The principle of contracting out is a legal principle bedevilled by a lot of exceptions to the extent that it could be considered an exception to the rules rather than a rule with exceptions.
Contracting out simply means undertaking in a contract to abandon one's rights already protected by existing law. Thus, a man could enter into a contract with another person to permit that other person to cut off his head and use for a ritual in exchange for payment of specified huge sums of money to his family members for their upkeep in the event that he be dead after the cutting off of his head. This contract is made in total abandonment of the constitutional right that protects a person from being killed by another person.
In another related contract, a yearly tenant could contract with the landlord to eject him after one week of failure to pay his rent, in total abandonment of the protection afforded him by the Tenancy Laws that he be given 6 month notice before he could be ejected. In this case, the tenant contracted out his right to 6 month notice.
A resident doctor could contract out his annual leave and weekends to the hospital management, and keeps working daily throughout the year by year despite the protection afforded him by the Public Service Rules that he be allowed a minimum of 30 days of an annual leave. There are many other instances and ways one could contract out.
The big question is why would a sane person contract out? The reasons include desperation, inadequacies, unbalanced bargaining positions, fraud, duress, greed, misrepresentation and ignorance.
It must be stressed that Nigerian Courts view contracting out with Argus eyes and would usually visit it with a lot of disapproval. The proponents of contracting out base their argument on the dictum that contract is contract and must bind the parties. However, the Nigerian Courts are courts of equity, justice and good conscience. Nigerian laws and courts would not hesitate to strike down a contract purporting to contract out statutorily protected rights of the Nigerian citizenry especially when there is a tinge of desperation, unbalanced bargaining statuses, fraud, coersion, greed, ignorance, mistake or misrepresentation. See case laws on the subject matter infra.
Contracts are readily vitiated by fraud, coersion and misrepresentation, and such contracts are not enforceable. Bonding is one such contract that is usually vitiated by the above mentioned elements. A contract between an institution or company on one hand, and an individual on the other hand, is usually construed by Courts as a contract between two unequal parties. Such contracts are usually construed strictly against the stronger party. This is because the Courts tend to come to the rescue of the weak who has clean hands.
Bonding does not only constitute a restraint of trade and violation of our contract Laws, but also violates section 34(1)(c) of the 1999 Constitution of the Federal Republic of Nigeria and Section 73 of the Labour Act. These two laws provide that no person shall be required to perform forced or compulsory labour.
A member of staff who wishes to be bonded to the establishment can be bonded. The issues that arise from such bonding is how binding is the bonding?
It is not every agreement that is binding in law. For an agreement to binding there must be offer, acceptance, consideration and capacity on one hand, while there must not be a vitiating element on the other hand. It is trite that illegal agreements are not legally binding. They are not enforceable in court. In addition to illegal agreements not being binding, some lawful agreements are not binding too. One of such lawful agreements that are not binding is BONDING without consideration, as well as bonding vitiated by coersion. Coersion is implied whenever unequal parties contract unequally.
Bonding without consideration is the process of bonding a member of staff of an establishment without a consideration for the bond itself. A resident doctor or a consultant who is bonded to a hospital over some period of time is not bound by the bond unless the hospital furnished a consideration for the bond itself.
This simply means that such a resident doctor or consultant can treat the bond documents as useless pieces of papers and pull out of the institution and no bonder can recover from him for abandoning the bond. He could even sue and recover from the institution for breach of his fundamental rights.
A bond with consideration is a bond with special attachment to it. It can be a bond with money attached to it. Thus, apart from the normal salaries or normal sponsorships that any other member of staff of the same category can apply and obtain in the course of service, a bond with consideration must involve an extra consideration not readily made available to other members of staff of the same category.
Such consideration could include extra bonuses paid the bondee monthly, annually or in bulk. This extra gratification is not available for members of staff of the same category. It is this extra bonus that constitutes the consideration, and not the normal salaries or sponsorships other members of staff of the same category are entitled to in the course of their service.
A resident doctor or a consultant who is a civil servant is entitled to a few perquisites by virtue of the Public Service Rules or the Residency Training Program Laws and Regulations as the case may be. The provisions of any of those entitlements by the employer to the bondee do not constitute adequate and sufficient consideration. Adequate consideration is a levy against the bonder in favor of the bondee far outside of what is considered the routine obligations of the bonder to the bondee of similar category. Therefore, no bond can be grounded or premised on the fact that a resident is sponsored for an overseas training if such training is part of contemplated training processes in the residency appointment.
It must be noted that any amount may be considered sufficient consideration depending on the circumstances of the case as adjudged by courts which shall also adjudge that the bond was not vitiated. But no consideration at all invalidates a bond pronto, no matter how beautifully the agreement is crafted or drafted.
A bond without consideration is an empty chariot in war. A consideration that is not sufficient will not avail the bonder. A consideration is only sufficient if it is adequate, and outside of and beyond what is the normal and usual expectations of the employee of a particular category in the course of his employment.
The Doctrine of Consideration is inextricably tied to simple contract. Not same could be said of a Deed Contract. Therefore, circumventing consideration by the use of Deeds is a veritable tool in the hands of the wily Chief Executives, secondary to what the Courts would say as regards bonding.
In simple contract of employment not witnessed in Deeds, a bond in Deed would be circumspect. In the end, simple contracts must have valuable consideration to be enforceable in Nigeria. The characteristics of consideration are as listed below, with their corresponding case laws.
1. Consideration must not be past: Roscorla v. Thomas (1842); Eastwood v. Kenyon (1840); R. v. Clark (1927), Re McArdle (1951), Lampleigh v. Brathwaite (1615); Re Casey’s Patents (1892); Pao On v. Lau Yiu Long (1980).
2. Consideration must move from promisee/claimant: Tweddle v. Atkinson (1861).
3. Consideration must be legal: Wyatt v. Kreglinger and Fernau (1933).
4. Consideration must be requested: There must be express or implied request by promisor to promisee for consideration. Distinguish from conditional gifts.
5. Consideration must be valuable and sufficient, but not necessarily adequate: Thomas v. Thomas (1842); Chappell v. Nestlé (1960), White v. Bluett (1853); cf. US case of Hamer v. Sidway (1891), Alliance Bank Ltd. v. Broom (1864), Combe v. Combe (1951).
6. Consideration does not arise from the performance of existing public duty without extra or factual benefit: Collins v. Godefroy (1831), Glasbrook Brothers v. Glasmorgan County Council (1925), Stilk v. Myrick (1809); cf. Hartley v. Ponsonby (1857), Williams v. Roffey (1990), Antons Trawling Co. Ltd. v. Smith (2003), Pinnel’s Case (1602), Foakes v. Beer (1884), Re Selectmove Ltd (1995), Collier v. P & M J Wright (Holdings) Ltd (2008), Hirachand Punamchan v. Temple (1911), Cooper v. Parker (1885)), Shadwell v. Shadwell (1860), New Zealand Shipping Co. v. A.M. Satterthwaite & Co. (The Eurymedon) (1975). In Pao On v. Lau Yiu Long (1980).
The above conditions must be met seriatim before a bond can be enforceable against the person that executed the bond to be bound, in this article referred to as bondee.
The employees who execute bonds do that after their employment contract. The employment contract is what is used as the consideration, and not further training. Where further training is conscripted as the consideration, it fails flat in the case of a resident doctor or medical consultant whose professional line of duty ordinarily involves continuous training. In fact, not allowing for this further training of these mentioned categories of doctors is an inhibition of the professional practice of the named medical practitioners, and actionable.
Thus, the consideration in the case of a medical consultant or resident doctor is not only past, but also nonexistent. The consideration is past because the employment contract used as consideration for the bond is earlier in time to the bond. The consideration is nonexistent because the training part is not anything extra to the normal professional appurtenances of a practicing consultant or resident doctor in his field of study. If for anything, it only enhances his productivity as he discharges his duties as he concurrently trains. Contrast this with an employee who is only being trained without a concurrent discharge of duty.
Furthermore, the bonding institution is only performing an existing duty in the contract of employment. This performance of existing duty of payment of salaries is not a consideration for bonding. That is only a consideration for the contract of employment.
In contract of employment, the employer is the promisor while the employee is the promisee. The employee accepts the promise (employment). The consideration is the salary from the employer and the work done by the employee. In the contract of bond, the employee is the promisor while the employer is the promisee. The table is turned here. The consideration is the promise not to leave the employment by the employee for a number of years. The employer on the other hand furnished no consideration at all. This, therefore, is more like a unilateral contract, although the promisor has not stipulated his conditions to the promisee employer. In fact, it is a mere invitation to treat. The employee can abandon this invitation any time he wishes without legal consequences. This is because invitation to treat is not a binding offer or agreement.
Awkadigwe Fredrick Ikenna
OBGYN
ESUTTHP
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