Nigeria: An Appraisal Of Types Of Employment And The Means Of Their Effective Termination Under Nigerian Law

Last Updated: 21 August 2017
Article by Emmanuel Ekpenyong and Ugochi Igwe

What are the main regulations regulating employment in Nigeria?

The main legislation regulating employment and labour relations in Nigeria is the Labour Act CAP. L1, Laws of the Federation of Nigeria, 2004. However the Act only covers employees engaged under a contract of manual labour or clerical work in private and public sector. Hence the need for other legislations which includes;

  1. Trade Union Act, CAP T14, Laws of the Federation 2004.
  2. Trade Dispute Act CAP T8, Laws of the Federation 2004.
  3. National Industrial Court Act, No 38. Vol. 93, 2006.
  4. The Constitution of the Federal Republic of Nigeria 1999 (as amended).

What types of employment are recognised under Nigerian law?

Generally, employments in Nigeria fall within three categories and they are;

  1. Employment which is governed by statute;
  2. Employment by written contract of employment;
  3. Employment at will or servant holding an office at pleasure of employer or Master and servant relationship.

a. Employment that is governed by statute

This is an employment with statutory flavour. An employment is said to have a statutory flavour when the appointment and termination is protected by statute or laid down regulations made to govern the procedure for employment of an employee. The rules and regulations are part of the terms and conditions of the employees' employment which gives it statutory flavour. For an employee to effectively claim that his or her employment is coated with statutory flavour and be terminated according to its provisions, the employment must;

  1. have statutory reinforcement or at any rate, be regarded as mandatory,
  2. be within the meaning of the relevant statute and directly applicable to the employee or persons of his cadre,
  3. be seen to be protected under the statute; and
  4. have been breached in the course of determining the employment; before the employee can rely on same to challenge the validity of the termination of his or her employment.

b. Employment by written contract of employment

A contract of employment is defined in Section 91 of the Labour Act as-

" any agreement, whether oral or written, express or implied whereby one person agrees to employ another as a worker and that other person agrees to serve the employer as a worker".

An employer is defined to mean "any person who has entered into a contract of employment to employ any other person as a worker either for himself or for the service of any other person and includes the agent, manager or factory of the first mentioned person and the personnel representative of a deceased employer".

In the same section, a worker is defined to be "any person who has entered into or work under a contract with an employer, whether is for manual labour or clerical work or is expressed or implied or oral or written and whether it is a contract or service or a contract personally to execute any work or labour..."

Section 3 of the Labour Act stated that an employer must give an employee a written contract within 3 months of the commencement of the employment. The contract must have certain key terms namely; name of employer and employee, nature of employment, duration, wages, termination etc. The provisions of the contract regulate the relationship between the employer and the employee. 

c. Employment at will or servant holding an office at pleasure or Master and servant relationship

An employment at will is when the employee holds an office at the pleasure of the employer. As the name suggest, this is a form of employment held at the will and caprices of the employer. Unlike employment with statutory favour, the continuous engagement of the employee is at the discretion of the employer. For example, a Minister of the Federal Republic of Nigeria is employed by the President and therefore he or she holds that office at the pleasure of the President.

This also applies to the personal aides of the employer. One major disadvantage of this type of employment is that loyalty of the employees is usually to the employer not necessarily for the general wellbeing of the masses or the business. The employer has a wide discretionary to "hire and fire".

What are the means of termination of employment in Nigeria?

Generally, the principles of law governing the termination of an employment in Nigeria are dependent on the type of employment.

(i) Termination of an employment governed by statute.

Where the contract of employment is governed by the provisions of a statute or where the conditions are derived from statutory provisions, it invests the employee with a legal status than the ordinary one of master and servant. The termination therefore must be according to the provision of the relevant statute, otherwise the purported termination would be declared null and void by the court.

Where an appointment is not governed by any statutory provision, it does not enjoy statutory provision and cannot be said to have statutory flavour notwithstanding the fact that the organisation or institution is a creation of statute or is a statutory corporation. The fact that an organisation is a statutory body does not mean that the conditions of service of its employees are protected by statute.

(ii) Termination of an employment by written contract of employment

It is trite that where parties have entered into a contract or an agreement, they are bound by the provision of that contract or agreement as this is the whole essence of the doctrine of sanctity of contract. For a termination of employment to be lawful, it must be done in accordance with the provisions of the contract of employment. Where the termination is not in accordance with the provisions of the contract, the termination is wrongful and a claim for breach of contract would be sustained. In such an instance, damages for wrongful termination would be what the employee is entitled to had his or her employment been validly terminated in accordance with the provisions of the contract.

Section 9(7) of the Labour Act provides that for a contract of employment shall be terminated upon expiry of the period for which it was made or by the death of the employee before the expiry of that period or by notice in accordance with section 11 of the Act or the provisions of the contract.

(iii) Termination of employment at will

An employee in an employment at will hold office at the pleasure of the employer. Therefore there are no special criteria for its termination; the employer can terminate the employment whenever he desires and it will not amount to wrongful termination.

Practically, a type of employment may have the ingredients of another type of employment. For instance, an employee under an employment with statutory favour may have a written contract with his or her employer while a relationship between a Master and Servant may be reduced to a simple contract of employment. In such circumstance, the employment of the employee must be terminated in accordance with all the provisions regulating the employment of the employee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Emmanuel Ekpenyong
Ugochi Igwe
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