Court faults Direct on Data Ltd for selling assets without paying staff salaries

The National Industrial Court (NIC), Lagos has faulted Direct on Data Ltd for selling its assets to another company without paying the salary of one of its staff, Essien Aquaisua.

The court declared that the sale of the ICT firm and the non-absorption of Essien by the new company it was sold to, amounted to a termination of the applicant’s employment.

The judgment delivered by Hon. Justice Elizabeth Oji was published on the NIC official website on Tuesday, April 2, 2024.

What transpired at the proceeding

The claimant had submitted that his former company, Direct on Data Ltd sacked him “by conduct” when it sold off its assets to another company while denying him access to his office and the company’s portal.

Mr. Essien argued that following his discharge without due process, he calculated his entitlement and sent it to the company’s director and new owner, insisting his one-month pay stood at N914,143.

  • Essien’s legal team added, “he never abandoned his employment, but the company’s website and mail servers were shut down, his office taken over, and all facilities therein and he was denied all access (including access to the premises), and the conduct of the firm and its director amounted to termination of his employment by conduct.

However, the company urged the court to hold that Essien failed to establish that Direct on Data Ltd and its Director terminated his employment.

  • The former employee was accused of abandoning his work and “cannot be entitled to any terminal benefit from the Direct on Data Ltd and/or its Director whatsoever.”
  • Based on the doctrine of corporate personality, the Director cannot be held liable for any obligation the Direct on Data Ltd owes to Mr. Essien under the employment relationship, and neither can those obligations be imputed to the Director,” the ICT firm’s legal team posited.

Court agrees with ex-staff

Delivering her judgment, Justice Elizabeth Oji agreed with the claimant’s submission.

The judge said,

  • The sale of Direct on Data Ltd to another company had changed the circumstances of Mr. Essien’s employment and did not see the practicability of the Director’s assertion that Mr. Essien was still regarded as a staff of the Direct on Data Ltd without the new company absorbing Mr. Essien even though it absorbed others.
  • The Court subsequently ordered Direct on Data Ltd and its Director to “pay Mr Essien the sum of N914,143.1(Nine Hundred and Fourteen Thousand, One Hundred and Forty-Three Naira Ten Kobo) being one month salary in lieu of notice of termination, and the sum of N200,000.00 as the costs of action within 30 days.”

The judge held that the claimant tendered exhibits to show that he was not paid before the company sold its assets.

More Insights

  • The National Industrial Court of Nigeria is a judicial institution established in 1976 to preside over issues relating to the Trade Disputes Act.
  • It has jurisdiction over labour issues, civil matters, child trafficking, employment issues, entitlement/allowances, and sexual harassment at the workplace.

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