FUNDAMENTALS OF CONTRACT OF EMPLOYMENT IN NIGERIA

FUNDAMENTALS OF CONTRACT OF EMPLOYMENT IN NIGERIA

INTRODUCTION

The element of a valid contract includes; consideration, intention, legality, capacity, offer, acceptances, certainty  to create legal relationship and capacity to contract. This was the view of the Court in ORIENT BANK V BILANTE INTERNATIONAL LTD (1997) 8 NWLR 515.

Section 91 of the Labour Act 2004 defines Contract of Employment as an agreement whereby one person agrees to employ another as a worker and that person agrees to serve the employer as a worker. This agreement between both parties to the contract may be oral or written, express or implied. Generally, a contract of employment becomes enforceable on the parties to the contract when signed and agreed by parties to the contract. The Court that has jurisdiction to entertain employment matters in Nigeria is the National Industrial Court. When an offer has been accepted orally or by conduct, it implies that both parties are in contract. This was the view of a competent Nigerian Court in the celebrated case of Effong Vs. African Development Corporation Ltd.

CONSIDERATION

Consideration is essentially the benefit both parties receive for performing the contract. Oftentimes, consideration is money, but it can be a service, an object, or anything else of value. In fact, consideration can even be a right, interest, or benefit. Parties must exchange some value for a contract to be binding. This is called consideration. Consideration does not have to be adequate or for the benefit of the other person, it merely has to be sufficient.

INTENTION

Parties to a contract of employment must have the intention to create a valid, enforceable contract. This in another words is called the “meeting of the minds”.  All parties must have the ability to understand the terms of and any obligations under the contract.  Consent to the contract must be freely given. Not all agreements between parties are contracts. It must be clear that the parties intended to enter into a legally binding contract. If there is no intention to create legal relations in a contract, the contract could be subject to a lawsuit.

LEGALITY

Legality refers to the subject matter of the contract and whether it is legal. A contract is a legally binding promise made between at least two parties in order to fulfil an obligation in exchange for something of value.

CAPACITY

Not everyone is eligible to form a contract. Capacity means that a person has the legal ability to sign the contract. It can involve a sound mind, as in the ability to understand the contents of the document. Therefore,  people with unsound minds, children under 7 years who are mentally insan,  people who are under the influence of drugs or alcohol cannot enter into any valid contract.  There is a presumption, however, that they do not understand the implications of entering into the contract.

AGREEMENT

An agreement happens when an offer is made by one party to the other, and that offer is accepted. Acceptance of the offer must be unconditiona and it must be communicated. Any negotiations between the parties are counter-offers, not acceptance. What constitutes as adequate acceptance will vary depending on the type of contract.

 OFFER

. Offer is one of the elements to make sure that the contract is legally valid or acceptable. In a contract, it is very important that a party would make an offer. If the offer is accepted,  then it would constitutes to a legally valid contract. An offer occurs when one party presents something of value that they wish to exchange for something else of value. The offer is usually the terms that make up the contract. After an offer is presented, it can be accepted or declined.

ACCEPTANCE

Acceptance simply means that an offer presented was accepted. After having an offer in a contract, there should be acceptance. For a contract to be made there should be acceptance from the other party or person. When the other party is clear with the offer, there would make an acceptance once they are clear with the rules and regulations being offer in the contract. There will be no contract if the parties are still negotiating or discussing and have not made accept the offer. The interesting thing about acceptance is that it doesn’t need to be said or written to be conveyed; it can be determined through conduct.

CERTAINTY

The terms and regulations being made in a contract should be stated clearly and understood by the parties of the contract. If the agreement is not certain, it would be no longer valid.

TERMINATION OF CONTRACT OF EMPLOYMENT

·         An employment may be determined in the following ways:

·         By operation of the lawn

·         By the intention of the parties and

·         By summary dismissal.

A notice of termination must be given by the party of the intention to terminate the contract by paying the other party salary in lieu of notice. See section 11 of the Labour Act.. An employee’s contract can be terminated in the event of the death of the employee. Also, either party may terminate the employment contract as long as the other party is given notice.

MINIMUM NOTICE PERIODS TO BE GIVEN TO EMPLOYEES (SECTION 11 OF THE LABOUR ACT)

One day, if the period of service is up to three months;

One week, if the period of service is up to two years;

Two weeks, if the period of service is up to five years; and

One month, if the period of service is five years or more.

STATUTES THAT REGULATE EMPLOYMENT AND OTHER LABOUR ISSUES IN NIGERIA 

 The Labour Act Cap L1, Laws of the Federation of Nigeria 2004

The constitution of the Federal Republic of Nigeria

The National Industrial Court Act 2006

The Trade Unions Act 2004

The Trade Dispute Act 2004 and others.

PREPARED BY: CHAMAN LAW FIRM TEAM

Email: chamanlawfirm@gmail.com

Tel: 08065553671, 08024200080