LSP168: Salary Entitlement and Retrospective Retirement

Hello LSP Readers, and Happy New Year! Today’s discussion revolves around an essential aspect of employee rights which is the entitlement to salary and remuneration when faced with retrospective retirement. We’ll explore this topic through the case of Tamti v. Nigeria Customs Service Board (2009) 7 NWLR (Pt. 1141) 631 which examines the implications when an employee’s salary continues, even if the retirement decision is applied retrospectively.

Ordinarily, retrospective refers to something that takes effect from a date in the past. In the case of employment, it means a decision (like retirement) that is applied as if it happened at an earlier time, rather than from the date the employee is formally notified.

Now, imagine working tirelessly for years, earning your salary, only to discover that your employer decides to apply your retirement with retrospective effect, denying you the pay you’ve earned. This situation is not just hypothetical; it is exactly what happened in the case we are about to discuss.

In Tamti v. Nigeria Customs Service Board, the appellant was a Superintendent of Customs employed by the Nigeria Customs Service (NCS) since 1989. Over the years, he was promoted to a senior position. However, in November 2004, the appellant was retired, following an investigation into the disappearance of 270 packages of cargo at Muritala Mohammed Airport. Although his retirement letter was dated 6th September 2004, it was only formally delivered to him on 19th November 2004. The appellant argued that he should receive his salary up until the actual date the letter was served, which was 19th November, rather than from the date it was written.

One of the issues for determination as it relates to this topic is that the court had to determine whether the trial judge’s decision to award salary only up to the date the retirement letter was written (6th September 2004) was correct, or whether the appellant should be entitled to his salary up until the date the letter was served, 19th November 2004.

In response, the appellant’s counsel argued that, based on established legal principles, salary becomes vested at the end of each month, and thus, the appellant was entitled to remuneration up until 16th November 2004 which is the date the retirement letter was officially served. The counsel further emphasized that an employer cannot retire or dismiss an employee with retrospective effect to deprive them of earned salary, referencing cases like Healey v. Societe Anonyme Francaise Rubastic (1917) 1 KB 946 and Underwater Engineering Co. Ltd. v. Darusha Dubefon (1995) 6 NWLR (Pt. 400) 156.

In Underwater Engineering Co. Ltd. v. Darusha Dubefon (supra), the Supreme Court held that the respondent’s absence from duty from 20th May to 12th October 1982 was due to his arrest and prosecution at the instance of the appellant. The court clarified that the respondent did not voluntarily abscond from work and reasonably believed that his employment was still active up until he was orally informed on 12th October 1982 that his services were no longer required. The Supreme Court concluded that the respondent was entitled to remuneration for the period from May to October 1982, as his salary was vested monthly, and the employer could not withhold payment for that period.

Interestingly, the respondent’s counsel did not respond to this specific argument, leaving the court to consider only the appellant’s position.

Giving its judgment, the Court of Appeal found in favour of the appellant, declaring that his salary and allowances should be paid until 16th November 2004, the date the retirement letter was actually served. The court held that salary is vested at the end of each month, and an employer cannot apply a retrospective retirement to deny an employee their due wages. The judgment was based on previous case law, particularly Underwater Engineering Co. Ltd. v. Darusha Dubefon, which reinforced the principle that an employee’s employment continues until formal notification is made.

Now, a little knowledge has been added. Thank you for reading. See you next month.