Carry out a redundancy in Nigeria, the right way.
Answer a few questions and the toolkit builds your evidence pack — inform the union, apply last-in-first-out, negotiate the payment and settle notice and final pay. Nigeria has no statutory redundancy pay, so a fair, negotiated process is what protects you.
Nigeria — the Labour Act redundancy procedure: inform the union, LIFO selection, negotiate the payment. No statutory redundancy pay; senior/professional staff fall under contract. Disputes go to the National Industrial Court.
The exact numbers and rules that apply — worked out for your situation and jurisdiction.
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Redundancy, done right — for Nigerian employers
In Nigeria a redundancy is defined by the Labour Act as an involuntary and permanent loss of employment caused by a surplus of labour. The Act sets a procedure, not a payment: there is no statutory redundancy pay. Any redundancy money comes from a collective agreement or the contract, negotiated with the workers’ representatives. This free AI toolkit walks you through a compliant redundancy and builds the evidence pack.
The redundancy process, step by step
- Business case — record the genuine reason for the surplus of labour (downturn, reorganisation, closure of a unit).
- Inform the union / workers’ representative — the Labour Act (s.20) requires you to inform the trade union or workers’ representative of the reasons for and extent of the anticipated redundancy.
- Selection — last in, first out — apply the LIFO principle in each category affected, subject to the need to retain the more skilled or efficient worker.
- Negotiate the payment — negotiate redundancy payments with the union/representatives; there is no statutory rate, so the amount comes from the CBA or contract.
- Notice & final pay — give the tenure-based notice below (or pay in lieu) and settle final wages, accrued leave and any negotiated redundancy payment.
Redundancy pay
There is no statutory redundancy pay in Nigeria. The Labour Act (s.20) sets only the procedure — inform the union, apply last-in-first-out, and negotiate redundancy payments with the workers’ representatives. Any amount is whatever a collective bargaining agreement or the contract provides, not a legislated formula. Managerial, administrative, professional and clerical staff whose work is not mainly manual fall outside the Labour Act (s.91) — their terms are governed by contract and the common law.
No statutory rate exists — do not represent any figure as a legal entitlement. Confirm the CBA or contract; senior/professional staff fall under contract and common law.
Notice periods
| 3 months or less | 1 day |
| 3 months to less than 2 years | 1 week |
| 2 years to less than 5 years | 2 weeks |
| 5 years or more | 1 month |
Labour Act, s.11(2) minimums, unless the contract provides more. Notice of a week or more must be in writing; notice may be paid in lieu.
Consultation & the National Industrial Court
The Labour Act imposes no headcount threshold and no permission requirement, but s.20 does require you to inform the trade union or workers’ representative of the reasons for and extent of the redundancy and to use your best endeavours to negotiate the payments. Disputes about a redundancy — including whether it was genuine and fairly conducted — are heard by the National Industrial Court of Nigeria, which increasingly applies international best practice on fair process.
Common questions
How much redundancy pay must I give?
The Labour Act sets no amount — there is no statutory redundancy pay in Nigeria. The Act (s.20) only requires you to inform the union, apply last-in-first-out and negotiate payments. Whatever the collective agreement or contract provides is what is owed.
What does the Labour Act actually require?
Procedure, not payment: inform the trade union or workers’ representative of the reasons and extent of the redundancy, apply LIFO in each category (subject to retaining skill and efficiency), and negotiate the redundancy payments in good faith.
Does the Labour Act cover all my staff?
No. It protects "workers" doing mainly manual or clerical work. Managerial, administrative and professional staff are excluded (s.91) and are governed by their contract and the common law, so their redundancy terms come from the contract, not the Act.
Reference: Labour Act, Cap L1 LFN 2004, ss.11 & 20 (exclusions s.91). General information for employers, not legal advice.