With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance by September 2025 in Nigeria.

01 Overview of the Labor Law System

1.Legal System

The Nigerian legal system comprises of received English law (pre-1900), laws passed by the National Assembly of Nigeria, in addition to customary law and Islamic law which primarily regulate personal matters.

2.Resources and Agencies

• Constitution 

• Labour Act 

• Trade Unions Act

• Trade Disputes Act 

• Employees’ Compensation Act

• Factories Act

• Pension Reform Act 

• Industrial Training Fund (Amendment) Act

02 Employment Qualifications and Classification

1.Employment Age

According to the Labour Act, no child (i.e., a young person under the age of 12 years) shall be employed in any capacity except where the child is employed by a family member on light work of an agricultural, horticultural or domestic nature as approved by the Minister of Labour and Employment.

2.Qualifications for Employment

A foreign business may hire locally without a permanent establishment without breaching any laws so far as the foreign business does not ‘’carry on business’’ in Nigeria. Generally, the Companies and Allied Matters Act (CAMA), 2020 mandates any foreign company intending to conduct business in Nigeria to incorporate a separate entity under Nigerian law.

3.Classification of Employment

Under Nigerian law, there are two broad categories of employees:

• Workers

• Non-Workers

4.Foreign Workers

Applicable laws mandate that first consideration is given to local hires for available jobs. In order to employ foreigners to any job positions in Nigeria, the employer must justify the same to the Ministry of the Interior and may be required to prove that job advertisements for the position did not result in suitable candidates applying for relevant roles. 

03 Recruitment and Employment Contracts

1.Background Examination

Background checks on applicants are not prohibited under Nigerian law and must be done in compliance with the Data Protection Act 2023 (“NDPA”) and the NDPA General Application and Implementation Directive 2025 (“NDPA GAID”).

2.Contract Types

The main types are:

• Non-fixed term (open-ended) contracts

• Fixed-term contracts

• Part time contracts

• Casual contracts

• Apprenticeship contracts

3.Probationary Period

There are no maximum probationary periods set by law. In practice, it is common to have probationary periods of between three (3) to six (6) months.

04 Working Standards

1.Remuneration and Statutory Benefits

According to the Labour Act, wages of workers shall become due and payable at the end of each period for which the contract is expressed to subsist, whether daily, weekly or at such other period as may be agreed upon. However, where the period agreed upon is more than one month, the wages become due and payable at intervals not exceeding one month.

2.Social Security and Employment Taxes

In Nigeria, statutory employee benefits are regulated by a number of federal regulations, and these include the following:

• Contributory Pension Scheme

• State Health Insurance Scheme

• Social Insurance Trust Fund:

• Industrial Training Fund

3.Working Hours

In Nigeria, there are no statutory working hours, and work hours are as agreed by mutual agreement between the employer and the employee or by a collective bargaining. The usual work week is 40 hours, and the workday could either be from 8am to 5pm or 9am to 6pm with a 1-hour lunch break. Overtime pay would apply to excess hours of work.

4.Rest and Leave

The usual work week is from Monday to Friday, but depending on the sector, employees will work on weekends with time off as agreed. If an employee works during agreed rest days, overtime pay may apply. The Labour Act provides that every worker must have one continuous rest period of at least 24 consecutive hours in every seven days.

05 Occupational Health and Special Protection

1.Occupational Health and Security

In Nigeria, employers have a duty to protect the health and safety of workers in the workplace. Specific health and safety laws include the Labour Act , the Factories Act , the National Policy on Occupational Safety and Health (Revised 2020) and the Employee Compensation Act .

2.Special Protection

• Statutory maternity protection for female workers

• Statutory protection for children and young persons

• Statutory protections for persons with disabilities

• Statutory protections for persons with HIV/AIDS

06 Personal Information and Privacy

1.General Rules

In Nigeria, employee personal data is protected by the relevant data protection regulations including the Nigeria Data Protection Act (NDPA) and the NDPA GAID. Under the NDPA, employers are considered as data controllers or data processors and employees are considered data subjects.

2.Transnational Transfer

The NDPA prohibits the transnational transfer of personal data of Nigerian subjects unless the recipient country has personal data protections which are similar to the data protection principles stipulated in the NDPA.

07 Anti-Discrimination and Anti-Harassment

1.General Rules

The Nigerian Constitution protects all citizens and residents of Nigeria from discriminatory practices. The Constitution guarantees Nigerian citizens freedom from discrimination, and no one can be targeted due to their community, ethnic group, place of origin, sex, religion or political opinion.

2.Protective Characters

• Constitutional grounds: Discrimination on any ground is expressly prohibited.

• Disability: Discrimination on the ground of disability is expressly prohibited.

• HIV status: Discrimination against persons living with or affected by HIV is prohibited,

• International labour standards applied by the NICN: race, colour, sex, religion, political opinion, national extraction, and social origin under ILO Convention 111.

08 Internal Policies

1.Applicability

It is common practice in Nigeria to regulate employees and workplace interactions through internal policies. Where the HR policies are incorporated into the employment contract, Nigerian courts treat the same as binding and will interpret disputes by reference to the contract and the policies.

2.Validity

Parent-company internal policies can apply in Nigeria if they are expressly incorporated into Nigerian employment contracts, are made available to employees, and do not conflict with Nigerian law or public policy.

3.Whistleblowing

Whistleblowing is regulated through corporate, public, and sector-specific frameworks. The Nigerian Code of Corporate Governance 2018 requires companies to which its provisions apply to establish whistleblowing mechanisms for reporting illegal or unethical conduct.

09 Transactions

1.Employment Relationship

Where there is an equity or asset sale and the employer remains the same entity the employee's contracts, positions and remuneration continue on the same terms. Where the surviving entity after a M&A is different from the employer, such that the employer ceases to exist, there is no automatic transfer of employment contracts and new contracts may be issued.

2.Compensation

There are generally no automatic change-of-control payments mandated by statute. In some sectors i.e. in the oil and gas sector, the collective agreement may include compensation to employees after a divestment or M&A. 

10 Termination of Employment

1.Termination Grounds

In Nigeria, there is a difference between termination and dismissal. Either the employer or the employee, may on notice (or payment in lieu of notice) terminate the employment contract. Dismissals are always for cause and would typically involve a disciplinary process.

2.Termination Procedure

Notice periods are required based on applicable law and market practice. Notice periods depend on the HR policies and seniority of employee and would usually range from 1 month to 6 months. Shorter notice is common for probationary period, a payment in lieu of notice may be provided.

3.Termination Protection

In any case, before dismissal for misconduct, the employee is entitled to fair hearing, with the right to defend themselves. Nigerian courts expect the rules of natural justice to be followed and compliance with the procedures in the applicable staff handbook (if incorporated into the contract) or any collective bargaining agreement.

4.Severance and Compensation

The right to severance payment upon termination depends on the terms of the contract of employment or any HR policies or a collective agreement.

5.Wrongful Termination

The courts typically interpret the contractual terms as mutually agreed between the parties, regardless of who breached the terms. We note that the NICN tends to promote international best practices (whether or not the contract terms are different) and usually frown against unfair labour practices.

6.Mass termination and Layoffs

Under the Labour Act, where there is a mass dismissal of workers are usually regarded as a redundancy, and the employer must:

• inform the workers, trade union or workers’ representative (if any) of the reasons for and the extent of the anticipated mass dismissal;

• adopt the principle of “last in, first out”, subject to a consideration of the factors of relative merit, skill, ability and reliability; and

• use its best endeavours to negotiate contractual payments and entitlements.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

Senior managers’ contracts of employment may contain confidentiality clauses.

2.Non-Compete and Non-Solicitation

Non-compete and non-solicitation clauses are lawful in Nigeria if they protect a legitimate business interest and are reasonable in scope, geography and duration.

12 Work Representation and Trade Unions

1.Work Representation

Employee representation is through trade unions.

2.Trade Unions

The Trade Union Act primarily governs the activities of trade unions in Nigeria. The Act makes recognition of registered trade unions obligatory for an employer.

13 Dispute Resolution

1.Procedures & Enforcement

In Nigeria, usually, the first step in resolving labour disputes is a negotiation between the employer and the employee to reach a mutual agreement.

Alternatively, parties may bring actions in the National Industrial Court which has the jurisdiction to resolve labour and employment disputes. The types of claims which may be brought before the NICN, include claims for wrongful termination, breach of contract, discrimination, and violations of labour laws.

2.Waiver & Enforcement

Employers and employees may enter into mutual settlement agreements in which an employee waives their rights and claims and agree that they will have any recourse against the company arising from their employment relationship, other than in terms of the settlement agreement.

14 Others

1.Latest Development & Trends

Paternity leave – Private and public sector employees are recognising paternity leave.

Work from home – This has become increasingly common since the Covid-19 pandemic.

There are proposals to re-enact the Labour Act to align with international best practices.

2.Cultural and Religious Considerations

Cultural and religious differences in different regions of the country. The north is more conservative than the southern regions. Nigerians tend to respect culture, formality, hierarchy and titles and these should be noted.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Oghogho Makinde is a Partner at Aluko & Oyebode. With over 30 years of experience, Oghogho advises on banking and commercial transactions, labour and employment, oil and gas project finance, E & P restructurings, corporate strategy and company reorganisations, and all Nigerian statutory and regulatory compliance matters, environmental advisory and corporate governance amongst others. 

Oghenetega Abu is a Senior Associate at Aluko & Oyebode. She has over seven years’ experience. Her practice covers project structuring and financing, mergers and acquisitions, public private partnerships, employment and labour matters, and regulatory compliance.

Aaron Alasa is an Associate at Aluko & Oyebode with a practice spanning regulatory, transactional, and employment-related matters.

Translator

Zhou Hao, Master of Laws, Associate at Anli Partners. Areas of expertise: Labor Law, Dispute Resolution, ESG Compliance.