Introduction
An employee who receives salary in lieu of notice after the termination of employment may assume that accepting the payment has no further legal consequences. In Nigerian employment law, however, that assumption can be dangerous.
The courts have consistently held that, in an ordinary master and servant relationship, an employee who accepts salary in lieu of notice may be taken to have accepted the termination of the employment. In such circumstances, the employee may be precluded from subsequently challenging the termination.
But that is not the end of the story.
A significant qualification arises where the employment is governed by statute and the employer has failed to comply with a mandatory statutory procedure for termination. In such a case, the fact that the employee collected salary in lieu of notice does not necessarily validate the termination.
This distinction was recently brought into sharp focus by the Court of Appeal in Nwankwo v. University of Jos & Anor (2025) LPELR-80937(CA).
The general rule: acceptance of salary in lieu may amount to acceptance of termination
In an ordinary master and servant relationship, the terms of the contract of employment determine the rights and obligations of the parties.
Where the contract provides that the employment may be terminated by giving a specified period of notice or by paying salary in lieu of notice, an employer may ordinarily exercise that contractual right.
The courts have held that where the employee accepts the salary paid in lieu of notice without protest, the employee’s conduct may amount to acceptance of the termination.
The principle was applied by the Court of Appeal in Shuaibu & Ors. v. NBC Plc (Coca-Cola) (2020) LPELR-52110(CA) at pp. 58-59, paras. C-A.
The Court held:
“…Further, the evidence before the lower Court showed that the Appellants accepted and collected the salary in lieu of notice and the other monies paid to them by the Respondent, upon the service of the letter of termination, and without any protest. The law, in such circumstances as in this case, is that the Appellants, by collecting the monies, had consented to the termination and the termination is mutual and can no longer be contested or challenged by the Appellants-Olaniyan Vs University of Lagos (1985) 2 NWLR (Pt 9) 599, Ajilore Vs Kwara State College of Technology (1986) 2 SC 371, Morohunfola VS Kwara State College of Technology (1990) 1 NWLR (Pt 145) 506, Guinness Nigeria Ltd Vs Agoma (1992) 7 NWLR (Pt 256) 728. Angel Spinning & Dyeing Ltd Vs Ajah supra.”
Per HABEEB ADEWALE OLUMUYIWA ABIRU, JCA.
The important words are “without any protest”.
They demonstrate why the circumstances in which the employee receives the money matter. The courts are not merely concerned with the physical receipt of the money. They may consider whether the employee’s conduct amounted to an acceptance of the employer’s decision to terminate the employment.
But is acceptance of salary in lieu an absolute bar to challenging termination?
No.
This is where the law becomes more nuanced.
The rule applicable to ordinary contractual employment cannot simply be transferred to every employment relationship.
Where an employee’s employment is governed by statute and the employer is required to comply with a mandatory statutory procedure before terminating the employment, failure to comply with that procedure may render the termination void.
Where the termination is void, the subsequent acceptance of salary in lieu of notice does not validate it.
This distinction was emphasised by the Supreme Court in The Military Administrator of Benue State & Ors. v. Ulegede & Ors. (2001) 11 NWLR (Pt. 141) 194.
As reproduced and relied upon by the Court of Appeal in NWANKWO v. UNIJOS & ANOR (2025) LPELR-80937(CA) (Pp 51 – 53 Paras D – E), the Supreme Court held:
“The retirement of respondents was therefore not in compliance with the enabling law that is the Public Officers (Special Provisions) Act, Cap 381, Laws of Nigeria, 1990. The retirement being unlawful and void a valid act cannot arise therefrom. I agree therefor that acceptance of three months’ salary in lieu of notice cannot in the circumstance preclude the respondents from complaining about the unlawful retirement which was void ab initio….. The principle is now well settled that where an act is void ab initio, it cannot be validated by subsequent acts even if valid. This is because you cannot add something on nothing….. The retirement remains void notwithstanding. The acceptance of the payment of three months’ salary in lieu of notice of retirement did not amount to acceptance of the invalid and void retirement.”
Per Ayoola, JSC.
The principle is straightforward: an act which is void cannot be made valid merely because the person affected by it subsequently accepts a payment arising from that act.
The recent decision in Nwankwo v. UNIJOS (supra)
The distinction between the two situations was recently considered by the Court of Appeal in Nwankwo v. University of Jos & Anor (supra).
The case concerned an employee whose employment with the University of Jos was regulated by statute. The appellant had collected three months’ salary in lieu of notice, but challenged the termination on the basis that the employer had failed to comply with the statutory procedure governing the termination of his appointment.
The respondents argued, in substance, that having collected the salary in lieu of notice, the appellant could no longer challenge the termination.
The Court of Appeal rejected that argument.
The Court acknowledged the established rule applicable to common law master and servant relationships, but distinguished it from cases involving statutory employment.
The Court held:
“Whilst it has been held in many cases relating to Common Law master and servant relationships that where an employee accepts salary in lieu of notice, he may not be heard to subsequently complain that his contract of employment was not validly and properly determined because in such a case, his conduct could render the determination mutual. See ILOABACHIE v. PHILIPS [2002] 14 NWLR (PT 181) 264 and ANGEL SPINNING DYEING LTD v AJAH supra (cited by the Respondents). However, in THE MILITARY ADMINISTRATOR OF BENUE STATE & ORS v ULEGEDE & ORS [2001] 11 NWLR (PT 141) 194 (where the issue arose as to whether a claimant who was compulsorily retired under the Public Officers (Special Provision) Act has forfeited his right of action by collecting payment in lieu of notice), the Supreme Court (per Ayoola, JSC) held thusly: “The retirement of respondents was therefore not in compliance with the enabling law that is the Public Officers (Special Provisions) Act, Cap 381, Laws of Nigeria, 1990. The retirement being unlawful and void a valid act cannot arise therefrom. I agree therefor that acceptance of three months’ salary in lieu of notice cannot in the circumstance preclude the respondents from complaining about the unlawful retirement which was void ab initio….. The principle is now well settled that where an act is void ab initio, it cannot be validated by subsequent acts even if valid. This is because you cannot add something on nothing….. The retirement remains void notwithstanding. The acceptance of the payment of three months’ salary in lieu of notice of retirement did not amount to acceptance of the invalid and void retirement.” The Supreme Court equally held in ADENIYI v GOVERNING COUNCIL, YABA COLLEGE OF TECHNOLOGY supra that application for and collection of three months’ salary in lieu of notice of retirement did not validate the invalid and void act of unlawful and wrongful retirement. See also the decisions of this Court in ALHASSAN v A.B.U., ZARIA & ORS (2009) LPELR-8138(CA) and EGESI v SEMB & ORS (2014) LPELR-24101(CA) 1 at 27 – 29. It being so, quite contrary to the arguments forcefully pressed by counsel on behalf of the Respondents, the fact that the Appellant collected three months’ salary in lieu of notice does not preclude him from challenging the purported termination of his appointment with the 1st Respondent that did not comply with the emphatic dictates of Section 16(1) of the University of Jos Act.”
Per PETER OYINKENIMIEMI AFFEN, JCA.
This decision is important because it puts the two apparently conflicting lines of cases into their proper context.
The difference between wrongful and void termination
One of the most important distinctions in Nigerian employment law is the distinction between a termination that is wrongful and one that is void.
In ordinary master and servant employment, an employer may have a contractual right to terminate the employment by giving the required notice or paying salary in lieu.
If the employer terminates the employment contrary to the terms of the contract, the termination may be wrongful.
But wrongful termination does not ordinarily mean that the termination itself is ineffective. The employment comes to an end, although the employer may be liable in damages for the breach of contract.
A different situation arises where the employer’s power to terminate is controlled by statute and the statute prescribes a mandatory procedure which the employer fails to follow.
In such a case, the termination may be void.
Where the termination is void, there is nothing valid for the employee to have accepted merely by receiving salary in lieu of notice.
That is the critical distinction in Nwankwo.
Statutory flavour changes the analysis
An employment is generally described as having statutory flavour where its terms and conditions are governed by statutory provisions or regulations made pursuant to statute, and the employer is required to comply with those provisions when exercising its power over the employee.
Universities and certain public institutions provide common examples where the relevant enabling legislation may prescribe the procedure for appointment, discipline, removal or termination.
In such cases, the employer cannot simply rely on the general contractual principle of payment in lieu of notice where the statute requires something more.
The question becomes:
Did the employer comply with the statutory procedure?
If the answer is no, and the non-compliance renders the termination void, the employee’s subsequent acceptance of salary in lieu does not cure the defect.
This principle was also recognised by the Court of Appeal in Alhassan v. Ahmadu Bello University, Zaria & Ors. (2009) LPELR-8138(CA) and Egesi v. Semb & Ors. (2014) LPELR-24101(CA) at pp. 27-29.
Adeniyi v. Governing Council, Yaba College of Technology
The same principle was applied by the Supreme Court in Adeniyi v. Governing Council, Yaba College of Technology.
The case is significant because the employee had applied for and collected three months’ salary in lieu of notice.
Nevertheless, the Supreme Court held that the acceptance of the payment did not validate an otherwise invalid and void termination.
The significance of Adeniyi is therefore that acceptance of the financial benefit resulting from a termination cannot retrospectively confer validity on an act which the law regards as void.
This principle was expressly relied upon by the Court of Appeal in Nwankwo.
What then is the position where the employee accepts the money without protest?
The answer depends upon the employment relationship and the legal defect being alleged.
In ordinary contractual employment
Where the relationship is one of ordinary master and servant, the contract governs.
If the contract permits termination by notice or payment in lieu and the employer exercises that contractual right, an employee who accepts the salary in lieu without protest may be regarded as having consented to the termination.
The employee may consequently be unable to subsequently challenge the termination merely on the basis that the contract was not validly determined.
This is the principle applied in Shuaibu v. NBC Plc.
In employment with statutory flavour
The position is different where the employer is required by statute to comply with a mandatory procedure.
If the statutory procedure was not followed and the resulting termination is void, acceptance of salary in lieu does not validate the termination.
The employee remains entitled to challenge the validity of the termination.
That is the principle affirmed in The Military Administrator of Benue State v. Ulegede and recently applied in Nwankwo v. UNIJOS.
Does protesting the termination make a difference?
Yes, it may.
In Shuaibu v. NBC Plc, the Court specifically relied on the fact that the employees accepted the money “without any protest.”
This is significant because the courts may consider the conduct of the employee in determining whether acceptance of the payment amounted to consent to the termination.
An employee who believes that the termination is wrongful should therefore be cautious about signing an unconditional acknowledgment that the employment has been validly terminated or accepting the payment in circumstances that may objectively amount to an acceptance of the employer’s position.
However, an employee cannot avoid the consequences of a void termination merely because the employee protested, nor can an employee create statutory protection where none exists simply by writing “under protest” on a payment acknowledgment.
The underlying legal question remains whether the employer complied with the applicable contract or statute.
Salary in lieu of notice is not a universal cure
It is therefore incorrect to state the law broadly as follows:
“Once an employee collects salary in lieu of notice, the employee cannot challenge the termination.”
That statement is too wide.
The more accurate statement is:
Where an employee in an ordinary master and servant relationship accepts salary in lieu of notice, particularly without protest, the employee may be taken to have consented to the termination and may be precluded from subsequently challenging the determination of the contract.
However:
Where the termination is governed by a mandatory statutory procedure and the employer fails to comply with that procedure, acceptance of salary in lieu does not necessarily preclude the employee from challenging the termination, particularly where the non-compliance renders the termination void ab initio.
That is the distinction now reinforced by Nwankwo v. University of Jos & Anor (2025) LPELR-80937(CA).
What should employers do?
Employers should not assume that payment of salary in lieu automatically makes every termination lawful.
Before terminating an employee, an employer should determine:
- whether the employment is purely contractual or has statutory flavour;
- what the contract of employment provides concerning termination;
- whether the employer has a contractual right to terminate by payment in lieu;
- whether any statute, regulation or applicable conditions of service prescribes a special procedure;
- whether that procedure has been strictly complied with;
- the correct amount payable as salary in lieu; and
- whether the payment is being made in the manner and at the time required by the contract or applicable law.
For an employment protected by statute, compliance with the statutory procedure should come first. Payment of money should not be treated as a substitute for a mandatory statutory requirement.
What should employees do?
Employees should equally understand that receiving salary in lieu of notice can have legal consequences.
Where the employment is an ordinary contractual employment and the employee accepts the payment without protest, the employee may subsequently face difficulty challenging the termination.
An employee who believes that the employer has violated a contractual or statutory obligation should therefore obtain appropriate legal advice before signing documents or accepting payments in circumstances that may amount to an unconditional acceptance of the termination.
At the same time, employees should not assume that refusing the payment is always necessary to preserve their rights. The law, particularly in cases involving statutory employment, looks at the legal validity of the termination itself.
Conclusion
The Nigerian law on acceptance of salary in lieu of notice is therefore not as simple as saying that “acceptance equals consent.”
There are two important lines of authority.
The first applies principally to ordinary master and servant relationships. Under this line of cases, an employee who accepts salary in lieu of notice, particularly without protest, may be regarded as having consented to the termination. The termination becomes mutual and may no longer be open to challenge on the ground that the contract was not validly determined.
The second applies where the employment is governed by statute and the employer has failed to comply with a mandatory statutory procedure. In such a case, if the termination is void, acceptance of salary in lieu does not validate it.
The recent decision in Nwankwo v. University of Jos & Anor (2025) LPELR-80937(CA) (Pp. 51-53, Paras. D-E) is therefore significant. It does not abolish the established principle concerning acceptance of salary in lieu in ordinary contractual employment. Rather, it confirms that the principle cannot be used to validate a termination which the law regards as void for failure to comply with a mandatory statutory requirement.
Ultimately, the question is not merely:
“Did the employee collect salary in lieu of notice?”
The more important questions are:
What kind of employment was it? What did the contract provide? Was the employer bound by a statute? Was a mandatory statutory procedure prescribed? Was that procedure complied with? And was the resulting termination wrongful or void?
Those questions determine the legal effect of the employee’s acceptance of salary in lieu of notice.
Disclaimer
This article is for general information and educational purposes only. It does not constitute legal advice and should not be relied upon as a substitute for legal advice on the facts of a particular employment dispute. The applicable law and available remedies may depend on the contract of employment, applicable legislation, regulations, conditions of service and the specific circumstances of the termination.
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