CAN AN EMPLOYER IMPOSE BANK ACCOUNT ON AN EMPLOYEE?
An employer cannot mandate an employee to open a salary account in his preferred choice of bank. In Nigeria and some other places, employers mandate employees to open salary accounts in their specific banks or direct their preferred banks to open accounts for their proposed employees.
While this is adjudged a normal practice, especially as most employees have lower bargaining powers and are willing to do the bidding of an employer just so that they can get hired. This practice has been declared to be an unfair labour practice by a court of competent jurisdiction in Nigeria following international standards. Unfair labour practices are actions or practices that do not conform with recognized global best labour practices.
The greatest domestic application of international law in Nigeria is found in Labour. Although, the Nigerian Labour Act did not explicitly define unfair labour practices but the national industrial court has relied on international best practices in adjudicating such matters,
The Nigerian Constitution (Third Alteration Act) empowers the Nigerian industrial courts to rely on international best practices in resolving labour disputes. A classical example was seen in the case of Sunday Chukwudi Ukpai V Ajuba Nigeria Limited & Zenith Bank, NICN/LA/77/2015. Here, Ajuba Nigeria Limited directed Zenith Bank to establish virtual salary accounts (VSAs) for eighteen employees including Mr Ukpai (the petitioner) who encountered difficulties accessing the account. Additionally, Mr Ukpai was denied financial statements for the account upon request. The court determined that the employer violated the law by not allowing employees to choose their preferred bank for salary payments. Ajuba Nigeria Limited’s directive to Zenith Bank to open virtual salary accounts (VSAs) for eighteen employees including the petitioner was deemed coercive and demeaning. The court rejected the company’s argument that opening virtual salary accounts was a common practice, emphasizing that it contravenes the dignity of individuals, their freedom of choice and was contrary to Nigerian labour laws and international labour practices.
Although, imposition of account on employees by employers is regarded as unfair labour practice, most employers have argued that it is for operational convenience and nothing more. According to them, an employer is obligated under the law to pay wages within a reasonable time, and the burden of meeting up with the reasonable time is on the employer who would suffer if the obligation is not met.
In order for employers to shield themselves from any liability arising from imposition of salary accounts, it is advised that employers execute a consent agreement with proposed employees. Employers need to take a more consensual approach rather than using coercive means.
Monica Peters Esq.
