JusticeSure
    Labour Law
    Nigerian Law
    Updated 2025

    Nigerian Labour Act Guide (2025): Employment Contracts, Leave & Termination

    A plain-English guide to Nigerian employment law for business owners and HR managers — covering employment contracts, the ₦70,000 minimum wage, leave entitlements, lawful termination, and employee rights under the Labour Act and related statutes.

    What this guide covers

    • ✓ Employment contract requirements under the Labour Act
    • ✓ Current minimum wage — ₦70,000/month (2024 amendment)
    • ✓ Annual leave (6 days minimum), maternity leave (12 weeks), sick leave
    • ✓ Legal requirements for termination and dismissal
    • ✓ What constitutes wrongful dismissal and how to protect yourself
    • ✓ Employee rights: pension, NSITF, union membership, discrimination protection

    Key Nigerian Labour Law Facts for Employers

    💰
    National Minimum Wage (2024)
    ₦70,000 per month
    🏖️
    Minimum Annual Leave
    6 working days per year (after 12 months)
    👶
    Maternity Leave
    12 weeks — at least 50% of wages
    📄
    Written Contract Deadline
    Within 3 months of employment start
    📅
    Notice Period — Monthly Staff
    Minimum 1 month written notice
    ⚖️
    Employment Dispute Forum
    National Industrial Court of Nigeria (NICN)

    Notice Periods Under the Nigerian Labour Act

    Employee CategoryMinimum Notice (or Pay in Lieu)
    Daily-paid workers1 day
    Weekly-paid workers1 week
    Monthly-paid workers (< 2 years service)1 month
    Monthly-paid workers (2+ years service)1 month (+ consider severance by contract)
    Dismissal for gross misconductNone (summary dismissal — but must follow due process)

    Employment contracts can — and should — specify longer notice periods. Statutory minimums are floors, not ceilings.

    Frequently Asked Questions

    Common Nigerian employment law questions from business owners and HR managers

    The Nigerian Labour Act does not specify a universal maximum working hours limit in the way some countries do. However, it requires that workers not be required to work on Sundays or public holidays without special arrangements, and overtime must be compensated at an agreed rate (typically 1.5x the normal rate for weekday overtime, 2x for Sunday/holiday work). The Labour Act's provisions on hours apply mainly to factory workers and similar categories. Employers should specify working hours clearly in employment contracts. For industrial establishments, the Factories Act (Cap F1 LFN 2004) limits factory workers to 8 hours per day and 48 hours per week, with rest periods.

    Beyond the Labour Act, Nigerian employees have rights under several laws: freedom of association and the right to join a trade union (Trade Unions Act); protection from discrimination based on gender, tribe, religion, or political opinion (Constitution S.42); mandatory Contributory Pension Scheme participation (Pension Reform Act); NSITF workplace accident compensation (Employee's Compensation Act 2010); safe working conditions (Factories Act); protection from sexual harassment in the workplace (courts have applied common law and constitutional grounds). The Employee's Compensation Act 2010 is particularly important — it mandates no-fault workplace injury and disease compensation funded by employer NSITF contributions, removing the need for employees to sue for workplace accidents.

    Best Practices: Lawful Employment and Dismissal

    1

    Issue written employment contracts before the employee starts

    A signed contract protects both sides. Include: start date, job title, salary, notice period, leave entitlements, grounds for summary dismissal, confidentiality, and non-competition clauses where relevant.

    2

    Document the probation period and review outcome

    Most contracts specify a 3–6 month probation period. Conduct a formal review before the end of probation, document the outcome in writing, and either confirm employment or terminate before probation ends (simpler than post-probation termination).

    3

    Maintain a personnel file for every employee

    Keep: the signed employment contract, payslips, leave records, performance reviews, disciplinary letters, and any written warnings. These are essential if an employment dispute reaches the NICN.

    4

    Use a query-response-hearing process for misconduct

    Before any disciplinary action: (1) Issue a written query stating the allegation, (2) Give the employee a reasonable time to respond in writing, (3) Hold a formal hearing where the employee can state their case, (4) Issue a written decision. Courts have overturned dismissals where this process was not followed.

    5

    Give proper notice or pay wages in lieu of notice

    Whether you are terminating for poor performance or restructuring, always give the contractual or statutory notice period (whichever is longer), or pay the equivalent salary in lieu. Document this in a formal termination letter.

    6

    Settle outstanding entitlements on termination

    Pay all accrued salary, outstanding leave pay, bonuses due, and any severance agreed in the contract. Issue a letter confirming full and final settlement. Unpaid entitlements can be pursued at the NICN — courts regularly award arrears plus legal costs.

    Manage HR and stay Labour Act compliant

    Kontrol by JusticeSure handles Nigerian payroll (PAYE, pension, NHF), leave tracking, HR records, and employment contracts — built for compliance with the Nigerian Labour Act and CAMA 2020.

    Related guides: Running Payroll in Nigeria · PAYE for Employers · CAC Annual Returns · Debt Collection in Nigeria
    Reviewed by Nigerian employment lawyers

    Ready to get started?

    Sign up free

    What is the Nigerian Labour Act and who does it cover?

    The Labour Act Cap L1 LFN 2004 is the primary Nigerian law governing the relationship between employers and employees in the private sector. It covers workers defined as people who have entered into or work under a contract of employment — including oral contracts. The Act governs employment contracts, wages, working hours, leave entitlements, termination and dismissal, and the rights of young persons and women in the workplace. It applies to most private sector workers in Nigeria. Senior employees (managers and executives) are often governed by their specific employment contracts as well, which can provide rights beyond the statutory minimum.

    Must Nigerian employers provide written employment contracts?

    Under the Nigerian Labour Act, every employer must provide every worker (except domestic servants) with a written statement of the terms of their employment within 3 months of employment. This statement must include: the name and address of the employer, the worker's name and address and details, the nature of the employment, the date employment commenced, the rate of wages and method of payment, hours of work, holiday entitlements, any sick leave provisions, notice periods, and any other agreed terms. While verbal contracts are technically valid, they are extremely difficult to enforce. A proper signed employment contract is strongly recommended for all staff — senior and junior alike.

    What is the current minimum wage in Nigeria?

    The National Minimum Wage Act 2019 (as amended 2024) sets the national minimum wage at ₦70,000 per month for workers in the private and public sector. This increase (from the previous ₦30,000) was gazetted in July 2024. Some states may set higher minimum wages — Lagos, Rivers, and other commercial states have periodically set state minimums above the national floor. Employers paying below the national minimum wage commit a criminal offence and can face prosecution, fines, and a direction to pay arrears. The minimum wage applies to full-time employees — part-time arrangements should pro-rate accordingly.

    What leave are Nigerian employees entitled to under the Labour Act?

    Under the Nigerian Labour Act, employees are entitled to: Annual Leave — at least 6 working days per year for employees who have worked for at least 12 months (some industries and senior employees receive more, typically 15–21 days); Sick Leave — Nigerian law does not prescribe a specific number of paid sick days, but the contract of employment or company policy governs this; Maternity Leave — female employees are entitled to 12 weeks of maternity leave (before and after delivery), with at least 50% of wages paid during leave; Paternity Leave — not prescribed by the Labour Act but some states (e.g., Lagos) and many employers provide 2–4 weeks. Public holidays declared by the Federal Government are additional to annual leave.

    How can an employer legally terminate an employee in Nigeria?

    The Nigerian Labour Act allows termination of employment in two primary ways: (1) Notice termination — by giving the minimum statutory notice (1 day for daily workers, 1 week for weekly workers, 2 weeks for monthly workers paid monthly, 1 month for longer-term employees) or paying wages in lieu of notice. (2) Immediate termination for gross misconduct — without notice if the employee has committed a fundamental breach such as theft, dishonesty, fighting, or wilful damage to property. Always document misconduct with a written query, the employee's response, and a formal disciplinary hearing outcome. Wrongful termination (dismissing without cause or due process) can result in damages equivalent to the unserved notice period at minimum.

    What constitutes wrongful or unfair dismissal under Nigerian law?

    Nigerian law (Labour Act + case law) recognises wrongful dismissal as dismissal without the contractual or statutory notice period, or dismissal without pay in lieu of notice. Unfair dismissal can also arise where the employer dismisses an employee without following fair procedure — without a written query, without an opportunity to respond, and without a proper disciplinary hearing (particularly for serious misconduct). Courts have awarded damages for breach of contract, lost earnings during the notice period, and sometimes general damages. Employees who believe they have been wrongfully dismissed can file at the National Industrial Court of Nigeria (NICN) — a specialised court with jurisdiction over employment disputes.

    What are the legal limits on working hours in Nigeria?

    The Nigerian Labour Act does not specify a universal maximum working hours limit in the way some countries do. However, it requires that workers not be required to work on Sundays or public holidays without special arrangements, and overtime must be compensated at an agreed rate (typically 1.5x the normal rate for weekday overtime, 2x for Sunday/holiday work). The Labour Act's provisions on hours apply mainly to factory workers and similar categories. Employers should specify working hours clearly in employment contracts. For industrial establishments, the Factories Act (Cap F1 LFN 2004) limits factory workers to 8 hours per day and 48 hours per week, with rest periods.

    What other key rights do Nigerian employees have under labour law?

    Beyond the Labour Act, Nigerian employees have rights under several laws: freedom of association and the right to join a trade union (Trade Unions Act); protection from discrimination based on gender, tribe, religion, or political opinion (Constitution S.42); mandatory Contributory Pension Scheme participation (Pension Reform Act); NSITF workplace accident compensation (Employee's Compensation Act 2010); safe working conditions (Factories Act); protection from sexual harassment in the workplace (courts have applied common law and constitutional grounds). The Employee's Compensation Act 2010 is particularly important — it mandates no-fault workplace injury and disease compensation funded by employer NSITF contributions, removing the need for employees to sue for workplace accidents.