1.0 INTRODUCTION
Determination of a contract of employment is the process of bringing a contract to an end. This may occur by dismissal, retirement, or termination.[1] The notion in general refers to the act of ending the employment in any of the variety of ways that’s contracts end.[2] This chapter assesses the provisions of the law as it relates to determination of contracts of employment generally. This we will do by looking at the definition and nature of determination of contracts of employment, the modes of determining a contract of employment and the basis of dismissal. In so doing, it addresses the first specific objective of this research while giving answers to the first research question. In doing this, the thesis discusses the theory of Career is Property which is to the effect that work is central in employment and a worker must spend a reasonable time in a job for it to become his property. A worker’s job must not be taken away from him discriminately as doing so will mean taking away his career which is his source of livelihood in future. Thus, to better secure employment, employers must base their decisions on the above theory which is aimed at protecting workers against unfair termination of employment contracts.
1.1 DEFINITION AND NATURE OF EMPLOYMENT CONTRACTS
An employment contract is any oral or written, expressed or implied agreement specifying terms and conditions under which a person consents to perform certain duties as directed and controlled by an employer in return for an agreed wage or salary.[3] Whether stated or not in the contract, both the employee and the employer owe the duty of mutual confidence and trust and to make only lawful and reasonable demands on each other. Every employee is under the duty to carry assigned duties and the employer’s instructions to the best of his abilities. The employee on the other hand is under the obligation to protect the employee from harm and injury and make compensation for any loss arising from any job-related accident.[4]
By section 23(1) of the Labour Code 1992, a contract of employment is an engagement which by the agreement of the parties, a worker undertakes to put his services under the authority and management of an employer against remuneration. The definition was adopted in CARFOP v. Kan Enroy Moses Payne[5] by Bawak JCA as the basis of the conclusion that there was a contract of service between CARFOB and the respondent who was seconded to it from the Ministry of Finance.
A contract of specified duration is, on the other hand, defined in section 25 (1)(a) of the Labour Code 1992 as one in which the duration is specified in advance by both parties to the occurrence of a specified event. These employments which are for periods not exceeding two years are renewable once. However, at the end of the renewal period, if a working relationship ensues, the contract can be transformed into a contract of unspecified duration as provided for in section 25(3). However, an extension of a contract of specified duration more than once automatically converts the contract into a permanent employment. Since generally, workers are oblivious of this fact, they continue to work as if they were under a contract of specified duration. Where the worker involved is not of Cameroonian nationality, such renewal will be possible only after endorsement by the Minister in charge of Labour.[6]
Contracts of employment may be specified but non-renewable. The termination of such contracts may depend on the intention of the parties, an event so stated in the contract[7] or the performance of a specified activity.[8]
According to section 25(4) of the Labour Code 1992, contracts of employment do not include seasonal job contracts resulting from the climatic nature of a company’s activity.[9] They do not also include occasional jobs created by unexpected growth of company activities resulting from urgent work to prevent accidents, organizing emergency measures, repairing company equipment, facilities or buildings that are dangerous for workers[10], as well as temporary jobs to replace suspended or absent workers in order to complete a piece of work within specified time limit requiring additional workers.[11] All such contracts can only can only be for periods of between one to fifteen days renewable once.[12]
Even though labour regulations between workers and employers under section 25 (4) are not binding on temporary or seasonal workers, section 26(5) does nevertheless recognize that a contract of employment exists between these classes of workers and a temporary job contractor who engages them.[13] Section 39(3) of the Labour Code 1992 and the decision in Akamangwa Martin case combined provide that it is a question of fact whether an individual is a worker once he has declared his status as a worker. The fact that the temporary job contractors pay the salary, medical bills and social insurance benefits of such seasonal workers does not make them their employees. However, they are workers of the user of enterprise who employed them.[14]
Common law recognizes that there could be part time employees who are not servants as conceptualized above. Although the amount of work given is not an indication of the status of employment, persons working on part time basis may never the less be employees if the element of control and the mutual obligation to work and provide work are present.[15]
1.2 TERMINATION AND MODES TERMINATION OF EMPLOYMENT CONTRACTS
Termination in common parlance is defined as the act of bringing to an end or coming to an end in space or time.[16] It is the process whereby an employment is determined in accordance with the parties’ agreement or at least what the law regards as their agreement.[17] This principle is a product of the general rule that parties are bound by the terms of their employment.[18]
Section 34(1) of the Labour Code refers to the termination of contracts of employment of unspecified duration. It asserts thus:
“A contract of employment of unspecified duration may be terminated at any rime at the will of either party. Such termination shall be subject to the condition that previous notice is given by the party taking the initiative of terminating the contract. Notification of termination shall be made in writing to the other and shall set out the reason for the termination. The notice period shall start to run from the date of such notification. It shall not be subject to any condition precedent or condition subsequent. Under no circumstance may it be set off against the leave period of the worker. Where the above obligations are not respected by one of the parties, no period of notice shall be without prejudice to the right of the injured party to claim damages.”[19]
It is perhaps necessary to commence the analysis of this provision by noting that the section has not defined termination. Note be taking that the above section has not defined the term termination but rather gives various conditions of termination. To this effect, it is important to turn to other writers to get the meaning of termination. The concept has been defined as referring to the process by which a contract is put to an end in accordance with the pre-determined rules regulating the employment.[20] In situating this definition in our Cameroonian context, it must be observed that such rules are normally derived from the terms of the party’s employment, the provisions of the labour code, other legislations and collective conventions where relevant.[21]
In general, the contract of employment terminates when the obligations in the employment which are provided in the terms of the contract are fully performed.[22] These obligations normally relate to the duration of time. Whatever the reasons, it will be a breach of contract if the express provisions of section 34(1) of the code relating to written notice specifically the reasons for termination is not given.[23]
1.2.1 Modes of Termination of Employment Contracts
Termination of contracts of employment revolves around the contractual relationship between the parties governed by common law rules, statutes, and or agreement of the parties.[24] With regards to section 34 of the 1992 Labour Code, it needs to be specifically noted that the first sentence apparently codifies the common-law principle that permits either party in a contract of service to terminate it at will. This freedom of either party to an employment contract to put an end to it was read into a similar provision in a previous labour code by the Supreme Court in Ngo Minyemeck CATHERINE V COMACICO[25] when the court held that an employer was legally at liberty to terminate a contract of employment.
Indeed, in yet another decision delivered a month later, the same court in Mazioh Claude v S.E.A.C[26] affirmed the employer/workers freedom to terminate a contract of employment at will. The Supreme Court in Mazioh Claud’s case rejected the argument that the right to terminate can be taken away because of the illness of the worker. These decisions were clearly animated by the near universal philosophy of the laissez faire notion of the freedom to contract as well as determine contracts of employment at will.
However, in spite the fact that the sentence is declaratory of the common law notion of the freedom to terminate an employment contract, it will be hasty to suggest that this weakens the security of tenure of a worker in Cameroon as it is clear from the new Labour Code that the right to terminate may not be abusively and negligently used against a worker.
The nature of contracts of employment determines the mode of its termination as well as the legal consequences of a wrongful termination or an unlawful termination. Generally, a contract shall be terminated:
- By the expiry of the period for which it was made; or
- By the death of the worker before the expiry of that period; or
- By notice in accordance with section 34(1) of the Labour Code or in any other way in which a contract is legally terminable or held to be terminated.
According to Emiola;
Unless a statute provides otherwise, the question as to the duration of an employment or the length and nature of the notice required to determine it will depend on the intention of the parties which may be gathered from the express or implied terms of the contract or may reasonably be inferred from the circumstances.[27]
Termination could be by notice, lapse of time, operation of law, subsequent agreement or repudiation.[28] The most usual form of termination is by notice.[29] The various modes of termination of contracts of employment will be discussed below.
1.2.1.1 Termination by Operation of Law
This refers to the determination of a contract of employment through the automatic effects of law and not by private agreement or the direct intervention of the parties to the contract of employment.[30] An employment contract can be terminated by operation of the law in the following ways:
1.2.1.2 Termination by Frustration.
A contract of employment can also be deemed terminated by operation of law as a result frustration. This occurs when the performance of the contractual obligation is rendered impossible. Frustration of contracts entails the premature determination of an agreement lawfully entered into between parties. This is owing to the occurrence of an intervening event or a fundamental change during its operation as to be regarded by law both as striking at the root of the agreement and as entirely beyond what was contemplated by the parties when they entered into the agreement.[31] This doctrine of frustration applies to contracts of employment as it applies to contracts generally. The underlying principle of frustration was formulated in Dans Contractor Ltd v Fareham D.C[32] as follows:
“Frustration occurs whenever the law recognizes that without default of either a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. It is not hardships or inconvenience or material loss itself which calls the principle of frustration into play. There must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, is different thing from that contracted for. It is not hardships or inconveniences or material loss itself which calls the principle of frustration into play. There must be as well a change in the significance of the obligation that the thing undertaken would, if performed, is different thing from that contracted for.”[33]
In labour law, when unforeseen circumstances beyond the control of both parties occur making it impossible for the employer and employee to perform their contractual obligations as was initially agreed, or if performed, it will be radically different from what the contracting parties had envisaged[34]
Frustration kills the contract with the effect that the parties to the employment are discharged from their contractual obligations.[35] Per, Uvieghara[36], the contract law position of the principle of frustration is applicable to employment contracts. According to him, this occurs where the changes in the circumstances of employment are such that it will render the further performance of the contract impossible or where the obligations undertaken by the parties under the contract have become radically different.
It is in this wise that Fokum[37] contends and the candidate adopts her contention that a contract of employment can be terminated by frustration upon long illness of employee, imprisonment of the employee or death. This mode of termination occurs as a pure function of the law which should in the natural course in the business be expected and planned for. Although the Labour Code is mute as to this doctrine, it cannot be gainsaid that as a general common law principle the doctrine of frustration in employment contracts is applicable here on the basis of section 156 of the Code.[38]
1.2.1.3 Termination due to ill health
At common law[39], the illness of an employee per se does not automatically bring a contract of employment to an end.[40] It is only where worker is struck by occupational disease or industrial accident, which makes it impossible for the employee to take up his/her service permanently that the contract of employment can be said to be terminated by frustration due to incapacity.[41]
The above common law position is codified in section 32(c) of the Labour Code, which provides that, a contract of employment shall be suspended; “during the worker’s absence in the cause of ill health duly certified by a medical practitioner approved by the employer or one belonging to a hospital establishment recognized by the state, for periods not exceeding six months…shall be extended until such time as the worker is replaced.”
Section 32(g) of the Code further provides that a worker’s contract will be suspended during any period of unavailability following an industrial accident or occupational disease. Since section 89(3)(a) – (b) actually sees these periods of incapacity as periods of leave, it follows that this ‘ leave’ cannot at the same time amount to a termination of the employment by frustration.[42] The issue is made clearer by the second limb of section 32(g) which extends the six months period of sick leave indefinitely to ‘ such a time as the worker is replaced.’ Does it therefore mean that for security of service, a worker who has been debilitated for more than six months whose work rule or collective bargaining agreement is silent can sue for wrongful dismissal if he is terminated because of absence from work due to ill health if he has not been replaced? It is asserted that from the above, such a worker can sue for wrongful dismissal which further strengthens the security of service.
It is important to draw the fine line, which separates frustration of a contract of employment due to ill health from dismissals by reason of disability[43] as was done in the TRAPP Groupement d’ Enterprise v Che Guza Cletus.[44] Here, the plaintiff was employed as a welder for the stone crushing machine of the defendant who were road constructors. He developed ear problems later in the course of employment and a declaration to this effect was sent to National Social Insurance Fund.
Following the defendant’s physician’s report that the plaintiff had developed ear problems, which needed continues medical attention the plaintiff was transferred from his post as welder to that of general labour. However, the defendant on economic grounds subsequently terminated him. The plaintiff brought an action for wrongful termination. The plaintiff argued that his termination was not for economic reasons but the occupational disease he suffered as a result of the defendant’s failure to give him proper medical care. His termination according to the plaintiff was a disguise which enabled the defendant to escape the issue of wrongful termination.
After reviewing the above facts, the trial judge held that the worker’s redundancy was wrongful and entered judgment in his favour. This decision which was confirmed upon appeal to the Bamenda Court of Appeal, enhances security of tenure in that in finding that the worker was wrongfully dismissed (although the worker’s contract with the employer had ended), gave room for his entitlement to accrued wages and damages for wrongful dismissal.[45] Had the appeal not arrive at a decision of wrongful dismissal, the plaintiff would have been entitled only to redundancy benefits which would not have been up to the entitlements he got.
Since the facts of the case reveal the fate of many workers who are dismissed under the pretest of economic reasons, it is for reason of security of service imperative to distinguish at all times between termination due to frustration and termination on economic grounds. This is because in the later, the employer has to pay only compensation while in wrongful dismissals the employee is entitled to damages and or other forms of remedies.[46]
1.2.1.4 Termination due to Imprisonment.
Even though under common law a contract of employment can be frustrated by imprisonment, Section 32(1) of the Labour Code merely provides that where worker is under preventive detention or police custody, the contract of employment maybe suspended, but not terminated. Reading the expression unio est exclusion alterius rule (stating one thing excludes the other) alongside section 32(i) of the Code where a worker is given a prison sentence, the contract of employment may be terminated by frustration without the need for compensation to be paid by either party to the contract.[47]
The Cameroonian position as stated above is different from that in English common law. Under the latter, it is not whether there is conflict as to whether imprisonment actually frustrates a contract of employment. The decision of the National Industrial Relations Court in Hare v Murphy Brbecause[48] which held that the plaintiff’s sentence of imprisonment was not a frustrating event because it was brought about by his own act in committing the offence for which he was imprisoned. Upon appeal to the English Court of Appeal, Lord Denning M.R held that the sentence of imprisonment did not frustrate the contract of employment because of the length of time he would be away from work and the importance of his position to his employer as a foreman.[49] It may be observed that Lord Denning in this decision made an analogy with a case where the contract of employment of a worker who is incapacitated for 8 months as a result of an accident will be frustrated even though the contract was determinable on short notice.[50] It is evident that the situation in Cameroon protest employment better than what obtains in England in this area of employment law.
1.2.1.5 Termination by Death
An employment contract is terminated on the death of either party to the employment. Whenever one of the parties comes across death, contractual relations will come to an end.[51] At common law, the death of any of the parties to an employment contract will terminate the contract. This common law position though not expressly provided for in the Labour Code may be applied in Cameroon where the employee dies. This is so because contracts of employments are contracts of personal service by virtue of section 31 of the Labour Code which cannot survive the death of the worker.[52]
Fokum[53] argues and the candidate agrees with her contention that the death of an employer does not necessarily bring the employment contract to an end. Obviously, an employer which is a company, cannot automatically terminate its employment because of economic difficulty leading to the compulsory liquidation of the company.[54] Thus, the parties are not discharged of their contractual obligations only on the basis that the company has gone into liquidation as opposed to cases of frustration. The employer in the former case will have to pay the employer certain benefits like lump sum payments for redundancy. It is for this reason that the death of an employer which is a company is sometimes not seen as frustration.[55]
1.2.1.6 Termination for Economic Reasons
Termination on economic grounds refers to a situation where workers lose their job because the employer has ceased or intends to cease to carry on business. It could also result from diminished business activity.[56] When termination is set going by economic difficulties, the worker is said to have been made redundant or retrenched by the employer.[57] In practice, this occurs when there is either a closure of the employer’s business, reduction in staff for better economic management of the enterprise so long as it is not capricious.[58] It could also occur where the employer’s business is transferred or substantially changed.
By section 40(2) of the Labour Code a dismissal for economic reason occurs where the employer “for one or more reasons not inherent in the person of the worker” relieves the worker of his service. The discharge must necessarily result “from an abolition or transformation of posts or an amendment to the contract of employment consequent on economic difficulties, technological changes, or internal reorganization.”
This type of dismissal is similar to that under common law where employment is said to determine by operation of the law. The contract of employment ends simply because the law regards the contract as determined. This situation is distinguished from the normal circumstances by which employment are determined either by effluxion of time for contracts of fixed period, or by notice in employment of an unspecified duration. The termination of the employment under this general rubric is scribed to circumstances beyond the control of either the employer or the worker.[59]
The employment of an employee engaged for a short term to perform a specific assignment could be determined by frustration under the principles in Pousard v Spiers[60] if he is incapacitated to either illness or any other phenomenon that makes it impossible to carry out his obligations under the contract. It was thus in this case held that the illness of the plaintiff which prevented her from performing single role in opera for which she was engaged had frustrated the employment.
[1] Fokum, I.D.N, The Security of Service, op cit. p 144
[2] Ibid
[3] Rebecca Nkumeh Akumbu (2010) “The Consequences of the Unlawful Termination of Employment Contracts”. Unpublished Thesis for the LL.B, University of Buea: 13.
[4] Ibid
[5] Carfob v Kan Enrol Moses Payne (2001) (Unreported). 1 CCLR.
[6] Fokum, I.D.N, The Security of Employment, op cit. p 86-86. See Section 25(2) of the 1992 Labour Code.
[7] Ibid, see also Section 25(1) (a) para 1 of Labour Code 1992.
[8] Ibid, see section 25(1)(a) para 2.
[9] Ibid, see section 24(4) (c).
[10] Ibid see also section 25(4)(b).
[11] Ibid, see section 25(4)(a).
[12] Article 5(2) OF Ministerial Order Law No 93/577/P of 19th July 1993. Also Although article 7(1) of Law No 93/577/P of 19th July 1993 converts all such seasonal job contracts of unspecified duration if they exceed the legally authorized period without termination.
[13] A temporary job contractor according to section 26(2) of the Labour Code shall mean any individual or corporate body whose sole activity consists in temporarily providing users with workers whom they recruit and pay.
[14] D.N, Fokum, The Security of Employment, op cit, p 87.
[15] Ibid
[16] M.R. Freedland, The Contract of Employment Oxford; Claredon Press, 1976:142
[17] M. A. Yanou, “Labour Law: Principles and Practice in Cameroon”. Op Cit.
[18] This was recognized in the Supreme Court Appeal No 202 of 16/5/1961
[19] M.A Yanou “Principles of Law and Practice in Cameroon”. Op Cit. p 64
[20] Ibid
[21] Ibid
[22] Ibid
[23] Ibid
[24] S, Erugo, ‘Security of Employment in Nigeria: A Case for Statutory Intervention’, NJLIR Vol. 1 No. 1 (2007) p.60
[25] Appeal No 25 of 21/3/1974
[26] Appeal No 45 of 25/4/1974
[27] A, Emiola, Nigerian Labour Law, (4thedn, Ogbomosho: Emiola Publisher Limited, 2008) p. 127.
[28] Ibid
[29] Section 34(1) of the 1992 Labour Code
[30] Fokum, op cit, at p 158.
[31] Mazin Engineering Ltd v Tower Aluminium (Nig.) Ltd Supra P. 534; Warner & Warner International Associates v Federal Housing Authority 19936 NWLR (pt. 298)148.
[32] (1956) AC 696 at 729.
[33] Modes of Termination of contract of Employment . Accessed at www.docsity.com
[34] Roger W., “Principles of Labour Law”, London: Stevens, 1977.
[35] Per Viscount Simon L.C. in Joseph Constantine Steamship Ltd v Imperial Smelting Corporation Ltd 1942 A.C 154.
[36] Uvieghara, E.E., “Labour Law in Nigeria”, Lagos, Malthouse Press LTD, 2001, P, 13.
[37] Fokum, I.D.N, op cit. p 160
[38] Ibid
[39] See for example the case of Warburton v. Co-operative Wholesale Society LTD [ 1917] 1 KB 663.Where the court of Appeal held that ‘it has long been settled that a contract of service is not terminated by incapacity to work by reason of temporary illness, and that upon return to work, the man can recover his wages during the period of his absence’ due to ill health.
[40] Yanou, M.A., op cit at p. 85-86
[41] This then gives the employer the right to employ another in place of the incapacitated employee.
[42] Fokum, I.D.N., op cit at p. 161
[43] Ibid
[44] Appeal No.BCA/2.1/98 (unreported).
[45] Fokum, I.D.N., op cit. p 162-163.
[46] Ibid
[47] Ibid
[48] 1994 1RLR 342.
[49] Stevenson L.G, in the same case observed that a sentence of imprisonment did terminate an employment and it did not matter whether the termination was labelled a frustrating event, repudiatory conduct, a breach going to the roots of the contract of employment or impossibility of performance.
[50] Fokum, I.D.N., op cit. p 165.
[51] www.lawofbusiness.com Accessed on 10/03/22
[52] Fokum, I.D.N., op cit. p 166.
[53] Ibid
[54] Ibid
[55] Ibid
[56] Ridout, R.W. op. cit at p. 269.
[57] Ibid
[58] John Anagha v Agip Cameroon S.A. Suit No.WC/11A/69 HC (Unreported).
[59] M.A Yanou, “Labour Law: Principles and Practice in Cameroon”. Op Cit. p 84.
[60] M.A. Yanou, “Labour Law: Principles and Practice in Cameroon”, Op Cit.pg 85