There are two formally recognised employment categories, namely “workers” and “employees”.

Workers

Workers, as defined by the Nigerian Labour Act, encompass those who perform manual labour or clerical work. This category includes casual workers, contract staff and part-time workers. They may engage in physical tasks like construction, manufacturing and maintenance. Workers are entitled to the basic minimum protections prescribed under the Labour Act. Accordingly, employment contracts issued to workers are required to comply with the statutory minimum terms and conditions set out therein. In any instance where a contract of employment with a worker fails to meet such requirements, the relevant provisions of the Labour Act shall prevail.

Employees

Under the Labour Act, any individual engaged in administrative, executive, technical or professional functions is not a worker and is not covered under the Labour Act. Such persons are commonly referred to as employees. They typically work under formal employment contracts. Examples include full-time managers, engineers and lawyers.

Other Statuses

Apart from employees and workers, independent contractors form another significant category within the Nigerian labour market. These individuals, such as freelancers, operate without formal employee status or the full statutory protections provided to workers. They negotiate contracts for specific services and operate more independently within their respective professions.

There are three basic types of employment contracts.

• Full-time/permanent/indefinite employment contract – This type of contract provides indefinite employment with no set end date. Permanent employees are entitled to benefits such as health insurance, pensions and paid vacations, in addition to their wages.
• Fixed-term/definite employment contract – This type of contract specifies a predetermined duration for the employment, typically for a specific project or period. Fixed-term employees may receive similar benefits to permanent employees but only for the contract’s duration.
• Part-time employment contract – This type of contract is entered into for employment with fewer working hours than a full-time position. Such contracts may also be for a definite or indefinite period.

Requirement of Contracts

Section 7 of the Labour Act requires employers to issue a written contract to workers within three months of starting the employment relationship.

For employees, while there is no statutory requirement for contracts to be in writing, it is highly advisable to have written contracts. Written contracts provide clarity and serve as a reference point, forming the basis of the formal employment relationship between the parties.

The Labour Act does not stipulate maximum working hours for workers. However, guidance is generally derived from the ILO Hours of Work Convention, 1919, which limits work hours in industrial undertakings to eight hours per day and 48 hours per week.

The Labour Act also permits flexible arrangements, stating that normal working hours can be determined:

• by mutual agreement;
• by collective bargaining within the organisation or industry concerned; or
• by an industrial wages board, established by relevant legislation, where there is no machinery for collective bargaining.

Flowing from the above, the Labour Act allows for flexible working arrangements within the legal limit of eight hours per day.

It is important to note that the Labour Act generally prohibits women and young persons from engaging in night work in the industrial and agricultural sectors. Therefore, flexible working arrangements must adhere to these restrictions.

While the Labour Act specifically applies to workers, it is generally expected to serve as a guideline for employers when setting work hours.

Terms Required for Part-Time Contracts

Section 7 of the Labour Act requires the inclusion of the following terms for workers:

• the nature of the employment;
• the duration of the employment;
• the appropriate notice period;
• the rates of wages and calculation thereof, and the manner and periodicity of payment of wages;
• terms and conditions relating to hours of work and overtime;
• statutory entitlements including leave, leave requirements and any provisions for sick pay, and maternity leave for female workers, etc; and
• any special conditions of the contract.

Employers may adopt similar terms for part-time employees.

Overtime

The Labour Act defines overtime as any work performed beyond the normal working hours stipulated in the agreement or contract between the employer and employee. The Labour Act does not mandate a specific limit on overtime hours or prescribe a set rate for overtime pay.

Regulation on overtime is minimal beyond this definition. Generally, the preferred approach is for the employer and employee to mutually agree on the rate of overtime compensation in the employment contract.

The Federal Government of Nigeria (FGN) has approved a new minimum wage threshold for Nigerian workers. This new development was confirmed in the statement from the Office of the Minister of Information announced on Thursday, 18 July 2024. The Executive Bill for this wage adjustment was presented to the National Assembly by Tuesday, 23 July 2024. The National Minimum Wage, as approved by the federal government, is NGN70,000 (USD43).

Thirteenth-month salaries and bonuses are not stipulated benefits under the law. These payments are typically outlined in employment contracts and can be determined by mutual agreement between the employer and employee. The agreement between the parties also determines whether such payments shall be mandatory or at the discretion of the employer, and under which circumstances they may be paid.

Vacation/Leave in Nigeria

The Labour Act outlines the following provisions regarding leave and benefits.

• Workers with at least 12 months of service are entitled to a minimum of six working days of annual leave with full pay.
• Annual leave can be accumulated for up to two years with mutual agreement.
• Employers cannot provide monetary compensation instead of leave, except upon termination.
• Public holidays during annual leave do not count against leave entitlement.
• Leave allowance is not mandated by law but may be provided as per contracts or company policies.
• There is no standard or mandated leave allowance calculation. Leave allowance varies from one employer to another based on the contract.
• A worker is entitled to up to 12 working days of paid sick leave per calendar year for temporary illness certified by a registered medical practitioner.
• Women are entitled to 12 weeks of maternity leave, with six weeks taken before delivery and six weeks after. During this period, they should receive at least 50% of their salary. Some states may have different maternity leave regulations.
• A nursing mother is permitted half an hour, twice a day during working hours, to nurse her child.
• Paternity leave is not provided under the Labour Act but is approved by the federal government for men working in public service or federal roles. Some states in Nigeria, namely Enugu and Lagos, offer paternity leave to male employees in public service. Enugu permits three weeks, while Lagos permits two weeks for the first two children of such employees. Paternity leave pay is not specified/mandated under these regulations.

While the provisions of the Act specifically cover workers, the National Industrial Court (NIC) often uses them as a standard for leave benefits for employees in Nigeria. Employers are also encouraged to adhere to international standards and best practices as the NIC has statutory authority to apply ratified international laws in its judgments.

Limitations on Confidentiality and Non-Disparagement Agreements

Nigeria does not have statutory provisions addressing confidentiality and non-disparagement agreements comprehensively. However, the NIC generally considers the following limitations when evaluating the enforceability of such agreements.

• Public domain – Information that becomes publicly known through lawful means cannot be subject to confidentiality obligations. Once information is in the public domain, it loses its confidential status.
• Public order, public policy or legal requirements – Confidentiality and non-disparagement agreements cannot override laws, public policy or legal requirements. Employees have the right to disclose information required by law or in the public interest, such as illegal activities or matters affecting public safety.
• Illegality – Confidentiality clauses in employment contracts or contracts related to illegal activities are generally illegal ab initio. Courts would not enforce agreements that involve illegal activities or are against public policy.

Employee Liability for Breach of Confidentiality and Non-Disparagement Agreements

An employee may incur the following liabilities.

• Termination of employment for breach of confidentiality and/or non-disparagement agreement where such can be proven and constitutes a valid ground for termination under the contract.
• Damages for breach of contract.
• Accounting for profits obtained by the employee as a result of the breach.
• Contractual penalties (if specified under the contract).
• Bearing the cost for legal action by the employer (at the discretion of the court).

Limitation of liability

For these liabilities to apply, the employer must be able to demonstrate that a breach occurred and provide evidence of the damages incurred or profits obtained by the employee.

Requirement of Reasonableness for the Validity of Non-Compete Clauses

Nigerian courts emphasise the importance of reasonableness in non-compete agreements. The restrictions imposed by any such clause – such as geographic scope, duration and the specific line of business being restricted – must be fair and balanced. The terms must be clearly defined and proportionate to protect the legitimate business interests of the employer.

Enforcement of Non-Compete Clauses

The enforceability of non-compete clauses hinges on their reasonableness and their necessity to protect the employer’s legitimate business interests, rather than merely stifling competition. Each case is evaluated on its merits. For instance, in the case of Lacasera Company v Mr Prahad Gangadharan, the court deemed a non-compete clause invalid and unfair for prohibiting the employee from accepting any job in a similar field for five years post-employment. Similarly, in 7th Heaven Bistro Limited v Mr Amit, the NIC ruled against a three-year non-compete clause deemed excessively restrictive and unfair.

Courts assess factors such as the nature of the employer’s business, the employee’s access to confidential information or trade secrets, and the impact of the restriction on the employee’s ability to earn a livelihood.

Non-solicitation clauses in employment contracts are designed to prevent former employees from enticing current employees to leave the company and join a competitor or a new business venture. Non-solicitation clauses relating to customers prevent former employees from contacting or soliciting the former employer’s clients, customers or business contacts after they leave the company. These clauses are essential for protecting the company’s business relationships, workforce and client base.

For non-solicitation clauses to be enforceable, they must be reasonable in scope, duration and geographical area. The Nigerian courts typically seek to ensure that these clauses are not overly restrictive and do not unfairly limit an individual’s ability to work. For instance, in the case of Infinity Tyres Limited v Mr Sanjay Kumar & 3 Others (Unreported Suit No NICN/LA/170/2014), the NIC emphasised the importance of specificity and reasonableness in non-solicitation clauses. The court noted that while it could have upheld the clause if it specified the industry or company to which the restraint applied, it ultimately rejected the clause for being overly broad. The clause attempted to prevent Mr Kumar from taking up any employment in Nigeria, which the court found unreasonable and non-specific.

Nigeria does not have a comprehensive regulation specifically protecting data privacy in the workplace. However, several existing laws can be applied to address data privacy protection in the workplace.

• The Constitution of the Federal Republic of Nigeria (1999), as amended – This guarantees the right to privacy of citizens.
• The Nigeria Data Protection Regulation (NDPR) 2019 – This provides comprehensive guidelines on data protection and privacy. It mandates organisations, including employers, to ensure the confidentiality, integrity and availability of personal data. It requires employers to obtain consent for data collection, limit data use to necessary purposes, secure data, and uphold employees’ rights to access and correct their data.
• The Cybercrimes (Prohibition, Prevention, Etc) Act 2015 – This Act prohibits unlawful interception of communications and mandates data protection measures.

Foreign employees and companies hiring foreign employees must obtain the necessary permits, including an expatriate quota, a visa, and a Combined Expatriate Residence Permit and Aliens Card (CERPAC) or temporary work permit, depending on the duration of the work.

Employers must facilitate skill transfer from expatriates to local employees through training programmes to enable Nigerians to take over such positions after a period. The government enforces local content policies, especially in sectors like oil and gas, to prioritise Nigerian employment. Companies must prove they have conducted labour market testing to show the unavailability of local talent before hiring expatriates.

Business Permit

A Business Permit is a statutory approval issued by the Federal Ministry of Interior that allows a foreign-owned company to legally operate and engage in business activities in Nigeria. It is a prerequisite for companies with any level of foreign participation before applying for expatriate quotas or employing foreign nationals.

Expatriate Quota

Companies intending to employ expatriates must register and obtain an expatriate quota from the Ministry of Interior.

Combined Expatriate Residence Permit and Aliens Card (CERPAC)

Foreign employees employed by a Nigerian company must register with the Nigerian Immigration Service (NIS) upon arrival and obtain a CERPAC. This serves as both a residence permit and a work authorisation document.

ECOWAS Residence Card

Foreign nationals from ECOWAS member states are exempt from the CERPAC requirement. In place of this, they must obtain an ECOWAS Residence Card, which authorises them to live and work in Nigeria in accordance with the ECOWAS Protocol on Free Movement of Persons, Residence and Establishment.

E-Migrant Registration

Foreign employees must also complete e-migrant registration with the NIS. This involves providing personal details, employment information and any other relevant documentation required by the NIS.

There are no specific regulations regarding mobile work in Nigeria.

Data Privacy

While there is no specific law on data privacy during mobile work, the NDPR requires organisations to protect personal data collected or processed within Nigeria. Employers must ensure that data accessed or processed during mobile work is handled in compliance with this regulation. Employees must also be informed about how their data will be collected, used and protected.

Occupational Safety and Health

Employers are required under the Factories Act and the Labour Act to ensure the safety and health of their employees, including those engaged in mobile work. Employers must conduct risk assessments for mobile work environments and provide necessary safety equipment and training to mitigate risks. Employees must also adhere to safety protocols and report any hazards encountered during mobile work.

There is no specific national legislation governing sabbaticals, but they are a well-established practice in academia and public service.

Public Sector

In the Nigerian public sector, under the provision of the Public Service Rules, officers on Grade Level 15 and above are eligible for a one-year sabbatical leave.

Academic Institutions

Sabbatical leave is most common in academic institutions. Universities and research centres typically grant sabbatical leave to faculty members for research, further education or other scholarly activities. This leave is usually granted every seven years for a duration of up to one year.

Private Sector

Some progressive private sector companies may offer sabbatical leave as part of their employee benefits package or may grant such on request. This leave can be used for personal growth, for skill development or to prevent burnout.

There is no regulatory provision with regard to desk sharing; however, since the COVID-19 pandemic, many private employers that have designed remote work policies have added desk sharing as part of the policy in order to manage office space.

Trade unions play a significant role in the labour market in Nigeria, serving as vital intermediaries between workers, employees and employers. They have a strong historical presence and continue to influence labour relations, workplace conditions and labour laws. Once a union is duly registered by the Registrar of Unions, it gains recognition under Nigerian law and possesses the legal authority to exercise various powers as stipulated by the Trade Unions Act, including negotiation and advocacy, dispute resolution, legal representation in disputes, etc.

Role of Unions

Trade unions are involved in the following:

• promotion of collective bargaining agreements;
• maintaining peace and harmony in the work environment;
• contribution to members’ welfare; and
• representation of employees.

See 6.1 Unions.

Collective bargaining agreements (CBAs) are legally binding contracts negotiated between employers and labour unions or representatives on behalf of employees. These agreements record the terms and conditions of employment, including the following:

• wages;
• working hours;
• benefits;
• grievance procedures; and
• other workplace policies reached between the parties after the bargaining process.

The process of negotiating a CBA involves both parties bargaining in good faith to reach mutually acceptable terms that balance the interests of labour and management. They are enforceable under Nigerian labour law and provide a framework for resolving disputes through agreed-upon procedures, thereby promoting harmonious employer–employee relations.

In Nigeria, CBAs are recognised in both public and private employment.

Motive for Termination of Employment

Previously, the law on termination was that motive was irrelevant as long as the terms of the contract were complied with, and an employer had the right to terminate an employee’s contract either with or without reason, provided this was done within the ambit of the law and the clearly stated provisions of the employment contract. That position has, however, shifted, with the NIC specifying that an employer must now provide a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service, as held in Duru v Skye Bank Plc and Aloysius v Diamond Bank Plc.

Procedure for Dismissal

An employer has the right to terminate an employment contract through dismissal without notice in cases of gross misconduct, as defined by common law. This right is typically outlined in the employment contract, which specifies the grounds for such dismissal. Commonly reaffirmed grounds under Nigerian law include fraud, criminal conduct, professional misconduct, incapacity, dishonesty, etc. The procedural requirements for dismissal vary depending on the grounds for termination.

Performance-related dismissal

The procedure for performance-related dismissal is as follows.

• Document performance issues and provide feedback.
• Issue formal warnings and offer a performance improvement plan.
• Allow the employee time to improve their performance.
• If there is no improvement, proceed with termination, ensuring the process and documentation are clear and transparent.

Misconduct-related dismissal

The procedure for misconduct-related dismissal is as follows.

• Conduct a thorough investigation of the alleged misconduct.
• Provide the employee with an opportunity to respond to the allegations (Baba v NCATC (1991) 5 NWLR (Pt. 192) 388).
• Based on the investigation and hearing, decide on termination for gross misconduct (Olatunbosun v NISER Council (1988) 3 NWLR (Pt. 80) 25).

Generally, where the employment contract has set out the procedure, it should be followed, and the employers must ensure they align with best practices and legal standards.

Collective Redundancies

Collective redundancies are permitted and recognised under Nigerian law. The Labour Act, which is the primary legislation regulating labour and employment, defines redundancy as an involuntary and permanent loss of employment caused by excess manpower. Flowing from this, various reasons have been accepted/endorsed by the Nigerian courts as being valid grounds for redundancy, including technological advancement.

Procedure for Collective Redundancies

The Labour Act outlines the steps an employer must take in the event of redundancy.

• Notification – The employer must inform the trade union or workers’ representative of the reasons for and the extent of the anticipated redundancy.
• Selection criteria – The principle of “last in, first out” should be adopted for the category of workers affected, taking into account factors such as skill, ability and reliability.
• Redundancy payments – Negotiations should be conducted regarding redundancy payments to any discharged workers.

The above procedure applies to workers as defined by the Labour Act.

For employees

In the case of employees, redundancies are regulated by the terms of the employment contract, the CBA (if applicable) and the company’s handbook (collectively referred to as the “Documents”). When a dispute arises, the court will enforce the terms of these Documents.

Additionally, with the NIC’s growing reliance on international best practices, employers are encouraged to observe the provisions of the International Labour Organization (ILO) Convention No 158 on the Termination of Employment, particularly where the contract or internal policy is silent. This Convention provides for:

• prior consultation with the employee(s) or their representatives;
• adequate notice of termination;
• objective selection criteria; and
• provision of severance pay or other terminal benefits to those affected.

Though Nigeria has not ratified ILO Convention No 158, the NIC has in several decisions applied its principles, thereby making compliance a matter of best practice and risk mitigation.

Entitlements for workers

For workers, entitlements will be determined by the outcome of negotiations between the trade union/employee representatives and the employer.

The law states that the removal of an employee by redundancy does not entitle them to any benefits beyond those specified in the employment contract. Therefore, the entitlements of an employee declared redundant are strictly as agreed in the contract. If the employment contract or applicable document specifies redundancy payments or benefits, the employer must comply with these terms; otherwise, it may constitute a breach of contract.

However, where the contract is silent, it is advisable to negotiate redundancy benefits as required under ILO Convention No 158.

Notice Period

The Labour Act provides statutory notice periods for workers in Nigeria. The length of the notice period typically depends on the worker’s length of service and the terms specified in the employment contract. According to the Labour Act, the notice periods are as follows:

• one day’s notice for a worker who has been employed for a period of three months or less;
• one week’s notice for a worker who has been employed for more than three months but less than two years;
• two weeks’ notice for a worker who has been employed for a period of two years but less than five years; and
• one month’s notice for a worker who has been employed for five years or more.

For employees, the notice periods are generally defined under the employment contract. However, most employers are guided by the provisions of the Labour Act in defining their notice periods.

Formalities to be Observed

Written notice

The notice of termination must be in writing.

Employment contract

The employment contract may specify certain formalities to be observed in the case of termination. Where this is the case, the employer must carry out all the necessary formalities.

Payment in lieu of notice

By virtue of Sections 11 (6) and (9) of the Labour Act, employers can terminate employment immediately by paying the worker for the notice period instead of requiring them to work through it. The same applies for employees if so provided under the employment contract. The termination notice must inform the employee of this.

Payment of outstanding benefits

The employer is required to pay any outstanding benefits, including:

• the salary of the employee for the period already worked;
• salary in lieu of notice if termination is immediate;
• severance pay, if any, as specified in the employment contract;
• accrued leave pay for unused annual leave, including pro-rated leave and any carried-over days; and
• other earned entitlements such as bonuses and allowances, as provided in the employment contract.

Severance Pay

The Labour Act does not mandate severance pay for general terminations. However, the terms of the employment contract or CBA may stipulate severance pay and, in such cases, the employer is obligated to comply with those terms. Many employment contracts include clauses that provide for severance pay in the event of termination, especially for higher-level employees or where CBAs are in place. Employers must adhere to these contractual obligations.

Furthermore, in cases of redundancy, the Labour Act requires that redundancy payments be negotiated with the trade union or workers’ representatives. The specific amount and terms of redundancy pay are not defined by law but can be determined through negotiations between the employer and the workers’ representatives.

While external advice is not legally required for terminating employment, it is often advisable for employers to seek legal counsel before proceeding with termination to ensure compliance with relevant laws and reduce the possibility of wrongful termination claims. For mass lay-offs and redundancies, notifying the relevant labour authorities may be necessary.

Summary Dismissal

Summary dismissal is the immediate termination of an employee’s contract without notice due to serious misconduct or significant failure in performance. This is justified under common law based on the employee’s conduct or capabilities. The Nigerian case Jombo v Petroleum Equalisation Fund (Management Board) & Others highlights the distinction between termination and dismissal: ‘‘termination’’ or ‘‘dismissal’’ of an employee by the employer means bringing the employment to an end. Under a termination of appointment, the employee is enabled to receive the terminal benefits under the contract of employment. Dismissal, on the other hand, is punitive and, depending on the contract of employment, very often entails a loss of terminal benefits.

Generally, where the employment contract has set out the procedure, the contract specifies a procedure for dismissal, and it must be strictly followed. Employers must ensure the procedure outlined under the contract is in alignment with best practices and legal standards.

The procedural requirements for dismissal vary depending on the grounds for termination.

Performance-related dismissal

The procedure for performance-related dismissal is as follows:

• document performance issues and provide feedback;
• issue formal warnings and offer a performance improvement plan;
• allow the employee time to improve their performance; and
• if there is no improvement, proceed with termination, ensuring the process and documentation are clear and transparent.

Misconduct-related dismissal

The procedure for misconduct-related dismissal is as follows:

• conduct a thorough investigation of the alleged misconduct;
• provide the employee with an opportunity to respond to the allegations (Baba v NCATC (1991) 5 NWLR (Pt. 192) 388); and
• based on the investigation and hearing, decide on termination for gross misconduct (Olatunbosun v NISER Council (1988) 3 NWLR (Pt. 80) 25).

Consequences

Failure to follow the appropriate process or lack of valid grounds for dismissal can lead to several adverse outcomes.

• Damages – Employees may successfully claim unfair dismissal, resulting in damages awarded against the employer.
• Loss of reputation – Mishandling dismissals can damage the employer’s reputation.
• Legal costs – Employers may incur significant legal expenses.
• Reinstatement – Courts may order the reinstatement of the employee to their former position.

Termination agreements are permissible in Nigeria. They stand as legally binding contracts between an employer and an employee that outline the terms and conditions of the employee’s departure from the company. Termination agreements must comply with the requirements/formalities of a contract under law. These include the following.

• Form – The agreement must be in writing, signed by the parties and witnessed.
• Mutual consent – The agreement must be made mutually by both parties, free from fraud, duress, undue influence, or other vitiating factors that could invalidate the contract.
• Consideration – There must be a form of consideration provided, such as terminal benefits. These benefits should be clearly negotiated and included in the termination agreement.

Limitations on Termination Agreement Terms

Non-disparagement clauses

Such clauses must not infringe on the employee’s freedom of speech to an unreasonable extent.

Confidentiality agreements

Any confidentiality clauses should be specific and not overly broad to avoid being considered unenforceable.

Restrictive covenants

Restrictive covenants such as non-compete or non-solicitation clauses must be reasonable in terms of duration, geographical scope and scope of activities restricted.

Waivers of future claims

The agreement cannot lawfully waive the employee’s right to bring future claims relating to issues that may arise after the agreement is signed.

Lay-offs and redundancies

In cases of mass lay-offs or redundancies, employers may need to comply with additional regulatory requirements, such as notifying the relevant labour authorities before concluding such termination agreements.

By virtue of Section 54 (4) of the Labour Act, employers are prohibited from terminating the contract of any female worker who is absent due to maternity leave, or who remains absent from her work for a longer period as a result of illness that arose out of her pregnancy or confinement and renders her unfit for work.

Furthermore, under the Guidelines for the Release of Staff in the Nigerian Oil and Gas Industry 2019, employers that hold an oil mining lease, licence or permit (or an interest therein) issued under the Petroleum Act or under regulations made pursuant to the Petroleum Act are required to obtain an approval from the Minister of Petroleum Resources (the “Minister”) for the dismissal of a worker. The Department of Petroleum Resources will conduct an inquiry into the circumstances of the proposed staff release and make a decision on whether to convey the Minister’s approval or otherwise.

The Staff Release Guidelines stipulate a penalty, not exceeding the sum of USD250,000, for failure to comply with the Staff Release Guidelines.

Wrongful dismissal claims can arise from several factors, including:

• failure to follow due process:
1. not providing a fair hearing;
2. not adhering to procedures outlined in the employment contract;
• dismissal on invalid grounds:
1. termination based on grounds not justified by evidence;
2. discriminatory or retaliatory dismissal; and
• lack of sufficient proof:
1. insufficient documentation or evidence to support the reasons for dismissal.

Consequences of Wrongful Dismissal Claim

Failure to follow the appropriate process or lack of valid grounds for dismissal can lead to several adverse outcomes.

• Damages – Employees may successfully claim unfair dismissal, resulting in damages awarded against the employer.
• Loss of reputation – Mishandling dismissals can damage the employer’s reputation.
• Legal costs – Employers may incur significant legal expenses and may be required by court to recompense the employee for the legal cost of the court proceeding.
• Reinstatement – Courts may order the reinstatement of the employee to their former position.

Grounds for Claims of Discrimination

The NIC rules provide that where there is a claim of alleged workplace discrimination, the claimant shall state on which grounds the claim is based, which may include the following:

• ancestry;
• religion;
• gender;
• marital status;
• family situation;
• genetic heritage;
• ethnic origin;
• political or ideological convictions;
• union affiliation;
• tribe;
• handicap or disability;
• health;
• pregnancy; and
• any other ground.

Burden of Proof

In Nigeria, the burden of proof for discrimination in the workplace primarily rests on the employee (the one who alleges the discrimination). The employee must provide sufficient evidence to support their claim of discriminatory practices by the employer. Once the employee establishes a prima facie case of discrimination, the burden shifts to the employer to provide a legitimate, non-discriminatory reason for the actions in question. The decision of the court is usually based on the balance of probabilities.

In termination cases where there is a claim of termination for discriminatory reasons, it is not for the employee to show that the termination was discriminatory; it is for the employer to justify the said termination. The law is that once an employer gives a reason for terminating or dismissing an employee, the burden lies with the employer to justify the said reason (Angel Shipping & Dyeing Ltd v Ajah (2000) 13 NWLR (Pt. 685) 551 CA).

Virtual Hearings and Remote Court Sittings

Due to the COVID-19 pandemic, the NIC was prompted to commence virtual hearings, as recommended by the Court of Appeal. Following this, the NIC Practice Directions of 2020 included provisions for virtual proceedings. The NIC continues to practise virtual hearings, allowing parties to participate in their proceedings from any part of the country via their website.

The NIC encourages and promotes virtual court sittings (also referred to as “remote court sittings” or “online court sittings”) for matters that do not require the taking of evidence.

E-filing Centre

The NIC Rules, Order 6A, establishes an E-filing Centre for electronic filing and the payment of filing fees for processes and documents relating to or connected with a matter before the court.

It provides that a party or counsel to a party may e-file any process or document that may be filed with the court in paper form, except:

• documents to be presented to the court in camera (ie, in chambers) solely for the purpose of obtaining a ruling; and
• documents to which access is otherwise restricted by law or court order.

Specialised Employment Forums

The NIC is the primary forum for employment disputes in Nigeria. As established by the 1999 Nigerian Constitution (Third Alteration) Amendment Act 2010, it has exclusive jurisdiction over the following matters:

• labour;
• employment;
• trade unions;
• industrial relations; and
• conditions of service.

In furtherance of its authority, the NIC has established an additional forum for hearing employment disputes through means of alternative dispute resolution (ADR) – the NIC Alternative Dispute Resolution Centre. The NIC offers parties the option of ADR using two mechanisms – mediation and conciliation. The ADR Centre may handle:

• civil matters involving disputes between employers and employees;
• disputes arising from health at the workplace;
• disputes arising from safety at the workplace; and
• disputes arising from the welfare of workers.

Class Action Claims

Class action claims are permitted in employment disputes in Nigeria. According to Order 13 Rule 11 of the NIC Rules, if numerous persons have the same interest in one suit, one or more such persons may sue or be sued on behalf of all interested parties.

Representation in Court

In employment litigation before the NIC, parties can be represented by the following.

• Legal counsel – Both employees and employers are often represented in court by their legal counsels.
• Trade unions or employee associations – These bodies may represent their members, especially in collective disputes.
• Class action representatives – In class action claims, one or more persons with the same interest can represent the entire group of affected individuals.

Arbitration in Employment Disputes

Where arbitration is provided under the employment contract as the means of dispute resolution, the parties may resort to arbitration to resolve any dispute arising from the employment contract. However, while such clauses may serve a guiding or persuasive role, they do not oust the exclusive jurisdiction of the National Industrial Court (NIC) of Nigeria. Parties are just given the avenue and possibility of settling their dispute amicably out of court. A party to an agreement with an arbitration clause has the option either to submit to arbitration or to have the dispute decided by court.

This position was confirmed by the NIC in Mr Ibitola Oludemi v Alcon Nigeria Limited (NICN/PHC/120/2022), where the defendant objected to the court’s jurisdiction on the grounds of an arbitration clause in the employment contract not being fulfilled. The court dismissed the objection, holding that the existence of such a clause does not bar a party from initiating proceedings before the NIC. The court stated clearly that “parties have the option to either submit to arbitration or to have their dispute decided by Court”, and concluded that it had the jurisdiction to hear and determine the matter.

In summary, while parties may include arbitration clauses in employment contracts, such provisions are not strictly enforceable, and either party may approach the NIC directly without first submitting the dispute to arbitration.

Arbitration Agreements

Arbitration agreements are enforceable in Nigeria where the court has jurisdiction. For the court to have jurisdiction over an application for recognition and enforcement of an award, one of the following conditions must be met:

• the award debtor must be in Nigeria or be a Nigerian; or
• the assets sought for enforcement must be within Nigeria.

A prevailing employee or employer can be awarded attorney’s fees or other costs. According to Order 55 of the NIC Civil Procedure Rules, the following rules apply to the award of costs in employment disputes.

• The costs of the entire suit and each specific proceeding are at the discretion of the court as regards the party by which they are to be paid.
• Even if a party is successful, the court can order it to pay the costs of any particular proceeding.
• The court may order costs to be paid out of any fund or property related to the suit.
• In fixing the amount of costs, the principle to be observed is that the successful party is to be indemnified for the expenses that party unnecessarily incurred in the proceedings. The judge may summarily fix the amount of cost at the time of delivery of judgment. However, the court may stay the proceeding pending the payment of the costs of any party.