Oando’s Entitlement Tango

Chris Nwobu

Ocean and Oil (Oando), a leading oil marketing firm, has been dragged to court by its former employee over an alleged discrimination in payment of his retirement benefits
By Edward Dibiana
Ocean and Oil, a Nigerian oil marketing firm, popular as Oando, led the market for the better part of last week at the Nigerian Stock Exchange (NSE). Fired by a burning desire to become “West Africa’s premier last mile energy provider,” and propelled by a young management team led by Managing Director, Wale Tinubu, the company has no doubt done well in its area of business.
Between 2001 and 2004 when the company went public, Oando which had earlier transformed from ESSO West Africa Incorporated, and later Unipetrol Nigeria Limited, achieved an unprecedented result in the area of shareholders returns on investment to the tune of 520 per cent, representing an increase in turnover by 152 per cent. Due to this performance, the company in September 2004, emerged the Quoted Company of the Year in the 2003 financial year of the Nigeria Stock Exchange (NSE).
Employees– past and present– of a company with such a resounding success story are always the envy of their colleagues in other less prominent organisations. Significantly, a company with such spread and corporate brand name normally has a unified set of rules which are applicable to all as such rules are fashioned in a way that they do not breach the fundamental human rights of those involved, or fail the test of due process.
Such corporate business fundamentals, according to a former employee of Oando, Chris Chinyere Nwobu, have a perculiar, discriminatory application in the company. Nwobu, who was until March 29, 2004, an employee of the oil marketing outfit, alleged that inspite of the fact that he was forced into retirement before the mandatory age of 55, the company till date has refused to pay him his full benefits.
Why the non-payment of Nwobu’s entitlements appears curious, is his claim that three other employees of the company who were also made to retire prematurely, were all fully paid. For instance, Nwobu disclosed that Dele Akande who retired two years before he was due for retirement and Ade Arima Obi (a woman) who also retired three years earlier than the official age limit, received their full entitlements.
Specifically, Nwobu alleged that Oando denied him his ex-gratia which amounted to N1,690,151, as well as short-changed him in the payment of his entitlements by calculating the payment with only 15 per cent rather than 25 per cent as stipulated in the rules of the company. That 15 per cent payment, he said, resulted in a shortfall of N2,860,535. These led Nwobu to assert that his human rights have been violated, as he claimed that the company did not give any reasons for such breach.
Going by Article 32 of the collective agrement between Management and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), “an employee leaving the services of the company on retirement will receive a lump sum payment of 25 per cent times number of accredited years of services. In addition, the employee should receive an ex-gratia payment of one year gross salary provided he/she has served not less than 10 years in the company. The tax element of the payment shall be borne by the company.”
According to Obiora Akabogu, Nwobu’s lawyer, the calculation of Nwobu’s entitlement with 15 per cent amounted to “termination of employment.” In Akabogu’s opinion, there is an element of “malice and bad faith on the part of Oando” in its decision to quietly ease Nwobu out through forced leave. Had Oando allowed Nwobu to conclude his leave, he said, he would have had just two months to attain the mandatory 45 years which is the age of voluntary retirement.
Disquiet, instructively, set in between Nwobu and Oando on March 19, 2004 when he received a disengagement letter from the company. The letter signed by Adeola Bali, Head, Human Capital Management, read in part: “Following the on-going reorganisation exercise, we regret to inform you that your services will no longer be required.
“Consequently, management has decided that you proceed on early retirement with effect from the 29th of March 2004.
“In compliance therefore, with the conditions of service, you will be paid two months basic salary in lieu of notice.
“The finance department is by a copy of this letter advised to make necessary arrangements to pay your retirement benefits less any indebtedness to the company”.
Nwobu had written a letter to the company through his lawyer when he felt short-changed over the payment of his entitlement. The letter pointed out that despite the fact that he had put in 14 years of “meritorious and unblemished services” to Oando, the company against its own rules, refused, for no just cause, to pay him his complete benefits.
But the company in a letter dated May 3, 2004, signed by the Personnel Manager, Pearl George, stated that the calculation of Nwobu’s terminal benefits based on 15 per cent was correct as it claimed that he does not meet the criteria for early retirement since he had not attained the age of 45, which is the age for voluntary retirement.
Several other correspondences to Oando from Nwobu on this issue failed to yield the desired result, thus forcing him to seek redress in the court of law. A writ of summons to that affect was procured by his lawyer in the High Court of Lagos, on April 18, 2005.
Nwobu restated his case in his statement of claim and argued that his fundamental human rights have been breached as he alleged that he was arbitrarily retired and was also discriminated against in the payment of his benefits.
However, in Oando’s statement of defense, it denied that Nwobu’s employment was unlawfully terminated, as it stated that rather, he had “consistently demonstrated his inefficiency in the performance of his assigned duties and roles” as the Deputy Divisional Accountant.
For instance, the company alleged that Nwobu was “unable to analyse and describe the company’s stock and upload necessary information onto its computerised accounting system and instead always asked his subordinates to execute the tasks which were meant for him to personally execute”.
Other allegations against Nwobu by Oando, according to the statement of defence, are that he is “lazy”, “lacks zeal” often comes to work late and is also incompetent, as he is said to be unable to work with the company’s accounting software.
Instances were cited by the company, for example, when he allegedly failed to reconcile the company’s account for about three months.
The company claimed that queries were issued to him from the head office on four occasions and was even recommended for an outright sack before his final disengagement.
The company also denied the claim by Nwobu that he was short-changed in the payment of his entitlements, as it insisted that all his benefits were paid. According to Oando, the speicific area in Article 34 of the Collective Agreement between Oando and PENGASSAN as it affects Nwobu states: “Employees who leave the company before they are due for retirement, shall receive at the end of service credits as follow: 10years and above – 15 per cent of the annual gross salary times the number of years served”.
Nwobu’s former employer claimed that its decision to retire him prematurely rather than an outright sack was only borne out of magnanmity and so does not see any reason why he (Nwobu) should accuse it (Oando) of shabby treatment.
Is Oando’s account correct? The verdict of the court – which is being awaited – will proffer the answer.