LEGAL PRINCIPLE: LABOUR LAW — Employment Contracts — Termination — Express Contractual Provision — Right to Terminate by Notice or Payment in Lieu
PRINCIPLE STATEMENT
Where a contract contains a provision that either party may determine it by specified notice or payment in lieu, such notice or payment must be complied with in strict accordance with the terms of the contract.
RATIO DECIDENDI (SOURCE)
Per Iguh, JSC, in Abalogu v. The Shell Petroleum Development Company of Nigeria Ltd (2003) NLC-1221999(SC) at pp. 20–21; Paras A–B.
"Where a contract contains a provision that either party thereto may determine it by specified notice or payment of prescribed sum of money in lieu thereof, such notice or payment as the case may be must be complied with in strict accordance with the terms of the contract."
EXPLANATION / SCOPE
Contractual termination provisions must be strictly complied with. The principle applies to employment contracts. The party must give the required notice or payment. The rule protects contractual rights. Non-compliance may render the termination wrongful. The principle is well-established.