The refusal of the NICON Insurance to remit the pension contributions deducted from some of its former workers has landed it in trouble as a court has ordered it to refund the money and pay cost of litigation for the workers within 30 days.
Justice Anthonia Ubaka of the Lagos division of the National Industrial Court ordered NICON Insurance to refund the deducted salaries of three workers known simply as Mr Henry, Mrs Esther and Mr Gilbert which are N317,000, N706,000 and N263,000 respectively; and remit all outstanding unremitted pension due to them to their respective Pension Fund Administrators, and the sum of N1m as cost of the action within 30 days.
According to available court documents, the three of them submitted that they were employees of NICON Insurance and that throughout their employment, the company deducted pension contributions from their salaries but failed to remit same to their respective Retirement Savings Accounts, while also failing to comply with the contributory retirement provisions contained in its Staff Handbook.
They averred that the company’s Staff Handbook established a compulsory contributory retirement plan requiring contributions by both the employer and employees towards retirement benefits, but NICON Insurance failed to consistently remit the deducted pension contributions, leaving substantial outstanding pension liabilities at the time their employments were terminated.
They further submitted that NICON Insurance’s failure to pay the outstanding salaries, remit the deducted pension contributions and settle their entitlements deprived them of the benefits that would have cushioned the effect of the termination of their employments.
During the court sittings, NICON Insurance neither entered appearance nor filed any statement of defence despite being served with the originating processes and was subsequently foreclosed from opening its defence before the court.
It equally failed to file a final written address, leaving the former workers’ evidence and documentary exhibits unchallenged and uncontroverted before the court.
Delivering judgment, Justice Ubaka held that the former workers established their employment relationship with NICON Insurance and proved through documentary evidence that the insurance company deducted pension contributions from their salaries but failed to remit the deductions to the respective Pension Fund Administrators as required under the Pension Reform Act 2014 and NICON Insurance’s Staff Handbook.
She held that the evidence established that NICON Insurance defaulted in remitting the contributory pension due to the former employees and further that there was no evidence that the company contributed its own share of the contributory pension as required by law.
The judge stated that there was no provision in the contracts of employment or NICON Insurance Staff Handbook authorising the deductions made from the salaries.
She further held that the ex-workers successfully proved their entitlement to the reliefs sought and consequently entered judgment directing NICON Insurance Limited to refund the unlawfully deducted salaries.
