LSP091: Resignation and Dismissal of an Employee

Nothing lasts forever. As such, a contract of employment could come to an end through the dismissal or retirement of an employee. However, the two are mutually exclusive. The principle of law is that once either dismissal or retirement has taken place, the other cannot follow because the two serve the same purpose. 

In Unity Bank PLC v Bako N. Chori 2021 LPELR l-55720(CA), the court per ONYEMENAM, J.C.A opined that “I acknowledge that, though the two serve the same purpose, that is, to bring to an end the life of a contract of employment, there is a clear difference. Dismissal is punitive, and usually without any terminal benefits to the employee. The employee stands disgraced and held in ignominy. On the other hand, when an employee is retired, he receives his terminal benefits under the contract of employment.”

In that case, the Respondent was an employee of the Appellant who rose to the position of a manager in one of the branches of the Appellant where he worked as a branch manager. The Appellant alleged that one of her customers applied for a facility of N5 Million but the sum of 10 Million was processed for him on the purported advice of the Respondent as the branch manager with the understanding that he will give the Respondent N5 Million to use and to later settle the account together. The Respondent responded to the said allegation and nothing was heard about it again until after his purported retirement. 

The Respondent by the policy of the bank was retired on grounds of age along with other staff. Pursuant to the said retirement, the entitlement of the Respondent was calculated and paid into his account but was withdrawn by the Appellant the same day on ground of error. The Appellant thereafter dismissed the Respondent on the ground of misconduct.

The Court held that an employer cannot legally dismiss an employee who had earlier retired since, after his retirement, such an individual ceases to be his employee. The Respondent earlier retired on 23rd July, 2012 before the purported dismissal on 1st August 2012. Since dismissal and retirement cannot exist side by side nor follow each other, the first in time which is retirement prevails after having ended the contract of employment already.

In conclusion, this principle reflects the general principle of nature that one cannot place something on nothing and expect it to stand. Given that the said individual has retired and ceased to be an employee, an employer can’t then dismiss him. Oti lor

Thank you for reading. See you next week.