Outline of Nigerian Employment law

Under Nigerian law, the relationship between an employer and an employee is regulated by the Common Law of Contract as applied by the Nigerian courts, and a draft of other statutes which in one way or the other, affect the right of employees. These statutes and other laws operate against the backdrop of the Constitution of the Federal Republic of Nigeria 1999 (the "Constitution") and will be void to the extent that any of their provisions conflicts with the provisions of the Constitution.

The principal statutes and laws that are relevant to the employment of persons in Nigeria are:

a.    Labour Act, (Chapter L1), LFN 2004;

b.    The Trade Unions Act, (Chapter T14), LFN 2004 as amended by the Trade Union Amendment Act, No. 8 of 2005;

c.    The Trade Disputes Act, (Chapter T8) LFN 2004;

d.    The Trade Disputes (Essential Services) Act, (Chapter T9), LFN 2004;

e.    The 3rd Amendment to the Constitution incorporates the National Industrial Court into the Constitution, with powers to hear civil and criminal cases and matters relating to labour, including trade unions and industrial relations, matters between employers, their organizations, employees and their trade unions/representatives respectively;

f.    The Employees Compensation Act 2010;

g.    The National Minimum Wage Act, (Chapter N61) LFN 2004 prescribes the minimum wage payable to employees regardless of whether such persons are employed in the public or private sector of the economy;

h.     The Pension Reform Act 2014 establishes a contributory pension scheme (the "Scheme") for the payment of retirement benefits to employees in both the public service and private sectors of the Nigerian economy;

i.    The National Health Insurance Scheme Act, (Chapter N42), LFN 2004 has an underlying objective to ensure that every Nigerian has access to good health care and to protect Nigerian families from the rising cost of health care service;

j.    The National Housing Fund Act (Chapter N45), LFN 2004 requires an employer to deduct an amount equal to 2.5% (two and a half percent) of the monthly salary of any employee whose annual salary is up to three thousand Naira N3,000/US$20.02) and to remit the amount deducted to the National Housing Fund as the employee's contribution to the National Housing Fund;

k.    The Employees Housing Scheme (Special Provisions) Act, (Chapter E8), LFN 2004 makes it obligatory for an employer so designated by an order of the Minister of Employment, Labour and Productivity to establish, execute and maintain a housing scheme for its employees if it employs not less than 500 employees; and

l.    The Industrial Training Fund (Amendment) Act, 2011 regulates the training and development of employees.

Collective Agreements with Trade Unions

Collective agreements are not, in themselves, legally binding under Nigerian law.   Nigerian courts will, however, enforce such agreements if, for instance, a collective agreement or a part of it is incorporated expressly or by implication into an executed contract of employment between an employer and its employees, or into a company handbook that is deemed to form part of the contract of employment. 

The courts may also enforce the provisions of a collective agreement if it can be established that, in relation to its employees in other matters, an employer has had dealings in which it accepted or treated the collective agreement (or certain provisions contained therein) as being legally binding.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.