Appeal Court Dismisses ITF’s Suit against Pan Atlantic University

The Lagos Division of the Court of Appeal has dismissed an appeal filed by the Industrial Training Fund (ITF) challenging the judgment of Justice Saliu Saidu of the Federal High Court, in Lagos over remittances to fund.

Justice Saidu had in his judgment held that the ITF Act does not apply to educational, and not-for-profit organisations.

The suit, which was filed by the ITF Governing Council against Pan Atlantic University, claimed that the university was in default of Section 6(1) of the ITF Act and thus owed ITF a liquidated debt of N450,000,000 as the total outstanding statutory contributions.

But, the lower court in its ruling, held that ITF’s use of the provisions of Section 6(1) of the ITF (Amendment) Act 2011 to levy universities and NGOs is unlawful.

Dissatisfied, the ITF in its notice of appeal marked CA/L/996/2018 appealed against the judgment and prayed the court to allowed the appeal, and set aside the judgment of the lower court.

The appellant argued, amongst other things, that the non-payment of dividends or bonuses by the university did not render it a non-profit making organisation and that the university’s objects revolved around the provision of goods and services.

But counsel to the university, Prof Fabian Ajogwu, SAN of Kenna Partners, in opposition, argued that an employer, as defined under Section 16 of the Industrial Training (Amendment) Act, is a person engaged in industry or commerce and that the university only provided learning facilities.

Professor Ajogwu further contended that the definition contrasts with the objects of the University, which is that it will be “non-profit and non-partisan”.

However, the Court of Appeal in its decision, dismissed the appeal of ITF Governing Council and Director General for lacking in merit.

It held that since the university is purely an educational institution as provided for in its constitution, it did not fall within the scope of the ITF (Amendment) 2011 Act (ITFA).

The appellate court held that the interpretation of Section 6(1) of the Industrial Training (Amendment) Act was clear as the definition of employer under the act presupposed a person engaged in commerce and industry (mandatorily).

It further held that the requirement to pay the fund could not have applied to the university as it is clear from its objectives that it was not established to be engaged in commerce or for the production of goods and services but to provide facilities for learning.

The court also held that Sections 6(1)–(3) and 16 of the ITFA do not apply to non-profit organisations like the university, and therefore it is not required to make contributions to the ITF.

Consequently, the court held that there was no cause of action maintainable against the university at the trial court, and as such, the trial court was right in holding that it lacks jurisdiction to hear the matter.

Resolving the issues canvassed in favour of the university, the court upheld the judgment of the lower court, and held that the appeal lacked merit and dismissed it.