Hire in Nigeria

Certain terms are implied in contracts of employment. For example, an employee has the following implied obligations:

• To use reasonable care and skill
• To serve the employer with fidelity and in good faith
• Not to disclose confidential information
• To be ready and willing to work

An employer has the following implied obligations:

• To pay wages
• To provide a safe workplace and safe work systems
• To indemnify the employee against reasonable expenses as they perform their work
• Not to disclose an employee’s sensitive information without their consent

An employer can generally carry out background checks in relation to applicants (including criminal records, medical history, drug screening and credit checks) subject to certain restrictions. Background checks can be conducted by a third party on behalf of the employer.

There are no provisions for probationary periods under the Labor Act but such periods can be stipulated under the employment contract.

The working week in Nigeria is Monday to Friday. The working day for commercial offices is usually eight hours and the general understanding is that full-time hours amount to 40 hours per week.

A worker who works six hours or more per day is entitled to one or more suitably spaced rest breaks of at least one hour in total.

Section 13 of the Labour Act governs overtime. Hours which a worker is required to work in excess of the normal hours fixed by mutual agreement, or in a collective bargaining agreement, shall constitute overtime. The agreements should also state the rate of overtime compensation.

In practice, senior executives are usually not entitled to overtime payments.

Payroll reports must be kept for a statutory minimum period of six years.

There is no statutory requirement for employers in Nigeria to pay a bonus. However, it is common in the private sector to reward employees with contractual or discretionary bonuses.

Employers are generally entitled to terminate a contract of employment anytime without stating reason or cause, provided the appropriate notice is given or that a salary in lieu of such notice is paid. However, it is advisable for the employer to state the reasons for terminating an employee contract, in accordance with international standards.

For termination due to business reasons (e.g. redundancy), a worker is entitled to the following payments:

• Agreed redundancy or severance payment
• Accrued salary until effective termination date
• Encashment of accrued, unutilized annual leave entitlement
• Unpaid incentives or bonuses (if applicable)
• Gratuity payments (if applicable)
• Reimbursement of out-of-pocket expenses incurred by employee (if applicable)

In the event of a redundancy, the employer must inform the trade union/representatives the reasons for and the extent of the expected redundancy. They will be expected to apply the principle of ‘last in, first out’ in determining the employees affected by the process and negotiate redundancy payments.

For non-workers, there is no statutory obligation for redundancy payments. This is instead subject to the individual contracts of employment.

For termination due to reasons specific to an employee, the entitlement to compensation is subject to the provisions of the contract of employment. This typically includes accrued contractual payments (e.g. salary in lieu of notice if the employer chooses not to give notice), accrued salary and encashment of unutilized annual leave.

If the termination is due to misconduct, the employer must offer the employee an opportunity to defend himself or herself prior to dismissal.

When an employee is no longer employed by a company, the tax authority must be advised accordingly.

There is no general statutory severance pay in Nigeria but it can be regulated under the employment contract and sectoral collective agreements. This payment is usually calculated based on the worker’s length of service and last salary.

Restrictive covenants are governed by the individual employment contract. Restrictions against trade for 12 months or less are usually enforceable in practice. Anything over one year will most likely be deemed unfair and unenforceable by the courts.

The employer is also not required to pay remuneration during the period of post-employment restrictions.

There is no limit to the duration of a fixed-term contract in Nigeria. However, the duration should be stated in the employment contract. If the employee continues to provide services to the employer after the contract expires, it will be deemed that a new fixed-term contract has started or that the employee has become a permanent employee.

Fixed-term employees enjoy employment rights and benefits in the same way as permanent employees.

Payment of salaries should be at least monthly but it is acceptable for it to be in shorter intervals (bi-weekly or weekly).

The employer must provide the employee with a payslip for each pay cycle. These can be provided online.

Every employee is entitled to paid annual leave of a minimum of six working days after 12 continuous months of service. For employees not covered by the Labor Act, there is no statutory provision on annual leave. However, 15 to 20 working days per 12 months of continuous service is the norm.

An employee is entitled to 12 paid days of sick leave in any calendar year. The sickness must be certified by a registered medical practitioner.

The Employees Compensation Act outlines provision for the payment of compensation to employees who suffer from work-related injuries or illnesses.

Maternity Leave

A pregnant employee is entitled to 12 weeks’ maternity leave.

Pregnant employees are entitled to at least 50% of their normal wages, provided that they have been employed for at least six months.

Nursing mothers are allowed half an hour twice a day to attend to their babies. A surrogate mother may also be entitled to maternity leave.

Paternity Leave

The Labor Act does not contain provisions on paternity leave. However, in Lagos State, civil servants have a right to ten days’ paternity leave within the first two months following the birth of the baby.

Other Leave

There is no statutory entitlement to parental leave or leave to care for sick family members. For employees outside the scope of the Labor Act, the practice is that such employees are entitled to bereavement/compassionate leave ranging from one to two weeks. The employer is free to set its own policy.

There are about 14 public holidays per year in Nigeria.