The National Industrial Court of Nigeria (NICN), Bauchi Judicial Division, has ordered United Bank for Africa Plc (UBA) to refund N6.43 million to a former staff member, Mr Suleiman Lado, after holding that his resignation from the bank was involuntary and that loans granted to him were covered by an insurance scheme.
The court also nullified the restructuring and subsequent increase of Lado’s loan obligations to N19.63 million, holding that the bank was not entitled to recover the insured loans from him.
Justice Mustapha Tijjani, in a judgment delivered on April 20, 2026, in Suit No. NICN/GMB/06/2024, further ordered UBA to stop using the Global Instruction System (GIS) linked to Lado’s Bank Verification Number (BVN) to recover the loans.
The court equally directed the bank to remove Lado’s details from the Central Bank of Nigeria’s (CBN) Credit Risk Management System (CRMS) as a bad-loan customer.
The judgment arose from a dispute over two loans obtained by Lado while he was employed by UBA.
Lado, who worked with the bank from 2007 until 2020, obtained a car loan of N1.565 million in May 2019 and a personal loan of N3.1 million in October 2019.
According to the judgment, the terms of the loan offers contained insurance provisions covering specified events, including death, permanent disability and involuntary loss of employment.
The claimant contended that although the loans were covered by the insurance scheme, the bank failed to activate the insurance after his employment came to an end.
Instead, he alleged, UBA recovered portions of the outstanding loans from his terminal benefits and bank account.
Lado further claimed that the bank subsequently reported his outstanding indebtedness to the CBN’s CRMS, a development which he said adversely affected his prospects of securing employment with Sterling Bank Plc.
UBA denied the allegations and maintained that Lado had indicated his intention to leave the bank before it requested his resignation.
The bank also defended its decision to report his loan status to the CBN’s credit reporting system, arguing that the action was lawful and consistent with applicable CBN requirements.
The court, however, rejected the bank’s contention that Lado had voluntarily decided to resign.
Justice Tijjani placed particular reliance on an email tendered in evidence as Exhibit F, in which the bank instructed the claimant: “Please send your resignation letter now.”
The court noted that the email was sent at 9:57 p.m. on January 3, 2020, while Lado’s resignation letter was issued on the same day.
According to the judge, UBA failed to produce evidence supporting its assertion that Lado had previously expressed an intention to resign.
The court consequently found that the claimant’s resignation was involuntary.
Having reached that conclusion, the court held that the insurance provision attached to the loans was applicable to Lado’s circumstances.
It therefore declared that the insurance scheme covered the two loans and that Lado was entitled to the benefit of the loss-of-employment insurance.
The court also took issue with the subsequent restructuring of the loans.
It declared unlawful the restructuring of the claimant’s indebtedness to N5.05 million and the subsequent increase of the liability to N11.43 million, together with interest of N8.19 million.
The resulting liability, according to the judgment, stood at N19.63 million.
Justice Tijjani held that the bank could not lawfully pursue the claimant for repayment of loans which were covered by the insurance scheme.
Consequently, the court ordered UBA to discontinue the use of the GIS linked to Lado’s BVN for recovery of the insured loans.
It also ordered the bank to remove his name and details from the CBN CRMS as a bad-loan customer.
The court further ordered the bank to refund various sums it had deducted from Lado’s accounts.
The deductions included N1,658,327.29 taken from his account between July 30, 2023 and January 1, 2024; N2,046,821.67 deducted on January 14, 2020; and N2,729,000 unlawfully debited on January 16, 2020.
The total amount ordered to be refunded was N6,434,149.96.
In addition to the refund, the court awarded Lado N3 million as general damages for the wrongs established against the bank.
It also awarded him N600,000 as costs incurred in prosecuting the suit.
The judgment therefore placed the immediate monetary liability arising from the refund, damages and costs at N10.034 million, excluding post-judgment interest.
The court, however, rejected Lado’s claim for 100 per cent daily interest on the sums allegedly deducted from his accounts.
Justice Tijjani described the claim as unreasonable and unsupported by any contractual or statutory provision.
Rather, the court ordered UBA to pay interest at the rate of 10 per cent per annum on the judgment sum from April 20, 2026, the date of judgment, until the judgment is fully satisfied.
The court consequently entered judgment in favour of Lado.
The decision is significant in its treatment of the relationship between staff loans, employment termination and insurance coverage, particularly where an employee’s exit from employment is found by the court to have been involuntary.
It also underscores the consequences for financial institutions where loan-recovery measures are taken despite contractual provisions that may provide insurance protection against specified events, including involuntary loss of employment.
