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Nigeria

January 26, 2021

By Mary Ekemezie, Jumoke Lambo,  Karen Fulton, Nonkululeko Mkhwanazi and Bulela Mungeka 

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Nigeria

KEY DEVELOPMENTS FOR 2020


 

Reinstatement of Employees

The National Industrial Court ("NIC") appears to have expanded the grounds on which it would reinstate an employee whose appointment was terminated. The current grounds on which the NIC has indicated that it would be willing to reinstate an employee are:

  • terminations arising from an employee's involvement in trade union activities; and
  • terminations where any approval (contractual or otherwise) required to give effect to a termination of an employee's appointment is not obtained.

A third ground relied on by the Court in the case of Bello Ibrahim v Eco Bank Plc relates to the failure to pay an employee's severance benefits contemporaneously with the termination of the employee's employment contract. In this case, the employer had terminated the employee's appointment but paid the severance benefits 8 days after the effective termination date set out in the termination notice. In upholding the employee's claim of wrongful termination and granting the reinstatement order, the NIC relying on the decision of the Nigerian Supreme Court and held that the termination of an employment contract without the corresponding contemporaneous payment of severance benefits rendered such termination invalid, and therefore, wrongful. Given that the termination was ineffectual by reason of its invalidity, the Court held that the employee's employment had not been validly terminated. The employee was therefore reinstated.

This case is important because it clarifies:

  • the requirements to effectively terminate an employee's employment contract; and
  • the potentially significant consequences of failing to pay severance benefits contemporaneously with the issuance of the termination notice.
With thanks to Karen Fulton, Nonkululeko Mkhwanazi and Bulela Mungeka of Bowmans for their invaluable collaboration on this update.

 

KEY DEVELOPMENTS FOR 2019


 

Removal of arbitration clauses from employment contracts

Based on the decisions of the National Industrial Court (“NIC”), employers should desist from including arbitration clauses based on the provisions of the Arbitration and Conciliation Act, chapter A18, Laws of the Federation of Nigeria 2004, in a contract of employment. The NIC held that the Arbitration and Conciliation Act is not meant to apply to labour and employment disputes. Employers should review all existing contracts between employees to ensure that they do not contain arbitration clauses that require the parties to submit to arbitration under the Arbitration and Conciliation Act, and should amend any contracts that contain such clauses.


 

Proposed amendments to the Labour Act

The Senate is currently considering Bills to amend the Labour Act. The Bills propose to increase the penalties paid by employers for breaching the provisions of the Labour Act and will remove the restriction that prevents women from carrying out underground work in mines.

It is not entirely clear if the Bills amending the Labour Act will be passed by the House of Representatives and the Senate and assented to by the President before the expiration of their respective terms of office on 29 May 2019.

With thanks to Mary Ekemezie and Jumoke Lambo of Udo Udoma & Belo-Osagie for their invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department