The Employment Law Review: Nigeria
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 courts of appeal hear 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, if an appeal from the NICN relates to other employment matters, it must be with leave of the competent court of appeal.5
Year in review
According to data from the International Labour Organization, ILOSTAT database and World Bank population estimates (September 2019), as at the third quarter of 2019, Nigeria had a labour force of 62,447,234 people.6
A number of issues arose in 2019, such as the intrusive forces of technology in the workplace and evolving world of work. With the worrying rise in redundancy and downsizing that has taken place in the country, especially in the finance sector and the oil and gas industry, regulators were forced to take steps to review the reasons and modes of mass termination. For example, the Department of Petroleum Resources issued Guidelines and Procedures for the Release of Staff in the Nigerian Oil and Gas Industry 2019. The purpose of the Guidelines was to establish the procedure for obtaining authorisation prior to the disengagement of workers employed in the oil and gas industry.
In the light of the evolving world of work, 'outsourcing' has emerged as a growing, cost-cutting business tool that many organisations now key into. However, outsourcing arrangements and contract staffing remain a major issue, and many of these types of relationships have resulted in lawsuits regarding the protection of workers' rights and employment entitlements. The emerging trend now recognises that contracts of employment are, in the true sense, drafted by the employer, with little or no input by the employee, who has a lesser bargaining power. As such, the National Industrial Court does not hesitate to disregard any contract that is unfair, or that does not represent the actual relationship between the parties.
Other trending issues in employment law include the scope, validity and enforceability of non-compete clauses, technology and social media policies, sexual harassment and discrimination in the workplace, among others. Additionally, the federal government of Nigeria approved an upward review in 2019 of the national minimum wage.
In 2019, the underlying jurisprudence of the employment court (the National Industrial Court of Nigeria (NICN)) on workplace issues has been restless. Although some principles have been clarified and strengthened, a few other areas clamour for unanimity in the mind of the labour court.
To be sure, there are signposts that the NICN has continued to contribute to the development of a progressively evolving labour law jurisprudence. The most significant strides have been recorded in the areas of workers' protection and job security, workers' participation in respect of the influence of labour on decision-making by management, and fortifying the courts' resistance to interference with parties' freedom of contract; excepting in deserving cases to protect a weaker party (more often than not, the vulnerable worker) in accordance with the letters of the courts' enabling law. Some of the courts' decisions have also advanced increasing engagement with employees as a pivotal factor of production. Some of the more noteworthy decisions of the past year are examined below.
The case against a high compensatory regime of damages for a wrongfully dismissed worker in the labour court (at the NICN), which some recent appeal court decisions appear to have championed, may not, in all cases, hold to deny a successful litigant an appropriate award of damages with the lucid clarification in Emana I Edet v. Fidelity Bank Plc.7 Here the NICN, still placing reliance on a 2019 decision of the court of appeal in Promasidor (Nig) Ltd v. Asikhia,8 recognised the distinction between the somewhat limited scope of award of damages for a wrong arising from the termination of employment (often the failure to give the requisite notice) and an award of (general) damages for alleged unproven malpractice, holding that, in deserving cases, both can be awarded.
In a landmark decision around unfair labour practice, the NICN, in Ekeoma Ajah v. Fidelity Bank,9 resolved that, in the main, a recondite legal issue on the effect of a new policy on a party who had attained the exit point in an organisation. The question was whether an employee after attaining 14 years and 11 months in service, and serving notice indicating her option to retire and take the benefit of a certain policy extant at the time of serving the notice, should, to her detriment, be subject to the employer's sudden policy, making those entitlements only due upon completion of 15 years in service. The Court examined the details of this case thoroughly and thoughtfully, calling in aid-availing equities in (1) pronouncing against the employee being subjected to a retroactive policy, (2) holding the employer estopped from avoiding contractual obligations, and that in any event, (3) the principle of arithmetical approximation would nonetheless avail the claimant in deeming that she had served the 15 years on the date the new policy was issued.
Chucks Ajukwu v. Blueche Lomado & Logistics Limited,10 Gbite Adegoke v. Ecobank Nig Ltd,11 Toluwase v. MID Atlantic Sea Foods Company Limited,12 Oyama Friday v. PW Nig Ltd,13 Onifade Oluwatoyin v. IBDC Plc14 and Friday Godwin v. Anthony Rocks Limited15 all considered workplace injuries and accidents in ascertaining the ambit of the duty of care owed to sustain a claim for damages in negligence. Mr Ajukwu failed to establish that the negligent conduct of the defendants led to the collapse of a vessel crane cutting off his thumb. Mr Adegoke, a bank manager, was attacked by armed robbers during a road trip to Lagos on an official assignment and sustained a spinal cord injury from the gunshots received during the attack. The court held, inter alia, that the bank did not owe him a duty to provide police protection on that trip, similar to what was normally provided by the defendant when moving significant sums of cash from one branch to another.
Some of the aforementioned cases brought to the fore the seeming uncertainty around compensable damages. Mr Toluwase was awarded the sum of 3 million naira as compensation for the eye injury he sustained in the course of his employment with the defendants. For workplace injury causing total loss of vision in his right eye, Oyama Friday was awarded the sum of 5 million naira. Mr Oluwatoyin succeeded in establishing negligence on the part of his employer for injury (electric shock) sustained in the course of work which, in turn, led to the amputation of his arms.
Much less straightforward, with respect, is the rationale for the denial of an appreciable amount of the sum which Mr Oluwatoyin claimed, on the premise that the court had not yet been confronted with such a situation and consequent award of such a sum as that claimed.16 With respect, the resignation of the court in this regard suggests the fettering of judicial discretion.17 Litigants and counsel are entitled to the expectation that a case can be decided on its peculiar fact pattern, which may be completely unique. The facts in Oluwatoyin evoke deep emotion and, oddly enough, those facts were perhaps given their most compelling expression by the court, which nevertheless significantly whittled down his claim for a compensatory sum of 850 million naira. In describing the condition of the claimant on account of his workplace injury, the court summed it up pitiably, thus:
I watched the Claimant while testifying in chief. He has no hands and no arms. He joined the services of the Defendants as a complete human being but got disengaged as an incomplete being. For all intents and practical purposes, the Claimant will forever be dependent on somebody virtually 24 hours a day and seven days a week. He needs a person to bath, feed, dress him. He needs assistance to use the toilet. He needs assistance to even scratch his body in event of an insect bite. Should he find himself in a place of public disturbance or riot, the Claimant is right on his own and all alone to fend for his dear life. The appearance of the Claimant at trial was one of a sorry state. One cannot but think aloud as to how much could be awarded in damages to be able to put the Claimant back in his position before the accident leading to the amputation of his both arms.
The claimant was nonetheless awarded the sum of 150 million naira for the permanent injury he suffered as a result of the negligence of the defendants, against the 850 million sought.
Friday Godwin, in turn, was awarded the sum of 10 million naira of the 100 million naira sought as general damages for permanent injury sustained from an industrial crusher while in the employ of the defendant. The court recorded his plight thus:
I observed that the claimant throughout the trial had his right hand static, he could not move it, which might be due to the wasting of the right shoulder and upper limb, inability to flex and extend the right shoulder and elbow as stated in UBTH medical report as well as the other two from Fate Medical Center and Millennium Hospitals. I equally observed that his right ear lobe was chopped off. It is better imagined than to experience the pain and trauma he must be going through as a result of the injury he sustained, which permanently led to the loss of his right ear lobe/external ear and paralysis of his entire right hand from his shoulder down to his fingertips as stated supra. The import of which is that he can no longer use his right hand. His injuries are such that cannot be quantified in monetary term. The paralysis of his right hand has taken life and means of his livelihood from him.
In the light of inflationary trends that can now be safely said to characterise the Nigerian economy with no signs of abating, the damages awarded in the preceding case were sadly but undeniably inadequate. Perhaps on a related note, one is not unmindful of decisions of the appellate court that have sought to whittle down the stable gains made by the NICN in applying appropriate sanctions to erring employers by way of significant compensatory damages. The courts of appeal have often reduced compensatory damages awarded by the NICN and, in other cases, outright deprecated the lower court for making such – in the appellate court's views – exorbitant awards. It would be moot to speculate as to whether these influences of the courts of appeal have had the effect of tempering the disposition of the court as seen in Oluwatoyin, Friday Godwin and a slew of similar matters decided in the year under review. However, it suffices to say that the NICN remains the court that is most favourably placed to ensure that damages awarded in deserving cases truly reflect the justice of the case in terms of the socio-economic realities faced by litigants who appear before it.
The Supreme Court had an opportunity to make clarifications on a vexed legal issue arising out of the Public Officers Protection Act in National Revenue Mobilization Allocation and Fiscal Commission v. Ajibola Johnson.18 The Court made plain that the limitation provision in the Act,19 mandating that an action can only be instituted against public officers within three months of the accrual of the cause of action, will not apply to contracts of service. This laudable exposition came to the rescue of the otherwise stale claims in Hon Emeka Mbonu v. Etche Local Government Council,20 Mr Ibiwari Lovde Jack v. Niger-Delta Development Commission (NDDC),21 Alukwe Okpara v. AG, Rivers State22 and Agu v. Federal Civil Service Commission.23 This, even as the NICN, faced with a similar objection as to limitation of action, reached a diametrically opposed view in Bari v. Ministry of Local Government, Kano.24
Drawing a balance between its normative role and evolving dynamics in the world of work, the NICN, in Samson Systems & Investment Ltd v. Nabih Chamchoum,25 held a business covenant that restricted the defendant from visiting Nigeria for a minimum of five years for employment or business after his resignation from the claimant, as unreasonable in terms of time and length. Perhaps underscoring the importance of submitting proper issues for adjudication in adversarial, and not inquisitorial, court settings, an almost identical instance of restraint of trade fact emerged in Captain Chergui v. Dana Airlines Ltd,26 in which the Court held the claimant strictly bound to the terms of his contract with the defendant.
It is also instructive to look at the paradigm shift from a customarily settled position of law. This shift is as represented by the radically altering decision in Bello Ibrahim v. Ecobank Plc.27 In a very influential passage,28 perhaps in anticipation of the critique to follow, the Court 'demystified' the common law rule that reinstatement cannot avail as a possible remedy in the breach of master and servant contractual relationship. The holding of the Court unswervingly points in one direction – a probable reversal of the decision if submitted to the higher court for review.
The unfettered right of an employee to resign, even in the face of express stipulations to the contrary in an employer's handbook, was reiterated in Adigwe v. FBN Mortgages Limited.29 Relying on citation of cases expounding on the principle, the Court cast its decision in the light of international best labour practices and the applicable International Labour Organization Convention; lest such a practice be deemed to amount to forced labour. Curiously, Fajuyitan v Guinea Insurance Plc30 reached a divergent position with regard to an employee tendering a letter of resignation when facing a disciplinary hearing and the employee handbook stipulating otherwise.
Consistent with the thrust of the Court's previous decisions in matters with similar fact patterns, ASP Kiriben v. Nigeria Police Force31 hinted at how gratuity is ascertained with exactitude and particularised in a claim. Yunus Adewale Adefowope v. MTN Nigeria Communications Ltd32 and Kayode Tijani v. FRA Williams (Jr)33 gave an approval that payment in lieu of notice period must be made contemporaneously with the termination, otherwise the termination, in that circumstance, would be wrongful. Okonyia v. UBA,34 inter alia, emphasised the distinction between termination or dismissal that is wrongful and termination or dismissal that is unlawful or illegal and ensuing court orders attending upon each incident. Jonathan Pigden v. Tolu Ogunkoya35 affirmed that remuneration alone may not suffice as establishing a contract of employment as to confer jurisdiction on disputes arising from a contract of employment or service over which the NICN has jurisdiction.
In the realm of trade unionism and trade disputes, Joachim v. Union Registrars Limited36 fortifies the constitutional protection of employees' freedom of association and, more importantly, the protection of the employee from persecution or termination of employment on account of trade union activities. National Union of Hotels and Personal Services Workers37 stresses the need to exhaust the first-course grievance remedial processes of Part I of the Trade Disputes Act 2004 (in intra-union and inter-union trade disputes) before the appellate jurisdiction of the NICN can be invoked, whereas the court in First Bank of Nigeria Plc v. Nnaemeka Eminike,38 inter alia, recognised that a dispute arising from terminal benefits would qualify as a trade dispute eminently qualified to be referred to the Industrial Arbitration Panel under the applicable laws. The Court took time to clarify labour rights inuring at three levels: pre-employment rights (i.e., those that arise prior to the start of employment, such as rights inuring to job applicants); employment rights (i.e., rights arising during the pendency of an employment); and post-employment rights (i.e., rights inuring at the end of the employment, such as pension rights).
In all, the labour courts have had an eventful year adjudicating on varied issues that often characterise the disputes in the world of work, while also stimulating insights into the shape of things to come (such as the legal impact of new technologies in the workplace).
Basics of entering into 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 work. The contract must contain:
- the name of the employer, 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.39
Generally, the contract must be signed 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.40
Fixed-term contracts are permissible and must specify the above-mentioned 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.41
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.42 If 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.43 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 probationary period.44
iii Establishing a presence
For a foreign company to hire employees to carry on business in Nigeria, it must establish its presence45 by incorporation under the Companies and Allied Matters Act (CAMA).46 It cannot own a place of business before incorporation, except for receiving correspondence, notices and other documents preliminary to incorporation. The CAMA47 empowers the National Council of Ministers, on application by a foreign company, to grant exemption from incorporation in limited circumstances.48
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).49 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 (PITA), as amended, obliges the employer to ensure monthly remittance of employees' taxes. The Pension Reform Act 201450 requires the employer to make monthly deductions of a minimum of 8 per cent from its employees' salaries, plus a minimum contribution of its own of an additional 10 per cent, 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.
Generally, all covenants in restraint of trade are unenforceable, unless they are reasonable with respect to the interests 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 with 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 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.
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 increased and has been approved at 30,000 naira. There are plans to commence the implementation of the minimum wage as soon as practicable.
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.51
i Working time
Pursuant to the Labour Act, normal working hours under 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 working day, which in practice is regulated by company policy. The statutory minimum for rest periods and leave52 must be considered when determining working 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 work53 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 number 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; in practice, the rate is determined by the employer's internal policies.
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,54 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.55 Persons entering Nigeria for business purposes must obtain the Minister's consent.56
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 dependants (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.57 A company must remit tax on behalf of its foreign employees if the employer is in Nigeria or has a fixed base in Nigeria, or if the duties of the employment are wholly or partly performed in Nigeria, unless:
a 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 periods 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 a 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 a subsequent transfer of his or her RSA content to his or her home country on retirement or exit.
Employer-employee relationships in the private sector are formalised by parties entering an employment contract. It is common for organisations to have a handbook containing additional details on matters pertaining to the relationship. Although internal disciplinary 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 an 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 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., when the employees are unionised). Acceptance of the employment offer is usually predicated on acceptance of internal rules. However, employees must be notified of the existence of internal rules and any subsequent changes to them. While there is no prescribed format for where the 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,58 which is forbidden in the workplace.59 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'.60 The Trade Union Act (TUA), as amended, 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'.61 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.
The right of women in private and public organisations to maternity leave is guaranteed by the Labour Act.62 However, the Labour Act is silent on paternity leave. Thus, entitlement thereto is subject to the contract of employment, company policy or handbook, or collective bargaining agreement between the employer and employees.
Under the Labour Act, pregnant women have the right to leave their work if they produce a medical certificate given by a registered medical practitioner and stating that their confinement will probably take place within six weeks. Women shall also not be permitted or compelled to work during the six weeks after childbirth. Accordingly, maternity leave is 12 weeks (i.e., six weeks before and six weeks after childbirth). The 12 weeks of maternity leave guaranteed by Labour Act can be increased by contract; however, it cannot be reduced by an employer.
After the maternity leave has ended, a nursing mother is entitled to half an hour twice a day during her working hours, to nurse her child. The Labour Act also provides that a woman who has been continuously employed by her employer for six months or more prior to her maternity leave will be entitled to not less than 50 per cent of her salary. This may be increased by contract, however, which may comprise either full pay or a mixture of full and partial pay. Since paternity leave is not governed by any Nigerian law, the entitlements accruing to the same are governed by contract.
No employer is liable, or can be compelled, under the Labour Act to pay any medical expenses incurred by a woman during, or on account of, her pregnancy or confinement, unless such an entitlement is contained in the employment contract.
With regard to dismissal, the Labour Act provides that when a woman is absent from her work through being on maternity leave, or remains absent from her work for a longer period as a result of an illness certified by a registered medical practitioner to have arisen out of her pregnancy or confinement and to render her unfit for work, then, until her absence has exceeded a period (if any) as may be prescribed by the medical practitioner, her employer is prohibited from giving her a notice of dismissal during her absence or a notice of dismissal expiring during her absence. The terms of dismissal of a person on paternity leave are subject to the terms of the employment contract.
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.63 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.
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 members of the branch. 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.
Employee representation (protected concerted activity)
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) 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).64 The Personal Information and Data Protection Bill is pending before the National Assembly.65 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.66 When data is used in the course of a company's usual line of business, consent or notification to an employee may, arguably, not be necessary. Where it is assumed that an 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,67 the processing of personal data is considered lawful if, among other things, it is necessary for the performance of a contract to which the individual is a party, it is in compliance with a legal obligation, or consent has been given to the 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 omissions 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.68
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 interests 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.69
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, trade union membership, criminal records or any other sensitive personal information; and requires measures to be put in place to protect it.70 Nigeria does not operate a social security system; however, medical information, client–solicitor communications and bank–customer communications do enjoy conditional protection by law.71
iv Background checks
Background checks are not the subject of statutory regulation; however, evidence suggests that many employers conduct 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.
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 has been substantially altered by the decisions of the NICN. 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 Supreme Court) had followed. By the NICN decision in the leading case of Aloysius v. Diamond Bank,72 in certain circumstances, an employee cannot be dismissed 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.73 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.74
Severance pay in a dismissal is dictated by the employment contract. Employers may also make (discretionary) ex gratia payments. However, the parties may 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 workers' representative of the reasons for and extent of the anticipated redundancy. In certain industries, this requirement may extend to the regulator.75
There is no statutory redundancy notice period, but the applicable contract, handbook or CBA may stipulate a period.76 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.
Transfer of business
Nigerian law imposes no obligation on employers to protect employees in a 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 when its intention is to transfer an employee's contract. The transfer is subject to the employee's consent and authorisation of the transfer by an authorised labour officer.77 Redundancy provisions and policies of the company may be relevant (depending on the base structure of the transfer).
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, the Federal Competition and Consumer Protection Act (FCCPA), the CAMA and the Company Regulations of 2012.78
Companies proposing a large merger or acquisition shall, in compliance with the FCCPA, file with the Federal Competition and Consumer Protection Commission a pre-merger notice and a formal application for approval of the proposed merger. Companies must comply with post-approval requirements. The obligatory filings with the Corporate Affairs Commission and associated costs are controlled by the CAMA and accompanying regulations.
The courts are now increasingly disposed towards applying international best practices in determining employment disputes, depending on the facts of each case. Additionally, the courts now determine 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 the evolving world of work. 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.
Sexual harassment and discrimination in the workplace are steadily becoming a major issue for deliberation in the courts.