Court lambasts Indian firm, TATA for refusal to pay ex-employees

Justice Ikechi Nwenka of the National Industrial Court, Lagos, has lambasted Indian-owned firm, Tata Africa Services Limited, for refusing to pay its former Sales Manager, Mr. Wilfred Obi, his retirement benefits and commission. Justice Nwenka, while delivering her judgment, described Tata’s action as unbecoming, unlawful and reprehensible even as she ordered the firm to pay Obi N3.2m in benefits, damages, commission and cost of legal fees.

Obi had through his lawyer, Odion Akhuetie, approached the court through a writ of summons on February 9, 2017 after all his demands for the payment of his benefits and commission fell on deaf ears. He said in his statement of claim that while being a manager at the firm, he was able to sell 100 Tata Ace mini trucks to the Lagos State Government through the Lagos State Waste Management Authority in a deal worth N199.5m and was thus entitled to N1.5m commission according to the company’s policy.

Obi therefore prayed the court for an order directing the firm to pay him the sum of N1.5m as commission. The former employee also prayed for an order directing the defendant to pay him another N1.5m which represents the retirement emolument due to him for his service to the firm from November 2008 to June 2015. Obi asked the court to rule that the failure of Tata to pay was a breach of contract, illegal and unlawful.

He asked that the defendant be made to pay the sum of N500, 000 as damages.  In its response, however, the firm through its lawyer, Ibenegbu Ebuka, claimed that Obi was not entitled to commission for the sale of the mini trucks because the sale was team-based and shared amongst the entire sales structure, including the management who initiated the sales. Tata also denied liability for N1.5m on the grounds that at the time of Obi’s resignation, the company had no policy on payment of retirement benefits to any of its staff members.

It said the employee handbook was just a policy guideline. While delivering her judgment, however, Justice Nwenka noted that Obi stated in his letter of resignation that he expressed hope that he would be paid his commission on sale of the 100 trucks and in its acceptance of the resignation letter, Tata was silent on the issue of commission but wrote “you shall receive any severance payment in accordance with the company policy.”

The judge said the employee handbook was binding on both the firm and the employee and its contents remained valid whether it was signed or not. She added, “The refusal of the defendant to pay the claimant’s commission and end of service benefit in spite of its own clear stipulations in exhibits 8 and DW1C is reprehensible and unbecoming of a company of the stature of the defendant and makes it liable in damages. “The claimant was deprived of his entitlements after six and a half years of meritorious service to the defendant without reasonable cause and put through much stress and expense to recover it.”


The court subsequently ordered that N1.5m be paid to the claimant as commission while N1.53m be paid as retirement benefit. Punch