LEGAL PRINCIPLE: COMPANY LAW — Corporate Entity — Federal Government Ownership — Effect on Employment Relations
PRINCIPLE STATEMENT
Having a controlling number of shares in a company is not synonymous with its ownership once it is incorporated as an entity of its own with separate legal existence; the Federal Civil Service Commission does not maintain direct or remote control over such a company's employment relations.
RATIO DECIDENDI (SOURCE)
Per Onu, JSC, in Okomu Oil Palm Company Limited v. Iserhienrhien (2001) NLC-1211995(SC) at p. 28; Paras A–C.
"Having a controlling number of shares in a company is not synonymous with its ownership once it is incorporated as an entity of its own and having its own separate legal existence. Whatever impression was therefore given in this case that the Federal Civil Service Commission sat in the background and maintained a direct or remote control over the activities of the appellant - a corporate entity with its own legal existence - must be rejected as a wrong and ill-conceived legal proposition."
EXPLANATION / SCOPE
A company with government shareholding is a distinct legal entity with separate legal existence. Government ownership of shares does not make the company a government department or its employees public servants. The Federal Civil Service Commission has no control over the company’s employment relations. The principle of separate legal personality (Salomon principle) applies regardless of government shareholding. The company’s employees are not civil servants unless expressly provided by statute. The court will not pierce the corporate veil merely because the government holds shares. Employment disputes involving government-owned companies are governed by company law and the specific contract of employment, not civil service rules.