Employee Compensation Act Progress or Retrogression

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EMPLOYEES COMPENSATION ACT, 2010: PROGRESS ORRETROGRESSION? By Femi Aborisade. Paper Delivered at the 15th

Kolagbodi Annual Memorial Lecture

2011

EMPLOYEES COMPENSATION ACT, 2010: PROGRESS OR

RETROGRESSION?

By

Femi Aborisade1

Centre for Labour Studies & Department of Business Administration andManagement Studies,

The Polytechnic, Ibadan

[email protected]

INTRODUCTION

Internationally, millions of people are injured, fall ill and die every year as a

result of work-related hazards. In Nigeria, the more or less permanent economic

crisis has meant that the average job seeker is prepared to accept any available

job offer regardless of the health hazards. When health issues arise, the cost of

legal action to seek redress discourages victims from initiating actions. Even

where compensation is paid or action is successfully instituted, the entitlementtends to be too meagre as not to justify the time and resources invested in the

process. It is these challenges and particularly the pressure of organized labour

that brought about the repeal of the Workmens Compensation Act, CAP. W6

Laws of the Federation of Nigeria 2004 and the enactment of the Employees

Compensation Act 2010. It is contended that there is a relationship between

legislation on the one hand and social order and justice on the other. Where

appropriate legislation is lacking, injustice and all forms of abuse of power or

position will prevail. Hence, there is a need to assess, from time to time, the

capacity of existing legislation to cope with the mischief or problems they were

meant to resolve.

This paper is a critical analysis of the Employees Compensation Act, 2010. It

answers one basic question:

Does the Act represent progress or retrogression in terms of the right to

be compensated for occupational injuries and hazards experienced at

work? Put in another way, does the Act expand or restrict the right to

claim compensation for occupational hazards?

1 Paper delivered at the 15th Annual Kolagbodi Memorial Lecture organised by the

Dr. M. E. Kolagbodi Memorial Foundation in collaboration with the Friedrich EbertFoundation (FEF), held on Thursday, 10 November 2011 at Lagos Travels Inn, ToyinStreet, Ikeja, Lagos.

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The subsidiary questions answered in the paper are:

What are the key provisions that represent progress in terms of

advancement of the right to compensation for hazards at work?

What are those provisions that constitute set back?

In what way can the Act be improved?

The Relationship between Employers Duty and Claim for Compensation

The existence of a contract of employment, whether express or implied, and if itis express, whether oral or in writing means that the employer owes certain

duties to the employee. These duties could be expressly provided for in the

terms of the contract of employment or implied into the terms, even though not

expressly stated.

The sources of the implied duties are two-fold common law and relevant

legislation. Both at common law and in statutory provisions, particularly in the

Factories Act and the Employees Compensation Act, there is the implied duty of

the employer to exercise reasonable care for the employees physical and

psychological well-being. While the legal consequence of ordinary violation of

the Factories Act, for example, is essentially criminal prosecution, violation ofthe Factories Act, which results in injury, occupational disease or death of

the employee arising out of or in the course of employment will validly give rise

to civil litigation, involving claims for compensation under the Employees

Compensation Act or action at common law for damages based on the

employers negligence of the duty of (reasonable) care.

Employers Implied Duty under Common Law2

The employers implied duty to exercise reasonable care, under common law, is

usually divided into three:

Provision of safe plant, including safe equipment, tools, materials and

appliances in the workplace;

Provision of safe and secure system of work, that is, a safe work process,

and

2 Common law is judge-declared law or judicially created law; a body of English law,based on oral tradition of tribal justice, which is judicially developed by judges and foundin precedents over time. Because it is not written (by the legislature), it is often referred

to as unwritten law, which in Latin means Lex non scripta. Common law has beeninfluenced over time by both statute and the principles of equity and where they differfrom common law, take precedence over it.

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The Constitution of the Federal Republic of Nigeria, CFRN, 1999,

which provides, among others that the State shall direct its policy towards

ensuring that conditions of work are just and humane, there are adequate

medical and health facilities, and that the health, safety and welfare of allpersons are safeguarded.6

International Labour Organisations Conventions and

Recommendations, particularly Convention Nos.:

o 155, Occupational Safety and Health, 1981

o 12, Workmens Compensation (Agriculture) 1921

o 17, Workmens Compensation (Accident) 1925

o 18, Workmens Compensation (Occupational Diseases) 1925

o 19, Equality of Treatment (Accident Compensation) 1925

o 42, Workmens Compensation (Occupational Diseases) (Revised)

1934.

o 121, Employment Injury Benefits, 1964, and

o ILO Recommendation No. 121, concerning Benefits in the case of

Employment Injury

HISTORICAL ORIGIN OF WORKMENS COMPENSATION

In order to have proper understanding of the provisions of the Employees

Compensation Act and the criticisms that have been proffered, it is considered

important to do a broad review of the origin of workmens compensation.

On 7 April 2011, Workers Compensation Centennial Symposium held in Boston,

USA. This implies a century history of workmens compensation. The first State in

the U.S. adopted workers compensation law in 1911 while majority of them didso between 1911 and 19207. The first English workmens legislation was the

1897 Act over a century ago. Under it, the workman only needed to show he

had been injured to claim compensation, unlike the earlier 1880 Employers

Liability Act that put the burden of proving negligence on the employee before

he could claim. The Workmens Compensation Act of 1906 fixed the

5 See for example S. 27 (1) of NESREA. However, it should be noted that NESREAprovides an easy escape route for the Defendant in that the Plaintiff has to prove that thequantity discharged is harmful. Also, the same section contains a proviso which suggeststhat the defendant will not be liable if he can show that the discharge of the harmful

substance is authorised under some law.6 S. 17 (3), CFRN, 1999.7 See www.workerscompresources.com

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compensation the workman could recover from the employer, except in cases of

serious and wilful misconduct. In Nigeria8, the first workmens compensation

legislation was the Ordinance of 1942, which was tailored after the English Act of

1925. It later became known as the Workmens Compensation Act, CAP 222,Laws of the Federation of Nigeria, 1958. It was followed by the Workmens

Compensation Decree No. 17 of 1987, which was later codified as CAP 470, Laws

of the Federation of Nigeria 1990 and later re-codified as the Workmens

Compensation Act, CAP W6, Laws of the Federation of Nigeria 2004, which the

current Act repeals.

The system of workers compensation has its origins in the system of negligence

liability. In other words, prior to the introduction of Workmens Compensation

system, workers injured at work were compensated under the system of

negligence liability. This system requires the employee to prove the following

ingredients9 conjunctively:

a) The employer or Defendant has a duty of care, owed to the worker or

claimant.

b) an accident has occurred

c) the accident was caused because the employer was negligent or failed to

exercise the duty of care

d) the accident caused personal injury to the employee

The case ofChagaury v. Yakubu10can be used to explain the critical weakness

of action based on Negligent Liability the employer will not be liable if it is not

proved that the employer was negligent. In the case,Yakubu was employed as

a driver with a company and attached to one of the top officers of the

company. As part of the schedule of his work, he had to take the cooks

of Chagaury to their residences late in the night, for which he received

overtime payment. On one of the occasions, he was attacked by armed

robbers who shot at his face. He was able to escape with the car. His

boss, Chaguary rushed him to the hospital. The company paid hospital

expenses. After treatment, five pellets of bullets were extracted,

leaving one pellet, which could only be extracted at the risk of serious

negative health problems. Though Yakubu admitted he was no longer

8 See R. Idubor (1999). Employment and trade dispute law in Nigeria. Benin City: SylvaPublishers Ltd. and E. E. Uvieghara (2001). Labour law in Nigeria. Lagos: Malthouse PressLtd.9 See Iyere v. B.F.F.M. Ltd. (2008) 18 NWLR Pt. 1119 page 300 at 326 paras B-C (citedby Hon. Justice Bolaji-Yusuff in the judgement in Oyelade v. Inaolaji, Suit No.I/660/2003) where the Supreme Court reiterated the principle that there can be noactionable negligence unless there is damage. Negligence alone does not give a causeof action, damage alone does not give a cause of action; the two must co-exist. In other

words, there must be causal connection between the negligence to exercise duty of careand the damage suffered.10 (2006) 3 NWLR 138

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feeling any pains. Yakubu instituted a legal action, claiming N15m

N5m as special damages and N10m as general damages. The trial court

found that Chagaury and the company were not negligent. But the

court went ahead to award Yakubu N300, 000 (three hundred thousandNaira) damages as compensation for psychological feelings of having

the pellet in his body for the rest of his life. The company and Chaguary

appealed the decision of the trial court. The Court of Appeal held that

damages should not have been awarded against the Appellants since no

finding of negligence was made. But a few years after, Yakubu was one

of those laid off on ground of redundancy.

It should also be noted that under common law rules, the employer enjoys the

following three defences and would not be liable for damages if any of the

defences can be proved:

a) Defence of voluntary assumption of riskor volenti non-fit injuria - that

the worker knew of the dangers or risks involved in the work and willingly

assumed risks by accepting the job. This means that by accepting the job

offer, the worker has abdicated the right to sue for injuries.

b) Fellow-servant defence or defence of common employment that a

fellow worker of the claimant-worker caused the accident.

c) Contributory negligence that the injured employees negligence

contributed to the occurrence of the accident.

In many cases, it could not be difficult for employers to avoid liability under any

of the above three defences.

However, the common law defences have been influenced by both statute and

equity. Thus, for example, the British Employers Liability Act (1880)

abolished the old common law defences in theory but did not establish a no

fault system; a proof of negligence on the part of the employer was still

necessary for the employee to be entitled to damages.

On the defence ofvoluntary assumption of risk, the trend of judicial decisions

today is that where negligence of the duty of care is proved, the employercannot rely on the maxim ofvolenti non-fit injuriato protect him from liability

for his wrong11. As the Court had held in another case, his (i.e. the employees)

poverty, not his will consented to incur the danger.12

The defence of common employment was also abolished in Wilsons &

Clyde Coal Ltd. v. English.13 In the case, an employee was killed as a result of

an accident at work caused by co-workers. He was crushed while repairing an

airway leading off a Mine, a main haulage road. The employer argued that the

11 See smith v. Baker (1891) Ac 325 at 362, per Lord Herschell.12

Thrussel v. Handyside (1888) 20 QBD 359 at 364.13 Wilsons & Clyde Coal Co. Ltd v. English (1938) AC 57. (cited in D. Cabrelli (2010).Employment Law. 2nd ed. London: Pearson Education Ltd.

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company was not liable to pay damages on the grounds that the deceased

employee contributed to his own death by not taking an alternative route to

escape the accident or failing to make his colleagues aware of his location.

Alternatively, that the duty to provide a safe system of work had been delegatedto the colleagues of the deceased who caused the accident. The court held the

employer-company liable for negligence in the performance of the duty to

exercise reasonable care and to provide a reasonably safe system of working.

That the implied duty of care was personal to the employer-company and it could

not be devolved upon one of its employees - the employer has a non-delegable

duty to create a safe system of work. This position has been affirmed by the

Supreme Court of Nigeria in the case ofAgunane v. NTC14.

The defence of common employment has also been statutorily abolished in

Nigeria as follows: in the Federal Territory of Lagos, in 1961; Eastern Region,

1962; Western Region, 1963; and for the whole country in 198815.

Also, the court has rejected employers defence of not being liable on ground of

employees negligence and self-inflicted injury in refusing to use Personal

Protective Equipment (PPE). In Western Nigeria Trading Co. Ltd. v. Busari

Ajao,16the court, relying on Nolan v. Dental Manufacturing Co. Ltd.17 held

that it was the duty of the employers, at common law, not just to supply Personal

Protective Equipment such as goggles, but to also ensure they are used by strict

orders and effective supervision.

However, it must be explained that the employee too, having held himself18 out

as possessing certain degree of skill, is expected to demonstrate due care and

skill in the performance of his work; otherwise, where he suffers injury as a result

of his own carelessness or contributory negligence is established, the employer

may be declared not liable. Thus, in Ogunnusi v. Lagos City Caretaker

Committee19, the claimant (Ogunnusi), a bus conductor, was injured while

attempting to board a moving vehicle. The trial court (Magistrate court) found in

his favour. But the High Court set aside the decision, holding that the injury was

caused by the claimants wilful misconduct.20

However, the position of law under Statutory provisions now is that the court

could, as it thinks fit, reduce the damages the injured employee would have

14 (1995) 5 NWLR (Pt. 397) 541 SC.15 See S. 3, Law Reform (Torts) Act 1961; S. 4, Torts law CAP 125 laws of Eastern Nigeria,1963; S. 13 torts Law, CAP 122 Laws of Western Region of Nigeria, 1959 and S. 12,Labour Act, CAP 198 LFN, 1990, all cited in E. E. Uvieghara (2001). Labour Law in Nigeria.Lagos: Malthouse Press Ltd.16 (1965) 2 ALL NLR 100. In the case, a splinter of steel entered into the eyes of Ajaocausing injury. The employer had argued that it was not liable as the employee wasnegligent in not using the goggles provided.17 (1958) 2 All ER 449.18 All references to he or himself in this paper means he or she. Where appropriate,

an attempt is made to use a gender free concept of employee.19 Suit No. YB/216/69 OF 1973.20 See F. Falana (1997). Op. Cit., pp. 14 -15.

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recovered if he were not contributorily negligent, having regard to the

claimants share in the responsibility for the damage21.

From the foregoing, though the common law defences available to the

employer have largely been abolished, the employee is still required to

prove the guilt or negligence of the duty of care on the part of the

employer before he can succeed in an action for damages.

On the other hand, the system of workmens compensation, particularly as

represented in the Employees Compensation Act, 2010 is characterised by

eligibility or non-eligibility no longer being based on:

proving that the employer was at fault or negligent

workers contributory negligence

But the employee has to show that:

the injury is personal. Thus, for example, there is no compensation for

damage to personal property.

The injury or illness is work-related. This factor however does not consider

that certain illnesses could have multiple causes, work related and non-

work related causes, e.g. mental stress and other general psychological

conditions.

The Act is based on a no-fault principle22, such that the injured worker is entitled

to compensation, whoever may be at fault. For example, Section 1 (a) of the

Act declares that the Act sets out to provide a system of guaranteed

compensation for all employees or their dependants for any death, injury,

disease or disability arising out of or in the course of employment. Section 7

(1) of the same Act also restates the same principle by providing that:

Any employee, whether or not in a workplace, who suffers any disabling injury

arising out of or in the course of employment, shall be entitled to payment of

compensation in accordance with Part IV of this Act.

In addition, the express provision that No compensation shall be payable under

this Act in respect of any incapacity or death resulting from a deliberate self-

injury23 is no longer contained in the current Act. Though it may be ordinarily

difficult to succeed in claiming compensation for deliberate self-injury, the

occurrence of such an incidence may even be compensable, under the current

Act, where it is medically proved to be caused by mental stress, occasioned by

21 S. 16, Law reform (Torts) Law, CAP 115, Laws of Lagos State of Nigeria. Similarprovisions exist in the laws of other states.22 This is in conformity with S. 5(a) of ILO Recommendation No. 121 of 1964

concerning Benefits in the case of Employment Injury, which provides for benefits in theevent of accidents, regardless of their cause.23 S. 3 sub section (4) of the repealed Act.

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the nature of work or the occurrence of any event in the course of employment

or an acute reaction to a sudden and unexpected traumatic event arising out of

or in the course of employees employment which is covered under Section 8 (1)

of the Act.

Thus, from the foregoing, the injured worker is more likely to receive

compensation (no matter how meagre) under the system of workmens

compensation than under the system of Negligence Liability, which is marked by

uncertainties in the litigation process, considering the elements that have to be

proved or disproved and the defences available to the employer.

It is argued in this paper that both systems of compensation

Negligent Liability and Workmen Compensation should be statutorily

allowed; at least, Negligent Liability should not be prohibited. There are

certain situations in which Negligent Liability will be the only suitablecourse of action, for example, in Personal Injury Claims involving third parties

who do not have any employment relationship with any employer, such as

Product Liability cases and incidences of intentional torts. Legislation could be

enacted to limit the rules of common law, including defences available to the

employer. Indeed, in a few jurisdictions, the worker is allowed to opt out of the

system of workmens compensation, having the right to choose between

pursuing a claim for guaranteed benefits under workmens compensation or to

pursue a personal injury action24.

COMPONENTS OF THE EMPLOYEES COMPENSATION ACT, 2010

The Employees Compensation Act, 2010, which is referred to in this paper as

the Act comprises nine (9) Parts and two (2) Schedules as follows:

Part I Preliminary Provisions

Part II Procedures for Making Claims

Part III Compensation for Death, Injury or Disease

Part IV Scale of Compensation

Part V Powers and Functions of the Board

Part VI Employers Assessment and Contributions

Part VII Financial Provisions

Part VIII Establishment of the Investment Committee

24 See A. Larson (2005). Workers Compensation as the Exclusive Remedy. (Availableonline at www.attorneys-usa.com/workers_comp/exclusive_remedy.html

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Part IX Miscellaneous Provisions

First Schedule List of Occupational Diseases

Second Schedule Percentage of Disability

The paper undertakes an analysis of the Act, Part by Part, commencing

substantially from Part II.

PROCEDURE FOR MAKING CLAIMS (PART II)

Part II of the Act, comprising sections 4 to 6, provides for a three-stage

procedure:

1. Either the employee (or victim of an injury or disabling occupational

disease) or the dependant of the victim, in case of death of the victim,

shall report to the employer or immediate representative or superior of

the employee within 14 days of occurrence25.

2. The employer, in turn, shall be required to report to the Board and the

nearest office of the National Council for Occupational Safety and Health,

within 7 days of occurrence of any injury or disabling occupational

disease26.The Board is defined as the Nigerian Social Insurance Trust Fund

Management Board established under the Nigerian Social Insurance Trust

Fund Act, 1993.

3. Completion of formal Application, in the form prescribed by the Board, for

compensation signed by the employee or the employees dependant and

submitted to the Board27.

Weaknesses in the Procedure for making claims

1. Whereas the whole of Part II is devoted to Procedure for making

claims, there is still a provision28 that the Board may make rules of

procedures for making claims for compensation, thus suggesting or

confirming that Part II of the Act, which comprises three (3) main sections,have not fully set out the procedure for making claims. The concern is that

the perceived full procedure ought to have been set out rather than

burdening the Board with a responsibility that is discretionary and which if

not done, may throw up uncertainties in the procedure for making claims

under the Act. Examples29 of procedures for making compensation claims

in other countries, including opportunity for updating reports of

25 S. 4 Employees Compensation Act, 201026 ibid., S. 5.27

Ibid., S. 6.28 Ibid., S.5(8)29 Examples arewww.wcfgroup.com andwww.wcb.ab.ca

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injuries/claims submitted, exist online and they should have been

consulted, modified and improved to suit the particular Nigerian situation.

2. Four contradictory timelines are given for reporting injuries and/or making

applications for compensation:

a. Section 4(1) provides for 14 days within which the employee-victim

is to inform the employer, after the occurrence of an injury or

disabling occupational disease.

b. Section 5(1) provides that the employer shall report to the Board

and the nearest office of the National Council for Occupational

Safety and Health within 7 days of its occurrence. Meanwhile,

the employee whose information the employer acts upon reports

within 14 days of the occurrence of the injury.It might have made

better sense if the employer were required to report to the Board

within a period after the employee-victim has first filed a report.

c. Section 6(2) provides that no compensation shall be payable unless

application is filed within one year of the occurrence of injury or

disabling occupational disease.

d. Section 12 (3) of the Act also provides that an election to claim

compensation (rather than bringing an action at common law for

damages, where the cause of death, injury or disability of an

employee is such that an action lies against some person,other than an employer or employee) shall be done within 6

months of the occurrence of the injury, disability or death. One

wonders why the time limit of 6 months should be stipulated. There

is the possibility that certain diseases might not have sufficiently

developed within six months. The clause in section 12 stating within

6 months ... or any longer period as the Board may, from time to

time, determine.... will hardly be of help to the employee-victim

when section 12 has to be constructed where there are objective

and substantial reasons for delays in making an election to claim

compensation.

3. The Board is also given a discretionary power of defining and prescribing a

category of minor injuries not required to be reported to the Board 30. The

concern here is that the Act should have gone ahead to set out the

category of such minor injuries rather than giving discretionary power to

the Board on such a key object for which the Act itself was enacted. For

the avoidance of doubt, S. 5(6) provides in part ... the Board may, by

regulation, define and prescribe a category of minor injuries not required

to be reported ...

30 Ibid., S. 5(6).

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4. The Nigerian Employees Compensation Act 2010 may learn from the

American Occupational Safety and Health Act (OSHA) 1970 on what and

when to report rather than piling up unnecessary arbitrary powers for the

administering Board.

5. The OSHA, 1970 provides for the following to be reported:

a. Incidences of death

b. Incidences of illnesses, or

c. Injuries involving:

i. Treatment by a physician (other than first aid)

ii. Absence at work or restriction from work

iii. Loss of consciousness

iv. Transfer to another job.

6. The OSHA, 197031 also provides that the following may not be reported:

injuries that require only first aid and involve no loss of work time.

7. Indeed, borrowing from the American OSHA, 1970 referred to above, the

Nigerian Act should provide the right of the employees and/or their unions

to request inspection of circumstances leading to injuries or death as the

case may be. In addition, the Act should provide that reported incidencesof injuries, diseases and deaths be conspicuously displayed by employers

in prominent places at the workplace, using prescribed formal forms. This

will prevent attempts by some employers to avoid reporting incidences of

industrial accidents.

8. It is also noted that the information required to be supplied in reporting

injuries or disabling occupational disease and/or making application for

compensation is fuller under Section 5(4) than what is required under

Section 4(1). Similar information, as set out in S. 5(4) and modified below

should have been set out under the two sections in order to avoidconfusion and controversy at the stage of implementation of the Act or

litigation arising over claims

a. The name and address of the employee

b. The name and address of the employer

c. The time and place of the disease, injury or death

31 Cited in J. M. Ivancevich, (2007). Human Resource Managment. New York:

McGraw Hill. Pp. 555-556.

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d. The nature of the injury or alleged injury, in ordinary or technical

language

e. A general description or brief account of the cause of the injury

f. Name of any available witness or evidence in support

g. The name and address of any specialist or accredited medical

practitioner who attends to the employee; and

h. Any other particular required by the Board under the Act or any

regulation it may make under the Act.

9. Part II of the Act should have also imposed on the employer the

responsibility to report to the Board if it can be established that an

employee has sustained injury or suffered a disabling occupationaldisease or died, particularly where no dependant is aware or available to

make formal reports to the employer.

10.In the same vein, Part II of the Act should have made provisions for

admissibility of oral report, which an officer of the employer or Board will

be required to reduce into writing in case the employee is an illiterate. As

it is, there is a fallacious presumption that all employees are likely to be

literate.

11.Section 4(4) of the Act provides that failure on the part of the employee-

victim to supply specified information to the employer is a bar toclaim compensation. Section 6(2) also provides that no compensation

shall be payable if a claim is not made within one year of the

occurrence of an injury or disabling occupational disease. Rather than

pursuing the goal of preventing payment of compensation if claim or

report is not made within specified periods, it is advocated that the law

should regard industrial injuries and disabling occupational diseases as a

strict liability category such that employers are made liable,

without a rigid time limit on when reports and/or claims are made

by employee-victims or their dependants, provided the occurrence of the

injury or disabling occupational disease can be proved.

12. Who has responsibility to report injuries to the employer? S. 4(1) makes

provision on who can report injuries to the employer. Either the employee-

victim of an injury or disabling occupational disease or the dependant of

the victim, in case of death of the employee-victim shall report to the

employer or immediate representative or superior of the employee within

14 days of occurrence32. But borrowing from the reform introduced by

the Fundamental Human Rights Enforcement Procedure Rules,

2009, anyone, particularly co-employees and/or union representatives,

should be able to report industrial accidents on behalf of victims.Health32 S. 4, Employees Compensation Act, 2010.

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protection at work should be conceived as a category of fundamental

rights, to which everyone should, in the religious sense, be their brothers

keeper. We could learn from the Health and Safety legislation in the

United Kingdom, which from 1977 recognises the right of trade unions toappoint Health and Safety Representatives who have recognised power to

make inspections and reports in their working hours33.

13.There is a lacuna in the Employees Compensation Act, 2010 on who has

responsibility to report to the Board where the employer fails or

refuses to do so. S. 5 sub sections (1), (2) and (3) of the Act provide

that the occurrence of every injury, disabling occupational disease and

death respectively shall be reported by the employer to the Board.

Section 5(5) provides that failure of the employer to report constitutes an

offence, unless the failure is caused by a sufficient ground allowed by the

Board. But beyond criminalising employers failure to report, there is noprovision for an alternative way by which the Board could be notified. It is

suggested that there should be a provision which empowers the

employee-victim to report to both the employer and the Board in the

prescribed formal Form. The template of the formal forms (hard and e-

copies) with which to report and to make claims should be available, not

only at the physical offices of the employer and the Board, but also on the

internet, at their websites.

14.There is no time limit within which the injured-employee must be paid

compensation. In this regard, the Act could incorporate the provision ofArticle 6, Convention No. 17 of 1925, concerning Workmens

Compensation for Accidents, which states that In case of incapacity,

compensation shall be paid not later than as from the fifth day after

the accident...

Part III: TYPES OF COMPENSATION

The discussion of this Part of the Act (Part III) relates, not only to types of

compensation, but also covers other legal issues thrown up in sections 7 to 16,which make up the Part. The issues examined in this section of the paper, as

dictated by Part III of the Act, are:

Types of compensation

Abolition of employers strict liability in payment of employees

compensation for injuries

The concept of arising out of or in the course of employment

33 See http://www.tuc.org.uk/extras/SafetyRep_1b.pdf

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Employees optional choice to bring an action at common law or to claim

compensation under the Employees Compensation Act, and

Employment by contractors and payment of compensation

Part III of the Act recognises the following seven (7) types of compensation:

1. Compensation for disabling injury arising out of or in the course of

employment34

2. Provided the employer has prior notification of the following

specified places, compensation in respect of accident sustained by the

employee while commuting between the place of work and

a. residence, principal or secondary;

b. the place where the employee usually takes meals; or

c. the place where he usually receives remuneration35.

3. Compensation for mental stress36, provided the mental stress is -

a. An acute reaction to a sudden and unexpected traumatic event

arising out of or in the course of the employees employment, 37 or

b. Diagnosed by an accredited medical practitioner as a mental orphysical condition amounting to mental stress arising out of the

nature of work or the occurrence of any event in the course of the

employees employment,38 or

c. Caused by the decision of the employer to change the work or the

working conditions of work organization in such a way as to unfairly

exceed the work ability and capacity of the employee.39

4. Compensation for occupational disease which disables the employee from

earning full remuneration at the workplace.40

5. Compensation for any occupational disease listed in the First Schedule to

the Act.41

34 Ibid, S. 7(1).35 Ibi., S. 7(2).36 ILO Convention No. 155 (of 1981) concerning Occupational Safety and Health and theWorking Environment in Article 3(e) defines health as ...not merely the absence ofdisease or infirmity; it also includes the physical and mental elements affecting healthwhich are directly related to safety and hygiene at work.37 Ibid., S. 8(1).38 Ibid., S. 8(2).39

Ibid., S. 8(2).40 Ibid., S. 8(3)(1)(a).41 Ibi., S.8(3)(1)(d).

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6. Compensation for death resulting from an occupational disease.42

7. Compensation for hearing impairment arising out of or in the course of

employment.43

This Part of the Act reflects inelegant drafting as it contains avoidable

repetition, duplication and overlapping categories of types of compensation.

For example categories (1) and (7) above are the same, as category (7) is a

subset of category (1).

However, the second category of the type of compensation identified above

(compensation in respect of accident sustained by the employee while

commuting to or from the place of work) requires some analysis. It indirectly

raises the question of when employment begins and ends.

It is an important positive development for S. 7(2) of the EmployeesCompensation Act to recognise that compensation is payable in the event of

accidents when the employee commutes to or from work. That section of the

Act appears to be a codification of a precedent holding of the court in the

case ofJohn Stewart & Son Ltd44 that the course of employment is not

limited to the time or place where the workman is to carry out his specific

work. However, the proviso that prior notification of principal or secondary

residential address be given to the employer before the employee can claim

compensation in the event of accidents on the way appears to fall short of the

position of the court in the case of Northumbrian Shipping C. Ltd.45The

essence of the holding of the court in this case is that what is crucial is theaccessor route the workman has to take in going or coming from work, not

whether he goes from or to the principal, secondary or any other place of

abode. For the avoidance of doubt, the attitude of the court in this respect is

partly reproduced below:

It has been recognised time and again that the sphere of a

workmans employment is not necessarily limited to the actual

place where he does his work. If in going to or coming from his work

he has to use an access which is part of his employers premises or

which he is only entitled to traverse because he is going to orcoming from his work, he is held to be on his masters business while

he is using that access46.

Indeed, S. 5 (c) (i) ofILORecommendation No. 121, concerning Benefits

in the case of Employment Injury provides that accidents sustained while

the employee is on the direct way between the place of work and the

employees principal or secondary residence should be treated as industrial

42 Ibi., S. 8(3)(1)(b)43 Ibid., S. 10(1).44

John Stewart & Son Ltd v. Longhurst (1917) AC 249.45Northumbrian Shipping C. Ltd. v. McCullum (1932)48 TLR 568.46 Id.

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accidents; the Recommendation does not include the requirement of

prior notification of secondary residence to the employer. As the court

has held in some other instances, it should be appreciated that the workman

is not a machine.

But the identified shortcoming in S. 7(2) of the Act should not becloud its

positive side. It appears to have statutorily overruled Smith v. Elder

Dempster Lines Ltd47where it was held that even where a workman travels

in a vehicle provided by the employer, he is not in the course of his

employment until he commences actual work.

COMPENSATION FOR OCCUPATIONAL DISEASES

Section 9 of the Act makes specific provision for compensation for occupational

diseases. Two of the subsections [sub sections (1) and (4)] under this section

deserve analysis.

Section 9 subsection (1) provides that compensation and health care benefits

shall be payable under the Act where the following conditions are satisfied:

a) The employee must have suffered an occupational disease;

b) The occupational disease suffered must have either caused the death of

the employee or disabled the employee from earning full remuneration at

the workplace;

c) The disease is shown to be due to the nature of any employment theemployee must have been engaged; and

d) The disease is listed in the First Schedule to the Act.

The concern here is that the Act does not make it clear whether the conditions

are to be satisfied or interpreted conjunctively (jointly) or disjunctively

(separately). In the absence of statutory provision on whether conjunctive or

disjunctive interpretation should be given, where the Board or the court elects to

adopt conjunctive interpretation, it means that an employee may not be

considered qualified for compensation and health benefits where a particular

disease is not listed in the First Schedule. (See also pages 45 and 46 for further

analysis on the First Schedule).

Section 9 (4) (b) of the Act is an example of provisions in the Act, which

seek to ensure that the Board avoids liability to pay compensation

under spurious technical grounds. The section provides that neither the

employee nor a dependant shall be entitled to compensation for a

disability or death unless the employee was free from the disease and

complicating disease before being first exposed to the agent causing

the disease in the workplace. It is contended that there is no basis for this

provision because under Ss. 8 and 28 of the Labour Act, the employer has47Smith v. Elder Dempster Lines Ltd. (1944) 17 NLR 145.

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the duty to medically examine every worker, before commencement of work or

as soon as possible thereafter, and at the expense of the employer. It is

therefore advocated that the labour movement should agitate for the deletion of

S. 9 (4) (b) of the Act.

ABOLITION OF EMPLOYERS STRICT LIABILITY IN PAYMENT OF

EMPLOYEES COMPENSATION FOR INJURIES

Strict liability, in the context of Employees Compensation Act, is a concept that

refers to the employers responsibility to pay compensation to the employee who

sustains injury, no matter the cause of the injury. The guilt or lack of guilt of

either the employer or employee notwithstanding, once the employee sustains

injury or gets ill or dies in the course of employment, the employer is bound or

liable to pay compensation. The actual or physical occurrence of the injury,

disease or death (the actus reus) is all that matters in grounding liability;whether the incidence was intended by the employer or employee (mens rea) is

not required to be proved before the employer is found liable to pay

compensation.

S.11 of the Act shows that there is no strict liability on the employer in the event

of occurrence of an injury. Under the Act, employers liability is conditioned on

the injury occurring at the normal workplace of the employee and in the course

of employment. Where an employee sustains an injury while working outside the

normal workplace, compensation shall be paid to the employee under the Actonly if

a) the nature of the business of the employer extends beyond the usual

workplace;

b) the nature of the employment is such that the employee is required to

work both in and out of the workplace; or

c) the employee has the authority or permission of the employer to work

outside normal workplace.

(S.11, Employees Compensation Act, 2010).

Section 11, and particularly S. 11 (c) of the Employees Compensation Act, 2010

should therefore be seen to be a retrogression, from the standpoint of

employees, when compared to S. 3 (3) of the Workmens Compensation Act, CAP

470 Laws of the Federation of Nigeria, 1990. Section 3 (3) of the 1990 Act

appeared to have established strict liability on the employer once an accident

resulting in death or serious and permanent incapacity occurred and it was

established that the employee was engaged in activities beneficial to the

employer, whether or not he was in the normal workplace and whether or not

he was authorised to do what he was doing when the injury occurred. For the

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avoidance of any doubt, the provisions of S. 3 (3) of the 1990 Act are reproduced

below:

3(3) For the purpose of this Act, an accident resulting in the death or

serious and permanent incapacity of a workman shall be deemed to

arise out of and in the course of his employment, notwithstanding

that the workman was at the time when the accident happened

acting in contravention

(a)of any statutory or other regulation applicable to his employment;

or

(b)of any orders given by or on behalf of his employer; or

(c)that he was acting without instructions from his employer,

if such act was done by the workman for the purposes of and in

connection with his employers trade or business

The provision of S. 11 of the Employees Compensation Act, 2010 therefore runs

counter to the spirit of earlier statutory provisions, which tended to support strict

liability on the part of the employer. Lord Atkin for example had established that:

once you have found the work which he is seeking to do to be within his

employment, the question of negligence, great or small, on the part of the

employee is irrelevant.48

In the same way, inJohnson v. Marshall Sons & Co. Ltd (1906) AC 409, 412Lord James49 explains that the concept of workmens compensation is based on

the principle of strict liability of the employer, regardless of lack of guilt or

negligence of the employer as follows:

The main object was to entitle a workman who sustained injury

whilst engaged in certain employments to recover compensation

from the employer, although he (the employer) was guilty of no

fault. The intention was to make the business bear the burden of

the accidents that arose in course of employment, and relief from

this liability is not found even if the injured workman be guilty ofnegligence.

The gravity of the hardship that can be experienced by an employee based on

the provision of S. 11 (c) of the Employees Compensation Act, 2010 can be

better appreciated by the decision of a High Court in a recent case 50, which is

based on the principle of being entitled to compensation only if the employee is

48 See Harris v. Associated Portland Cement Manufacturers Ltd (1939) AC 71,76, cited in E.E. Uvvieghara, (2001). Labour Law in Nigeria. Lagos: Malthouse,p.251.49 Cited in E. E. Uvvieghara. (2001). Labour Law in Nigeria. Lagos: Malthouse, p.250-251),50

Oyelade v. Inaolaji Enterprises (Nig.) Ltd. Suit No. I/660/2003. Judgement wasdelivered in the High Court of Justice of Oyo State on 9 June 2011 by the HonourableJustice M. O. Bolaji-Yusuff.

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authorised to be in a particular place or to perform a given task resulting in an

injury. The facts of the case that are relevant to the claim of damages are as

follows:

The claimant was employed as an earthmoving equipment truck driver. An

accident occurred which resulted in the claimants injury he was directing one

of the Defendants operators who was lifting a caterpillar engine. The chain being

used to lift the engine suddenly broke and the engine fell and struck the left leg

of the claimant. He claimed damages, contending that the accident occurred due

to the negligence of the defendant. The Defendant pleaded that it was not liable

as the claimant had no authority to be where he was when the accident

occurred. The court found in favour of the Defendant, citing relevant judicial

authorities to support the decision that damage suffered must be connected with

the breach of duty and that in the instant case, the Defendant did not owe the

claimant any duty of care when he went outside the duty assigned to him.51

It is therefore advocated that the provisions of S.3 (3) of the repealed Act be

improved upon and re-instated in the Employees Compensation Act, 2010. The

improvement needed to be incorporated in S. 3(3) of the repealed Act should be

towards ensuring that claim should not only lie when death or permanent

incapacity results; any injury which requires more than first aid treatment should

give rise to claim, whether or not the employee is authorised to do what results

into the injury, provided the employees act is to benefit the employer.

THE CONCEPT OF ARISING OUT OF OR IN THE COURSE OF

EMPLOYMENT

The purpose of the Employees Compensation Act, 2010, as stated in the Long

Title of the Act is that the Act is to make provision for compensations for any

death, injury, disease or disability arising out of or in the course of employment

and for related matters. A key condition to be satisfied to qualify for

compensation under the Act therefore is that any death, injury, disease or

disability arises out of or in the course of employment.

The critical question then is what is meant by arising out of or in the course of

employment? Surprisingly, there is no statutory definition of the term in S. 73,the Interpretation Section of the Act. The only clarification contained in the Act is

that once an act in which the employee is engaged is work related and

authorised, the employee or the dependant, in the case of death, will be

entitled to claim compensation, whether or not the employee is at the normal

workplace52. As it has been argued earlier, the key shortcoming in the Act is the

requirement of employers authority or permission before an employees act,

which results in injury can be considered to fall within the course of

employment.

51 Ibid. P. 19.52 S. 11, Employees Compensation Act, 2010.

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Though no statutory definition of the term, arising out of or in the course of

employment, is provided in the Interpretation section, it has been judicially

defined over time.

Bukkley LJ53 has asserted that out of and in the course of employment are

conjunctive, not disjunctive.

The concept, out of has to do with establishing a relationship between an

incidence or injury and the employment. In other words, there must be a causal

relation between the act giving rise to the injury and what was being done. This

suggests that what was being done and at the time it was being done

when the injury occurred must be held to be within the job for which the

employee was employed. Therefore, an injury that occurs out of may also

necessarily be within the course of employment.

The term, employment, has been defined by Lord Shaw54 to include not only the

actual work for which the workman was employed but also the risks, conditions,

obligations, incidents, accidents, and so on, associated with the nature of the

work or which arise out of or in the course of the nature of the actual work.Thus,

the risks of robbery and murder have been held to be incidental to the

employment of a cashier55. An attack on a teacher by school students is an

incidence arising out of the work of a teacher56. A workman who is in charge of

an office has a duty to maintain order and prevent fighting within the premises

and whatever injury sustained in preventing a fight arises out of or in the course

of employment.57A workman who is struck by a falling tree on his way home

after business experiences an accident arising out of employment 58.A workman

who is killed by a lorry belonging to a third party while working by the roadside

loses his life in an accident that occurs out of employment.59

Although Employees Compensation Act, 2010 does not appear to distinguish

between out of employment and in the course of employment, the two

concepts have been judicially held to be distinguishable60. Lord Denning61

describes in the course of employment as a very sensible rule that even

though a person is not obliged to be in a particular place, but goes there for

something incidental to his employment, such as for a meal to a canteen, he is

acting in the course of his employment62. Other examples that have been givenjudicial recognition as belonging to the category of in the course of employment

include accidents or incidences of injuries or disabilities that may occur in the

course of going to assume post within the company premises, using toilet

53 In Fitzgerald v. W. G. Clarke & Son (1908) 2 KB, 796 at 799.54 In Simpson v. Sinclair (1917) AC 127 at 142.55 Nisbet v. Batne & Burn (1910) 2 KB 689.56 Trim Joint District School Board of Management v. Kelly.57 UAC v. Joseph Orekyen (1961) LLR 144.58 Lawrence v. George Matthews (1929) 1 KB 1.59 Tako Maikujeri v. Provincial Engineer (1981) 2 PLR 587.60

Per Lord Wright in Dover Navigation Co. V. Craig (1939) 4 All ER 558 at 563.61 In R. V. Industrial Injuries Commissioner (1966) 2 QB 31.62 (Cited in E.E. Uvieghara, 2001: 261, op. Cit.

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facilities, resting in between shifts, standing by, waiting for the next job, and so

on. As Lord Wrenbury puts it, ...all these, and such as these, are not the

employment but are incidental to the employment. The man who is in the

course of his employment is engaged in his employment in all such cases

63

.

The rationale for the broad definition given to in the course of employment has

been provided by Matthew LJ64, as follows:

I wish to say that I do not think that the protection given by the

Act can be confined to the time during which a workman is

actually engaged in manual labour, and that he would not be

protected during the intervals of leisure which may occur in the

course of his daily employment. A workman is not a machine and

must be treated as likely to act as workmen ordinarily would

during such intervals...

In the light of the foregoing, it is reiterated that the provisions of S.3 (3) of the

repealed Act be improved upon and reinstated in the Employees Compensation

Act. The improvement needed to be incorporated into S.3 (3) of the repealed Act

is to ensure that claim should not only lie when death or permanent incapacity

results from accidents; any injury which requires more than first aid treatment

should give rise to claims, whether or not the employee is authorised to do what

results into the injury, provided the employees act was to benefit the employer.

EMPLOYEES OPTIONAL CHOICE TO BRING AN ACTION AT COMMON LAW

OR TO CLAIM COMPENSATION UNDER THE EMPLOYEES COMPENSATIONACT

It has been noted that two main approaches inform monetary compensation for

injury sustained at work:

the system of Negligent Liability (at common law), and

the system of workmens compensation.

It is argued in this section of the paper that though the system of

Negligent Liability has its shortcomings, it is better, from thestandpoint of the employee, to retain the optional right of the

employee to bring action or claim compensation, and in appropriate

cases, to claim under the two systems, particularly, when we consider

the weaknesses in the Employees Compensation Act.

However, section 12 of the Act appears to preserve the optional right of an

injured employee or dependant of deceased employee to elect to claim

compensation under the Act or to bring an action (at common law) only in one

situation: where the cause of death, injury or disability of an employee

63

See St. Helens Colliery Co. Ltd. V. Hewitson (1924) AC 59.64 In Benson v. Lancashire & Yorkshire Railway Company (1904) 1 KB 242 at251.

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is such that an action lies against some person, other than an employer

or employee. It is only in that circumstance that the injured employee or

deceased employees dependant may elect to claim compensation or may bring

an action. Even in such a situation, the employee or the dependant shall makethe election within 6 months of the occurrence of the injury or death or any

longer period, as the Board may, from time to time, determine.... Indeed, an

election by the employee or dependant to bring an action in court shall be a bar

to claim compensation from the Fund in respect of such injury, disability or

death65.

In all other situations apart from where the cause of death, injury or disability

of an employee is such that an action lies against some person, other than an

employer or employee, Section 12 (1) appears to limit the injured employee or

the dependant of the deceaseds employee to only one course of action to

claim compensation under the Act, provided the condition in S. 12 (2) issatisfied - the action or conduct of the employer, the servant or agent of the

employer or the employee, which caused the breach of duty, arose out of and in

the course of employment within the scope of this Act. In other words, where

the cause of action is against an employer or an employee, who may or may not

be the injured employees employer or employee-colleague, then the injured

employee or the dependant of the deceaseds employee can only claim

compensation under the Act; there is no option of bringing an action at common

law.

For the avoidance of doubt, Section 12 (1) provides:

The provisions of this Act are in lieu of any right of action, statutory or

otherwise, founded on a breach of duty of care or any other cause of action,

whether that duty or cause of action is imposed by or arises by reason of law

or contract, express or implied, to which an employee, dependant or member

of the family of the employee is or may be entitled against the employer of

the employee, or against any employer within the scope of this Act, or against

any employee, in respect of any death, injury or disability arising out of and in

the course of employment and where no action in respect of it lies.

The Blacks Law Dictionary66defines in lieu of as instead of or in place of; inexchange or return for, and gives two examples of usage, which do not admit of

choice: . The phrase in lieu of used in S. 12 of the Act therefore

suggests that the injured employee or the dependant of the deceaseds

employee is deprived of bringing an action at law; the only course of action

available is claiming compensation under the Act, provided the cause of action

occurs out of or in the course of employment and is against an employer, an

employee or agent of the employer.

65

See S.12 (3) for all the quotations in this paragraph.66 B. A. Garner. (Ed.)(2004). Blacks Law Dictionary. (8th Ed.) St. Paul, U.S.: WestGroup.

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In essence, whereas S. 12 of the current Act has substituted Workmen

Compensation Scheme for action at common law, Section 25 of the repealed Act

presented Workmens Compensation as an alternative to action at common

law.

It will not be difficult to come to the conclusion that the current Act has taken

away the optional right to either claim under the Act or bring an action at law if

we compare the provision of section 25 of the repealed Act with the provision of

S. 12 of the current Act. Section 25 of the repealed Act preserves the right to

either claim under the Act or bring an action at common law, independently of

claiming under the Act, provided such proceedings shall be a bar to claiming

compensation under the Act.

Section 25 (1) of the repealed Act provides in part as follows:

Where the injury was caused by the personal negligence or wilful act of the

employer or of some other person for whose act or default the employer is

responsible, nothing in this Act shall prevent proceedings to recover damages

being instituted against the employer in a civil court independently of this

Act.

Provided that

(a) a judgement in such proceedings whether for or against the employer

shall be a bar to proceedings at the suit of any person by whom, or on

whose behalf, such proceedings were taken, in respect of the same injuryunder this Act

We may now offer an opinion on the desirability or otherwise of depriving the

injured employee or the dependant of the deceaseds employee the optional

right to claim under the Act or to bring an action for damages under the common

law on the negligence of the employer. Though the current Act has the positive

goal of establishing a no-fault compensation regime under which the injured

employee is entitled to guaranteed compensation, no matter who is at fault, the

employee or the dependant of the deceaseds employee stands to lose when the

freedom of the course of action that can be taken is largely limited to claiming

under the Act. Apart from the negative effect of restricting choice of right of

action, the Court67 has also had cause to allude, obiter, to the disadvantage of

not preserving the right of action for damages under the common law, as

follows:

In most cases, claims at common law raise higher damages than under

the Act. In other jurisdictions such as England, a workmans right at

common law is still preserved in a number of Acts, including Social

Security Act of 1975, Factory Act, 1937 and National Insurance (Industrial

Injuries) Act 1946....

67 Per Chukwuma-Eneh, JCA in Adetona v. Edet (2004) 16 NWLR 338 at 367, B-C.

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Also, in A. C. C. & C. (Nig.) Ltd. v. Bamigboye68the Court of Appeal asserted

that substantial damages could be awarded in actions based on

negligence of duty of care at common law:

Where the plaintiff has adduced sufficient evidence of the defendants

negligence coupled with the fact that the defendant admitted that it is a

company, which is a going concern, there is enough basis to support

an award of substantial damages as opposed to excessive

damages to the plaintiff...

It is thus advocated that the Act be amended such that it retains the optional

right to claim damages for employers negligence, under common law, or to

claim compensation under the Act. In the event of a successful action by the

employee or dependant of deceased employee, the judgement sum may still be

sourced from the Compensation Fund to which all employers are required tocontribute. This may be an appropriate answer to the likely argument that it will

amount to double jeopardy for the employer, who contributes to the

Compensation Fund, to again bear the burden of judgment sum that may be

imposed by the court in a civil action.

However, while S. 12(1)(2) of the Act restricts right of choice of action to

claiming under Statute and S. 12(3) of the same Act limits the choice of

the employee or the dependant of deceased employee (where the cause of

death, injury or disability of an employee is such that an action lies

against some person, other than an employer or employee) to either a

claim of compensation or an action at common law on the ground of negligence

of the duty of care, S. 12 sub sections (6) and (7) allow the Board to decide

whether or not to maintain an action at common law for damages against the

party that is liable, in the name of the Board, if the employee or his dependant

has applied for compensation and/or has been paid compensation by the Board

under the Act. If the action for damages by the Board is successful, and more

money than has been paid to the employee as compensation is recovered, S. 12

sub section 6 provides in part that the amount of the excess, less costs and

administration charges shall be paid to the employee or dependant.

Section 12 sub section (7) of the Act goes further to prescribe that determiningwhether to maintain an action or compromise the right of action shall be within

the exclusive competence of the Board and the Boards decision shall be final.

The question this provision raises is: what is the rationale for putting this

decision within the exclusive competence of the Board when it is the employee-

victim rather than the Board that stands to benefit from the excess of damages

that may be recovered less costs and administration charges? This question is

pertinent particularly when it is borne in mind that the Employees Compensation

Act 2010 has done away with the provision ofS. 16 in the repealed Workmens

Compensation Act on the requirement of agreement between the employee

and the employer on the compensation payable in the event of an injury.68 Op. Cit., at p. 290, paras. E-F.

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For the avoidance of any doubt, section 16(1)(a) of the repealed Workmens

Compensation Act provides as follows:

16. (1) The employer and workman may after the injury in respect

of which a claim to compensation has arisen, agree in writing as

to the compensation to be paid by the employer and such

agreement shall be in triplicate, one of which shall be kept by the

employer, another copy by the workman and the third copy sent

to the nearest authorised labour officer; but-

(a) the compensation agreed upon shall not be less than the

amount payable under the provisions of this Act.

The current Employees Compensation Act, 2010 has completely left the

employee at the whims and caprices of the Board in terms of the amount of

compensation payable, without a requirement of an agreement. In interpreting

the value and significance ofS. 16 in earlier workmens compensation statutes,

the court has held that where compensation paid by the employer does not arise

from agreement between the affected employee and the employer, the

conclusion to draw is that the workman has not recovered compensation69.

Therefore, in the absence of a provision requiring agreement between the

employee and employer on the amount of compensation payable, the employee

should be statutorily allowed todetermine whether or not to bring an action at

common law for damages in addition to compensation paid by the Board,

provided that the amount of compensation collected from the Board

shall be refunded by the employee if his action is successful and he

recovers money in excess of the amount paid by the Board under the

Act.

Indeed, the legal framework governing employees compensation should permit

the employee to claim under the Act in addition to recovering damages by

instituting Personal Injury actions in the following circumstances, without

making a refund of excess over claims collected under the Act:

Product Liability actions where for example an injury results from

working with a defective or unreasonably dangerous equipmentaccompanied with deficient instructions or warnings in relation to the

operation of the equipment. The manufacturer, distributor or installer of

the equipment could be sued, apart from claiming compensation against

the employer under the Act.

Intentional torts committed by the employer or a third party

proven situations under which the employer or third party, whether co-

worker or not, actually acts with the intention to harm the employee. (This

category should be distinguished from situations under which employees

69 See Western Nigeria Trading Co. Ltd v. Ajao (1965) 2 ALL NLR, cited inUvieghara, 2001: 303.

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work under unlawful and exceptional hazardous working environment).

The employer or any third party could be sued apart from claiming

compensation under the Act.

The call for preservation of the optional right to claim under the Act and bring

action at common law may also be justified by considering that under the Act,

qualification for compensation is conditioned on occupational diseases which

have disabled the employee from earning full remuneration (S. 9 (1) (a). Also, all

references to the Second Schedule show that entitlement is based on degree of

disability. Thus, whether an employee suffers an occupational disease or sustains

an injury, if it does not cause reduction in earning capacity, compensation will

not be available, under the Act, for the pain, suffering and psychological trauma.

In the contrary, under the Negligent Liability system, there are chances for the

award of general damages.

We therefore reiterate that both systems of compensation Negligent

Liability and Workmen Compensation should be statutorily allowed; at

least, Negligent Liability should not be prohibited. Personal Injury Claims

involving third parties who do not have any employment relationship with any

employer, such as Product Liability cases or incidences of intentional torts are

examples of situations in which Negligent Liability will be the only

suitable course of action. Legislation could be enacted to limit the rules of

common law, including defences available to the employer. Indeed, in a few

jurisdictions, the worker is allowed to opt out of the system of workmens

compensation, having the right to choose between pursuing a claim forguaranteed benefits under workmens compensation or to pursue a personal

injury action70.

EMPLOYMENT BY CONTRACTORS AND PAYMENT OF COMPENSATION

This subsection of the paper answers the question: who pays compensation for

injuries sustained by employees of an independent contractor engaged (as an

agent) by a (principal) employer. Section 12 subsection (8) covers situations

where an employer (Principal employer) engages a contractor to execute the

whole or part of any work for the purpose of his trade or business. The principal

shall be liable to pay any compensation payable under the Act to any employeeemployed by the contractor-employer in the execution of the work. However, the

principal-employer has the right to maintain an action, for example, third party

proceedings, for indemnity against the contractor-employer. Alternatively, as

provided in S. 12(9) of the Act, the Board could order that the compensation

payable be charged, in whole or in part, to the employer-contractor.

The principle that the principal employer is liable to pay compensation to any

workman employed by the contractor-employer has been judicially upheld to be

applicable even where there are a principal, a contractor and a sub-contractor 71.

70 See A. Larson (2005), op. Cit.71 See Dittmar v. Owners of Ship V 593 (1909) 1 KB 389.

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Collins, LJ72 has explained the rationale for the principle which imposes

immediate liability to pay compensation on the Principal employer as opposed to

the contractor-employer as follows:

...if a person substitutes another for himself to do that which is

his own business, he ought not to escape the liability which would

have been imposed upon him, if he had done it himself, towards

the workman employed in that business

PART IV: INCAPACITY TO EARN, SCALE OF COMPENSATION AND THE

SECOND SCHEDULE TO THE ACT

A basic condition for entitlement to compensation is that the employee has been

rendered incapable to earn a living, on a point of finality, as a result of death; ordisabled to earn, totally, partially, permanently or temporarily as a result of

injury or disease. It is therefore considered important to briefly explain the

different categories of incapacity to earn, within the framework of the Act and

particularly in the light of the Second Schedule to the Act.

The Employees Compensation Act, 2010, in its Part IV (sections 17 to 30)

recognises the following three broad categories or five specific categories of

incapacity:

1. Fatal cases death, resulting from injury or disease

2. Permanent Disability

a. Permanent total disability

b. Permanent partial disability or disfigurement

3. Temporary Disability

a. Temporary total disability

b. Temporary partial disability

The above various categories of disability are briefly discussed below.

DEATH

There are two basic categories of beneficiaries entitled to compensation in the

event of death of an employee. They are:

Children beneficiaries, and

beneficiaries other than children.

72 See Wrigley v. Bagley & Wright (1901) 1 QB780,783, cited in E. E. Uvieghara, 2001:27,(op. Cit.).

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A basic condition is that the claimant must be a dependant of the deceased

employee. S. 73of the Act defines a dependant to include those members of

the family, including adoptive and foster family, of the deceased or disabled

employee who were wholly dependent upon his earnings at the time of hisdeath, or would, but for the disability due to the occupational accident or

diseases, have been so dependent. This definition, it must be noted, represents

retrogression when we compare it to the definition in the repealed Act, which

included persons wholly or partly dependent on the deceased or injured

employee, including the illegitimate children, their parents or grandparents73. S.

73 of the Act prescribes thata child means any person not more than 21 years

old and who is receiving full time education or any training and is not paid

wages; and includes any step-child and child adopted in a manner recognised as

lawful in Nigeria. S. 17(1)(c) of the Act complements S. 73 by providing that

monthly payments to eligible children under this Act shall be made to children

up to the age of 21 or until they complete undergraduate studies, whichever

comes first. However, in the case of disabled children, S. 17(1)(d) provides that

the Board is to determine for how long they would receive compensation after

attaining the age of 21 or after completing their undergraduate studies.

Where death occurs from an injury or occupational disease, the beneficiary is

entitled to monthly compensation based on calculated percentages of the

remuneration of the deceased employee for specified periods. The varied

percentages and length of period within which the beneficiary could collect are

reflected in the tabulation below (see pages 28 to 31).

It is important to point out that contrary to the provision of Article 2 of

Convention No 121 of 1964 concerning Benefits in the case of

Employment Injury, which provides for a funeral benefit ...at a prescribed

rate in addition to cash benefit to dependants, the Act does not make any

provision for funeral benefits.

PERMANENT DISABILITY: PERMANENT TOTAL DISABILITY AND

PERMANENT PARTIAL DISABILITY

Under the Act, apart from death, incapacity to earn could be either permanent

partial disability or permanent total disability. Unfortunately, unlike the

repealed Act, there are no statutory definitions offered to distinguish between

the two types of disability. The Employees Compensation Act, 2010 presents the

same definition reproduced below for the two types as if there is no difference

that it means the physical functions or conditions, mental capacity or

physiological health arising from and in the course of employment that cause a

deviation for more than 12 months from the condition typical for the respective

age which restricts participation in the life of society and includes

73 (See S. 41, Workmens Compensation Act, LFN, 2004)

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disfigurement74. The lack of definitions which clearly distinguish between

permanent partial disability or permanent total disability may therefore create

equivocal interpretation in the event of disputed claims for compensation.

Though repealed, the provisions of the Workmens Compensation Act may be

useful in differentiating between partial and total disability. In place of

disability, the repealed Act uses the word, incapacity. In this paper, the two

words are taken to be synonymous and can be used interchangeably. Section 41

(the interpretation section) of the repealed Act defines and distinguishes the two

concepts75. However, it will be odd for a party to rely on the definitions of a

repealed Act in making a case before the court.

From the definitions under S. 41 of the repealed Act, incapacity means either an

injury resulting in reduction of earnings or absolute inability to earn a living from

employment in which the workman was capable of being engaged. Partialincapacity means reduction in earnings in the particular employment the

workman was engaged at the time of the accident resulting in the incapacity, on

a temporary basis or reduction in earnings in every employment the

74 S. 73, Employees Compensation Act, 2010.

75 Partial incapacity means

(a) where the incapacity is of a temporary nature, such incapacity asreduces the earning capacity of a workman in any employment in which

he was engaged at the time of the accident resulting in the

incapacity; and

(b) where the incapacity is of a permanent nature, such incapacity as

reduces his earning capacity in every employment which he was

capable of undertaking at that time

The proviso to the definition goes further to clarify that but every injury in

the Second Schedule to this Act .... shall be deemed to result in permanent

partial incapacity except such injury or combination of injuries in respect ofwhich the percentage or aggregate percentage of the loss of earning capacity

as specified in that Schedule amounts to one hundred percent or more.

Total incapacity on the other hand is defined to mean such incapacity,

whether of a temporary or permanent nature, as incapacitates a workman for

any employment which he was capable of undertaking at the time of the

accident resulting in such incapacity, provided that permanent total

incapacity shall be deemed to result from an injury or from any combination

of injuries specified in the Second Schedule, which amounts to one hundred

per cent or more.

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workman was capable of undertaking, on a permanent basis. On the other

hand, total incapacity disables the workman from earning a living in any

employment he was capable of undertaking prior to the injury, either on a

temporary or permanent basis; it goes far beyond resulting in reduction inearnings.

However, an injury or a combination of injuries amounting to one hundred

percent or more estimated disability as specified in the Second Schedule shall be

deemed to be permanent total incapacityjust as any injury or combination of

injuries in respect of which the percentage or aggregate percentage of the

loss of earning capacity as specified in the Second Schedule amounting to one

hundred percent or more shall be deemed as permanent partial incapacity.

Though the current Act makes no distinction in defining permanent total

disability and permanent partial disability, compensation payable in the twoinstances varies. For Permanent Total Disability, the claimant is entitled to 90

per cent of the employees earnings, until he attains 55 years of age, or if he is

already 55 or more, then, for 2 years after the date of the injury 76 while for

permanent partial disability, the claimant is entitled to 90 per cent of an

estimate of the loss of remuneration, which results from the disability or

impairment,until the employee attains 55 years of age, or if he is already 55 or

more, then, for 2 years after the date of the injury77.

The critical concern is how to arrive at an estimate of the loss in earnings in

the case of injuries considered as Permanent Partial Disability. The Act makes it

dependent upon the whims and caprices of the Board, to make a determination

to pay either of the following depending on what the Board considers better

represents the loss in earnings -

a periodic payment that is equal to 90% of the difference between the

remuneration of the worker before the injury and what the employee

Documents

Employee Compensation Act Progress or Retrogression