The Nigerian Labour Market
OVERVIEW OF THE NIGERIAN LABOUR MARKET
The Nigerian labour market is very flexible with skilled, low labor cost level, highly motivated and productive workforce. Nigerian employees distinguish themselves by being highly educated and efficient. Thus, ‘self-managing teams’ are very common within Nigerian business and industry: a typical team does all its own planning to achieve targets, with minimal intervention from management. Nigerian employees are also known for being healthily self-critical, with a willingness to learn and a commitment to making improvements – in both production and performance.
Nigeria also has a strong tradition of collaboration between universities and private-sector companies, which co-operate on research that often culminates in innovative, prize-winning products.
Download the main document on the Nigerian labour market here.
KEY FEATURES OF NIGERIAN LABOUR MARKET:
- Highly skilled
- Very flexible
- Low labor cost level
- Highly motivated and productive workforce
NATIONAL MINIMUM WAGE
Due to inflationary factors, further wage increases have been recommended, and minimum wages are about 18,000 naira, about 50 United States dollars per month. An employer, defined as someone employing 50 or more persons, is required to pay the minimum wage, defined as the total emolument payable to a worker.
MINIMUM REQUIREMENTS IN EMPLOYMENT CONTRACT
Rights are usually determined by the terms in the contract of employment. When a hire is made, the Nigerian Labour Act requires employers to provide an employment contract setting out the following:
- The terms and conditions of the employment within three months of the commencement of employment;
- The name of the employer;
- The undertaking by which the worker is employed;
- Name, address, and date of hire of the worker;
- Nature of the employment;
- Date of expiration if the contract is for a fixed term;
- Period of notice for termination with attention to section 11 of the Nigerian Labour Act;
- Rates of wages, method of calculation, and frequency of pay;
- Terms and conditions relating to hours, holidays, incapacity (including any provisions for sick pay), and any special conditions in the contract.
Employers may use the first three months before providing the contract as a probationary period, and if spelled out in the contract, time thereafter as well. With regard to contracts for a fixed term, contracts must be in writing, but otherwise, there are no statutory limitations or restrictions on employment contracts for a fixed term.
In certain situations, an employer may desire to use independent contractors rather than hiring an employee. The rules governing independent contractors in Nigeria are similar to the United States. For example, the status as an employer and vicarious liability for torts committed by an independent contractor is determined by the level of control exercised by the employer over the independent contractor.
Normal hours of work are fixed by mutual agreement, or by collective bargaining, or by an industrial wages board where there is no machinery for collective bargaining.
REST HOURS, SICK LEAVE AND HOLIDAYS
If a worker is at work for more than 6 hours a day, he/she must be given at least 1 hour of rest-interval in that day. Further, in every period of 7 days, a worker is entitled to at least 1 day of rest which must not be less than 24 consecutive hours.
Every worker is also entitled to 12 days’ sick leave for temporary illness certified by a registered medical practitioner.
Every employee after 12 months of continuous service is entitled to a holiday with full pay of at least 6 working days or in the case of a person under the age of sixteen (16) years (including an apprentice), at least twelve (12) working days (this is exclusive of all the public holidays). An exception to the entitlement to a holiday after 12 month’s continuous service is that such holiday can be deferred to a later date by agreement between the employee and employer provided that the holiday earning period shall not be increased beyond 24 months’ continuous service.
All female employees are entitled to take up to 12 weeks of maternity leave with full pay. Of this period, six weeks must be taken after the birth. Women may start their leave at any time from six weeks before the expected date of birth, on producing a medical certificate issued by a registered medical practitioner stating that confinement will probably take place within six weeks. Nigerian Labour Act does not recognize paternity leave and makes no such provisions
There is no legislation that specifically regulates equal opportunities and discrimination in employment in the Nigerian labour market. The Constitution contains a general prohibition of discrimination on the grounds of: ethnic group; place of origin; community; sex; religion; political opinion; and circumstances of birth.
SAFETY AND WELFARE OF EMPLOYEES
The Factories Act places an obligation upon employers/owners or occupiers of a factory to ensure the health, safety and welfare of employees within the factory. Thus, it is the duty of the employer to ensure that the provisions of the Factories Act relating to cleanliness, overcrowding, ventilation, lighting, drainage and sanitary conveniences are complied with.
Furthermore, the Act makes it the duty of the employer to provide a safe means of access and safe place of employment, sections 47 and 48 of the Act also make it mandatory for factory workers to be provided with protective clothing and appliances, where they are employed in any process involving excessive exposure to wet or to injurious or offensive substance. Similarly, where necessary, suitable gloves, footwear, goggles and head coverings should also be provided and maintained for use by the workers.
Employers looking to hire foreign nationals into the Nigerian labour market must apply for an “expatriate quota”. The quota allows a company to employ foreign nationals in specifically approved job designations as well as specifying the validity period of the designations provided on the quota.
There are two types of visas which may be granted to expats, depending on the length of stay. For short-term assignments, an employer must apply for and receive a temporary work permit, allowing the employee to carry out some specific tasks. The temporary work permit is a single-entry visa, and expires after three months. There are no numerical limitations on short-term visas, and foreign nationals who meet the conditions for grant of a visa may apply for as many short-term visas as required.
For long-term assignments, the employer should apply for a “subject-to-regularization” visa (STR). To apply for an STR, an employer must apply for and obtain an expatriate quota. The expatriate quota states positions in the company that will be occupied by expatriate staff. Upon arrival in Nigeria, the employee will need to validate his or her visa by applying for a work and residence permit.
Spouses of authorized workers may also work in Nigeria, provided they obtain a work and residence permit as well. Nigeria does not employ a labor market test, although the Nigerian Content Act does state that employers should exercise a preference for local employees.
The Nigerian Labour Act defines redundancy as an involuntary and permanent loss of employment caused by excess manpower. The law in Nigeria recognizes the right of the employer to terminate the contract of employment of an employee on ground of redundancy. The Labour Act specifically provides that in the event of redundancy:
- The employer is to inform the trade union or workers’ representative concerned.
- 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.
- The employer is to use his best endeavours to negotiate redundancy payments to any discharged workers who are not protected under the Labour Act.
The purchaser of the business may decide to enter into consultation in order to enjoy a smooth transfer of the business. The time frame for the process would depend on the nature of the business to be transferred. Also, an employee’s position prior to and post-transfer is a matter of contract between the employees and the transferor employer.
There is no statutory obligation on employers to inform and/or consult employees or their representatives prior to business transfers except where specifically provided for in a collective agreement.
PROTECTION AGAINST DISMISSAL
There is little or no protection afforded to the workforce by legislation in the Nigerian labour market. This position has been further adumbrated by Nigerian courts in decided cases where it is clearly stated that the employer could bring the appointment of his employee to an end for any reason or no reason at all. As stated in other decided cases, it is generally not the policy of Nigerian courts to foist a servant on an unwilling master.
TERMINATION OF EMPLOYMENT
The Nigerian Labour Act provides the following as minimum notice periods for the termination of an employment contract:
- Where the employee has been employed for a period of 3 months or less, either party may terminate the contract with a minimum of 1-day notice
- Where the employee has been employed for a period of 3 months but less than 2 years, either party may terminate the contract with a minimum of 1-week notice.
- Where the employee has been employed for a period of 2 years but less than 5 years, either party may terminate the contract with a minimum of a 2-week notice.
- Where the employee has been employed for a period of 5 years or more, either party may terminate the contract with a minimum of 1-month notice.
When giving notice of termination of employment contract where the notice is 1 week or more, the notice must be in writing.