Nigerian Employment Law Review

Procedure for Terminating Contractual Employment on Grounds of Redundancy in Nigeria

In order to survive in business in the current economic downturn in Nigeria, Employers may have to terminate the employment of their redundant staff. To avoid trade union disputes, industrial actions and damages for breach of contract employment, it is important for Employers to know the proper legal procedure in terminating the employment of their Employees on grounds of redundancy.

What are the basic legislations regulating employment matters in Nigeria

The Trade Union Act, CAP T14, Laws of the Federation, 2004 (“the Trade Union Act”), the Labor Act, CAP L1, Laws of the Federation of Nigeria, 2004 (“the Labor Act”), Trade Disputes Act, CAP T8, Laws of the Federation of Nigeria, 2004 (“the Trade Disputes Act”), National Industrial Court Act, No 38. Vol. 93, 2006, Laws of the Federation of Nigeria and the National Industrial Court Rules, 2007.

What is the status of Collective Agreement under Nigerian Law?

Nigerian courts adopt the common law principle that Collective Agreements of Trade Unions are generally unenforceable. This is because there is no privity of contract between the Trade Union who agreed to the Collective Agreement and the Employer. In essence, the Collective Agreement is not a Contract between the Employer and its Employees. This is because the Employer did not participate in the negotiation meeting which resulted in the Collective Agreement.

Nevertheless, where the Minister of Employment, Labor and Productivity promulgates an order for a Collective Agreement to be incorporated into Employees’ Contract of Employment; or a Collective Agreement is incorporated by reference into the individual Contract of Employment of Employees; or the Employer makes reference to it in its relationship with the Employees; or adopts the provisions of the Collective Agreement in arguing its case, the Employee may validly claim rights under the Collective Agreement.

Moreover, Section 23 (1) and 23 (2) (d) of the Trade Union Act, provides that;

23 (1)”…….nothing in this subsection shall enable any court to entertain any legal proceedings instituted for the purpose of directly enforcing any agreement mentioned in subsection (2) of this section, or of recovering damages for any breach of any agreement so mentioned

23 (2) (d) “any agreement such that every party thereto is one or other of the following, that is to say, a trade union or the Federation of Trade Unions”  

The import of the above provisions is that the Courts would not enforce the provisions of a Collective Agreement on the Employers if the parties to the Agreement are Trade Unions or Federation of Trade Unions only. The Employer would have to adopt the Agreement for it to be binding on it.

What is the status of the Employee’s Union’s membership of a Federation of Trade Union?  

Section 3 of the Trade Union Act provides that at least 50 members of the Union shall apply to register a trade union. Some labor law scholars contend that the right to organize Union activities in Nigeria does not extend to workers of companies of less than 50 persons.

Therefore the legality of Employees’ Union activities and resolutions reached in their meetings is in serious doubt if its members are currently less than 50 members

What is the notice period for termination of employment on grounds of redundancy?

The Employer would rely on the period of notice stated in the Contract of Employment, Collection Agreement or other rules and regulations incorporated to the Contract of Employment or the Internal Conditions of Service of the Company or pay the salary of the Employees in lieu of notice.

If none of the above documents provides for termination notice, the Employer would have to rely on the provisions of Section 11 (2) of the Labor Act which provides that the Employee will be entitled to;

  • (i) 1 day notice, where the contract has continued for a period of 3 months or less;
  • (ii) 1 week notice, where the contract has continued for more than 3 months but less than 2 years;
  • (iii) 2 weeks’ notice, where the contract has continued for a period of 2 years but less than 5 years; and
  • (iv) 1 month notice, where the contract has continued for 5 years or more.

What are the reasons for termination of the employment of the Employees to be stated on the Termination Notice?

The Nigerian labor law acknowledges that an Employer reserves the right to pay off any Employee whether on the basis of redundancy, idleness etc. or at the end of a project where the Employee is engaged.

Section 20 (1) of the Labor Act provides that the Employer shall inform the trade union or workers’ representative concerned reasons for and the extent of the anticipated redundancy. Section 20 (3) of the Labor Act defines “redundancy as an involuntary and permanent loss of employment caused by an excess of manpower

Though the definition of excess of manpower is not stated in the Labor Act, the Courts have considered the acquisition of a company, restructuring, reduction of production line, shortage of raw materials, economic and technological reasons as valid grounds for declaring redundancy. An Employee has no right not to be declared redundant in line with the terms of his employment or Collective Agreement which is applicable to him.

What are the criteria for computing the severance package upon termination of employment on grounds of redundancy?

Section 20 (1) (c) of the Labor Act provides that the Employer shall use its best endeavors to negotiate redundancy payments to workers who are not covered by the Minister’s regulations on the subject matter. Since the Minister has not promulgated these regulations, the Employer would be bound to compute the benefits of the Employees based on the provisions of the individual Contract of Employment of the Employees, the rules and regulations or any Collective Agreement and the provisions of its Internal Conditions of Service (“the relevant documents”).

Nevertheless, to show its good faith and best endeavor, the Company may at its sole discretion, meet with representative of the Employees to agree on other customary heads of claims and allowances not mentioned in the relevant documents. The Termination notice must clearly list the severance benefits of the individual Employee. Since each Contract of Employment constitutes a distinct course of action, the Company must give each Employee his Termination notice.

MILAN

DWF opens sixth office this year in Italy

DWF has opened its sixth office this year – this time hiring a three-partner team in Italy.

Three partners from Pavia e Ansaldo are joining DWF for the launch in Milan, along with 13 lawyers.

Corporate finance partner Michele Cicchetti will become managing partner of DWF’s Italian operations, joining alongside tax partner Tancredi Marino and M&A partner Luca Cuomo.

Real estate associate Daniele Zanni will also be joining the team as a partner.

DWF has launched six offices this year, including two new operations in Continental Europe. The firm opened in Berlin in March after hiring two lawyers from DLA Piper. It also launched its first office in France through a merger with four-partner Paris firm Heenan Paris.

In the Asia Pacific region, DWF also launched two offices in Melbourne and Brisbane through a combination with independent firm MVM Legal. DWF further opened in Singapore after hiring from Eversheds Sutherland’s practice.

As well as office launches, DWF has agreed several new associations with local firms. DWF announced an association with Saudi Arabian firm Harasani & Alkhamees in February, giving it offices in Riyadh and Jeddah.

There were a further trio of associations in South America, as DWF entered into a non-exclusive best friends arrangement with Vagedes & Associados in Argentina, Fabrega Molino in Panama and Duarte Garcia Abogados in Colombia.

MILAN

HSF to launch in Milan with Simmons hire

Herbert Smith Freehills (HSF) is set to open an office in Milan next year with the hire of Simmons & Simmons Italy dispute resolution and intellectual property head Laura Orlando.

The base, which is due to open in early 2018, will be HSF’s first in Italy and its tenth office in Europe.

Orlando (pictured) joined Simmons in 2010 from local firm Trevisan & Cuonzo, becoming partner in 2014. She specialises in contentious and non-contentious IP, with a focus on patent and regulatory law in the life sciences sector.

According to Simmons’ website, her exit will leave the UK firm without another IP partner in Italy and with one disputes partner. Simmons will not immediately replace her in her management roles.

Two associates and one trainee will join HSF alongside Orlando, with the departures leaving Simmons with 30 associates and 10 partners in its wider Milan office. The firm previously closed in Rome in January 2016 to focus its efforts on Milan.

HSF head of UK and US disputes and global head of intellectual property Mark Shillito said: “We decided to start with a specialist IP offering in Milan because there is a clear client demand for it. One of our big areas is pan-European patent litigation, so for the past few years we’ve been thinking about how best to add to a pan-European offering. Laura is someone we’ve worked with for joint clients and referral matters for the last few years and we think she’s the best in the market.”

He added: “London will increasingly support the new office on pan-European work and we expect it to be a busy and profitable part of the practice. At the moment we’re not planning to open in any other practice areas [in Milan] but we are optimistic about future growth.”

HSF chief executive Mark Rigotti added: “We were one of the few international firms of our scale not to have an office in Italy, so it’s always been something we’ve kept under consideration. There are also a lot of strong local firms there, so we had to consider what we could add that wasn’t already there. Why go into a crowded market unless you can stand out?”

The new office is the second launch announced by HSF this year after confirming plans to open in Kuala Lumpur in May, marking the firm’s ninth base in Asia.

 

BLP and Bryan Cave have entered into preliminary merger negotiations

Berwin Leighton Paisner (BLP) and Bryan Cave have entered into preliminary merger negotiations.

BLP managing partner Lisa Mayhew said: “Our two firms share a strong commitment to innovation in the interests of our clients. We also have an unusually strong cultural fit with a mutual focus on collaboration across our businesses in the interests of deep and lasting client relationships. It is encouraging for the potential firm that BLP and Bryan Cave both have this complementary heritage, but crucially also share the same ambitions for the future.”

Bryan Cave chair Therese Pritchard said: “If we combine we will operate without regard to geographic boundaries. Our firm would be one of only a handful of global firms operating in a one-firm structure with more than 500 lawyers in both the US and also internationally. We will seamlessly provide counsel to clients across the globe, deliver client service at a new level and use technology and innovation to redefine efficiency in the practice of law.”

A merger would create a firm of around 582 partners and $989.5m (£744m) in annual turnover, and would gift BLP with an additional 13 partners in London. The firm would have 32 offices in 12 countries and a platform of 1,200 lawyers.

Linklaters

Linklaters hire Latham & Watkins investment funds co-head

Linklaters has made a key addition to its City investment management group, with the hire of Latham & Watkins investment funds co-head Tom Alabaster.

Alabaster, a specialist private equity fund formation lawyer, has been at Latham since 2014, when he joined from the Carlyle Group. He will join Linklaters next month.

At the private equity firm he was a senior counsel, working in both London and New York, focusing on issues such as fund formation, marketing and structuring, as well as various EMEA regulatory and compliance matters. He was also previously an associate at Slaughter and May and Debevoise & Plimpton.

He has a particular focus on advising US institutions operating in Europe, Asia and the Middle East.

The hire of Alabaster is part of a new strategic focus on financial sponsors and funds for Linklaters.

Investment management head Matthew Keogh said: “Tom is one of the UK’s brightest young private equity fund formation lawyers, with specialist global expertise that sits squarely at the heart of the private equity and financial sponsor sectors.

“His cross-Atlantic experience and global outlook make him a perfect addition to our team, supporting our continual prioritisation of financial sponsors and investors.”

Other recent London lateral hires for Linklaters include Ropes & Gray restructuring partner James Douglas, who the firm hired in May, and Goldman Sachs restructuring lawyer, who joined the firm as a partner in March.

The firm recently launched a client committee chaired by banking head Tony Bugg to coordinate the work it does for its biggest key clients, a move described by managing partner Gideon Moore as “one of the cornerstones” of the firm’s new strategy.

 

GERMANY

KWM hires ex SJ Berwin partner for M&A boost

King & Wood Mallesons has hired former SJ Berwin Frankfurt head of corporate Michael Roos to join its German M&A practice.

Myanmar

Reforming Myanmar’s Intellectual Property Laws

Myanmar’s new IP laws are under deliberation by the legislative committee of Myanmar’s parliament and are expected to be promulgated by the end of 2017. Presently, IP protection in Myanmar is inadequate for foreign investors.

The Myanmar government is currently reforming its outdated intellectual property (IP) regime. The Ministry of Education, Science and Technology has prepared four draft IP bills (new IP laws)—the trademark law (TL), industrial design law (IDL), patent law (PL) and copyright law (CL)—in cooperation with the Union Attorney General’s Office and other government ministries.

The new IP law drafts were finalized by the previous Union Solidarity and Development Party (USDP) government in 2014 to encourage foreign investment. However, these IP laws are still in the bill stage and are not yet law. The new IP laws are presently under deliberation by the legislative committee of the Pyidaungsu Hluttaw (Myanmar’s parliament) and are expected to be promulgated by the end of 2017. The body of implementing regulations will take a further three to six months to pass following enactment.

Myanmar’s new IP laws are based on best international IP practices, IP laws of other ASEAN nations, the Agreement on Trade Related Aspects of Intellectual Property Rights and the Ministry of World Intellectual Property Organization recommendations.

Presently, IP protection in Myanmar is inadequate for foreign investors. There are no specific trademark or IP laws other than the Burma Copyright Act 1914, nor any specific provisions concerning the registration of trademarks. While there is a definition of “trademark” under §478 Penal Code 1861, this provides little guidance or protection. The lack of an IP regulatory framework has resulted in a customary protection practice developing, whereby the trademark owner makes a declaration of ownership and then registers this declaration with the relevant Office of Registration Deeds (ORD). In cases of infringement, foreign or domestic investors will present this declaration to the Myanmar authorities. Currently, foreign investors rely on this practice to enforce their IP rights.

Here is a summary of what you need to know about the new IP laws:

Trademark Law

The TL establishes the legal basis for the application, examination and registration of trademarks and is based on the first-to-file principle. Under the TL, the following marks can be protected: (i) smell and touch signs; (ii) visual marks; and (iii) perceivable sound.

Registration as a group/collection of marks will be allowed. Domestic and foreign brand owners can also apply for registration. However, foreign applicants will have to appoint an authorized agent, and this agent must reside in Myanmar. This agent will then represent these foreign mark owners at the Myanmar Intellectual Property Office (MIPO) on their behalf. The MIPO will be established to oversee operations under the new IP laws. Specialized IP courts will also be created to deal with enforcement and infringement.

The TL will allow the trademark applications to claim priority over foreign applications/registrations. The registration process includes:

  • Filing of an application (application must be filed in English or Myanmar language and have a declaration of intention to use)
  • Substantive examination and other formalities
  • Publication for opposition
  • Issuance of a certificate

The duration of protection of registered trademarks will be 10 years from the effective filing date. Each renewal will extend the validity by another 10 years.

The TL contains civil and criminal liabilities for infringements in Myanmar. Such liabilities for a criminal offence may be punishable by a maximum of up to three years of imprisonment or fines or both.

Industrial Design Law

Current Myanmar law does not deal specifically with “industrial design.” Owners only have limited protection by filing a declaration of ownership with the ORD, followed by publication of a cautionary notice in a newspaper to advise the public of design ownership.

An “industrial design” is defined under the IDL as an appearance, in whole or in part, of any industrial or handicraft product and features representable by lines, contours, colors, shapes, textures and/or materials of the product itself and/or its ornamentation.

An industrial design will receive protection under the IDL if it meets these two requirements:

  • Novelty or new
    • An industrial design is considered new if it has not been disclosed to the public in Myanmar or overseas. An industrial design will lack novelty if it is identical or substantially the same as an existing design. The IDL also indicates that an industrial design will not be considered as new if it merely combines features of other designs.
  • Design is not excluded from protection. The IDL provides for certain exclusions, including:
    • Industrial designs that are merely differentiated by technical or functional aspect
    • Industrial designs that are contrary to public order, moral, faith or the cherished culture of Myanmar

Applications for registration can be submitted in English or Burmese. Applications from a Paris Convention country or member state of the World Trade Organization will be accepted for registration, provided that the application is filed within six months of the first-filed application overseas. Publication of the application will be performed in accordance with the Myanmar industrial design regulations.

Any third party may file an opposition with the registrar within 30 days of the publication date of the industrial design application. The applicant of the industrial design application will be provided with an opportunity to file a counter statement to the opposition, and a hearing may be held before the registrar. Decisions made by the registrar are appealable to the director general within 60 days of the publication of the decision.

An industrial design, once registered, will have an initial term of five years from the filing date of the application. This initial term may be extended twice by five years for a total maximum term of 15 years. The owner of the registered industrial design will have the exclusive right in Myanmar to make, use, sell, offer for sale and/or import any product having the registered industrial design. The owner will also have the right to transfer or license the registered industrial design, but such transactions must be registered in writing with the MIPO.

An owner of the registered industrial design may pursue civil and/or criminal action for industrial design infringement. Injunctions are also available upon application to the relevant court. Additionally, the owner has a right to transfer or license the registered industrial design and must record such transactions with the MIPO.

Patent Law

To register any patent, the patent application must be filed with the registrar. The PL allows Myanmar patent applications to claim priority to a first-filed patent application of a Paris Convention country so long as the Myanmar patent application is filed within 12 months of the first-filed patent application.

Once a patent is granted, the patentee will have the exclusive right in Myanmar to make, use, sell, offer for sale and/or import the invention contained in the patent. The patentee will also have the right to prevent others from making, using, selling, offering for sale and/or importing the invention contained in the patent, as well as the right to assign the patent to others.

A patentee may pursue civil action and/or criminal action for patent infringement.

Copyright Law

Under the CL, “copyright” is defined as the exclusive rights of the author of a literary and artistic work. The CL also introduces exclusive rights of performers, producers of phonograms, as well as broadcasting organizations. Original works are also protected by copyright.

The CL provides protection of the original works of a person who is a citizen of Myanmar, or has a habitual residence in Myanmar, or has habitual residence in a member country. “Member country” means a country that is a member of a convention, treaty or agreement relating to copyright to which Myanmar is also a member; or any country which is a member of any international or regional organization related to such convention, treaty or agreement. Such provisions are a reflection of Myanmar’s obligations under the ASEAN Framework Agreement on Intellectual Property Cooperation.

Registration of copyright is not mandatory. If an author or owner wishes to register their copyright, they may file an application at the MIPO. If the registrar grants the registration, it will issue a certificate of copyright registration to the applicant. In general, a term of protection of a work created by an author is the lifetime of the author plus 50 years.

A copyright owner has the exclusive right to reproduce, translate, adapt, arrange, transform, modify and/or distribute the original copyrighted work. A copyright owner also has the right to transfer, assign or license said rights to others. If a registered copyrighted work is transferred, assigned or licensed to others, the applicable agreement must be registered at the MIPO.

There are also exceptions to a breach of copyright, these include:

  • Use of a copyrighted work without authorization of the copyright owner will not be deemed copyright infringement if done for the sole purpose of private study, research, critical review or summary in news media
  • Reproduction of copyrighted work in an appropriate quantity that specifies the name of the author and source in the form of a reference or credit will not be deemed copyright infringement
  • Access to copyrighted work in a library for education purposes
  • Copying of a computer program without authorization will be permitted for the purposes of retaining an original copy as purchased, and/or the backing up of data to prevent loss or damage, providing this is for a consumer’s own use

Under the CL, a copyright owner may pursue administrative action, civil action and/or criminal action for copyright infringement.

Outlook

Generally, the impact of the new IP laws on businesses will be positive. The new IP laws will create a simple, uncomplicated and cost-effective system of IP registration. This will be beneficial to all foreign and domestic businesses who wish to protect their IP, as it can be done cheaply and quickly by most small- to large-scale businesses. For the first time, the whole trademark application process will be clear.

In the long term, the new IP laws will work to protect both domestic and foreign brands. IP law reform will also send a clear message to international investors that Myanmar is serious about IP protection. The new IP laws are a promising step that will encourage further growth in Myanmar’s retail trading, technology and manufacturing sectors.

CREDIT: Duane Morris LLPKrishna Ramachandra and Mr Rory Lang

Simmons third INTL Firm to open in Dublin since Brexit vote

Simmons & Simmons has hired a partner from Mason Hayes & Curran to spearhead a launch in Dublin.

Simmons has hired the Irish firm’s head of investment funds and financial regulation, Fionan Breathnach, ahead of the planned opening.

Breathnach has been at Mason Hayes since 2003. He was previously an associate at PwC legacy law firm Landwell and also spent time in-house at banking giant HSBC.

The Dublin base will represent the first new office for Simmons since 2015, when it opened in Luxembourg. Before that, it launched bases in Munich and Singapore in 2013. However, it has also shut its doors in locations such as Rome in 2015 and Abu Dhabi in 2016.

Simmons managing partner Jeremy Hoyland told Legal Week: “We are going to be opening an office in Dublin. It will focus initially on our asset management clients. We already service those clients in Singapore and Luxembourg but Ireland is a key jurisdiction for fund formation and it is a gap in our offering that we are keen to close. It is currently an important location and it will become more important going forward due to the referendum result.

“Brexit is obviously a fluid situation and we are trying to stay at the forefront of changes. There is a lot of uncertainty.”

The timing and further details of the launch are yet to be confirmed, however, Hoyland said that the office could become full service over time.

Mason Hayes managing partner Declan Black said: “Fionan has made a great contribution to MHC over the years and he will retain many friends here when he leaves. We wish him the very best of fortune.”

The Irish legal market has become increasingly attractive for UK and international firms since the Brexit vote last year.

Like their major clients in the banking sector, many law firms have been examining their post-Brexit footprints to ensure they continue to have access to the European Union (EU) single market and the EU’s courts and decision-making bodies when the UK leaves the EU.

Last month, Legal Week revealed that US firm Covington & Burling is currently waiting for regulatory clearance from the Irish Law Society to launch a life sciences and technology focused office in Dublin.

Earlier this year, Pinsent Masons opened in Dublin with the hire of three partners from local firms, making it the first international firm to open in Ireland following last year’s Brexit vote.

Other UK and international firms with bases in the Irish capital include Eversheds Sutherland, DWF, which hired William Fry corporate partner Ross Little last year to launch a full-service practice, insurance players DAC Beachcroft, Kennedys and BLM,  US firm Dechert, and offshore firms Maples & Calder and Walkers.

Local partners also expect global giant DLA Piper to enter the market. Earlier this year the firm’s senior partner  Juan Picon told Legal Week: “Post-Brexit, there will be more institutions looking to have a presence in Ireland, so opening there would be consistent with our strategy.”

 

NEW YORK CITY

Latham hires Corporate Law partner from A&0 in New York

Latham & Watkins has hired long-serving Allen & Overy (A&O) corporate partner Peter Harwich in New York.

Harwich was made partner at A&O in 2001 and has since led on a range of high-profile M&A matters for the magic circle firm.

These include advising A&O client SAP on its announced $3.4bn purchase of cloud computing company SuccessFactors in 2011, as well as GE Healthcare’s $1bn acquisition of NASDAQ-listed Vital Signs in 2008.

He also worked on Elster Group’s $2.3bn takeover by Melrose in 2012 and Misys’ sale of its Diagnostic Information Business to Vista Equity Partners.

Other new joiners to Latham’s global corporate department in the past year include Linklaters’ German partners Nikolaos Paschos and Rainer Traugott.

The US firm also recruited from A&O in London earlier in 2017, taking corporate partner Ed Barnett and finance partner Stephen Kensell.

A&O has been recruiting heavily in the New York market in the past year, prioritising growth in the finance practice. It took on four lateral partners to its finance team. The three laterals were from White & Case and Proskauer Rose, while Milbank associate Todd Koretzky also made the move.

Months later, the magic circle firm also hired from Paul Hastings finance group, recruiting former head of leveraged finance Bill Schwitter, alongside partners Michael Chernick and Jeffrey Pellegrino.

Former A&O US senior partner Kevin O’Shea nevertheless left the firm for Milbank Tweed Hadley & McCloy along with two real estate partners last November. The departure saw litigation head Tim House relocate to the US as the firm’s new senior partner this year.