016, in which Taiwo had claimed that he had a backlog of 220 days unused leave before he was disengaged by the bank on June 9, 2015.

Justice Gwandu has ordered Unity Bank to pay him N7,065,000, “being the amount claimed as backlog leave unpaid.”

Gwandu applied the same principle in the cases of the 24 of Taiwo’s colleagues.

“The defendant’s witness admitted under cross-examination that the claimant was employed for a cumulative period of eight years and eight months, while he was paid (gratuity) for seven years.

“That, to my mind, leaves a deficit of one year unpaid. I hereby hold that the claimant was paid his gratuity less one year by the defendant,” said the Justice.

He, therefore, ordered that “The defendant shall calculate and pay the claimant one year gratuity being the balance unpaid”, and that Taiwo and former colleagues’ outstanding gratuities should be paid with five per cent interest within 30 days.