In a significant ruling, Hon. Justice Joyce Damachi of the Lagos Judicial Division of the National Industrial Court has declared the Nigeria Inter-Bank Settlement System’s (NIBSS) deduction of a former employee’s salary and benefits as unlawful and oppressive.
The court ordered NIBSS to pay Mr. Kayode the sum of N8.2 million within 30 days, along with N500,000 as cost of action.
Mr. Kayode, who was employed by NIBSS in 2014, had his services abruptly terminated in August 2019 through phone and email notification. During his tenure, NIBSS paid him part of his salary upfront, including allowances for housing, furniture, and travel (estacode).
Following his dismissal, the company claimed he owed N18.4 million as “unearned upfront” payments, which could be reduced to N7.5 million if he returned the official car. Although Mr. Kayode complied by returning the vehicle, NIBSS proceeded to seize N8.2 million from his salary entitlements.
NIBSS defended its actions by asserting the termination was conducted according to due process and insisted the upfront payments were discretionary benefits subject to repayment upon early exit from the company. The company also counterclaimed over N10 million as balance due on the upfront allowances plus N5 million in solicitors’ fees.
However, Justice Damachi found that the terms and conditions surrounding the upfront payments and their repayment were unclear and unconfirmed by any enforceable agreement.
The court held that Mr. Kayode could not be held indebted to NIBSS, deeming the salary deductions unlawful and oppressive. The judgment underscored that NIBSS’ action amounted to self-help without following proper legal procedures to recover any alleged debts. The ruling requires the company to refund Mr. Kayode’s withheld salary and benefits, marking a notable victory for employee rights in Nigeria’s industrial relations landscape.
