Contract of Employment

Essentials of a Contract of Employment | Kingsley Ugochukwu Ani

by Legalnaija | Sep 25, 2017 | Uncategorized

A contract of
employment is necessary whenever a person wants to undertake a position with an
employer. But before signing the contract, the employee should endeavor to
understand the ramifications of what he is setting his signature to. If
possible, such employee should try and understand all the clauses in the
contract of employment before signing same. If there are gray areas in the
contract of employment, then he should forward same to a lawyer to go through
the contract for him with a fine-tooth comb before appending his signature.

A contract of
employment is a contract in and of itself, one governing the relationship
between the employer and the employee in their dealings with each other.

Ingredients
present in contracts of employment

There are
certain clauses that should be contained in a contract of employment. There are
certain industry-wide essentials that encompass contracts across all spheres of
work, and there are certain clauses that are industry-specific, taking into
cognizance the nature of Industry, the work expected of the employee, the
confidentiality involved alongside the technical expertise, among a host of
other considerations.

Example:

Mr A is
employed as a teacher in a community secondary school. In his contract of
employment (if any), the employer cannot just insert a Non-Disclosure clause or
prepare a separate Non-Disclosure Agreement. The reason is because of the fact
that there is probably no confidential information Mr. A is going to be
handling during the duration of his employment. He is teaching students, right?

However, the
same will not be applicable in an employment where the employee handles high
stakes business for his employer, with attendant secrets which the employer
might be worried about.

Clauses in a
contract of employment

1. Name of parties
and designation: the parties’ names and their designation, whether as
employer and employee should be clearly stated.

2. Address of the
business: this is the address where the employer carries on
business and where the (prospective) employee will work.

3. Commencement
date: the date the parties are entering into the contract of
employment should be stated too for avoidance of doubt. There might be need too
for a termination date if the contract is time-specific.

4. Salary: the
remuneration, mode of payment, and regularity, plus other factors regulating
the payment of the employee should be set down.

5. Hours of work: this could be
stated as 8 AM to 5 PM, etc, depending on the working billable hours of the
firm.

6. Non compete
clause: this clause is usually inserted for the protection of
the interest of the employer in the deal. It can state that within a stated
period (which should definitely not be unreasonable) from the date of the
termination of the employment of the employee, that he shall not set up a
similar business within a particular physical radius from the address of the
employer’s business.

7. Copyright: During the
duration of the employment of a particular employee, an employee might produce
a copyright-able work. This clause might serve to transfer copyright in any
work-related, industry-specific work created by the employee, especially if
said work was produced using the materials of the employer, on the employer. Or
it can serve to share the copyright between both parties. (Employees should be
careful of this and try to consult with an intellectual property law expert
before agreeing to this).

8. Course of
disciplinary action against employee: This will serve
to showcase the mode of conducting disciplinary actions against an employee
should the employee go against the rules of the employer’s workplace.

9. Overtime: if in the
contract of employment, the work periods of the employee is clearly stated,
then this will serve to show how the employee can be remunerated for work done
by him outside his work periods for the employer’s business.

10. Employee
performance review: many employers can insert this clause in the contract
of employment of the employee for periodic review of the work performance of
the employee. This becomes necessary in a firm which has a hierarchical upward
promotion system so as to check whether an employee is due for upward promotion
in his work.

11. Ethics: This basically
will serve as the code of conduct that the employee is expected to abide by in
his work for the employer.

12. Termination of
employment; notice of termination: under this
particular clause, a lot can go in, including the intention of either party to
terminate the contract between them, the notice to be given, remuneration
during the period of notice, etc. NB: employers should take particular care
in this clause because of the strong laws that exist to protect the interest of
the employee against wrongful termination of employment.

13. Vacation: the employer
might insert this clause to give employee periods within which he can take
leaves from the workplace and still be paid for it; duration, etc.

14. Study Leave: mostly applies
to employees working in institutions of higher education.

15. Sick leave

16. Insurance
coverage: some employers might be considerate enough to include
such clauses that make for mandatory insurance schemes for incoming employees
who are not yet covered under any insurance scheme. It can deal with: amount to
be remitted from employee’s salary, amount the employer will add, etc.

17. Health coverage

18. Work-related
travel: some employers might provide for this, mostly to the
effect that they will shoulder the entire expenses to be accrued by the
employee.

19. Salary scale

20. Non disclosure
clause: will apply to keep the lips of the employee sealed
against revealing any confidential information that the employer considers
important enough, or what they consider their trade secrets from being revealed
by the employees after the employee has left the service of the
employer.

The list is
basically endless.

There are a lot
of clauses that can go into an employee’s contract of employment and these
depend on the nature of the work, and in some cases, on the industry the
employee is getting into. It can also depend on what the parties want covered.

Point to Note: The employee
should be careful so as not to agree to terms that would be considered by an
expert as onerous and detrimental to his interests.

Finally, the
parties will sign and date the contract, and it will have a binding force of
the Law should either of the parties try to renege on the terms of said
contract.

About the
Author:

Kingsley
Ugochukwu Ani is a corporate lawyer with particular emphasis on Real Estate, IT
& IP areas of the law. He can be reached on aniugochukwu@gmail.com

Difference between Letter of Dismissal & Letter of Termination | Adedunmade Onibokun

by Legalnaija | Aug 11, 2017 | Uncategorized

It
is important to note that an employment relationship cannot be forced upon
either an unwilling employer or employee. Therefore, an employer has a right to
hire and fire, likewise an employee has the right to resign from an employment.

Many a times, the words “dismissal” and “termination”
are used interchangeably when referring to an employee whose employment has
seized. This may be appropriate in general
discussions, however, under the law, a dismissal and a termination of
employment have completely different interpretations and consequences. A letter
of resignation represents an employee’s desire to quit a job; however, the
effects of a letter of dismissal from an employer are quite different from
those of a letter of termination.

The Oxford Dictionary describes the word “dismiss”
to mean to send away from one’s presence or employment, it also describes it as
meaning to “reject”. Likewise, a letter of dismissal is a rejection of the
employee by the employer, such rejection which is usually for a reason.

The first difference between a dismissal
and a termination is that a dismissal is usually punitive in nature while a
termination is simply bringing an employment contract to an end. This implies that
while an employer may well under the law terminate an employment, choosing to
rather dismiss an employee seeks to punish that employee for an act of
misconduct. This was illustrated in Eigbe V Nigeria Union Of Teachers (2007)
LPELR-8310(CA) where the court held that –

“It is now well settled that in statutory
employment, as well as in private employment, the employer can dismiss an
employee where the accusations against such employee is of gross misconduct
involving dishonesty bordering on criminality, and in such a case, it is not
necessary, nor is it required under Section 36 (1) of the 1999 Constitution
that employee must be tried in a court of law.”

Another difference between a dismissal and
a termination is that, under a termination, the employee is liable to receive a
gratuity and other terminal benefits, however, an employee who has been
dismissed may not be liable to receive any such benefits. This is further
stated in Union Bank Of Nigeria Plc v. Soares (2012)
LPELR-8018(CA), where the court held that –

“There is a clear distinction between termination of a
contract of employment and a dismissal. Termination gives the parties the right
to determine the contract at any time by giving the prescribed period of
notice. Dismissal on the other hand, is a disciplinary measure which carries no
benefits.”

A third difference between a dismissal and
a termination is that, an employee whose contract of employment is terminated
without notice will be liable to collect a salary in lieu of notice, while this
is not the case under a dismissal. This was aptly put by the Supreme Court in Ekunola
V. Cbn & Anor. (2013)
LPELR-20391(SC) where the court deliberated whether an employee dismissed on the ground of allegation of gross
misconduct is entitled to notice or salary in lieu of notice, it was held that –

“Where his dismissal is founded on the
allegation of gross misconduct the appellant is not entitled to any notice or
salary in lieu of notice …………. And it would be wrong in law to make any awards
to him in these regards.”

The above is a guide to help when
considering, the legal implications of a letter of dismissal and a letter of
termination.

Adedunmade Onibokun

@adedunmade

dunmadeo@yahoo.com

The Right of the Employer to Reject a Resignation | Michael Dugeri

by Legalnaija | Jun 15, 2017 | Uncategorized

An employer has no right to reject the
resignation of its employee, for whatever reason. The law is that a notice of
resignation of an appointment becomes effective and valid the moment it is
received by the person or authority to whom it is addressed. This is because
there is absolute power to resign and no discretion to refuse to accept; and it
is not necessary for the person to whom the notice of resignation is addressed
to reply that the resignation is accepted.

In the cases of Taduggoronno v.
Gotom [2002] 4 NWLR (Pt. 757) 453 andYesufu v. Gov. Edo
State [2001] 13 NWLR (Pt. 731) 517, the courts held that it is not
open to the employer for whatsoever reason to refuse to accept the resignation
of the employee, for the employee has an absolute power to resign and the
employer has no discretion to refuse to accept the resignation. See also the
case of Adefemi v. Abegunde [2004] 15 NWLR (Pt. 895) 1.

It is not uncommon for Employee Handbooks
to contain a clause that confers on the employer the right not to accept the
resignation of an employee on grounds such as ‘on-going investigation’ and where
the employee seeking to resign is under a contractual bond, the terms of which
he is yet to finish serving. The courts have held such provisions to be
unlawful and unenforceable. An employee has the right to resign with immediate
effect, and to reject his rejection is tantamount to forced labour, and also
against the time-honour labour law principle that an employer cannot force
himself on an unwilling employee.

It is also common to find in the
termination clause of some employment contracts that only the employer may make
a payment in lieu of notice, while the employee is mandatorily required to give
notice. The remedy available to the employer, where the employee, in such a
case, resigns without notice would likely be damages and certainly not specific
performance. In other words, such resignation would be treated as wrongful but
not null and void.

In WAEC v. Oshionebo [2006]
12 NWLR (Pt. 994) 258, it was held that a notice of resignation is effective
not from the date of the letter, or from the date of any purported acceptance,
but from the date on which the letter was received by the employer or his
agent; and that tendering of a letter of resignation by an employee carries
with it the right to leave the service automatically without any benefit subject
to the employee paying any of his indebtedness to his employer.

Thus, once an employee tenders his
resignation, he ceases henceforth to be an employee, regardless of a rejection
of the resignation by the employer. The employee’s resignation would have
immediate effect even where he continues to come to work after his resignation
is tendered.

Rejection of retirement

The distinction is however, made in cases
of retirement. A letter of retirement does not necessarily take effect from the
date that it is received by the employer. The case ofWAEC v. Oshionebo [2006]
12 NWLR (Pt. 994) 258 made a distinction between “resignation” and
“retirement” with different legal consequences. Resignation carries with it the
right to leave service immediately and automatically without any benefit
subject to the employee paying any of indebtedness to his employer. Retirement,
on the other hand does not confer such a right to leave service immediately and
automatically. A further legal consequence of retirement is provided for in OSHC
v. Shittu [1994] 1 NWLR (Pt. 321) 476, the court held that where
an employee gives notice of his voluntary retirement to his employer, and the
employer refuses to accept the notice, the position is that the employee is
still in the employer’s service. However, it is only the employee who can rely
on that notice in his favour and not the employer who rejected the notice. This
would be particularly relevant for the computation of terminal benefits. This
is because it has to be adjudged not only a deviation from “natural equity” but
also contrary to law for an employer who is guilty of the irregularity of
refusing a notice of voluntary retirement to turn around and benefit from that
irregularity.

See also Osu v. PAN Ltd [2001]
13 NWLR (Pt. 731) 627, where the court held that the notice of retirement will
appropriately expire at the stipulated periods regardless of directives from
the employer that the employee should stop work before the date stipulated; as
such an employee remains a staff of the employer up to and including the last
day when the notice would have properly expired.

Michael Dugeri

Corporate Commercial Lawyer at Austen-Peters & Co.

Ed’s Note – This article was first published here.

The Need for Contract of Employment| by Kingsley Ugochukwu Ani Esq.

by Legalnaija | May 22, 2017 | Uncategorized

It is a good thing when
you are offered that new job at that new company you applied to alongside
several hundred other applicants. And that job, after three years of unemployment;
now you cannot wait to start working right away and start earning your pay. You are eager to start working, to
start putting in the hours and doing the eight-to-five grind daily. You want to
put in your own quota and be rewarded for the good work. That’s good.

Question: Did your boss
get you to sign a contract of employment?

If the answer is yes, and
the contract of employment was well drawn by a good professional with a
well-formed knowledge of employment law, then you are probably in safe hands
because of the fact that your employer must have taken into cognizance a lot of
factors pertaining to your employment. He must looked at the laws and drafted
the contract accordingly.

If no, you might be
tempted to ask: what’s the need for one anyway?I have been

employed, and that is all
that matters, yes?

No. The answer is no; that
is not all that matters.

There is the need for a
contract of employment to be drawn up and duly signed by the parties involved
the employer and the employee for a myriad of reasons you might know nothing
about until trouble comes knocking on your door. And trouble will come knocking
on your day in some situations, particularly as it pertains to the severance of
the employer-employee relationship on the terms of the employee. The reason is
because, most times, employers would want for the relationship to be severed on
their own terms.

Let me give you an
instance.

Mr A is a writer and also
a website engineer. He got employed by ABC company to work at their head office
in Victoria Island, Lagos. Unfortunately, he did not sign a contract of
employment at the time he entered into the job placement to work for the firm.

After working there for a
period of seven months, he subsequently got granted a Writers’ Fellowship at
the Writing Institute, Johannesburg. He told his boss about it this one-month
writing fellowship. The boss unequivocally said no, and that was the end of the
matter. If A was unhappy about it, then the door was open for him to leave.

Two years later, after
working for long months and having no break, he asked his boss for a one-week
paid-or-unpaid vacation since he wanted to take some time off and relax. The
boss said no; there was a lot of work in the office and they could not afford to
give him the break he needed. Perhaps another time? Or, if he was desperately
in need of such a break, then he might as well consider his contract of
employment terminated. There were several applications on the man’s desk and he
could replace A with any of them any day.

Mr. A stayed on.

On another instance, the
boss called him in to the office to work on a national holiday; he did that but
received no pay. Sometimes too, he works very late at the office and the boss
offers him no remuneration for the said overtime. After all, he cannot hold his
boss to anything because they have no agreement governing their relationship.

Note that said boss does
not care for his welfare: if he is no longer interested in collecting his
salary, then he should find employment elsewhere. Mr A needs the money, so he
stayed on.

Analysis

Mr A. is under the full
control of his boss. He is being paid well, they owe him no salaries payments.
In other words, he has nothing to complain about. Still, his boss owns him and
he knows it, though there is nothing he can do about it.

Implications

All the above would have
undoubtedly been forestalled by a contract of employment. If at the time of Mr. A’s
entering into the job placement, he had demanded for, and signed, a contract of
employment with his boss, then he would most likely not be having these
problems. A lot of issues and concerns which he felt would likely arise in the
course of his employment would have been effectively handled in the said contract
of employment.

Issues dealt with in
contracts of employment –

Salary
Health coverage
Vacations
Opportunities for further
personal-cum-professional development
Work ethics
No compete clause
Copyright of employee’s
works during the course of his duties for the employer
(if any)
Non Disclosure of
confidential information
Remittance of employee
payments
Notice of resignation
Disciplinary action
against employee
Sick leave
Salary increment
Salary scale
Review of employee performance
Code of conduct
Study leave
Company rules and
regulations
Overtime work
Travel and accruing
expenses
Notice for termination of
employee’s contract

The list is positively
endless, and it all depends on the nature of the work, the industry involved,
alongside a host of other numerous considerations the parties can take into cognizance
when entering into a contract for employment. Plus, do not forget the applicable
laws, which most employees, and several employers, are deliriously oblivious
of. After all, who needs the laws, yes? Wrong; the laws are there for a reason,
particularly for the protection of employees.

For instance, in the oil
and gas industry in Nigeria, oil companies have laid off an unusually high
number of employees due to the current economic recession biting at the
Nigerian economy. What the employees have no knowledge of is the fact that there
is a provision to the effect that the company must notify the Department
of Petroleum Resources before they terminate. They do not, and the employees
have absolutely no knowledge of this. They just pack their bags, cry a few
tears, and then leave. The employers smile, pack themselves off to their posh
offices, and take sips of

creamed coffee. Life goes
on.

Thus, if the employer
reneges on any of the articles in a contract of employment, or goes against the
labor laws designed to protect the interest of the employees, then the employee
can call the boss up on this. He can even go to court to enforce said contract.

But then, most employers
will be unwilling to go to court once they know and understand that you know
your rights and can take the necessary steps to enforce those rights.

Conclusion

It is a wonderful thing if
and when a job seeker subsequently manages to snag a job. However, do not be so
happy with your new position and make the mistake of not putting the terms of
your employment in writing. You might get to work for years without problems,
but you stand the risk of running into problems one day, and then you will see
the need for a contract of employment. Then you will start wishing that you had
ensured that your boss prepared and had you sign a contract of employment which
isn’t too stringent and onerous. After all, contracts of employment are there
to protect the interest of employees, and even employers.

About the Author:

Kingsley Ugochukwu Ani
Esq. is a legal practitioner, blogger, corporate branding expert, and human
rights activist living and working in Lagos, Nigeria. You can contact him via
+2347035074930, aniugochukwu@gmail.com or on Linkedin, Facebook, and connect
with him on Twitter.

Dunmade Onibokun – Do you have a Contract of Employment?

by Legalnaija | Jul 25, 2016 | Uncategorized

There
are a lot of people reading this post, answering “No” to the above question.
Next is thinking asking why you don’t have one in the first place and wondering
if you are even entitled to one?

Personally,
I have met workers who informed me that though they were engaged in various
forms of employments, they did not have written Contracts of Employment neither
had they been provided one by their employers.

If
you work in Nigeria and most likely any part of the World. Employers are always
required to provide a contract of employment to their workers. Also by virtue
of the Labour Act, every employer should provide a worker with a copy of the
Contract of employment not later than 3 months after the worker has commenced employment.
The law states in Section 7, that –

7. (1) Not later than three months
after the beginning of a worker’s period of employment with an employer, the
employer shall give to the worker a written statement specifying-

(a)
the name of the employer or group of employers, and where appropriate, of the
undertaking by which the worker is employed;

(b)
the name and address of the worker and the place and date of his engagement;

(d)
if the contract is for a fixed term, the date when the contract expires;

(e)
the appropriate period of notice to be given by the party wishing to terminate
the contract, due regard being had to section 11 of this Act;

(f)
the rates of wages and method of calculation thereof and the manner and
periodicity of payment of wages;

(g)
any terms and conditions relating to-

(i)
hours of work, or

(ii)
holidays and holiday pay, or

(iii)
incapacity for work due to sickness or injury, including any provisions for
sick pay; and

(h)
any special conditions of the contract.

Furthermore,
Subsection (2) states that if after the date to which the said statement
relates there is a change in the terms to be included or referred to in the
statement the employer shall, not more than one month after the change, inform
the worker of the nature of the change by a written statement; if he does not
leave a copy of the statement with the worker, shall preserve the statement and
ensure that the worker has reasonable opportunities of reading it in the course
of his employment, or that it is made reasonably accessible to the worker in
some other way.

From the above, it’s
essential that workers are provided with copies of their Contracts of
employment according to the provisions of the law. By virtue of Section 21 of
the Act, any employer who breaches the above mentioned law is guilty of an
offence and liable to payment of a fine.

Dunmade Onibokun

Adedunmade Onibokun &
Co.

www.adedunmadeonibokun.com

Photo Credit – www.constituitionproject.ie