Category: Publications

02 Jul 2021
Divorce
Publications GRF Dalley & Partners 0 comment

Dissolution of Marriage in Nigeria

  1. Applicable Laws and Jurisdiction

 

What is the applicable law governing dissolution of marriage in Nigeria?

The applicable laws are the Matrimonial Causes Act Cap. M7 Laws of the Federation of Nigeria, 2004 and the Matrimonial Causes Rules 1983.

Which Court has Jurisdiction over matrimonial causes?

The High Court of each State of the Federation (Section 2(1)(a) of the Matrimonial Causes Act). It is important to bear in mind that, in order to invoke the Court’s jurisdiction, the petitioner must be domiciled in Nigeria.

Does the High Court have Jurisdiction over all types of marriage? 

No, the jurisdiction of the High Court relates strictly to statutory marriages.

How does Divisional Jurisdiction apply in matrimonial Causes? 

A person domiciled in any state of the Federation may institute proceedings in the High Court of any of the states of the Federation, irrespective of whether the person is domiciled in the particular state or not.

 

  1. Grounds for Divorce

 

On what ground can a party seek to dissolve a marriage contracted under the Act? 

Section 15(1) of the Matrimonial Causes Act provides the sole grounds for the dissolution of marriage as being “the marriage has broken down irretrievably”. However, Section 15(2)(a-h) provides the circumstances in which a petitioner may prove that the marriage has broken down irretrievably and they include non- consummation of marriage, adultery, irresponsible behaviour, desertion, living apart for two years, living apart for three years, failure to comply with Decree of restitution of conjugal rights and presumption of death.

Can a marriage below two years be dissolved? 

Generally, by Section 30(1) of the Matrimonial Causes Act, a petition for the dissolution of marriage shall not be instituted within two (2) years after the celebration of the marriage. However, a petitioner can seek the leave of Court on the ground that refusal shall impose exceptional hardship or exceptional depravity.

Furthermore, Section 30(3) of the Matrimonial Causes Act provides for exceptions. It states that the provisions as contained in Section 30 of the Act shall not apply where the institution of proceedings is based on matters relating to wilful failure to consummate the marriage, adultery, commission of rape, sodomy or bestiality; or if the procedure is by way of cross proceedings.

What decision can the Court make in cases of dissolution of marriage? 

After the conclusion of trial, provided the Court is satisfied that the marriage has broken down irretrievably it will grant a Decree Nisi which is usually for a period of three (3) months after which it may be made absolute.

What is the effect of a Decree Absolute? 

By Section 33 of the Matrimonial Causes Act, where a Decree of Dissolution becomes absolute, a party to the marriage is free to re-marry. However, during the three (3) month waiting period parties are forbidden from re-marrying.

What is the difference between Dissolution and Nullity of marriage? 

An order of Dissolution determines the marriage based on the intolerable behaviour of one of the parties, whilst nullity is based on fundamental illegalities, such as failure to comply with formal requirements, affinity, etc.

 

  1. Reliefs

 

Asides from the Decree of Dissolution, what other pronouncements can the Court can make? 

The Court is restricted to granting the reliefs sought by the petitioner. Apart from seeking the dissolution of marriage the parties are at liberty to seek ancillary reliefs such as custody, maintenance, financial and proprietary settlements. (See Section 70(1), 71(1), 72 of the Matrimonial Causes Act).

 

  1. Types of Marriages in Nigeria

 

Asides from statutory marriages, what other type of Marriage can be contracted in Nigeria? 

Apart from statutory marriages the parties may marry under native law and custom or Islamic law.

How can a customary marriage be dissolved? 

There are 3 ways of dissolving customary marriages namely: Extra-Judicial (return of dowry based on the particular tradition), Judicial dissolution (through the pronouncement of a Customary Court), and by death.

 

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25 Jun 2021
Publications GRF Dalley & Partners 0 comment

CHECKLIST ON THE ANTI-MONEY LAUNDERING LEGAL FRAMEWORK IN NIGERIA

  1. Applicable Laws

 

The applicable laws in relation to anti-money laundering efforts in Nigeria are:

  • Money Laundering (Prohibition) Act 2011 (as Amended)
  • Central Bank of Nigeria (Anti-Money Laundering and Combating the Financing of Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations 2013
  • Economic and Financial Crime Commission (Establishment) Act 2004
  • Terrorism Prevention Act, 2012 (as amended)
  • Banks and other Financial Institutions Act (BOFIA) 1991
  • Central Bank of Nigeria Act, 2017
  • National Drug Law Enforcement Act (1990)
  • Financial Action Task Force Recommendations

 

The Money Laundering (Prohibition) Act 2011 (as Amended) is the primary legislation that regulates money laundering in Nigeria and is divided into three (3) parts namely Prohibition of Money Laundering, Offences, and Miscellaneous.

 

  1. General Provisions

 

What amounts to money laundering under Nigerian law?


Any person or body corporate, in or outside Nigeria, who directly or indirectly conceals or disguises the origin of, converts or transfers, removes from the jurisdiction, or acquires, uses, retains or takes possession or control of any fund or property, knowingly or reasonably ought to have known that such fund or property is, or forms part of the proceeds of an unlawful act commits an offence of money laundering under the Money Laundering (Prohibition) Act 2011 (as amended).

 

Are the anti-money laundering provisions applicable to corporate bodies?


The anti-money laundering provisions apply equally to corporate bodies.

 

Is there a limitation on the acceptance of cash payments?


Section 1 of the Money Laundering (Prohibition) Act (as amended) prohibits the making or acceptance of cash payments above the sum of =N= 5,000,000.00 or its equivalent in the case of individuals; or above the sum of =N= 10,000,000.00 or its equivalent in the case of a body corporate.

 

What is the punishment for money laundering under Nigerian law?

A person found liable upon conviction can be sentenced to a term of not less than seven (7) years but not more than fourteen (14) years imprisonment while a body corporate is liable upon conviction to a fine of not less than 100% of the funds and properties acquired as a result of the offence committed and a withdrawal and/or revocation of its license.

Are there requirements in the law for mandatory disclosure?


A Financial Institution or Designated Non-Financial Institution is required to report to the Economic and Financial Crimes Commission (EFCC) in writing within seven (7) days, any single transaction, lodgment or transfer of funds in excess of =N= 5,000,000.00 or its equivalent in the case of an individual; or =N= 10,000,000.00 or its equivalent in the case of a body corporate.
Any Financial Institution or Designated Non-Financial Institution that fails to make such disclosure is guilty of an offence and liable to a fine of not less than =N= 250,000.00 and not more than =N= 1,000,000.00 for each day the contravention continues.

A person other than a Financial Institution may voluntarily give information on any transaction, lodgment or transfer of funds in excess of =N= 1,000,000.00 or its equivalent in the case of an individual; or =N= 5,000,000.00 or its equivalent in the case of a body corporate.

 

  1. Enforcement

 

Who is responsible for enforcement?


Enforcement of the Money Laundering (Prohibition) Act is primarily carried out by the following government agencies, amongst others:

  • Economic and Financial Crimes Commission (EFCC)
  • Central Bank of Nigeria (CBN)
  • National Drug Law Enforcement Agency (NDLEA)
  • Nigeria Customs Service (NCS)
  • Nigeria Police Force (NPF)

 

Which court has jurisdiction over money laundering matters?


Section 20 of the Money Laundering (Prohibition) Act 2011 (as amended) confers, jurisdiction to try offences and impose penalties under the Act, on the Federal High Court of Nigeria.

 

  1. Compliance with AML/CFT in relation to the Central Bank of Nigeria’s eNaira project

 

The eNaira is to be recognised as legal tender that has parity of value with the Naira. In view of this, the Regulatory Guidelines on the eNaira issued by the CBN require that Financial Institutions comply with the Money Laundering  (Prohibition) Act 2011 (as amended), the Terrorism (Prevention) Act 2011 (as amended) and all subsisting anti-money laundering laws and regulations as may be issued by the CBN from time to time.

 

 

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15 Jun 2021
Social bonds
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OVERVIEW OF THE PROPOSED NEW RULE ON SOCIAL BONDS IN NIGERIA

Social bonds, which are also known as social impact bonds, are a relatively recent concept. The first social bond was issued in 2010 by Social Finance Ltd. in the United Kingdom.[1] Recent examples of social bond issuance abound such as the €13 billion dual-tranche social bond issued by the European Union to mitigate the negative effects of the COVID-19 pandemic[2] and the $463.9 million Kangaroo bond launched by the African Development Bank.[3]

The Securities and Exchange Commission recently made available the Proposed New Rule on Social Bonds. The rationale cited for this was the rise of interest in ethical investment and the recognition of social bonds being as a means of providing funding for specific projects. The realization of the potential use of social bonds to fund social projects was brought to the fore in view of the diversion of government spending to other affected areas during the COVID-19 pandemic.

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[1] https://sibdatabase.socialfinance.org.uk/?project_id=7

[2] https://cib.bnpparibas/eu-issues-e13bn-sure-social-bond-to-further-mitigate-pandemic-impact/

[3] https://www.afdb.org/en/news-and-events/press-releases/african-development-bank-launches-aud600-million-usd4639-million-kangaroo-social-bond-44119

02 Jun 2021
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Checklist of Requirements to Register as a Crowdfunding Intermediary in Nigeria

The Securities and Exchange Commission (SEC) requires all existing investment crowdfunding portals/digital commodities investment platforms to register with the Commission by the 30th of June 2021. Failure to comply would attract regulatory sanctions. Thus, such entities are expected to take note of the registration requirements and ensure that they comply with the eligibility criteria.

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02 Dec 2020
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Notice for Takedown Schemes: Guarding Against Intellectual Property Infringement in Ecommerce

Introduction

With the improvement of technology and increase in cross-border transactions, there is a growing shift towards using ecommerce channels in conducting business activities. This brings along with it benefits such as appealing to a wider customer base without incurring the overhead costs involved in running and expanding brick-and-mortar businesses. Developments in fintech solutions have been instrumental to facilitating the adoption of ecommerce in Nigeria. The cost of integrating payment solutions to platforms has drastically reduced over the years and as such it has become more accessible to the general public who intend to use these solutions to receive payments for products and services sold through the internet. Ecommerce has particularly proved itself as a viable means of continuing sales during the COVID-19 pandemic where movement was limited.

Internet user penetration in Nigeria is estimated to be 46.6% in 2020 and is expected to be 65.3% by 2025.[1] With this, Nigerian ecommerce spending is estimated to be $12 billion as at 2020.[2] However, despite the benefits of ecommerce, it is accompanied by various challenges including intellectual property infringement. In this article, we will be examining intellectual property infringement and how it can be avoided in ecommerce through notice for takedown schemes.

 

Intellectual property infringement under various laws

Simply put, intellectual property infringement occurs when a person uses, produces or sells content, designs, methods, procedures, products, etc. without the permission of the owner. In Nigeria, the main laws governing intellectual property are as follows:

  1. Copyright Act, Cap. C28 Laws of the Federation of Nigeria 2004
  2. Trade Marks Act, Cap. T13 Laws of the Federation of Nigeria 2004
  3. Patents and Designs Act, Cap. P2 Laws of the Federation of Nigeria 2004

Under the Copyright Act, an infringement is said to occur when a person does any of the following without the licence or authorization of the copyright holder:

  1. Does or causes any other person to do an act that is controlled by copyright;
  2. Imports into Nigeria, otherwise than for his private or domestic use, any article in respect of which copyright is infringed;
  3. Exhibits in public any article in respect of which copyright is infringed;
  4. Distributes an article by way of trade, offer for sale, hire or otherwise or for any purpose prejudicial to the owner of the copyright;
  5. Makes or has in his possession, plates, master tapes, machines, equipment or contrivances used for the purpose of making infringed copies of the work;
  6. Permits a place of public entertainment or of business to be used for a performance in the public of the work, where the performance constitutes an infringement of the copyright in the work, unless the person permitting the place to be used is not aware, and had no reasonable ground for suspecting that the performance would be an infringement of the copyright;
  7. Performs or cause to be performed for the purposes of trade or business or as supporting facility to a trade or business or as supporting facility to a trade or business, any work in which copyright subsists.[3]

With regards to patents and designs, rights of a patentee or design owner are infringed if another person makes, imports, sells, or uses the product or applies the process without a licence from the patent owner.[4]

Under the Trade Marks Act, an infringement is said to occur when a person, who is neither the trademark owner nor a person authorised by the trademark owner, uses a mark that is identical with or similar to the trademark such that it is likely to deceive or cause confusion in the course of trade.[5]

Currently, the ways of handling intellectual property infringement in Nigeria range from measures such as cease and desist letters to litigation. However, at this juncture it would be proper to look into the possibility of adopting notice for takedown schemes.

 

Notice for takedown scheme in Nigeria as a means of resolving intellectual property infringement

The present intellectual property regime in Nigeria does not make provision for notice for takedown schemes. At best, it is left to the discretion of ecommerce service providers. However, the draft Copyright Bill 2015 contains provisions governing notice for takedown regarding content that is shared online.

Section 47(1) of the Bill provides thus:

“The owner of copyright in a work in respect of which copyright has been infringed, may issue notice of such infringement to the relevant service provider requesting the service provider to take down or disable access to any infringing content or link to such content, hosted on its systems or networks.”

The Bill defines a service provider as “a provider of online services or network access, or the operator of facilities therefor, and includes an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received”.[6] This provision would give copyright owners the right to notify service providers, such as e-commerce stores, internet service providers and content providers, of an ongoing intellectual property infringement. The notification is required to fulfill the following criteria:

  1. It must be in writing.
  2. It should be signed, either physically or electronically, by a person authorized to act on behalf of the copyright owner.
  3. The work claimed to have been infringed should be identified.
  4. The infringing material or activity should be identified in such a way as to enable the service provider locate the material.
  5. The contact information of the complaining party should be provided.
  6. The complaining party should make a statement that they believe, in good faith, that the use of the material is not authorized by the copyright owner, his agent or the law.
  7. The complaining party is to make a statement that the information in the notification is accurate and that the complaining party has authority to act on behalf of the copyright owner.[7]

In the same vein, a service provider has certain duties to fulfil upon receiving a notice of infringement. Section 48(1) of the Bill requires the service provider to notify the subscriber responsible for the alleged infringing content of the infringement notice.

The subscriber in question has 10 days to provide information justifying the continued keeping of the alleged infringing content. Although the Bill does not expressly specify criteria that the subscriber must satisfy, it can be deduced that a subscriber should show either of the following:

  1. The infringing material is different from the work alleged to be infringed on; or
  2. The subscriber has a licence to use the work alleged to be infringed on.

If the service provider is satisfied by the information provided the subscriber, they shall inform the complaining party of their decision not to take down the content.[8]

If the subscriber fails to provide justification, Section 48(2) of the Bill requires the service provider to take down or disable access to the infringing content or links to such content hosted on its systems or networks and subsequently notify the copyright owner.

From the foregoing, it can be seen that ecommerce service providers would be expected to accord sellers who utilize their platforms the right to fair hearing before taking any action to resolve the issue.

In a situation where the work alleged to be infringed on is in fact the infringing material, the subscriber can submit a written counter notice to the service provider. The counter notice will be submitted to the copyright owner who would be required to show that the subscriber was not authorized to make the content available.[9]

It must be noted that the notice for takedown scheme as provided in the Copyright Bill 2015 was not intended to be final. Any party who is dissatisfied with the decision of the service provider has the right to appeal the decision to the Nigerian Copyright Commission. Parties could further appeal to the Federal High Court.[10]

 

Application of notice for takedown scheme in patent infringement cases   

Copyright infringement is not synonymous with patent infringement and as such issues may arise in attempting to apply the foregoing provisions of the Copyright Bill, should the Bill receive Presidential assent. In spite of this, the spread of ecommerce necessitates stakeholders to extend the possibility of resolving patent infringement matters through notice for takedown schemes. Incorporating a notice for takedown framework to specifically address patent infringement issues can help to facilitate dispute resolution without going through lengthy court processes.

There arise certain challenges in adopting notice for takedown schemes in cases of patent infringement. While notice for takedown schemes relate to removing information that is stored in a system, resolving patent infringement issues requires the restriction of sales of the patented item. However, in the case of ecommerce it can be argued that a sale taking place on an ecommerce platform relies on the presence of the relevant advertising medium (content) on the ecommerce platform’s system and as such taking down the offending content from the servers would help to curtail the sale of the infringing item.

 

Conclusion

A reliable intellectual property regime is an important aspect of ensuring business success and promoting economic growth and investment. Intellectual property infringement has a negative effect on innovation and research and development efforts. In addition to this, the present justice dispensation in Nigeria is in need of important reforms to enable it deal with cases in a timely, efficient and effective manner.

The Copyright Bill 2015 was approved by the Federal Executive Council in 2017 and is currently awaiting review and passage into law by the National Assembly. Once the Bill is passed, it would become easier to implement the notice for take down scheme due to the presence of existing framework. By extension, this would form a blueprint for the application of a similar scheme to incidences of patent infringements.

 

 

For inquiries and further information, email us at inq@grfdalleyandpartners.com

 

Footnotes:

[1] https://www.statista.com/statistics/484918/internet-user-reach-nigeria/

[2] https://www.thisdaylive.com/index.php/2020/01/09/of-ecommerce-growth-and-digital-economy/

[3] Section 14 Copyright Act 2004

[4] Section 25 Patents and Designs Act 2004

[5] Section 5 Trade Marks Act 2004

[6] Section 47(3) Copyright Bill 2015

[7] Section 47(2) Copyright Bill 2015

[8] Section 48(3) Copyright Bill 2015

[9] Section 48(4) Copyright Bill 2015

[10] Section 81 Copyright Bill 2015

11 Aug 2020
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Changes Introduced by the Companies and Allied Matters Act 2020

President Muhammadu Buhari recently assented to the Companies and Allied Matters Bill 2020.

The Companies and Allied Matters Act 2020 (CAMA 2020) introduced a number of changes to improve ease of doing business and introduce transparency. This document highlights some of the changes.

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29 May 2020
Publications GRF Dalley & Partners 0 comment

THE NECESSITY OF IMPROVING THE OPERATIONS OF THE TRADEMARK REGISTRY ONLINE PLATFORM

A trademark is considered an intangible asset that has positive effects on the goodwill of a business. Through trademarks, goods and brands are able to distinguish themselves from others and attest to their quality. In spite of the laudable effects of trademarks, the trademark registration process in Nigeria leaves much to be desired.

 

A Case for Digitizing the Trademark Registry in Nigeria

A juxtaposition of the current state of the Trademark Registry with that of the Corporate Affairs Commission (CAC) would greatly facilitate an understanding of the need for the Trademark Registry to improve its online operations.

Prior to the launching of the CAC online system in 2015, the process of registering a Company was done manually. Consequently, going through the initial stages of starting a business was a time-consuming task. According to the World Bank’s Report on Doing Business 2014, a person had to go through an average of 10 procedures over 33 days in order to start a limited liability Company.[1] Certificates of Incorporation were issued directly from the headquarters in Abuja.

Over time, Nigeria has been able to perfect its use of the CAC online system. Searches for available company names can be done online. As at 2019, Nigeria ranked 131 out of 190 economies in the ease of doing business.[2] The number of procedures involved in starting a business have reduced from 10 to 7 and it now takes approximately 7 days for a limited liability Company to be registered. The digitization of the Corporate Affairs Commission has reduced the level of bureaucracy involved in Company registrations and this, among others, has contributed to Nigeria’s improved score to 86.2 in starting a business.

In Nigeria, debarring any delays, it takes approximately 18-24 months to register a trademark or sometimes longer. Unlike the search process at the CAC, the preliminary trademark availability search process is still done manually at the Trademarks, Patent and Designs Registry in Abuja. For Practitioners not based or with an office in Abuja, this would add the inconvenience of travel to effectively handle the process of registration of a trademark. In other jurisdictions such as the United Kingdom, the preliminary trademark availability search can be done by using the online platform made available by the Intellectual Property Office (IPO). Searches can be done by trademark number, owner, and keyword, phrase or image.

Once a trademark application is accepted, it is published in the trademark journal to give interested parties the opportunity to notify the Registry of their objections to the registration of the trademark. Unfortunately, there is no online version of the trademark journal in respect of trademark applications made in Nigeria. Therefore, physical copies of the journal have to be obtained. This does not promote efficiency in the trademark registration process. In the United Kingdom, the Intellectual Property Office (IPO) makes the online version of the trademark journal available. Details of the application such as the word, image, class and owner are provided.

Having a registered trademark is one of the requirements as stipulated by the National Agency for Food and Drug Administration and Control (NAFDAC) that must be satisfied by those intending to venture into the pharmaceutical market. By extension, it would take much longer for a pharmaceutical company to commence operations in Nigeria. Thus, delays experienced as a result of the bureaucracy involved in the trademark registration process can dampen interest in investing in the pharmaceutical market in Nigeria.

 

Conclusion

The important role that trademark registration plays in brand recognition cannot be underestimated. Although Nigerian institutions are slowly embracing the advantages brought by technology, there is still room for improvement. Digitizing the trademark registry can contribute positively to the ease of doing business in Nigeria, especially with the current ongoing COVID-19 experience. On this basis, it is important to address the need for the Trademark Registry to improve the functionality of its online platform.

[1] https://www.doingbusiness.org/content/dam/doingBusiness/media/Subnational-Reports/DB14-Nigeria.pdf

[2] https://www.doingbusiness.org/content/dam/doingBusiness/country/n/nigeria/NGA.pdf

09 Apr 2020
Publications GRF Dalley & Partners 0 comment

THE IMPACT OF COVID-19 ON THE WORLD OF WORK IN NIGERIA

In the wake of COVID-19, in Nigeria, businesses that provide non-essential services have been forced to shut down operations whilst businesses that do provide essential services are mandated to operate under the restrictive guidelines of the National Centre for Disease Control (NCDC).

In consequence businesses are faced with the imminent loss of: revenue; profits; existing and future business, which in turn is likely to lead to forced reduction in staff working hours, shortage/non-payment of salaries, and mass layoffs.

Guy Ryder the Director-General of the International Labour Organisation (ILO) recently said “ILO estimates are that as many as 25 million people could become unemployed, with a loss of workers’ income of as much as USD 3.4 trillion. However, it is already becoming clear that these numbers may underestimate the magnitude of the impact”.

Undoubtedly in the coming months and years Nigeria’s National Industrial Court (NIC) is bound to be inundated with an unprecedented number of employment dispute suits. Inevitably, many companies will be faced with the possibility of substantial litigation risks resulting from the hard decision to reduce working hours, suspend, and lay off employees. It is therefore imperative for companies to be well equipped with answers to key questions on the relevant aspects of Nigeria’s labour laws and procedure vis -a- vis contracts of employment, the relevant terms of the contract of employment, sick pay, suspension, termination/layoffs, and the modes of dispute resolution, amongst other matters.

Relevant laws and regulations

Significant legislation that governs the employment of persons, in Nigeria, are:

  • The Constitution of the Federal Republic of Nigeria (Promulgation) Act (Chapter C23, Laws of the Federation of Nigeria 2004, as amended);
  • The National Industrial Court of Nigeria Act 2006;
  • The Labour Act, Chapter L1 Laws of the Federation of Nigeria 2004;[1]
  • The Employees’ Compensation Act 2010;
  • The Factories Act, Chapter F1 Laws of the Federation of Nigeria 2004;
  • The Industrial Training Fund Act, Chapter I9 Laws of the Federation of Nigeria 2004, (as amended);
  • The Immigration Act No. 8, 2015;
  • The National Health Insurance Scheme Act, Chapter 42 Laws of the Federation of Nigeria 2004;
  • The National Housing Fund Act, Chapter N 45 Laws of the Federation of Nigeria 2004;
  • The Nigerian Oil and Gas Industry Content Development Act 2010
  • The Pension Reform Act 2014;
  • The Personal Income Tax Act (Chapter P8 Laws of the Federation of Nigeria 2004, as amended by the Personal Income Tax (Amendment) Act 2011);
  • The Trade Unions Act, Chapter T14 Laws of the Federation of Nigeria 2004 (as amended).
  • The Trade Disputes Act, Chapter T 8 Laws of the Federation of Nigeria 2004

Key Questions

 

1. What are the implied duties owed by an employer to employees, during the lock down?

An employer owes its employees the duty to fulfil the terms of the contract of employment and to provide work within a safe and reasonable working environment. Therefore, for those employees that work in the essential service sectors the employer is expected to engage all necessary measures to protect the health and safety of all its employees at the place of work and during the course of work.

 

2. Is an employee who has tested positive for COVID-19 entitled to sick leave?

Under section 16 of the Labour Act a worker is entitled to 12 days of paid sick leave in every calendar year provided the illness is temporary and certified by a registered medical practitioner. Though in addition the Act recognises maternity leave (and in some states of the Federation paternity leave), generally there are no provisions for parental leave or leave to care for sick family members.

Furthermore, the Employees’ Compensation Act appears to advocate for adequate compensation in respect of employees who may have been infected by the virus during the course of employment.

In relation to employees not covered under the Labour Act the terms of the contract of employment and employee handbook is usually referred to, in order to determine the extent of entitlement to sick leave.

 

3. In the wake of the unprecedented changes caused by the epidemic, under the law, are parties permitted to review the contract of employment?

Under the Labour Act there are no specific provisions for the review of the contract of employment. However, parties are, under the principles of mutuality, at liberty to review the terms of their contractual relationship.

 

4.What is the legal position with respect to discrimination on grounds of health status (i.e. contracting COVID-19)?

Unlike the HIV and AIDS (Anti-discrimination) Act 2014, – which prohibits employers from discriminating directly or indirectly against employees on the basis of their HIV status or HIV-related illness – there are no specific provisions upon which an employee may claim discrimination in relation to contracting the COVID-19 disease or any disease of the like.

However, in the contract of employment employers are at liberty to stipulate the need for regular health checks and stable health as a condition for continued employment.

 

5. Relevant statutory employee benefits to bear in mind

According to the Pension Reforms Act 2014 all employers are mandated to procure a group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee. In the event of default the employer shall be liable for claims arising from the death of the employee.

Under the Employee Compensation Act 2010 a scheme based on the employees’ compensation fund and administered by the Nigeria Social Insurance Trust Fund provides compensation for employees that have sustained injuries or disabilities resulting from an accident, or infections/disease contracted in the course of employment.

The Labour Act – which relates to Workers as defined under the Act – suggests that employers with a minimum of 10 employees may make contributions under the National Health Insurance Scheme. Clearly this does not apply to employers of non-workers.

 

6. Trade Unions

Under the trade unions Act employers are mandated to recognise registered trade unions and under the rules on collective bargaining the members of registered trade union must establish a body of representatives who may represent trade unions when engaging discussions with the employer.

The membership of trade unions is voluntary and no employee must be forced to join or be victimised for refusing to join or remain.

The terms of agreements reached between the employer and the trade union representatives are set out in a collective bargaining agreement, which form part of, and will be read together with, the employment contracts of employees who are members of trade unions.

 

7. Can an employer terminate a contract of employment without reason and notice?

Generally, the employer is entitled to terminate the contract of employment without reason, provided termination is in accordance with the terms of employment. Although the National Industrial Court of Nigeria has on a number of occasions indicated the need to state the reasons for the termination, in accordance with international standards and best practices.

It is however, pertinent to state, that a worker under the Act is entitled to be given notice of termination or his/her salary in lieu of notice. Pursuant to section 11(2) of the Labour Act the respective periods of notice are set out as follows:

  1. one day notice, where the contract has continued for a period of three months or less;
  2. one week’s notice, where the contract has continued for more than three months but less than two years;
  3. two weeks’ notice, where the contract has continued for a period of two years but less than five years; and
  4. one month’s notice, where the contract has continued for a period of five years or more.

Subsection (3) of the Act requires any notice for a period of one week or more to be in writing. Furthermore, parties are at liberty to agree to longer notice periods, in the contract of employment.

It is important to bear in mind some exceptions. Under the Act (Section 54(4) to be precise), any female worker who is absent due to maternity leave, or any longer period as a result of ill health emanating from the pregnancy or confinement and which renders her unfit for work, cannot be disengaged.

In relation to non-workers (employees not covered by the Act as described above) the right of termination and period of notice will be strictly guided by the contract of employment and where there is no written contract the Court will rely on applicable implied terms which may be inferred from the conduct of parties and surrounding circumstances.

On the contrary the contract of employment may be terminated for cause, usually owing to criminal acts, gross misconduct, sexual harassment, assault and the like. Under such circumstances, in what is referred to as a dismissal, the law does not necessarily require the employer to pay the employee’s salary and other benefits, upon condition that the employee is provided with ample opportunity to defend allegations levelled against him/her by the employer.

 

8. Under what circumstances can the contract of employment be terminated on grounds of redundancy and does the COVID-19 pandemic fall within such grounds?

Redundancy is described, by the Act, as an involuntary and permanent loss of employment caused by excess of manpower. Section 20 of the Act provides that an employer in the event of redundancy shall take the following steps:

  1. inform the trade union or workers’ representative concerned of the reasons for and the extent of the anticipated redundancy;
  2. 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 relative merit, including skill, ability and reliability; and
  3. the employer shall use best endeavours to negotiate redundancy payments to any discharged worker(s) not protected by regulations.

It is expected that, “workers” not covered by the Act will be subject to the relevant contract of employment or any implied term of contract applicable in the industry.

Clearly by the definition of redundancy it will be difficult for employers, seeking to reduce their work force in the wake of COVID-19, to terminate contracts of employment by reason of redundancy.

 

The Emergency Economic Stimulus Bill, 2020

As part of its efforts in mitigating the economic effects of the COVID-19 pandemic, the House of Representatives passed the Emergency Economic Stimulus Bill, 2020 to put in place certain palliative measures. Section 3 of the Bill provides that any employer duly registered under Part A or Part B of the Companies and Allied Matters Act (CAMA) 2004[2], which maintains the same employee status without retrenching their staff as at March 1, 2020 till December 31, 2020 shall be entitled to 50 percent income tax rebate on the total of the actual amount due or paid as Pay As You Earn (PAYE) Tax under the Personal Income Tax Act 2004.[3]

However, Section 6 of the Bill goes on to state that this does not apply to employers partly or wholly subject to the Petroleum Profit Tax Act[4].

The following circumstances shall not preclude the rebate to employers under the Section 3:

  1. Where an employee dies of natural causes;
  2. Where an employee voluntarily leaves the employment or has already indicated interest to leave the employment before March 1, 2020; or
  3. Where the employer breaches the Labour Act.

The rebate period can also be extended by the President of the Federal Republic of Nigeria for the duration during which COVID-19 remains an urgent and severe public health emergency.[5] However, this must be ratified by a majority of the members of the National Assembly.

 

Conclusion

Mass sackings and employment review is inevitable. The resultant flurry of settlement negotiations and litigation is equally certain.

What remains uncertain is the readiness of many employers to foresee the extent of the challenge and prepare adequately in order to mitigate litigation risks.

Further losses are bound to be better managed if all relevant heads of human resources and legal departments plan adequately for the eventuality

 

For more information, contact:

 

GRF Dalley & Partners

Lagos Office:
Gabsdall House (2nd – 4th Floor)
26, Igbosere Road

Port Harcourt Office:
13, Finima Street,
Old G.R.A.

Tel: +23414549824
Email: inq@grfdalleyandpartners.com

 

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Twitter: @GRFDALLEY
LinkedIn: G.R.F Dalley & Partners

 

 

Notes:

[1]The Labour Act, is limited in its scope of application being it only regulates employment of ‘workers’ which is defined under the act as employees that perform manual labour or clerical work. Non-workers are those who perform administrative, executive, technical and/or professional duties. Though these group of employees are not within the scope of the Labour Act they are generally subject to the terms of their respective contracts of employment.

[2] Cap. C20, Laws of the Federation of Nigeria, 2004

[3] Cap. C8, Laws of the Federation of Nigeria 2004 (as amended)

[4] Cap. P13, Laws of the Federation of Nigeria 2004

[5] Section 7, Emergency Economic Stimulus Bill 2020

 

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01 Apr 2020
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COVID-19: POLICY MEASURES BY NIGERIA’S CENTRAL BANK

The devastating impact of COVID-19, also known as the corona virus, on the world’s economy is without doubt.

The sporadic spread of the virus, across international borders prompted – rightly so – the ban on international and in many cases domestic air travel. Asides the evident strain on the health care and pharmaceutical supply chain industries we have seen, almost immediately, a devastating free fall in the revenue stream of airlines and stake holders in the aviation and travel and tourism industry.

The knock-on effect of this and other measures (stay at home orders etc.) to manage the pandemic is likely to cripple most sectors of the economy, particularly small and medium scale enterprises.

In Nigeria the export of crude oil represents the country’s main source of revenue. The sharp drop in the demand for oil products – resulting from the pandemic and coupled with the recent crude oil pricing crisis – has led to a terrifying decline in Nigeria’s export revenue. Therefore, the immediate introduction and implementation of appropriate fiscal policy buffers are crucial.

 

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