are employment bonds legal

02 Feb Are Employment Bonds Legal in Nigeria?

QUESTION:

I am a banker currently working with a Nigerian bank. Before my appointment, I was made to sign a 2yr bond that ensures I work with the bank for a minimum of 2 years before my exit or pay N2m upon termination of the appointment. Owing to the desperation then, I committed to signing this bond and till date, my life has been a misery.

I have spent exactly 1yr and 6 months on this job and have also gotten offers elsewhere which has kept me in a dilemma.
Is it possible for me to leave the bank without bearing the consequence of paying N2m? Someone once told me the Nigerian labor law stipulates a maximum of 1yr to bond an employee but I’m not sure.

 

ANSWER:

As a general rule, employment contracts which state that the employee must stay in the employment of the employer for a certain period of time or else pay a sum of money, are void and unenforceable because they constitute a restraint of trade and violate our Labour Laws.
However, to avoid this, most of these sorts of bonds are couched in such a way that the employer states that the amount represents the investment they would have made in training the employee during the time of his employment with them. In your case, we suspect that is how it is couched, but we are unable to tell for certain as we have not read your employment contract.
If this is the case, and your employer has indeed spent money in training you to the level which you are at, the bond will be technically referred to as a ‘training bond’. We are not saying that they are legal (that is up to the courts to determine), we are however saying they could be enforced in court if the court views the training to be of such a specialised nature as to warrant the bond.
We think you have three options:
  1. Stay with your employer until the 2 years runs out (which you do not seem inclined to want to do)
  2. Leave to another employer and challenge the validity of the bond (you might win the case, this will be down to how your lawyer argues the case, and in fact you could also get some compensation for lost earnings if you can successfully prove that the bond stopped you from taking a job which you would have earned considerably more).
  3. Leave to another employer, and offer to pay your current employer a pro-rated sum of the bond. In other words, the bond was for 2 years, and you are 1.5 years into it, you would offer them N500,000 to amicably discharge yourself of the bond without getting the courts involved.

 

 

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We hope you have found this information helpfulPlease note that this information is provided for general informational purposes only and is not intended to be legal advice. No lawyer-client relationship is formed nor should any such relationship be implied. This answer is not intended to substitute for the advice of a qualified lawyer. If you require legal advice, please consult with a qualified lawyer. If you would like to find out more about a consultation with one of the lawyers in our network regarding a legal issue you are experiencing, you can use the free tool below to get an estimate.

 

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