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The Legal Framework and Implications Governing Employment Contracts in Nigeria

The Legal Framework and Implications Governing Employment Contracts in Nigeria

It goes without saying that there are more people looking for work than there are jobs available in Nigeria currently. It’s also very true that the labour market in Nigeria is one of the most exploited in the world, with many job-seekers signing a lot of very detrimental work engagement offer letters out of desperation.

This is worsened by the fact that in Nigeria, many employers through their respective Human Resource departments are basically laws unto themselves, failing to take into cognizance the existing legal framework governing employment in Nigeria.

This article thus aims to do the following:-

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– Explain the proper legal definition of an employee in Nigeria.

– Highlight the Legal Framework and Regulatory agencies governing employment in Nigeria.

– Explain the legal implications of some of the most common employment contract clauses in Nigeria.

– Highlight the difference between a Contract of service and a contract for service.

– Highlight the rights of an employee and employer in Nigeria.

– Highlight the legal protection available to affected parties to an employment contract.

Who is a worker and employee under Nigerian Law?

Under Nigerian labour law, a “worker” is a person that has entered into work under a contract with an employer whether the contract is for manual labour or clerical work or is expressed or  implied or oral/written. 

Nigerian labour law specifically exempts persons it describes as “employees” exercising administrative, executive, technical or professional functions as public officers or otherwise” and goes further to state that such persons are governed by the terms and conditions contained in their contracts of employment.

This alone is a Statutory warning in particular to any person entering into a white-collar/skilled labour contract for salaried pay or remuneration to properly understand what they are getting themselves into when signing an employment contract as this can serve as the Regulatory Framework governing an employee in so far as no conflicts with any relevant law in force arises.

What is the Regulatory Framework and what are the Regulatory agencies governing employment in Nigeria?

Employment in Nigeria is specifically governed mainly by the following laws and agencies:

– The Nigerian Labour Act.

– The Nigerian Employee Compensation Act through which the Nigerian Social Insurance Trust Fund (NSITF) was established.

– The Industrial Training Act through which the Industrial Training Fund was established.

– The Pension Reform Act through which the National Pension Commission(PENCOM) was established.

– The Trade Union Act .

– The National Industrial Court of Nigeria (NICN). 

– The Constitution of The Federal Republic of Nigeria regarding the issue of fundamental rights and trade/worker unionism.

What are the rights of an employee and employer?

While an employer has the right to terminate an employment contract without giving reasons for doing so as long as notice is given or a salary is paid in lieu of such notice to the employee, an employee has the rights to :-

– An annual paid leave of 6-14 days.

– Paid sick leave periods in a year.

– A notice of termination.

– Speak on work conditions.

– Paid maternity leave periods.

– Freedom from discrimination, harassment and abuse in the workplace.

Is Paternity leave provided for under Nigerian Law?

No, it isn’t. Paternity leave provisions are only allowed if provided for in a contract of employment.

How long are maternity leave periods under Nigerian law?

Female workers/employees are entitled to a maximum of 12 weeks of fully-paid maternity leave out of which 6weeks must be taken after birth. Nursing mothers are also allowed a half-hour nursing break twice a day during working hours.

How long are paid sick leave periods under Nigerian law?

Workers/Employees in Nigeria are entitled to a maximum 12 – working day paid sick leave period.

I have been made an employment offer via phone call which i have accepted and i have been told to come over to sign an employment contract. What should be the contents of this contract?

An employment contract should contain the following:-

– The name of the employer.

– The name of the employee, his address, position and date of engagement.

– The nature of employment/job description.

– The duration of an employment contract if it is to be for a fixed term.

– The terms and conditions relating to work hours, holiday pay and conditions for the inability to work due to sickness, injury and provisions for sick pay.

– The notice period to be given by any party wishing to terminate the contract and manner of termination.

– Remuneration (ideally, this should be net statutory deductions such as tax,deductions required under the Pensions Reform Act and Employee Compensation Act among others and stated allowances).

– Uniquely condition clauses.

How is an employment contract to be terminated under Nigerian Law?

Employment contracts are to be terminated by written notices.

What are the notice periods required under Nigerian law to terminate an employment contract?

The notice periods to terminate an employment contract under Nigerian law are :-

– 1day, where the contract has been running for 3 months or less;

– 1 week, where the contract has continued for more than 3 months but less than 2 years;

– 2weeks where the employment contract has continued for 2 years but less than 5 years;

– 1 month, where the contract has continued for 5 years or more.

My boss at the office ordered me to work on at least 3 National holidays even though such an arrangement was not agreed to in my employment contract and paid me for those holidays on which i worked. What is the position of Nigerian law on this?

It is unlawful to pay wages in lieu of an annual holiday.

I simply could not stand the verbal and emotional abuse meted out to me by my employer and as a result, i dropped my resignation letter the very day i received my pay for last month’s work. The employer has been harassing me over not giving due notice and has been demanding that i refund the pay i got in lieu of notice. What is the position of Nigerian law on this?

The law will not be used as a basis for illegality. There is abundant case law showing where the National Industrial Court had held that salary for work done is non-refundable and that in lieu of a notice to terminate an employment agreement, it is only pre-paid allowances and benefits, not core remuneration or salaries, that should be refunded.

Despite resigning from my job, my former employer still has not paid me salary arrears for about 4 months, so i left with the company laptop which the company HR department has been asking me to return or they will file a police petition against me. Is what i did illegal?

What you did is to exercise or place a lien on the company’s property in your custody in lieu of salaries owed, but actually selling the laptop might give rise to an allegation of illegal conversion and self-help which is not allowed under Nigerian law, so the first thing is to get your lawyer to send your former employer a Demand letter and where this fails, file an action for recovery of your unpaid salaries at the National Industrial Court. 

I am a Nigerian born and raised abroad that is coming into the country for the first time to take up a high-paying job with massive benefits. Is there any legal precaution i should take before signing an employment contract?

Yes there is – you are not eligible for salaried full-time employment in Nigeria because you have not completed your mandatory 1-year National Youth Service Corps(NYSC). 

This will automatically render any employment contract you sign void and unenforceable. Instead, you should sign what is called a Contract for Services .

What is a contract for services and how is it different from a contract of service?

A contract for services is an agreement between an independent/self-employed entity (usually with a specialized professional skill) and an employer characterized by an absence of the control usually exerted by an employer over an employee who is usually a full-time salaried staff engaged by an employment contract or contract of service.

Contracts for Service are different from “Contract Staff” engagements which are usually 3rd-party full-time salaried-employment agreements brokered by HR agencies that outsourced their catalogue of skilled workers for a transaction fee or percentage of the employment contract value, usually for short-term roles or jobs that can’t be provided on a full-time pay basis.

Contracts for Service entitle the employed parties to strictly remuneration alone and are usually for  specialized services that can be simultaneously delivered to several other employers such as :-

– ICT (UI/UX, Frontend/Back-end development services).

– AML/CFT Compliance/Data Protection Compliance services.

– In-house Medical personnel services retained by blue-chip companies.

– Company Secretarial services.

– Actuarial/Audit services.

– Engineering services.

I recently found out that my employment contract contains some very exploitative clauses which do not favour me at all and which have been encouraging my employer to treat me badly at the work place. I want to sue him on the grounds that they pressured me into signing the agreement against my free will in the first place knowing i was very desperate. Will i have a chance in court?

Employment contracts like the one you described are very common in Nigeria due to their “Take it or leave it” clauses that leave very little room for negotiations. Such contracts are called  “Contracts of adhesion” or “Standards form contracts”.

Such employment contracts usually involve their terms and conditions proposed by one party, usually the employers, in such a way that provides very little or a total absence of bargaining/negotiating power on the part of job-seekers.

Though such contracts are not illegal,they can be overturned by the National Industrial Court on the sole basis of unconscionability or conflict with any law currently in place and can consequently be interpreted by the court against the employers since they drafted the contract and had the opportunity to remove any ambiguity in the first place.

Other than the exception painted above, prospective employees are expected to retain sound legal counsel to guide them on interpreting very clear contracts that give them a good idea of what they are getting themselves into by signing such agreements which would be very binding. Only illiterate people certified as such by a court can be free from the binding nature of such contracts. 

What are the legal remedies available to me if my employer violates the employment agreement or my rights?

The law through the courts can order civil remedies in the form of :-

– An award of Damages.

– An order for the Terminal payments due to any ex-worker or employee.

– Where both parties agree, job reinstatement in the case of unfair dismissal/termination of employment.

There are also remedies in criminal law for work-related rights abuses. 

Conclusion :- From the above write-up, it can be seen that labour law is actually quite vast and you will be needing diligent legal guidance before hiring anyone or working for anyone. 

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