Understanding the Private Sector Termination Guidelines in Nigeria
Termination of private employment in Nigeria is governed by the terms of the employment contract and the guidelines of international labor standards. The Labor Act, Laws of the Federation of Nigeria (LFN) 2004, which implies certain conditions in the employment relationship, does not apply to employees performing administrative, executive, technical or professional functions. Termination of statutory employment such as those employed by Government Ministries, Departments and Agencies (MDAs) falls within the scope of the relevant civil service rules. In terms of termination of private employment at the initiative of the employer, the applicable principles are as follows:
1. Termination must be justified by a valid reason
Under Article 4 of the International Labor Organization (ILO) Termination of Employment Convention, 1982 (No. 158) (the “Convention”), the employment of a worker only for a “valid reason” related to the capacity of the worker; the conduct of the worker; or depending on the operational requirements of the employer. This removes the possibility for the employer to unilaterally terminate employment without reason. This principle has been applied by the NICN in a plethora of cases including – Bello Ibrahim v. Ecobank Plc (unpublished lawsuit no. NICN/AB/144/2018); Aloysius v Diamond Bank Plc. (2015) 58 NLLR (Pt 99) 92 at 132; and Duru v Skye Bank Plc (2015) 59 NLLR (Pt.207) 680.
Dismissal for capacity may take the form of a lack of skills or qualities necessary to perform tasks resulting in unsatisfactory performance, or a permanent inability to perform a job as a result of illness or wound. Reasons for misconduct may include improper performance of duties such as neglect of duty, violation of work rules, disobedience of lawful orders, etc. ; or inappropriate behavior such as disorderly conduct, violence, assault, disruption of peace and order in the workplace, etc. unrelated to the employee’s ability or conduct.
Under Article 5 of the agreement, the following grounds do not constitute valid grounds for dismissal: (a) membership of a trade union or participation in trade union activities; (b) apply for a position or act as a representative of the workers; c) lodge a complaint or seize the competent administrative authorities or participate in a procedure against an employer; (d) temporary absence from work due to illness or injury; (e) absence from work during maternity leave; (f) or race, color, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
2. Procedure prior to termination
Article 11 of the agreement provides that the employee is entitled to a reasonable period of notice or to compensation in lieu thereof, unless he commits serious misconduct of such a nature that it would be unreasonable to require of the employer that he continue his employment during the notice period. . The purpose of this obligation is to prevent an employee from being taken by surprise by immediate dismissal and to mitigate the harmful consequences. Under Article 7 of the agreement, an employee must be given the opportunity to defend themselves against allegations relating to their conduct or performance, unless the employer can reasonably be expected to offers this possibility. In addition, section 8 of the Termination of Employment Recommendation 1982 (No. 166) (the “Recommendation”) provides that employment shall not be terminated for unsatisfactory performance unless the employer has given the employee proper instructions and a written warning and the employee continues to perform his duties unsatisfactorily after a reasonable period of improvement has elapsed.
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Note that the employer could be deemed to have waived their right to terminate employment for misconduct if they did not do so within a reasonable time after becoming aware of the misconduct, see section 10 of the recommendation . Finally, under Article 10 of the Recommendation, an employee should have the right to be assisted by another person when defending himself against allegations concerning his conduct or performance which may lead to the termination of his use.
3. Severance pay and other income protection
An employee whose job has been terminated is entitled to his or her severance pay or other severance benefits. See Article 12 of the Convention.
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4. Work certificate
Under Article 17 of the Recommendation, an employee whose job has been made redundant should have the right to receive, on request, a certificate from the employer specifying only the dates of his engagement and of the termination of his employment and the type of work at which he was employed. However, at the request of the employee, an evaluation of his performance or conduct may be provided. In Kelvin Nwaigwe v Fidelity Bank Plc (unreported lawsuit no. NICN/LA/85/2014), the court held that there is an implied duty in employment contracts for employers to provide accurate and fair work references to their current or former employees. . While this decision is rooted in the principle of implied duty, it is nonetheless consistent with the applicable international labor standard.
5. Excluded categories of employees
The following categories of employees may be excluded from the application of the provisions of the agreement: (a) employees under an employment contract for a specific period or task; (b) employees on probation for a reasonable period; (c) and Casual workers. It should be noted that fixed-term contracts, when they are renewed on one or more occasions, are assimilated to open-ended employment contracts.
The National Industrial Court of Nigeria (NICN) is the court with exclusive jurisdiction to hear and decide all labor and employment matters. A few comments were made about the court’s judicial attitude of applying international labor standards in labor disputes against common law precepts. I am of the view that this power is constitutional, as provided in Section 254(c)(2) of the Third Amendment to the Constitution of 1999, and in the absence of a constitutional amendment, the expectation that the NICN’s recent judicial attitude to be quashed must be altered. Note that international labor standards are guidelines only and their exact application and ramifications will invariably be determined on a case-by-case basis. The issue of the apparent inconsistency of NICN’s application of these standards becomes less scathing, when viewed through the above lens. In this order of ideas, it is relevant that the corporate lawyer and human resources know not only the clauses of employment contracts but also the principles contained in the applicable international labor standards.
Ozi’ Nwadike Esq., Senior Attorney, Pristine and Sage Attorneys, Lagos