The COVID-19 pandemic has had a significant impact on employer-employee relations worldwide. Due to the slowdown of economies around the world, businesses have been impacted a great deal which has led to the review of business policies, operating procedures, employment contracts and inevitably, job cuts. For employers and employees in Nigeria looking for guidance on navigating the employment landscape, below are answers to pertinent questions.
1. Can an employee’s contract be terminated due to business losses from COVID-19?
Under Nigerian law, employers may terminate the employment of an employee with reason or without reason. What is important is that the termination is carried out in accordance with the terms of the employment agreement. Where it provides for notice or salary in lieu of notice to be given, either of these options should be followed otherwise it would constitute a breach of the employment agreement.
2. Can an employer decide to not pay employees due to unavailability of work?
Under the Labour Act, employers have a duty to provide work. Therefore, where employees are able and available to work, it is the responsibility of an employer to ensure work is provided. If work is not provided or unavailable, the employer is still required to pay wages to its employees. However, the Labour Act only applies to staff in lower cadre roles (drivers, clerks, etc). All other employees are governed according to the terms of their contracts which ordinarily provide for renumeration regardless of the availability of work. Employers unable to provide work and thereby unable to pay salaries due to the effect of COVID-19 are advised to discuss with their employees and agree on an arrangement that is fair to both parties.
3. Can employees be asked to proceed on indefinite leave or have their employment agreements suspended?
Nigerian law does not provide for indefinite leave or the suspension of employment agreements. If an employer seeks to suspend the employment of its employees or ask that they proceed on indefinite leave pending when operations return to normal, it would have to be in line with the terms of the agreement. Where the contract is silent on this, the employer is advised to consult with employees and agree on the terms of the suspension or the indefinite leave as this cannot be done unilaterally. This also applies to situations where employers request that employees proceed on their annual leave without pay
4. Are employers allowed to cut salaries due to the business impact of Covid-19?
Employment agreements typically include the renumeration of employees. If there is to be a variation of the remuneration, it must be agreed to by parties to the agreement. If a business is unable to pay salaries, this should be made known to the employees beforehand and a fair arrangement reached.
5. Can an employer be exposed to a claim for wrongful termination?
If the manner of termination of employment is not in accordance with the Labour Act or the terms of the employment agreement, employers will be liable for wrongful termination. For example, where the employment contract provides for notice to be given before termination, an employer must ensure the applicable notice as stated in the agreement is given.