Employment and Labour Laws Guides In Nigeria Q&A

HRLeverage Africa is an HR, Outsourcing and Recruitment Company with major interest in helping organization solve the puzzles presented to them while navigating staffing issues.

Whether you need information about Recruitment, Staffing And Employment Processes and guidelines in Nigeria, this piece  by HRLeverage Africa Consulting Ltd is all You Need To Know to start off. We also moved further into what is needed to hire an expatriate in Nigeria.

It is a Q&A guide to issues on recruitment, staffing, employment  and expatriate management process in Nigeria which is Africa’s most populous nation. 

 

We try to give a general overview on employment status; recruitment process, terms of employment; post-employment background verification; expatriate’s  permits to work;  minimum wages; working hours; employer liability on injury; discrimination and harassment; disengagement and dismissals; laying-off; taxes; labour unionism  and entire industrial relation issues.

Overview of employment law in Nigeria

Nigeria is a mixed capitalist economy and as such, there is freedom of private ownership of companies and properties while government plays a regulatory rule.

REGULATION OF THE EMPLOYMENT RELATIONSHIP 

  1. Question 1. How is the employment relationship governed and regulated?

Answer: Labour act of Nigeria is the primary source of labour law. By this, all employment relationship must be a Written employment contract.

Nigeria has one of the world’s affordable workforce due to the largeness in population. Under the Labour Act, an employer is meant to give its employee(s) a documented employment contract within the first three months at the start of the employment period.

Question 2. What are the content in the employment contract.

Answers

The  content in the employment  contract from the Nigerian Labour act:

  1. The name of the employer (s),
  2. The date of employment , full name and address of the employee and the place of work
  3. The nature of the employment.
  4. The date when the contract expires.( Only for fixed term contract)
  5. Disengagement notice period for each  party wishing to terminate the contract
  6. Process and periodic process for payment of wages and Salary .
  7. Other terms and working conditions such as working hours; holiday and holiday pay; incapacity to work due to sickness or injury, including any provisions for sick pay; and any special conditions of the contract.

RECRUITMENT AND STAFFING IN NIGERIA

Question 3: Is there any incentives available for employers employing people?

Answers:

This is a Yes because Labour intensive production organization especially in some sectors are entitled to progressive tax concessions as listed below;

  • Industries employing at least 100 persons benefit from a 6 % tax concession.
  • Industries employing at least 200 persons benefit from a 7% tax concession.
  • Industries employing 1,000 persons or more benefit from a 15% tax concession.

Certain industries benefit from various tax concessions, to encourage and promote investment. The availability of these tax concessions and their privileges are limited in time.

SOCIAL SECURITY IN NIGERIA:

Question 4 : Is there social security in Nigeria?

Answers

There is no clear social security policy. Available social security benefits include:

  • A social security pension scheme as discussed in Question 8.
  • An employee compensation scheme as discussed in Question 8.
  • An industrial training fund to be discussed in Question 8.
  • Group life insurance scheme

BACKGROUND CHECK AND VERIFICATION:

Question 5: Are there any restrictions or prohibitions on carrying out background checks in relation to employment.

Answers:

An employer can generally carry out background checks in relation to applicants, subject to certain restrictions.  Although relevant sections of 1999 Constitution of Nigeria (as amended) provide for the protection of privacy of citizens. Therefore, an employer can only obtain personal information regarding an applicant’s past, health or criminal record provided that the information is relevant, reasonable and lawful.

Background checks can be conducted by a third party agents such as HRLeverage Africa on behalf of primary employer. However, it is believed that during employment process, employees must have given you assent to such checks .

Implied terms in employment Contract

Question 6:

Answers: Are there any implied terms in employment contract in Nigeria?

Certain terms are implied into contracts of employment and related to jurisdictional court pronouncement such as industrial court as well as in relations to statutes.

An employee has the following implied obligations:

  • To use reasonable care and skill.
  • To serve the employer with  in good faith.
  • Never to confidential information.
  • Employee must be willing to work.

An employer has the following implied obligations:

  • To provide a safe workplace and safe work systems.
  • To pay wages.
  • To provide working tools for employee work
  • To indemnify the employee against reasonable expenses in the performance of their employment.
  • Not to disclose sensitive information regarding employees without their consent.

INDUSTRIAL UNION

Question 6: Does Nigeria have an organized trade union?

Answers:

Nigeria is a democratic society whose constitution guarantees freedom of association including freedom to join labour union.  Both employers and employees has their own separate trade unions.

Nigeria has 2 central labour unions which house local and unions across several industries.

This union includes

  • Nigeria Labour Congress ( Meant to advocate and represent junior level employees)
  • Trade union Congress ( meant to advocate and represent senior level employees)

To balance  this,  organisations /employers in Nigeria also have there own organized union.

The employer’s trade unions includes:

  • NECA is the umbrella organization of employers in the Organised Private Sector of Nigeria. ( This is the body that represents employer’s interest at local and at the level of ILO
  • Manufacturers Associations of Nigeria (Strictly for manufacturers )
  • The Nigerian Association Of Chamber Of Commerce Industry Mines And Agriculture(relevant industry membership)

Collective agreement in the face of law

Question 7: How enforceable is Collective agreement?

Collective agreements with trade unions or employee representatives are voluntary agreements and are not binding on employers, unless the terms of a collective agreement are expressly incorporated into a contract of employment.

Below are some terms relevant to collective bargaining between employers and employee unions/representatives.

  • Wages and Salaries.
  • Health benefit .
  • Holiday, leave and leave conditions.
  • The working hours.
  • Severance package.
  • Redundancy
  • Disciplinary procedure.
  • Transport and housing.
  • Medical scheme.
  • Lunch subsidy.
  • Membership of unions.
  • Staff conversion.
  • Staff transfers
  • End-of-year payments. (Popularly called 13th months in Nigeria )

 STATUTORY REMITTANCES 

Question 8: Is there any compulsory statutory employment remittance?

Answers : 

Employees are entitled to the full range of statutory employment remittances provided under the various labour laws. Such rights include monthly

  • Contributory pension,
  • Housing remittance,
  • Employee compensation act,
  • Industrial training funds.

EMPLOYMENT CATEGORIES STATUS

Question 9: 

Does the law distinguished between different categories of workers?

Categories of worker

There is no express statutory distinction between different categories of workers in Nigeria.

The Employees Compensation Act and the Labour Act use the words “employee” and “workers”, respectively, to cover any person who is employed.

Question 10: Is there any type of work specify for different people?

Answers:

Only young persons and women are not meant to work at  night work, subject to certain exceptions stated in the Labour Act.

Question 11:

Is there any special preference on employees shareholding in an organization Nigeria.

Answers :

Under the Nigeria’s Companies and Allied Matters Act 1990, employees with shares capital in the organization are referred to as employee shareholders. He/she is entitled to both wage and profit sharing/divided.

Questions 12

What is the difference between an independent contractor and employer in Nigeria.

Answers

An independent contractor is someone on a specific engagement to carry out a definite type of work based on his/her expertise without being under the instructional control of the company’s employer.

By comparison, an employee is engaged to provide services under the control of the employer. By this employer can dictate how to do his work, when to do his work and tools to use to do his work. This is not directly the case for independent contractor who are paid to render services per time.

RELATIONSHIP WITH OUTSOURCING AGENCY/COMPANIES 

Question 13:

Can organization engage an outsourcing to hire staff while the staff belongs to the agency as an independent contractor?

Answers:

This is a yes, most multinationals and local companies engage in this to save cost and to avoid  compliance issues and liability.

 Question 14: 

How does Labour Law ( The Labour Act) regulate the employment for

  1. Local citizens
  2. Foreign nationals outside west Africa but working Nigeria?
  3. Expatriate Africa but working Nigeria?

Answers:

Laws applicable to foreign nationals

  • Foreign nationals within west Africa are not regarded as expatriate. Relevant substantive laws that regulate the employment relationship in Nigeria also apply to foreign nationals working in Nigeria; However, the Pension Act does not apply to foreign nationals who are covered by similar provisions in their country.
  • The Employees Compensation Act coordinated by NSITF grants inalienable rights to employees in Nigeria. Therefore, this Act is mandatory and applies to all employees regardless of the choice of law in the employment contract. Certain provisions of the Labour Act are also implied into an employment contract regardless of the choice of law.

FILINGS

An employer that intends to recruit foreign nationals to work in Nigeria must file certain information/paperwork with the authorities. Employers in certain sectors may also need to make filings regarding new employees with the relevant regulatory bodies. New employees must be given a contract of employment.

PERMISSION TO WORK FOR EXPATRIATE 

Questions 15:

What prior approvals do foreign nationals require to work in your country? What information/paperwork needs to be kept or filed with the authorities when they start work?

Answers:

For foreign nationals to work in Nigeria, a company needs to have Expatriate quota.  This expatriate quota can be procured through the HRLeverage Expatriate management unit:

Foreign national may require any of the following which can be procured

  • A subject to regularization (STR) visa.
  • A temporary work permit (TWP).
  • Single or multiple entry visas.

To obtain an STR visa, the employer company may outsource this process to HRLeverage. Kindly contact us via 2348022155626

Expatriates resident or working in Nigeria may qualify for a combined expatriate residence permit and aliens card (CERPAC). A CERPAC is a document that allows a foreign national to reside in Nigeria and carry out an approved activity as specified in the permit, or to accompany a resident or citizen of Nigeria as a dependent.

To obtain a CERPAC, an applicant must: kindly contact HRLeverage to ease this process for you.

Questions 16:

Are there any restrictions on who can register a company and act as director?

What about Age restrictions?

Answers:

To register a company or be appointed as a director or managing director must be at least 18 years.

There is no maximum age in private companies. The appointment of a person of 70 years or more as a director of a public company must first be disclosed to the company’s members at a general meeting. Any resolution appointing such a person requires a special notice.

Questions 17:

Is there Nationality restrictions on who can run a company in Nigeria?

Answers:

There are no nationality restrictions.

Some  restrictions  you should know

The following persons cannot be appointed as directors of a company in Nigeria:

  • Persons of unsound mind.
  • A convicted person of fraudulent trading.
  • Persons disqualified by a court of relevant jurisdiction
  • Corporation, unless appointed by their representative for a specific term.

MINIMUM WAGE 

Questions 18:

Is there a national (or regional) minimum wage in Nigeria?

Answers:

The national minimum wage in Nigeria is N30, 000 per month as at 2019. However, some state has moved higher.

What this means however is that no one should earn below the minimum wage on a monthly basis.

Questions 19:

How do workers get paid in Nigeria?

Answers:

An employee’s wages must be paid either (Labour Act):

  • In legal tender.
  • By cheque or postal order, subject to the employee’s prior written consent.

However, with the advent of financial inclusiveness and financial technology, wages are now been paid through electronic transfer. Wages are mostly paid monthly in Nigeria.

Working  Hour

Questions 20:

Are there restrictions on working hours?

Working hours generally in Nigeria is between 8am  to 5pm

40 hours a week.

Questions 21:

  • Are there rest break breaks

Answers: 

A worker who works six hours or more per day is entitled to one  hour rest breaks .

Questions 22:

What if people want extra working hours ?

Answers:

An employee  who works seven days within the  week  is to be given a full  day rest . Otherwise corresponding time off must be granted as soon as possible, or wages at overtime rates must be paid in lieu.

  • Shift workers

Shift workers are also entitled to rest breaks. Women and young persons cannot work night shifts.

HOLIDAY ENTITLEMENT 

Questions 23:

  • Is there a minimum paid holiday entitlement?

Answers:

Minimum paid holiday entitlement

Within the labour act, an employee who works continuously for 12 months  are entitled to atleast  minimum annual paid holiday as follows:

  • Six working days, for persons under the age of 16 years (including apprentices).
  • 12 working days.

This excludes all public holidays.

Questions 24:

  • Is there anything such as Public holidays

Answers:

Government from time to time declare public holidays ,  below are 11 public holidays mostly recognized in Nigeria.

10 Apr (subject to change ) Good Friday Public Holiday
13 Apr Easter Monday Public Holiday
1 May Workers’ Day Public Holiday
24 May (subject to change ) Id el Fitr Public Holiday
25 May (subject to change ) Id el Fitr additional holiday Public Holiday
12 Jun Democracy Day Public Holiday
31 Jul (subject to change ) Id el Kabir Public Holiday
1 Aug Id el Kabir additional holiday Public Holiday
1 Oct National independence Day Public Holiday
29 Oct Id el Maulud Public Holiday
25 Dec Christmas Day Public Holiday
26 Dec Boxing Day Public Holiday

 

Statutory rights of parenting 

Questions 25:

  • What are the statutory rights of employees who are:
  • Parents (including maternity, paternity, surrogacy, adoption and parental rights, where applicable)?

Answers:

Maternity rights

A pregnant employee is entitled to 12 weeks’ maternity leave if she provides a written medical certificate from a medical doctor stating that she should not or cannot work. Pregnant employees are entitled to at least 50% of their normal wages, provided that they have been employed for at least six months. Upon resumption, nursing mothers are meant to be given an hour a day to attend to their babies.

Paternity rights

Aside the commercial capital of Nigeria,  Lagos State, who gives its civil servants ten days’ paternity leave within the first two months from the birth of the baby.  There is no provision for paternity leave in Labour Act.

Surrogacy rights

Nigerian labour law does not recognize surrogacy rights.  This practices depends on the organisation .

 What else do you want to know?  

Call 08032288650 0802255626

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