Country snapshot

Key considerations

Which issues would you most highlight to someone new to your country?

Two issues to highlight are:

  • the limited scope of application of the primary legislation (the Labour Act, Chapter L1, Laws of the Federation of Nigeria 2004) governing employment relationships in Nigeria, which applies to ‘workers’ (ie, persons who perform manual and clerical functions); and
  • the distinction between ‘workers’ and ‘non-workers’ (ie, persons who perform executive, administrative, technical and professional functions) – non-workers’ relationships with employers are governed by the specific employment contract entered into by the parties, and care must be taken to ensure that the terms are carefully negotiated.

Further, the specialised labour court, the National Industrial Court of Nigeria (NICN), has jurisdiction over all labour and employment matters and industrial relations, and has introduced changes into Nigerian labour law jurisprudence. These changes include:

  • the modification of the application of long-settled common law principles such as ordering the reinstatement of employees in a purely master-servant arrangement;
  • the award of damages for constructive dismissal or wrongful termination of employment; and
  • the re-evaluation of ‘triangular’ employment arrangements.

There have also been recent developments regarding the right to appeal NICN decisions.

Finally, although an employer cannot prohibit employees from joining trade unions, provided that a trade union is registered pursuant to the Trade Union Act (Chapter T14, Laws of the Federation of Nigeria 2004, as amended), trade unionism does not apply to employees holding management positions.

What do you consider unique to those doing business in your country?

Nigeria has no social security system. However, the Pension Reform Act 2014 requires employers to contribute to employees’ pension remittances, and uniquely requires employers to maintain group life insurance for all employees of a value that is at least three times the value of each employee’s total annual emoluments. 

Due to the limited scope of application of the Labour Act, non-worker employment falls outside the scope of the act and is governed by the employment contract and common law principles.

Is there any general advice you would give in the employment area?

Employers and investors in the private sector generally have little cause to worry about trade union activities by employees, provided that the employers:

  • pay reasonably decent wages and allowances;
  • strive to maintain fair working conditions;
  • desist from unfair labour practices; and
  • encourage dialogue with the trade unions.

Emerging issues/hot topics/proposals for reform

Are there any noteworthy proposals for reform in your jurisdiction?


What are the emerging trends in employment law in your jurisdiction?

Some of the trends are:

  • the introduction of the concept of ‘constructive dismissal’ or ‘constructive termination’ of employment and the award of damages for wrongful termination; and
  • the creation of an employment relationship between employees seconded by a labour contractor to a third party and the third party to whom the employees are seconded.

The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

The primary legislation that regulates the employment of persons in Nigeria is the Labour Act. Other laws that are of importance are the Constitution of the Federal Republic of Nigeria (Promulgation) Act (Chapter C23, Laws of the Federation of Nigeria 2004, as amended) and the National Industrial Court of Nigeria Act 2006, which prescribes the jurisdiction of the National Industrial Court of Nigeria (NICN). In addition, the following also apply:

  • the Pension Reform Act 2014, which regulates the contributory pension scheme;
  • the Personal Income Tax Act (Chapter P8 LFN 2004, as amended by the Personal Income Tax (Amendment) Act 2011), which regulates the taxation of employees’ remuneration;
  • the Employees’ Compensation Act 2010, which regulates the payment of compensation to employees who suffer occupational diseases or sustain injuries arising from accidents in the workplace or during employment;
  • the Industrial Training Fund Act (Chapter I9 LFN 2004, as amended), which requires employers to contribute 1% of their annual payroll to the Industrial Training Fund created by the act;
  • the Immigration Act 2015, which regulates the employment of foreign nationals;
  • the National Health Insurance Scheme Act (Chapter N42 LFN 2004), which established the national health insurance scheme; and
  • the Trade Unions Act (Chapter T14 LFN 2004, as amended), which regulates the organisation of trade unions and their activities.

Who do these cover, including categories of worker?

Unlike the Labour Act, which is limited in its scope of application as it regulates only the employment of ‘workers’ – defined in the act as employees who perform manual labour or clerical work – the Constitution, the NICN Act, the Trade Unions Act and the Personal Income Tax Act apply to all categories of employee, with some exceptions. 

The Pension Reform Act 2014 applies to all employees in the public and private sectors other than judges, members of the armed forces and the intelligent and secret services, while the Employees’ Compensation Act applies to all employers and employees other than members of the armed forces (although it does apply to members of the armed forces employed in a civilian capacity).

The Industrial Training Fund Act applies to every employer in Nigeria which employs more than five persons, or which employs fewer than five persons but has an annual turnover of up to N50 million. The National Health Insurance Scheme Act applies to employers which have a minimum of 10 employees, while the Immigration Act 2015 applies to employers which employ foreign nationals and to expatriate employees.


Are there specific rules regarding employee/contractor classification?

Other than the Labour Act, no specific law sets out what factors would be considered in ascertaining whether an individual is an employee or an independent contractor. However, in SS Co Ltd v Afropak (Nig) Ltd ((2008) 18 NWLR 77 at p82) the Supreme Court prescribed the following criteria to provide guidance in making this determination:

  • the mode of payment;
  • ownership of the equipment, tools or instruments used in providing the services;
  • the ability to delegate duty;
  • the hours of work;
  • the place where the work is carried out; and
  • the provision of office accommodation and a secretary.


Must an employment contract be in writing?

Yes. Section 7(1) of the Labour Act requires employers to provide a contract to employees within three months of commencement of the employment relationship.

Are any terms implied into employment contracts?

Yes, terms established by conduct such as the payment of bonuses can be implied into an employment contract. In addition, the statutory provisions set out in the Labour Act, if not expressly reflected in the contract between an employer and an employee, are implied into the employment contract.

Are mandatory arbitration/dispute resolution agreements enforceable?

No law requires parties to an employment contract to submit to mandatory arbitration. Parties, however, must arbitrate any dispute arising from the terms of an employment contract, if the contract contains a valid arbitration clause.

How can employers make changes to existing employment agreements?

This is subject to the nature of the proposed change but, generally, employers must obtain the consent of each individual employee in order to vary the terms of an employment contract.

Foreign workers

Is a distinction drawn between local and foreign workers?

Yes. An employer which wishes to employ foreign nationals must obtain a specific authorisation that approves the maximum number of expatriates the employer can engage, their job designations and the duration of such employment. Employers must show that there are no suitably qualified Nigerian employees for the positions to be occupied by expatriates and, where approval is granted, Nigerians are expected to be trained to fill the positions over time. These requirements do not apply to the employment of Nigerian nationals and nationals of member states of the Economic Community of West African States (ECOWAS).



What are the requirements relating to advertising positions?

No specific laws limit or restrict employers from advertising positions. However, employers which wish to employ expatriates usually advertise positions for the employment of foreign nationals only if no Nigerian nationals are qualified for such positions.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

Employers can engage a service provider to conduct background checks on potential employees. Employers may also apply to the Nigerian police force to ascertain whether an employee has a criminal record or apply to the competent court for a judgment in respect of a decided criminal matter. However, employers cannot access criminal records if such records will result in the identification of a juvenile offender, as these records are confidential and closed to third parties.

(b) Medical history?

An employer may, with the employee’s consent, conduct medical tests on the employee. However, employers are prohibited from conducting HIV/AIDS tests on employees, and may only do so if they have obtained the employees’ specific prior written consent.

(c) Drug screening?

Employers can conduct such tests with employees’ consent.

(d) Credit checks?

Employers may, with employees’ consent, conduct credit checks. In practice, such tests are conducted by the employer submitting an application to any of the credit bureau companies in Nigeria.

(e) Immigration status?

Any employer that intends to employ a foreign national must obtain an expatriate quota approval from the Federal Ministry of the Interior. This approval permits a company to employ non-Nigerians for specifically approved job designations for a specified duration, usually two years in the first instance. In relation to nationals of ECOWAS member states who are entitled to reside and work in Nigeria, an employer can require the employee to provide his or her ECOWAS card or international ECOWAS passport. The employer will require either document to apply for an ECOWAS residence card, which enables the employees to live and work in Nigeria.

(f) Social media?

An employer can access information on its employees’ social media platforms if the information is already in the public domain.

(g) Other?

Employers can also access information held by a public institution (ie, a legislative, executive, judicial, administrative or advisory body of the government). This access is permitted under the Freedom of information Act 2011. In order to access such information, the employer must submit an application to the institution. The employer need not demonstrate specific interest in the information in respect of which the application is made. However, this right is not absolute and the institution may deny access to the information where it contains personal information (defined in the act as any official information held about an identifiable person, not including information that bears on the public duties of public employees and officials).

Wages and working time


Is there a national minimum wage and, if so, what is it?

Yes. The minimum wage as prescribed by the National Minimum Wage (Amendment) Act 2011 is N18,000.

Are there restrictions on working hours?

The Labour Act provides that normal working hours in any undertaking will be fixed in one of the following ways:

  • by mutual agreement;
  • by collective bargaining within the organisation or industry concerned; or
  • by an industrial wages board (established by or under an enactment providing for the establishment of such boards) where there is no machinery for collective bargaining.

In practice, the usual daily working hours are eight to nine hours, with a one-hour lunch break.

Hours and overtime

What are the requirements for meal and rest breaks?

The Labour Act provides that every employee who works for six hours or more a day is entitled to one hour off for meals. Where the work involves continuous strain or is particularly trying in other ways, in addition to the one-hour meal break the employee is also allowed short breaks during working hours.

How should overtime be calculated?

The Labour Act does not expressly order the payment of overtime. However, this obligation can be inferred from a combined reading of Sections 11(9), 13(7) and 19 of the act. In practice, in sectors that are predominantly unionised (eg, the manufacturing and oil and gas sectors) overtime payments are negotiated by the trade unions and employers usually pay overtime at the negotiated rates. Otherwise, overtime payments are as agreed between the parties to the employment contract.

What exemptions are there from overtime?

Any exemptions from overtime are as provided in the employment contract. In practice, senior executives are usually not entitled to overtime payments.

Is there a minimum paid holiday entitlement?

Yes, under the Labour Act an employee is entitled to at least six days of annual leave for every 12 months of employment. For non-workers, holiday time is as agreed in their contract of employment or in the employer’s staff manual.

What are the rules applicable to final pay and deductions from wages?

The Labour Act does not prescribe specific rules in this respect. However, it provides that the total amount of deductions from an employee’s salary in a single month cannot exceed one-third of the employee’s salary for the month. In practice, employers usually deduct any outstanding sums owed by the employee from the employee’s final salary.

Record keeping

What payroll and payment records must be maintained?

Under the Labour Act employers must maintain records that indicate the sums paid to employees. In addition, for taxation purposes, employers must maintain records that indicate the total sums paid to employees and the deductions made from salaries.

Discrimination, harassment & family leave

What is the position in relation to:

Protected categories

(a) Age?

No law specifically prohibits discrimination on the basis of an employee’s age. However, the Child’s Right Act prohibits the employment of children in any capacity other than by members of their families, and such employment is restricted to light work of an agricultural, horticultural or domestic character. Children are defined as persons under the age of 18 years.

(b) Race

Although Section 42 of the Constitution does not explicitly prohibit discrimination on the basis of race, it prohibits discrimination on the basis of an individual’s community, ethnic group or place of origin.

(c) Disability?

The Lagos State Special Peoples Law 2010 prohibits discrimination on the basis of an employee’s disability. The law requires employers which employ up to 100 persons to:

  • reserve a minimum of 1% of their workforce for qualified persons living with disability;
  • reserve parking spaces for employees with disabilities in their parking lots; and
  • assign special seats to persons with disabilities in employers’ vehicles, vessels, trains or aircrafts.

(d) Gender?

The Constitution prohibits discrimination on the basis of an employee’s sex.

(e) Sexual orientation?

No law specifically prohibits discrimination on the basis of an employee’s sexual orientation.

(f) Religion?

The Constitution prohibits discrimination on the basis of an employee’s religion.

(g) Medical?

The HIV and AIDS (Anti-discrimination) Act 2014 prohibits employers from discriminating directly or indirectly against employees on the basis of their HIV status or HIV-related illness.

(h) Other?

The Constitution prohibits discrimination on the grounds of political opinion.

Family and medical leave

What is the position in relation to family and medical leave?

Under the Labour Act, an employee is entitled to sick leave of up to 12 working days in a calendar year. A female worker is entitled to 12 weeks of maternity leave and at least 50% of her salary during that time.


What is the position in relation to harassment?

Sexual harassment, where it involves unwanted touching, physical intimidation or other forms of extreme coercion, constitutes sexual assault, which is a crime under Nigerian law. In practice, it is common for employers to issue guidelines that regulate such actions and penalties for the breach of such guidelines.


What is the position in relation to whistleblowing?

The Labour Act does not require an employer to maintain a disciplinary or grievance procedure. However, public companies, and private companies that operate in regulated sectors (eg, banks and financial institutions, capital market operators, insurers and telecoms companies) must establish whistleblowing mechanisms. The Code of Corporate Governance for Public Companies issued by the Nigerian Securities and Exchange Commission requires the whistleblowing policies of public companies to:

  • provide a dedicated hotline or email system for the anonymous reporting of unethical practices; and
  • specify a senior officer responsible for reviewing reported cases and initiating the appropriate action.

Privacy in the workplace

Privacy and monitoring

What are employees’ rights with regard to privacy and monitoring?

At present, Nigeria has no specific or comprehensive data privacy or protection law. The only law that generally deals with protection of the privacy of Nigerian citizens is the Constitution. Section 37 of the Constitution provides that “The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected”. In practice, employers usually require employees to consent to the use and storage of personal information provided by an employee in the context of the employment relationship. 

To what extent can employers regulate off-duty conduct?

Employers can regulate off-duty conduct by indicating what is considered unacceptable behaviour in codes of conduct or employee handbooks. However, such restrictions must be drafted in terms that would not infringe the protections afforded to an employee under the Constitution.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

Personal social media accounts maintained by employees and which are not linked to the employee’s official email address cannot be monitored by an employer. However, an employer may, with the employee’s consent, monitor these social media accounts or social media accounts that are linked to the employee’s official email address.

Trade secrets and restrictive covenants

Intellectual Property

Who owns IP rights created by employees during the course of their employment?

The rights in any intellectual property created by an employee during the course of employment vests in the employer.

Restrictive covenants

What types of restrictive covenants are recognised and enforceable?

Under Nigerian law, restrictive covenants are prima facie void, but the courts may enforce such covenants if they are reasonable with reference to the interest of the parties concerned and the general public (Koumolis v Leventis Motors Ltd (1973) NSCC 561 at para 35). In deciding the question of reasonableness, the courts will take into account the nature of the business, trade or occupation, the area over which the restraint is to be imposed and the length of time for which it is to continue. Restraint of trade covenants of 12 months or less are usually enforceable in practice, but anything over one year would most likely be deemed unfair and unenforceable by the courts.


Are there any special rules on non-competes for particular classes of employee?


Discipline and grievance procedures


Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

The Labour Act does not require employers to maintain disciplinary or grievance procedures. In practice, many employers have written disciplinary or grievance procedural requirements. However, these procedures must comply with the principles of natural justice, which require an employee to be notified of allegations or complaints made against him or her and to be given an opportunity to defend him or herself against such allegations. The hearing tribunal must also be impartial. Where the allegations are of a criminal nature, the same burden of proof applies as in criminal cases (ie, the allegation must be proved beyond reasonable doubt).

Industrial relations

Unions and layoffs

Is your country (or a particular area) known to be heavily unionised?

In Nigeria, the sectors that are known to be heavily unionised are:

  • the public sector;
  • the oil and gas sector;
  • the manufacturing sector;
  • the educational sector; and
  • the medical sector.

What are the rules on trade union recognition?

Under the Trade Unions Act employers must recognise registered trade unions if their employees choose to join such trade unions.

What are the rules on collective bargaining?

The members of a registered trade union must establish an electoral college to elect members to represent the trade union in negotiations with their employer. The terms of agreements reached between the employer and the trade union representatives are set out in a collective bargaining agreement, which thereafter forms part of, and will be read together with, the employment contracts of employees who are members of trade unions.



Are employers required to give notice of termination?

Yes, employers must give notice of the termination of employment, but an employer may elect to make a payment in lieu of the notice.

The statutory notice periods prescribed in Section 11 of the Labour Act are as follows:

  • one day’s notice for contracts with a duration of three months or less;
  • one week’s notice for contracts with a duration of more than three months but less than two years;
  • two weeks' notice for contracts with a duration of two years or more but less than five years; and
  • one month’s notice for contracts with a duration of five years or more.

The Labour Act applies only to workers. However, in practice employers use its provisions as a benchmark for determining the applicable notice periods for non-workers.


What are the rules that govern redundancy procedures?

Redundancies are governed by:

  • the Labour Act;
  • the decisions of the National Industrial Court of Nigeria (NICN);
  • the contracts of the affected employees (which include the employees’ handbook); and
  • the provisions of any collective bargaining agreement between an employer and the representatives of a trade union.

In the event of a redundancy, an employer must:

  • inform the trade union or representatives of the employees of the reason for and extent of the anticipated redundancy;
  • apply the principle of ‘last in, first out’ in determining the employees to be affected by the process; and
  • negotiate redundancy payments of the affected employees.

Are there particular rules for collective redundancies/mass layoffs?

No specific rules apply to collective redundancy or mass layoff. In practice, employers usually notify employees of a proposed collective redundancy or mass layoff and, as far as practicable, apply the redundancy procedure set out above.


What protections do employees have on dismissal?

Employees may challenge their dismissal by instituting an action at the NICN.


Jurisdiction and procedure

Which tribunals or courts have jurisdiction to hear complaints?

By virtue of Section 254C of the Constitution and Section 7 of the National Industrial Court of Nigeria Act, the National Industrial Court of Nigeria (NICN) has exclusive original jurisdiction in civil cases and matters relating to labour, trade unions, industrial relations and employment.

What is the procedure and typical timescale?

Litigation in Nigeria tends to be protracted and it is difficult to predict with any degree of accuracy the length of time required to conclude a matter in court. In practice, depending on the nature of the claim, an action instituted at the NICN can be concluded within 12 to 18 months.


What is the route for appeals?

Appeals from the judgments of the NICN can only be made to the Court of Appeal.