Labour and Employment » Goldsmiths Solicitors https://goldsmithsllp.com Top Business Law Firm, Lagos | Abuja | Nigeria Thu, 29 Feb 2024 12:54:45 +0000 en-US hourly 1 https://goldsmithsllp.com/wp-content/uploads/2022/08/Goldsmiths-LLP-Icon-300px-e1659753938146-150x150.png Labour and Employment » Goldsmiths Solicitors https://goldsmithsllp.com 32 32 What you Need to Know about the New Nigeria Expatriate Employment Levy https://goldsmithsllp.com/what-you-need-to-know-about-the-new-nigeria-expatriate-employment-levy/?utm_source=rss&utm_medium=rss&utm_campaign=what-you-need-to-know-about-the-new-nigeria-expatriate-employment-levy Thu, 29 Feb 2024 11:26:26 +0000 https://goldsmithsllp.com/?p=8655 The Expatriate Employment Levy (EEL) handbook was recently issued by the Ministry of Interior and was launched by the Nigerian president, on 27 February 2024. The EEL is a government-mandated…

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The Expatriate Employment Levy (EEL) handbook was recently issued by the Ministry of Interior and was launched by the Nigerian president, on 27 February 2024. The EEL is a government-mandated contribution imposed on companies that employ expatriate workers in Nigeria. According to the Nigerian government, the EEL is aimed at addressing the wage imbalance between the expatriate employees and local employees, whilst also protecting the local job market.

EEL Amount and Payment Cycle

An annual sum of $15,000.00 (Fifteen Thousand USD) is payable for each director and an annual sum of $10,000 (Ten Thousand USD) is payable for other categories of expatriates. This payment applies to any expatriate that is employed for 183 days or more.

Liability to pay the EEL

There appears to be no distinction on the size of the company and any company which employs expatriates (defined as non-Nigerians citizens) within Nigeria are liable to pay the EEL. This includes multinational companies, small and medium size enterprises (SMEs).

EEL Coverage

The EEL applies to private sector companies utilizing foreign workforce or relying on expatriate labour. These companies include but not limited to construction, agriculture, oil and gas, telecommunication, maritime and shipping, etc. It should be noted that the coverage of the EEL is in no way limited to the aforementioned industries as the coverage covers all industries engaging expatriate talent.

Duration of Residency/Employment

To be liable to pay the EEL, an expatriate worker must have been employed for a period not less than 183 days within a year. The 183 days may be calculated and spread across a period exceeding one fiscal year.

An employer would still be liable to pay the EEL in a situation where the expatriate is temporarily seconded or assigned to work in a foreign country provided the concerned expatriate occupies a Quota Position in a company operating in Nigeria.

Exemption from the EEL

The EEL does not apply to all accredited staff of diplomatic missions and government officials.

The Role of the Nigerian Immigration Service (NIS)

The NIS is responsible for determining the expatriates which fall within the purview of EEL. It is also responsible for enforcing the EEL in line with the provisions of the Nigerian Immigration Act, 2015 and the applicable Nigerian Visa Policies.

Reporting and Compliance

The Government is required to provide online platforms for employers of expatriates in Nigeria to report employment details of expatriates electronically.

Both the employers and expatriate employees have reporting and compliance obligations. Employers are required to maintain comprehensive records which include salary details, work permits, etc. on expatriate employees. The employers are also mandated to provide timely reports to government and notify any change in expatriate employment circumstances to the appropriate government agencies. There is also a need for employers to comply with filing deadlines.

The expatriate employee has the responsibility to ensure that accurate personal information and employment details are reported to employers and government.

Compliance Audits

The government agencies responsible for EEL enforcement may conduct compliance audits for accuracy of information provided to it and may also crosscheck the information provided with data from other sources such as immigration records and tax filings.

Offences, Sanctions and Penalties

Sanctions and penalties have been provided for various infractions relating to the EEL as follows:

  1. Providing false information, returns, statements or representations to an immigration officer is punishable with imprisonment for a term of five years or a fine of N1,000,000 or both.
  2. Failure to file EEL within 30 days attracts a fine of N3,000,000
  3. Failure to register new employees within 30 days attracts a fine of N3,000,000.
  4. Submission of forged or falsified information attracts a fine of N3,000,000.
  5. Failure to renew EEL within 30 days to the expiry date attracts a fine of N3,000,000.

Conclusion

The EEL has been introduced to regulate and balance the benefits of expatriate employment with the protection of Nigeria’s local labour markets. The EEL is payable by any company employing expatriate employees in Nigeria. The EEL is enforced by the NIS and there are reporting and compliance obligations imposed on employers and expatriate employees. Sanctions and penalties also apply where there is a failure to comply with obligations imposed by the EEL handbook.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

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Termination of Employment in Nigeria: Legal Considerations for Employers. https://goldsmithsllp.com/https-goldsmithsllp-com-termination-of-employment-in-nigeria-legal-considerations-for-employers/?utm_source=rss&utm_medium=rss&utm_campaign=https-goldsmithsllp-com-termination-of-employment-in-nigeria-legal-considerations-for-employers Thu, 16 Nov 2023 08:23:05 +0000 https://goldsmithsllp.com/?p=8612 Introduction Like in all common law jurisdictions, relationships between employers and employees in Nigeria are primarily governed by their contracts of employment and any applicable employment laws for the time…

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Introduction

Like in all common law jurisdictions, relationships between employers and employees in Nigeria are primarily governed by their contracts of employment and any applicable employment laws for the time being in force. Contracts of employment would typically deal with issues such as nature of work, hours of work, emoluments, holidays, sickness, termination, notice period, disciplinary procedures, etc. Despite the provisions of the contracts, disputes still arise between the parties. Some of the issues that lead to disputes in employment include termination without notice, failure to follow laid down procedure/policies, non-payment of termination benefits, failure to give notice of termination, withholding or deduction of salaries, etc. When this happens, the aggrieved party mostly the employee would usually issue proceedings against the employer at the National Industrial Court after making demands of the employee. The court with exclusive jurisdiction to deal with employment disputes in Nigeria is the National Industrial Court.

Legal Considerations for Employers

Prior to any termination of employment, it is very expedient that employers carry out some house-keeping with respect to important issues that may arise in the course of termination. Importantly, some of the legal issues which employers are expected to consider in the termination of any employment contact can be categorized into pre-termination, during termination and post-termination.

Pre-termination

The legal issues which employers should avert their minds to and effectively consider before the termination of the employment of an employee includes:

  1. Review of Employment Contract: Prior to terminating any employment, it is important for the employer to thoroughly review the terms and conditions of the employee’s engagement and familiarize themselves with the provisions of the contract. Particular attention should be paid to issues like notice period, payment in lieu of notice, outstanding benefits including bonuses, return of company assets, etc.
  2. Review of the Employment Laws: In addition to the review of the contract, employers should ensure they review the relevant laws governing their relationship and specific industry. Some local laws protect certain industries and it is important that any termination complies with the provisions of industry specific laws, like local content laws.
  3. Compliance with Company’s Policies: Most organizations would have company policies usually contained in the staff handbook. The handbook would typically deal with issues such as disciplinary procedure, warnings, suspensions, definition of (gross) misconduct, payment in lieu of notice and the like. It is very important that prior to any termination an employer familiarizes itself with these policies and ensure that due process is followed and that the letter and spirit of the policies are complied with.
  4. Disciplinary Hearing: Some terminations would be as a result of breach of company policy such as conflict of interest, insubordination, habitual lateness to work, misuse of employer’s resources, absence without authorization, etc. In such situations, employers are also expected to conduct disciplinary hearings for any employee that breaches any of the employer’s policies. The essence of the disciplinary hearing is to ensure that the employee is given the opportunity to explain themselves and for the employer to consider the next step of action which is either to accept the employee’s explanation, warn, suspend, or dismiss the employee. Whatever is the case, employers must ensure that they comply with their own laid down disciplinary procedure. Contemporaneous notes must be kept of the proceedings and any decision made during the disciplinary process must be in writing. Any person subjected to any such proceedings must be given a fair hearing. The courts are likely to find that the employee was not given a fair hearing if the laid down procedure was not followed.

During Termination

Having followed some or all of the steps outlined above and satisfied that the employment should be terminated, it is important that the employer considers the issues discussed below during the termination process.

  1. Termination Letter: In the course of terminating employment employers are required to issue termination letter to the employee. The termination letter would inform the employee of the reason for the termination of the employment. If the termination was due to a breach of policy resulting in a disciplinary hearing, it is important to set out the allegations against the employee and the findings made as part of the termination process. The letter will also inform the employee whether or not the termination is immediate and without notice, the effective date of termination, any payments in lieu of notice, any accrued benefits, return of company assets, including ID cards, etc.
  2. Payments to the Employee: Further to the termination letter issued to the employee, the employer is required to pay any outstanding benefits including the salary of the employee for the period already worked. Except in cases of gross misconduct, in the event that, the termination is immediate, the employer is required to pay the employee’s the required salary in lieu of notice as set out in the contract. Other earned entitlements such as bonuses and allowances are also to be paid to the employee within reasonable time upon termination.
  3. International Best Practices: Employers have an obligation to ensure that every action taken with respect to the termination or dismissal of employees complies with international labour best practices. Over the years, the National Industrial Court of Nigeria has departed from mere compliance with local laws and provisions of contract and decided that the processes leading to the termination or dismissal of employees must comply with international labour best practices. For example, it used to be the practice in Nigeria to simply state in a termination letter that an employee’s services ‘were no longer required’. The NIC has held over several cases that an employer cannot now terminate the employment of an employee without stating the reason for such termination. It is therefore very important that employees look beyond the mere provisions of the contract of employment and local laws when considering terminations.

Post-Termination

Despite following the above steps, an employee who is terminated could still be aggrieved by the termination and take steps to claim compensation after the termination. If this occurs, some of the steps to be taken by the employer are highlighted below.

1. Letter Before Action: It is usual for an employee who is dissatisfied by the termination of his employment to issue letter before action to his employer. This is usually done through the employee’s lawyers but it is not unusual for the employer to receive one directly from the employee. A letter before action would typically contain the purported ways in which the former employees say they are dissatisfied, proposed claims and demands of the employee and an ultimatum that the employer meets the demands of the employee within a particular time. It would usually end with a threat that if the demands are not met within the time stated, legal action shall commence.

2. Seek Legal Advice: An employer that has received a letter before action is expected to seek legal advice immediately with respect to the proposed claims and demands of the employee in order to determine how best to respond to the notice before legal action. It is best to proceed on the basis that legal action shall be commenced if there is no response by the employer within the time stated in the letter before action.

3. Respond to Notice before Legal Action: Having assessed the demands made in the letter before action and the all the processes leading up to the termination of the employment, the employer is expected to respond appropriately to the letter before action. There are several ways to respond to a letter before action. First, the employer could effectively respond by rejecting the claims and demands of the employee where employer is of the view that the termination has fully complied with the employee’s contract, the company policies and the law. The employer could also respond by paying the demands made in the letter before action in full or they could respond by making an offer or calculating what they say is the former employee’s entitlement following their termination. Whatever the case, the general advice is never to ignore a letter before action when received.

4. Legal Action: It could be the case that an employee commences legal action against his employer despite the employer’s response to the employee’s letter before legal action. The legal action by the employee will set out the case of the employee and his demands before the court. The employer is required to promptly seek legal assistance in defending the legal action commenced by the employee.

Conclusion

The relationship between employers and employees in Nigeria are mostly governed by their contracts of employment and the applicable employment laws. Employers are expected to have regard to some legal considerations before, during and post-termination of employments. Before the termination, employers are required to have adequately reviewed the contract of the employee, company’s policies and the law. It is also important that disciplinary hearing is conducted before termination where applicable.

During termination, the employer is required to issue termination letter which details the allegations and reasons for the termination. The employer is also required to make appropriate payments such as earned bonuses, salaries, payment in lieu of notice etc., to the employee. Employers are expected to go beyond the provisions of the contract and local laws and comply with international labour best practices. After termination, an aggrieved employee may issue letter before legal action to the employer. The employer is required respond to the letter before legal action. Finally, an aggrieved former employee may commence legal action at the National Industrial Court against the employer in which case the employer is required to seek legal assistance to defend the legal action.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

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Better Late than Never: Nigeria Finally Passes the Data Protection Act https://goldsmithsllp.com/better-late-than-never-nigeria-finally-passes-the-data-protection-act/?utm_source=rss&utm_medium=rss&utm_campaign=better-late-than-never-nigeria-finally-passes-the-data-protection-act Tue, 27 Jun 2023 12:02:55 +0000 https://goldsmithsllp.com/?p=8579 On 12 June 2023, the Nigeria Data Protection Act, 2023 (“the Act”) was signed into law by President Bola Ahmed Tinubu. The Act provides a legal framework for the protection…

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On 12 June 2023, the Nigeria Data Protection Act, 2023 (“the Act”) was signed into law by President Bola Ahmed Tinubu. The Act provides a legal framework for the protection of personal information, processing and transfer of personal information and regulatory obligations of data controllers and data processors among others in Nigeria. Prior to this, Nigeria did not have a single unified data protection law despite there being calls for one.

This article provides an overview of the new law, it considers the objectives, application, principles guiding the processing of personal data, cross-border transfer of personal data and other key provisions.

Application of the Nigeria Data Protection Act

The Act applies to data controllers or data processors domiciled, resident or operating in Nigeria and the processing of personal data that occurs within Nigeria. It also applies to situations where the data controllers or data processors are not domiciled, resident or operating in Nigeria but are processing the personal data of data subjects in Nigeria.

The Act does not apply to the processing of personal data which is done solely for personal or household purposes by one or two more persons. The Act also does not apply to the processing of personal data necessary for the investigation, detection or prosecution of crimes or the prevention or control of a public health emergency, etc.

Objectives of the Act

The Act seeks to achieve the following objectives:

  1. Safeguard the fundamental rights, freedoms and interest of data subjects as guaranteed under the Constitution.
  2. Regulate the processing of personal data and ensures that personal data is processed in a fair, lawful and accountable manner.
  3. Protect data subjects’ rights and provide means of recourse and remedies in the event of breach.
  4. Ensure that data controllers and data processors fulfill their obligations to data subjects.
  5. Establish an impartial, independent and effective regulatory Commission to superintend over data protection and privacy issues and supervise data controllers and data processors.

Establishment and Functions of the Nigeria Data Protection Commission

The Act established the Nigeria Data Protection Commission (“the Commission”) for the purposes of achieving the objectives of the Act. Thus, the Commission has the core functions of regulating the deployment of technological and organizational measures to enhance personal data protection, accredit, licence, and register suitable persons to provide data protection compliance services, register data controllers and data processors, receiving complaints relating to violations of the Act or any subsidiary legislations.

Principles of Processing Personal Data

Data controllers and data processors process personal data on the basis of care and accountability to data subjects. Accordingly, data controllers and data processors must act in a fair, lawful and transparent manner, collect data only for specified and legitimate purpose, hold and retain the data accurately, not longer than necessary, and generally ensure appropriate security measures are taken to secure the personal data.

Consent and Lawful Basis for the Processing of Personal Data

Consent of a data subject is very important for processing personal data. A data subject is a person whose information or data is being processed or sought to be processed. A data controller or data processor must obtain the consent of a data subject before processing his/her data, and it lies on the data controller or processor to prove that the data subject has given consent. The request for consent must be in a clear simple language and format with information that the data subject reserves the right to withdraw the consent at any time.  The consent must be freely and intentionally given either in writing, orally or through electronic means. Silence or inactivity does not amount to consent. In the case of a child, or person lacking legal capacity), the consent of a parent or guardian will suffice. The need to obtain consent of parent or guardian, may however not apply where the processing of personal data is necessary to protect the vital interests, or for the purpose of the education, medical or social care of such child or person lacking legal capacity, or where it is necessary for proceedings before a court.

The consent must be given for the specific purpose(s) for which personal data is processed, or where the processing is necessary for the following purposes:

  1. For the performance of a contract to which the data subject is a party
  2. For compliance with a legal obligation to which the data controller or data processor is subject
  3. To protect the vital interest of the data subject or another person
  4. For the performance of a task carried out in the public interest or in the exercise of official authority vested in the data controller or data processor
  5. For the purposes of the legitimate interest pursued by the data controller or data processor, or by a third party to whom the data is disclosed.

Obligations of a Data Controller

  • Obligation to Provide Information: A data controller has the obligation to provide certain necessary information to a data subject before collecting his personal data. The information which the data controller must provide to the data subject include the following:
  1. Identity, residence or place of business and means of communication with the data controller and its representative.
  2. Recipients or categories of recipients of the personal data
  3. Existence of the rights of the data subject
  4. Retention period for the personal data, etc.

The data controller shall make this information available by means of a privacy policy which should be expressed in a clear, concise, transparent, intelligible and easily accessible format.

  • Data Privacy Impact Assessment Obligation: The assessment is a process designed to identify the risks and impact of processing personal data. A data controller is required to conduct a data privacy impact assessment where the processing of personal data may result in high risk to the rights and freedom of a data subject. This is to be conducted before the processing of personal data.
  • Obligation to Erase Personal Data: A data controller has the obligation to erase the personal data of a data subject without undue delay where it is no longer necessary or where the data controller has no other lawful basis to retain the personal data.

Obligations of a Data Processor

Data controllers are engaged by data processors to process personal data. These data processors are also mandated to comply with the principles for the processing of personal data, assist the data controller to fulfill its obligation, implement appropriate technical and organizational measures to ensure the security, integrity, and confidentiality of personal data. Where a data processor engaged by a data controller further engages another data processor, the data processor directly engaged by the data controller is obliged to notify the data controller of its engagement with another data processor.

Data Protection Officers

Data controllers that process significant personal data are required to designate a person as a Data Protection Officer (DPO). The DPO may be an employee of the data controller or a person engaged by a service contract and must possess expert knowledge on data protection laws and practices. A DPO advises data controller, monitors compliance with the Act and related data protection policies of the data controller. The DPO also act as the contact point for the Commission on data processing issues.

Rights of Data Subjects

A data subject has the following rights with respect to the processing of his personal data by a data controller.

  1. Right to Confirmation from a Data Controller. A data subject has the right to obtain from a data controller without constraint or unreasonable delay, confirmation as to whether the data controller or a data processor operating on its behalf is storing or otherwise processing personal data relating to the data subject and if so, the purpose of the processing, the recipients or categories of recipients to whom the personal data have been disclosed or will be disclosed, etc.
  2. Right to receive a copy of his personal data in a commonly used electronic format.
  3. Right to correction or deletion of the data subject’s personal data where correction is not possible where the personal data is inaccurate, out of date, incomplete or misleading.
  4. Erasure of personal data of the data subject without undue delay
  5. Right to restrict the processing of personal data
  6. Right to withdraw consent to the processing of personal data at any time.
  7. Right to object to the processing of personal data relating to the data subject.
  8. The right to reject being subject to a decision based solely on automated processing of personal data.
  9. The right to receive personal data in a structured, commonly used and machine-readable format and be able to transmit it to another data controller without any hindrance.

Data Security

Data controllers and data processors are required to implement appropriate technical and organisational measures to ensure the security, integrity and confidentiality of personal data in the possession. They must ensure that personal data are protected against accidental or unlawful destruction, loss, misuse, alteration, unauthorized disclosure or access.

The security measures that may be implemented to ensure personal data security include encryption, periodic assessments of risks to processing systems and services, regular testing, assessing and evaluation of the effectiveness of the measures, regular updating of the measures and introducing new measures to address shortcomings, etc.

Personal Data Breaches

Personal data breach is the breach of the security of a data controller or data processor which leads to or may lead to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to personal data transmitted, stored or processed.

Data processors are required to notify data controllers or engaging data processors of personal data breaches which the data processors store or process upon becoming aware of it by describing the nature of the personal data breach and the number of data subjects and personal data records concerned and also respond to all information requests from the data controllers or the engaging data processors.

Data controllers should also notify the Commission of personal data breaches which are likely to result in a risk to the rights and freedoms of individuals within 72 hours of becoming aware of such breach. Data controllers are also to communicate the personal data breach to the data subjects in a plain and clear language including measures that could be taken by the data subjects to mitigate any possible adverse effects.

Data controllers and data processors are also required to keep a record of all personal data breaches, facts relating to the breaches, its effects and remedial actions taken.

Cross-border Transfers of Personal Data

Data controllers and data processors are not allowed to transfer or permit the transfer of personal data from Nigeria to another country unless:

  1. The recipient is subject to a law, binding corporate rules, contractual clauses, code of conduct or certification mechanism that affords an adequate level of protection.
  2. meets one of the lawful basis for transfer of personal data outside Nigeria.

The level of protection considered adequate must uphold the principles that are substantially similar to the conditions for processing personal data provided by the Act. An adequate level of protection is assessed by taking into account the existence of an effective data protection law, access of public authority to personal data, existence of an independent supervisory authority, etc.

Registration of Data Controllers and Data Processors

Data controllers and data processors of major importance are mandated to register with the Commission within six months after the commencement of the Act or upon becoming a data controller or data processor of major importance. Data controllers or data processors of major importance are data controllers or data processors that process personal data of particular value or significance to the economy, society or security and are resident or operating in Nigeria.

The Commission is required to maintain and publish a register of duly registered data controllers and data processors of major importance on its website. A data controller or data processor of major importance shall be removed from the register where it ceases operation.

Enforcement and Penalties

A data subject who is aggrieved by the action, inaction or decision of a data controller or processor may lodge a complaint with the Commission and it may investigate the complaint where it is not vexatious or frivolous.

The Commission may also issue a compliance order once it is satisfied that any requirement of the Act or subsidiary legislation has been violated or likely to be violated by a data controller or data processor. The order may be a warning, order to comply with the request of a data subject or a cease-and-desist order. The Commission may also issue an enforcement order or impose a sanction for violation of the Act or a subsidiary legislation.

The penalty or remedial fee for violation of the Act or subsidiary legislation is:

  1. Higher maximum amount, which is the greater of N10,000,000 and 2% of its annual gross revenue in the preceding financial year, in the case of a data controller or data processor of major importance.
  2. Standard maximum amount, which is the greater of N2,000,000 and 2% of its annual gross revenue in the preceding financial year, in the case of a data controller or data processor not of major importance.

Conclusion and Remarks

The Nigeria Data Protection Act, 2023 is an important piece of legislation and has been long in coming. It provides for the basic principles and the lawful bases for the processing and transfer of personal data in Nigeria and applies to both resident and non-resident data processors. It provides for the responsibilities of data controllers and data processors while also providing for the rights of data subjects. The processing of sensitive personal data and the personal data of children and persons lacking legal capacity to consent must follow the applicable principles as provided by the Act. Data security measures which are robust are expected to be put in place by data controllers and data processors to protect against the risk of personal data breaches. The Act creates the Nigerian Data Protection Commission which has the overall responsibility to ensure compliance and impose penalties where necessary. Both resident and non-resident data processors are advised to pay particular attention to this new legislation as they are now required to take specific steps to ensure compliance with the Act.

 

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

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