Executive Summary
Consistent with our prediction in the 2022 edition of the review, the global economic recovery from the COVID-19 pandemic continued in 2023, with rising cost of living and slow economic growth and a harsher business environment leading to increased friction between workers and employers.
The situation in Nigeria was not different as the new government elected within the year implemented painful economic reforms such as removal of fuel subsidies and liberalisation of the foreign exchange market.
It is no surprise then that the labour and employment landscape witnessed a lot of wage and welfare disputes between workers and their employers. Strikes and threats of strikes were rampant and the National Industrial Court of Nigeria (NICN) was central to the resolution of these disputes as it strove to ensure industrial harmony and avoid disruptions to the economy. In the process, the Court issued landmark decisions with an increasing reliance on international labour standards and upending many years of judicial precedent.
The Federal Government of Nigeria (“FGN”) announced an interim wage award for government workers pending the conclusion of negotiations with Organised Labour, while there was also a flurry of activities on the legislative and regulatory fronts as the National Assembly, regulatory agencies as well as professional associations in the medical and legal professions attempted to address talent shortage and welfare issues. Though some of these efforts proved to be controversial (such as the brain drain Bill’ which sought to stem the tide of medical doctors emigrating abroad and the revision of the national unemployment rate to 4% by the bureau of statistics), others are aimed at providing relief for workers from statutory obligations and improve their welfare.
In our look ahead, we project the announcement of a new national minimum wage even as we foresee an escalation of employment and labour disputes, as the effects of the economic reforms bite harder. We also highlight legislative interventions we expect to gain traction in 2024.
We present to you The Employment Law Year 2023
2.0 INDUSTRIAL DISPUTES
Fuel Subsidy Strike Threats
In his inaugural speech as President of the Federal Republic of Nigeria on 19th of May, 2023, President Bola Ahmed Tinubu announced a ‘total’ removal of fuel subsidy and pledged to re-channel the money meant for fuel subsidy to other economic priorities. . The Nigeria Labour Congress (“NLC”) and its affiliate unions (the Unions) responded to the resulting increase in fuel pump price by issuing a strike notice to take effect on 7th June 2023 if the government failed to revert to the old pump price. .
Following a meeting with the FGN, and an interim order of the NICN restraining the Unions from embarking on the strike, the Unions suspended the action. Although the Unions also threatened to embark on indefinite strike actions over the high cost of living at different times in the course of the year, particularly in August, September and October, 2023, interventions by the FGN and other stakeholders prevented any strikes by the Unions within the year in review.
New National Minimum Wage Negotiations/Wage Award
One of the achievements of the new Federal Government elected in February 2023 was its ability to avoid the endemic strikes that have crippled the economy in time past by engaging Organised Labour in trade dispute negotiations. The negotiations with Organised Labour over a new national minimum wage led to an interim additional wage award of NGN35,000 (thirty – five thousand Naira) for six months to government workers, starting from 1st September 2023. The wage award is intended to be a temporary respite for government workers pending the FGN’s conclusion of negotiations with Organised Labour, for the review of the current national minimum wage of NGN30,000.00 (thirty thousand Naira) and enactment of a new National Minimum Wage Act.
Resident Doctors’ Strike
In what has become an annual occurrence, the Nigerian Association of Resident Doctors (NARD) commenced a “total and indefinite strike” on 26th of July, 2023 to protest salaries owed its members since 2015, working conditions and to demand an immediate recruitment of clinical staff in hospitals to address staff shortages.
The industrial action lasted two weeks following an earlier five-day warning strike embarked upon by NARD in May, 2023 to demand amongst others, the withdrawal of the Bill which proposed a compulsory service period of five years in Nigeria for medical and dental graduates as a condition for issuance of practice licence.
Industrial Action by the Osun State Judiciary Staff Union
Judiciary workers in Osun State also commenced an indefinite strike action on 22nd November, 2023. The strike action followed allegations of abuse of office, unlawful suspension of its members, refusal to lift embargo on staff training and pay allowances made against the State’s Chief Judge by the State Judiciary Staff Union. Despite the intervention of the National Judicial Council in the tensions within the Osun State Judiciary, the State Judiciary Staff Union has insisted that the industrial action would continue until its demands are met and is still on at the time of this report.
3.0 EMPLOYMENT LITIGATION
On freedom of workers to organise and trade union plurality – Academic Staff Union of Universities (ASUU) v. Minister of Labour and Employment. In our 2022 review, one of the cases we projected as highlights for 2023 is the suit filed by the Academic Staff Union of Nigerian Universities (ASUU) challenging the registration of the rival Congress of University Academics (CONUA) and National Association of Medical and Dental Academics (NAMDA) by the Registrar of Trade Unions.
On 25th of July, 2023, the NICN delivered judgment in the suit. Amongst other issues raised and resolved by the Court, the NICN held that the provisions of Sections 3 and 5(4) of the Trade Unions Act (TUA) which bars the registration of a trade union where there already exists a trade union representing same interest contravenes the International Labour Organisation (“ILO”) Convention No. 87 on Freedom of Association and Collective Bargaining. In dismissing the action and upholding the registration of CONUA and NAMDA, the Court applied the ILO jurisprudence on freedom of workers to organise freely, particularly Article 2 of Convention No. 87 which dictates that workers and employers have the right, without distinction whatsoever, to establish and join organisations of their own choosing without previous authorisation.
The Court found that this jurisprudence accords more with section 40 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) (“1999 Constitution”) and overrides the statutory discretion which the Registrar of Trade Unions enjoys (or enjoyed now?) under the TUA. To the Court, the ILO jurisprudence does not permit of any monopoly in trade unions registration neither does it permit government interference in the administration of trade unions.
This judgment represents a major shift in labour law jurisprudence established in previous cases like the Supreme Court decision in Osakwe v Registrar of Trade Unions2 as well as the NICN’s more recent decision in NASU v. The Honourable Minister of Labour and Employment3 where the Courts discouraged the registration of trade unions where there are similar unions in existence that sufficiently protects the interests which the proposed union seeks to protect. With the decision in ASUU v Minister of Labour and Employment, it appears that the powers of the Registrar of Trade Unions have been seriously whittled down and trade unions can be formed without any hindrance.
On validity of the “No Work No Pay” policy in Federal Universities: Federal Government of Nigeria v ASUU. The NICN also handed down its decision in the case between the Federal Government of Nigeria (FGN) v ASUU4 dealing with the legality of ASUU’s 2022 strike over various welfare issues and funding of tertiary education on 30th May, 2023.
One of the major issues that was resolved is the validity of the FGN’s ‘No Work No Pay’ policy. The Court affirmed the provision of S. 43(1) of the Trade Disputes Act (“TDA”) which permits an employer to withhold salaries of striking workers for the period of a strike even as it noted that the salaries could be paid if parties reach an agreement to that effect. The Court also held that the period of a strike cannot be deducted in calculating years of service as this would be an impermissible penalty for exercising the right to strike.
Another notable finding in the case is the Court’s holding that the powers of the Minister of Labour under S. 43 (2) of the TDA to determine if there has been a lockout is unconstitutional because such powers are reserved for courts under the ILO Convention on Freedom of Association and Collective Bargaining. In other words, the courts have the final say on whether there has been a lockout or not.
ASUU also secured a major win as the Court upheld the right of universities to determine the software for the payment of lecturers’ salaries. The Court ruled that it is a breach of university autonomy for the FG to impose a payment software on ASUU.
On the NICN’s jurisdiction over contracts for service and the meaning of ‘any labour’ Alphacyn Nigeria Limited v. Prince and Princess Estate. The scope of the NICN’s jurisdiction has always been a cause for hair splitting discussions among labour and employment practitioners following the expanded jurisdiction of the Court in 2011 via the Constitution Third Alteration Act. Even then, the prevailing view (supported by decisions of the NICN itself) has been that the jurisdiction of the Court is limited to labour and employment contracts. The precise ambits of that scope was stretched to new limits in Alphacyn Nigeria Limited v. Prince and Princess Estate.
The Claimant was a facility management company providing various facility management services to a residential estate (including providing security guards). A claim for wrongful termination of the facility management agreement was filed at the NICN and the defendant estate objected to this, arguing that the subject matter of the dispute was a simple contract dispute that should have been filed at the High Court. In resolving the objection to the jurisdiction of the court, the NICN held that a broad interpretation of the term “any labour”, as used in Section 254C (1) (a) of the 1999 Constitution, has the effect of encompassing both contracts of service and contracts for service and, as such, the NICN has jurisdiction to determine actions which border on contracts of service and for service. The Court also anchored its decision on the Supreme Court decision in Shena Security Co Ltd v Afropak6 where a contractual dispute over supply of security guards was held to be one over a contract of employment and on Part II of the Labour Act which contains extensive provisions on recruitment of workers.
This decision has generated quite some conversation as it appears, at first blush, to expand further the jurisdiction of the NICN. This is because previous decisions of the Court such as Jude Ononiwu v NDE7, Henry Adoh v EMCI8 and Ozafe Nigeria Ltd v Access Bank9 distinguished between contracts for service and contracts of service holding that the Court only has jurisdiction to entertain cases dealing with the latter. It appears to us that the overarching rationale of this decision is that, regardless of its main purpose, any agreement which involves the recruitment or supply of labour could be regarded as one of employment of labour and therefore fall under the jurisdiction of the NICN.
On application of unratified ILO conventions in employment cases: Joseph Osayande v. SPDC & SNEPC. We continued to see pushback from the oil and gas industry in relation to the NICN’s validation of the Guidelines for the Release of Staff in the Oil and Gas Industry 2019 (“the Guidelines”) in cases like SPDC v Minster of Labour and Employment11 decided in 2022.
However, while in the Osayande’s case the fulcrum of the dispute was the propriety of the termination of the Claimant’s employment without compliance with the Guidelines or the ILO Termination of Employment Convention (C158 of 1982), , it is the Court’s finding on the application of unratified ILO Conventions that cements this case’s place in our review.
The Defendant had argued that under section 254 (c) of the 1999 Constitution, only conventions that have been ratified by Nigeria can be applied by the Court. It was common ground between the parties, and the Court agreed with them, that Nigeria is yet to ratify the ILO Convention 158 of 1982 on Termination of Employment. Yet, the Court made the distinction between ratified and unratified conventions as one that affects only the mode of application by the Court, noting that while unratified conventions cannot be applied directly, nothing stops the Court from relying on the principles enunciated in them as a guide in the adjudication of disputes before it. pursuant to S.254 C (1) (f) and (h) of the 1999 Constitution.
On calculation of lump sum payment to retirees under the Contributory Pensions Scheme: Olugbenga Adams Adedipe v Pensions Alliance Ltd & National Pensions Commission. There is no letup in the advocacy by retirees for increased access to the balance standing to their credit in their retirement savings account (RSA). Earlier, in Maroof Abdul Giwa v. Arm Pension Managers (PEA) Ltd & Anor13 and Rekiya Girei v Sigma Pensions14, the NICN had permitted two retirees access to 50% of their RSA balance on the ground that no percentage was fixed by section 7(1) of the Pension Reforms Act as the withdrawal limit for retirees.
Even though PenCom, in an attempt to correct the loophole created by the PRA, released the revised regulation on the administration of retirement and terminal benefits in 2022 which provides detailed guidelines for calculation of lumpsum, the NICN in Olugbenga Adedipe v Pensions Alliance Limited has maintained the line of reasoning in the two earlier cases in permitting the claimant to access 50% of his RSA balance.
The Claimant who was disengaged at 50 years rejected the 25% lump sum offered to him by the defendant Pension Fund Administrator (PFA), making a claim for 50% instead. The PFA relied on the Standard Retirement Benefits Computation (SRBC) template issued by PenCom and the revised guidelines in contending that the Claimant could not access more than 25%.
Apart from reiterating the point that section 7(1) of the PRA did not place a cap on the amount that a retiree can withdraw as lump sum (subject to the condition that the balance be enough to purchase an annuity for life, the case eventually turned on the failure of the PFA to provide evidence on how it calculated the life expectancy of the claimant before arriving at the assessment that the balance left would not be enough to purchase an annuity for the rest of his life if he was allowed to access 50% as claimed.
We expect that this sensitive issue for both workers and the pension industry would be settled on appeal soon as the pension operators have appealed the judgments in the cases decided so far. This case is however significant learning for PFAs to be more thorough in calculating retirement benefits with demonstrable data and scientific evidence.
4.0 LEGISLATIVE AND REGULATORY INTERVENTIONS
Unemployment figures drop to lowest rate on record
In August 2023, the National Bureau of Statistics (NBS) released its Nigeria Labour Force Survey which tracks employment and unemployment data. In the year’s report, the NBS revised the methodology for computing the country’s unemployment data “in line with international best practices”. Based on the new methodology, the unemployment rate stood at 4.1% in the first quarter of 2023, down from 5.3% in the fourth quarter of 2022. The last published unemployment data in March 2021 had put the unemployment rate at 33.3% in the fourth quarter of 2020.
Under the revised system, the NBS defines employed persons as those in paid jobs and who worked for at least one hour in the last seven days, and considers underemployment as those working less than 40 hours a week and declaring themselves willing and available to work. The report also pegged informal employment at 92.6% among all employed Nigerians during the period, while underemployment was 12.2%, compared with 13% in the fourth quarter of 2022.
The report received wide criticism and skepticism by experts and citizens, with most regarding the revised methodology as a political makeover of an otherwise different reality.
Amendment to the National Housing Fund Act and the Industrial Training Fund Act. The Business Facilitation (Miscellaneous Provisions) Act, 2022 (“BFA”) was passed on 8th February 2023 by the National Assembly to amend certain existing laws with a view to facilitating the ease of doing business in Nigeria. Some of the laws amended include the National Housing Fund Act, Cap N.45, 2004 (“the NHF Act”) and the Industrial Training Fund Act, Cap I9, Laws of the Federation of Nigeria, 2004 (“the ITF Act”).
The BFA amended the NHF Act by making the statutory contribution of 2.5% of monthly basic salary to the NHF mandatory only for self-employed persons and workers in the public sector earning the national minimum wage and above or its equivalent. Contribution is now optional for workers in the private sector, who may now contribute 2.5% of their monthly income to the NHF. An interest rate of 2% per annum, or as may be determined by the Federal Mortgage Bank of Nigeria (“FMBN”) is payable on contributions to the NHF.
The amendment to the ITF Act now requires only employers with 25 (twenty-five) or more employees and not operating within a free trade zone to contribute 1% of its annual payroll to the ITF. Before now, the threshold for contribution to the ITF was 5 (five) employees.
Increase of National Housing Fund (NHF) Individual Maximum Loan Limit
In May 2023, following the amendment of the NHF Act by the BFA, the FMBN announced an increase in the NHF loan limit from NGN15,000,000 (fifteen million Naira) to NGN50,000,000 (fifty million Naira). According to the Bank, the increase aligns with the mandate passed on the FMBN by the BFA to carter to the yearnings of the different classes of employees (notably the private sector), that contribute to the National Housing Fund Scheme.
However, the loan eligibility is based on the monthly contribution range. Thus, an applicant who makes a monthly contribution below NGN10,000 (ten thousand Naira) shall be eligible to a maximum loan sum of NGN15,000,000 (fifteen million Naira). An applicant who makes a monthly contribution between NGN10,001 and NGN25,000 shall be eligible to a maximum loan sum of NGN25,000,000 (twenty-five million Naira), while an applicant who makes a monthly contribution of NGN25,000 (twenty-five thousand Naira) and above is entitled to a maximum loan sum of NGN50,000,000 (fifty million Naira).
Harmonised Retirement Age for Judges of Superior Courts
On 8th June, 2023, President Bola Ahmed Tinubu signed his first Bill since taking the oath of office on May 29 Bill into law when he appended his signature to the “Constitution of the Federal Republic of Nigeria, 1999 (Fifth Alteration) (No.37) Act, 2023”. The law unifies the retirement age and pension rights of judicial officers of superior courts of record. The retirement age of the Court of Appeal and Supreme Court Justices was previously pegged at 70 years while High Court Judges were constitutionally mandated to retire at the age of 65 years. Following the passage of the law, all judicial officers of superior Courts of record may now retire when they attain the age of sixty-five years and shall cease to hold office when they attain the age of seventy years.
Nigerian e-hailing drivers register a trade union
The Ministry of Labour issued a trade union certificate to e-hailing drivers in Nigeria who organized themselves under the Amalgamated Union of App-Based Transport Workers of Nigeria AUATWON.
Registration of the union for e-hailing drivers is the first in Africa and empowers the union to look out for the welfare of its members and negotiate improved working conditions. It is also an indication of the increasing recognition of platform workers as part of the realities of the new world of work. On their part, top ride-hailing companies in Nigeria reportedly objected to the registration chiefly on the basis that the inclusion of “workers” in the union’s name give an impression that e-hailing drivers are workers for the ride-hailing platforms and not independent contractors. Nigerian courts are yet to decide on the legal classification of platform workers.
National Assembly moves to amend the Medical and Dental Practitioners’ Act, 2004
The Lower Chamber of the National Assembly – House of Representatives in April 2023 introduced A Bill to amend the Medical and Dental Practitioners Act (the “Bill”), which seeks to mandate all medical and dental graduates to practice in Nigeria for at least 5 years as a prerequisite to be granted full practice license. The National Assembly noted the recent mass migration of mental and dental practitioners trained in Nigeria to other jurisdictions as the primary reason for the Bill.
Further, the lawmakers added that mandating the mental and dental practitioners to practice in Nigeria for a minimum period of 5 years would only be fair to the taxpayers as their money was expended to subsidize medical and dental education in Nigeria. In response to the proposed Act, the Nigerian Medical Association and other stakeholders in the medical sector have expressed disappointment at the National Assembly’s approach to addressing the brain drain problem. At the time of this report, the Bill has passed second reading and has been referred to the House Committee on Healthcare Services.
PENCOM’s Additional Benefits Scheme Framework
The National Pension Commission (“PenCom”) in September 2023 published the Framework for the Establishment of Additional Benefits Scheme (“ABS”) (the “Framework”) under the Contributory Pension Scheme (“CPS”). Under section 4 (4) (a) of the Pension Reforms Act 2014, employers are permitted to provide additional benefits to their employees upon retirement.
The Framework released by PenCom highlights the procedure for the establishment and management of the ABS by employers. Employers that desire to establish ABS for its employees are required to show evidence of up to date remittance of pension contributions for its employees; group life insurance cover; and execution of Portfolio Management Agreement (“PMA”) with Pension Funds Administrators (PFAs) of their choice. In addition, the relationship between the sponsor of the ABS and the PFAs is to be governed by the provisions of PMA as executed by the sponsor of the ABS and the PFAs. PenCom is required to approve the PMA before execution by the parties.
Already, PenCom indicated that it has granted approval to 5 (five) private sector organisations and a public agency to set up ABS. This is a significant development as it enables employee-centric employers to provide more benefits for their retiring staff as part of their employee value proposition.
National Health Insurance Authority Operational Guidelines, 2023
The National Health Insurance Authority (“NHIA”) Operational Guidelines 2023 (the “Guidelines”) is another noteworthy regulatory intervention in 2023. The Guideline is supplements the NHIA Act signed into law last year to enlarge access to access to quality healthcare in Nigeria.
The Guideline essentially elaborates the provisions of the Act. For instance, paragraph 2.2.2 of the Guideline clearly defines the employees under the formal and informal sectors, as they relate to the provisions of the Act on contributory scheme. The Guideline requires the employers and employees to register as well as the procedure to register with NHIA.
Further, the Guideline highlights the rights and privileges of beneficiaries, as well as the obligations of the Health Maintenance Organisations (“HMOs”) towards the beneficiaries and enrollees under the Act. The Guideline also provides for the minimum package for health services, medical claim management, data management, and penalties for defaults among other provisions.
The Legal Practitioners Remuneration Order 2023
The legal profession was not left out of the scramble for better conditions of service as the Legal Practitioners Remuneration Committee released the Legal Practitioners (Remuneration for Business, Legal Services and Representation) Order 2023 on 5th June 2023.
The first schedule of the Order provides 4 (four) scales of charges according to which a legal practitioner shall charge his legal fees for consultations and legal opinions, incorporation or registration of companies and business names, litigation and property transactions.
The Order also divides Nigeria into State Bands with respect to Remuneration of legal practitioners, taking into account the economic development of the states.
Charging below the approves scale is regarded as professional misconduct and where a legal practitioner wishes to charge below the approved scale or provide legal services on a pro bono basis, they are expected to apply to the Bar Remuneration Committee for approval or refusal. It is left to be seen how effective the Order would be in regulating the pricing of legal services.
Nigeria ratifies the Migrant Workers (Supplementary Provisions) Convention, 1975 (No. 143) and the Private Employment Agencies Convention, 1997 (No. 181)
On 23rd of March, 2023, Nigeria ratified the Migrant Workers (Supplementary Provisions) Convention, 1975 (No. 143). The Convention which comes into force in Nigeria on 23rd March, 2024 aims to protect the fundamental rights of all migrant workers and promote equality of opportunity and treatment of migrant workers. Article 11 of the Convention defines the term “migrant worker” as a person who migrates or who has migrated from one country to another with a view to being employed otherwise than on his own account. This definition however excludes frontier workers, artistes and liberal professionals who enter a Member country on a short-term basis, seamen, persons coming into a member country specifically for purposes of training or education and employees who are temporarily admitted into a Member country at the request of their employer to undertake specific assignments for a limited and defined period of time.
Nigeria also ratified the Private Employment Agencies Convention, 1997 (No. 181) on 23rd of March, 2023. The Convention serves as a comprehensive framework for the registration, licensing and effective regulation of private employment agencies and the protection of workers who use their services. The Convention requires ratifying Member States to take measures to protect national and migrant workers from discrimination in terms of minimum wages, working time and conditions, social security benefits, training and access to occupational safety and health and also protects legitimate private employment agencies from unfair competition.
The ratification of these Conventions brings the total number of ILO Conventions ratified by Nigeria till date.
Nigeria Data Protection Act, 2023
President Bola Ahmed Tinubu on 12th June 2023 signed the Nigeria Data Protection Bill into law. The enactment of the Nigeria Data Protection Act, 2023 further strengthens the right to privacy guaranteed under the Constitution. The enactment creates an obligation for employers of labour, who can be categorized as data controllers under the Act to ensure that the handling of employee’s data is fair and in compliance with the principles of data processing prescribed in the Act.
Concerning employment law, the Act recognizes employment or social security data as a specie of sensitive personal data which cannot be processed without the express consent of the data subject (which would usually be the employee). It also includes personal data relating to an individual’s trade union membership as in the definition of sensitive personal data. Employers have a responsibility to ensure that technical and structural measures are implemented to guarantee the security and integrity of these data.
The Act establishes the Nigeria Data Protection Commission to enforce the provisions of the Act and provides regulatory and judicial enforcement options for data subjects who believe their rights under the Act have been breached.
5.0 2024: A LOOK-AHEAD
Passage of a new National Minimum Wage Act
On 30th November 2023, the Federal Government of Nigeria announced that a new minimum wage will come into effect on 1st April 2024. This announcement is in consonance with Section 3(4) of the Minimum Wage Act, 2019 which provides for review of the current national minimum wage of N30,000 (Thirty Thousand Naira) after five years.
According to the Minister of Information and National Orientation, Idris Mohammed, a committee is already being constituted to determine the new wage regime. We expect an announcement of the new minimum wage by March 2024.
Industrial Disputes Escalations
There is a high probability of friction between Organised Labour and the FGN over the new minimum wage. With labour already angling for a minimum wage of N200,000 (Two Hundred Thousand Naira) and the precarious fiscal condition of the country, it would take great negotiating and dispute resolution skills by the FGN to avoid industrial unrest.
We also envisage more wage disputes between individual companies and their workers as everyone tries to adjust to the economic instability.
Passage of the Employees Remuneration Protection Bill, 2023?
A Bill to prohibit the late payment, non-payment and underpayment of employees’ salaries is currently being considered by the House of Representatives of Nigeria. The Bill titled “Employees Remuneration Protection Bill, 2023” passed its first reading at the Lower Chamber in December, 2023. The Bill prescribes various penalties which range from jail terms to fines against any employer(s) who refuse or neglect to pay the remuneration of their employees. The last Assembly was considering a similar bill before the change of government.
We look forward to the National Assembly giving speedy consideration to this Bill in 2024.
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