How to Navigate Employment Contracts and Workplace Disputes in Nigeria
Introduction
When Ada was hired as a project lead in a fast-growing tech firm in Lagos, she was told her employment “would be formalised soon.” Six months later, after hitting major performance milestones, she was abruptly dismissed without warning or severance. The HR manager simply said, “You were never on payroll.”
Unfortunately, Ada’s story isn’t rare.
Across Nigeria, employers and professionals alike often rely on informal agreements, verbal promises, or vague appointment letters to manage working relationships. But in the eyes of the law, what’s not documented doesn’t exist. And when workplace disputes arise — whether it’s about termination, salary, or misconduct — the absence of a legally sound employment contract can turn a misunderstanding into a costly legal crisis.
At Kehinde & Partners, we’ve worked with business owners blindsided by wrongful dismissal claims — and employees who didn’t even know they had enforceable rights. This article breaks down how employment contract laws in Nigeria work, what makes a contract valid, and how to navigate workplace conflicts legally and fairly — whether you’re an employer, HR manager, or working professional.
Key Point 1: What Makes an Employment Contract Legally Valid in Nigeria?
An employment contract is more than a formality — it’s the legal framework that defines and protects every working relationship. Without it, both parties are operating in a fog of assumptions.
Under Nigerian labour law, particularly the Labour Act and principles of contract law, an employment agreement must contain five key elements to be enforceable:
Offer and Acceptance: There must be a clear job offer, and the employee must formally accept it — preferably in writing.
Consideration: This refers to the agreed compensation — salary, benefits, or other remuneration — that flows from the employer to the employee in exchange for their services.
Legal Capacity: Both employer and employee must be of legal age and mentally competent to enter into the agreement.
Intention to Create Legal Relations: The parties must intend for the agreement to be legally binding — casual “help me out” arrangements don’t hold.
Certainty of Terms: The job description, salary, and other terms must be clear, not vague or ambiguous.
⚖️ Case Example: A boutique owner hired a sales assistant “on trust,” promising to sort her documents later. Months later, the assistant was dismissed after a disagreement. She filed a claim for wrongful termination. In court, the employer couldn’t prove any formal agreement — but the assistant had chat messages, payment records, and a signed “offer slip.” The judge ruled in her favour, citing implied employment and lack of due process.
🧠 Think of it this way:
“Relying on a handshake deal in the workplace is like building a house with no foundation — you don’t know how shaky things are until they collapse.”
Even where the Labour Act doesn’t strictly apply (e.g., for senior executives or contract staff), general principles of contract law still require that employment terms be legally sound, unambiguous, and documented.
Key Point 2: Essential Clauses in a Legally Binding Employment Contract
A well-drafted employment contract is like a roadmap — it guides both the employer and employee throughout the working relationship. Without it, disagreements over responsibilities, entitlements, and boundaries become inevitable.
Under Nigerian employment contract laws, especially as enforced by the National Industrial Court and guided by the Labour Act, certain clauses are not optional — they form the core of a contract’s enforceability and fairness.
Let’s walk through the key components every employment agreement should include:
🔹 1. Job Title and Scope of Duties
Clearly outline the employee’s position and their core responsibilities. Ambiguous roles lead to role creep, unfulfilled expectations, and conflict.
Example: A business owner hired someone as “office staff” but later expected them to manage the company’s social media accounts. The court ruled that the tasks fell outside the original role and demanded additional compensation.
🔹 2. Compensation and Benefits
Specify the salary amount, payment frequency, bonus terms, allowances, and statutory deductions (e.g., tax, pension). Mention benefits such as health insurance, leave days, and end-of-year bonuses, where applicable.
Practical Tip: Include the net salary and not just “as agreed” or “to be negotiated,” which courts may view as vague.
🔹 3. Working Hours and Location
State the expected workdays, hours (e.g., 8am–5pm), and whether remote or on-site. This helps avoid claims of overwork or non-compliance with working hour laws.
🔹 4. Termination Clause
This is critical. It should outline:
The notice period required by either party
Grounds for termination (e.g., misconduct, redundancy)
Entitlement to severance or final pay
Exit procedures (handover, return of property, etc.)
⚠️ Without a termination clause, even justified dismissal may be ruled wrongful.
🔹 5. Confidentiality and Non-Compete Clauses
For roles involving access to sensitive business information, include clauses that:
Prevent the employee from disclosing trade secrets during or after employment
Limit their ability to join a direct competitor within a defined time and location after exit
Legal Note: Non-compete clauses must be reasonable to be enforceable — overly broad terms may be struck down.
🔹 6. Dispute Resolution Mechanism
Spell out how disagreements will be handled:
Internal grievance steps
Mediation or arbitration option
Final recourse to labour court
Kehinde & Partners Tip: Including an arbitration clause often saves time and money in case of conflict.
Key Point 3: Contract Loopholes That Lead to Disputes
A contract may exist on paper, but if it’s riddled with vague language, missing terms, or legal gaps, it becomes a ticking time bomb.
At Kehinde & Partners, we’ve reviewed dozens of employment contracts that looked professional but left clients legally exposed due to small — yet critical — oversights. In the fast-moving Nigerian workplace, these loopholes often surface only when a dispute arises.
Here are some of the most common contract traps to avoid:
🔸 1. Ambiguous Job Descriptions
A contract that merely says “Marketing Executive” without clearly defining duties may lead to disputes over expectations, performance reviews, or promotions.
Scenario: An employee sued for unfair treatment after being demoted. The employer claimed she wasn’t meeting deliverables — but the contract had no measurable responsibilities.
🔸 2. Unspecified Notice Periods
When a contract doesn’t state the length of notice required for termination, the employer may assume they can let an employee go immediately. Legally, however, the employee may be entitled to reasonable notice or compensation in lieu — especially if they’ve worked for over 3 months.
Legal Insight: The Labour Act prescribes minimum notice durations based on the length of service.
🔸 3. Verbal Alterations or Side Agreements
Many Nigerian workplaces operate informally. Employers make promises (“We’ll increase your salary next month”) that never make it into writing — leading to confusion, broken trust, and legal exposure.
Quote: “If it’s not in writing, it didn’t happen — at least not in court.”
🔸 4. Inconsistent Documents
Sometimes, an employee’s appointment letter says one thing, the staff handbook says another, and the offer email says something else entirely. If there’s no integration clause stating which document prevails, courts may side with the employee’s interpretation.
🔸 5. Missing Grievance and Disciplinary Procedures
Without clear processes for complaints and misconduct, employers risk being seen as unfair or arbitrary. Labour courts in Nigeria often weigh procedural fairness just as heavily as legal correctness.
🧠 Think of it like this:
“An employment contract without clear terms is like a GPS with no destination — you’ll keep driving until you hit something.”
⚖️ Real-World Case Example:
A Lagos firm was ordered to pay ₦3.2 million to a dismissed employee because his contract lacked a termination clause and the employer could not justify summary dismissal. A simple one-page clause could have prevented the judgment.
Key Point 4: Rights and Obligations of Employers and Employees in Nigeria
In every employment relationship, both parties have legal rights and responsibilities. When one side oversteps — or fails to meet their obligations — disputes are inevitable.
Understanding these mutual expectations is essential not just for avoiding conflict, but for fostering a legally compliant and ethically sound workplace. Nigerian employment contract laws outline many of these duties through the Labour Act and court precedents.
Let’s break it down:
👩💼 Employee Rights
Employees in Nigeria are entitled to:
Fair and timely compensation for work done
Rest days, annual leave, and public holidays
Safe and healthy working conditions
Freedom from harassment, discrimination, or wrongful dismissal
Written contract terms after three months of continuous service
Due process in disciplinary or termination proceedings
Example: An employee who is dismissed without any query or investigation may succeed in a wrongful termination suit — even if they were at fault — simply because proper process wasn’t followed.
🧑💼 Employer Rights
Employers also have legitimate rights, including:
To discipline or terminate staff in line with the contract and law
To assign job roles and evaluate performance
To protect business interests, including trade secrets and client data
To expect loyalty and compliance with workplace policies
Legal Tip: Employers may include a confidentiality clause and restrictive covenants in senior-level contracts — but such clauses must be reasonable to be enforceable.
🤝 Shared Obligations
Both employers and employees are expected to:
Act in good faith
Honor contract terms
Resolve conflicts through agreed channels
Maintain workplace professionalism
Key Point 5: Common Workplace Disputes and What Triggers Them
No matter how well-structured a business is, workplace disputes are almost inevitable. But most conflicts don’t start out as lawsuits — they begin as unresolved misunderstandings, unclear expectations, or emotional reactions to perceived injustice.
From our experience at Kehinde & Partners, the root of many employment disputes in Nigeria is preventable — and often stems from poor documentation or neglected communication.
Let’s explore the most common flashpoints:
⚠️ 1. Wrongful Termination
Dismissals that occur:
Without proper notice,
Without stated cause,
Or without following disciplinary procedure,
…are often challenged in court — and courts tend to favor employees when due process is skipped.
Example: A mid-level executive was fired over WhatsApp for “insubordination.” She had no queries on file and had received positive reviews. The employer paid ₦5 million in damages after court proceedings.
⏳ 2. Delayed or Unpaid Salaries
This is a frequent issue, especially in startups and small businesses. Even in tough economic times, an employer is legally obligated to pay on time.
Legal Note: Deliberate, prolonged salary delays can amount to constructive dismissal or breach of contract.
💰 3. Unpaid Benefits
Employees often take legal action when promised allowances, pensions, or end-of-year bonuses are withheld — especially if such benefits were written (or implied) in their contract or employee handbook.
🧾 4. Disputes Over Role Expectations
Lack of a clear job description can result in disputes over promotions, demotions, or performance targets.
Quote: “My contract said ‘Admin Officer’ — not operations manager, logistics lead, and customer care rolled into one.”
🧍♂️ 5. Workplace Harassment or Bullying
Claims of verbal abuse, intimidation, or sexual harassment are rising in Nigerian workplaces — and courts now view employers as duty-bound to provide a safe environment.
Kehinde & Partners Tip: A well-drafted anti-harassment policy, enforced consistently, can protect both the company and its staff.
🧠 Think of it like this:
“Most workplace disputes don’t start in court — they start in silence. And what isn’t addressed early tends to explode later.”
❓ Common Audience Questions:
“Can I fire someone on the spot for misconduct?”
“Is it legal to deduct an employee’s salary without their consent?”
“How do I handle a complaint of harassment without legal risk?”
Key Point 6: Resolving Workplace Disputes Legally in Nigeria
When conflict breaks out in the workplace, how it’s handled can make the difference between a one-week hiccup and a six-month legal crisis. Nigerian law provides multiple pathways for resolving employment disputes — but each path has its own timing, tone, and implications.
At Kehinde & Partners, we often advise clients to start small and escalate only when necessary. Here’s how:
🔁 1. Internal Grievance Procedure
Before any legal steps are taken, employees are generally expected to use the company’s grievance system — if one exists.
This typically involves:
Filing a written complaint to HR
Holding a meeting or hearing
Issuing a response or resolution in writing
Tip for Employers: If you don’t have a formal grievance policy, now’s the time to create one. Courts may view its absence as evidence of negligence or bad faith.
🫱🏽🫲🏾 2. Mediation or Arbitration
If internal steps fail, parties may proceed to mediation or arbitration, especially if the contract includes a dispute resolution clause.
Mediation is informal, voluntary, and seeks a win-win resolution
Arbitration is more structured — like court but private and typically faster
⚖️ Case Example: Kehinde & Partners helped resolve a ₦9 million bonus dispute between a CEO and an ex-staff via mediation — preserving the company’s reputation and avoiding public litigation.
⚖️ 3. National Industrial Court of Nigeria (NICN)
When all else fails — or when the law requires — disputes may be filed at the NICN, which has exclusive jurisdiction over:
Employment contracts
Terminations
Workplace discrimination or harassment
Pension and labour union matters
What to Know:
Employers must bring documented evidence: contracts, query letters, payslips, etc.
Employees must prove the existence of a relationship and breach of rights.
Important: The court process can be lengthy — mediation is often faster and less confrontational.
🧾 4. Trade Unions or Ministry of Labour
For unionised workplaces or informal sector employees, the Ministry of Labour or trade union mechanisms may offer support and intervention before legal escalation.
Key Point 7: Preventing Conflict Before It Starts
The best time to solve a workplace dispute is before it happens. While legal support is vital when things go wrong, proactive HR practices and contract clarity can stop 80% of disputes before they ever reach your inbox — or a courtroom.
At Kehinde & Partners, we often tell our clients: “Disputes thrive in silence and ambiguity. Prevention thrives on documentation and clarity.”
Here are proven ways Nigerian employers and professionals can avoid unnecessary conflict:
✅ 1. Conduct Comprehensive Onboarding
From the first day of work, employees should be taken through:
Their signed employment contract
The company’s grievance and disciplinary policy
Expectations on conduct, reporting lines, and KPIs
Tip: Make sure employees sign an acknowledgment form — this proves they understood the rules from Day 1.
📚 2. Maintain Clear Workplace Policies
Develop written policies on:
Leave entitlements and procedures
Sexual harassment and whistleblower protection
Internet use, confidentiality, dress code, etc.
Conflict resolution and appeal steps
Pro Tip: Include your policies in an Employee Handbook that’s updated annually.
📝 3. Keep HR Documentation in Order
Documentation is your best defence in a dispute. This includes:
Attendance records
Query and response letters
Performance appraisals
Warnings or disciplinary actions
Scenario: A company avoided a wrongful dismissal claim by presenting two signed queries, a written warning, and the employee’s own admission — all dated and filed.
🎯 4. Clarify Terms of Promotion and Disciplinary Action
If your promotion policy is “merit-based,” define what merit means. If you dismiss for “gross misconduct,” describe what that includes.
Ambiguity is the mother of litigation.
🧠 Think of it like this:
“An employee handbook is like a workplace GPS — when everyone has one, no one gets lost.”
Conclusion: Clarity in the Contract, Confidence in the Workplace
Workplace relationships are built on more than trust — they’re built on terms. In Nigeria’s evolving labour landscape, where informal practices are still common and legal awareness varies widely, the absence of a clear employment contract or grievance system is a risk no employer or professional should ignore.
From misunderstood job roles to wrongful dismissals and unpaid benefits, we’ve seen firsthand how minor oversights can trigger major legal consequences. But we’ve also seen how the right contract, the right policy, and the right approach to conflict can transform how teams work together — and protect everyone involved.
Whether you’re a business owner drafting your first employment agreement, an HR manager facing a complex dispute, or a professional wondering if your rights are being respected, one thing is certain:
“The earlier you seek legal guidance, the stronger your position — and the smoother your resolution.”
Kehinde & Partners helps Nigerian employers and employees navigate employment contracts, workplace policies, and disputes with legal clarity and strategic care.
