close
Share with your friends

The Labour Act for Review

The Labour Act for Review

The Labour Act (the Law), which regulates the relationship between the employee and employer, was enacted in 1971 (about 50 years ago!).

1000

Related content

The Labour Act for Review

Given the tremendous rate of developments in the workplace and complex nature of work in today’s modern, global and technology-driven world, most people will agree that the Act is long overdue for review.

The new President/Chairman of Council of the Chartered Institute of Personnel Management of Nigeria (CIPM), Wale Adediran, recently advocated for the review of the Labour Act to make it more relevant to today’s workplace realities. In support of this, he said the CIPM would soon launch a one-million signature campaign in this regard.

Some of the areas that need to be reviewed are:

(a)    Limited scope of application: The law appears not to cover all workers, even though, in practice, it is often referenced or applied across board for employment issues.  The Act covers clerical or junior-staff sort of roles and not “persons exercising administrative, executive, technical or professional functions as public officers or otherwise”. 

(b)    Maternity leave: The Law currently provides for twelve (12) weeks, with at least 50% pay. At the minimum, this does not align with the current trend of sixteen (16) weeks, with full pay.

(c)    Paternity leave: This is a global and growing practice not recognized under the Law. This has become a necessity, given the evolving structure of family and parenting in today’s modern world.

(d)    Trade unionism: Though the law forbids employers prohibiting their employees from joining trade unions, this restriction may not apply to ‘Management’ employees, who do not seem to be covered.

(e)    Severance pay (pay in lieu of notice): The Law appears to reference Basic Salary as the basis of computing pay in lieu of notice, which does not align with leading practice that typically focuses on Fixed Pay (i.e. Basic Salary and other cash allowances/items), and in some cases, target bonus.

(f)     No provision for unfair dismissal/unfair labour practice: Based on the Law, the employer is allowed to terminate an employee for no reason, provided the employer complies with the notice period provision or, where the contract is regulated by statute, the employer complies with the relevant statutory provision. This is based on the Common Law and does not align with the International Labour Organization (ILO) standards on unfair dismissal, which require employers to give reasons for terminating or dismissing an employee. Some countries, such as Gambia, Ghana, South Africa, United Kingdom and Zambia, have already  adopted these standards.

(g)    Low fines / penalties for contraventions: The fines imposed by the Law are as low as N100! In today’s world, this defeats the purpose of deterring contraventions and promoting compliance.

(h)    Concerns on child labour: Based on Section 59, a family member can employ a child for agricultural or domestic work. This is not acceptable in today’s modern world and exposes children to exploitation for commercial agriculture and miserable treatment as domestic servants.

 

For more information, please contact Yewande Alli or Boluwaji Apanpa

© 2019 KPMG Professional Services, a partnership registered in Nigeria and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal