WORKERS’ OBLIGATIONS AND MANAGEMENT’S RIGHTS, DUTIES AND

LIMITATIONS IN EMPLOYMENT RELATIONSHIP

* John Nkeobuna Nnah Ugoani,

Department of Management Sciences
School of Postgraduate Studies
Rhema University, Nigeria, Aba.
*Email: John_ugoani@rhemauniversity.edu.ng;
drjohnugoani@yahoo.com

ORCID: 0000-0002-2403-1851

ABSTRACT
The implication of workers’ obligations and management’s rights, duties and limitations is that
there must be a process for reconciling both workers and management’s interests in the employment
relationship. This can be done through formal collective agreements where there are recognized
trade unions or even workers’ associations. The absence of these may indicate clearly that
management adopts an unpopular unitarist philosophy. But it is to be expected that in these
circumstances, management’s efforts to increase mutuality and to gain workers’ commitment it
adopts a stakeholder or partnership mentality which should, at least, involve consultation with
workers on how the interests of the super-ordinate organization and its members can best be served.
Thus, reconciliation of interests would involve the development, negotiation and application of
formal rules and procedures for collective bargaining, handling disputes and regulating
employment. These serve to determine the reward for effort and other conditions of employment to
protect the interests of both employees and their employers and to regulate the ways in which
employers treat their employees and how the latter are expected to behave at work.

Keywords: Mutuality, Workers’ obligations, Management’s rights, Engagement, Promotion,

Indemnity, Emotional intelligence, Industrial Relations, Floor effect, Industrial democracy.

JEL: M10, M12,

I. INTRODUCTION
Classical Management Theory emphasizes that building mutuality between workers and
management is important not only for the reconciliation of interest of both management and
members of an organization, but also to gain commitment, loyalty and organizational citizenship
behavior needed for the sustainability of the super-ordinate organization. This presupposes the
necessity for the workers and management to understand and appreciate their obligations, rights,
duties and limitations in employment relationship. This cannot be over-emphasized because even
the strongest organizational leader with high intelligence quotient can fail because of floor effect,
or the inability to obtain commitment of the workers at the workplace. Everyone at the top levels of
a large organization has already been sifted for intellect and expertise. At those lofty levels, a high

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intelligence quotient (IQ) becomes threshold ability, one needed just to get into and stay at the top
of the management hierarchy. But to reduce the floor effect, the chief executive officer (CEO) with
a high IQ requires an equally high dose of emotional intelligence (EI), especially empathy and the
ability to manage relationships to achieve workplace success. This is necessary because
management and workers constitute the major stakeholders in the workplace. They are like two
sides of a coin - different, yet inseparable. They, therefore, have joint interests in the continuous
survival of the enterprise. In spite of their vested interests, their expectations from the enterprise
may be different. It is therefore. to manage these differences effectively in order to ensure that they
do not tear the enterprise apart that a system of rights, duties, obligations and limitations of both
parties must be developed and adopted in the employment relationship. Labour-management
relations or industrial relations is a major concern of organization management today.

II. CONCEPTUAL CLARIFICATIONS

a. Who is Management?
 Although the distinction between management and workers does exist, very often management
is reduced solely to the Chairman, Managing Directors and the very top officials of the
enterprise.
 Management refers to the people engaged in the professional administration of the enterprise.
These could range from the Governing Body or the Board of Directors to the managers in
charge of running the business at other levels.
 These people constitute the alter-ego of the business. They are "the directing will of the
company who control what it does".
 The complexities of modern business coupled with the constraints of time, information and
skills often necessitate the delegation of powers and duties to the middle management cadre and
the lower management.
 Management, therefore, refers to more than just the Managing Director and the top company
executives, to include other level managers in the organization.
b. Who is a Worker?
 Like management, there is no unanimity about who exactly is a worker:
According to the Labour Act, which regulates employment relations, a worker is a person who has
entered into or works under a contract with an employer. The contract of employment may be (i)
either for manual labour or clerical work (ii) express or implied (iii) oral or written and (iv) a
contract of service or a contract personally to execute any work or labour. Generally, the statutory
provisions are merely minimal and in practice workers enjoy far greater benefits, through collective
agreements and their contracts of employment, than the Labour Act stipulates. For example, The
Workman’s Compensation Act is a social security measure which provides for payment of financial
compensation to workers who have suffered injuries or occupational disease at work or in the case
of death, to their dependants
c. Understanding Rights, Duties and Obligations
* A right within the context of this paper refers to something that one can legally or morally claim.
It is the state of being entitled to a privilege or immunity or authority, which does not depend on the
goodwill of another.

* Within the workplace, therefore, the rights of management will refer to the authority or power

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which management can legally or morally claim in the way it manages the enterprise. The rights of
the workers will refer to the right that is inherent in them as workers.
* A duty is a moral or legal obligation, a responsibility.
* In the context of this paper, therefore, the duty of management refers to its moral or legal
obligations to the workers while the duties of the workers refer to their obligation to management.
* There is a correlation between rights and duties. Thus, while the employee has the right to his
wages, the employer has the duty to pay him. Also, where the workers have the duty to perform a
particular general task, the employer has right to demand performance.

III. MANAGEMENT’S DUTIES, RIGHTS AND ITS LIMITATIONS

 The main duty of management is to manage the business enterprise efficiently. To be able to
perform these duties, management must retain some basic rights. Some of these rights include:
 To hire, control, direct, assign, redeploy, promote, demote, transfer and discipline its
workforce.
 To introduce technical improvements and determine the times, manner and type of work
to be done.
 To modify, extend, curtail or cease operations and determine the number of employees
required, and
 To decide in its sole discretion, all matters connected with the company's business

In recent times, the trade unions have questioned the rationale for some of these rights and Nigerian
Employers Consultative Association (NECA's) Memorandum of Advice and Guidance No 1 on
Management functions specifies the following rights of Management:
a. Engagement
Management has the sole right to engage anyone whom it believes would be able to contribute to
the growth and development of the enterprise.
b. Promotion
Management must have the right to promote employees for valuable services to the enterprise. It
would be most undesirable to qualify promotions by means of yardsticks (seniority, age,
qualifications, etc.), but if such expediency is put into an agreement, it must be qualified by
stressing management's right to make the final decision.
c. Dismissals and Terminations
Management's right to dismiss and to terminate an employee's employment with due notice should
on no account be curtailed. This is a right available to both parties.
d. Wages and Salaries
Wages/salaries are matters for negotiation for a collective agreement, but management must retain
the right to lay down and modify the job content relating to each wage/salary group.
e. Order and Discipline
Management's right to maintain order and to discipline the work-force cannot be subject to
negotiation. A grievance procedure is, however, expedient, provided that management has the final
say.
f. Work Schedule
It is the duty of management to plan the work schedule of the workers. Although total hours of work
per week can, and should be, negotiated, decisions as to times of presentation and departure should
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be retained as management's right.
g. Size of the Work Force
It is the right of management to determine the number of employees necessary to perform the
company's activities.
h. Classification of Staff
Management must retain the right to determine at its discretion those that are considered as
management material for purposes of excluding them from union membership.
i. Labour-Management Partnership
Figure 1 demonstrates mutual labour-management partnership behavior in the workplace.

Fig. 1: Management and Worker Relations

IV. MANAGEMENT'S DUTIES TO THE WORKERS

a. Payment of Salary/Wages
Remuneration by way of wages/salary and allowances or commission must be paid to the employee
for work performed. Remuneration is normally payable in accordance with the terms of the contract,
subject to the national minimum wage. The obligation to pay wages ceases when the contract of
employment is brought to an end or when it is suspended in accordance with the terms of the
contract.
b. Provision of work
So long as the employee is paid his wages, management is under no general obligation to provide
work for him. In recent years, however, judicial opinion and legislation have provided two
circumstances under which management will be obliged to provide work:
 Where the employee's job involves the exercise of professional skills and it is understood by
both parties that the contract would provide him the opportunity to gain publicity or
experience.
 Where the employee's wages depend wholly or partially on payment of commission or fringe
benefits.
 Under the Labour Act, the employer is obligated to provide work failing which he shall pay
the worker such remuneration, as he would have earned.
 This obligation will not arise where the employer is unable to provide work due to a
temporary emergency or other circumstances beyond his control and where the worker is
suspended from work as a disciplinary measure.
c. References/Testimonials

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Management is under no obligation to provide a testimonial or reference for an employee. If,
however, management undertakes to give a testimonial, care must be taken to ensure that the
contents are true.

d. Indemnity and other Rights

Management has the obligation to indemnify an employee for expenses reasonably incurred in the
course of performing his duties.
e. Health and Safety at Work
Management has a duty under the Labour Act and various statutes to ensure the health and safety of
workers. The standard of care is that of a reasonable man and varies from one employee to another.
The employee must prove that:
(i) The employer owes him a duty of care
(ii) The employer has failed in that duty
(iii) The failure has resulted in injury/damages to him

V. EMPLOYEES RIGHTS AND THE LIMITATIONS

a. Right to remuneration
The employee is entitled to remuneration in return for work performed or service rendered. The rate
of remuneration is either established by contract, or by collective agreement, or sometimes by
statute. The limit of this right is that it is dependent on the employee actually working or being
able and willing to work - hence the slogan of "no work, no pay".
b. Right to Written Particulars Of Terms and Conditions of Employment
The Labour Act provides that not later than 3 months after a worker resumes employment, the
employer shall give to him a written statement specifying the essential particulars of the terms and
conditions of employment.
c. Right to Annual Holiday with Pay
According to the Labour Act, every worker shall be entitled after 12 months of continuous
employment to a holiday with full pay. The holiday may be accumulated for up to a maximum of 2
years, but payment in lieu of holiday is unlawful except where a worker's appointment has been
terminated.
d. Right to Sick Leave with Pay
Under the Labour Act, an employee is entitled to sick leave with full pay provided a registered
medical practitioner certifies the temporary illness. The period of sick leave may, and often is,
extended by contract or collective agreements.
e. Right to Paid Maternity Leave
Section 53 of the labour Act provides that a woman shall have the right to leave her work if she
produces a medical certificate given by a registered practitioner stating that her confinement will
probably take place within 6 weeks. The employer has no obligation to pay any medical expenses
incurred on account of her pregnancy or confinement. The woman shall not be served with a notice
of dismissal during her maternity leave or a notice of dismissal to expire during such leave.
f. Right to Redundancy Payment
The Labour Act requires the employer to use his best endeavor to negotiate redundancy payments to
employees discharged on the ground of redundancy.
g. Right to Freedom of Association
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The Constitution makes specific reference to the right of employees to join trade unions for the
protection of their occupational interests. In addition, Labour Act supports the employee's right to
freedom of association.

h. Right to Health and Safety at Work

An employee is entitled to be protected, as far as is reasonably practicable, from the hazards
associated with his employment. The employer can do this by:
 The provision and maintenance of plant and systems of work that are safe and without risk to
health;
 Provision of information, instruction, training and supervision aimed at ensuring health and
safety;
 Maintenance of the place of work and the working environment in a condition that ensures
health and safety
i. Right to Strike
While the law implicitly recognizes strikes and lockouts, the rights must be exercised in accordance
with the laid down procedure and in conformity with the law.
Strikes and lockouts are prohibited where:
(i) the parties have not attempted to settle the dispute in accordance with the grievance
procedure.
(ii) a conciliator is appointed.
(iii) the dispute has been referred to the Industrial Arbitration Panel (IAP).
(iv) an award by the I.A.P. has become binding after the period permitted for objection,
(v) the dispute has been referred to the National Industrial Court (NIC).

VI. EMPLOYEE'S DUTIES AND OBLIGATIONS TO MANAGEMENT

a. Readiness and Willingness to Work
The duty of the employee here is to present himself for work, ready, willing and able to work.
The willingness to work implies that the employee must co-operate with the employer and must
not willfully disrupt business/operations of his employer.
b. Duty to Obey Instructions
An employee is under a duty to obey all lawful and reasonable instructions of the employer. Thus,
where a servant disobeys the master's instruction, he will be held in breach of his duties and will be
rightfully liable for dismissal. It is often a question of fact whether a single act of disobedience
constitutes such a breach as to give the employer a right to dismiss.
c. Faithful and Loyal Service
An employee owes his employer a duty of utmost loyalty and good faith. Accordingly, he must not
put himself in a situation in which his personal interest conflicts or is likely to conflict with his
obligation to his employer.
d. Secret Profits
An employee must not use his position to earn a secret profit and to enrich himself. Thus, he must
not receive a secret commission, bonus, or reward.
A breach of this duty by an employee entitles the employer to dismiss him summarily and the
employee must account to the employer for the secret profit.
e. Competition
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The employee is under a duty to use his employer's working time only for his benefit. Accordingly,
he must not work for himself or for a third party in competition against his employer. Where this
duty is breached, an injunction will lie to restrain the employee from working for a rival company.
This remedy is not dependent on the actual abuse of confidential information but the likelihood of
such abuse in future.
f. Abuse of Confidential Information
An employee must not appropriate to himself or to the benefit of another, his employer's property
including corporate opportunity and confidential information. Confidential information includes
sensitive information such as marketing plans, business strategies, management strategies, secret
formula, financial projections and customer's list but these are not exhaustive.
What is confidential information is a question of fact to be determined by the court but generally
information which is open to the public or whose circulation is unrestricted will not be protected.
g. Duty to Exercise Care, Skill and Diligence
An employee is under a duty to exercise reasonable care, skill and diligence in the discharge of his
duties. Where an employee is employed on the basis of his professional skills, there is an implied
warranty on his part that he is reasonably competent for the work. If he proves incompetent, the
employer is entitled to dismiss him or claim an indemnity from him.

V. EMPLOYEE’S RIGHT TO SALARIES DURING PERIOD OF SUSPENSION

An employee is entitled to salaries during period of suspension. Adesina (2023) reports the matter
of the Respondent employed by the Appellant as an Auto Mechanic, and was placed on indefinite
suspension vide a letter served on him on 11/09/2007. He was neither recalled from the indefinite
suspension nor his appointment formally terminated by the appellant. The respondent approached
the court for justice and found favour. The respondent’s counsel contended that the heavy reliance
of the appellant’s counsel on the Labour Act does not apply to the instant appeal as no provision
was made therein for the wages/entitlement of a worker during the period of suspension. He
submitted that the power of an employer to suspend a worker without pay must stem from the
contract of employment of such worker, and in the absence of such term in an employee’s contract
of employment, the employer has a statutory duty to continue the payment of wages of such worker
during his suspension.
 In resolving this issue, the court firstly described suspension as a temporary cessation of
employment either pending investigation for an alleged wrong or as a disciplinary procedure
for misconduct by the employee. That suspension of an employee from work only means
suspension from ordinary duties assigned to him by virtue of his employment or office.
 The court pointed out that suspension does not amount to termination or dismissal from the
employment. That the contract of employment remains subsisting until it is formally or legally
brought to an end by either party.
 The court stated that where a contract of employment is not one with statutory flavor, for
suspension to be validly made, it must be so provided in the employment contract or in the
Handbook regulating the terms of the employment.
 The court explained that since suspension is neither a termination of the employment contract
nor a dismissal of the employee, then in effect the employee is still in continuous employment
of the employer until he is recalled or formally terminated or dismissed. That pending his
recall or dismissal, a suspended employee is entitled to his wages or salary during the period
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 of suspension, unless the terms of the contract of employment or the letter of suspension itself
is specific that the suspended employee will not be paid salaries during the period of
suspension.
 The court stated also that in the instant appeal, the letter suspending the Respondent did not
state that he will not be paid salaries and that the letter of employment did not contain any
terms with respect to the suspension of the employee without pay. Furthermore, that there is
no Employees’ Handbook or Collective Agreement specifying the terms of employment,
including rules with regard to suspension, indefinite or for a fixed term.
 The court pointed out that where a suspension did not indicate that the suspended employee
will not be paid salary or will be on half pay, the suspended employee is entitled to his
emoluments during the period of the suspension.
 In conclusion, the court stated that the basic and most important right of an employee is the
right to his wages and held that the Appellant is obligated to pay the Respondent his wages
during the period of suspension as his right to the wages has not been affected by the
indefinite suspension. The court therefore, decided that the Appellant is liable to pay the
Respondent his salary for the period of suspension.

It must be noted that wages/salary constitute fundamental right of the worker, and the worker
should be rewarded appropriately and sustainably. Generally, there are no hard and fast metrics for
deciding when to review workers’ pay and employment. The correct framework is a level of pay
consistent with the operation of a motivated and professional organization at a scale the
organization can afford on a sustained financing basis, the ability to pay theory.

VI. GROWING MANAGEMENT’S INTEREST IN INDUSTRIAL RELATIONS

Management anti-union or worker policies have reduced drastically since the late 1970s, partly due
to education and more significantly due to public policy which clearly make union recognition a
statutory requirement. For example, until the late 1970s, employers use force to obtain commitment
from workers, due to the absence or weak collective bargaining or agreement. Today, the trend of
growing management interest in collective bargaining has served to enhance co-operation in
labour-management relations. This douses the individualism/collectivism dimension of workplace
differences and strongly influences positive labour-management behavior, leading to the
reconciliation of interests. From the 1970s, to the present time, labour-management relationship has
passed through five stages as shown in figure 2:
5 Co-operation
4 Accommodation
3 Power Bargaining
2 Armed Truce
1 Open Conflict
Figure 2: Stages of Labour-Management Relationship

At the earliest stage, to the employer, the union was an unnecessary intruder, a trouble maker bent
on undermining employees’ loyalty to the employer, thus, labour-management relationship was

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characterized by open conflict. The stage of the armed truce attitude reflected a situation in which
the management was constrained by law or public policy to recognize and deal with the union but
attempts to contain the union within its limits. In the circumstance, management bargains with the
union strictly within the boundaries of legal obligations. The power bargaining stage was where the
management had accepted the union but it was constrained to take advantage of its overwhelming
bargaining power to the maximum point possible. The accommodation stage is characterized by the
willingness and acceptance by both parties to tolerate and accommodate each other and to conciliate
whenever necessary. During this stage, strict opposition is minimized, and management becomes
prepared to meet the union halfway. Co-operation is the last stage in the evolving strategies for
ensuring stable industrial relations or industrial democracy. Today, it is clear that it is importantly
imperative for management and labour to move away from a position of strife, conflict, intolerance
and antagonism to the arena of co-operation, co-existence and reconciliation of interests. Here lies
the stability of industrial relations or industrial harmony in the employment relationship. Industrial
harmony is strengthened by Collective Agreement. Collective Agreement is a machinery for
discussions and negotiation whether formal or informal, between employers and workers’
representatives aimed at reaching mutual agreement or understanding on the general employment
relationship between employer(s) and workers. Generally speaking, Collective Agreement aims at
the reconciliation of interests as shown in figure 3.

Employees Employers

Highest wages Profit/surplus high

Different Interests
and conditions quality services

Survival of the
Survival of the
enterprise Common interest
enterprise

Reconciliation of different
interests

Processes

Agreements Reflect relative bargaining

power
Figure 3: Reconciliation of Interests

Bargaining power is inherent in any situation where differences have to be reconciled. It is however,
not an end in itself, and negotiations must not rely solely on bargaining power. One side may have
enormous bargaining power, but to use it to the point where the other side feels that it is impossible
to deal with such a party, is to defeat the purpose of negotiations. In this context, negotiation occurs
where one party attempts to influence another party through an exchange of ideas, or something of
material value. Negotiation depends on communication. It occurs between individuals, acting either
for themselves or as representative of organized groups.
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VII. RECOMMENDATIONS
i. Management must always ensure to observe the rights of workers as a measure of
promoting industrial democracy.
ii. Reconciliation of interests must be vigorously pursued by both labour and management
to ensure the sustainability of the enterprise.
iii. Terms and conditions of employment relationship must be made explicit by management
and clearly understood by labour to reduce the frequent recourse to the courts for
interpretation.
iv. Management at the top does not require only high IQ as most people think, but a
combination of high EI as the new science of success.
v. Both labour and management must understand that co-operation is the best way to
organizational excellence.

VIII. CONCLUSION
In this paper we have examined the various rights, duties and obligations of management and
workers in an employment relationship. Since society is dynamic, it should be expected that their
rights and obligations, as we know them today, would continue to evolve as they have always done.
The rights and obligations highlighted here are not exhaustive. Through collective bargaining,
special rights agreed between management and employees may be incorporated from time to time.
It is hoped that as management and employees exercise and enjoy their legal rights they will do so
in a responsible manner. They owe a moral responsibility to ensure that their legal rights are not
asserted in such a way as to undermine the interest of the public, which sustain them. To enhance
industrial harmony management is invited to observe the elements of employee relations; including
the formal and informal employment policies and practices of the organization. It also involves the
development, negotiation and applications of formal rules and procedures for collective bargaining,
handling disputes and regulating employment. These serve to determine the reward for effort and
other conditions of employment to protect the interests of both employees and their employers, and
to regulate the ways in which employers treat their employees and how the latter are expected to
behave at work. Thus, reconciliation of interests would mean observance of regulations and policies
of the management hierarchy, the laws of any worker hierarchy, the regulations, decisions, awards
or orders of government, the collective bargaining arrangements and the customs and traditions of
the workplace.

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Biography

John Nkeobuna Nnah Ugoani is Professor of Management at Rhema University,

Nigeria. His research interest focuses on business, management, governance,
leadership, emotional intelligence and entrepreneurship. John is recognized for
presenting the first best PhD Thesis in Management at the Faculty of
Business Administration, Imo State University, Owerri, Nigeria. He has over
160 scholarly publications with full paper readership downloads of over 100,000 and
ranked among Top Ten Authors by SSRN. Before entering academia, he was a Senior
Manager at First Bank of Nigeria Plc.

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