CBN: Propriety Of Taking Directives From The Federal Government

In the Supreme Court of Nigeria

Holden at Abuja

On Friday, the 2nd day of December, 2022

Before Their Lordships

Olukayode Ariwoola, CJN

John Inyang Okoro

Amina Adamu Augie

Tijjani Abubakar

Emmanuel Akomaye Agim

Justices, Supreme Court

SC/520/2012

Between

Mr. Olasupo Adedeji
Mr. Chimezie C. Ahaneku
Mr. G.A. Nnamdi Osaji
Mr. B.S.C. Igwebuike
Mr. P.O. Olubowale
Mr. N.A. Ogunbuyide … Appellants
Mrs. Pat Ikem
Dr. (Miss) Joyce Ukaigwe
Mr. Wilson Onyefunazua
Mr. R.O. Balogun
Mr. S.E.A. Ahirima

(For themselves and on behalf of the over one

thousand staff of the Central Bank of Nigeria (CBN)

And

Central Bank of Nigeria (CBN)
Attorney-General of the Federation Respondents

(Lead Judgement delivered by Honourable Tijjani Abubakar, JSC)

Facts

The Appellants were members of staff of the 1st Respondent. Within the period of 1996 and 2003, the Federal Government gave various written directives to the 1st Respondent to terminate the appointments of some of the 1st Respondent’s staff. The 1st Respondent, following the said directives, terminated the appointment of some of its members of staff (the “rationalisation”). The Appellants’ contention was that the rationalisation exercise carried out by the 1st Respondent did not comply with the Central Bank of Nigeria Staff Manual (the “Staff Manual”). According to the Appellants, the employment of staff of the 1st Respondent was pursuant to a certain Section 49 of the Central Bank of Nigeria (CBN) Act 1990, Section 9(g) of the CBN Bye Laws and Chapters 3, 4 and 6 of the CBN Staff Manual.

The Appellants, therefore, commenced the suit grounding this appeal via Originating Summons, filed at the Federal High Court, Lagos Judicial Division on 19th May, 2003, where the Appellants for themselves and on behalf of the over one thousand rationalised staff of the Central Bank of Nigeria, sought declaratory reliefs and court orders against the Respondents. They sought, inter alia, a declaration that the 1st Respondent, being an autonomous legal body, is not subject to the Federal Government control in its affairs with its staff, and that the directive of the Federal Government to the 1st Respondent to embark on rationalisation of its staff is wholly in violation of the 1st Respondent’s contractual relationship with its staff. They also sought an order nullifying the purported rationalisation exercise conducted by the 1st Respondent, as well as an order reinstating them immediately to their respective posts without loss of seniority or benefits.

The suit was heard and determined by the trial court, where the action filed by the Appellants was dismissed. The Appellants, being aggrieved, filed an appeal at the Court of Appeal, but on hearing the appeal, the Court of Appeal affirmed the decision of the trial court.

Further, the Appellants lodged an appeal at the Supreme Court of Nigeria, seeking to upturn the decisions of the lower courts. The Appellants obtained the leave of court and further appealed to the Apex Court via an amended Notice of Appeal filed on 4th August, 2014.

Issue for Determination

The Appellants submitted four issues for determination of the appeal, while the 1st Respondent raised two issues for determination by the court. The 2nd Respondent, on his part, did not file a Brief of Argument. The Supreme Court, however, considered a lone issue as germane for determination of the appeal, thus:

Whether having regard to the circumstances of this case, the termination of the Appellant’s employment vide the rationalisation exercise embarked upon by the 1st Respondent sometime in years 1996 and 1998, was valid and effectual.

Arguments

Arguing the appeal, counsel for the Appellants contended that the rationalisation exercise carried out by the 1st Respondent on the Appellants in execution of the specific directives of the 2nd Respondent, was in violation of the relationship between the Appellants and the 1st Respondent. Counsel argued that pursuant to the CBN Act, the power to create, appoint and employ persons and set terms and conditions for employment in the 1st Respondent, resides in the Board of the 1st Respondent, thus, the Federal Government was not competent to issue directives to the 1st Respondent that would lead to the termination of the staff of the 1st Respondent. He posited further that the 1st Respondent had admitted by its letter (Exhibit OA2), that the reason for the so-called rationalisation of the Appellants’ employment was in compliance with the directives of the Federal Government; thus, relying on the provisions of Sections 9, 20 and 23 of the Evidence Act 2011 and the authority of SEISMOGRAPH SERVICE (NIG) LTD v CHIEF KEKE O. EYUAFE (1976) NSCC 434, he submitted that facts admitted by a party to a proceeding are admissible, and need not be proved. It was also his contention that there was no compliance with the provisions of the Central Bank Act 1990 and the Staff Manual, because the 1st Respondent was in a hurry to carry out the directives of the Federal Government, in contravention of the settled law that where legislation lays down a procedure or regulates the procedure for doing a thing, anything done in pursuance thereto must be in accordance with, and subject to the legislation, and not by any other method. He argued that the Staff Manual served as a subsidiary legislation, which meant that the Appellants enjoyed employment with a statutory flavour. The Appellants, thus, claimed a re-instatement in the circumstance.

The 1st Respondent’s sided with the lower courts and submitted that Section 6 of the Central Bank Act, 1990 provides that, only the Federal Government of Nigeria shall hold all the shares of the 1st Respondent. He argued that the status of the 1st Respondent under its enabling Act is dual – not only as an autonomous body, but also as an Agency of the Federal Government (Section 39 of the Act). He contended that the Federal Government did not interfere with the workings of the 1st Respondent, but merely gave it a policy directive as the sole shareholder, which was executed by the 1st Respondent; and that the policy is neither invalid nor void by the provisions of Section 39 of the Act. He posited further that where the terms and conditions of the employment of an employee cannot be found in the statute establishing the employment, the fact that such an organisation is a statutory body does not equate the conditions of service of its employees as one protected by statute – OKAMY OIL PALM LTD v ISERHIENHREN (2001) 3 SC at 163. Counsel argued that the relationship which was created between the Appellants and the 1st Respondent was a master-servant relationship, in lieu of employment with a statutory flavour as alleged by the Appellants. He submitted that the Staff Manual which contains the terms and conditions of staffers cannot be equated to a subsidiary legislation, because unless a condition of service is implicitly borne from the section(s) delegating or donating the authority, it cannot be held to be a subsidiary legislation.

Court’s Judgement and Rationale

In determining the appeal, the Apex Court reasoned that the 1st Respondent sought to downsize, and it had to take a decision to so do. There are three categories of contracts of employment namely: (a) purely master and servant relationship; (b) servant who holds their office at the pleasure of the employer; and (c) employment with statutory flavour. – MOBIL PRODUCING (NIG) UNLIMITED v OKON JOHNSON & ORS. (2018) 14 NWLR (Pt. 1639) 329. The common denominator in every contract of employment, is that they all have terms and condition which regulate the employment relationship, such as terms on determination, notices, wages and more. In this case, the Appellants rely heavily on the provisions of the Central Bank of Nigeria Staff Manual, which was drawn up by the Board of Directors of CBN. That document is clearly not an enactment by the parliament or any law making body as a schedule to the CBN Act, or as a subsidiary legislation. Their employment cannot, therefore, be said to be governed by the statute. More so, upon their rationalisation, the Appellants were paid salaries in lieu of termination as stated in the Staff Manual, thus, making their relationship that of master and servant.

Further, the 1st Respondent, by its enabling law, is autonomous, and the Act precludes the 2nd Respondent or the Federal Government from taking part in its control and management. By the provisions of Section 7 of the CBN Decree, the Board of Directors of CBN is vested with powers to make Staff Manual setting out the conditions of service of staff of the Bank. The findings of the trial court was to the effect that, the Board of Directors of the Bank sat and took the decision to rationalise without the involvement or participation of any person from outside the Board. Nonetheless, Section 40 of the Central Bank Act 1990 provides that the CBN can act generally as agent for the Federal Government, State Governments, or Local Governments; thus, the CBN can take directives from the Federal Government and implement same in accordance with its enabling statute and regulations, on such terms and conditions as may be agreed, so long as the terms and conditions are consistent with the provisions of the Act, its duties and functions as a Bank.

Given the provision above, it is therefore apparent, that the 1st Respondent acted in the lawful exercise of its powers under the Act. The Supreme Court noted that, the said provision had nothing to do with the autonomy of the 1st Respondent. Their Lordships, therefore, unanimously endorsed the decisions of the lower courts, that the rationalisation exercise by the 1st Respondent was appropriate.

Appeal Dismissed.

Representation:

Dr Adekunle Ojo, SAN with Sunday O. Ake Esq, Adesina Adegbite Esq and Caleb Echoga for the Appellants

Oladipo Tolani with Celestine A. Acheme for the 1st Respondent.

T.A. Gazali, SAN with O.A. Oloruntogbe (P.S.C. Fed. Min. of Justice); Farouq Gobir (S.C. Fed. Min. of Justice); C.R. Onyema (S.C. Fed. Min. of Justice) and O.D. Okoronkwo (S.C. Fed. Min. of Justice) for the 2nd Respondent.