Nigerian Labour Laws Every HR Professional Must Know

As an HR professional in Nigeria, having a solid grasp of labour laws is non-negotiable. HR professionals manage recruitment, termination, compensation, workplace disputes etc.   Understanding the legal framework governing employment helps you protect your organisation and its employees.

Let’s break down key Nigerian labour laws every HR professional must be familiar with in 2025.

1. The Labour Act (2004) – The Foundation

The Nigerian Labour Act is the cornerstone of labour regulation. While it mostly applies to low to mid-level employees (non-executives), it outlines the basic terms and conditions of employment, including:

• Minimum wage requirements
• Working hours (typically 40 hours/week)
• Overtime rules
• Sick leave and annual leave entitlements
• Termination procedures

 Note: Always draft employment contracts in line with the Labour Act. Include clauses on leave, working hours, and termination to avoid disputes.

2. Employee Compensation Act (2010)

This Act mandates employers to provide compensation to employees who suffer injuries, diseases, or death in the course of employment.

Key Provisions:

• Employers must register with the Nigeria Social Insurance Trust Fund (NSITF)
• Compensation covers medical treatment, disability, and dependents of deceased employees
• Applies to both private and public sector employees

Note: Ensure your organization is registered with the NSITF and that your employees know how to report workplace injuries.

3. National Minimum Wage Act

The current national minimum wage in Nigeria is ₦70,000/month, States or sectors’ minimum wage may vary but no employer is permitted to pay below this threshold.

 Note: Ensure all employees, including contract staff and interns, are paid at or above the minimum wage as non-compliance can lead to serious penalties.

4. Trade Unions and Industrial Disputes Act

This law governs the registration of trade unions and the resolution of industrial disputes.

HR Responsibilities:

• Allow employees to freely join or form trade unions
• Engage in collective bargaining where necessary
• Follow due process before dismissing unionized staff
• Handle strikes in compliance with the law

 Note: Foster open dialogue between management and union leaders to prevent escalations.

5. Pensions Reform Act (2014)

The Act makes pension contributions mandatory for employers with more than 3 employees.

Contribution Breakdown:

• Employer: Minimum of 10% of monthly salary
• Employee: Minimum of 8%

Note: Remit pension contributions monthly to employees’ Retirement Savings Accounts (RSA) via a licensed PFA (Pension Fund Administrator).

6. Personal Income Tax Act (PITA)

As an HR lead, you’re responsible for deducting Pay-As-You-Earn (PAYE) tax from employee salaries and remitting to the appropriate state Inland Revenue Service.

7. The Factories Act

If your company operates in a manufacturing or production setting, this law applies.

It covers:

• Workplace safety standards
• Provision of protective equipment
• Clean working environment
• Medical examinations

 Note: Regularly conduct health and safety audits and ensure compliance with the Ministry of Labour guidelines.

8. Maternity and Paternity Leave Laws

Under the Labour Act:

• Female employees are entitled to at least 12 weeks of maternity leave (6 before and 6 after delivery), with at least 50% pay.
• Paternity leave is not yet officially recognized under federal law, but some states (e.g., Lagos, Enugu) grant up to 10 days of paternity leave.

Note: Offer competitive and inclusive leave policies to support employee wellbeing and attract top talent.

9. Termination and Redundancy Laws

Termination must follow due process, including:

• Issuing proper notice or payment in lieu
• Providing severance packages where applicable
• Avoiding unfair dismissal (e.g., based on gender, religion, or union membership)

Note: Keep documentation for every disciplinary action or performance issue to avoid legal pitfalls if termination arises.

Conclusion

Labour law compliance is a core HR responsibility. Staying updated helps you:

• Build trust with your workforce
• Avoid costly legal battles
• Protect your organization’s reputation

In a dynamic economy like Nigeria’s, labour laws are evolving. Smart HR leaders regularly consult legal advisors, stay in tune with policy updates, and adapt company policies accordingly.

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