On this Page
1. Registration with ISIPA
2. Company Taxation
3. Labour
4. Production Factor
5. Land
6. Legal Framework
Imo State has an estimated population of about 4.5million people, who are generally enterprising and hospitable. The labour market in Imo is very flexible with highly skilled, low labour cost level, highly motivated and productive workforce.
Imo labour market distinguish themselves by being highly educated, efficient, responsible, heathily self-critical with a willingness to learn and a commitment to making improvement - in both production and performance.
The current national minimum wage is about 36,000 naira, about 100 United States dollars per month. An employer, defined as someone employing 50 or more persons, is required to pay the minimum wage, defined as the total emolument payable to a worker.
Rights are usually determined by the terms in the contract of employment. When a hire is made, the Nigerian Labour Act requires employers to provide an employment contract setting out the following:
The terms and condition of employment within three months of the commencement of employment;
● The name of the employer;
● The undertaking by which the worker is employed;
● Name, address, and date of hire of the worker;
● Nature of the employment;
● Date of expiration if the contract is for a fixed term;
● Period of notice for termination with attention to section 11 of the Nigerian Labour Act;
● Rate of wages, method of calculation, and frequency of pay;
● Terms and conditions relating to hours, holidays, incapacity (including any provision for sick pay), and any special conditions in the contract.
Employers may use the first three months before providing the contract as a probationary period, and if spelled out in the contract time thereafter as well. With regards to contracts for a fixed term, contracts must be in writing, but otherwise there are no statutory limitations or restrictions on employment contracts for a fixed term.
In certain situations, an employer may desire to use independent contractors rather than hiring employees. Status as an independent contractor and vicarious liability for torts committed by an independent contractor is determined by the level of control exercised by the employer over the contractor.
Normal hours of work are fixed by mutual agreement, or by collective bargaining, or by an industrial wages board where there is no machinery for collective bargaining.
If a worker is at work for more than 6 hours a day, he she must be given at least 1 hour of rest-interval in that day. Further, in every period of 7 days, a worker is entitled to at least 1 day of rest which must not be less than 24 consecutive hours.
Every worker is also entitled to 12 days' sick leave for temporary illness certified by a registered medical practitioner.
Every employee after 12 months of continuous service is entitled to a holiday with full pay of at least 6 working days or in the case of a person under the age of sixteen (16) years (including an apprentice), at least twelve (12) working days (this is exclusive of all the public holidays). An exception to the entitlement to a holiday after 12 month's continuous service is that such holiday can be deferred to a later date by agreement between the employee and employer provided that the holiday earning period shall not be increased beyond 24 months' continuous service.
All female employees are entitled to take up to 12 weeks of maternity leave with full pay. Of this period, six weeks must be taken after the birth. Women may start their leave at any time from six weeks before the expected date of birth, on producing a medical certificate issued by a registered medical practitioner stating that confinement will probably take place within six weeks. Nigerian labour Act does not recognize paternity leave and makes no such provisions.
There is a general prohibition of discrimination in employment on the grounds of ethnic group; place of origin; community; sex; religion; political opinion; and circumstances of birth.
The factories Act places an obligation upon employers owners or occupiers of a factory to ensure the health, safety and welfare of employees within the factory. Thus, it is the duty of the employer to ensure the provisions of the factories Acts relating to cleanliness, overcrowding, ventilation, lighting, drainage and sanitary conveniences complied with.
Furthermore, the Act makes it the duty of the employer to provide a safe means of access and safe place of emploment, sections 47 and 48 of the Act also make it mandatory for factory workers to be provided with protective clothing and appliances, where they are employed in any process involving excessive exposure to wet or to injurious or offensive substance. Similarly, where necessary, suitable gloves, footwear, goggles and head coverings should also be provided and maintained for use by the workers.
Employers must apply for an "expatriate quota." The quota allows a company to employ foreign nationals in specifically approved job designation as well as specifying the validity period of the designations provided on the quota.
There are two types of visas which may be granted, depending on the length of stay. for short term assignments, an employer must apply for and receive a temporary work permit, allowing the employee to carry out some specific tasks. The temporary work permit is a single-entry visa, and expires after three months. There are no numerical limitations on short-erm visas, and foreign nationals who meets the conditions for grant of a visa may apply for as many short term visas as required.
For long-term assignments, the employer shoukd apply for a "subject-to-regularization" visa (STR). To apply for an STR, an employer must apply for and obtain an expatriate quota. The expatriate quota states positions in the company that will be occupied by expatriate staff.Upon arrival in Nigeria, the employee will need to validate his or her visa by applying for a work and residence permit.
Spouses of authorized workers may also work in Nigeria, provided they obtain a work and residence permit as well. Nigeria does not employ a labor market test, although the Nigerian Content Act does state that emploers should exercise a preference for local employees.
The Nigerian Labour Act defines redundancy as an involuntary and permanent loss of employment caused by excess manpower. The law in nigeria recognizes the right of the employer to terminate the contract of employment of an employee on ground of redundancy. The labour Act specifically provides that in the event of redundancy:
● The employer is to inform the trade union or workers' representative concerned.
● The principle of "last in, first out" shall be adopted in the discharge of the particular category of workers affected, subject to all factors of relevant merit, including skill, ability and reliability.
● The employer is to use his best endeavours to negotiate redundancy payments to any discharged worker who are not protected under the Labour Act.
The Nigerian Labour Act provides the following as minimum notice periods for the termination of an employment contract:
● Where the employee has been employed for a period of 3 months or less, either party may terminate the contract with a minimum of 1-day notice.
● Where the employee has been employed for a period of 3 months but less than 2 years, either party may terminate the contract with a minimum of a 2-week notice.
● Where the employee has been employed for a period of 2 years but less than 5 years, either party may terminate the contract with a minimum of a 2-week notice.
● Where the employee has been employed for a period of 5 years or more, either party may terminate the contract with a minimum of 1-month notice.
When giving notice of termination of employment contract where the notice is 1 week or more, the notice must be in writing.
The Employee Compensation Act (ECA) provides for adequate compensation for employees or their dependants in the event of death, injury, disease or disability arising out of, or in the course of employment. The Act is also intended to provide for safer working conditions for employees, by ensuring that all relevant stakeholders contribute to the prevention of occupational hazards and disabilities. To this end, employers are required to contribute 1% of their payroll costs to the National Social Insurance Trust Fund (NSITF) to cover employees from work-related accidents and death.
Contributory Pension Scheme
Under the Pension Reform Act of 2014, employers and employees are required to make a minimum contribution of 10% and 8% respectively of the employee’s monthly emoluments to a Pension Fund Administrator chosen by the employee. In addition, an employer is also required to maintain a Group Life Insurance Policy for each employee for a minimum of three times the annual total emolument of the employee.
The NHF seeks to facilitate the provision of houses to Nigerians at affordable prices. Employers are required to deduct 2.5% of employee’s basic salary and remit same to the Federal Mortgage Bank of Nigeria within one month of such deduction.
The National Health Insurance Scheme (NHIS) provides all employees access to affordable health care. Companies with a minimum of ten (10) staff are expected to provide health insurance for their staff and their dependants.
The ITF was established to promote the acquisition of skills in industry and commerce with a view to generating a pool of indigenous trained manpower sufficient to meet the needs of the economy. Employers are required to contribute 1% of annual payroll costs to the ITF, if they
● have five (5) or more employees or an annual turnover of ₦50million and above;
● bid for or solicit contracts, businesses, goods and services from public and private establishments;
● require approval for Expatriate Quota; or
● utilise Customs services for import and export.
However, the ITF Governing Council may refund of up to 50% of an employer’s contributions if he submits evidence of providing relevant training to his employees.
|
Employer contribution |
Employee Contribution |
Pension Contribution |
10% of employee’s salary |
8% of salary |
National Housing Fund |
None |
2.5% of basic salary |
National Health Insurance Scheme |
10% of employee’s basic salary |
5% of basic salary |
Industrial Training Fund |
1% of annual payroll |
None |
Employee Compensation Scheme |
1% of annual payroll |
None |
Citizens of countries that are members of the Economic Community of West African States (ECOWAS) can reside and work in Nigeria without residence permits; they are however required to apply for the ECOWAS Residence Card within 90 days of their arrival in Nigeria.
An expatriate is liable to tax in Nigeria if his employment costs are recharged to a Nigerian company; or he is in Nigeria for up to 183 days in a year (including leave and temporary absence); or where he is not liable to tax in another country which has a double tax agreement with Nigeria.