Sources of regulation
Nigeria’s legal system is based on the English common law,
which continues to apply except to the extent it has been modified by statute.
In relation to the termination of employment, the most important statutes
are the Labour Act 1974 (LA) (also known as the Labour Decree 1974), as
amended, and the Trade Disputes Act 1976 (TDA).
Scope of legislation
All labour law statutes in Nigeria, including the LA and
the TDA, apply only to those persons considered “employees” at common law
(i.e. those employed under a “contract of service” rather than a “contract
for services”). In addition, both Acts apply only to those employees who
are “workers”. The LA defines a worker as any person who has entered into
a contract (of service) with an employer, whether the contract is for manual
or clerical work, or is express or implied, or oral or written (sec.
90, LA). The courts have interpreted this definition to apply only
to manual or clerical workers.[1] The LA definition also excludes:
- any
person not employed for the purposes of the employer’s business (such
as domestic staff);
- persons
exercising administrative, executive, technical or professional functions;
- members
of the employer’s family (also excluded by sec. 21 of the LA);
- representatives,
agents and commercial travellers, to the extent their work is carried
out outside the employer’s permanent workplace;
- home
workers; and
- any
persons employed at sea or on an aeroplane, who are governed by specific
legislation.
In addition, members of the armed forces and police are
excluded from the LA (sec. 88(2)).
The definition of “worker” in the TDA mirrors the LA definition,
except that it is expressly extended to workers other than manual or clerical
workers and to apprentices; furthermore the exceptions listed above do
not apply (sec. 47). However, again, members of the armed forces
and police are excluded from the TDA (sec. 48).
Contracts of employment
Contracts of employment may be either contracts for an
indefinite period or for a fixed term or fixed amount of work. The common
law position that contracts for a fixed term or fixed amount of work expire
according to their terms is codified in sec. 9(7)(a) of the LA and
this rule has not been modified by statute, nor is there any further statutory
regulation of fixed-term contracts.
Probationary periods are possible, although, as the statutes
do not exclude probationary employees from their ambit, the statutory notice
periods (see below) also apply to probationary employees. The term “casual
worker” has no legal significance in Nigeria.
Termination of employment
The termination of employment other than at the employer’s
initiative is largely governed by common law. Contracts of employment may
be terminated, other than at the employer’s initiative, by:
- mutual
agreement, either by an agreement as to the term of the contract or an
agreement that employment should end;
- frustration
by a supervening event;
- the
employee resigning by giving the requisite notice; and
- the
death of the employee (codified in sec. 9(7), LA).
Sec. 10 of the LA codifies
the common law position that an employee’s contract of employment may not
be transferred from one employer to another without the employee’s consent,
and, in addition, requires authorization of any transfer of employment
by a government labour officer, who may also require a medical examination.
Dismissal
There is no general statutory principle against unfair
dismissal in Nigeria and the law of dismissal is largely governed by the
common law, as affected by the LA. However, a dismissal may constitute
a “trade dispute” under the TDA, in which case the worker concerned may
bring a claim to the National Industrial Court (NIC) under that Act.
Notably, while it is far from clear from the statutory
definition of “trade dispute” in the TDA (i.e. “any dispute between employers
and workers ... which is connected with the employment or non-employment
of any person”) that claims relating to dismissals are covered by the Act,
in practice the NIC has exercised jurisdiction over dismissal claims. There
is, however, little statutory guidance as to the standard the NIC is to
apply in adjudicating trade disputes involving a dismissal; its remedial
jurisdiction simply being to “make awards to settle trade disputes” (sec.
15(1)(a), TDA).
There are specific statutory prohibitions against dismissal
on the grounds of union membership and activity (sec. 9(6)(b),
LA) and pregnancy and taking maternity leave (sec. 53(4), LA).
In addition, the common law has developed the concept of
a “constructive dismissal” (i.e. behaviour by the employer which is intolerable,
and which forces the employee to resign, and which is deemed to be a dismissal)
and, as part of the common law, this concept is part of Nigerian law.
The LA (sec. 11(5)) expressly retains the common
law right of an employer to summarily dismiss an employee for serious misconduct.
The LA also retains the employer’s ability to dismiss on the grounds of
redundancy (sec. 20), although this section also introduces certain
procedural requirements for redundancies (see below). “Redundancy” is defined
by sec. 20(2) of the LA to be “an involuntary and permanent loss
of employment caused by an excess of manpower”.
Notice and prior procedural safeguards
Sec. 11 of the LA sets out
statutory minimum notice periods as follows:
- for
less than three months of service, one day;
- for
three months to two years of service, one week;
- for
two to five years of service, two weeks; and
- for
more than five years of service, one month.
The above periods are statutory minima which can be improved
upon by collective agreements or contracts of employment. Payments in lieu
of notice are permissible, and either party may waive the right to notice
(sec. 11(6), LA).
For dismissals for misconduct, the common law rule that
employers who, with full knowledge of the employee’s conduct, condone such
conduct, cannot thereafter rely on the conduct to justify a summary dismissal.[2] However, the
common law rule that misconduct discovered after dismissal may justify
the dismissal also applies.[3] There are no
statutory requirements as to procedure for dismissals for misconduct, although
a breach of any contractual procedure may constitute a breach of contract
leading to an award of damages. Likewise, there are no statutory procedural
requirements for dismissals on the grounds of unsatisfactory performance.
For dismissals on the grounds of redundancy, sec. 20 sets
out the following procedural requirements:
- the
employer is to inform the trade union or worker’s representative of the
reasons for and anticipated extent of the redundancies;
- the
principle of last in, first out is to be applied, subject to factors
of merit, including skill, ability and reliability; and
- the
employer is to use his or her best endeavours to negotiate redundancy
payments.
Severance pay
There is no general statutory severance pay, although there
is provision for the Minister of Labour to enact regulations providing
for severance pay to redundant workers (pursuant to sec. 20(2) of
the LA). In addition, the NIC has, on occasion, awarded severance pay,
as additional compensation, to unfairly dismissed workers.
Avenues for redress
Claims for wrongful dismissal or breach of contract may
be brought in the civil courts, although such claims are limited to damages
for the equivalent amount that the employee would have earned during the
notice period, and generally exclude reinstatement[4] and damages
for injured feelings.[5]
In addition, as discussed above,
a dismissed employee may submit a trade dispute to the NIC, and the NIC
has a wide discretion as to remedies, including reinstatement. The resolution
process for trade disputes can also include conciliation provided by the
government.
Further information
[1] Following the English decision of NALGO v. Bolton
Corporation [1943] AC 166.
[2] See, for example, ECN v. Nicol [1968]
All NLR 201.
[3] Clouston v. Corry [1906] AC 122.
[4] Except for “office-holders” under administrative
law. Such persons are unlikely to include private sector
employees.
[5] Addis v. Gramophone
Co. [1908] AC 488.
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