The employment contract in Nigeria is a crucial tool in employment and labour relations, serving to delineate the rights and responsibilities of the parties involved. It primarily underscores the employer’s authority to direct and oversee the employee’s work.
According to section 91 of the Labour Act 2004, a contract of employment is described as “an agreement, whether verbal or written, direct or implied, in which one party commits to employing another as a worker, and the other party agrees to work for the employer”.
In Nigeria, employment laws mandate that a contract of employment be mutually agreed upon and signed by both parties. Once signed, the contract becomes legally binding. If there’s a breach of the contract, the affected party can seek legal recourse at the National Industrial Court within their jurisdiction.
The principal legislation governing employment and labour relations in Nigeria is the Labour Act Cap L1, Laws of the Federation of Nigeria 2004. Other relevant laws include:
– The Constitution of the Federal Republic of Nigeria
– The Trade Unions Act 2004
– The Trade Dispute Act 2004
– The National Industrial Court Act 2006
Key Elements of a Contract of Employment
The specifics of a contract of employment hinge on the rights and duties of both the employer and the employee. As stipulated by Section 7 of the Act, an employer is obligated to provide a written contract to the employee within three months of employment commencement. The contract’s provisions govern the employer-employee relationship.
According to the Act, a written employment contract should include:
– Employer’s name or group of employers
– Employee’s name, address, date, and place of engagement
– Nature of the employment
– Expiry date of a fixed-term contract, if applicable
– Notice period for contract termination
– Wages/salary rate, calculation method, and payment frequency
– Terms and conditions regarding work hours, holidays, sick days, insurance, etc.
– Any special contract conditions
Key Provisions in Drafting an Employment Contract
1.Position: The contract should clearly define the job role, responsibilities, and essential duties to avoid ambiguity and set clear expectations.
2. Contract Duration: It’s vital to safeguard the interests of both parties by outlining conditions for extending, reducing, or terminating the contract.
3. Compensation and Payment Calculation: The contract should explicitly state the wages, payment frequency, and, if applicable, commission rates.
4. Performance Expectations: Standard contracts typically include performance review criteria and employer’s production and revenue goals.
5. Benefits and Severance: Employee benefits such as health insurance, profit-sharing, vacations, and retirement plans should be clearly stated.
6. Termination of Employment: The termination process should align with Section 11 of the Labour Act, specifying the intent to terminate and required notice periods. Failure to adhere to these terms could result in legal penalties.
As per the law, the notice periods for termination are:
– One day for contracts lasting up to three months
– One week for contracts over three months but under two years
– Two weeks for contracts over two years but under five years
– One month for contracts lasting five years or more
A contract of employment establishes the relationship between an employer and an employee. For it to be legally binding, both parties must sign and agree to the terms.
The significance of a well-drafted employment contract cannot be overstated. It clarifies expectations and safeguards both parties in the event of disputes or termination.
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