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The short answer
A staff guarantor form is a written promise by a third party to vouch for a new employee and, if the form says so, to make good a stated loss up to a stated cap. It is a civil contract: if the employee causes a loss, your remedy against the guarantor is a demand and, if needed, a civil claim, not a police arrest. Verify every guarantor by calling them on a number you found yourself.
What a guarantor form does, and what it does not
Many Nigerian shops, schools, logistics firms and pharmacies ask new cashiers, drivers, storekeepers and sales staff for one or two guarantors. The form does two jobs. First, it gives you a reference from a known adult who will say they know the candidate. Second, if it is drafted to do so, it is a promise by that adult to pay for a defined loss the employee causes, up to a limit.
What the form cannot do matters as much. A guarantee is a private agreement between you and the guarantor. A LawPavilion commentary by Douglas Ogbankwa notes the Court of Appeal's statements that the police have no role in settling civil disputes or collecting debts, and argues that arresting someone for standing as a guarantor breaches the right to personal liberty in section 35 of the Constitution. If a staff member steals, that is a crime for the police; what the guarantor owes you is a civil matter you pursue by letter and, if needed, in court.
The template
Copy this onto your letterhead and adjust the items in square brackets. Keep it to two pages so a guarantor actually reads it.
- Heading
- [Business name], RC/BN [number], [address]. STAFF GUARANTOR FORM.
- Part A: Employee
- Full name; role applied for ([cashier/driver/sales representative]); proposed start date; NIN.
- Part B: Guarantor
- Full name; home address; office address; occupation and employer; grade or position if in employment; phone numbers; email; NIN; relationship to the employee; how long they have known the employee.
- Part C: Declaration of knowledge
- "I have known [employee] for [number] years. To my knowledge, they are of good character and have not been convicted of an offence involving dishonesty."
- Part D: Undertaking
- "In consideration of [business] employing [employee], I undertake to pay [business] any loss of money or property caused by the dishonesty of [employee] while in its employment, up to a maximum of ₦[cap], after [business] has made written demand on [employee] and given me written notice of the loss with supporting documents."
- Part E: Duration and withdrawal
- "This guarantee covers losses arising between [start date] and [end date or: the date I withdraw it by written notice to the business]. Withdrawal does not affect losses that arose before the notice is received."
- Part F: Notice of changes
- "[Business] will tell me in writing if [employee] is moved to a role handling materially more cash or stock."
- Part G: Data
- "I agree that [business] may keep these details and contact me to verify them and about this guarantee. They will be kept for [period] after the guarantee ends."
- Part H: Signatures
- Guarantor signature and date; witness name, address and signature; attach passport photograph and a copy of a government ID.
- Part I: Interpreter (if needed)
- "This form was read over and explained to the guarantor in [language] by [name, address], who appeared to understand it before signing or thumbprinting."
Why the cap and the dates matter
An open-ended promise to cover "any loss whatsoever" is the version most likely to be argued over. A guarantor who signed for a trainee driver will say they never agreed to cover the same person as head cashier five years later. A clear cap, a defined trigger (dishonesty, not ordinary mistakes) and a stated period make the promise easier to understand at signing and easier to enforce later.
The interpreter clause exists because many guarantors sign documents in English that they do not read fluently. A 1962 Supreme Court appeal on a trader's guarantee, Gusau v Paterson Zochonis, turned partly on whether the Illiterates Protection Act had been complied with when the guarantee was written out for the guarantor. Recording who read and explained the form removes that argument.
How to verify a guarantor
A form signed by someone nobody calls is decoration. Verification takes about twenty minutes per guarantor.
- Find the guarantor's phone number independently where you can, for example through the switchboard of the employer named on the form, rather than only using the number the candidate wrote.
- Call and ask open questions: how they know the candidate, for how long, and what role they think the candidate is taking. Then ask whether they signed the form and whether they understood the cap.
- Check the ID copy against the person you speak to. If you meet them, compare the photograph.
- For a guarantor who says they work in a public office or a company, confirm the employment through the organisation, not a mobile number on a letterhead.
- Note the date, who called, and what was said on the back of the form, and sign it.
Our guide to background checks on new staff covers references, certificates and credit checks alongside the guarantor call.
If a loss happens
Keep the order of events clean. Investigate first: count the cash or stock, get the employee's written explanation and keep records. If you decide dishonesty caused the loss, write to the employee asking for repayment. Then write to the guarantor, enclosing the evidence and the amount claimed (not more than the cap), and give a reasonable deadline.
Do not deduct the loss from the employee's wages on your own. Section 5(1) of the Labour Act, as published, allows a deduction for loss caused by wilful misconduct or neglect only with the prior written consent of an authorised labour officer. If the guarantor refuses to pay, the claim goes to court like any other debt; in Lagos, a liquidated claim up to ₦5,000,000 can use the Small Claims Court process, as set out in the Lagos Practice Direction.
| Example only | Amount |
|---|---|
| Cash shortage traced to a cashier over March | ₦380,000 |
| Cap stated on guarantor form | ₦250,000 |
| Most you can demand from the guarantor | ₦250,000 |
| Balance to pursue from the employee directly | ₦130,000 |
Data protection and storage
A guarantor form holds a stranger's ID, address and phone number. Under section 24 of the Nigeria Data Protection Act 2023, personal data must be limited to what is necessary and kept no longer than needed; section 27 lists what you should tell the person at collection, including who you are, why you hold the data and how long you keep it. Part G of the template covers this. Store forms in a locked cabinet or access-controlled folder and shred them once the guarantee period and any claim have ended.
Where Pryme fits
A Pryme Business Account includes a Compliance agent that can prepare a checklist of guarantor calls still outstanding for new hires, and a payroll tool so wages are paid on record rather than in cash. A person approves actions above a set ceiling. For the full hiring sequence, see hiring your first employee and our staff handbook template.
Questions people ask
Can police arrest my guarantor if the staff steals?
A guarantee is a civil contract. Commentary citing Court of Appeal decisions says the police have no role in recovering debts. Report the theft by the employee to the police; recover from the guarantor by demand letter and, if needed, a civil claim.
How many guarantors should a cashier have?
There is no legal number. Many employers ask for one or two. Two verified guarantors with clear caps are better than three unchecked ones.
Can a guarantor withdraw?
If your form allows withdrawal by written notice, yes, for future losses. Losses before the notice stay covered. When a guarantor withdraws, ask the employee for a replacement.
Must the guarantor be a civil servant?
No law requires it. What matters is that the person exists, knows the candidate, understands the form and can be traced. Verify employment claims through the organisation itself.
Sources
- LawPavilion (Douglas Ogbankwa): Arresting persons for standing as guarantors is illegal · accessed Oct 2026
- Judy.legal: Mallam Momo Gusau & Anor v Paterson Zochonis & Co Ltd (1962, FSC 131/1961) · accessed Oct 2026
- Labour Act full text (theiguides copy) · accessed Oct 2026
- Nigeria Data Protection Act 2023 (KPMG copy) · accessed Oct 2026
- Lagos State Small Claims Court Practice Direction 2023 · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.