The Nigerian Labour Act is the legal framework that regulates various aspects of employment in Nigeria, including working hours, wages, employment terms and conditions, and health and safety, among others. It is important for businesses, including startups, to comply with the provisions of the Labour Act to ensure that employees are treated fairly, paid decent wages, and work under safe and healthy conditions.
Failure to comply with the act can attract legal and financial consequences, including penalties and fines. Some of the key provisions of the act include the following include
Working Hours
Under Section 61 of the Nigerian Labour Act, the standard working hours in Nigeria are 8 hours per day, and 40 hours per week. This means that employers are required to ensure that their workers do not work more than 8 hours per day and 40 hours per week, except in cases where there is an exemption granted by the Minister of Employment and Labour Relations.
Furthermore, Section 62 states that where a worker is required or permitted to work for more than the standard hours in a day or week, the worker shall be paid at an overtime rate, which is typically 1.5 times the normal hourly rate.
It is also important to note that under the Act, an employee cannot be required to work for more than 6 hours without a break, and a break of at least one hour must be provided for employees who work for more than 8 hours per day.
Termination and Dismissal
The Nigerian Labour Act specifies the procedures that employers must follow when terminating the employment of a worker. The procedure for termination of employment under the Act requires the employer to give the worker reasonable notice of their intention to terminate their employment or pay the worker in lieu of notice, as specified in the employment contract or the Act. If the contract does not specify this, the notice given should be reasonable and adequate depending on the circumstances.
The employer must pay the worker all outstanding salary or wages, any bonuses or incentives due, and any other entitlements due to the worker at the time of termination. If the worker is eligible for gratuity payment upon termination, the employer must pay the gratuity amount to the worker at the time of termination.
It is also important to note that employers can only terminate employment for justifiable reasons, as stated in the Act, and the worker must be given an opportunity to be heard before the termination.
Employment Contracts
Employment contracts must comply with the minimum standards set forth in the Nigerian Labour Act and any other applicable laws or regulations. Employers must provide their workers with these contracts within three months of employment.
Section 7 of the Nigerian Labour Act requires employers to provide their workers with an appointment letter, which should contain essential terms and conditions of employment, including the job title, type of work, duration of employment, remuneration, working hours, and other relevant details. Furthermore, Section 11 of the Act requires that an employment contract shall be in writing and shall contain the terms and conditions of the employment. The contract should also include information about the duration of the contract, the notice period, and grounds for termination.
Minimum Wage
Under the Nigerian Labour Act, the minimum wage for workers in Nigeria is currently set at ₦30,000 (Thirty Thousand Naira) per month. This minimum wage applies to all workers, regardless of the sector or industry in which they are employed, and it is subject to periodic review by the Federal Government of Nigeria.
Additionally, employers must be aware that some local governments or states in Nigeria may have their own minimum wage, which could be higher than the national minimum wage. Employers must ensure that they comply with the minimum wage requirement that is applicable to their location of operation.
Health and Safety
Section 17 of the Nigerian Labour Act requires that employers provide and maintain safe working conditions that do not cause harm to employees. It also mandates that employers provide adequate facilities for the welfare of employees, including medical services, first aid, and accommodation.
The act also requires employers to provide protective clothing and equipment to employees where necessary to prevent injury or illness. Employers are prohibited from requiring employees to work in conditions that endanger their health, welfare or safety.
Section 47 provides for the establishment of a National Advisory Council on Occupational Safety and Health by the Minister of Labour and Productivity. The council is charged with advising the Minister on matters relating to occupational safety and health in the country.
Employee Benefits
The Nigerian Labour Act provides for a range of employee benefits that employers are required to provide to their workers. These employee benefits include Annual leave for workers every twelve months of continuous service, or more if specified in the employment contract or agreement.
Workers are also entitled to a minimum of six working days of sick leave with pay in a calendar year, provided that they have been employed for at least two months and have been provided with a medical certificate from a qualified medical practitioner.
Female workers are entitled to a minimum of twelve weeks of maternity leave with pay, provided that they have been employed for at least one year prior to the date of delivery, while Male workers are entitled to a minimum of two weeks of paternity leave with pay, provided that they have been employed for at least one year prior to the date of delivery.
Employers are required to contribute to a pension scheme for their workers, in line with the provisions of the Pension Reform Act. They are also required to provide health insurance for their workers, in compliance with the National Health Insurance Scheme Act.
In conclusion, compliance with the Nigerian Labour Act in Nigeria is mandatory. It is essential for companies to familiarize themselves with its provisions as noncompliance may result in legal and financial consequences, including penalties, fines, imprisonment, and damage to the company's reputation. Additionally, complying with the Labour Act can help ensure that employees are treated fairly and can perform their duties in a safe and healthy environment.