NIGERIA Law and Practice Contributed by: Adekunle Obebe and Tade Leo-Adegun, Bloomfield LP
For employees, the notice periods are generally defined under the employment contract. However, most employers are guided by the provisions of the Labour Act in defining their notice periods. Formalities to be Observed Written notice The notice of termination must be in writing. Employment contract The employment contract may specify certain formali - ties to be observed in the case of termination. Where this is the case, the employer must carry out all the necessary formalities. Payment in lieu of notice By virtue of Sections 11 (6) and (9) of the Labour Act, employers can terminate employment immediately by paying the worker for the notice period instead of requiring them to work through it. The same applies for employees if so provided under the employment contract. The termination notice must inform the employee of this. Payment of outstanding benefits The employer is required to pay any outstanding ben - efits, including: • the salary of the employee for the period already worked; • salary in lieu of notice if termination is immediate; • severance pay, if any, as specified in the employ - ment contract; • accrued leave pay for unused annual leave, includ - ing pro-rated leave and any carried-over days; and • other earned entitlements such as bonuses and allowances, as provided in the employment con - tract. Severance Pay The Labour Act does not mandate severance pay for general terminations. However, the terms of the employment contract or CBA may stipulate severance pay and, in such cases, the employer is obligated to comply with those terms. Many employment con - tracts include clauses that provide for severance pay in the event of termination, especially for higher-level
employees or where CBAs are in place. Employers must adhere to these contractual obligations. Furthermore, in cases of redundancy, the Labour Act requires that redundancy payments be negotiated with the trade union or workers’ representatives. The specific amount and terms of redundancy pay are not defined by law but can be determined through negotiations between the employer and the workers’ representatives. While external advice is not legally required for termi - nating employment, it is often advisable for employers to seek legal counsel before proceeding with termi - nation to ensure compliance with relevant laws and reduce the possibility of wrongful termination claims. For mass lay-offs and redundancies, notifying the rel - evant labour authorities may be necessary. 7.3 Dismissal for (Serious) Cause Summary Dismissal Summary dismissal is the immediate termination of an employee’s contract without notice due to seri - ous misconduct or significant failure in performance. This is justified under common law based on the employee’s conduct or capabilities. The Nigerian case Jombo v Petroleum Equalisation Fund (Management Board) & Others highlights the distinction between termination and dismissal: ‘‘termination’’ or ‘‘dismiss - al’’ of an employee by the employer means bringing the employment to an end. Under a termination of appointment, the employee is enabled to receive the terminal benefits under the contract of employment. Dismissal, on the other hand, is punitive and, depend - ing on the contract of employment, very often entails a loss of terminal benefits. Generally, where the employment contract has set out the procedure, the contract specifies a procedure for dismissal, and it must be strictly followed. Employ - ers must ensure the procedure outlined under the contract is in alignment with best practices and legal standards. The procedural requirements for dismissal vary depending on the grounds for termination.
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