Nigeria. Oladele Ogunshote, Eberechi Ukejianya. Streamsowers & Köhn

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1 Oladele Ogunshote, Eberechi Ukejianya Streamsowers & Köhn Legislation and agencies 1 What are the main statutes and regulations relating to employment? The main statutes and regulations relating to employment are as listed below: the Employees Housing Schemes (Special Provisions) Act Cap8 LFN 2004; the Factories Act Cap F1 LFN 2004; the Labour Act Cap L1 LFN 2004; the Trade Unions Act. Cap T14 LFN 2004; the Workmen s Compensation Act CapW6 LFN 2004; and the Civil Service Rules. 2 Is there any legislation prohibiting discrimination or harassment in employment? There is no specific employment legislation prohibiting discrimination or harassment, however, section 42 of the Constitution of the Federal Republic of gives every citizen a right to freedom from discrimination regardless of his or her ethnic group, place of origin, sex, religion or political opinion. The Constitution makes more specific provision for workers in section 17(3)(e). It provides that the state shall direct its policy to ensure that there is equal pay for equal work without discrimination on account of sex, or any other ground whatsoever. 3 Is there any legislation protecting employee privacy or personnel data? If yes, what are an employer s obligations under the legislation? There is no special legislation protecting employee privacy or personnel data. However, by virtue of section 37 of the Constitution, the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communication are guaranteed and protected as a fundamental right. 4 What are the primary government agencies or other entities responsible for the enforcement of employment statutes and regulations? The include the departments of the Ministry of Labour, the regular courts, the National Industrial Court and the Industrial Arbitration Panel Worker representation 5 Is there any legislation mandating the establishment of a works council or workers committee in the workplace? There is no legislation mandating the establishment of a works council or workers committee in the workplace, however, in individual workplaces workers (of their own initiative) are at liberty to establish a body through which they can bring their requests, grievances and the like (as one body) to the employer. Background information on applicants 6 Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party? The only restriction on background checks on applicants for employment is their fundamental right to privacy. As long as the checks do not contravene this right, it would not matter whether they were done by the employer or a third party. 7 Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment? There are neither restrictions nor prohibitions against requiring a medical examination as a condition of employment. The Labour Act actually places a responsibility on the employer to finance the employee s medical examination as a condition for entering into the contract. The Act stipulates that every worker who enters into a contract shall be medically examined and that no one recruited shall be employed until he or she has been medically examined and passed fit to perform the work for which he or she has been recruited. It follows that an employer can and is indeed obligated to refuse to hire an applicant who does not submit to a medical examination. However, a state authority can make an order to exempt from medical examination workers in agricultural undertakings or non-agricultural undertakings deemed by the state authority as not injurious to the health of a worker. 8 Are there any restrictions or prohibitions against drug and alcohol testing of applicants? There are no restrictions or prohibitions against drug and alcohol testing of applicants. Whether an employer can refuse to hire an applicant who does not submit to an examination will depend on its own employment policies. Hiring of employees 9 Are there any legal requirements to give preference in hiring to particular people or groups of people? According to government policy, the unskilled cadre in any workplace, especially in industrial undertakings, are reserved for indi-

2 genes of the locality where the industry is situated. 10 Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing? The Labour Act stipulates that the terms of employment must be reduced into writing by the employer within three months of the commencement of employment. The essential terms to be in writing include the following: a) the name of the employer or group of employers, and where appropriate, of the undertaking by which the worker is employed; (b) the name and address of the worker and the place and date of his or her engagement; (c) the nature of the employment; (d) if the contract is for a fixed term, the date when the contract expires; (e) the appropriate period of notice to be given by the party wishing to terminate the contract, due regard being had to section 11 of the Labour Act; (f) the rates of wages and method of calculation thereof and the manner and frequency of the payment of wages; (g) any terms and conditions relating to: (i) hours of work; or (ii) holidays and holiday pay; or (iii) incapacity for work due to sickness or injury, including any provisions for sick pay; and (h) any special conditions of the contract. 11 To what extent are fixed-term employment contracts permissible? Fixed-term employment contracts are permissible in so far as the parties are ad idem and the agreement is reduced into writing. Parties are at liberty to fix the term of the employment. There is no law or regulation stipulating a maximum duration for such contracts. It is as such subject to negotiation between the parties. 14 What are the primary factors that distinguish an independent contractor from an employee? The primary factors that distinguish an independent contractor from an employee are: Control: the employer gets the employee to perform service for him on terms that whereby the employee is to be subject to the control and direction of the employer in respect of the manner in which the work is to be done. On the other hand, an independent contractor is told the objective of the service and achieves the stipulated objective by his own devices free from directives from the employer. Liability: generally, the employer will be liable for torts committed by an employee in the course of the execution of the employee s service or duty upon the principle of vicarious liability, whereas the same liability does not attach for torts committed by an independent contractor. Foreign workers 15 Are there any numerical limitations on short-term visas? Are visas available for employees transferring from one corporate entity to a related entity? Basically, there are no numerical limitations on short-term visas. However, conditions for granting expatriate quotas apply on a case-by-case basis whereby the internal affairs minister determines the number of foreigners that may be employed for particular purposes in a particular company. Visas are available for employees transferring from one corporate entity to another related entity but the same expatriate quota restrictions will apply. 16 Is spousal work authorisation available? Spousal work authorisation is not yet available. The spouse of a foreign worker will go through the same process and meet all the requirements to secure a work permit and expatriate quota before taking up employment in. 12 What is the maximum probationary period permitted by law? The law fixes no maximum probationary period for workers. The Labour Act, however, requires employees to be given a written statement specifying the terms of employment within three months of their starting work. In practice, employers fix the duration of probationary periods for their employees. While some employees may fix the probationary period for six months, it would not be unusual to see some employers fix theirs for as long as two years. The written statement or contract will state whether or not the probationary period may be extended at the discretion of the employer. 13 To what extent are covenants not to compete valid and enforceable? A covenant not to compete is enforceable provided that: (a) it is reasonably necessary to protect the interest of the employer in whose favour it is imposed; (b) it is not unreasonable as regards the person restrained; and (c) it is not injurious to the public. Such covenant must be backed by valuable consideration and the duration of the restraint must be reasonable. Also, trade secrets protected under intellectual property law may determine the duration of such covenant. The enforceability of the covenant is through legal action in the law court by any aggrieved employer. 17 What are the rules about having a work-authorised workforce and what are the sanctions if you do not? For a n employer (other than a state government or the federal government) to employ a non-n employee, the approval of the comptroller general of immigration must be obtained. Any employer who contravenes this provision is guilty of an offence and liable to pay a fine or suffer an imprisonment term of six months, or both such fine and imprisonment. Terms of employment 18 Are there any restrictions or limitations on working hours and may an employee opt out of such restrictions or limitations? Working hours are fixed by the employer and employee s mutual agreement, by collective bargaining or by an industrial wages board. The law, however, provides for compulsory break times and rest intervals of an aggregate of one hour per six hours of work per day. Also, in every seven days a worker shall be entitled to one full day s rest of not less than 24 consecutive hours. 19 What categories of workers are entitled to overtime pay and how is it calculated? Every worker who is required to work for any period of time in excess of the work hours fixed by agreement is entitled to 2

3 Update and trends 1. The labour federations are bringing a lot of pressure to bear on employers to phase out casualisation of labour, ie, the engagement of employees as casual labourers, except for labour that is seasonal as in labour required in the agricultural sector. Casual employment is characterised by poor pay, job insecurity, and little or no training and development of the worker. Employees engaged on a casual basis miss out on a lot of benefits like health care, paid vacation, bonuses, etc. It is to be noted that the casualisation of labour remains lawful. It is expected that a bill to do away with the practice will be proposed so as to provide a legal platform upon which to fight the practice. 2. More employers are beginning to embrace fixedterm contracts as opposed to open-ended contracts which have been the norm. This is not likely to help security of employment and is likely engender underemployment. There are some who believe that it is casualisation of labour by other means. 3. Globalisation. There is much discourse regarding how globalisation will affect labour and employment regulations in. is a signatory to the WTO treaty which frees the provision of certain goods and services across borders. This has not yet been implemented because of domestication and it is expected that government will put the appropriate laws and regulations in place both for the comfortable take-off and the smooth running of such dispensation. overtime pay. Also, every worker who suffers a reduction of the 24 hours rest period in any seven days period as stipulated by the Labour Act is entitled to overtime pay. The method used for calculating overtime pay is determined by individual or collective agreement. Invariably it is calculated on an hourly basis. 20 Is there any legislation establishing the right to annual vacation and holidays? The Labour Act establishes a right to annual holidays. Section 18 of the Labour Act provides that an employee has the right to take a holiday with full pay after completing 12 months of continuous service. The minimum number of days of vacation which the law stipulates is six working days or, in the case of persons under the age of 16 years, at least twelve working days. In the calculation of leave pay, only the part of his or her wages which a worker receives in money (excluding overtime and other allowances) is taken into account. 21 Is there any legislation establishing the right to sick leave or sick pay? The Labour Act makes provisions for sick leave and sickness benefits. The entitlement is wages for 12 working days in any one calendar year (excluding overtime and other allowances). 22 In what circumstances may an employee have the right to take a leave of absence? What is the maximum duration of such leave and does an employee receive pay during the leave? The right to leave of absence accrues from the agreement between the employer and the employee. There is no direct legislation on the matter. The maximum duration of such leave, the entitlement to pay and the quantum of pay during the leave are matters subject to agreement between the parties. Statutorily, a woman worker is entitled to 12 consecutive weeks leave of absence on account of maternity leave. 23 What employee benefits are mandated by law? National minimum wage for employees; pension schemes; holidays; limitation of work hours; employees housing schemes; group life assurance; and workmen s compensation. 24 Are there any special rules relating to part-time or fixed-term employees? There are no special rules relating to part-time or fixed-term employees. Liability of acts of employees 25 In which circumstances may an employer be held legally liable for the acts or conduct of its employees? Where an employee performs any act on behalf of the employer in the course of his duties or responsibilities, the employer shall be held legally responsible, including where an employee performs any act in the course of his employment even if such act is not authorised by the employer. Taxation of employees 26 What employment-related taxes are mandated by law? Every employee is mandated to pay the personal income tax, ie, PAY-AS-YOU-EARN tax. Employee-created IP 27 Is there any legislation addressing the parties rights with respect to employee inventions? The Patents and Designs Act provides that where an invention is made in the course of employment or in the execution of a contract for the performance of specified work, the employer or commissioner of the work owns the patent right. Where the inventor is an employee whose contract of employment does not require him or her to exercise any inventive activity but he has in making the invention used data or means that his employment has put at his disposal or where the invention is of exceptional importance, the employee shall be entitled to fair remuneration. Termination of employment 3

4 28 May an employer dismiss an employee for any reason or must there be cause? How is cause defined under the applicable statute or regulation? An employer may terminate the contract of employment at any time for good or bad reasons or for none at all provided appropriate notice is given. It is important to note that a distinction is drawn between termination and dismissal, the latter has been explained as carrying a stigma as it imports an allegation of wrongdoing or fault on the part of the employee. The employer seeking to dismiss an employee will therefore have to show cause. The usual cause is gross misconduct. 29 Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice? Dismissal can be done summarily and without notice. Notice usually precede termination. However, the Labour Act reserves the right of either party to treat the contract as terminable without notice by reason of such conduct by the other party that would entitle the affected party to treat the employment as at an end. Also, an employer can provide payment in lieu of notice. 30 In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice? An employer may treat a contract as terminable without notice by reason of the employee s conduct. Such conduct may be conduct inconsistent with the fulfillment of express or implied conditions of the contract. It is usual to have an employer dismiss an employee without notice or payment in lieu of notice where the employee has committed a crime or is guilty of gross misconduct. 31 Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated? Severance pay or terminal benefits are regulated by the terms of the contract of employment. Severance pay is usually calculated in relation to length of service, age and last salary of the employee. 32 Are there any procedural requirements for dismissing an employee? Where an employee is to be dismissed for a stated cause, the cause must be made known to him or her and he or she must be given an opportunity to make representation in his or her own defence to satisfy the constitutional requirement for fair hearing. This is common in statutory employment or employment in government departments, agencies and institutions where the procedure invariably is in two stages: a) a fact-finding panel of enquiry is constituted to establish if there is a basis for the allegation of wrongdoing against the employee; b) if a basis exists, then the matter is submitted to a judicial panel where the employee is afforded the opportunity to make a representation in his or her own defence before the decision of Streamsowers & Köhn Contacts: Etigwe Uwa Oladele Ogunshote Tamuno Atekebo Bolatito Alaofin Eberechi Ukejianya etigwe@sskohn.com oladele@sskohn.com tamuno@sskohn.com bolatito@sskohn.com ebere@sskohn.com Lagos 16D Akin Olugbade Street Tel: / / Victoria Island Fax: Lagos info@sskohn.com Abuja Suite 206 Tel: Anbeez Plaza Fax: Wuse Zone 5 info@sskohn.com Abuja 4

5 dismissal is taken and implemented. In the oil and gas industry, the approval of the director of the Department of Petroleum Resources must first be obtained before a worker in a management cadre in that industry can be dismissed. 33 In what circumstances are employees protected from dismissal? Employees are protected from dismissal by the Labour Act in the following circumstances: where dismissal is by reason of: trade union membership; or trade union activities outside working hours or with the consent of the employer during working hours; or that the employee has lost or has been deprived of membership of a trade union or has been refused or has been unable to become, or for any other reason is not, a member of a trade union. government department or agency is usually three months. For example, the Public Officers Protection Act bars any action against a public officer (public officer has been judicially defined to include natural persons holding government posts, the institutions and statutory offices) if it commenced later than three months after the act, neglect or default complained of; or in the case of continuance of injury, three months after the ceasing of same. Claims in respect of breaches of the contract of employment will have a limitation period of six years, as with other simple contracts. 34 Are there special rules for mass terminations or collective dismissals? There are no special rules unless such mass termination is as a result of redundancy, in which event the following provisions apply: (a) the employer shall inform the trade union or workers representative concerned of the reasons for and the extent of the anticipated redundancy; (b) the principle of last in, first out shall be adopted in the discharge of the particular category of workers affected, subject to all factors of relative merit, including skill, ability and reliability; and (c) the employer shall use its best endeavours to negotiate redundancy payments to the discharged workers. Dispute resolution 35 May the parties agree to private arbitration of employment disputes? There is no law precluding parties from agreeing to settle employment disputes by private arbitration. However, in the case of a trade dispute, ie, any dispute or difference between employers and workers (or between workers and other workers) connected with: (a) employment or non-employment; or (b) the terms of employment; or (c) the conditions of labour of any person; if the parties do not arrive at a settlement by such agreed private arbitration, it may be settled by the intervention of the minister of labour or be referred to the Industrial Arbitration Panel and, in appropriate cases, to the National Industrial Court by virtue of the provisions of the Trade Disputes Act. 36 May an employee agree to waive statutory and contractual rights to potential employment claims? An employee cannot agree to waive statutory rights to a potential employment claim but may for valuable consideration agree to waive contractual rights. For a waiver to be valid it must be voluntary, unequivocal and in writing. 37 What are the limitation periods for bringing employment claims? Limitation periods for bringing employment claims if the employer is the government, a government functionary or a 5