Nigeria
Unlawful termination (case law)
Impact date: 1 June 2026
A total of 108 employees were recruited, screened, and issued employment letters by the Obafemi Awolowo University Teaching Hospital Complex Management Board (OAUTHC). However, management subsequently cancelled their appointments, acting on a Ministerial directive, because the recruitment exceeded the approved ministerial waiver. The affected employees were prevented from working and their salaries were stopped, yet no individual termination letters were issued and no disciplinary procedures were followed. The National Industrial Court of Nigeria (NICN) held that the appointments were valid and that only the employer, not the Minister, had the statutory authority to terminate employment, subject to compliance with the prescribed procedure. The court found that the termination by circular was unlawful, null, and void, and ordered the reinstatement of the employees, payment of all outstanding salaries and emoluments from February 2024 until judgment, and awarded costs of ₦500,000.
Employer implications/action needed Statutory employers must strictly adhere to both contractual and statutory procedures for termination, ensuring that only those legally empowered can exercise the authority to terminate employment. Employers should not shift the consequences of their own administrative errors onto employees who have acted in good faith.
Employer risk Employers (whether in the private or public sectors) face significant litigation and financial exposure if employment is terminated through informal means, such as circulars, or without following the prescribed process. Invalid terminations may result in reinstatement and an obligation to pay full back pay of salaries and benefits for the entire affected period, rather than only damages in lieu of notice.
Link NICN Judgment: Mrs Adedire Caroline O & Ors vs. OAUTHC Management Board - NICN/IB/30/2024
Workplace injury (case law)
Impact date: 18 June 2026
In this case, the Claimant sustained a serious injury while moving heavy machinery at the Defendant’s factory and alleged that the employer failed to provide adequate medical treatment. The Claimant sought compensation for medical expenses, severance allowance, ₦5 million in compensation, and ₦5 million in damages. The employer contended that it had paid the Claimant’s medical bills and continued to pay his salary. The National Industrial Court of Nigeria (NICN) dismissed the claim for lack of evidence, finding that the employer had provided substantial proof of medical payments and that the Claimant admitted his medical bills were paid and he remained on the payroll. The court further held that compensation under the Employees’ Compensation Act 2010 is payable through the statutory Employees’ Compensation Fund/NSITF, not directly by the employer.
Employer implications/action needed Employers should maintain comprehensive documentation of workplace accidents, medical treatment provided, payments made, and ongoing support for affected employees. Strict compliance with the Employees’ Compensation Act and the NSITF framework is essential. Proper record-keeping was pivotal to the employer’s successful defense in this case.
Employer risk The risk of liability is high where accident records and employee compensation processes are inadequately documented. However, this case demonstrates that employers who can provide evidence of appropriate response, payment of medical expenses, and continued employment support can successfully defend against injury claims.
Link NICN Judgment: Cosmos Okoh v. Uberness Nigeria Limited – NICN/IB/43/2022 .
Termination of employment for conflict of interest (case law)
Impact date: 7 July 2026
The Claimant commenced employment with PZ Cussons on 14 March 2022, while her resignation from UAC Foods, a competitor, did not formally take effect until 8 April 2022. Upon discovering the overlap, PZ Cussons queried the Claimant and terminated her employment for conflict of interest and gross misconduct. The National Industrial Court of Nigeria (NICN) dismissed the Claimant’s case, holding that an employee remains employed during the notice or terminal leave period until the official exit date. The court found that the Claimant was simultaneously employed by both companies, resulting in a conflict of interest. The termination was upheld as valid because PZ Cussons established the reason for termination, provided the Claimant with an opportunity to respond, and complied with the contractual requirement for one month’s notice or payment in lieu.
Employer implications/action needed Employers should verify that new hires have fully disengaged from previous employment, especially where competitors are involved. Employment and HR forms should require explicit disclosure of any ongoing employment, notice periods, terminal leave, and potential conflicts of interest.
Employer risk The risk is moderate to high if employers rely on assumptions rather than verified information. When an employer cites a specific reason for termination, it must be able to substantiate that reason. This case confirms that well-documented conflict-of-interest provisions, fair opportunity to respond, and adherence to contractual termination procedures provide strong legal protection.
Link NICN Judgment: Mrs. Mercy Aiyudubie Awala v. PZ Cussons Nigeria Plc – NICN/LA/215/2022
Unlawful salary deductions (case law)
Impact date: 8 July 2026
The Claimant, who was employed on probation, was terminated for alleged poor performance. While the court upheld the validity of the termination, the Claimant challenged salary deductions and fines imposed under the Employee Handbook. The employer was unable to justify the deductions, and several handbook provisions permitted fines to be deducted directly from employees’ salaries. The National Industrial Court of Nigeria (NICN) held that, although the termination was lawful, the salary deductions were wrongful and constituted unfair labour practice. The court found several provisions of the Employee Handbook to be illegal as they contravened section 5 of the Labour Act. The employer was ordered to pay ₦207,240 in salary shortfalls, ₦500,000 in general damages, ₦500,000 in costs, and 10% post-judgment interest after 30 days.
Employer implications/action needed Employers should immediately review employee handbooks, disciplinary policies and payroll practices, particularly provisions imposing monetary fines or salary deductions. Disciplinary issues should generally be addressed through queries, warnings and other lawful disciplinary procedures, rather than arbitrary salary deductions.
Employer risk High. Even a signed Employee Handbook does not shield an employer from liability if its provisions conflict with mandatory labour laws. Unlawful deductions can result in orders for repayment, damages, costs, findings of unfair labour practice, and possible regulatory sanctions.
Link NICN Judgment: Mr. Akindele Akinyemi v. Lifemate Nigeria Limited – NICN/LA/290/2022
Validity of resignation and enforceability of PhD bond (case law)
Impact date: 14 July 2026
The Claimant resigned from Adeleke University after giving the required three months’ notice. The University refused to process his exit and entitlements, alleging that he was bound by a PhD bond arising from two days’ weekly study leave. The University also withheld his August 2024 salary and had previously suspended him without pay over an alleged missing laptop. The National Industrial Court of Nigeria (NICN) held that the resignation was valid and effective upon receipt, and that the alleged bond was unenforceable because the leave was granted unconditionally and there was no signed or applicable bond. The court ordered payment of ₦557,115.28 in withheld salaries, ₦278,557.64 for the August 2024 salary, and release of ₦3,884,314.03 in pension funds. The University's counterclaims were dismissed, and ₦1 million in costs was awarded against it.
Employer implications/action needed Employers should ensure that any training or study bonds are expressly agreed, properly documented, and signed before granting funded or special study arrangements. Employers should not withhold salary or exit entitlements solely because an employee is disengaging, unless there is a clear contractual or statutory basis.
Employer risk Employers cannot retrospectively impose conditions on employees or rely on unsigned or irrelevant policies. Improperly withholding salaries or obstructing resignation and exit benefits can result in orders for payment of arrears, costs, interest, and adverse findings. In this case, the court imposed 20% interest per annum on monetary awards after 30 days.
Contacts
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.
Connect with us
