Employment law in Nigeria was not founded on the provisions of a single statute. As a result , specific legislation has been enacted to contend different issues in the Nigerian employment industry.


6/10/20223 min read


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Employment law in Nigeria was not founded on the provisions of a single statute. Rather, it is dispersed in different legislation that provides the framework and is greatly backed up by case law. Over the years, specific legislation has been enacted to contend different issues in the Nigerian employment industry.

The sources of employment law in Nigeria are:

  • The Constitution of the Federal Republic of Nigeria 1999 (as amended) (the "Constitution") · The Labour Act, Laws of the Federation of Nigeria 2004 ("Labour Act") ·

  • Guidelines for the Release of Staff in the Nigerian Oil and Gas Industry, 2019 ·

  • Employees' Compensation Act 2010

  • Factories Act, Chapter F1, LFN 2004

  • Finance Act 2020 · National Housing Fund Act, Chapter N45, LFN 2004

  • Nigerian Oil and Gas Industry Content Development Act 2010

  • Trade Disputes Act, Chapter T8, LFN 2004

  • Nigeria Data Protection Regulation 2019 issued by the National Information Technology Development Agency

  • International conventions, treaties and protocols relating to labour, employment, workplace, industrial relations or matters connected therewith that have been ratified by Nigeria.

In addition, the following also applies;

  • Pension Reform Act 2014, which regulates the contributory pension scheme · Personal Income Tax Act which regulates the taxation of employees' remuneration ·

  • Employees' Compensation Act 2010, which regulates the payment of compensation to employees who suffer occupational diseases or sustain injuries arising from accidents in the workplace or during employment ·

  • Industrial Training Fund Act which requires employers to contribute 1% of their annual payroll to the Industrial Training Fund created by the act · Immigration Act 2015, which regulates the employment of foreign nationals ·

  • National Health Insurance Scheme Act which established the national health insurance scheme ·

  • Trade Unions Act which regulates the organisation of trade unions and their activities.

The Labour Act is the supreme legislation governing employment relations in Nigeria. Its application is limited to employees engaged under a contract of manual labour or clerical work in private and public sectors.

Employees exercising administrative, executive, technical or professional functions are governed by their respective contracts of employment. It is important to note that reliance is sometimes placed on judicial authorities to promote some labour and employment law principles.

The new President/Chairman of Council of the Chartered Institute of Personnel Management of Nigeria (CIPM), Wale Adediran, recently championed for the review of the Labour Act to make it more relevant to today’s workplace realities. In support of this, he said the CIPM would soon launch a one-million signature campaign in this regard.

Some of the areas that need to be reviewed are:

(a) Limited scope of application: The law appears not to cover all workers, even though, in practice, it is often referenced or applied across board for employment issues. The Act covers clerical or junior-staff sort of roles and not “persons exercising administrative, executive, technical or professional functions as public officers or otherwise”.

(b) Maternity leave: The Law currently provides for twelve (12) weeks, with at least 50% pay. At the minimum, this does not align with the current trend of sixteen (16) weeks, with full pay.

(c) Paternity leave: This is a global and growing practice not recognized under the Law. This has become a necessity, given the evolving structure of family and parenting in today’s modern world.

(d) Trade unionism: Though the law forbids employers prohibiting their employees from joining trade unions, this restriction may not apply to ‘Management’ employees, who do not seem to be covered.

(e) Severance pay (pay in lieu of notice): The Law appears to reference Basic Salary as the basis of computing pay in lieu of notice, which does not align with leading practice that typically focuses on Fixed Pay (i.e. Basic Salary and other cash allowances/items), and in some cases, target bonus.

(f) No provision for unfair dismissal/unfair labour practice: Based on the Law, the employer is allowed to terminate an employee for no reason, provided the employer complies with the notice period provision or, where the contract is regulated by statute, the employer complies with the relevant statutory provision. This is based on the Common Law and does not align with the International Labour Organization (ILO) standards on unfair dismissal, which require employers to give reasons for terminating or dismissing an employee. Some countries, such as Gambia, Ghana, South Africa, United Kingdom and Zambia, have already adopted these standards.

(g) Low fines / penalties for contraventions: The fines imposed by the Law are as low as N100! In today’s world, this defeats the purpose of deterring contraventions and promoting compliance.

(h) Concerns on child labour: Based on Section 59, a family member can employ a child for agricultural or domestic work. This is not acceptable in today’s modern world and exposes children to exploitation for commercial agriculture and miserable treatment as domestic servants.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com


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