EMPLOYMENT CONTRACT AND CONFLICT IN ORGANIZATION IN NIGERIA: COURSE, CAUSES, CONSEQUENCES AND RECOMMENDATION

INTRODUCTION

Employees occupy a very strategic place in an organization because of their

centrality to the production process. They contribute a very indefinable role

both in the achievement of various organization goals and objectives as well as

the government economic programme. However, for employees to perform their

crucial role effectively and efficiently there must exist a strong cordial

relationship between the employer and employee of such organizations.

Although conflict in an organization is inevitable, it must however be noted that

friction between employer and the employee must be reduced through a vibrant

collective bargaining process to ensure smooth operation in the business of the

organization. Conflicts are inevitable in every organization. There will always

be conflicts and disagreements between employers and employees, either on

wages or on the general condition of service of the workers.

Conflict in Nigerian industries has become perennial and disturbing so much

that it has hampered the growth of some organizations in Nigeria.

In many organizations in Nigeria today, internal (intrapersonal) and

interpersonal conflicts are consuming so much organizational time and attention

that organizations are starting to look as though conflict is their primary

business (Ojielo, 2002).

This development is largely due to the inability of leaders in Nigerian work

organizations to view the management of conflict as systematically as they view

information, human resources, and financial management systems. Instead,

conflict is viewed and handled in piecemeal and is considered as local events.

The inability to view and manage workplace conflicts systematically has

therefore rendered conflict dysfunctional in some organizations. This is

evidenced by the high frequency of strike action, unhealthy rivalry between and

among sub-units and individuals within an organization, sabotage at workplace,

slow work, labour turnover, absenteeism, lack of productivity, general

inefficiency, high rate of industrial accident, low moral, withholding of vital

knowledge and a host of others that are being perpetrated by workers in

workplaces.

What is a Contract of Employment?

As in every form of contract, the contract of employment is the central

element in the structure of labour law. One could succinctly say that a

contract of employment is that written document that governs the

relationship between an employer and an employee. This will generally

presuppose that there is someone who is in dire need of labour and

another who is in dare need of wages.

Nature and Basic Elements of Contract of Employment

As stated in the introductory part of this unit, a contract of employment,

like all other contracts, is governed by the general law of contract.

Therefore, all the essential features which characterize ordinary

contracts must be present in a contract of employment before it can be

said to be a valid contract of service.

A contract of employment may be under seal, oral, in writing or inferred

from the conduct of the parties thereto. The essential elements required

for the validity of contracts are;

(a) offer;

(b) acceptance;

(c) consideration;

(d) intention to create legal relations;

(e) capacity to contract;

(f) certainty; and

(g) legality.

Offer

The offer is an expression of willingness to contract made with the

intention (actual or apparent) that it shall become binding on the person

making it as soon as it is accepted by the person to whom it is addressed.

It may also be express or by conduct.

In AGOMO V GUINNESS (NIG) LTD (1995)2 N.W.L.R (PT380) P.672

at 675, the Supreme Court defined an “offer” as

A preposition put by one party (the offeror) to another in dire

need of a means of survival in terms of a gainful employment.

When these two meet, and there is a consensus as to the terms

and conditions of service to be rendered by the employee for a

fee, salary or wages mutually agreed by both parties, then it is

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LAW231 LABOUR LAW

said that a master/servant relationship exists between them.

Therefore, the said employee becomes subservient to the dictates

of the employer who is otherwise regarded as the master.

In labour law however, there is a clear distinction between servants who

are subject to the whims and caprices of their masters who chose,

directs, monitors and controls the servant in respect of the jobs to be

performed by the servant. The master dictates what to do and what not

to do. In such a situation, the contract of employment is said to be a

contract to service.

On the other hand, where the employer chooses, directs, monitors and

controls the type of job to be performed for the master, such contract of

employer is categorized as a contract of service. The employees in this

category include professionals such as lawyers, doctors, architects,

nurses, engineers and so on. This distinction shall be dealt with at the

appropriate unit in this course.

Acceptance

While an offer is an expression of willingness to contract, an acceptance

on the other hand is a final and unqualified expression of assent to the

terms of an offer. In Lawal V U.B.N. Plc (1995) 2NWLR (pt. 378) 407 at

409 the Supreme Court defined acceptance as an unqualified assent to

the terms of an offer. The Court further stated that for acceptance of an

offer to constitute an agreement the acceptance must be made while the

offer still subsisted, and was known to the offeree, and must be

communicated to the offeror, or the requisite act required by the offeror

must have been done.

One could safely conclude that expression of interest to an offer clearly

indicates an interest to accept the terms and condition of such an offer.

CONSIDERATION

Usually consideration takes the form of promises exchanged by the

contractual parties, or the duty undertaken by one party on account of

the promises of the other. In the famous English case of CURRIE V

MISA (1875) L.R.10 Exch. 153 at 162, LUSH J. made a classical

definition of the term consideration as follows;

A valuable consideration in the eye of the law may consist

either in some right, interest, profit or benefit accruing to

one party, or some forbearance, detriment, loss or

responsibility, given, suffered or undertaken by the other.

Thus consideration does not only consist of profit by one

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LAW231 LABOUR LAW

party but also exists where the other party abandons some

legal right in the present, or limits his legal freedom of

action in the future as an inducement for the promises of the

first.

In a contract of employment, the consideration for work is wages and

the consideration for wages is work.

The terms of a Contract of Employment

By virtue of section 91 of the Labour Act, Cap 198, Laws of the

Federation of Nigeria, a contract of employment means any agreement,

whether oral, written, express or implied, whereby one person agrees to

employ another as a worker and that other person agrees to serve the

employer as a worker.

By the foregoing, it is clear that contractual terms consist of express and

implied terms. Express terms comprise those orally agreed or reduced to

writing. Section 7 of the Labour Act makes it mandatory for an employer, not

later than three months after the commencement of a worker’s

employment, to take the particulars of the employer, place and date of

commencement of the engagement, the nature of the employment,

duration of the contract, method of termination of contract, wages and

the period of payment, hours of work, holidays, holiday pay and sick

pay.

Implied terms are those which the contractual parties have not expressed

or made but which may yet form a part of their contract. Mi

Awolowo ?????University Sources of implied terms include;

(a) Common law

(b) Collective agreements

(c) Workplace notices and documents

(d) Customs and practices

(e) Terms imposed or assumed by the courts

(f) Statutes

Managing conflict is critical for sustaining organizational efficiency and

effectiveness (McCain & Galbriath, 1981). Growth in multinational companies

and international alliances (Kanter & Corn, 1994), as well as increased diversity

within a country's workforce (Jackson,Stone, & Alvarez, 1992), suggest that

individuals from diverse backgrounds will be working together in organizations.

An increase in diversity is often associated with an increase in conflict (e.g.,

Jehn, Northcraft, & Neale, 1999).

Industrial relations deals with the problem of employment, conditions of work,

pay, security of employment and other issues such as labour grievances, trade

disputes and their resolution within the frame work of rules and regulations,

mutually to by employer and its employees. In the words of Marshall (1996),

Industrial relations, (also known as labour relations) is the interdisciplinary and

somewhat diffuse study of the institutions and rule-fixing processes of the

labour. It's core subject-mater has always been collective bargaining between

trade unions or analogous organisations on the other hand. The term "employee

relation" found increasingly in management writing, was once a synonym for

industrial relations.

The unpleasant side of industrial relation and on which the public often

associate industrial union is strike. The strike shows a breakdown of cordial

relationship between the employee represented by the labour union and

employer or management. Strike are the most overt and significant aspect of

industrial conflict but they are unfortunately only a part of the phenomenon of

conflict. Most strikes involved attempts by either the union or management to

change the bargaining power of the other party. When a strike is adequately

used for the demand of the employees, it can force employers to concede to the

demands of the employees.

It can impose exorbitant costs and thereby induce them to reach agreement. A

strike may be used to effect a change in the structure of bargaining and to win

substantive demand by workers.

Collective bargaining can therefore be described as the industrial machinery

for determining wages and conditions of employment with a view to improving

the quality of work life of the employees. It encourages the power of the union

to enter contract with management to determine the terms and conditions of

service of its members as well as establish the procedure for handling disputes.

What is Industrial Relations?

Industrial relations is the process and institution through which employment is

managed, such as trade union and employers associations (Kuper and Kuper

1996). Cordova (1980) defines industrial relations as "the process of interest

accommodation by which conditions of work are fixed; relations are regulated

and power is shared in the field of labour". Yesufu (1984), on his part sees

industrial relations as "the whole web of human interactions at work which is

predicted upon and arises out of the employment contract". Both definitions

recognized that industrial relations is concerned with the systems, rules and

procedures used by union and employers to determine the reward for effort and

other conditions of employment, to protect the interest of the employed and

their employers and to regulate the ways in which employers treat their

employees. Mgbe (1993) emphasized that the term industrial relations is

relevant in and applies to the context within which modern society organises its

various economic and production services.

Concept of conflict and industrial conflict

Unions and management tend to have opposite views because of the

divergence between the expectations of management and labour in

organizations which often leads to conflicts. Conflict by nature is a constant

phenomenon in any human organization. It is so ubiquitous in social life that it

has been isolated by some as the basic unit for understanding social existence

(Ajala, 2003; Alimba, 2010). The endemic nature of conflict in human grouping

has been traced to the pursuit of divergent interests, goals and aspirations by

individuals and/or groups in defined social and physical environment (Otite,

2001). Thus, conflict remains the most permanent feature that makes humanity

convinced that growth and development are predicated on conflicts. Though

conflict is generally perceived as something devastating, abnormal,

dysfunctional and detestable, yet it could be a precursor of positive change if

constructively handled (Edwards, 2002; Hammed & Ayantunji,2002).

As a concept, conflict has been subjected to diverse definitions by various

scholars based on the context and their understanding of the concept. For

example, Lederach (1995) described conflict as an ongoing situation that is

based on deep seated differences of values, ideologies, and goals. In support of

this definition,

Fisher et al (2004) defined conflict as a relationship between two or more

parties (individuals or groups) who have or think they have incompatible goals.

It therefore implies that conflict is a continuous interaction that span through

lifetime of man and not just a one-off relationship.

Also, one of the most quoted traditional definitions of conflict describes it as

„struggle over values and claims to scarce status, power and resources in which

the aims of the opponents are to neutralize, injure, or eliminate their rivals

(Coser,1956:8)

This description of conflict explains the reasons why workers are often

ready to ground all economic or productive activities via strike in a bid to get

their demands met. In corroboration with Coser‟s definition of conflict,

Constantino et‟al(1995) described conflict as the process of expressing

dissatisfaction, disagreement or unmet expectations with any organizational

interchange. But in his contribution,Otite (2001) conceptualized conflict as a

way of settling problems originating from opposing interests and from the

continuity of society. Ajala (2003) succinctly summarises the discourse on

conflict when he said conflict is the mechanism which keeps society going.

Conflicts are not occurring. Dahrandorf (1959) said that "conflict of interest is

inevitable between employer and employee because an authority relationship in

the aim of the two parties will at least lead to conflicts". Dahrandorf holds the

view that there will always be conflicts between those in authority and those

without authority, that is, the governing and the governed, because of divergent

views on the basic employment relationship, which seems to make some degree

of conflict inevitable at the work place. He observed that while the government

wants to impose on the governed, the governed want to have a say in the

imposition upon them. It is the absence of having a say that usually brew

conflict. Yesufu (1984) said, "Conflict is a normal and inevitable part of

everyday life. As it is destructive, so also, it is beneficial depending on the

situation, circumstance and the issue at stake.

Usually conflict result in wasteful use of human and material resources

leading to low productivity, retrenchment, dismissal, and alienation. Conflict

can manifest itself in the form of unrest, work stoppage (strikes), sabotage,

absenteeism, work to rule, lock out, and so on. The most common of the

manifestation of conflict is strike.

This implies that conflict as a phenomenon can manifest in diverse ways such

as strike, absenteeism sabotage, labour turnover, pilfering, restriction of output,

lockout and a host of others. Ubeku (1983) opined that most conflicts are caused

by motivational factors. He stated that „an employee who feels aggrieved

against a manager, a supervisor or against the company as a whole is unhappy

employee and an unhappy employee cannot work effectively. The employee

becomes very low; satisfaction at work in terms of all the circumstances that

surround the job is the key to high morale. It does not matter how well paid and

interesting a job may be unless the individual performing the job feels that he is

being fairly treated his morale will be adversely affected.

Folarin (1988) stated that individuals, group and organization or institution are

naturally not in the state of harmony or equilibrium and that conflict is a natural

and inevitable occurrence in human condition. He stated further that conflict is

not invariably synonymous with a breakdown in communication but rather, it is

a different type of communication, which may in fact be the ideal mode of

expressing ideas.

The most liable treatment is often conflict management rather than conflict

resolution. He also pointed out that not all conflict is detrimental to the

individual, group or organization. He stated that it is generally recognized that

there can be no change without conflict and without change there can be no

progress or development whether personal, social or scientific.

Conclusively, conflict is defined within the context of work relationship as

inevitable disagreements between and within any or all of the actors in the work

place. The views of various writers on the concept of conflict and industrial

conflicts have established that conflict is inevitable and that it is not inherently

dysfunctional rather its outcome depends on how it is handled or responded to

by the parties involved.

Whether conflict is seen as central or ancillary to the employment

relationship, however, depends upon one‟s conceptualization or larger view of

the origins, function and structure of this relationship. From one perspective,

historically and contemporaneously reflected in the work of industrial relations

scholars, the employment relationship is a pluralist, mixed motive relationship

featuring two parties, labor and management, with opposing interests; hence,

conflict is inevitable in this relationship.

CAUSES OF CONFLICT

Conflicts arise in organizations in two ways namely, internal and external.

A. INTERNAL SOURCE

This comprise of disagreements arising within the organisation. Conflict

orientations within a work setting centres basically on the opposed nature of the

interest of the employers and workers. The employer is seeking the greatest

possible output at the least cost. The employer is constantly seeking to lower the

wage rate, to lengthen the hours of work, to speed up the workers, to layoff and

to discharge workers whenever it is temporarily economical. On the other hand,

the union which represents the workgroup is seeking continuous employment

for its members at the highest possible conditions in respect of hours of work,

security and continuity,safety, comfort, sanitation, esteem and so on.

In this relation, both the employers and the employees want the largest cut of

the industrial cake that they both cannot get. Moreover, conflict arises because

the needs of all three actors of industrial relations often conflict with one

another. Therefore, according to Otobo (2000), internal sources of conflict

would include:

i. Style of management

ii. Nature of physical environment of the work place

iii. Orientation or social consciousness of workers

iv. Other conditions of service

v. Efficacy or otherwise of the promotion system and

vi. Cumbersomeness of grievance and disputes procedure.

B) EXTERNAL SOURCE

These include government industrial and economic policies, the nature of

labor legislation, unpatriotic and unethical behaviour of the political and

economic classes, national economic mismanagement and general distribution

of wealth and power in the society. The important thing to note about these

factors is that both workers and management respond to them. Some of the

external causes of conflict may however not directly instigate industrial conflict,

but they do influence general social expectation.

Ojeli (1977) stated that the causes of industrial conflict in Nigeria is due to the

lukewarm attitude of employers and government in responding to the demands

of the workers or treating their demand with levity, and also, non recognition of

the Nigerian Labour Congress [NLC] as an organ for harmonizing possible

conflict between the employers of labor and employees. He also argued that

most union leaders are politically motivated by making a big case out of nothing

in order to obtain cheap popularity. More often than not, they cause confusion

in their organization when they capitalize on trivial matters to blow their

trumpets.

However, there is a consensus that conflict is inevitable in all interactions of

human beings. Organizations exemplify this by the way it is structured, because

there are different individuals and groups, various departments, divisions, units,

etc. These various groupings struggle to maintain their identities, missions and

roles in carrying out their different functions which harbor abundant

opportunities of conflict.

CONSEQUENCES OF EMPLOYMENT CONTRACT AND CONFLICT

Consequences of breaking employment contract can be very severe for the

parties who signed the contract. A contract of employment is a legal agreement

between an employee and the employer. A breach of such a contract happens

when either the employee or employer breaks a condition. If the employer does

not give wages or the employee do not slog the agreed hours in the contract it

gets terminated.

Not all the conditions of a contract are written down. A breach can be of a

verbally decided term or a written down term of a contract. An income has

special protection and in certain situations the employer can be prevented from

taking away money out of the payment even if that isn’t breaching the

agreement. If the employer suffers a monetary loss due to a breach, they can

make a complaint for harm against the employee

He would normally apply to a county court for a breach of agreement claim.

The only method an employer would make a formal application to an

Employment Court is in response to a breaking of contract claim made by the

employee.

Compensations are only given for financial loss. For instance, if the employee

does not provide sufficient notice the company could make a claim for damages

due to the extra price of hiring staff to do that work. The employee would get

the right to salaries he earned prior to leaving plus pay for unclaimed statutory

leave. The most general breaches of contract are when one quits without giving

notice.

The effects of conflict in the workplace are widespread and costly. Its

prevalence, as indicated by three serious studies, shows that 24-60% of

management time and energy is spent dealing with anger. This leads to

decreased productivity, increased stress among employees, hampered

performance, high turnover rate, absenteeism and at its worst, violence and

death. Conflict in the workplace is the result of a variety of factors. Perhaps the

most significant cause is when someone feels taken advantage of. This might

happen when a perfectionist boss demands the same dedication and

commitment from employees as he or she exhibits, but does not compensate

them for the late or weekend hours.

Other scenarios include the employee having unrealistic expectations of what

their job position really is, or of being misunderstood in the workplace. Conflict

also arises because of values and goal differences in the company. The company

may not have goals or not adequately express the goals and values to their

employees. Conversely, the employee may have personal goals and values at

odds with those of the company.

RECOMMENDATIONS

There are four specific steps managers can take to reduce workplace conflict.

The first is for managers to look at communication skills, both in terms of how

they communicate and how they’re teaching their employees to communicate

with each other. This, of course, includes using ‘I’ statements instead of ‘you’

language. Owning your own feelings and your own communication is a much

more effective way to communicate and even more, teaching your employees to

communicate that way with others, goes a long way toward reducing conflict.

The second part of communication is for managers to beef up listening skills.

Active listening involves things like actually trying to understand what the other

person is saying, and then communicating to the other person that you do indeed

understand what they’re saying.

The second way to decrease workplace conflict is to establish healthy

boundaries. Without boundaries, there will be conflict and squabbles, power

struggles and all kinds of circumstances that make for messy situations.

You can be professional and be empathetic and compassionate toward your

employees, without crossing the line of becoming their friend. This is especially

important when there’s a power difference between two people in an

employment situation.

The third factor to reducing conflict is a skill called ‘emotional intelligence.’

There are many aspects and facets but it basically means developing skills to be

more effective by teaching people to combine both intelligence and emotions in

the workplace.

Seeing and dealing with employees as human beings with real lives is often

overlooked in the busy workplace. People with high emotional intelligence can

do this in a professional manner, and maintain appropriate boundaries. Another

aspect of EQ is knowing and being sensitive to how employees are experiencing

you as a manager. Part of EQ is teaching managers to be sensitive to how

they’re coming across to others.

The fourth aspect of reducing workplace conflict is setting up behavioral

consequences to be used with truly uncooperative employees who are unwilling

to change. Despite using all these recommendations, there will be a few

employees that just won’t change because they’re unwilling or unable. That

means a manager must explain a consequence, which is an action or sanction

that states to the employee the likely outcome of continuing problematic

behavior. It will take skills from the three previous points to do this in a non-

threatening way.

Is there ever a place for anger in the workplace? Yes. When people can say,

‘Wait a minute. I’m not happy with this; I don’t like what’s going on,’ and they

turn that anger into a positive action, then the anger can be seen as a kind of

motivator. Sometimes when we’re in a position where we recognize that we are

upset about something, and we use that to our advantage, we can make that

work for us, and in the long run, actually work for the company.

As employees, the more we can learn to speak up, to be able to say what our

needs and our wants are in a healthy way, and not let it fester to the point of

rage or explosion, we can use our anger as a motivator to help us take action.

Employees can also change their attitude toward their job while putting up with

the unpleasant aspects of it. One way to reduce conflict and to be happier is to

find a way to shift our perspective and our vision of why we’re there.

In summary,

1 Organizations must always be prepared for the occurrences of conflict and be

able to tolerate and contain them with reasonable bounds.

2 A proactive industrial relations policy should be put in place by employers to

always anticipate and respond to economic changes that affect the welfare of

workers.

3. Employers should desist from infringing upon the rights of employee. in the

same vein, unions must respect managerial or employer’s prerogatives.

CONCLUSION

This paper work has revealed the following facts;

· Definition of contract of employment both under the common law

and under the Nigeria statutes regulating thereto.

· The nature of a contract of employment and the basic requirements

needed for a valid employment contract.

· A discussion of the relevant statutes

· The distinctive features between the terms of contract.

Where a contract of employment exists, it is necessary to put in place

all the necessary machineries that will make it workable and

compensatory to the adverse party in time of breach.

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