LEGAL PRINCIPLE: LABOUR LAW — Employment Contracts — Termination vs Dismissal — Distinction
PRINCIPLE STATEMENT
Termination by notice or payment in lieu is an unqualified right under a contract, while dismissal is a qualified right for cause such as serious misconduct. Misconduct has nothing to do with termination by notice.
RATIO DECIDENDI (SOURCE)
Per Iguh, JSC, in Abalogu v. The Shell Petroleum Development Company of Nigeria Ltd (2003) NLC-1221999(SC) at p. 25; Paras B–D.
"Whereas clause 9 confers a general and unqualified right to either party thereto to terminate the contract of service at any time by giving to the other the three months stipulated period of notice or payment of three months' salary in lieu of such notice, clause 10, on the other hand, confers a qualified right on the respondent at any time to dismiss the appellant summarily for any cause which justifies such a severe action, including but not limited to serious misconduct, dishonesty or actions conflicting with the appellant's obligations under clauses 4 and 11 of exhibit D. Misconduct, therefore, has nothing to do with clause 9 of exhibit D."
EXPLANATION / SCOPE
Termination by notice is an unqualified right; dismissal for misconduct is a qualified right. The principle applies to employment contracts. The employer may choose either route. The rule distinguishes between the two actions. Misconduct is irrelevant to termination by notice. The principle is well-established.