Nigerian Labour Law

The administration of labour is regulated by Labour Decree No. 21 of 1974 and its subsequent amendments.


General Requirements

Not later than three months after the beginning of a worker’s period of employment, the employer shall give to the worker a written statement/contract specifying:

  • The name of the employer or group of employer or group of employers and, where appropriate, of the undertaking by which the worker is employed.
  •  The name and address of the worker and the place and date of his engagement.
  • The nature of the employment.
  • If the contract is for a fixed term, the date when the contract expires.
  • The appropriate period of notice to be given by the party wishing to terminate the contract.
  • The rates of wages and method of calculation thereof and the manner and periodicity of payment of wages.
  • Any terms and conditions relating to:
    •  hours of work, or
    •  holidays and holiday pay, or
    •  incapacity for work due to sickness or injury, including anyprovisions for sick pay.
  •  Any special conditions of the contract, if, after the date to which the the statement relates, there is a change in the terms to be included or referred to in the statement, the employer:
  • Shall, not more than one month after the change, inform the worker of the nature of the change by a written statement;
  • If it does not leave a copy of the statement with the workers, shall preserve the statement and ensure that the worker has reasonable opportunities of reading it in the course of his employment, or that it is made reasonably accessible to the worker in some other way.


Termination of Employment

A contract of employment may be terminated by either the employer or employee on the expiration of notice given by one party to the other party of his intention to do so.


A one day notice may be given where the contract has been in existence for a period of three months or less. For a contract that has continued for between three months and five years or more, the notice which shall be in writing shall be for a period ranging from one week to one month depending on the duration of the contract.


Employee Remuneration

Wages and salaries are normally paid weekly, bi-monthly or monthly. Fringe benefits usually paid to workers including housing allowance, travelling allowance annual holidays with pay, leave bonus, pension and gratuity contributions, meal subsidies, provision of housing, medical and transportation.

Employers are not permitted to make deductions from employees’ remuneration other than those prescribed by law and collective bargaining agreements such as taxes under the Pay As You Earn (PAYE) system, contributions to trade union and contributions to provident and pension funds. Other deductions that could be made include overpayment of wages and advances given. The total amount of deductions that may be made in any month shall not be greater than one third of the employee’s wages for the month. Overtime is payable at rates stipulated by the employer.


Restrictions on Employment of Foreigners

Visa and Work Permits – A non-Nigerian requires the consent of the Ministry of Internal Affairs to do business in Nigeria. The approval is conveyed in a letter styled business permit.


Expatriate Quota

On application to the Federal Ministry of Internal Affairs, approval can be given to a company proposing to employ expatriates for senior management, technical or specialist posts. Approval will not normally be given to employ expatriates to do jobs for which there are suitably qualified Nigerians, it is therefore the responsibility of an applicant to prove that the employment of an expatriate is unavoidable.


The expatriate quota approval for a new company with non-Nigerian participation is usually stated in the business permit. An increase in expatriate quota and the number of expatriates approved for a wholly indigenous company is usually conveyed in a letter from the Federal Ministry of Internal Affairs.


An expatriate quota is granted for specific jobs and, generally, is for a specific number of years except for one or two key personnel the quota for whom may be permanent until reviewed. Capitalization of 5 million attracts an automatic quota of two while a capitalization of 10 million or more attracts four.


Residence Permits

When an expatriate quota is granted, application is made through the appropriate Nigerian Embassy or High Commission abroad for resident permits (entry permits). This is in addition to visa requirements where applicable. Generally, evidence of academic, professional or technical qualification and/or experience is required to be produced. A person (usually the prospective employer) resident in Nigeria must give a written undertaking to bear all immigration responsibilities in respect of person(s) covered by the application.



Wives and children of expatriates with entry permits are also granted entry permits freely on application, but they require specific permission to work in Nigeria except on a voluntary non-remuneration basis for charity.



Generally, a foreigner requires a visa to enter Nigeria. The only exception relates to citizens of member states of the Economic Community of West African States (ECOWAS) who required only entry permits. The former exemption granted to Commonwealth citizens from the requirement to obtain information from the nearest Nigerian Embassy or High Commission seeking clarification concerning their status.



An expatriate on leave is counted as part of the quota.



Periodic returns in respect of expatriate quota in a specified form have to be submitted to the Federal Ministry of Internal Affairs. Failure to do so may create embarrassment.


Final Departure

When an expatriate employee leaves Nigeria finally, the Department of Immigration must be informed.


Visitors’ Permits

It is possible to obtain visitors’ permits on application to the Nigerian High Commission or Embassy abroad. Permits are usually granted for 28 days but the visitor must have a return ticket on arrival in Nigeria. Persons with visitors’ permits must not take up employment in Nigeria.


Temporary Quota

The Immigration Department may, on application, grant a temporary expatriate quota for a short period. A temporary quota is usually for specialists required for, say, three months to install or service a special type of machine or equipment. Non residents negotiating one-time contract work in Nigeria should discuss the immigration implications with the prospective employer, particularly where the non-resident intends to apply for exemption from incorporating a local company under Sections 56-60 of the Companies and Allied Matters Decree, 1990. In such a situation, the Nigerian employer may have to apply directly to the Federal Ministry of Internal Affairs for a special quota for the purpose of the job.


Employees’ Associations and Labour Unions

Provision is made in the labour laws for the formation of employers’ associations and trade/labour unions on the basis of similarity of business interest or occupations. At present, there are 42 Trade Labour unions memberships and 19 Senior Staff Associations’ in the country.


Social Security

Both employer and employees contribute to approved provident funds. In some cases, employees do not make any contribution to pension funds. The eligibility of a worker to benefit from pensions, retirement or gratuity schemes varies from one employment to another. Invariably, the terms are contained in contracts of employment or collective bargaining agreements with registered trade unions. Social security schemes are approved by the Joint Tax Board and subject to renewal annually.


Other Benefits

Other benefits include maternity leave and pay, medical and year-end bonuses.


Workmen’s Compensation

Employers are obliged to provide accident insurance for their employees