Justice Maureen N. Esowe of the Lagos division of the National Industrial Court of Nigeria, has ruled that Union Bank of Nigeria Plc’s failure to pay one of it’s former staff, Mr. Odebunmi Odeniyi Taiwo, pension allowance violates the bank’s Pension Scheme Rule 7(a), deeming the action wrongful.
Justice Esowe consequently ordered the Union bank to pay Mr. Taiwo, N2, 000, 000. 00 (Two Million Naira) as compensation for the hardship caused by the bank’s delay in transferring funds to his Retirement Savings Account (RSA).
Additionally, the judge also awarded interest at a rate of 10 percent per annum on the judgment sum, which will accrue until the amount is fully paid.
The Claimant, Taiwo through his lawyer, C. M. Ohamuo, had Union Bank Plc before the court in a suit marked NICN/LA/550/2012.
Taiwo began his employment with the bank as a Clerk on June 22, 1982. Over the years, he rose through various ranks and served in different capacities at several branches. On January 26, 2006, after nearly 23 years of service, his employment was terminated by the bank.
In the suit. Mr. Taiwo had claimed that he was not given a fair hearing before the termination and that his appeals for reconsideration were ignored.
Adding that the bank violated it’s Trust Deed of 1996 and its Pension and Gratuity Scheme Rules of 1979 by deferring his pension payments and altering the pension payment plan, causing significant financial hardship for him and his family.
But Union Bank denied the allegations, asserting that the termination was in accordance with the staff handbook and that the claimant’s services were no longer needed.
The bank through it’s lawyer, S. A. Obadojin, further explained that following the introduction of the Pension Reform Act, it transferred Mr. Taiwo’s pension into an RSA in line with the new pension policies.
Dissatisfied with the bank’s actions, the claimant sought compensation and a reconsideration of his pension rights, as outlined in his Amended General Form of Complaint and Statement of Facts.
After reviewing the evidence, Justice Esowe resolved the issue as follows: “that Mr. Taiwo had provided sufficient evidence to support his claims.
And that both parties agreed that the claimant had worked for the bank for approximately 23 years before his termination in January 2006. Rule 9 of the Defendant’s Pension and Gratuity Rules of 1979 allows an employee to receive pension upon retirement or withdrawal from service once they are 45 years old. Evidence showed that the claimant was slightly above 45 years old when his employment was terminated”.
The judge emphasized that the bank’s pension rules should be interpreted holistically, not in isolation. Rule 4 of the Pension and Gratuity Rules mandates a review of the rules every three years, unless a government pronouncement necessitates an earlier review. The bank argued that the enactment of the Pension Reform Act of 2004, which introduced a mandatory pension scheme for all employees, changed the applicability of the bank’s pension rules to the claimant’s situation.
However, the court ruled that the claimant was still entitled to his pension benefits under the old rules.
It rejected the claimant’s claim for pre-judgment interest due to a lack of supporting evidence but awarded interest at a rate of 10% per annum on the judgment sum.
In conclusion, the judge partially ruled in favour of the claimant, rejecting certain claims while ordering the bank to: “Pay Mr. Taiwo N2,000,000.00 as compensation for the delay in transferring his pension funds.
“Pay interest at a rate of 10% per annum on the judgment sum until it is fully paid.
The court also confirmed that the bank’s refusal to pay the claimant’s pension allowance violated the pension scheme, rendering the action wrongful.
