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 influenced by case law. While there is an unsettled discussion as to whether the Labour Act extends beyond unskilled and manual workers, it nonetheless remains the governing law for labour matters.
Nigerian law allows freedom of contract in upholding and binding employers and employees to their agreements.
Section 1 of the National Industrial Court Act2 establishes a specialised court, the National Industrial Court of Nigeria (NICN), with exclusive responsibility for handling employment-related disputes. The Constitution of the Federal Republic of Nigeria 1999, as amended (CFRN)3 further endorses the NICN's authority and jurisdiction. The Industrial Arbitration Panel (IAP), which was established by the Trade Dispute Act, is responsible for settling any dispute referred to it by the Minister of Labour and Productivity. Any objection to an IAP award is taken before the NICN. The Court of Appeals hears appeals from the NICN regarding questions of fundamental rights contained in Chapter IV of the CFRN, in relation to matters under its jurisdiction.4 However, where an appeal from the NICN relates to other employment matters, it must be with leave of the Court of Appeal.5
II Year In Review
According to the Labour Force Statistics – Unemployment and Underemployment Report produced by the National Bureau of Statistics (December 2018), as at the third quarter of 2018, Nigeria had a labour force of 90.5 million people, of which 69.54 million were in employment. An analysis of the report reveal that 51.3 million Nigerians were in full-time employment and 18.21 million were in part-time employment. As 2019 is an election year, there is a chance that these figures will be improved, as there has been a rise in the number of young entrepreneurs.
A number of issues that arose in 2018 have been addressed by the NICN or the passing of new or amended laws, such as the more comprehensive Job Creation and Protection (Establishment) Bill 2013. Globally, the employment landscape is changing, forced by the advent of new technology and diversity in the workforce. For example, with millennials largely making up the modern workforce, employers are now being forced to consider more flexible and sustainable working arrangements.
Outsourcing arrangements and contract staffing remain a major issue. In 2018, there were protests against arrangements that allow employers to avoid certain obligations such as pensions, insurance and gratuity. Technological innovations have introduced novel employment structures, which are quite dynamic but somewhat vague, especially in relation to the classification of persons working under such arrangements. Consequently, in 2018, the National Industrial Court was provided with an opportunity to determine the nature of the relationship between Uber and Taxify and their drivers, that is, whether they could be classified as employees or independent contractors. However, this could not be determined by the court owing to an absence of sufficient facts and evidence to inform a substantive determination. This remains an area of interest.
Other trending issues in employment law include the scope, validity and enforceability of non-compete clauses; enforceability of arbitration clauses in employment contracts; liability of former employers in giving false or malicious references to a former employee; and the ability of financial institutions to recover staff loans after employment contracts are terminated. Additionally, the National Labour Congress and the federal government have been engaged in discussions on the upward review of the national minimum wage. While the President is yet to assent to the proposed review, an increase in the current minimum wage is feasible.
III SIGNIFICANT CASES
A number of noteworthy labour cases were decided in 2018.
The age-long debate about the reasonableness of non-compete clauses to protect commercially sensitive trade secrets of an employer came to the forefront again in two decisions of the NICN. In Infinity Tyres Limited v. Mr Sanjay Kumar,6 the NICN held that the non-compete clause restricting the first defendant from joining 'any other company in Nigeria for one year' upon cessation of employment with the claimant company was reasonable with regard to the geographic coverage and the one-year restraint, but unreasonable with respect to 'any other company in Nigeria'. In 7th Heaven Bistro Limited v. Mr Amit Desphande,7 a similar issue arose. In this case, the NICN declared as 'inhuman and stifling', and consequently to constitute an unfair labour practice, a restrictive covenant mandating that 'for whatever reason even if his employment is terminated [the employee] shall not accept employment with any other employer in Nigeria . . . for a period of (3) years from the date of termination or resignation as the case may be'.
In Raphael Adula Odama v. Federal Judicial Service Commission & 3 Ors8 and Iretiolu Wemimo Dada v. Ondo State Judicial Service Commission & Anor,9 the NICN considered whether a dismissed employee, whose contract was terminated because of irregular or void employment status, is liable to pay back all remuneration received during the period of employment. In the Odama case, the court noted that the remuneration for which a refund was sought was a special type of damages that must be specifically pleaded and proven. However, beyond a bare reference to the period, the very particulars or quantum of remuneration received was not given or stated in Dada's case. The Court nevertheless held that the appointment of Dada as Chief Magistrate was void, and granted the defendant's counterclaim asking for a refund of all remuneration received during the purported employment.
Adjudicatory processes involving the enforcement of the principal legislation dealing with arbitration (in relation to aspects of employment contracts) were the focus in three NICN decisions. The facts in Giuseppe Francesco E Ravelli v. Digitsteel Integrated Services Limited,10 Chandra Prakash & 11 Ors v. Orleans Invest Holdings Limited & 4 Ors11 and Mr Michael Ajilore v. KLM Royal Dutch Airlines12 were somewhat similar, as was the verdict rendered in the preliminary objection raised in all three cases. For example, in Ajilore, the applicant was an employee of the respondent and had executed a training bond while in the employment of the respondent. Upon resignation and after taking the benefits of the bond, a dispute arose as to the interpretation of parties' rights and obligations. The bond contained an arbitration clause that covered the resolution of possible disputes arising from its interpretation. When both parties could not agree on a sole arbitrator, the applicant applied to the court for the appointment of an arbitrator. However, the NICN did not have jurisdiction because it is not contemplated within the meaning of 'court' as the term appears in the Arbitration and Conciliation Act. One significant point from these decisions is the question of whether it is appropriate, or necessary, to insert arbitration clauses in employment contracts. The NICN encourages the swift resolution of employment-related disputes through its court-assisted alternative dispute resolution mechanism.
The facts in Udenigwe Udogu v. Provost, Institute of Ecumenical Education & Anor,13 among other things, highlight the legal liability associated with giving a false, malicious and misleading work reference to the prospective employer of a former employee. In this case, the claimant, a former lecturer, received 8 million naira in damages for what he would have earned if his previous employer's false and malicious work reference had not truncated the claimant's new-found employment.
The NICN held in both Darlington Eriseye Lawson v. Keystone Bank Limited14 and Jacob Folarin v. Union Assurance Co Ltd15 that the employer acted in a discriminatory manner and carried out an unfair labour practice by making ex gratia payments to former employees whose employment relationships were terminated in the same or similar circumstances as that of the claimant, but failed to make the same payment to the claimant.
In Mrs Gloria Chukwudi-Nneke v. Registered Trustees of Dowen College, Lagos,16 the defendant was asked to pay damages to the claimant 'for the manner in which she was disengaged by the defendant given her status as a pregnant woman'.
Olusanya Adeosun v. Stag Engineering Nig Ltd17 and Mr Bala M Yesufu v. Nigeria Breweries Plc18 bring into focus the need for clarity and precision in HR recruitment and termination documentation. The court, in determining the required notice period to be given by the claimant when opting for early retirement, specifically directed the defendant (employer) to 'take immediate steps to include and incorporate in the [defendant's] HR Policy and Employee Handbook the entitlement conditions and packages for Early Retirement as well as the Exit Notice Period'.
It seems that the NICN, with few exceptions, will not allow a former employee to avoid fulfilling contractual obligations. For example, an employee cannot avoid the repayment of loans using the excuse that the loss of employment has made it impossible to repay the loans advanced in the course of the employment relationship. See Mrs Kikelomo Kola-Fasanu v. Prestige Assurance Plc,19 Ms Kate Iyamah v. First Bank of Nigeria Plc20 and Mr Adebayo Gbolahan Adepoju v. Coscharis Group.21 The court in Kola-Fasanu distinguished the contract of employment and personal loans between the parties as two separate subject matters that are not mutually dependent.
In Oladapo Olatunji & Anor (Representing themselves and other Uber and Taxify Drivers in Nigeria in a Class Action) v. Uber Technologies System Nigeria Limited & 2 Ors,22 a case regarding ride-sharing applications that allow users to order a taxi that appears within a few minutes of a request, the drivers, mainly owners of the taxis, brought a suit to determine whether they are independent contractors or direct employees of Uber, Taxify, etc. In this case, the claimants sought, among other things, for a declaration that all Uber and Taxify drivers are employees of Uber and Taxify and, as such, are entitled to certain employee benefits. They contended that they were engaged subject to certain conditions (vehicle standards and maintenance, charges per trip, code of conduct, etc.), and work was periodically assigned for which they were paid 'weekly wages'. While the court dismissed the case, largely as a result of the claimants' failure to provide sufficient facts and evidence to inform a substantive determination, it made reference to the imprecise language of Section 91 of the Labour Act,23 which seems to be broad enough to favour the classification of ride-sharing drivers as employees.
IV BASICS OF ENTERING AN EMPLOYMENT RELATIONSHIP
i Employment relationship
An employer is required to provide an employee with a written employment contract within three months of the employee commencing his or her job. The contract must contain:
- the employer's name or group of employers;
- the worker's name, address, position and date of engagement;
- the nature of the employment;
- the date of expiry, if a fixed-term contract;
- the notice period for termination;
- wages, frequency of payment and method of calculation;
- hours of work, holiday pay and conditions for incapacity owing to sickness and injury; and
- special conditions of the contract.24
Generally, the contract must be signed in order to make it legally binding, as the employee's signature conveys acceptance of terms. The NICN may ignore express contractual terms if they are inconsistent with the reality of the relationship between the parties.25
Fixed-term contracts are permissible and must specify the above terms. If the contract is terminated before the agreed term has expired, the employer must pay the employee the full salary he or she would have earned for the period of the fixed term.26
The Labour Act allows parties to change or amend terms after execution, requiring the employer to inform the worker of the nature of the change by a written statement not more than one month after it is made.27 Where a copy of the statement is not left in the worker's possession, he or she must be given reasonable access to it during the course of his or her employment.
ii Probationary periods
Probationary periods in employment contracts are permissible, and the duration and length of notice to terminate during the period is subject to agreement between the parties. The notice requirement may also be waived.28 Industry practice is usually for probation to last for three months. Failure to confirm or terminate the employment after probation could be deemed 'confirmation by conduct', where the employer continues to utilise the services of the employee at the end of the probation.29
iii Establishing a presence
For a foreign company to hire employees to carry on business in Nigeria, it must establish its presence30 by incorporation under the Companies and Allied Matters Act (CAMA).31 It cannot own a place of business before incorporation, except for receiving correspondence, notices and other documents preliminary to incorporation. The CAMA32 empowers the National Council of Ministers, on application by a foreign company, to grant exemption from incorporation in limited circumstances.33
The Minister of Labour and Productivity may permit 'fit and proper persons' to recruit citizens in Nigeria for employment outside Nigeria (for 12 months from the date of issue).34 An unincorporated company may engage an independent contractor strictly to carry out a specific task or contract and not to carry on any business in its favour. A joint venture agreement between a foreign company and an indigenous company would allow for employment of persons, with the local company (having legal status) hiring the employees.
The Personal Income Tax Act, as amended (PITA) obliges the employer to ensure monthly remittance of employees' taxes. The Pension Reform Act 2014 (PRA)35 requires the employer to make monthly deductions of a minimum of 8 per cent from its employees' salaries, plus an additional 10 per cent minimum contribution of its own, and remit the same to the employees' retirement savings accounts (RSA). The employer must also maintain a group life insurance policy for each employee for a minimum of three times the annual total salary of the employee and the premium must be paid not later than the date of commencement of the cover.
V RESTRICTIVE COVENANTS
Generally, all covenants in restraint of trade are unenforceable, unless they are reasonable with respect to the interest of the parties concerned and of the public. The courts apply a reasonableness test to determine whether or not to enforce such clauses. The burden of proof for 'reasonableness' lies upon the enforcing party.
There is no express prohibition in Nigeria's laws on entering into restrictive covenants, which may have retrospective effect. An employer needs to be mindful of what proprietary interest it seeks to protect, as judicial trends lean in favour of the employee who is often considered the party with the weaker bargaining power. While the employers may have legitimate reasons for imposing restrictive covenants, they are often considered to inhibit competition and may be struck down by the courts if held unreasonable.
Recently, the government responded to calls for an increase in the national minimum wage by establishing, through the Federal Executive Council, a National Minimum Wage Committee. The minimum wage was subsequently raised to 30,000 naira; however, the proposed increase is yet to be transmitted to the National Assembly for enactment into law.
Furthermore, under the Labour Act, it is unlawful for an employer to determine or direct the place or manner in which an employee must spend his or her wages.36
i Working time
Pursuant to the Labour Act, normal working hours in any employment contract shall be fixed by agreement, by any collective bargaining process within the organisation or industry, or by an industrial wages board (where there is no mechanism for collective bargaining). The Act is silent on the duration of the actual working day, which in practice is regulated by company policy. The statutory minimum for rest periods and leave37 must be considered when determining work hours.
With the exception of the Labour Act's provisions prohibiting employment of women for night work in a public or private industrial undertaking or any agricultural undertaking, and young persons below the age of 16 (and over 16, with exceptions), there are no other restrictions on working time. The prohibition on employment of women for night work38 does not extend to women employed as nurses or holding management positions, or those who are not ordinarily engaged in manual labour.
Overtime is defined under the Labour Act as the hours an employee is required to work in excess of the normal fixed hours. While the Act does not categorise overtime work, it recognises work done in excess of agreed hours and contains time off (rest periods) or payment in lieu for worked hours. In practice, overtime wages are calculated on an hourly basis on a par with the normal hourly rate of the worker and may differ depending on the staff category.
While the Act is silent on a threshold for the actual amount of overtime hours an employee can undertake per month, the total number of working hours undertaken should fall within the permissive periods of leave and rest. The quantum of overtime wages falls within the purview of the contract and in practice the rate is determined by the employer's internal policies.
VII FOREIGN WORKERS
Foreigners working in Nigeria are subject to immigration approvals, controls, permissions and permits.
A bill repealing all previous Immigration Acts was enacted into law in May 2015, revising the rules with respect to issuance of work permits and expatriate quotas,39 and imposing strict penalties on companies and foreign employees for non-compliance. The Immigration Act prohibits companies from employing a foreign national without the permission of the Director General of Immigration, unless the Minister of the Interior grants a waiver or exemption by notice.40 Persons entering Nigeria for business purposes must obtain the Minister's consent.41
There is no mandatory requirement for an employer to maintain a register of foreign workers. However, according to the Immigration Act (Control of Aliens) Regulations, all foreigners (having undergone legal formalities for residency) are to register their presence with the immigration offices closest to their place of residence within 21 days of arrival. Companies seeking to employ expatriates are to obtain a permit from the Nigerian Investment Promotion Commission. The expatriate quota (temporary or permanent until review), issued for two years and renewable thereafter, determines the number of foreign workers the employer may have. Further requirements include a disclosure of the provision made for repatriation of the expatriate and his or her dependents (if any).
The visa to be applied for is determined by the intended duration of employment. Experts invited for specialised employment for a short period ordinarily apply for a temporary work permit. Those wishing to reside in Nigeria permanently require a 'subject to regularisation' visa and, subsequently, a combined expatriate residence permit and aliens card.
The legislation regulating tax matters for individuals is the PITA.42 A company must remit tax on behalf of its foreign employees where the employer is in Nigeria or has a fixed base in Nigeria, or where the duties of the employment are wholly or partly performed in Nigeria, unless:
- the duties are performed on behalf of an employer in a country other than Nigeria and the remuneration of the employee is not borne by a fixed base of the employer in Nigeria;
- the employee is not in Nigeria for a period or periods amounting to an aggregate of 183 days (inclusive of annual leave or temporary period of absence) or more in any 12-month period; and
- the remuneration of the employee is liable to tax in the other country under the provisions of the avoidance of double taxation treaty with that country.
Tax remissions may be available depending on the existence of a double taxation treaty between Nigeria and the employee's home country.
Nigerian employment legislation does not discriminate between foreign and local workers. In practice, the employee's contractual terms may elect for the home country pension arrangement to remain or subsequent transfer of his or her RSA content to his or her home country on retirement or exit.
VIII GLOBAL POLICIES
Employer–employee relationships in the private sector are formalised by parties entering an employment contract. It is commonplace for organisations to have a handbook containing additional details on matters pertaining to the relationship. Although internal discipline rules are common, they are not mandated by law. In practice, they are found in the handbook and in some cases, completed by the contract or a collective bargaining agreement (CBA). Public sector workers may be bound by rules specific to their establishments or industry.
It is common practice for a handbook to be provided to the employee at the commencement of employment or shortly thereafter, or to be included as part of the contract. Its terms do not have to be agreed to through a representative body, or approved or filed with a government authority; however, in some instances, they may be reviewed by representative bodies (e.g., where the employees are unionised). Acceptance of the employment offer is usually predicated on acceptance of internal rules. The employees, however, must be notified of the existence of internal rules and any subsequent changes to them. While there is no prescribed format for where such rules are to be posted, organisations tend to provide employees with a hard copy and make them easily available (electronically or otherwise).
Nigerian laws address discrimination, sexual harassment, corruption and related matters. The CFRN enshrines the right to freedom from discrimination,43 which is forbidden in the workplace.44 Section 17(3) requires the state to direct its policy towards ensuring that 'there is equal pay for equal work without discrimination on account of sex, or any other ground'.45 The Trade Union Act, as amended (TUA) stipulates that 'if any person is refused admission into a union on discriminatory grounds, the union and all its officials shall be guilty of an offence'.46 The Labour Act also states that contracts that cause the dismissal of or prejudice a worker on the grounds of union membership or participation in union activities, is in contravention of the Act and shall be illegal.
Ordinarily, Nigerian law presumes that a person is of full age and capacity, and that the person fully understands the meaning of any document that he or she signs, with the exceptions of fraud, illegality, duress or coercion.
There is no statute or regulation requiring employment documents to be translated into the local language or an employee's native language. In Nigeria, the official language is English and therefore employment contracts and relevant documents are usually in English, provided that they are interpreted for the employee and the employee has a clear understanding of the document before signing it. The interpreter is also required to sign the document and certify that it was duly interpreted and understood by the employee.47 The nature of the document and contract terms will determine whether they must be signed by the employee or whether a simple notification would suffice. However, the Labour Act requires the employee to have access to the contract and to be notified of any changes thereto.
X Employee Representation
The CFRN grants all persons the fundamental right to peacefully assemble and associate. The Labour Act and TUA permit employees to form and belong to a union. The membership of a union or representative body must be voluntary and no employee is to be forced to join or to be victimised for refusing to join or remain a member.
The ratio of representatives to employees differs per institution and is not the subject of statute. In accordance with the TUA, an application for the registration of a union must be supported by at least 50 members for a union of workers and two for a union of employers.
The election procedure, terms of office of representatives and the frequency of meetings are regulated by the union's constitution or guiding document. The TUA requires registered unions to create an electoral college to elect members to represent them in negotiations.
The rights and protection of employees' representatives are guaranteed by the CFRN. The Labour Act prohibits contracts from making union membership (or lack thereof) a condition of employment, and prohibits employers from dismissing or being prejudiced against an employee:
- by reason of union membership;
- because of union activities outside working hours or, with the consent of the employer, within working hours; or
- by reason of the fact that he or she has lost or been deprived of membership of a union or has refused or been unable to become, or for any other reason is not, a member of a union.
Employers are required to recognise any registered union branch within its organisation once notified by employees that they are its members. The employer must deduct labour dues from members' wages for remission to the union's registered office within a reasonable period or a period prescribed by the Registrar of Trade Unions.
XI Data Protection
Nigeria does not currently have a strict data protection statute. The usual recourse is the CFRN, which guarantees 'privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications', and English common law.
Other relevant laws include the Nigeria Data Protection Regulation 2019 (NDPR) recently issued by the National Information Technology Development Agency; the Cybercrimes (Prohibition, Prevention, etc.) Act 2015 (promoting cybersecurity and protecting computer systems, programs, e-communications, intellectual property, privacy rights and system data); and the Freedom of Information Act 2011 (applicable only to personal information in the custody of public agencies and institutions in Nigeria).48 The Personal Information and Data Protection Bill is pending before the National Assembly.49 In practice, employers provide for data protection in their handbooks or employee contracts.
i Requirements for registration
There is currently no data protection agency requiring registration.50 Where data is used in the course of the company's usual line of business, consent or notification to the employee may, arguably, not be necessary. Where it is assumed that the employee's consent was obtained when executing the employment contract, a clause to this effect should be included in the handbook or contract. Under the NDPR,51 processing of personal data is considered lawful if, among other things, it is necessary for the performance of a contract in which the individual is a party, it is in compliance with a legal obligation, or consent has been given to its processing for one or more specific purposes.
In practice, companies tend to limit access to information about employees and company data by contractual terms. The need to ensure adequate data protection is commercially prudent. Also, the NDPR places a duty of care on any person entrusted with personal data and makes him or her accountable for acts or omission arising from processing the data. The NDPR also requires any person or organisation involved in data processing or control of data to develop security measures to protect the data.52
ii Cross-border data transfers
Any transfer of personal data undergoing processing or intended for processing after transfer to a foreign country or to an international organisation shall take place subject to the NDPR and under the supervision of the Honourable Attorney General of the Federation. The NDPR permits the transfer of data to a foreign country where, among other things, the consent of the individual has been obtained, the transfer is necessary for the performance of a contract, or the transfer is necessary for the conclusion or performance of a contract concluded in the interest of an employee between the employer and another entity. It is advisable for data being transferred to be used solely for the company business. The use of a joint-use agreement or safe harbour registration is discretionary.53
iii Sensitive data
The NDPR defines sensitive personal data to mean data relating to religious or other beliefs, sexual orientation, health, race, ethnicity, political views, trades union membership, criminal records or any other sensitive personal information; and requires measures to be put in place to protect it.54 Nigeria does not operate a social security system; however, medical information, client–solicitor communications and bank–customer communications do enjoy conditional protection by law.55
iv Background checks
Background checks are not the subject of statutory regulation. However, evidence suggests that many employers conduct such checks as a matter of prudence. The employee's approval may be required for certain checks. Credit and criminal records checks are allowed. There is no centralised credit registry in Nigeria, which means an individual's financial records are left in the custody of his or her bank, accessible only with clear authorisation and consent. Undertaking criminal checks, by discrete application to the Nigerian police, is a fairly common practice.
XII Discontinuing Employment
In the past, Nigerian law generally permitted parties to an employment contract to terminate for cause or for no reason, provided that the terminating party complied with the contract terms. However, this position was substantially altered by the decisions of the NICN in 2016. The NICN departed from the applicable principle of law in a master and servant relationship, which the common law developed and the decisions from other courts (up to the apex court) had followed. By its decision in the leading case of Aloysius v. Diamond Bank,56 in certain circumstances, an employee cannot be terminated without a reason. The employer is required to not only give a reason, but that the reason be justified and connected with the performance of the employee's work.
The law distinguishes between termination and dismissal, with dismissal being a severe sanction available only to the employer and connoting some grave infraction by the employee, such as theft, fraud or gross insubordination. It is often exercised without notice or pay. An employee should only be dismissed for a stated cause. Before a decision is reached on account of an infraction, the law requires the employer to afford the employee an opportunity to defend such allegations. Failure to do so may lead a court to declare the dismissal wrongful, entitling the employee to damages.
Notification to the authorities of the dismissal is generally not required. However, certain industries require prior notification to the appropriate industry regulator.57 Except where expressly stated in any CBA, notification to a works council or union is not required. The closest thing to a social plan for dismissed employees is the RSA contributory scheme.
The employer's obligations should be up to date as at the time of dismissal. An employee has no legal right of rehire, although employers are not prohibited from extending this privilege. Either an employer or an employee may terminate the employment relationship. The Labour Act (and most contracts) state the required termination notice period. It is widespread practice for contracts to contain a clause permitting payment in lieu of notice.
The Labour Act protects a woman who is absent from work for a long period owing to a certified illness arising out of pregnancy from receiving a notice of dismissal during her absence, or one expiring during her absence. Additionally, an employer cannot cause the dismissal of or prejudice a worker by reason of a union membership and related reasons.58
Severance pay in a dismissal is dictated by the employment contract. Employers may also make (discretionary) ex gratia payments. The parties may, however, enter into a settlement agreement.
The law does not recognise multiple redundancies nor require government notification for individual or collective redundancies. Employers are to inform the union or worker's representative of the reasons for and extent of the anticipated redundancy. In certain industries, this requirement may extend to the regulator.59
There is no statutory redundancy notice period, but the applicable contract, handbook or CBA may stipulate the period.60 The employer must fulfil its severance, statutory and contractual obligations. Nigerian legislation does not confer rehire rights; it does, however, require that the principle of 'last in, first out' is adopted in executing a redundancy. Offers of suitable alternative employment may be exercised.
XIII TRANSFER OF BUSINESS
Nigerian law imposes no obligation to protect employees in an employer's successor company in the event of a business transfer. An employee's position before and after transfer is a matter of contract between the employee and the transferor. The transferee assumes no obligation to existing employees, except as intended at the contracting stage.
The Labour Act places a notification obligation on an employer where its intention is to transfer an employee's contract. Such a transfer is subject to the employee's consent and authorisation of the transfer by an authorised labour officer.61 Redundancy provisions and policies of the company may be relevant (depending on the transfer base structure).
The Labour Act is limited in the security it provides. The existence of a CBA may afford a degree of protection to the extent of organised labour's ability to influence policy direction. The relevant business transfer laws are the Investment and Securities Act 2007 (ISA), the CAMA and the Company Regulations of 2012.62
Companies proposing a merger or acquisition shall, in compliance with the ISA, file with the Securities and Exchange Commission (SEC) a pre-merger notice and a formal application for approval of the proposed merger. Companies must comply with post-approval requirements, including obtaining a court order sanctioning the arrangement and, within five days of the order, file a notice with SEC. The obligatory filings with the Corporate Affairs Commission and associated costs are controlled by the CAMA and accompanying regulations.
The courts are increasingly determining the nature of an employment relationship based on the facts and the principle of primacy of facts. This is especially in view of the unique employment arrangements today in the face of evolving technology. The courts have also come to recognise co-employer status or triangular relationships, particularly where the arrangement purports to conceal the real employer. In essence, if the court is of the view that the written terms of a contract do not reflect the reality of the relationship, or the arrangement appears to be ambiguous or purporting to conceal the true employer, it may, in appropriate circumstances, disregard the written contract and determine the relationship of the parties based on the facts and evidence before it.
1 Folabi Kuti is a partner, Ifedayo Iroche is the Head of Chambers (Lagos Office) and Chisom Obiokoye is an intermediate senior associate at Perchstone & Graeys.
2 This used to be Section 20 of the Trade Dispute Act, Cap T8, LFN 2004.
3 Section 254C (2). The establishment of the NICN by Section 1 of the National Industrial Court Act, and its further empowerment by the amendment to the 1999 Constitution to the Federal Republic of Nigeria has changed the resolution of employment disputes significantly, also expanding the outdated provisions of the Nigerian Labour Act. In many cases, the NICN has taken into consideration International Labour Practices as well as International Best Practices in reaching decisions, on a case by case basis and with an air of finality.
4 Section 243 (2) of the CFRN.
5 Skye Bank Plc v. Victor Anaemem Iwu (2017) LPELR-42595(SC).
9 Unreported suit No. NICN/AK/33/2017, judgment delivered on 4 October 2018; per Oyewumi J.
10 Unreported suit No. NICN/LA/559/2016, ruling delivered on 16 February 2018; per Kanyip J.
11 Unreported suit No. NICN/LA/521/2017, ruling delivered on 5 March 2018; per Bassi J.
12 Unreported suit No. NICN/LA/617/2017, ruling delivered on 3 May 2018; per Bassi J.
15 Unreported suit No. LA/08/2016, decision made on 25 October 2018; per Amadi J.
17 Unreported suit No. NICN/LA/617/2015, judgment delivered on 30 October 2018; per Kanyip J.
18 Unreported suit No. NICN/LA/172/2015, judgment delivered on 23 November 2018; per Ogbuanya J. http://judgement.nicnadr.gov.ng/details.php?id=3048.
21 Unreported suit No. NICN/LA/409/014, judgment delivered on 16 February 2018; per Kanyip J.
22 Unreported suit No. NICN/LA/546/2017, judgment delivered on 4 December 2018; per Kanyip J.
23 23 CAP L1, LFN 2004.
24 Section 7(1)(a)–(f), Labour Act.
25 Oladapo Olatunji & Anor (Representing themselves and other Uber and Taxify Drivers in Nigeria in a Class Action) v. Uber Technologies System Nigeria Limited & 2 Ors. Suit No. NICN/LA/546/2017, judgment delivered on 4 December 2018; per Kanyip J.
26 Nigerian Society of Engineers v. Ozah (2016) 64 NLLR (Part 225) 1 CA.
27 Section 7(2)(a) and (b), Labour Act.
28 Section 11(6), Labour Act.
30 Sections 54 and 55, CAMA.
31 Chapter C20 LFN 2004.
32 Section 56.
33 A foreign company may apply to the National Council of Ministers for exemption from incorporation if it belongs to one of the following categories: (1) foreign companies (other than those specified in paragraph (d) of Section 56(1)) invited to Nigeria by or with the approval of the Federal Military Government to execute any specified individual project; (2) foreign companies that are in Nigeria for the execution of a specific individual loan project on behalf of a donor country or international organisation; (3) foreign government-owned companies engaged solely in export promotion activities; and (4) engineering consultants and technical experts engaged on any individual specialist project under contract with any of the governments in the Federation or any of their agencies or with any other body or person, where such contract has been approved by the Federal Military Government.
34 Section 25(1), Labour Act.
35 The PRA 2014 was signed into Law on 1 July 2014, repealing the Pension Reform Act 2004.
36 Sections ۱ and ۲, Labour Act.
37 The Act provides that where an employee is at work for six hours or more a day, his or her work shall be interrupted (to the extent that is necessary, having regard to its character and duration and to the working conditions in general) by allowing one or more suitably spaced rest intervals (the rest intervals being not less than one hour in aggregate). Furthermore, an employee is entitled to one day of rest, which shall not be less than 24 consecutive hours, every seven days.
38 The word 'night' is defined to mean: (1) with respect to industrial undertakings, a period of at least 11 consecutive hours, including the interval between 10pm and 5am; and (2) with respect to agricultural undertakings, a period of at least nine consecutive hours, including the interval between 9pm and 4am.
39 Following an announcement from the Nigerian Immigrations Services, with effect from 6 April 2015, a re-entry visa ceased to be a requirement for the purpose of re-admitting any foreigner who is legally resident in Nigeria. The possession of a valid Combined Expatriate Residence Permit and Aliens Card, in addition to other travel documents, now suffices for re-entry into Nigeria.
40 Sections 34 and 18(1).
41 Sections 8(1) and 14(1).
42 See Section IV.iii, above.
43 Section 42, CFRN; other laws, such as the Discrimination Against Persons with Disabilities (Prohibition) Act 2018 and the HIV and AIDS (Anti-Discrimination) Act 2014, reflect this.
44 Section 17, CFRN. As regards corruption, there are a number of Nigerian laws in this respect.
45 While admirable in its intent, transgressions of Chapter II, Section 17 of the CFRN are not justiciable. Thus, unless a law is passed embodying the provision, it is not possible to rely on it as a basis for challenging any discriminatory practice in a court of law.
46 Section 12(2).
47 The Labour Act defines foreign contracts as contracts for the employment of citizens outside Nigeria. Section 38 provides requirements specific to such contracts, including that the contracts are read to or translated into a language understood by such persons.
48 One of the 46 bills passed by the 7th National Assembly (in 2015) was the Electronic Transactions Bill, which is used to 'eliminate legal barriers to the effective use of electronic communications to the transaction'. It covers electronic transactions carried out in both public and private sectors, and although yet to be assented to by the President, seeks to promote the harmonisation of legal rules on electronic transactions across national boundaries. It also promotes business and community confidence in electronic transactions and provides a legal framework for e-commerce in Nigeria, protecting consumer and third party rights.
49 The Bill, if passed, will provide a legal framework for privacy and data protection.
50 The Cybercrimes Act does, however, require cybercafe operators to register as a business concern with the Computer Professionals Registration Council and as a business name with the Corporate Affairs Commission.
51 Section 22.
52 Sections 2.1(2) and (3), and 2.6, NDPR.
53 Sections 2.11 and 2.12, NDPR.
54 Section 1.3(xxv). Such measures include protecting systems from hackers; setting up firewalls; storing data securely with access given to specific, authorised individuals; employing data encryption technologies, developing an organisational policy for handling personal data (and other sensitive or confidential data); protection of email systems; and continuously building capacity for staff.
55 The President of Nigeria, by the provisions of the Cybercrimes Act, is empowered to designate computer systems and networks as constituting Critical National Information Infrastructure systems, preventing the destruction of such information, which is viewed as a threat to national security.
56 (2015) 58 NLLR (Pt.199) 92; the NICN stated: '“that the Court can now move away from the harsh and rigid common law posture of allowing an employer to terminate its employee for a bad or no reason at all” . . . “it is now contrary to international labour standards and international best practice and, therefore, unfair for an employer to terminate the employment of its employee without any reason or justifiable reason that is connected with the performance of the employee's work”. I further hold that the reason given by the defendant for determining the claimant's employment in the instant case, which is that his “service was no longer required” is not a valid one connected with the capacity or conduct of the claimant's duties in the defendant bank. In addition, I hold that it is no longer conventional in this twenty-first century labour law practice and in industrial relations for an employer to terminate the employment of its employee without any reason even in private employment.' [Emphasis ours].
57 In the oil and gas industry, a notification of a termination or dismissal must be submitted to the Department of Petroleum Resources.
58 See Section 9(6), Labour Act.
59 In the oil and gas industry, employers are required to notify the Department of Petroleum Resources.
60 In practice, although this is not a legal requirement, notice periods are generally between three and six months.
61 Section 10(1), Labour Act.
62 Pursuant to Sections 16, 585 and 609, CAMA.