Hiring guide in Nigeria

What should I know about hiring in Nigeria?

Employing new staff from Nigeria might help your business grow, but there are a few things to think about before you start hiring talent from this African country.

When employing an employee who falls within the laws of Nigeria’s Labour Act, which includes individuals performing physical labour as well as those with clerical tasks, it is legally needed to prepare a formal employment contract.

Identification of both parties, starting date, place of work, type of position and definition of the role, salary and extra pay, working hours and overtime regulatory requirements, the total number of holidays, and notice periods for employment termination must all be included in the contract.

Why is Nigeria a good choice for finding remote employees?

Nigeria is an appealing alternative for international companies seeking fresh workers to join their remote operations. Furthermore, Nigeria is one of Africa’s fastest developing countries, making it an ideal starting point for exploring potential value in the African market.

Looking at how many start-up firms in Nigeria are adopting remote work as the new normal for reasons such as reduced daily company activities, reduced need for specific work facilities, and so on, remote work is the future of work in Nigeria, especially with the use of technology.

According to the information we have acquired, businesses are more interested in employees who can work remotely. We have also noticed a rise in the number of remote job postings advertised after the COVID-19 outbreak.

How can Native Teams help you hire in Nigeria?

Native Teams can help you hire employees from Nigeria through our optimised Employer of Record solutions. With legal entities in 70+ countries, as well as teams of tax and legal professionals, you can get the necessary assistance and support to employ team members, run a global payroll, and stay compliant with all the local tax regulations of Nigeria.

Hire your first Nigerian employee with Native Teams.

Legal requirements for hiring in Nigeria

Below, you can learn everything about the legal requirements for hiring individuals from Nigeria.

Core employment practices

Nigerian labour law is based on a comprehensive framework integrating constitutional provisions, statutory enactments, received English law, and judicial precedents. These sources collectively define and regulate the rights and responsibilities of both employers and employees, including various principles such as freedom of contracting, priority of employment rights, employment contracts, discrimination and equal treatment, collective bargaining, and others.

Legal framework

Types of employment contracts

Labour laws in Nigeria recognise two primary types of employment contracts: indefinite-term and fixed-term employment contracts.

Indefinite-term contracts are contracts that don’t specify an end date, and as such, they’re commonly used for permanent roles to offer long-term security and job stability. Fixed-term contracts are limited to a particular period. As such, they have a clearly outlined start and end date and are commonly used for roles or projects with a defined duration or temporary assignments.

Content of an employment contract

For an employment contract to be legally binding in Nigeria, both parties must reach a mutual agreement on its terms. The employer is obligated to provide the employee with a written statement regarding the terms of employment after three months of service. While the official languages in the country include English, Hausa, Yoruba, and Igbo, English is predominantly used in legislative processes, and therefore, contracts are usually drafted in English.

Download a free employment contract for Nigeria through Native Teams.

Oral, written or electronic employment contracts

Even though the Labour Act in Nigeria acknowledges the flexibility of employment contracts being verbal or written, employers are obligated to provide a written contract no later than three months of employee service. The written statement must outline all the important work terms and conditions, including the working hours, salary, leave entitlements, and others.

Working hours

According to the National Minimum Wage Act of Nigeria, standard full-time working hours can not exceed 40 hours per week. However, both parties of the employment contract have the freedom to set working hours per the Labour Act of the country. 

Working hours can also be determined through a mutual agreement or collective bargaining within the enterprise or on an industry level.

Night work and breaks

Night work in Nigeria is split into two different sections, each offering different definitions.

Firstly, under the night work of women, the term “night” includes a duration of at least seven, or where applicable, ten consecutive hours of work from 10 pm to 5 am.

On the other hand, night work for young individuals is defined as a period lasting twelve consecutive hours within specific time frames, depending on the age brackets. For individuals under 16 years, it extends from 10 pm to 6 am, while for those between 16 and 18, night work can last for seven consecutive hours from 10 pm to 7 am.

When it comes to breaks, the Nigerian Labour Code mandates that each worker whose daily work exceeds six hours is entitled to one or more rest intervals totalling at least one hour. These intervals should be spaced appropriately and considerate of the work and the conditions.

Annual leave

Employees in Nigeria are entitled to annual leave of at least six working days per calendar year, extending to at least 12 working days for young workers under 16. To qualify for annual leave, an employee must have completed at least 12 months of employment. 

While these are the annual leave provisions per the Labour Act, parties retain the freedom to mutually agree on extending the duration of the annual leave beyond the stipulated minimums.

Public holidays

In Nigeria, there are six public, non-working holidays: New Year’s Day, Good Friday, Easter Monday, Worker’s Day, National Day, and Christmas Day.

Salary

The right to minimum wage is one of the most essential employee rights per the Nigerian Labour Code. Hence, this right must be explicitly included in each written employment contract.

The employment contract must detail the rates of wages, the method of calculation, and the periodicity of payment. Wages should be paid at the end of each period specified in the contract, which can be daily, weekly, or another agreed-upon timeframe. However, the payment period must not exceed one month to ensure that employees receive regular and timely compensation for their work.

To calculate the salary and taxes in Nigeria, click here.

Sick leave

Employees in Nigeria are entitled to receive wages for up to 12 working days per calendar year in case of illness. However, there are certain conditions that must be met for this entitlement to apply.

As a first condition, the employment must remain in force during the absence, and the worker must be ready and willing to fulfil their contractual obligations, except for the incapacity caused by the illness. If the sick leave is requested by the employer, the employee must consent to be examined by a qualified medical practitioner chosen by the employer.

Parental leave

The Nigerian Labour Act currently does not specifically define or provide for parental leave. However, it does recognise the right of female workers to maternity leave following childbirth, which allows them to recover and care for their newborn.

Maternity and paternity leave

Employed women in Nigeria are entitled to maternity leave after presenting a medical certificate from a registered medical practitioner indicating that her confinement is expected within six weeks. Women are also prohibited from working during the six weeks following their confinement. 

If a woman has been continuously employed by her current employer for six months or more prior to her maternity leave, she is entitled to receive at least 50% of her standard wage. Also, a woman who is nursing her child is entitled to take half an hour twice a day during working hours for nursing purposes. 

Although Nigeria does not have statutory paternity leave provisions, the Federal Executive Council recognised the need in 2021 and granted male employees in the public sector 14 days for this purpose.

Methods of employment termination

Both employers and employees in Nigeria have the right to terminate employment contracts at any time without providing a reason as long as the appropriate notice period is observed.

However, the Nigerian Labour Act specifies a few lawful grounds for termination, including the death of the worker/employer, completion of a fixed-term contract, and a mutual agreement. 

The country also offers the possibility of transferring the employment contract from one employer to another. The transfer requires the employee’s consent and must be endorsed by an authorised labour officer.

Ordinary dismissal by the employer

Employers and employees in Nigeria have the right to terminate employment contracts without providing a reason for termination. However, the employee is obligated to fulfil the notice period as prescribed by law or as outlined in the employment contract.

Additionally, the Labour Code permits employers to terminate employment contracts without adhering to the notice period, provided that the employer compensates the employee with payment in lieu of notice.

Notice period and challenging the dismissal

When the employer decides to terminate the employment contract, they must provide notice in accordance with the employee’s length of service. If the employer wants to terminate the employment immediately, they must compensate the employee with a payment equivalent to the salary for the notice period. 

Employees who want to terminate the employment contract must also give notice based on their length of service. If they can’t serve the notice period, they may forfeit an equivalent amount from their final salary. 

Wrongful termination of employment in Nigeria can occur when either the employer or the employee terminates the contract in a manner that violates the terms specified in the agreement. If an employee believes they have been wrongfully terminated, they have the right to challenge their dismissal.

Rights and obligations of unemployed individuals

In Nigeria, currently, there is no statutory provision for unemployment benefits or insurance for unemployed individuals. Therefore, individuals who are unemployed don’t have a legal entitlement to receive any benefits from the government. 

However, the Senate of the country recently approved a bill which proposed the establishment of a National Leadership and Unemployment Benefit Scheme, with the goal of addressing unemployment among Nigerian graduates by offering part-time jobs for gaining experience and earning stipends.

Severance pay

According to the Nigerian labour law, employers are not obligated to provide severance pay to terminated employees. However, severance pay may be outlined in individual employment contracts or collective agreements.

Probationary period

The concept of probationary period is neither defined nor recognised per the Nigerian labour law. Therefore, the maximum length of the probationary period is not specified by law. 

However, employers have the discretion to include a probationary period in the employment contract, which, upon the acceptance of the employee, becomes binding on both parties.

Prohibition of competition

Post-employment non-compete clauses in Nigeria are typically constrained to a maximum duration of two years following the termination of employment. They are typically structured in two phases, with restrictions applied during and after employment.

While employed, employees are often restricted from engaging in business activities that directly compete with their employer without prior consent. After termination, employees may be prohibited from working for competitors or pursuing competitive ventures for a specified duration. 

The enforceability of non-compete clauses is based on their reasonableness and assessed against factors like business nature, geographical reach, and duration. Breaching these agreements may result in damages borne by the employee. These damages can vary, including compensatory, punitive, or liquidated forms, depending on the harm endured by the employers and the evidence presented in court.

Remote working policy

Currently, there are no specific laws addressing home offices, remote work, and responsibilities in virtual work setups. However, the incorporation of international labour standards and best practices in Nigerian labour law means that the standards established by organisations (such as the International Labour Organisations) are still relevant and applicable.

Responsibilities within a remote work arrangement

Employers in Nigeria must adhere to the applicable regulations regarding remote work, ensuring the safety of virtual workplaces and providing the necessary tools and equipment for effective remote work. The specific tools may vary depending on the nature of the job and tasks assigned to the employee, including laptops, internet subscriptions, workstations, software licences, hardware, and others. 

Additionally, employers should ensure the maintenance of these tools and reimburse employees for utility expenses incurred during employment.

Health and safety at home

Ensuring health and safety in home workspaces in Nigeria requires employers to adapt traditional workplace safety measures to home environments. This requires careful consideration of remote work settings, where employers can operate from various locations, such as homes, offices, co-working spaces, etc. 

To ensure safety, employers should take steps such as verifying the safety of employees’ virtual workstations, establishing mechanisms for reporting work-related injuries, and providing employees with relevant safety information and training.

Intellectual property rights

Under the Patents and Designs Act (PDA) in Nigeria, the employer is legally recognised as the inventor of any invention or design created by an employee or an independent contractor. This applies even if the employment terms don’t explicitly require the employee to engage in inventive activities. 

Therefore, it’s crucial for employment contracts and independent contractor agreements to clearly specify who owns the copyrights for works created during the relationship to avoid legal issues.

Employee data privacy

Employers in Nigeria are mandated by the NDPA to implement measures that ensure the security and confidentiality of the personal data they possess. However, under NDPA, employees have the right to inquire about stored or processed personal data, as well as to withdraw consent to data processing.

What are the advantages of hiring employees from Nigeria vs other countries?

Hiring team members from Nigeria offers a plethora of advantages compared to some other countries. 

First of all, Nigeria boasts a large, young, and educated workforce with a high proficiency in English, which makes communication easier and smoother when collaborating with international businesses. 

In addition, the country’s growing tech and professional sectors provide a pool of skilled talent in areas such as IT, finance, engineering, and customer service, with the cost of labour relatively lower than in many Western countries. 

Finally, Nigerian professionals are known for their entrepreneurial spirit, resourcefulness, and ability to thrive in challenging environments. This innovative mindset is important for driving businesses forward and fostering a culture of problem-solving and creativity.

Why use Native Teams for hiring in Nigeria?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.