QUICK DIVE: Employment laws in Nigeria

With the current trend of employer-employee tussles on mainstream media, we thought to provide clarity on the laws that guide the employer-employee relationship in Nigeria.

Employment laws are in place to make sure that both employers and employees are protected while exchanging value, one to the other. Providing legislation on dismissal, pay, discrimination and more, these laws are in place to protect workers’ rights while also safeguarding an employer’s interests and keeping the relationship between the two fair.

The Labour Act…

There is no single law that encompasses employment laws in Nigeria, rather it is disseminated in different legislations that provide the framework for employment. Employment matters are also greatly influenced by the decisions of the court. Different laws have been enacted to address various issues in the Nigerian employment industry. However, the primary law remains the Labour Act. The Labour Act of 2004 is the principal law governing employment relations in Nigeria. It is limited to employees engaged under a contract of employment or clerical work in the private or public sector.?

The Act provides that an employer must give an employee a written contract of employment within 3 months of the commencement of the employment. It also makes provision for work hours, overtime and leave period. Section 18 of the Act states that an employee must have worked for at least twelve months to qualify for annual leave and?

It makes provision for the termination of a contract of employment by the issuance of notice in writing. Either party to a contract of employment may terminate the contract by notice. In respect of terms of employment, the Labour Act prescribes the minimum terms and conditions of employment of workers, however, the terms and conditions of employment of employees who perform administrative, technical or professional functions are primarily subject to the terms of their respective contracts of employment. The maintenance and retention of employment records is also a salient issue discussed by the Act.

What other laws govern employment-related matters?

The Nigeria Data Protection Regulation of 2019 oversees the collection, processing and disclosure of the personal data of prospective employees that are Nigerian citizens or residents. The National Health Insurance Scheme Act, 2004 established the national health insurance scheme and mandates that health insurance benefits should be enjoyed by employees. The Personal Income Tax Act, 2011 is very important legislation that discusses the taxation of employees' remuneration.

The Employee Compensation Act 2010 applies to all employees in the private and public sectors in Nigeria. The Act imposes obligations on employers of labour to deduct 1% from the monthly salary of its employees and remit it to an Employee Compensation Fund. It also provides compensation for an injury, disease or death suffered during a period of employment.

The Industrial Training Act promotes the acquisition of relevant skills with the intention to increase the pool of skilful human resources in Nigeria. It imposes a duty on employers to provide training for their staff to improve job-specific skills. The Pensions Reform Act of 2004 introduced the Contributory Pension Scheme (CPS) and made it mandatory for employers and employees in both the public and private sectors to contribute toward the retirement benefits of employees.

It is pertinent to note that where there is an employment-related dispute between an employer and employee, the appropriate court with the exclusive jurisdiction (power) to determine the matter is the National Industrial Court.