The Employee Compensation
Act was an important piece of legislation passed in order to provide for
employees who were injured, disabled, or died during the course of their
employment. The Act replaced the Workmen’s Compensation Act.

Some of the key features
of the law which Nigerians need to be aware of are:

The Law was established in order to provide
an open and fair system of guaranteed and adequate compensation for
employees or their dependants for any death, injury, disease or disability
arising out of or in the course of employment. 

The Law is applicable to all employers and
employees in the public and private sectors throughout the Federal Republic of

The Nigeria Social Insurance Trust Fund
Management Board is empowered to implement the Act and the Fund established
under it. 

In order to access compensation, the
employee (or his/her dependants) must notify the employer of the
injury/disabling occupational disease/death within 14 days of the occurrence.
The information should include – name of the employee, time and place of the
occurrence, and nature and cause of the disease or injury if known. Failure to
provide the information required is a bar to a claim for compensation (subject
to decision of the NSITF in certain circumstances. 

The Employer must report this information
to the NSITF Management Board within 7 days of receiving notification from the
employee or his/her dependants. In the case of a death it must be reported
immediately. Failure to make a report is an offence under the Employee
Compensation Act. 

An application for compensation must be
made by the employee or his/her dependants within one year after the date of
death, injury or disability arising from an occupational accident or disease,
or else the claim will be refused (except if special circumstances for the
delay existed). 

Any employee who suffers any disabling
 out of or in the course of employment is entitled to
compensation, whether or not it occurred in the workplace. 

An employee is entitled to payment of
compensation with respect to any accident sustained while on
the way between the place of work and –
  • The employee’s principal or secondary
  • The place where the employee usually
    takes meals, or
  • The place where he usually receives
    remuneration provided that the employer has prior notification of such
An employee is entitled to compensation for
mental stress arising from an acute reaction to a sudden and unexpected
traumatic event arising out of or in the course of the employee’s employment. 

In the case of death of the employee,
compensation is paid to the employee’s widow(er) and/or child(ren) on a scale
ranging from 30%- 90% monthly of the employee’s remuneration depending on the
circumstances of the dependants. 

Every employer is to make a minimum monthly
contribution of 1% of the total monthly payroll into the Employee Compensation

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