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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 [email protected]
www.spaajibade.com
http://www.spaajibade.com/