Aug 11, 2017

Difference between Letter of Dismissal & Letter of Termination | Adedunmade Onibokun

It is important to note that an employment relationship cannot be forced upon either an unwilling employer or employee. Therefore, an employer has a right to hire and fire, likewise an employee has the right to resign from an employment.

Many a times, the words “dismissal” and “termination” are used interchangeably when referring to an employee whose employment has seized.  This may be appropriate in general discussions, however, under the law, a dismissal and a termination of employment have completely different interpretations and consequences. A letter of resignation represents an employee’s desire to quit a job; however, the effects of a letter of dismissal from an employer are quite different from those of a letter of termination.  

The Oxford Dictionary describes the word “dismiss” to mean to send away from one’s presence or employment, it also describes it as meaning to “reject”. Likewise, a letter of dismissal is a rejection of the employee by the employer, such rejection which is usually for a reason.  

The first difference between a dismissal and a termination is that a dismissal is usually punitive in nature while a termination is simply bringing an employment contract to an end. This implies that while an employer may well under the law terminate an employment, choosing to rather dismiss an employee seeks to punish that employee for an act of misconduct. This was illustrated in Eigbe V Nigeria Union Of Teachers (2007) LPELR-8310(CA) where the court held that

"It is now well settled that in statutory employment, as well as in private employment, the employer can dismiss an employee where the accusations against such employee is of gross misconduct involving dishonesty bordering on criminality, and in such a case, it is not necessary, nor is it required under Section 36 (1) of the 1999 Constitution that employee must be tried in a court of law."

Another difference between a dismissal and a termination is that, under a termination, the employee is liable to receive a gratuity and other terminal benefits, however, an employee who has been dismissed may not be liable to receive any such benefits. This is further stated in Union Bank Of Nigeria Plc v. Soares (2012) LPELR-8018(CA), where the court held that –

“There is a clear distinction between termination of a contract of employment and a dismissal. Termination gives the parties the right to determine the contract at any time by giving the prescribed period of notice. Dismissal on the other hand, is a disciplinary measure which carries no benefits.”

A third difference between a dismissal and a termination is that, an employee whose contract of employment is terminated without notice will be liable to collect a salary in lieu of notice, while this is not the case under a dismissal. This was aptly put by the Supreme Court in Ekunola V. Cbn & Anor. (2013) LPELR-20391(SC) where the court deliberated whether an employee dismissed on the ground of allegation of gross misconduct is entitled to notice or salary in lieu of notice, it was held that  –

 "Where his dismissal is founded on the allegation of gross misconduct the appellant is not entitled to any notice or salary in lieu of notice …………. And it would be wrong in law to make any awards to him in these regards."

The above is a guide to help when considering, the legal implications of a letter of dismissal and a letter of termination.

Adedunmade Onibokun