NIGERIA LAW AND PRACTICE Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Rebecca Ebokpo, Jibrin Dasun, Peretimi Akinmodun, Onyinyechi Chima and Princess Otah, ǼLEX
• one month, where the contract has continued for five years or more. For non-workers/employees in the same posi - tion, the courts have held that reasonable notice (which in many cases is at least one month) should be given. Non-compliance with the notice and termination obligations provided by contract or the Labour Act, by either employer or worker/non-worker, could potentially lead to claims of wrongful ter - mination or unfair labour practices. If the courts decide in favour of the aggrieved party, the defaulting party may be held liable for damages. Redundancies Redundancy is defined under the Labour Act as an involuntary and permanent loss of employ - ment caused by an excess of manpower. In carrying out a redundancy exercise in respect of workers, an employer is required to: • inform the trade union or workers’ representa - tive concerned of the reasons for and the extent of the anticipated redundancy; • adopt the principle of “last in, first out” in the discharge of the particular category of work - ers affected, subject to all factors of relative merit, including skill, ability and reliability; and • use its best endeavours to negotiate redun - dancy payments to any discharged worker. Although the above requirements only apply to workers, they can be adopted by employers as a guide when carrying out redundancy exercises in respect of non-workers/employees, subject to the provisions of an employment contract or any applicable collective bargaining agreement.
Failure by an employer to comply with the requirements for carrying out a redundancy exer - cise may result in claims for wrongful termination or unfair labour practices. If the courts decide in favour of affected employees, the employer may be liable to pay damages. 4.5 Employee Representations There is no legal requirement for employee rep - resentation through trade unions or associa - tions. However, employers are legally obliged to recognise and not interfere with the formation of a trade union or association where employees choose to establish one. 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers Personal Income Tax Generally, an employee is considered tax resi - dent in Nigeria where their employer is in Nige - ria or has a fixed base in Nigeria, or where the duties of that employment are wholly or partly performed in Nigeria, unless: • the duties of the employment are performed for, and the remuneration is paid by, a non- resident employer; • the employee is not in Nigeria for an aggre - gate of 183 days in any 12-month period; or • the remuneration is taxed in the country of the non-resident employer, with which Nigeria must have a double tax treaty. Individual employees are allowed a consolidated relief allowance of 20% of gross income plus either NGN200,000 or 1% of gross income, whichever is higher. The balance of the income after all deductions will be taxed in accordance with the graduated tax scale rates set out below:
570 CHAMBERS.COM
Powered by FlippingBook