Court Orders NICON Insurance to Refund Unlawful Salary Deductions and Remit Pension Contributions

The National Industrial Court sitting in Lagos has ordered NICON Insurance Limited to refund unlawfully deducted salaries belonging to three former employees and remit outstanding pension contributions owed to them.

The court, presided over by Hon. Justice Anthonia Ubaka of the Lagos Judicial Division, directed the insurance company to pay Mr. Henry, Mrs. Esther, and Mr. Gilbert the sums of N317,000, N706,000, and N263,000 respectively as refunds for unauthorized salary deductions.

NICON Insurance was also ordered to remit all outstanding pension contributions owed to the claimants into their respective Pension Fund Administrators’ accounts and pay N1 million as the cost of the legal action within 30 days.

The claimants, Mr. Henry and two others, told the court that they were employees of NICON Insurance and that the company deducted pension contributions from their salaries throughout their employment but failed to transfer the funds into their Retirement Savings Accounts.

They argued that the company also failed to comply with the contributory retirement scheme outlined in its Staff Handbook, which required both the employer and employees to contribute toward retirement benefits.

According to the claimants, NICON Insurance accumulated significant pension liabilities by failing to consistently remit deducted contributions before their employment relationships were terminated.

Their counsel argued that the company’s failure to pay outstanding salaries, remit pension deductions, and settle their employment entitlements caused financial hardship and deprived them of benefits meant to support them after termination.

During proceedings, NICON Insurance failed to enter an appearance or file a statement of defence despite being served with the court processes.

The company was subsequently barred from presenting a defence, and it also failed to submit a final written address.

As a result, the evidence and documentary exhibits presented by the claimants remained unchallenged before the court.

Counsel to the claimants, Adetutu Oshinusi Esq., argued that NICON Insurance’s Staff Handbook clearly established its obligations toward employees and that the company breached both contractual and statutory duties by failing to remit pension deductions and making unauthorized salary deductions.

In her judgment, Justice Anthonia Ubaka held that the claimants successfully proved their employment relationship with NICON Insurance and established through documentary evidence that pension deductions were made from their salaries but were not properly remitted to their Pension Fund Administrators.

The judge ruled that the company violated provisions of the Pension Reform Act 2014 and failed to comply with its own Staff Handbook.

Justice Ubaka further held that there was no evidence that NICON Insurance paid its required share of the contributory pension scheme as mandated by law.

The court also ruled that the salary deductions made by the insurance company were unlawful because there was no contractual provision or clause in the Staff Handbook authorising such deductions.

Consequently, the court granted the reliefs sought by the claimants and ordered NICON Insurance Limited to refund the unlawfully deducted salaries, settle outstanding pension obligations, and pay the awarded legal costs within 30 days.

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