Wrongful Termination in Nigeria: What Employers and Employees Need to Know

The landscape of employment law in Nigeria has shifted considerably in the last decade. The National Industrial Court (NIC), now with exclusive jurisdiction over employment and labour matters, has developed a body of jurisprudence that many employers still do not fully appreciate. Employees, meanwhile, often do not know what remedies are available to them.

The Basic Position: Contract Governs

Employment in Nigeria is primarily a contractual relationship. The terms of the employment contract, particularly the notice provisions and termination conditions, govern how and when either party may end the relationship.

An employee terminated in accordance with their contract (proper notice given, or pay in lieu of notice) is not, in law, wrongfully terminated, even if the termination feels arbitrary or unfair.

This is the common law position and it remains the foundation. But there are now important exceptions.

When Termination Becomes Wrongful

1. Breach of the Contract Terms

If your contract specifies that termination requires a disciplinary hearing before dismissal, and none was held, the termination may be wrongful regardless of the underlying conduct. Procedural requirements in employment contracts are enforceable.

2. Statutory Protections

The Employees Compensation Act, the Labour Act, and various sector-specific regulations impose obligations on employers that cannot be waived by contract. Termination that violates these protections carries its own legal consequences.

3. Constitutional Dimension

The National Industrial Court has held that where the employer is a statutory body or public institution, the constitutional right to fair hearing under Section 36 of the 1999 Constitution applies to employment termination. This is a significant departure from the pure contract position.

4. Discrimination

Termination on grounds of gender, ethnicity, religion, or disability, though historically difficult to prove, is now more actively pursued before the NIC, which has shown willingness to award substantial damages where discrimination is established.

What the NIC Can Award

The National Industrial Court has broad jurisdiction to award remedies including:

• Damages: compensatory damages for wrongful termination

• Re-instatement: ordering that the employee be restored to their position

• Re-engagement: placement in a comparable role

• General damages for injury to reputation and feelings in appropriate cases

Courts in other jurisdictions have been reluctant to order re-instatement. The NIC has shown greater willingness.

For Employers: Getting Termination Right

If you intend to terminate an employee, especially a senior one, you should:

1. Review the employment contract and identify the precise termination mechanism

2. Follow any contractual disciplinary procedures before dismissal for cause

3. Ensure notice or pay in lieu of notice is properly calculated and paid

4. Document your reasons, even if the contract does not require this

5. Consider a negotiated separation agreement where appropriate

The cost of a properly managed termination is significantly lower than the cost of NIC litigation.

For Employees: Assessing Your Position

If you have been terminated and believe it was wrongful, consider:

1. Timing: NIC proceedings must typically be commenced within statutory limitation periods; delay can prejudice your claim

2. Documentation: preserve your employment contract, payslips, performance reviews, and any correspondence relating to the termination

3. Quantum: what you are entitled to depends on your contract, your remuneration, and the nature of the breach

Our labour law team advises both employers and individuals on employment matters including termination disputes, contractual entitlements, and National Industrial Court litigation. Initial consultations are confidential.