LAWS GOVERNING EMPLOYMENT RELATIONSHIP IN NIGERIA

LAWS GOVERNING EMPLOYMENT RELATIONSHIP IN NIGERIA AND THE RIGHTS OF WORKERS www.eclathrconsulting.com.ng

LAWS GOVERNING EMPLOYMENT RELATIONSHIP IN NIGERIA AND THE RIGHTS OF WORKERS P a g e |2 In establishing any organizational endeavor, an employment contract must be drawn up. In Nigeria, the employment relationship is governed primarily by the sources of employment laws in the country. A proper understanding of the laws that govern an employment relationship and adherence to laws that guide employees’ rights and employers’ obligations, can protect the company from serious human rights violations. This article provides a guide to laws governing the employment relationship in Nigeria, from the sources of the law, the scope of the law, to the tenets of a typical employment contract. There are two (2) broad categories of employees in Nigeria, namely: • “Workers”, defined under the Labour Act as those “who are generally employees who perform manual labour or clerical work”; and • “Employees”, who perform administrative, executive, technical or professional functions (referred to as “Non-workers”). THE SOURCES OF EMPLOYMENT LAW IN NIGERIA The sources of employment law in Nigeria are: a. The Constitution of the Federal Republic of Nigeria 1999 (as amended), referred to as “the Constitution”. b. The Labour Act Chapter L1, Laws of the Federation of Nigeria 2004 (“Labour Act”), which prescribes the minimum terms and conditions for employment for workers as defined above. As stipulated by the Labour act of Nigeria, the details of an employment relationship between workers and employers should be stipulated in a contract. The Nigerian Labour Law provides a detailed look into the rights, conditions, minimum wage and many other tenets set by the Nigerian Government. The current version of the act was enacted in 2004. c. The Federal laws enacted by the National Assembly (Nigeria’s national legislative houses) and the State laws enacted by the House of Assembly (the State legislative authority) of each state, that relate to labour and employment, pension and workplace compensation, including the following: ● Guidelines for the Release of Staff in the Nigeria Oil and Gas Industry, 2019. ● Employees Compensation Act 2010 ● Factories Act FI, LFN 2004 ● Industrial Training Fund Chapter 19, LFN 2004 (as amended)

LAWS GOVERNING EMPLOYMENT RELATIONSHIP IN NIGERIA AND THE RIGHTS OF WORKERS P a g e |3 ● National Health Insurance Scheme Act, Chapter N45, LFN 2004 ● National Oil and Gas Industry Content Development Act 2010 ● Pension Reform Act 2014 ● Personal Income Tax Act P8, LFN 2004 as amended by the Trade Union (Amendment) Act 2011 ● Trade Disputes Act, Chapter T8, LFN 2004 ● Trade Unions Act, Chapter T14, LFN 2004 as amended by the Trade Union (Amendment) Act 2005 ● Nigeria Data Protection Regulation 2019 issued by the National Information Technology Development Agency. d. Decisions of the Nigeria courts - case law, and e. International conventions, treaties and protocols relating to labour, employment, workplace, industrial relations or matters that connect, which have been ratified by Nigeria. SCOPE AND APPLICATION OF THE SOURCES OF LABOUR LAW ★ The Labour Act, which is limited in its scope of application as it regulates only the employment of workers as defined above. ★ The Constitution, the NICN Act, the Trade Union Act and the Personal Income Tax Act apply to all categories of employees, with some exceptions. ★ The Pension Reform Act 2014 applies to all employees in the private sector, other than judges, members of the armed forces and the intelligent and secret services. ★ The Employees Cooperation Act applies to all employees other than members of the armed forces (although it applies to members of the armed forces employed in a civilian capacity) ★ The Industrial Training Fund Act applies to every employer in Nigeria which employs more than 5 persons, or which employs fewer than 5 persons, but has an annual turnover of up to 50 million naira. ★ The National Health Insurance Scheme Act applies to employers which have a minimum of 10 employees. ★ The Immigration Act 2015 applies to employers which employ foreign nationals and to expatriate employees.

LAWS GOVERNING EMPLOYMENT RELATIONSHIP IN NIGERIA AND THE RIGHTS OF WORKERS P a g e |4 TENETS IN AN EMPLOYEE CONTRACT 1. The name of the employer and the undertaking where the employee is employed; 2. The name and address of the worker; 3. The date of engagement; 4. The nature of employment; 5. If the contract is for a fixed term, expiration date should be stated; 6. The period of notice for termination; 7. The rates of wages and method of calculation; 8. The manner and periodicity of payment of wages; 9. Terms and conditions relating to hours of work, holidays and holiday pay, incapacity for work due to sickness or injury including any provisions for sick pay; and 10.Any special conditions of the contract. *Special conditions include Provision of Transport, Annual holidays, Collective Agreements operative in the Industry or sector and other requirements as the employer may deem fit or as the employer’s duties may require. TERMINATING THE EMPLOYMENT CONTRACT It is required that employers be given notice of termination of their employment or salary in lieu of such notice. ➔ The minimum notice period for workers as defined above in the Labour Act are as follows: 1) One day, if the length of the service is up to 3 months. 2) One week, if the length of service is up to 2 years. 3) Two weeks, if the length of service is up to 5 years. 4) One month, if the length of the service is 5 years or more. ➔ It is agreeable for parties to agree to longer notice periods in their contracts of employment. ➔ Regarding employees as defined above, the applicable notice period is determined by the terms of their respective contracts of employment.

LAWS GOVERNING EMPLOYMENT RELATIONSHIP IN NIGERIA AND THE RIGHTS OF WORKERS P a g e |5 Author Oluchi Atoyebi (Mrs.) Principal Partner, Eclat Human Resources