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[Just In] Industrial Court orders NNPC to pay retirees on Harmonized Pension Policy

400 Thursday 23rd July 2020

Lagos---His Lordship, Hon. Justice Elizabeth Oji of the National Industrial Court, Lagos Judicial Division has ordered Nigeria National Petroleum Corporation, NNPC Pension Fund Limited, to pay Dr I. Nwobodo and 13 others retired staff forthwith all accrued pensions calculated with effect from 1st of January, 1997 on emoluments currently earned by their serving counterparts as prescribed under the Federal Government Policy on Harmonization of Pensions and subsequently all such pensions and when due. 

Justice Elizabeth directed NNPC, NNPC PENSION to comply fully with the provisions of Pension Reform Act, Laws of the Federation of Nigeria and to fully fund the pension scheme in accordance with the directives of National Pension Commission issued 21st December 2011.

The Court held that NNPC, NNPC Pension Fund are bound to observe the requirement of the Civil Service Circulars, Presidential Circulars and the provisions of the Constitution of the Federal Republic of Nigeria with regards to the harmonization of pension’s policy.


From facts, the Claimants are retired staff of the Nigeria National Petroleum Corporation had averred that all staff of the Defendant, whether serving or retired, is in the Public Service that the NNPC Corporate Policy & Procedure Guide (CPPG), 2006 guarantees the right of all the Claimants and other retired staff of the Defendant to Pension. 


They submitted further that, in addition to the periodical salary review, the NNPC is obliged as a Statutory Corporation to adhere to Federal Government Policy that requires that pensions of those that have served in the Public Service of the Federation be harmonized with those that just retired. 


They submitted that there exists a wide gulf between the pension payable to them and their colleagues who retired after them despite having retired on the same pay grade and similar years of service.  

In response to the Originating summons, the Defendants filed objection that the court lack the jurisdiction to hear the matter by virtue of Public Officer Protection Act and the NNPC Act, and further that the Claimants do not have the right to institute and maintain the suit that no letter of appointment/engagement showing that the Claimants were indeed staffers of the NNPC.


The Defendants stated that individual salary involving NNPC reward is driven by appraisal performance reward that the reference to Federal Govt Circulars did not apply to the Defendants because the Defendants operate a closed pension scheme which is statutorily provided for under the NNPC Act which is not being funded by the Federal Government directly through the Head of Civil Service of the Federation as claimed by the Claimants.


The Defendants argued that the Claimants’ pension were duly and accurately computed and paid to them at the point of their exit from the services of the NNPC; and have all benefited in all pension upward reviews approved by the Management since their retirement in line with extant laws regulating their employment/retirement benefits structure, that the Claimants’ claim to pay them forthwith all accrued pension calculated with effect from 1st January 1997 on emolument currently earned by their serving counterpart is not practicable. 


In response, the Claimants argued that defendants’ argument was misplaced and misconceived, urged the Court to grant reliefs sought.

Delivering Judgment after careful perusal of the submissions of both counsel, the presiding Judge, Justice Elizabeth Oji held that the suit is not statute-barred, and further that Claimants have locus standi to institute the action.


“The Defendants argument in this case that the circulars do not apply to it is not consistent with its previous position as shown in exhibit E dated 10th of October, 2006 wherein the Defendants, writing to the Honourable Attorney General of the Federation, acknowledged the Federal government directives on the harmonisation of the pension of its pensioners and stated that it had carried out the exercise.


“Further, Exhibit B which the Defendant also relies on in its paragraph 44.1.1 provides that ‘Pension shall be calculated on the basis of the Federal Government’s stipulated percentages of terminal base salary.’ This to me, defeats Defendants argument that it is not bound by Federal Government’s Directives on the calculation of percentages of pension.   


“Laws, Rules, Directives and Commitments made in employment relations are meant to be kept. To do otherwise will be to create an environment of uncertainty in the world of work. As a result of all the above, I find and hold that the 1st Defendant cannot on its own decide to pay the Claimants’ pension on the basis of “affordability and sustainability”.  


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