NIGERIA Law and Practice Contributed by: Adekunle Obebe and Tade Leo-Adegun, Bloomfield LP
Collective Redundancies Collective redundancies are permitted and recog - nised under Nigerian law. The Labour Act, which is the primary legislation regulating labour and employ - ment, defines redundancy as an involuntary and per - manent loss of employment caused by excess man - power. Flowing from this, various reasons have been accepted/endorsed by the Nigerian courts as being valid grounds for redundancy, including technological advancement. Procedure for Collective Redundancies The Labour Act outlines the steps an employer must take in the event of redundancy. • Notification – The employer must inform the trade union or workers’ representative of the reasons for and the extent of the anticipated redundancy. • Selection criteria – The principle of “last in, first out” should be adopted for the category of workers affected, taking into account factors such as skill, ability and reliability. • Redundancy payments – Negotiations should be conducted regarding redundancy payments to any discharged workers. The above procedure applies to workers as defined by the Labour Act. For employees In the case of employees, redundancies are regulated by the terms of the employment contract, the CBA (if applicable) and the company’s handbook (collec - tively referred to as the “Documents”). When a dis - pute arises, the court will enforce the terms of these Documents. Additionally, with the NIC’s growing reliance on inter - national best practices, employers are encouraged to observe the provisions of the International Labour Organization (ILO) Convention No 158 on the Termina - tion of Employment, particularly where the contract or internal policy is silent. This Convention provides for: • prior consultation with the employee(s) or their representatives;
• provision of severance pay or other terminal ben - efits to those affected. Though Nigeria has not ratified ILO Convention No 158, the NIC has in several decisions applied its prin - ciples, thereby making compliance a matter of best For workers, entitlements will be determined by the outcome of negotiations between the trade union/ employee representatives and the employer. The law states that the removal of an employee by redundancy does not entitle them to any benefits beyond those specified in the employment contract. Therefore, the entitlements of an employee declared redundant are strictly as agreed in the contract. If the employment contract or applicable document speci - fies redundancy payments or benefits, the employer must comply with these terms; otherwise, it may con - stitute a breach of contract. practice and risk mitigation. Entitlements for workers However, where the contract is silent, it is advisable to negotiate redundancy benefits as required under ILO The Labour Act provides statutory notice periods for workers in Nigeria. The length of the notice period typically depends on the worker’s length of service and the terms specified in the employment contract. According to the Labour Act, the notice periods are as follows: • one day’s notice for a worker who has been employed for a period of three months or less; • one week’s notice for a worker who has been employed for more than three months but less than two years; • two weeks’ notice for a worker who has been employed for a period of two years but less than five years; and • one month’s notice for a worker who has been employed for five years or more. Convention No 158. 7.2 Notice Periods Notice Period
• adequate notice of termination; • objective selection criteria; and
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