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. Over the years, specific legislation has been enacted to address different issues in the Nigerian employment industry. However, the substantive law remains the Labour Act enacted in the 1970s, the Factories Act, the Employees Compensation Act, the Trade Disputes Act and the Trade Unions Act (TUA). Although 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 also allows freedom of contract in upholding and binding employers and employees to their agreements.
Since the 2010 Third Alteration to the Constitution, there has been renewed interest in all things relating to labour and the world of work. It confers exclusive jurisdiction on the National Industrial Court of Nigeria (NICN) in matters relating to or connected with unfair labour practices or international best practices in labour, employment and industrial relations matters, and with judicial powers to apply the relevant international convention, treaty or protocol that Nigeria has ratified relating to labour, employment, workplace, industrial relations or matters connected therewith.
In terms of labour disputes, Section 1 of the National Industrial Court Act2 establishes a specialist court, the 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 concerns other employment matters, it must be with leave of the competent court of appeal.5
Year in review
In 2020, the outbreak of the covid-19 pandemic had far-reaching implications on the Nigerian economy, with several businesses temporarily shut down, movement restricted, and various economic activities placed on hold pending the containment of the virus. In the workplace, many employers were forced to adopt innovative and flexible approaches, including remote working, virtual meetings, among others.
Following the cessation of numerous economic activities in several states, the inability of certain businesses to work or generate income, and in the face of depleting financial resources, many employers were torn between the difficult decision of keeping the business afloat and meeting their employment obligations. Consequently, many businesses were forced to take drastic action to survive, including lay-offs, pay cuts, paid or unpaid leave, deferment of salaries, bonuses and promotions, declaration of redundancy, supplanting employees' annual leave with the lockdown period imposed by the government, among others. Generally, there was a spike in job losses and pay cuts. According to the unemployment data report published by the National Bureau of Statistics, the unemployment rate as at the second quarter of 2020 rose to 27.1 per cent indicating that 21,764,614 Nigerians were unemployed.6
Although the federal government attempted to introduce certain initiatives to temper the far-reaching effects of the pandemic in the world of work, some of these initiatives are yet to take effect. For instance, on 24 March 2020, the House of Representatives passed the Emergency Economic Stimulus Bill 2020 (the Bill). The salient objectives of the Bill as it relates to employers include the provision of temporary relief to companies and individuals and to alleviate the adverse financial consequences of a slowdown in economic activities as a result of covid-19. The proposed law also seeks to protect the employment status of Nigerians who might otherwise become unemployed as a consequence of management decisions to retrench its employees in response to the prevailing state of the economy. If passed into law, the Bill will entitle any employer that maintained the same employee status without retrenching its employees between 1 March 2020 and 31 December 2020 to 50 per cent income tax rebate on the total amount due or paid as pay as you earn under the Personal Income Tax Act.
Unarguably, the epoch-making decision of the Court of Appeal in Sahara Energy Resources Limited v. Mrs Olawunmi Oyebola7 represents perhaps the single most significant decision on the employment landscape in 2020. The final court on labour and employment matters, in a significant shift from some of its previous disapproving decisions, affirmed the latitude, within set parameters, of the NICN to depart from orthodox common law prescriptions, restricting the quantum of damages to remedy deserving wrongful termination cases. Instructive, though, is the incremental approach with which the NICN has also continued to apply its statutory powers in 2020 to apply equity in many deserving cases. A good number of noteworthy cases bear this out, some of which are discussed here.
In Captain Benedict Olusoji Akanni v. The Nigerian Army & 3 Ors,8 the NICN awarded 75 million naira for loss of expectation and psychological trauma as a result of the arbitrary and illegal actions of the first defendant. Similarly, in Ugochukwu Edmund Okwu v. Zenith Bank Plc,9 on a finding that a suspension without pay for 77 months was inhumane and tantamount to unfair labour practice, the NICN awarded the sum of 33,194,245.70 naira in favour of the claimant. The rationale was hinged on arrears of salary from the date of suspension to the day the claimant retired. Still on NICN's high watermark in compensatory damages, in apparently deserving cases, Chukwudoro v. Oiltest Well Services Limited 10 and Osazuwa v. International Tobacco Company & Anor11 are stand-alone seminal judgments. The NICN, inter alia, greatly expounded the broad scope of discriminatory practices that will amount to unfair labour practices, deserving of 'penalties that must have a dissuasive effect on potential perpetrators of discrimination'.
The labour court was also afforded the opportunity to deal decisively with what seems a disturbing trend in the pharmaceutical industry. Disputes involving three pharmaceutical companies, across two divisions of the NICN, returned with similar holdings of unfair labour practice. The patterns are strikingly similar to many known anecdotally throughout the world of work.
Pharmacists are engaged as medical or sales representatives and, at the start of their engagement, are asked to submit the originals of their university certificates. The employees are only entitled to request their return on 'successful clearance' when their contract of employment is ended, whether through resignation or termination. In the three cases in which the court dealt with this unscrupulous practice,12 the NICN deprecated the practice of holding these certificates, ordering their immediate release, and awarding damages against the companies involved.
The court had cause in a separate case to pronounce on a variant of this practice in another industry. It involved the procurement of an employee's certificate (as a qualified mining engineer) to enable an employer to 'hold the same out', in compliance with a statutory precondition, needed to evince that the employer can carry out mining activities. The claimant in Engr Tarfa Dzarma Garba v. Ashaka Cement Plc & Anor13 was held out as a supervising mining engineer when in fact he did not work in that capacity. The ratio decidendi to compensate the former employee was much less straightforward, relying on Section 19(d) of the National Industrial Court Act 2006, with the sum of 2 million naira 'for the period he was held out to be the supervising mining engineer during which period he did not so act'. On the facts as accepted, it appeared that the moral compass pointed unswervingly to not rewarding either of the two wrongdoers.
The court also provided additional guidance regarding minimum thresholds for claims (or defence) of compensatory damages for workplace injuries and accident.14 The claimant in Bamidele v. Nigeria Electricity Liability Management Limited/GTE 15 had gone to rectify an electrical fault on a pole when a high-tension wire fell on his head, inflicting severe burns. Not only did the defendants abandon the claimant to his travails, there was also a finding of breach of duty of care. The claimant was awarded 20 million naira as general damages.
The cases of Abe Adewunmi Babalola v. Equinox Int'l Resources Ltd 16 and Akindele v. Netconstruct Nigeria Limited 17 restated the principle that there is no fractional payment of salaries in periodic employment. The four-week notice period an exiting employee gave the employer was held to be ineffectual and contrary to the three-months' notice in the contract between the parties. The employee was held to have resigned without notice and liable to pay a sum equivalent to one month's salary to the employer.
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
- any special conditions of the contract.18
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.19
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.20
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.21 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 is subject to agreement between the parties. The notice requirement may also be waived.22 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 use the services of the employee at the end of the probationary period.23
iii Establishing a presence
For a foreign company to hire employees to carry on business in Nigeria, it must establish its presence24 by incorporation under the Companies and Allied Matters Act (CAMA). It cannot own a place of business before incorporation, except for receiving correspondence, notices and other documents preliminary to incorporation. The CAMA25 empowers the Minister of Industry, Trade and Investment, on application by a foreign company, to grant exemption from incorporation in limited circumstances.26
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).27 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 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, obliges the employer to ensure monthly remittance of employees' taxes. The Pension Reform Act 201428 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 total annual 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. Although 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 approved at 30,000 naira. There are plans to commence the implementation of a 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.29
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 leave30 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, with exceptions, over 16), there are no other restrictions on working time. The prohibition on employment of women for night work31 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. Although the Act does not categorise overtime work, it recognises work done in excess of agreed hours and provides for time off (rest periods) or payment in lieu of worked hours. In practice, payment for overtime is calculated on an hourly basis on a par with the normal hourly rate of the worker and may differ depending on the staff category.
Although 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 the issuance of work permits and expatriate quotas,32 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.33 Persons entering Nigeria for business purposes must obtain the Minister's consent.34
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 must 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 specialist 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 Personal Income Tax Act.35 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:
- 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 establishment 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. Although 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,36 which is forbidden in the workplace.37 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'.38 The 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'.39 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.40 However, the Labour Act is silent on paternity leave. Thus, entitlement thereto is subject to the contract of employment, company policy or handbook, or agreements between the employer and employees.
Under the Labour Act, pregnant women have the right to leave their work if they produce a medical certificate from 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 on maternity leave, or remains absent from 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 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.41 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 assemble and associate peacefully. 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.
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).42 The Personal Information and Data Protection Bill is pending before the National Assembly.43 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.44 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. If 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,45 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.46
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 provided, 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 company business. The use of a joint-use agreement or safe harbour registration is discretionary.47
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.48 Nigeria does not operate a social security system; however, medical information, client–solicitor communications and bank–customer communications do enjoy conditional protection by law.49
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, however. 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 terms of the contract. 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,50 in certain circumstances, an employee cannot be dismissed without a reason. The employer is required not only to not 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 the 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.51 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.52
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.53
There is no statutory redundancy notice period, but the applicable contract, handbook or CBA may stipulate a period.54 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.55 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) and CAMA.
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.
Most economies and employers are still grappling with the ravaging impact of the covid-19 pandemic. Many employers, in drafting their contracts of employment, did not contemplate the level of interruption and disruption to work occasioned by the pandemic. Consequently, given that a lot of measures taken by employers in the heat of the pandemic would probably not have been supported by law or contract, or followed the proper procedure, there are grim prospects of an upsurge in employment claims and attendant liabilities in damages where such claims are established in court.
Considering the 'new normal' of remote working, and the data security issues prevalent in work-from-home arrangements, there is an increased interest in data protection. Employers will be more inclined to set up appropriate technical and organisational security measures to ensure that sensitive data processed by employees at home are protected against breach or misuse.
Furthermore, given that the pandemic has normalised remote working, there is a probability that many employees will not be enthusiastic about fully resuming duties at their usual workplace. Consequently, many employers are likely to adopt either full remote working or a hybrid way of working both remotely and in the usual workplace. The disruption in the world of work driven by the pandemic may also give rise to more employment opportunities and considerations for remote roles.
1 Folabi Kuti is a partner and Chisom Obiokoye is a 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 National Industrial Court of Nigeria [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 and international best practices in reaching decisions, case by case and with an air of finality.
4 Constitution of the Federal Republic of Nigeria 1999, as amended [CFRN], Section 243(2).
5 Skye Bank Plc v. Victor Anaemem Iwu (2017) LPELR-42595(SC).
7 Appeal No. CA/L/1091/2016, delivered on 3 December 2020.
8 Unreported Suit No. NICN/ABJ/125/2018, judgment delivered 27 May 2020, per Hon Justice B B Kanyip PhD, President, NICN.
9 Unreported Suit No. NICN/LA/85/2017, judgment delivered 10 September 2020, per Hon Justice R H Gwandu.
10 Unreported Suit No. NICN/EN/53/2013, judgment delivered 28 September 2020, per Hon Justice O O Arowosegbe.
11 Unreported Suit No. NICN/EN/25/2016, judgment delivered 29 September 2020, per Hon Justice O O Arowosegbe.
12 Mr Adebayo v. Superior Pharmaceutical Ltd (Unreported Suit No. NICN/AK/62/2018, judgment delivered on 17 February 2020), per Hon Justice A A Adewemimo); Pharm Obateru Olufemi Abidemi v. Fidson Healthcare Plc (Unreported Suit No. NICN/AK/06/2018, judgment delivered on 17 February 2020), per Hon Justice A A Adewemimo) and Seagreen Pharmaceuticals Ltd v. Adaji Gabriel (Unreported Suit No. NICN/KD/16/2017, judgment delivered on 1 December 2020); per Hon Justice S O Adeniyi).
13 Unreported Suit No. NICN/BAU/13/2017, judgment delivered 28 February 2020, per Hon Justice K I Amadi.
14 See also Chigozie Esther v. Covenant University & 2 Ors, in which the claims against the defendants were in 'negligence for the failure of the defendants to keep the kitchen in a safe condition to prevent it from being slippery'. The claimant made a case for negligence leading to a workplace injury, but neither pleaded nor proved the particulars of negligence as required. The case was dismissed. The court also found that the claimants made a case for negligence against their respective employers and awarded damages in their favour in Ukpong v. CGCOC Group of Companies Ltd (Unreported Suit No. NICN/CA/24/2019, judgment delivered 24 January 2020, per Hon Justice M N Esowe), and in Ojeikhoa v. Nicon Luxury Services Ltd & Anor (Unreported Suit No. NICN/ABJ/446/2016, judgment delivered 30 June 2020, per Hon Justice R B Haastrup).
15 Unreported Suit No. NICN/AK/14/2018, judgment delivered 16 January 2020, per Hon Justice A A Adewemimo.
16 Unreported Suit No. NICN/166/2015, judgment delivered on 17 June 2020, per Hon Justice N C S Ogbuanya.
17 Unreported Suit No. NICN/LA/559/2017, judgment delivered 8 September 2020, per Hon Justice N C S Ogbuanya.
18 Labour Act, Section 7(1), Paras. (a) to (f).
19 Oladapo Olatunji & Anor (Representing themselves and other Uber and Taxi 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.
20 Nigerian Society of Engineers v. Ozah (2016) 64 NLLR (Part 225) 1 CA.
21 Labour Act, Section 7(2), Paras. (a) and (b).
22 id., at Section 11(6).
24 Companies and Allied Matters Act, Section 78.
25 Section 80.
26 A foreign company may apply to the Minister 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 80(1)) invited to Nigeria by or with the approval of the Federal 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 government.
27 Labour Act, Section 25(1).
28 The Pension Reform Act 2014 was signed into Law on 1 July 2014, repealing the Pension Reform Act 2004.
29 Labour Act, Sections 1 and 2.
30 The Labour Act provides that if 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, once every seven days.
31 The word 'night' is defined to mean (1) with respect to industrial undertakings, a period of at least 11 consecutive hours, including the hours between 10pm and 5am, and (2) with respect to agricultural undertakings, a period of at least nine consecutive hours, including the hours between 9pm and 4am.
32 Following an announcement by 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.
33 Immigration Act, Sections 34 and 18(1).
34 id., at Sections 8(1) and 14(1).
35 See Section IV.iii, above.
36 CFRN, Section 42; other laws, such as the Discrimination Against Persons with Disabilities (Prohibition) Act 2018 and the HIV and AIDS (Anti-Discrimination) Act 2014, reflect this.
37 id., at Section 17. As regards corruption, there are a number of Nigerian laws in this respect.
38 Although 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.
39 Trade Union Act, Section 12(2).
40 Labour Act, Section 54.
41 The Labour Act defines 'foreign contracts' as contracts for the employment of citizens outside Nigeria. Section 38 provides requirements specific to these contracts, including that they are read in or translated into a language understood by such persons.
42 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.
43 The Bill, if passed, will provide a legal framework for privacy and data protection, which will further support the Nigeria Data Protection Regulation currently in force.
44 The Cybercrimes Act does, however, require cybercafé operators to register as a business concern with the Computer Professionals Registration Council and as a business name with the Corporate Affairs Commission.
45 Nigeria Data Protection Regulation 2019 [NDPR], Section 22.
46 id., at Sections 2.1(2) and (3), and 2.6.
47 id., at Sections 2.11 and 2.12.
48 id., at Section 1.3(xxv). These 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.
49 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.
50 (2015) 58 NLLR (Pt 199) 92; the NICN stated: '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 added].
51 In the oil and gas industry, for instance, a notification of a termination or dismissal must be submitted to the Department of Petroleum Resources.
52 See Labour Act, Section 9(6).
53 In the oil and gas industry, for instance, employers are required to notify the Department of Petroleum Resources.
54 In practice, although this is not a legal requirement, notice periods are generally between three and six months.
55 Labour Act, Section 10(1).