1.1 Meaning and Scope of Contract of Employment

The contract of employment is a specie of contract, and is Therefore governed by general principles of the law of contract, consensusad item, Being a kind of simple contract, contract of employment must also satisfy the elements of a valid contract. The vitiating factors are also applicable to it. What distinguishes a contract of employment from a simple contract, which chitty defines as a promise or a set of promises which the law will enforce1, is the degree of control that one party has over the other party2. Also, a contract of employment relates to a relationship that exists between two or more persons for the performance of services, while one person is employed by the other. Where as, a contract relates to a relationship that exist between two or more persons in any transaction, generally.

Traditional statements of what constitute a contract of employment, place most emphasis on the power of the employer to control the work of the employee in contrast to a contract with an independent contractor.In Chadwick v. pioneer private telephone Ltd, contract of employment was defined thus: contract of services implies an obligation to serve and it comprises some degree of control by the master”3. It must howeverbe noted that there is no comprehensive definition, only conflicting criteria’s. A contract of employment can be defined as a contract entered in to by two parties whereby one party submits himself to the service of the other for some considerations in most casess salary and wages. An attempt has, however been made in the sphere of labour Legislations in Nigeria4 at defining a contract of employment as;

’’Any agreement whether oral or 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.”

It is a contract of service and not for service, what differentiates them is the fact that in a contract of service, a man (employee), places his labor at the disposal of another, resulting in a relationship between the to parties. Where as, a contract for services involve a situation where a man who operates an independent business agrees to do labor or carry out a task or tasks for the person of another. In past times, the contract of employment was known as and called a relationship of ‘’ master and servant”.

Since employment relationship strictly represents subordination of an individual as a worker to an employer, which relationship could be described as a dependent labor relationship, Mr. Y’s house keeper, gate keeper, driver or chauffeur is his employee, that a laundry man or a t-axi driver is an independent contractor5.

Thus, for a contract of employment to be distinguished from a contract for service, the parties involved must avail themselves of the statutory rights under it. That is, it must be shown that a relationship of employer and employee or master and servant exists between them. Thus, there must be terms agreed by both parties for this will be the sole principle which will guide their acts and conducts during the subsistence of the employment. As held by the court in SMITH V. GENERAL MOTOR CAB. CO6, where the claim for the existence of such relationship between the parties fails.

As must have been noted, a contract of service involves two separate legal categories of persons namely – an Employer, master, hirer, or recruiter, and an Employee. WHO IS AN EMPLOYER ?: Although this has no précise meaning in law;

’’An employer is any person who has entered in to contract of employment to employ any other person as a worker her for himself or for the services of any other person and includes the agents, manager, or factor of that first mentioned person and the personal representatives of a deceased employer.”7

An employer can also be defined as; ’’The entrepreneur who engages a worker under a dependent labor relationship and has control over that worker to the extent that such worker could be referred to as an employee’’. Also, an employer is ’’Any person who employs or engages labour or the service of another person under contract of service’’.Theemployer could be an individual, a partner, a corporate body or even a state (the Government).8


Any person who has entered in to or works under a contract with an employer whether the contract is for manual labor or clerical work or express or implied or oral or written, and whether it is a contract of service or a contract personally to execute any work or labor but does not include…………… persons exercising administrative, executive, technical or professional functions as public officer or otherwise.”9

To identify an employer or servant then, the essential question is ’’ was his contract a contract of service within the meaning which an ordinary person would give to the word?”. In CASSIDY v. MINISTER OF HEALTH10Bomerell,l.jgave the view that, if the answer is YES, then such a person will be regarded as an employee. In ADEYEMO v. OYO STATE PUBLIC SERVICE COMMISION,11 the plaintiff who was a deputy accountant Generalloyo state public service was held to be a servant or employee. Employee and servant have been used interchangeably by authors also, various Nigerian statutes have defined who a servant is by using words like workers, employee or workman.

1.2 Formation of Contract of Employment

The existence of binding relationship between the employer and the employee arises out of contract, as essential elements for the formation of  a contract of employment or service between an employer and employee upon which their rights and obligations depends are generally same as conditions in ordinary or simple contact. This legal relationship therefore presupposes the voluntary consent of the parties to its creation expressed through the process of hiring within limitation imposed only by the general law of contract or statutory regulation. The terms are often not negotiable by the individual employee except in some cases where remuneration is negotiable, depending on the professional skills required by the employer. As such,  the rights and dutiesof the master and servant are essentially the products of free bargaining  between the parties,  as they have liberty to decide  the terms and conditions of  service.

Beside the element of voluntariness, there is also the presumption of equality between the parties but professor Odumosu has described this presumption of equality between the parties as a ’’Fiction’’.12 Also, AdeogunA.A commented on the presumption of equality and voluntariness of bargaining power between the master and the servant, as he noted that, ’’… the so-called bargaining power of the individual worker is of little importance in practice……”13

The basic conceptual frame work for the individual employment relationship is provided by contract, and as such, the employment relationship created must of necessity satisfy all the essential features of a valid contract. There must be offer, acceptance, requisite capacity of parties, consideration, intention to give the agreement legal efficacy and no element vitiate the contract. With regard to capacity, the parties must have requisite legal capacity to enter the employment relationship, Generally, the capacity of infants, women, and persons of unsound mind are limited in some ways.


The terms of the contract of employment can be derived from the individual contract itself, collective agreement and legislations.Besides this, the terms of a contract also depends largely on the intention of the parties, as they are free to agree upon the contents or terms of their employment relationship. The terms of contract relates to those statements, express or implied, by which the employer and the employee intend to guide their employment relationship. The term defines the rights and duties of obligations and liabilities arising from the relationship. As stated above, there are express or implied terms . The express terms include: Hours of work14 travel to work,15wages and control of wages. The Implied obligation of employer include: To pay wages,16To treat employee with due respect; provision of work for the employee; Safety of the employee at work; Provision of references; To indenify the employee.17.

Some implied duties of the employee include: The duty of obedience; 18 Dutyto exercise skills and reasonable care;19  duty to render honest and faithful service; Avoid secret profit and personal gain; competition.Avoid misuse of confidential information.20

The contractual terms may be oral or written, but important contents of a contract ofemployment are as a matter of practice and prudence, made in writing and the terms documented properly.

1.4  Historical Background of Employer’s Liability 

Munkman21asserts that a recorded history of an employer’s liability started in 1837, when it started by effecting a denial of the workman a remedy for his damage through the application of the Doctrine of Common Employment. This doctrine operated as a defence under Common Law. It depends on the theory that the contract of employment between an employer and an employee contains an implied term that the employee will not hold his employer liable for an injury due to negligence of a fellow employeeengaged in Common employment with him. Thus, a master was only liable to his servant when there was a want of care in selecting his servant or personal negligence or omission to take reasonable precautions to ensure his worker’ safety. The employer was therefore absolved of any vicarious liability for any tort committed by one fellow employee against another.22 This was the principle introduced into the common law by Lord Abinger CB in PRIESTLEY v. FOWLER,23 where he held that:“the mere relation of the master and the servant can never imply an obligation on the part of the master to take more care of the servant than he may reasonably be expected to do of himself”.   By this, Lord Abinger almost excluded the employer totally from any liability to his employee.

This remained the common law position until the English House of Lords WILSON and CLYDE COAL Co Ltd. V. ENGLISH,24 Maintained that the employer is under the duty to take reasonable care for the safety of his employee in the course of his employment. This doctrine of common employment continued to limit the remedy available to employees until the Wilson’s case: In the case, an employee was killed due to an accident caused by co-workers. The employee argued that the company was not liable on the grounds that the decreased employee contributed to his own death by not taking an alternativeroute on thegrounds that the decreased employee contributed to his colleagues aware of his location. The court held that the employer-company is liable for negligence in the performance of the duty to exercise reasonable care and to ]provide a reasonably safe system of work. That the implied duty of care was personal to the employer –company and it could not be devolved upon one of its employees, as the employer had argued that the duty of provide a safe system of work had been delegated to the colleagues of the deceased who caused the accident, that the employer has a delegable duty to create a safe system of work. The defence of common employment has also been statutorily abolished in Nigeria, in the then Federal territory of Lagos, in 1961. Eastern Region, 1962, Western Region, 1963, and for the whole country in 1988.25

The Labour Act provides;

(1)   It shall not be a defence to an employee who is used in respect of personal injuries caused by the negligence of a person employed by him, that, that person was, at the time the injuries were caused, in common employment with the person injured.

2)    Any provisions contained in a contract of service or apprenticeship or in an agreement collateral thereto (including a contract or agreement entered into before the commencement of this section) shall be void in so far as it would have the effect of excluding or limiting any liability of the employee in respect of personal injuries caused to the person employed or apprenticed by the negligence of persons in common employment with him.

In NIGERIAN TOBACCO CO. LTD. V. ALLOYSIUS OLUMBA AGUNANNE,27 the Supreme Court opined that the doctrine does not exist to all.


The employee’s safety at work is generally guaranteed by the imposition of certain duties on the employer, duties either fixed by the contract itself expressly, or implied by and or imposed by statutes as the case may be. The breach of these duties may involve the employer in one form of liability of another.28 But one is baffled at the reason why the employer should be liable to the employee he has employed, as it is the employer who makes an offer of the existence of such employment to the employee and to pay him wages.

As stated above, certain duties are imposed on the employer, as fixed by the contract itself. That is, certain termsexpressly agreed on and fixed by both the employer and the employee as the sole principle which will guide their acts and conducts during the substance of the employment. In a situation where parties were free to go back on their promises without incurring any liability, employment relations would be unbearable and it would be impossible to carry on trade and commerce. In the case of a contract of employment, the employer’s liability to his employee should be breach any term of the contract arises because both –parties genuinely intended and consented their legal relations, to be bound by it.

The general rule is that the employer at common law has the implied duty to take reasonable care of his employee. This duty is concerned with those protection given by the common law, to guarantee the safety of the employee at work or save the employer from damages in case of any injury to the employee in the course of the employment.29

The legal duties and responsibilities of the employer in course of his relationships with the employee can arise in two ways namely; personal or vicarious (Liability).

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