…10% Annual Interest to Accrue Until Full Payment, Court Rules
Justice Maureen N. Esowe of the National Industrial Court of Nigeria, Lagos Division, has ruled that Union Bank of Nigeria Plc’s failure to pay a former employee, Mr. Odebunmi Odeniyi Taiwo, his pension allowance violated the bank’s Pension Scheme Rule 7(a).
The court deemed the bank’s action wrongful and ordered it to pay Mr. Taiwo N2,000,000.00 as compensation for the hardship caused by delays in transferring his pension to his Retirement Savings Account (RSA).
The court also awarded interest at a rate of 10% per annum on the judgment sum, which will continue to accrue until full payment is made.
Mr. Taiwo, who joined Union Bank as a Clerk on June 22, 1982, served the bank for nearly 23 years before his employment was terminated on January 26, 2006.
Represented by his lawyer, C.M. Ohamuo, he filed suit NICN/LA/550/2012, claiming that the termination violated the bank’s Trust Deed of 1996 and Pension and Gratuity Scheme Rules of 1979.
He argued that the bank’s actions in deferring and altering his pension payments caused significant financial hardship for him and his family.
Union Bank, through its counsel, S.A. Obadojin, denied the allegations, asserting that the termination was lawful and that the pension was transferred to Mr. Taiwo’s RSA in compliance with the Pension Reform Act of 2004.
However, the court found that the bank’s actions contravened its internal pension rules, noting that Mr. Taiwo had met the eligibility criteria for pension benefits under the old scheme.
While rejecting some of Mr. Taiwo’s claims, including pre-judgment interest due to insufficient evidence, the court ruled that Union Bank must:
• Pay N2,000,000.00 in compensation for the delay in transferring his pension funds.
• Pay interest at a rate of 10% per annum on the judgment sum until it is fully settled.
Justice Esowe emphasized the importance of interpreting the bank’s pension rules holistically and concluded that the bank’s refusal to pay the claimant’s pension violated its obligations under the pension scheme, rendering its actions wrongful.
