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Corporate Finance and Capital Markets September 2020

Demilade Odutola

Regulatory Overview of Atypical Employment in Nigeria1

Introduction

The contemporary labour market has many forms of employment relations that vary from the

standard model of employment. These types of employments, conceptualised differently in

different countries and regions, are properly defined as atypical forms of employment.

Atypical employment refers to employment relationships that do not conform with the regular

model of open-ended employment with a single employer over an extended period. Factors

such as globalisation, regulatory gaps in certain sectors of the economy, economic

recession, technological advancement, changes in the demographic composition of the

labour market, and unemployment have influenced the dynamics of the labour market.2

To manage the impact of these factors on the labour market, Non-standard Forms of

Employment (“NSFEs”) were created to give employers and employees more flexibility.

Consequently, employees in atypical employments occupy the grey area between traditional

employment and self-employment.

Non-standard modes of employment have gained prominence in Nigeria, especially in the

media, arts, hospitality, service, aviation, manufacturing, and construction sectors, where the

nature of work lends itself to this kind of employment regime. Whilst some of its variants

have been formalised in contractual arrangements, others remain informal arrangements.

A firm’s decision to employ non-standard work arrangements is influenced by

considerations, such as its size, the industry in which it operates, the skill level of its

workforce, the practices of competing enterprises, and the regulatory framework of the

1 Oluwademilade Odutola, Associate Intern, Corporate Finance and Capital Markets Department,

SPA Ajibade & Co., Lagos, Nigeria. 2 International Labour Organisation, Non-standard employment around the world: Understanding

challenges, shaping prospects https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/--

-publ/documents/publication/wcms_534496.pdf accessed on 12 August 2020.

https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_534496.pdfhttps://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_534496.pdf

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country in which it operates. Firms also employ these simplified work arrangements in

response to an increased demand for a product or service, as a cost reduction technique in

times of financial decline, to attain staff flexibility, or reduce problems commonly associated

with workforce management. For workers, NSFEs facilitate access to labour market, provide

a stepping-stone to standard employment and help to improve work-life balance. Such

employees are afforded the opportunity to gain work experience, strengthen labour market

attachment, and expand their professional networks.

In spite of these benefits, employees in NSFEs face a number of challenges including wage

deficits, limited regulatory oversight, job insecurity, occupational, health and safety hazards;

lack of collective representation, absence of a clearly defined employment relationship and

ease of dismissal. Employers are known to abuse these less formal work arrangements to

avoid fulfilment of statutory commitments to their employees.

This article attempts to provide suggestions on how the current regulatory framework on

labour and employment can evolve to support atypical forms of employment. It propounds

that modernisation of labour laws and expanding the reach of existing statutes to non-

standard forms of employment is a major way to realise increased job satisfaction, and

ensure compliance of workers and enterprises with regulatory requirements.

1. Forms of Atypical Employment

Legally recognised dimensions of atypical employment are part-time employment,

temporary employment, multiple party employments, and ambiguous or non-

contractual employment relationships and their variants. Each of these sub-

categories will be discussed below. It is important to note that two or more

dimensions of NSFE may be present in the same work relationship.3 For example, a

part-time worker may be employed by a private employment agency or a

subcontractor under a fixed-term contract.

1.1 Part-Time Employment

Part-Time employment is considered the closest to regular employment. The

National Minimum Wage Act4 defines "part-time work" as work of a duration of less

than forty hours per week. Within part-time employment, there are sub-categories

such as Marginal Part-Time employment (work of less than 20 hours per week) and

Substantial Part-Time employment (work of at least 20 hours but less than 35 hours

3 International Labour Organisation Non-Standard Employment Around The World: Understanding

Prospects and Challenges https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---

publ/documents/publication/wcms_534326.pdf accessed on 10 September 2020. 4 National Minimum Wage Act 2019.

https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_534326.pdfhttps://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_534326.pdf

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per week). Part-time working arrangements may involve unpredictable hours or

require workers to work on-demand on short notice, commonly known as ‘on-call

work’5 or zero-hour contracts.6 Zero-hour contracts are usually associated with retail,

fast food services, courier services, catering, care work, hospitality and tourism, and

other market-driven sectors. In Nigeria, zero-hour contracts have no specific legal

status, because they have no legislative recognition nor an accepted legal definition.

1.2 Temporary Employment

Temporary employment includes any employment limited to a certain period based

on the employer’s needs or the employee’s availability, or both. Popular forms of

temporary work include fixed-term contracts, contract staff in temporary employment

schemes,7 seasonal and casual work. Temporary employment is common in labour-

intensive sectors, such as agriculture, manufacturing, and construction. A high

percentage of employment in the informal sector is short-term and/or casual.

1.2.1 Fixed-Term Work

Fixed-Term work is an employment arrangement, the duration of which is

defined by the passage of a fixed period, the occurrence or non-occurrence of

an anticipated event or the completion of a task. Employers’ abusive use of

successive fixed term contracts is a ruse to avoid commitments associated

with permanent employment.8 Where a fixed-term arrangement has endured

for a number of years, it should create the presumption of a standard

employment relationship deemed employment.9

1.2.2 Casual Work

5 Zero-hours contracts accessed 07 August 2020. 6 The term 'zero-hour contract' is primarily used in the United Kingdom, where around 3% of the

workforce are on zero-hour contracts. 7 For example, casual workers deployed by INEC strictly for voter’s registration or by the Federal

Ministry of Health to administer vaccines. 8 These include statutory and contractual benefits, such as pensions and gratuity. Other costs

associated with permanent employment include contribution to the Nigerian Social Insurance

Trust Fund (NSITF) pursuant to the regime of the new Employees Compensation Act, 2010,

procurement of group life insurance on staff, pursuant to the provisions of the Pension Reform Act

(2014), contribution to the Industrial Training Fund (ITF) under the ITF Act and payments to the

company's retained Health Management Organisations (HMO) for staff medical care. 9 Case law provides certain parameters to be considered in determining the existence of an

employment arrangement, including the degree of control exercised by the employer, the extent

of integration of the employee into the business, extent to which the employee is obliged to work;

whether such work is on a continuing basis and the economic realities test. The more practical

test is to gauge an employee’s status based on the continuity of the arrangement and their

economic dependence on the business to which he/she is providing services.

https://www.eurofound.europa.eu/observatories/%20eurwork/%20industrial-relations-dictionary/zero-hours-contractshttps://www.eurofound.europa.eu/observatories/%20eurwork/%20industrial-relations-dictionary/zero-hours-contracts

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Although there is no legal definition of casual work, it is loosely defined as

work which is irregular or intermittent, with no expectation of continuous

employment.10 Casualisation of labour is the gradual replacement of fulltime

staff with staff engaged on an ad hoc basis.11

In Nigeria, casual work accounts for a vast majority of job placements,

especially in the unorganised private sector. The term “contract staff” is used

loosely in Nigeria to describe workers who are engaged in such

arrangements.

An offshoot of casual work is seasonal employment, which spans three to five

months at most. Its availability is hinged on activity cycles in different sectors.

Seasonal employees may be hired on either part-time or full-time basis.

1.3 Tripartite Employment Agreement:

Contractual arrangements involving multiple parties create tripartite or triangular

employment arrangements instead of the traditional relationship between employer

and employee.

A “triangular employment relationship” occurs when an employee of one employer

works under the control of another person.12 Employment agencies, such as labour

hire or temping agencies, are recruitment intermediaries securing employees for a

controlling third party for a fee. A “controlling third party” is an entity that has a

contract or arrangement with an employer where the controlling third party gets the

benefit of the employee’s work, and exercises control and direction over the

employee that is similar to the control and direction an employer exercises.13 The

Labour Act gives credence to recruitment agencies, provided they operate with a

licence. There is no guidance in the Labour Act on the division of liability for remedies

between the employer and controlling third party, where the employee is aggrieved.14

10

Its main attributes are the absence of mutuality of obligations and ease of dismissal. 11

Okafor Emeka E, “Emerging nonstandard employment relations and implications for human

resource management functions in Nigeria” African Journal of Business Management Vol.6 (26),

pp. 7612-7621, DOI: 10.5897/AJBM11.2731 (accessed 20 July 2018). 12

SBM Staff “Triangular employment relationships” (17 December, 2019)

https://www.sbmlegal.co.nz/Publications/Article.aspx?articleId=100 accessed 07 September

2020. 13

SBM Staff “Triangular employment – new law” (23 June, 2020).

https://www.sbmlegal.co.nz/Publications/Article.aspx?articleId=103 accessed 07 September 2020 14

New Zealand’s Employment Relations Act 2000 allows employees in a “triangular employment

relationship” to bring personal grievances against their employer as well as the controlling third

party, if the latter caused or contributed to the personal grievance while the employee worked

under their direction.

https://www.sbmlegal.co.nz/Publications/Article.aspx?articleId=100https://www.sbmlegal.co.nz/Publications/Article.aspx?articleId=103

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Given the lacuna in the law, it will be wise for parties to consider, as part of their

agreement, a formula for the allocation of matters such as indemnification for

potential liabilities and costs, and any processes for dealing with employees’

complaints.

Outsourcing is the practice of hiring external manpower from one undertaking to work

at the site of and/or under instructions from another undertaking. Such external

employees usually render essential services such as cleaning, accounting, security,

I.T. and legal services, on a full-time or part-time basis. Outsourcing peripheral jobs

allows the organisation to reduce operational costs and focus on developing its core

competencies.

These arrangements subsist for as long as the client requires the services of the

outsourced employees or the labour broker.

Technological advancement has made room for digitised labour and on-demand

work conducted via online platforms and mobile applications.15 In recent times,

freelancing has morphed into Crowdwork, where workers are matched with end

users through an online platform to render required services (with the platform having

varying levels of control on the relationship and its outcome). ‘Work-on-demand’

usually involves more non-virtual tasks and jobs, organised through online platforms

managed by companies which may retain control over important aspects of the work,

including setting prices and standards, and selecting and managing the workforce.16

1.4 Remote Employment

Technological advancement has enabled organisations around the world to

assemble teams of employees who work remotely. Remote employment17 has also

been absorbed into mainstream employment in Nigeria. Remote workers operate

outside the primary place of employment. Thus, there is limited administrative and

physical attachment to the organisation. Remote employment is applicable to

persons in standard employment, freelancers, and the self-employed.18 Challenges

associated with this type of work, depending on national circumstances, include job

15

Examples of multinational crowdwork platforms are TaskRabbit, Upwork, Uber and Deliveroo

(food delivery). Indigenous counterparts include Vconnect and OLX. 16

Andrew Stewart, Jim Stanford Regulating work in the gig economy:

what are the options? https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/

2530/attachments/original/1508324763/Gig_Symposium_PrePub_Stewart_Stanford.pdf?1508324

763 accessed 30 August 2020. 17

Same as telecommuting and homework. 18

‘ Remote Year “What is Remote Work?” https://remoteyear.com/blog/what-is-remote-work accessed

July 10 2020.

https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/%202530/attachments/original/1508324763/Gig_Symposium_PrePub_Stewart_Stanford.pdf?1508324763https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/%202530/attachments/original/1508324763/Gig_Symposium_PrePub_Stewart_Stanford.pdf?1508324763https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/%202530/attachments/original/1508324763/Gig_Symposium_PrePub_Stewart_Stanford.pdf?1508324763https://remoteyear.com/blog/what-is-remote-work

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and income insecurity, minimal social security and absence of employment rights

enjoyed by regular employees.

1.5 Ambiguous and Non-Contractual Employment

Some employment relationships can be ambiguous where the respective rights and

obligations of the parties concerned are not defined. Employers favour such

ambiguous arrangements because agreements are easily concluded without the

hassle of drawing up a contract. A common example of employment on the strength

of an oral contract is domestic employment. Domestic staff are persons engaged for

the provision of domestic services within a household.19 The definition of “employee”

in the National Industrial Court Act (“the NIC Act”)20 includes domestic staff and

household employees. The Labour Act also vests the Minister of Labour with power

to make regulations with respect to the engagement, conditions of service and

payment of compensation to domestic servants.21

Although, these informal arrangements are treated as standard employment

relationships in some jurisdictions, it is less likely that a worker in a tacit employment

arrangement will seek redress because there are no defined terms and conditions

regulating the employment relationship.

Whilst the Labour Act requires all employers to issue a written contract of

employment to workers within 3 months of the commencement of the employment

relationship,22 no similar statutory requirements exist for non-workers. It is ironic that

the class of workers that fall within the ambit of the Labour Act are usually hired

under ambiguous employment arrangements.

Apprenticeships can also be classified as ambiguous employment. The Labour Act

permits the engagement of young persons between twelve to sixteen years, with their

prior written consent by the execution a contract of apprenticeship,23 to be trained in

a trade or as domestic servants for any term not exceeding five years.24

The Act also provides safeguards to protect the interest of the apprentice, such as

the mandatory approval of the contract of apprenticeship by an authorised labour

19

Labour Act (1990) Cap L1, Laws of the Federal Republic of Nigerian, 2004, Section 91. 20

National Industrial Court Act, No. 38, 2006. 21

Section 65 of the Labour Act (1990) Cap L1, Laws of the Federal Republic of Nigerian, 2004. 22

Ibid, Section 7(1). 23

Any young person aged sixteen years and above may be apprenticed without the need for their

written consent evidenced by the execution of a contract of apprenticeship. 24

Ibid, Section 49(1).

http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=42156&p_country=NGA&p_count=253http://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=42156&p_country=NGA&p_count=253

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officer.25 An apprentice retained in service after expiration of the fixed period, without

any prior agreement between the parties for the payment of wages, shall be entitled

to be paid the minimum wage payable for services similar to that rendered by the

apprentice.26 Also, the Magistrate or District Court shall have power and jurisdiction

to hear and determine any question or dispute arising out of a contract of

apprenticeship.27

2. Regulatory Regime for Atypical Employment in Nigeria

The framework for the regulation of labour relations comprises an array of

institutions, departments, agencies, parastatals, laws, and regulations. The Federal

Ministry of Labour and Productivity (“the Ministry”), working in conjunction with

various government departments and agencies, is charged with the administration of

labour and employment relations in Nigeria.

At present, there is no definite body of laws that precisely regulate atypical

employment in Nigeria. However, principal labour legislations and guidelines28 give

credence to some forms of atypical employment, especially part-time employment.

With the upsurge of atypical work placements, there is an imminent need to bridge

regulatory gaps to create policies tailored to suit these neglected dimensions of

labour and improve the conditions of work.29

2.1 The Labour Act

Although the Labour Act30 is the principal Nigerian labour statute with comprehensive

stipulations on conditions of work and employment, it has largely outlived its

relevance. This is made obvious in Section 91 of the Labour Act which defines

“workers” as persons who perform manual or clerical work to the exclusion of

persons employed to perform administrative, executive, technical or professional

functions either in the public or private sector. This definition automatically excludes

atypical employees (and employees at large) who are not employed as manual

labourers or clerical staff. Furthermore, significant safeguards in the Labour Act, such

as protection against unfair dismissal and indecent labour practices perpetrated by

25

Ibid, Section 50. 26

Ibid, Section 51. 27

Ibid, Section 49(1). 28

The Federal Ministry of Labour and Productivity Guidelines on Labour Administration: Issues in

Contract Staffing or Outsourcing in the Oil and Gas Sector, 2011. 29

David Taylor “Ain’t That Typical? Everyday Challenges for an Atypical Workforce” (July, 2017)

https://archive.acas.org.uk/media/4878/Aint-that-typical-Everyday-challenges-for-an-atypical-

workforce/pdf/Everyday-challenges-for-an-atypical-workforce.pdf accessed June 10, 2020. 30

Labour Act, Cap. L1 Laws of the Federation of Nigeria, 2004.

https://archive.acas.org.uk/media/4878/Aint-that-typical-Everyday-challenges-for-an-atypical-workforce/pdf/Everyday-challenges-for-an-atypical-workforce.pdfhttps://archive.acas.org.uk/media/4878/Aint-that-typical-Everyday-challenges-for-an-atypical-workforce/pdf/Everyday-challenges-for-an-atypical-workforce.pdf

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the employers, are not applicable to non-workers.31 In addition, remote workers as

well as persons employed for purposes ancillary to the employer’s business are

excluded from regulatory oversight.

2.2 The Trade Union Act

The Trade Union (Amendment) Act (“TUA”) stipulates that workers, regardless of

their employment status, have the right to form and join trade unions. The National

Industrial Court in the Patovilki Industrial Planners Limited v National Union of Hotels

and Personal Services Workers32 held that both regular and casual workers have the

right to form trade unions.

Pursuant to the TUA, a “worker” is any person employed in a contract of service or

for service whether the contract is for manual labour, clerical work or otherwise,

expressed or implied, oral or in writing, and whether it is a contract to personally

execute any work or labour or a contract of apprenticeship. Workers include

independent contractors and apprentices. The use of the word ‘otherwise’ indicates

an intention to include other category of workers, thereby incorporating workers

employed casually (with or without written contracts of employment), independent

contractors, apprentices and virtually any form of lawful employment.

Unfortunately, atypical workers are short changed because trade unions in Nigeria

have turned out to be enterprise-based homogenous associations, representing only

workers in their traditional constituencies. Also, atypical workers are difficult to

organise because they are scattered in different sectors and locations, which

adversely affects their ability to relate collectively with employers, demand for better

conditions of employment or embark on any form of industrial action that may compel

their employers to accede to their demands.

2.3 The Employee’s Compensation Act

The Employee’s Compensation Act (ECA), 201033 was enacted to establish a welfare

scheme that guarantees adequate compensation for eligible employees or their

dependents in the event of injury, disease, disability or death arising out of or in the

course of employment.

31

Section 91 defines ‘worker’ to the exclusion of persons not involved in clerical or manual labour

work. Thus, the protective measures and rights under this legislation does not extend to ‘non-

workers’. 32

(Unreported) Suit No. NIC/12/89. 33

Employee’s Compensation Act, No. 13, 2010 .

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Section 73 of the ECA includes casual, part-time, and temporary workers in the

category of workers34 entitled to claim compensation for any accident sustained while

in transit from the workplace and the employee’s principal or secondary residence,

the place where the employee usually takes meals or the place where he usually

receives remuneration; provided that the employer has prior notification of such

place.35

There might be difficulty in applying this eligibility standard to remote workers

because the employee is left to his whims and the employer exercises only minimal

control over his movement.

According to the ECA,36 the "workplace" includes any premises or place where a

person performs work or is required to be in the course of employment. An employee

will be compensated for injury sustained working outside the workplace if the trade of

the employer extends beyond the workplace or if such work is authorised by

employer or forms part of the employee’s job description. Thus, remote workers are

also allowed to claim compensation for diseases, disabilities or injuries sustained

from accidents within and outside the normal workplace or in the course of

employment.

The latitude of the ECA extends to all employees in the public and private sectors

thus eliminating double standards. Also, the ECA makes no distinction between

persons employed in the formal and informal sectors of the economy. Persons

engaged in informal, undeclared, casual, and ambiguous employment arrangements

can also claim compensation under the Act.

2.4 The National Minimum Wage Act

The National Minimum Wage Act (NMWA), 201937 prescribes, subject to certain

exemptions, that an employer is to pay every employee not less than the prescribed

minimum wage of N30,000.00 per month, less statutory deductions.38

The Act exempts small and medium enterprises with less than 25 employees,

workers in part-time employment, seasonal employment, and workers (for example,

34

Ibid., section 73. 35

Law Padi “11 Things to Know About Nigeria’s Employee Compensation Act” https://lawpadi.com/

11-things-every-nigerian-know-employee-compensation-act/ accessed 15 August 2020. 36

Ibid, section 73. 37

National Minimum Wage 2019. 38

Ibid, section 3(1).

https://lawpadi.com/%2011-things-every-nigerian-know-employee-compensation-act/https://lawpadi.com/%2011-things-every-nigerian-know-employee-compensation-act/

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freelancers and independent contractors), who are paid on a ‘piece rate’ basis.39 The

implication of this is that employees engaged in these circumstances are not eligible

to receive minimum wage.

Having exempted these classes of workers, the Act does not provide any parameters

on how their wages should be computed. The employer may elect to pay below or

above the prescribed minimum and employers have been known to take advantage

of the precarious position of such workers. Thus, persons in atypical employments

are not adequately rewarded for their labour.

The penalty imposed for non-compliance with payment of minimum wage does apply

to employers of temporary or part-time labour, as well as freelancers and

independent contractors, who currently form the bulk of the labour market.40

Lastly, it is important to note that it is possible for establishments with less than 25

employees to afford to pay well above the minimum wage. The exemption of SMEs

should be based on turnover or capital assessment and not the number of staff

employed.

2.5 The Pension Reforms Act

The Pension Reforms Act (“PRA”) 2014 establishes and regulates the Contributory

Pension Scheme (“the Scheme”) funded by the contributions of workers and

employers to cater for the welfare of employees after retirement.

Persons in active employment are required to maintain a retirement savings account

(“RSA”) with any Pension Fund Administrator (“PFA”) of their choice41 and notify their

employer, who is obligated to make contributions according to the rates stipulated

under the Act.42 Where an employee changes his employment, such person can

maintain the same RSA or transfer his account to a different Pension Fund

Administrator (“PFA”) but may not transfer more than once a year. This provision

encourages workers in casual, temporary, or seasonal employment to participate in

the scheme. The Act recognises the precarious nature of atypical employment and

39

Section 17 of the National Minimum Wage Act defines ‘piece-rate’ as ‘any type of employment in

which a worker is paid according to the quantity produced regardless of time’. 40

Section 6 summarily provides that if the employer fails to pay minimum wage, he is guilty of an

offence and liable on conviction to a fine not exceeding N20,000 (twenty thousand Naira) and in

the case of continuing offence to a fine not exceeding N1000 (one thousand Naira) for each day

during which the offence continues. 41

Section 11 of the Pension Reform Act, 2014. 42

The contribution to the scheme is set at a minimum of ten percent of the employees’ earnings by

the employer and eight percent by the employee.

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permits a person who is unemployed for four months consecutively to withdraw up to

25% of his retirement savings.

Mandatory contribution is applicable to employees in the public sector and private

organisations in which there are 15 or more employees. The Act provides that in the

case of private organisations with less than 3 employees, participation in the Scheme

is governed by administrative guidelines issued by the PENCOM. However, the Act is

silent on the applicability of the Scheme to private establishments with more than 3

but less than 15 employees. In addition, persons in self-employment are permitted to

open an RSA with any PFA and make voluntary contributions.

2.6 The National Industrial Court Act

The National Industrial Court Act (“NIC Act”)43establishes the National Industrial

Court (“NIC”) and confers it with exclusive jurisdiction to adjudicate civil matters

relating to labour, industrial relations, conditions of work, health, safety and welfare of

employees and issues bordering on collective representation.44 Section 54 of the NIC

Act defines an employee as a person employed by another under an oral or written

contract of employment, whether on a continuous, temporary or part-time basis and

includes a domestic servant, who is not a member of the family. Premised on the

foregoing, workers in any sub-category of atypical employment may refer labour and

industrial related disputes to the NIC for resolution. This legislation is an effort by the

Nigerian law makers to adopt international best practices and to create an all-

inclusive system for the adjudication of labour disputes.

3 Changing the Face of Labour Laws in Nigeria

The upsurge of NSFEs in Nigeria has resulted in the segmentation of the Nigerian

labour market. Arguments in favour of atypical employment suggest that it reflects

the employee’s preference, expands the range of employment opportunities, and

allows more flexible labour conditions when compared with conventional

employment. Counterarguments view the increase of atypical employment as a

worrisome shift towards precarious forms of employment, driven by the limited nature

of legal and social protections afforded by the Nigerian regulatory framework.

Irrespective of these notions, the bottom line remains that the current legal regime

reflects a shortfall between the existing regulatory framework and the realities of the

world of work. This article advances a series of recommendations, based on

43

National Industrial Court Act No. 38, 2006 44

Section 7 of the National Industrial Court Act and section 254C (1) of the Constitution (Third

Alteration) Amendment Act, 2010.

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international labour standards set by the International Labour Organisation (“ILO”)

and international best practices, that promote decent work for all workers, regardless

of their occupational status.

The first recommendation is the consolidation of existing legislation. Presently, there

are several divergent enactments on labour and industrial relations in Nigeria. Often,

these statutes have overlapping or varying provisions which creates a lack of legal

clarity on the status of certain employees. The author recommends that all relevant

laws be merged into a single legislation which would cover substantial aspects of

labour and industrial relations. This initiative would be useful to achieve harmony and

a wholistic reform of the existing legislations.45

Secondly, most of the shortcomings associated with NSFEs are due to inadequacies,

disparities, or divergence of extant legislation, especially in the interpretation and

enforcement of legal provisions. To address this, the law should clarify and expand

on the concept of employment to include all forms of employment. Also, the focus of

labour legislations should be the entire workforce and not the ‘employee’ or ‘worker’.

The most effective method would be to entirely discard occupational status as the

trigger for regulating employment and apply appropriate legislative protections to

anyone performing ‘work’ or rendering a service for a fee. Whilst it may be argued

that the various statutes proffer contextual definitions to suit legislative purposes, the

variance in the definition of employees in various statutes pertaining to industrial

relations promotes segmentation of the labour market. It is recommended that the

definition put forward in the NIC Act 2006 be adopted as the legal definition.46

Furthermore, the current abuse of casual and fixed-term employment in Nigeria can

only be checked by eliminating regulatory barriers to equal treatment to ensure

decent working conditions and social security for persons in such employment.

Presently, local laws do not provide any ceiling to the number of renewals of a fixed

term contract or a maximum duration of fixed term contracts. Also, labour laws

should specify legal thresholds that clearly differentiate part-time from full-time work.

The expansion of digitised work organised via online platforms and mobile

applications poses a challenge to the traditional models for regulating work. It is

45

Nigeria may borrow a leaf from Ghana in this regard. Ghana adopted a holistic reform of its labour

laws in 2003 when it harmonised its various labour legislations and consolidated them into a

single Act known as the Labour Act No. 651 of 2003. The Act is one of the most comprehensive

labour legislations in the world because it addresses in a single Act subjects hitherto covered by

separate legislations. 46

Section 54 of the National Industrial Court Act, 2006.

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important to formulate laws that address these digitally driven forms of employment.

It is yet to be determined whether these employees exist within the realm of self-

employment, dependent employment or whether they form another category of

workers existing in between these two stated categories. It is left for the courts and

policy makers to point us in the right direction with respect to the status of these

employees.

Various instruments and directives put forward by regional and international bodies,

especially the ILO and the EU, on the regulation of atypical employment are vital

sources of national labour law in member states. The International Labour

Organisation conventions, recommendations and standards that address specific

forms of non-standard forms of employment are a blueprint for our laws and should

be transposed into our local legislations.47 Under the Discrimination (Employment

and Occupation) Convention, 1958 (No. 111), ratified in 2002, Nigeria is “to declare

and pursue a national policy designed to promote equality of opportunity and

treatment in respect of employment and occupation, with a view to eliminating any

discrimination based on employment statuses”. Also, pioneer legislations effectively

implemented in progressive jurisdictions can easily be modified to suit our legislative

regime.

It is crucial to emphasise the importance of law enforcement. Laws are not self-

enforcing. Hence, statutes regulating labour relations should be enforced and non-

compliance sanctioned accordingly. In the same vein, courts, tribunals, and quasi-

judicial bodies have a prominent role to play in supplementing the regulation of non-

standard work in the Nigerian legal system. Courts should consider the substance or

practical reality of an arrangement, as opposed to the formal terms agreed by the

parties. Section 6 of the Constitution (Third Alteration) Act 2010 confers the NIC with

power to take judicial notice of ILO conventions and recommendations48 addressing

specific forms of NSFE as long as they have been indorsed by the government. The

NIC was established with the mandate to pave way for reforms in industrial relations

through prompt and effective adjudication. Interestingly, the Supreme Court made a

pronouncement on fixed-term contracts, stating that where a contract of employment

47

The Third Alteration Act, 2010 allows the NIC to apply international treaties provided Nigeria is a

signatory to same. 48

Employment Relationship Recommendation, 2006 (No.198), Income Security Recommendation

(No. 67), Social Protection Floors Recommendation, 2012 (No. 202), Workers with Family

Responsibilities, Recommendation, 1981 (No. 165).

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for a fixed-term is determined before the agreed date, the employee is entitled to the

salary he would have earned for the unexpired period.49

Aside statutory reforms, social security is a major concern for workers in atypical

forms of employment, especially for those who are unable to make the transition to

stable employment.50 Policy reforms should also address wage disparities,

employment ambiguity;51 restrict the use of NSFE in certain sectors to prevent abuse,

establish paid minimum guaranteed hours, limit the variability of working schedules,52

and put in place safeguards for part-time, on-call, and casual workers.53 The

government can set up a scheme for statutory deductions with a model separate

from that of conventional employees, or adopt existing models to include standard or

atypical employment.54

Furthermore, atypical employment tends to involve a multitude of transitions from one

form of employment to another, with a high risk of unemployment which results in

intermittent earnings. The problem of irregular earnings could be tackled by granting

involuntary unemployment relief to persons in these circumstances.

Whilst labour reforms will be mainly implemented through legislation, social dialogue

has improved the working conditions of workers in more developed countries.

Legislative response should involve social dialogue at national, industry and

enterprise levels to foster long term solutions, better working conditions and

individual economic security. Forums should engage the Federal Ministry of Labour

49

See Shena Security Company Ltd v. Afropak (Nigeria) Ltd & Ors. (2008) LPELR-3052(SC) p. 27. 50

The Social Protection Floors Recommendation, 2012 (No. 202), provides for nationally defined

sets of basic social security guarantees, to made available to everyone regardless of employment

status. In more general terms, the Workers with Family Responsibilities Recommendation, 1981

(No. 165), states that particular attention should be given to general measures for improving

working conditions and the quality of working life, including measures aimed at achieving more

flexible working schedules. 51

The Employment Relationship Recommendation, 2006 (No. 198) appeals to member states to

formulate and apply a national policy for clarifying and adapting the scope of relevant laws and

regulations, in order to guarantee effective protection for workers who perform work in the context

of an employment relationship i.e. bogus self-employment, disguised employment relationships,

undeclared work such as family labour or where there is a lack of clarity as to employment

arrangement. 52

As regards minimum hours, few countries have established a daily or weekly minimum number of

working hours for part-time or to achieve a minimum level of income. Workers are to be paid a

minimum wage for certain number of hours, whether or not the hours were worked. This is what

obtains in Italy. 53

The UK Employment Act 2015 prohibits the abuse of zero-hours contracts who work below

minimum working hours or have no definite schedules. 54

Section 14 of the Pensions Reform Act supra, already provides for maintaining the same

retirement savings account even when the employee transfers his employment from one

employer or organization to another.

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and Productivity, Central Labour Organisations, employer representatives, trade

unions and stakeholders in Nigerian industrial relations.

Present working condition for employees in atypical employment are set at minimum

statutory level, most times even lower. Research has shown a direct correlation

between the presence of trade unions and improved working conditions for the

workers represented.55 This article advocates for trade union participation/worker

representation for atypical employees to improve the extent to which such employees

can influence organisational labour policies and regulations.

The Ministry of Labour and Productivity should carve out departments or agencies to

monitor employing entities and engage with their human resource departments to

guarantee decent workplace practices in atypical arrangements, and to make sure

corporate reforms are balanced against worker’s rights and other public policy

considerations. The Ministry should also provide effective mechanisms to address

complaints, provide remedies for rights’ violations, and raise worker’s awareness on

employment rights and benefits. Workforce Surveys should be carried out

periodically, using international best standards, as done in developed countries to

collect, analyse and disseminate employment and labour statistics, so that there is

accurate demographic analysis of persons in atypical forms of employment. There is

need for accuracy in the computation of labour statistics in order to prevent

misclassification of employment forms and also assist in the formulation and

monitoring of effective policies on human resource development, transition

assistance and social welfare programmes that reflect the significant changes in the

world of work.

Although, a competent regulatory system is required to deal with the growing

diversity in employment, shift in working practices and the creation of new types of

jobs, minimum labour standards are subject to and influenced by national

conditions/circumstances.

More so, the state of the Nigerian economy has forced many organisations to

manage scarce resources by cutting down staff strength, salaries, and employment

benefits to the disadvantage of the workforce. In such circumstances, the

government may give a tax rebate or other fiscal incentives to employers to secure

decent working conditions for employees or to assist them in retaining staff.

55

International Labour Organisation, Sectoral Activities Department, The Role of Worker

Representation and Consultation in Managing Health and Safety In The Construction Industry,

https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_

160793.pdf accessed on 10 September 2020.

https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_%20160793.pdfhttps://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_%20160793.pdf

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Regular and atypical employment are fast becoming one and the same. It is

necessary to enact all-inclusive legislations that embrace both regular and atypical

workers. This article concludes that core labour standards should emphasise

flexibility, employment stability, social security and decent work initiatives, and fair

working conditions for all workers, irrespective of the employment arrangement.

_________________________________________________________ For further information on this article and area of law, please contact

Demilade Odutola at: S. P. A. Ajibade & Co., Lagos by

telephone (+234 1 472 9890), fax (+234 1 4605092)

mobile (+234.0902 590 0719 or email oodutola@spaajibade.com

www.spaajibade.com

http://www.spaajibade.com/