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What Every Employee Should Know about the Nigeria Labor Act

The Nigeria Labor Act is an official legal document that guides employment practices in the country. The law was enacted nearly 52 years ago, in 1971. Although the law specifically protects workers involved in manual labor or clerical work, the guidelines enumerated in it are also used for employees who perform administrative, executive, and professional functions. In this article, we will be sharing 10 of the most important rules stated in the Nigerian Labor Act, that you need to know as long as you work in the country. As a wise saying goes; to be forewarned is to be forearmed – some of them are common knowledge, some are not, but all of them are necessary.

Firstly, the Labor Act does not have any clear-cut regulations for employees who are not workers. Workers in this context refers to employees who do not perform manual labor or clerical work are subject to the terms of the contract signed at their employment. This is why you must read through any employment contract carefully, and ensure that you are comfortable with the terms stated before you sign.

Section 7 of the Labour Act requires all terms of employment to be clearly stated in a written contract within three months of employment. Although the law recognizes that an employment contract may be written or verbal, it should be done in writing for reference and clarity’s sake. It is also worthy of mention that if there is any change in the terms of employment, the employer is required to communicate it to the employee in written form within 1 month before it can take any effect.

The decree goes further to protect workers by laying down some clear terms which are the minimum employment conditions required to be featured in the contract. Some of these terms of employment that must exist in any employment relationship in Nigeria as specified by the Labour Act include:

1. Wages can only be paid with Legal Tender

In other words, it is completely illegal for an employer to offer you payment for your services in form of anything that is not money. Hence, payment in kind; shout-outs, exposure, food, and other commodities are not legal unless you consent to it willingly (like in volunteering services).

2. Payment of Wages can only be done Monthly, Weekly, or Daily.

According to the Nigeria Labour Act, it is illegal for payments to be made to workers at intervals greater than a month. The only exception to this rule is if the State Authority consents to the proposed payment pattern with written approval. Therefore, any contract that states that a salary will be paid every 6 weeks, every other month, and so on, is illegal and should be contested.

3. Employers have no Right to Impose Restrictions on how an Employee’s Compensation is Spent

The law prohibits employers from interfering in how an employee spends his wages. Therefore your employer cannot restrict you from buying food or other items outside of your workplace, nor can he impose any spending limits on you, or offer to pay for your expenses out of your salary without paying you directly. The law also prohibits employers from offering a salary advance exceeding a month’s pay to their employees.

4. Wages can only be deducted for Good Reasons.

The law prohibits employers from deducting any percentage of an employee’s salary without good reason, without the written consent of an authorized labor officer. Therefore, a pay cut in your salary may be justified by your employer if you destroyed any of his properties, but not if he did so to spite you. Also, if you are ever overpaid unknowingly by your employer, he can only request the money back within the first three months after the date of payment. The law prohibits him from demanding it back after then or deducting it from your future payments.

5. Employees cannot be Prohibited from Joining Trade Unions

According to the Labor Act, employers are not allowed to restrict employees from becoming members of any trade unions or associations. The law prohibits employers from including any clauses that request potential employees to relinquish membership in such associations, in the employment contract. Employers are also not allowed to discriminate against employees based on tribe, ethnicity, religion, or membership in a different trade union.

6. Employees are Entitled to observe occasional Time off Work, Sick Leave, and Necessary Holidays

According to the Labour Act, every employee is entitled to rest hours and sick leaves. The conditions for observing this time off from work include:

  • Every employee is entitled to at least one hour of rest for every 6 hours of work, every day.
  • For every period of seven days, an employee is entitled to at least one free day not less than 24 consecutive hours of no work. For example, if you work from Monday to Saturday, you are mandated to have Sunday off from work, and your employer is not allowed to call in for extra hours of work on that day.
  • Every employee is entitled to 12 days off work if he falls sick while carrying out his duties. Employers are allowed to demand official evidence of ill health signed by a registered medical practitioner if they so desire.
  • All employees who have worked with a particular organization for 12 consecutive months are entitled to at least 6 working days of paid holiday, excluding public holidays.
  • Employees are mandated to observe public holidays.

7. Female Employees are Entitled to observe Maternity Leave

The Labor Act states that all female employees are entitled to at least 12 weeks of maternity leave with full pay. This pertains to female employees who have worked with the organization continuously for at least three months before the birth of their child. Currently, the Labour Act of 2004 has no provisions for paternity leave. However, Lagos State male civil servants are granted at least 10 days off from work to observe paternity leave, within the first 2 months of the birth of their child. This law only stands in Lagos State for now.

8. Employees cannot be transferred without their Consent

According to the Labor Act, an employee cannot be transferred from his job without his consent. Any employee scheduled for transfer of employment by his current employer must consent to the arrangement before it can take effect. For example, if your current employer auctions his company off to another organization, your employment contract will not reflect that you have been hired by the new employer until you consent to it. In such cases, employees may be asked to reapply to the new owners of the establishment.

9. No Employment can be Terminated without Notice

The Labor Act prohibits employers from terminating a worker’s employment contract without his notice, and vice versa. The regulations regarding the notice of termination are as follows:

  • An employee who has worked with a company for 3 months or less, may resign with at least a day’s notice. His employer is required to also notify him at least a day ahead of his termination.
  • For employees who have worked with an organization for more than 3 months but less than 2 years, termination of employment contract by either party must come with at least a week’s notice.
  • Where the employee has been in active service for up to 2 years but less than 5 years, either party is required to terminate the employment contract with a minimum of 2 weeks-notice when necessary.
  • When the employee whose employment contract is to be terminated has been in active service for up to 5 years or more, the notice of termination must be given at least 1 month before the date scheduled for termination.

When the notice of termination is given one week (or more) ahead of time, the Labour Act requires that it should be presented as a written document. Unfortunately, the law does not explicitly demand that an employer should state a good reason for the termination of the employment contract.

Limitations of the Nigerian Labor Act

Although the Nigerian Labor Act has set some really helpful regulations regarding employment in place, there are some limitations that we would like to see addressed by the next review. They are:

  • The Labor Act currently serves as the legal document of reference for all employment issues. However, it does not state any clear rules regarding employees who work professional and administrative roles.
  • Paternity leave is not recognized under the Labor Act, but it has become a necessity in recent times.
  • Although the Labor Act prohibits employers from restricting their employees from joining trade unions, it does not cover employees who work in senior executive positions.
  • The Labor Act protects employees from being severely underpaid by stating a minimum wage. However, this does not extend to employee benefits and merit bonuses.
  • According to the Labor Act, employment cannot be terminated without notice. However, the law does not expressly demand that there be a solid reason for the termination. This means that an employee may be terminated unfairly if the employer likes. Hopefully, a rule addressing this would be adopted by the next review of the Labor Act – the International Labor Organization (ILO) has already established some standards against unfair dismissal.
  • While forced labor is illegal according to the Nigerian Labor Act, the law does not prohibit people from employing their family members for domestic work. Unfortunately, this leaves children susceptible to exploitation for labor.
  • According to the Labor Act, defaulters of the stated rules and regulations have to pay a fine. However, the fines proposed in the Act have low monetary value now, which defeats the purpose of imposing them, as anyone can pay them.

Now You Know

These are some relevant rules and regulations guiding employment stated in the Nigeria Labor Act. Although the Nigeria Labor Act is not the only legal document that protects employee rights, you should be familiar with its provisions. I hope you find the information in this article helpful.

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Oputa Okwanuzor is a freelance writer skilled in the art of weaving words into stories for brand boost through copywriting, or make a soothing read using creative writing. In her free time, she loves to share personal development talks, fashion inspos and writing tricks on her blog.

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