It happens constantly and in diverse forms; and very seriously at that. Employees and employers disagree and resort to several industrial actions in search of a remedy. In the midst of these industrial actions, parties are sometimes compelled to rethink. The employer and employee sit down to debate, bargain and come up with agreeable terms and conditions of settlement. Most times, this settlement is perfected by the drafting of certain documents containing the points of agreement of the parties. This usually, but not always, marks a ceasefire, a resolution of the trade conflict. This “ceasefire” agreement is typically called a Collective Bargaining Agreement (CBA).
According to the DUHAIME Legal Dictionary,
“Collective bargaining agreement means an agreement in writing or writings between an employer and a trade union setting forth the terms and conditions of employment or containing provisions in regard to rates of pay, hours of work or other working conditions of employees.”(i)
By predominant industry occurrences, CBA is executed by trade unions acting for and on behalf of employees whom they represent on one part, and the relevant employer(s) on the other part. CBA abounds in different flavours and colours. It may even be termed in any manner so desired by the parties to it. A popular evidence of this in Nigeria is the Academic Staff Union of Universities/Federal Government (ASUU/FG) CBA. In analysing the purport of a CBA, Robert Gorman wrote;
‘In greatest measure, the labour contract sets down the relationship between the employer and the employees and among the employees themselves. Thus the contract will normally have provisions governing wages, hours, discipline, promotions and transfers, medical and health insurance, pensions, vacations and holidays, work assignments, seniority and the likes. The labour agreement is not a contract of employment; employees are hired separately and individually, but the tenure and terms of their employment once in the unit are regulated by the provisions of the collective bargaining agreement.’(ii)
In Nigeria, the Labour Act in Section 91 defines a CBA as;
‘An agreement in writing regarding working conditions and terms of employment concluded between-
- An organization of workers or an organization representing workers (or an association of such organizations) of the one part; and
- An organization of employers or an organization representing employers (or an association of such organizations) of the other part.’
In the same section, Collective Bargaining (CB) is defined as the:
‘…process of arriving or attempting to arrive at a collective agreement’
Furthermore, the Trade Disputes Act, CAP. T8 LFN 2004 defines “Collective Agreement” in Section 48 as:
‘…any agreement in writing for the settlement of disputes and relating to terms of employment and physical conditions of work concluded between-
- An employer, a group of employers or organisations representing workers, or the duly appointed representative of any body of workers, on the one hand; and
- One or more trade unions or organisations representing workers or the duly appointed representative of any body of workers, on the other hand.
The above definition was adopted by the Supreme Court in OSOH & ORS V. UNITY BANK PLC (2013) 1 SCM 149 where the apex Court held that;
“The provisions of Section 47(1) (supra) however require collective agreements to be in writing so as to formalize the agreements, what has further emerged from the definition with respect to many cases of ‘collective agreements’ is that where they have created legal relations giving rise to contractual obligations between the parties they are enforceable by the immediate collective parties (i.e. between an employer or an employer’s organization and a trade union or unions) but as between the employers and the workers as the respondent and appellants here it is only so where they have been incorporated into the contracts of employment of the employees so as to be actionable for any breaches arising there from at the suit of either party to the contractual relationship. Otherwise they are no-more than-mere vague inspirational terms which are bound to present practical problems of enforcement and the best method being to use political or trade union pressure to bring about their enforcement. The other notable, crucial feature of collective agreements arising from their being the products of the joint negotiating bodies of workers representatives and in that regard being in writing is raising the presumption of being legally enforceable provided the agreements have created contractual obligations arising out of legal relations as between the parties.”
Over the years, Nigerian Courts have refused to enforce CBAs. In Nigerian Arab Bank Ltd v. Shuiabu (1999) 4 NWLR (pt. 186) 450, 469 per Ndoma-Egba, a CBA was described to be:
‘…at best a gentleman’s agreement, an extra-legal document totally devoid of sanctions… It is a product of trade unionist’s pressure’.
In quite a number of Nigerian cases, CBA has suffered the setback of justiciability or enforceability. The Courts were never ready to enforce a CBA unless it is incorporated into the relevant employee’s contract of employment.(iii) In fortifying this position, Uwaifo JCA in Union Bank PLC v. Edet (2001) 6 NWLR (pt. 708) 224 stated that;
‘Collective Agreements, except where they have been adopted as forming part of the terms of employment, are not intended to give or capable of giving, individual employees a right to litigate over an alleged breach of their terms as may be conceived by them to have affected their interest nor are meant to supplant or even supplement their contract of service’
In addition to the above, Akintan JCA, in his concurring opinion quipped;
‘It is definitely necessary to expressly adopt the provisions of the document either in the letter of appointment or in a subsequent communication varying the terms of employment before the [employee can] enforce its contents against the [employer]’(iv)
Similarly, in Cooperative and Commerce Bank (Nig.) Ltd. v. Okonkwo (2001) 15 NWLR (pt. 735) 114, the employee’s appointment was terminated based on the provision of a CBA. In challenging the termination of appointment in Court, the employee relied on the provision of the said CBA. The employer objected to it, contending that the CBA is not enforceable in law. Akpabio JCA discountenancing the objection held that the employer is estopped from objecting to the enforceability of the collective agreement.
Curiously, the Court of Appeal as cited immediately above linked the enforceability of a CBA to the equitable principle of Estoppel. What this simply espoused was what where an employer has agreed to use the terms of the CBA with respect to its employee, such employer would not be permitted to deny or avoid the effect of the same CBA. The employer would not be allowed to approbate and reprobate at the same time.(v)
It appears to be the extant position of the law that an employee cannot enforce a CBA unless the terms of the agreement sought to be enforced or the entire agreement has been subsumed into his/her contract of employment. In OSOH & ORS V. UNITY BANK PLC (2013) 1 SCM 149, the Court stated;
‘I think that this proposition is being made on the assumption that the exhibits are binding collective agreements that is binding as between collective parties on the one hand and on the instant parties to, this suit on the other hand, in such situations unless and until the collective agreements cannot be enforced by the employee indeed either party as in this matter for want of privity of contract, it is on the principle of want of privity of contract that the court have shown reluctance to enforcing Collective Agreements between Collective parties at the instance of an employee(s) without the collective agreements having firstly been incorporated into his contract of employment…See the case of Holland v. London Society of Compositors (1924) 40 T.L.R. 440. The doctrine of privity of contract is so fundamental to the enforcement of contractual obligations between the parties to a contract if I may repeat that to enforce a collective agreement at the level of the employer and his employees the agreements have to be firstly incorporated into the conditions of employment of the employees. However, see Roblces v. Barnard (1961) 2 AER 827 per Lord Donovan on the authority of the union to act so as to bind its members.’(vi)
The Court has proved that until a CBA is adapted into the contract of employment of the employee, the employee cannot enforce such terms of the CBA. The fact that the employee is a member of the trade union which is a party to the CBA is immaterial.
Emeka Chianu in his book “Employment Law” suggested that;
‘rather than insist on an express incorporation of a collective agreement into an individual’s employment contract judges should look at the way its provisions were treated by the parties in practice after the collective agreement was executed. Where evidence exist that management has acted on the agreement, taking benefit of it, judges should infer an intention on the fact of the management as considering the agreement as binding.’(vii)
Moreover, in African Continental Bank v. Nwodika (1996) 4 NWLR (pt. 443) 470, 473 474, Ubeazonu JCA stated that the bindingness of a CBA depends on the following;
- The incorporation of the collective agreement in the contract of service if one exists
- The state of the pleadings
- The evidence before the court
- The conduct of the parties.
Clark G de N has argued that majority of the terms of a CBA are frivolous and aspirational and therefore devoid of any contractual force with which the court can enforce it(viii). Conversely, Emeka Chianu argued that most Nigerian cases on the enforcement of CBAs are based on disputes of bordering on terms that are not aspirational but important, such as the procedure of dismissal of an employee.
Meanwhile, in practical perspective, the Court also recognises the possibility of the employer already adopting the CBA into the contract of employment on which they regularly give their employee to append their signatures. In this scenario, both the employer and the employee are bound by the terms of the said CBA. In the case containing this practical perspective, the Court also held that;
‘However, it is also the case as borne out by these collective agreements that a trade union may negotiate with the employer in regards to the terms of conditions of employment of the employees which become binding on an employee upon the individual employee accepting his employer’s offer of employment embodying such collective agreements, see: Edwards v. Skyways Ltd (1964) 1AER 49a. Again in such situations, an employee can sue and be sued as regarding the terms of collective agreements…it is also not the case of both parties to this matter that these collective agreements all things being equal have been adopted and incorporated by implication into the contracts of employment of the instant employees on having been provided for in the employees’ respective contracts of employment thus meaning that the conditions of employment of the employees have to be regulated by the terms of collective bargain(s).'(ix)
In another related perspective, Nigerian Courts have ruled out CBAs on the basis of their failing to fulfil the principle of privity of contract.(x) In most of the above-stated cases, Nigerian Courts have held that a third party cannot lawfully enforce the benefit of an agreement he is not privy to or a party to.
Brief Inquest: the UK, US and International Community
The House of Lords has ruled contrariwise in Rookes v. Barnard (1964) 1 ALL ER 367 @ 374, where Lord Reid stated;
“…the fact that the direct cause of the loss was the breach of contract to which the defendant was not a party did not matter”.
Wedderburn argues that a “threat to breach one’s own contract is an illegal act gives an intentionally damaged third party a right of action, the doctrine of privity of contract is outflanked.”(xi)
In the United States, the principle of privity of contract does not deter the enforcement of a CBA. There are two theories that are deployed in solving the challenge of privity of contract and CBA in the United States.
On one hand is the Custom and Usage Theory. This holds sway where an employee sues an employer based on the contract of employment and not on the CBA. The CBA is only referred to as a custom of the profession which is deemed to have existed due to the collective bargain of the relevant trade union.
On the other hand, the Principle of Agency is also used. Here, the trade union is seen as the agent of the applicable employees who are in turn, the principals of the trade union. The trade union is itself a party to no contract and therefore the employee can bring an action on his own to enforce the collective agreement.(xii)
More so, the International Labour Organization (ILO) Recommendation Concerning Collective Agreement stipulates that collective agreement should bind their signatories and those on whose behalf the agreement is concluded. Stipulations in contracts of employment are regarded as void and automatically replaced by the stipulations of the collective agreement.(xiii)
Conclusion and Recommendations
The hidden wealth incidental to a CBA as noted by Emeka Chianu is that it recognises;
“…that the employer and the employee are not on equal footing and that as between them freedom of contract is often illusory. It therefore transfers the freedom of contract from the individual into a collective sphere assuming that the equality of bargaining power which is absent between employer and employee exists between their collective representatives. This way, the socially weaker is protected against the socially stronger party to a contract”.(xiv)
He also adds that “the only feasible option is judicial reform since parliament is unlikely to reform the law in favour of employees in the near future”(xv) . It is important to recommend the enactment of legislations to ensure the enforceability of collective agreements in Nigeria. Also, trade unions should maintain their feet on the gas in ensuring that employers insert such agreements into the contracts of employment of employees under their guard.
At this juncture, it is important to bring the million Dollar question to fore:
What is the law on CBA in Nigeria?
Well, the best answer would be that of Oliver Wendell Holmes Jr. when he immortally stated:
“[T]he prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law.”(xvi)
In summary meanwhile, the Courts have variously ruled on the elements required to enforce a CBA:
- That the CBA be incorporated into the employee’s contract of employment; or
- That the employer has acted on the provisions of the said collective agreement which they will be stopped from denying the agreement.(Doctrine of Estoppel)
Anything contrary to the two elements above would likely leave the employee unprotected by the relevant collective agreement regardless of the tireless efforts expended by the trade union on its execution.
(ii) Gorman, R., Basic Text on Labor Law – Unionization and Collective Bargaining (Minnesota: West Publishing Co., 1976) quoted in supra
(iii) Chukwumah V. Shell Petroleum Nig. Ltd (1993) 4 NWLR (pt. 289) 512, 543, 544. Abalogun V. Shell Petroleum Ltd. (1999) 8 NWLR (pt. 613) 12.
(iv) P. 304
(v) Harsall v. Brizell (1957) Ch. 169
(vi) Page 150-151`per C. M. Chukwuma-Eneh, JSC (Lead Judgment)
(vii) Emeka Chianu, ‘Employment Law’ Bemicov Pub., 2004 p. 89. In Adegboyega v. Barclays Bank of Nigeria Ltd. (1977) 3 CCNCJ 497,502 Akibo Savage J held that incorporation of collective agreement into an individual employment contract is acceptable.
(viii) Clark G de N, ‘Collective Agreements and the Law’ (1969) 32 Modern Law Review 377
(ix) Supra page 151 paragraph D-G
(x) See Union Bank of Nig. Ltd v. Edet (Supra) New Nigria Bank PLC v. Egun (2001) 7 NWLR (pt. 711) 1.
(xi) Quoted in Emeka Chinua (Ibid), Wedderburn, K. W. “The Right to threaten Strike I & II (1961) 24 Modern Law Review p. 572, 577 and (1962) 25 Modern Law Review p. 513, 516.
(xii) Gregory C. O., “The Enforcement of Collective Labour Agreement in the United States (1968)21 Current Legal Problems p. 159, 160. See also, Simmons C. W. “Collective Agreement and the Law of Contract” (1969) 78 Yale Law Journal
(xiii) See Recommendation 91 of 1951. See also De Givry J. “Comparative Observations on Legal Effects of Collective Agreement” (1958) 21 Modern Law Review p. 501
(xiv) Ibid see also Kahn Freund O. “Collective Agreements” (1940) Modern Law Review 225
(xv) Ibid p. 84
(xvi) Oliver Wendell Holmes, Jr., The Path of the Law, 10 Harvard Law Review 460-61 (1897). 2 Oliver Wendell Holmes, in Southern Pacific v. Jensen, 244 US 205, 222 (1917). “What I mean by the law,” Holmes said, are “the prophecies of what the courts will do in fact.”
Adeyemi O. Owoade Esq.
Law Axis 360°