In Nigeria, employment law recognizes various types of employment agreements, each with distinct characteristics and legal implications. Understanding these distinctions is crucial for both employers and employees.

Statutory Employment

The Nigerian Labour Act (NLA) forms the bedrock of employment law in Nigeria. It outlines minimum standards for various aspects of employment, including working hours, wages, leave entitlements, and termination procedures. This category encompasses employments governed by specific labor laws or regulations applicable to certain industries or sectors. These regulations often provide additional protections or benefits beyond the NLA's baseline standards.

Contractual Employment

Contractual employment agreements prevail when a written contract between employer and employee governs the employment relationship. These contracts can be tailored to address specific needs and can deviate from the NLA's provisions, provided such deviations are favorable to the employee.

Here are two common types of contractual employment agreements:

• Fixed-Term Employment Contract: This agreement specifies a predetermined duration for the employment, typically for a specific project or period. Renewals are possible upon mutual consent.

• Full-Time Permanent Employment Contract: This agreement offers indefinite employment with no set end date. Permanent employees are entitled to benefits like health insurance, pensions, and paid vacations, in addition to their wages.

Employment at Will

Employment at will, also known as "service at will" or "employment at the pleasure of the employer," exists in the absence of a written contract or specific statutory provisions governing the relationship. In such cases, either party can terminate the employment with or without notice, provided there's no discrimination or breach of good faith.

In Nigeria, a well-drafted employment agreement safeguards both employers and employees by clearly defining expectations and responsibilities. Here are some essential clauses to consider:

Parties to the Agreement

This section should accurately identify the employer and employee, including their full names and titles for precise reference.

Commencement and Term

• Start Date: The official start date of employment should be specified.
• Contract Duration: The employment term should be clearly defined, whether it's fixed-term (with or without renewal options) or full-time permanent.

Job Description and Duties

• Job Title: The employee's designated job title should be outlined.
• Responsibilities: The employee's primary duties and responsibilities should be clearly outlined.

Compensation and Benefits

• Remuneration: The employee's base salary should be specified, including payment frequency and method.
• Benefits: Any benefits offered, such as health insurance, pension plans, or paid leave entitlements, should be detailed in accordance with the Nigerian Labour Act (NLA) or industry standards.

Working Hours and Leave

• Working Hours: The standard working hours should be defined, including overtime arrangements and their compensation (following NLA guidelines).
• Leave Entitlements: The employee's leave entitlements, including annual leave, sick leave, and maternity/paternity leave, should be specified as mandated by the NLA.

Confidentiality and Intellectual Property

• Confidentiality: A clause prohibiting the employee from disclosing confidential company information during and after employment should be included.
• Intellectual Property: Ownership rights of any intellectual property created by the employee during their employment should be addressed.

Termination

• Termination Clause: The grounds for termination by either party, including notice periods as stipulated in the NLA, should be outlined.
• Severance Pay: Any severance pay entitlements in case of termination should be specified.

Governing Law and Dispute Resolution

• Governing Law: The agreement should indicate that the Nigerian Labour Act and relevant Nigerian laws govern its interpretation and enforcement.
• Dispute Resolution: A mechanism for resolving any disputes arising from the agreement, such as through mediation or arbitration, should be established.

This is not an exhaustive list, and additional clauses may be necessary depending on the specific employment situation. Consulting with a legal professional is recommended to ensure your employment agreement complies with Nigerian labor laws and adequately addresses your specific needs.

The probationary period is a common feature in Nigerian employment agreements, offering both employers and employees a trial phase to assess suitability.

Legal Framework

Nigerian law doesn't explicitly regulate probationary periods. However, the Nigerian Labour Act (NLA) requires employers to provide written particulars of employment within three months of commencement. This document can include details of the probationary period.

Common Practices

The typical probationary period in Nigeria ranges from three to six months, though it can vary depending on the position and industry. The probationary period allows employers to assess an employee's skills, work ethic, and suitability for the role. It also gives employees a chance to adjust to the work environment and determine if the position aligns with their expectations.

Key Considerations

The terms of the probationary period, including its duration, performance evaluation criteria, and potential outcomes, should be clearly outlined in the employment contract. Employers must ensure probationary employees are given a fair and reasonable opportunity to demonstrate their abilities. This includes providing adequate training, support, and clear performance feedback. The probationary period cannot be used as a pretext for unfair dismissal based on discriminatory grounds like ethnicity, religion, or gender.

Termination During Probation

Employers have more flexibility to terminate an employee's employment during the probation period, often with minimal notice requirements compared to confirmed employees. Even during probation, employees still have basic rights under the NLA, such as protection from wrongful dismissal and entitlement to minimum wage.

Employment agreements in Nigeria often include clauses that safeguard an employer's confidential information and restrict an employee's ability to compete post-employment. These clauses are known as confidentiality and non-compete clauses.

Confidentiality Clauses

Confidentiality clauses are crucial in protecting an employer's trade secrets, customer lists, and other sensitive data. These clauses generally prohibit employees from revealing such information to unauthorized third parties during and after their employment.

The enforceability of confidentiality clauses depends on their reasonableness. They must be drafted with clarity and should explicitly define what is considered confidential information. Furthermore, the duration of the restriction on disclosure must be reasonable.

Non-Compete Clauses

Non-compete clauses, also referred to as restrictive covenants, are designed to prevent employees from accepting positions with competitors or starting their own competing businesses for a specified period after leaving the company.

The legality of non-compete clauses in Nigeria is a complex issue. Nigerian courts acknowledge the necessity for employers to protect their legitimate business interests. However, they also need to ensure these clauses do not unjustly restrict an employee's ability to earn a living.

The Federal Competition and Consumer Protection Act (FCCPA) of 2019 is significant in this regard. Section 59 of the FCCPA prohibits agreements that impede competition within the Nigerian market. However, Section 68(e) provides an exception, permitting service contracts (which can include employment agreements) to include provisions limiting work activities for up to two years following termination.

Key Considerations for Enforceability of Non-Compete Clauses

• Reasonableness: Courts will evaluate factors such as the duration of the restriction, the geographic scope, and the employee's level and position within the company. A broad non-compete clause that restricts an employee from working in their entire field nationwide for several years is unlikely to be upheld.
• Protection of Legitimate Business Interests: The employer must demonstrate a legitimate business interest that justifies the non-compete clause. This could include protection of trade secrets, customer relationships, or confidential information.