In Nigeria, retirees go through a lot of hardship after serving the country for 20-35 years of their life, most times, the retirees are not paid their benefits thereby forcing them to depend on friends and family members for survival.
Though Section 7 (1) (a) of the Pension Reform Act (PRA) 2014 allows for only 25% of the retirement savings to be paid as a lump sum to retirees.
The good news is that a bill proposing that retirees can make a 75% withdrawal from their Retirement Savings Account (RSA) after retirement has passed the second reading in the Senate.
In a recent case between National Pension Commission and DAAR Communications PLC, the court declared that the matter succeeds on some but not all. The judge ordered the defendant to remit into the Retirement Savings Accounts (RSA) of the beneficiaries/employees, all outstanding pension contributions for the employees and ex-employees for the years spanning 2005 to 2015.
Facts of the case
The claimant (NPC) claimed that the defendant (DAAR Communications PLC) failed, neglected and/or refused to remit pension contributions deducted from the salaries of its employees and ex-employees between 2005 and 2015.
According to submissions by the claimant, after reviewing the defendant’s pension records, the sum of N618,561, 230.59 was the outstanding pension contributions for the employees and ex-employees which was not remitted by the defendant.
On this basis, the claimant approached the court on December 18, 2019, seeking the following reliefs against the defendant.
The claimant averred that the defendant violated sections 3 (a) & (b) and (5) of the Pension Reform Act, 2014. It demanded that the defendant pay a penalty sum of N576, 792, 970.90 for late remittance of pension contributions.
Other reliefs sought by the claimant include
- A Declaration of the Court that the defendant’s refusal to remit pension contributions of all its past and present employees into their Retirement Savings Accounts is a violation of sections 3 (a) & (b) and (5) of the Pension Reform Act, 2014.
- An Order of the Court directing the defendant to remit into the Retirement Savings Accounts (RSA) of the beneficiaries/employees, the sum of N618,561,230.59 being the outstanding pension contributions for the employees and ex-employees for the years spanning 2005 to 2015.
- An Order granting leave to the claimant to impose, on the Defendant, a penalty of the sum of N576, 792,970.90 being the outstanding penalty for late remittance of pension contributions for the years spanning 2005 to 2015 in accordance with the Pension Reform Act, 2014.
- An Order directing the defendant to pay the said penalty of the sum of N576,792,970.90 for late remittance of pension contributions flowing from the deduction and non-remittance as established for the years spanning 2005 to 2015 in accordance with the Pension Reform Act, 2014.
- An Order directing the Defendant to furnish to the claimant, its staff list, payroll, payment tellers and schedules showing complete evidence of remittance of its past and present employees’ monthly pension deductions from 2005 to date and forthwith.
- General and exemplary damages in the sum of N5,000,000 (Five Million Naira) only for the Defendant’s wilful failure, neglect and or refusal to remit the total sum of NI,195,354,205.49 being the outstanding pension contributions and the determined penalty for late remittance of the contributions of its employees and ex-employees in line with the Pension Reform Act, 2014.
In response, the defendant (DAAR communication) in its statement of defence maintained that it did not breach the Pension Reform Act and that as an employer of labour, it religiously observed and complied with all its statutory obligations to its employees and the government.
The Defendant averred that there was no review of the defendant’s pension records by either the claimant or any appointed agent of the claimant hence, it was not obligated to remit the total sum of N1,195,354,201.49 (One billion, one hundred and ninety-five million, three hundred and fifty-four thousand, two hundred and one eight naira and forty-nine kobo) to the claimant.
The defendant denied having a pension liability of 618, 561, 230. 59 nor incurring a penalty of 576, 792, 974. 90 for late remittance of pension contributions for her existing and exited employees.
It, therefore, contended that the claimant was not entitled to any of the reliefs sought and urged the court to dismiss the claimant’s claims.
The breakdown of the sum demanded by the claimant is given below:
- N618,561, 230.59 being the outstanding pension contributions for the employees and ex-employees for the years spanning 2005 to 2015
- N576, 792,970.90 being the outstanding penalty for late remittance of pension contributions for the years spanning 2005 to 2015.
- Additional N576, 792, 970.90 for late remittance of pension contributions flowing from the deduction and non-remittance as established for the years spanning 2005 to 2015.
- A directive demanding the defendant to provide to the claimant, its staff list, payroll, payment tellers and schedules showing complete evidence of remittance of its past and present employees’ monthly pension deductions from 2005 to date, instantly.
- General and exemplary damages of N5,000,000 for the Defendant’s wilful failure, neglect or refusal to remit the total sum of NI,195,354,205.49 being the outstanding pension contributions and the determined penalty for late remittance of the contributions of its employees and ex-employees.
What the judge ruled
After listening to submissions and arguments from parties in the suit, Justice E. N. Agbakoba ordered that the claimant is eligible for its acclaimed damages following the failure of the claimant to remit pension contributions of the claimant’s past and present employees from 2005 to 2015. Accordingly, he ruled thus;
‘’ It is hereby declared that the Defendant’s refusal to remit pension contributions of all its past and present employees into their Retirement Savings Accounts is a violation of section 3 (a) & (b) and (5) of the Pension Reform Act, 2014.’’
“By the order of this honourable court, the Defendant shall remit into the Retirement Savings Accounts (RSA) of the beneficiaries/employees, all outstanding pension contributions for the employees and ex-employees for the years spanning 2005 to 2015.’’
‘’It is hereby declared that the claimants are entitled on proof of late payment and default to impose, on the Defendant, a penalty of the sums outstanding penalty for late remittance of pension contributions for the years spanning 2005 to 2015 in accordance with the Pension Reform Act, 2014.’’
‘’An Order directing the Defendant to furnish to the claimant, its staff list, payroll, payment tellers and schedules showing complete evidence of remittance of its past and present employees’ monthly pension deductions from 2005 to date and forthwith.’’
The judge ordered DAAR Communications to make the payment order within 60 days from the day the judgement was issued which is November 2, 2021.
Basis of the judgement
On the issue of whether the claimant has by credible evidence proved its case against the defendant, the judge held that the claimants tendered a bundle of 10 documents marked as exhibit C3, while backing its case.
He said ‘’After careful examination of this exhibit, it reveals that the bundle is made up 12 tabulated lists of names of employees also showing pension data (RSA pins PFA Names deductions and penalties and amounts to be remitted’’
‘’The Claimant also front-loaded documents of employees showing employments letters, and letter of complaints addressed to PFA and the Defendants complaining in non-remittances,” the judge said.
He noted that the rule of the Court is that all front-loaded documents are deemed admitted unless specifically objected to by the opposing party.
The judge said the defendant argued that the documents making up Exhibit C3 were not made by them and that any person if at all who assisted the Claimants in producing the list in this exhibit did not act with their approval or permission.
“The defendant’s alternative argument that they did not mandate anyone to work on the documents would ordinarily suffice in a normal contractual arrangement where the simple rules of evidence just require that he who avers is required to prove, however in this instant, I find that the argument of the defendant is no more than smoke and mirrors and amounts to an insufficient defence in this situation as the Defendant have a legal obligation to comply with the dictates of the Pension Reform Act 2014 as amended, particularly Section 24(c).
“Now it is not in doubt that the defendants have not supplied the claimant with a detailed nominal roll of its staff or their current staff position nor is there any evidence before this Court that the defendants have been making regular remittances of PFA deductions to the RSA and the Law requires that they do so. They have not observed their legal obligations under the PRA,” the judge ruled.