Nigeria Employment Guide

Navigating Employee Termination in Nigeria: A Guide for Global Employers

Terminating an employment relationship in Nigeria requires careful navigation of complex legal frameworks and local regulations. The process must be managed collaboratively between the employer and key stakeholders, often involving specific procedures and potential costs depending on the circumstances. As an international HR professional, understanding these nuances is critical for compliance and risk management.

Valid Grounds for Termination

Employers cannot terminate employment arbitrarily; valid grounds must be established. Legally compliant termination methods include:

• Voluntary resignation by the employee
• Mutual agreement between both parties
• Expiration of a fixed-term contract
• Unilateral termination by the employer, justified by:
  • Objective reasons such as redundancy
  • Dismissal due to disciplinary issues
  • Criminal conduct by the employee
  • Persistent underperformance indicating unsuitability for the role
  • Permanent incapacity resulting from accident or illness

For example, a multinational company like SailGlobal successfully managed a termination in Lagos by documenting performance issues over six months, avoiding legal disputes.

Notice Period Requirements

While Nigerian law does not mandate a statutory notice period, best practices recommend providing at least 30 days’ notice for non-senior staff and a minimum of 30 days for senior employees. In cases of gross misconduct, no notice is required. Adhering to these standards helps maintain positive employer branding and reduces litigation risks.

Severance and Redundancy Payments

Employees not covered by the Labour Act are not legally entitled to severance pay, though they receive their standard wages during the notice period. However, all manual and clerical staff protected under the Labour Act are eligible for redundancy compensation. The amount is not fixed by law and is typically determined by the employer, often based on factors like length of service. For instance, SailGlobal’s policy includes calculating severance as one month’s salary per year of service, aligning with industry benchmarks.

Proactive compliance, such as clear documentation and fair processes, is essential. Companies like SailGlobal use localized HR platforms to streamline these procedures, ensuring adherence to Nigerian labor laws while supporting global expansion.