ASSOCIATIONS REGISTERED UNDER CAMA CANNOT LEGALLY OPERATE AS TRADE UNIONS
- December 19, 2023
- Posted by: Stephen Azubuike
- Category: Case Law Blog
An interesting decision emanating from the National Industrial Court of Nigeria (NICN), Port Harcourt Division, re-establishes the limits and boundaries of associations that can be registered by the Corporate Affairs Commission (CAC) under Part F of the Companies and Allied Matters Act 2020 (CAMA) which governs incorporated trustees.
In Maritime Workers Union of Nigeria v. Incorporated Trustees of Freight Forwarders Transport Association & Ors.,* an association registered under CAMA by the CAC was however intrinsically designed to operate as a trade union—and it operated as such—contrary to the provisions of the Trade Union Act. The NICN saw through the ‘disguise’ and made some brilliant pronouncements.
Facts of the Case
Two registered institutions—Maritime Workers Union of Nigeria (“MWUN” or “the Union”) and Incorporated Trustees of Freight Forwarders Transport Association (“Freight Forwarders Association” or “the Association”) were involved in a supremacy tussle. MWUN (as Claimant) sued the Association (as 1st Defendant) and some of its members, including the CAC (10th Defendant) at the NICN.
MWUN is a recognized trade union registered under the Trade Union Act by the Registrar of Trade Unions. It is the umbrella body for all maritime and allied workers/employees operating in the maritime sector. These workers include truck drivers involved in haulage transport who are engaged by clearing and forwarding agencies (freight forwarders). The Union has operated for many years and has offices in many parts of the country, including Port Harcourt (Onne Port).
On the other hand, the Freight Forwarders Association was registered by the CAC. The objective of the Association is to pursue the welfare interests and smooth business operations of truck drivers carrying out the trade of haulage transportation who are engaged by freight forwarders in Nigeria.
The Union sued the Association contending that the Union is the only legally recognised union in Nigeria with the mandate to cater for the welfare of its members which include truck drivers engaged by freight forwarders. The Union claimed that one of its former members, Idris Ali Garuba (sued as 6th Defendant), connived with other Defendants to form the Association to rival the Union.
The Union argued that the Association was dabbling into the Union’s sphere of operations by attempting to be in charge of collecting check-off dues and other levies from members of the Union at Onne Port and on the highways. The Union resisted this attempt, leading to a fracas at Onne Port. It was found that this fracas at Onne Port led to the filing of this suit. While the Union had an office at Onne Port, the Association had none.
The Union prayed the Court to declare that the Association—being an association registered under CAMA by the CAC—cannot be involved in trade union activities within the Union’s areas of control. It also prayed the Court for general damages, injunctive reliefs (restraining the Association from interfering with the Union’s operations), and nullification and cancellation of the Association’s CAC Certificate of Incorporation.
The Association and other Defendants (except CAC) filed their defence and preliminary objection. In order to accelerate justice, the Court considered the objection together with the substantive suit in line with the Rules of Court [Order 18 Rule 2(2)(3)].
The Court had no difficulty dismissing one leg of the preliminary objection filed against the suit. 1st–9th Defendants had argued that the matter is not a trade union dispute since the Association is not a trade union. The Court however held that the matter touches on section 254C(1)(j)(vi) of the 1999 Constitution—relating to the determination of any question as to the interpretation and application of trade union constitution, the constitution of an association of employers or any association relating to employment, labour, industrial relations, or work place. Obviously, the instant suit touches on the assembly of truck drivers (being employees of freight forwarders) as a group and the obstructive activities of the Association as claimed by the Union.
In deciding the case, as we shall soon see, the NICN had to interpret some provisions in the constitutions of the Union and the Association.
The other leg of the preliminary objection bordered on the argument that the CAC sued as 10th Defendant is a Federal Government agency and for that reason, the matter ought to be filed at the Federal High Court. The learned trial Judge disagreed with the “preposterous submissions”. His Lordship held that the National Industrial Court draws its jurisdictional life from the subject matter of the dispute and not from the nature of parties before it. Ogbuanya J. reasoned:
By S.245C(1) of the 1999 Constitution (3rd Alteration), the jurisdiction of the National Industrial Court is based on ‘subject matter test’, and not circumscribed by type of parties, as its subject-matter jurisdiction spans across various persons; be it public, private, corporate or individual, and all strata of government institutions and agencies operating at federal, state or municipal level which accounts for the appellation of ‘National’ in its Name—National Industrial Court of Nigeria.
Also, the Court censured the 1st–9th Defendants’ Counsel for presenting unsolicited arguments on behalf of the CAC which never hired the counsel to defend it in the suit. The Court seized the opportunity to caution counsel to refrain from such practice.
Dealing with the Substantive Issues
As the Association sought to deny that its existence and objectives are in conflict with those of the Union, the learned trial Judge had better ideas. Ogbuanya J. carefully turned to the aims and objectives of both institutions in order to determine the question of similarity and conflict. After a close scrutiny of their respective constitutions and evidence before the Court, his Lordship concluded that the Association operated as a trade union (collecting check-off dues from members) even though it was registered under CAMA by the CAC.
The Court further observed that the principal role of a trade union is to cater for the welfare interests of a designated category of workers within a specified sector. The performance of this role by the Association (in the interest of the truck drivers in haulage transport and who are members of the Union) was exactly what the Association set out to do. In the Court’s consideration, this directly conflicted with the operations of the Union.
More importantly, the Court held that going by the provisions of sections 823(1) and 825(1)(b) of CAMA and section 45 of the Trade Union Act, the Association has no right to operate as a trade union. Sections 823(1) and 825(1)(b) of CAMA only permit the registration of associations formed for religious, educational, literary, scientific, social, development, cultural, sporting, or charitable purposes. Trade unionism isn’t one of the purposes captured. Section 45 of the Trade Union Act states that “The Companies and Allied Matters Act shall not apply to any trade union, and registration of any such body under that Act shall be void.”
In finally stamping the seal of approval on the superiority of the Union as the legally recognised umbrella trade union within the maritime sector, the Court relied on the decision of the NICN in Maritime Workers Union of Nigeria v. National Union of Road Transport Workers** (cited by the Union and admitted by the Court). In that case, it was held that the Union is the appropriate body to unionize workers and those engaged in containerized haulage transportation in the maritime sector. Surprisingly, Counsel to the Association urged the Court to discountenance the case on the ground that the Association was not a party to the suit. His Lordship dismissed the contention for being “weird”. According to the Court:
Learned Counsel forgot that the entire corpus of case law forming precedents and stare decisis applicable in courts of law worldwide are applicable on the basis of ratio of the judgment gauged with the established principles of law, and not on the basis of actual parties involved in the litigation of the case.
Call to Cancel the Association’s CAC Registration
Interestingly, before instituting the instant suit, the Union had written a petition to the CAC complaining about the “unscrupulous activities” of the Association which was operating as a trade union. But the CAC replied, urging the Union to go to court. Upon filing the instant suit, one of the reliefs sought by the Union is the nullification and cancellation of the CAC Certificate of Incorporation of the Association.
The NICN established that the CAC ought to refrain from registering the Association in the first place, going by the Association’s stated objectives. And that’s all from the NICN. The Court in its admirable wisdom declined the call for the nullification and cancellation of the Certificate of Incorporation of the Association. This was on the ground that it lacked the jurisdiction to make such an order. The Court rightly held that only the Federal High Court has the jurisdiction to make such pronouncement. In my opinion, it is left for the Union to approach the Federal High Court, armed with this judgment.
Liberalization of the Rule on Trade Union Monopoly
Importantly, the Court made some vital observations regarding the recent judicial liberalization of the rule on trade union monopoly.
Before now, section 5(4) of the Trade Union Act guaranteed trade union monopoly by restricting multiplicity of trade unions. Thus, where there already exists a registered trade union representing certain classes of persons, no other trade union can be registered to pursue the same objectives in the interest of that same category of persons.
The Court cited two recent decisions of the NICN which approved registration of new trade unions to represent classes of persons in the same sectors with already existing trade unions. The cases are Yusuf Abdullahi & Ors. v. Minister of Labour & Employment*** and Federal Government & Anor. v. ASUU.**** Judgments were delivered on 16 May 2023 and on 30 May 2023 respectively. The decisions placed reliance on the constitutional right to freedom of association and precepts of the ILO Convention on liberal trade unionism.
But to take advantage of the liberalization regime, an association must be properly registered as a trade union under the Trade Union Act.
Trade unions play a vital role in fostering industrial peace and harmony. This is a major reason trade unions enjoy a different governing regime by virtue of the Trade Union Act. Therefore, the idea of associations registered under CAMA operating like trade unions or interfering with the operations of other trade unions in a given sector should be resisted by law. The Court is highly commended for the industry in deciding the case touching on a clear conflict between a union and an association. In upholding the case of the Union in the instant case, the Court awarded 10 Million Naira general damages in favour of the Union against the Association. The Court also restrained the Association from using its CAC Certificate of Incorporation to interfere with the operations of the Union. Associations intending to or that already operate as a trade union should therefore take steps to regularize their operations.
*Suit No. NICN/PHC/48/2022 – Judgment delivered on 3 October 2023
**Suit No. NICN/PHC/12/2015
***Suit No. NICN/AK/04/2022
****Suit No. NICN/ABJ/270/2022