Legal Issues Employers in Nigeria need to consider

Employment Issues in Nigeria

In this article, we will examine what employers in Nigeria need to consider from a legal perspective in Nigeria. Hopefully if you are reading this article you are an employer in Nigeria who has already set up their business, and is planning to run it properly.

After you have set up the structure of your business, the next thing you will be considering is hiring people to join your team. Under the Nigerian Labour Act, there are certain minimum obligations which every employer needs to meet. These obligations are as follows:

  • All employers must provide their employees with a written contract of employment within 3 months of hiring the employee, and there are certain essential clauses which must be included in the contract. These include – the names and addresses of the employer and employee, nature of the employment, duration of the employment, amount of salary/wages, notice period for termination, hours of work etc.
  • All employers must conduct a medical examination of every employee before the employee commences work. The examination must be carried out by a registered medical practitioner, at the expense of the employer.
  • Employers are obligated to provide rest breaks of at least 1 hour for every 6 hours of work, and must ensure that in every 7 days of work employees will be given at least 1 day of rest which shall not be less than 24 consecutive hours.
  • Generally, women are prohibited from ‘night work’, however the Labour Act allows for some exceptions. Further, Nigerian female employees who are pregnant are entitled to 12 weeks of maternity leave (6 weeks before the due date, and 6 weeks after), and where she has been in employment for at least 6 months she is entitled to at least 50% pay during her period of maternity leave.
  • All employers must give their employees at least 6 working days of holiday with full pay for a 12-month continuous service period. Further, employees are allowed to take up to 12 days as sick leave in any 1-year period, provided that the absence from work is certified by a registered medical practitioner.


Please note however that the Labour Act does not apply to all classes of employees, and therefore you need to consider if your class of employee falls under the Labour Act to ensure whether the above obligations apply to your business. The next group of obligations are however applicable to all employers regardless of the class of employees they have.

  • Under the Pension Reform Act, it is compulsory for every employer to maintain a Group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee. Further, under the Employee Compensation Act all employers must make a minimum monthly contribution of 1% of the total monthly payroll of employees to the Employee Compensation Fund. The Fund shall be used to provide compensation to employees or their dependants for any death, injury, disease or disability arising out of or during their employment.
  • The Pension Reform Act makes it mandatory for all employers that employ more than 15 workers to set up a contributory pension scheme in accordance with the provisions of the Act. The rate of contribution is at least 10% and 8% by the employer and the employee respectively.


Finally, please note that it is extremely important that you have an Employment Agreement in place. It is an Agreement which properly protects the interests of you and your business. Full time and part time employees should have their respective Employment Agreements.


Next Steps

We suggest that at the critical stage before your business begins to hire it’s first employees, you should consider consulting with an experienced employment lawyer. The employment lawyer will among other things advise on how best to structure your employment process to ensure that you are operating within the law, and also would assist in drafting your initial legal agreements like Employment Contracts, Offer Letters, and Employee Handbooks.

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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.

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