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The short answer
Under section 7 of Nigeria's Labour Act, an employer must give a worker a written statement of the main terms of employment no later than three months after the start date, covering pay, hours, holidays, sick pay and notice, and must notify changes in writing within one month. The Act's definition of "worker" excludes people in administrative, executive, technical or professional roles, so for managers and professionals the written contract itself carries most of the protection, which is a reason to issue a full contract to everyone on day one.
UK founders hiring in Lagos often start with an offer letter and plan to sort out the contract later. Nigerian law gives a window for written terms, but it is short, and for many of the roles a UK company hires, the contract is doing more work than the statute.
The three-month rule
Section 7(1) of the Labour Act requires the employer, not later than three months after the beginning of a worker's period of employment, to give the worker a written statement specifying:
- the names of employer and worker, and the employer's address
- the place and date of engagement
- the nature of the employment
- if the contract is for a fixed term, the date it expires
- the notice each party must give to end it
- rates of wages and how they are calculated, and how often wages are paid
- normal hours of work
- holidays and holiday pay
- sick pay and incapacity terms
- any special conditions
Section 7(2) says any change must be notified in writing within one month of the change.
Who the Act covers
Section 91 defines "worker" to exclude persons exercising administrative, executive, technical or professional functions. A UK company's Lagos developers, analysts, accountants and managers may well fall outside the Labour Act's protections, while drivers, cleaners and some support staff fall within them. For excluded staff, rights come mainly from the contract and the courts, so a vague contract leaves both sides exposed.
Statutory minimums to reflect
For staff the Act covers, the contract should not go below these Labour Act minimums:
- Annual holiday
- At least 6 working days with full pay after 12 months' continuous service (s.18)
- Sick pay
- Up to 12 working days a year with a medical certificate (s.16)
- Wage payment
- In legal tender at agreed intervals no longer than a month (ss.1 and 15); payment by cheque needs the worker's prior written consent
- Deductions
- Total deductions in a month not above one-third of that month's wages (s.5(7))
- Rest
- One rest day of at least 24 consecutive hours in every seven days (s.13(7))
- Notice
- Minimums from one day to one month by length of service (s.11)
The Act sets no statutory overtime rate; hours beyond normal hours are overtime, and the rate is a matter for the contract or collective agreement.
Advances, deductions and pay method
The Labour Act has specific rules on money that UK templates rarely cover. Section 4 limits an advance of wages to one month's wages, to be recovered over at least three months, with no interest or discount charged. Section 5 restricts deductions: no fines, and deductions for pension or provident schemes only with the worker's consent. Section 1 requires wages in legal tender, with cheque payment only if the worker agrees in writing beforehand. If you offer salary advances or staff loans, write the repayment terms into a separate signed agreement that respects these limits.
Offer letter, contract or both
An offer letter that states pay, start date and job title is useful, but it rarely covers notice, holidays, sick pay and special conditions. Treat the offer letter as a summary and the contract as the document that meets section 7. Practical points:
- Send both in English and get both signed; keep signed copies in the staff file.
- If you use a probation period, say how long it lasts, what notice applies during it and how confirmation is communicated.
- For fixed-term roles, state the expiry date, which section 7 requires, and what happens if work continues after it.
- Attach or reference the staff handbook, and say which version applies.
What a UK owner should add
- The employing entity. Name the Nigerian subsidiary or employer of record as employer, not the UK parent, unless you have taken advice on employing directly.
- Pay currency. State whether salary is in naira and how any foreign-currency element works (see salary in naira or dollars).
- Statutory deductions. PAYE, pension and any voluntary NHF.
- Intellectual property. Who owns work created (see IP in work by Nigerian staff).
- Data and confidentiality. Including how staff data is handled under the NDPA.
- Termination. Notice periods at or above the statutory minimum, pay in lieu, return of equipment.
Worked example: timing
Example only. A support officer starts on 1 February. The latest date for the written statement under section 7(1) is 1 May. If her salary rises on 1 August, written notice of the change is due by 1 September under section 7(2). Issuing the full contract with the offer avoids the deadline altogether.
Where Pryme fits
Signed contracts and payslips are records you will be asked for. Pryme partners with VerifyDoc.ai so you can issue verifiable documents such as payment receipts that staff, landlords or embassies can check are genuine (verifiable receipts), and staff can be paid through payroll. See also Labour Act basics for UK employers.
Questions people ask
Is a written employment contract required in Nigeria?
The Labour Act requires a written statement of key terms within three months of the start date for workers it covers.
What must the written statement include?
Parties, place and date of engagement, nature of work, any expiry date, notice, pay and how it is calculated, pay frequency, hours, holidays and sick pay terms.
Does the Labour Act cover managers and professionals?
Section 91 excludes people in administrative, executive, technical or professional roles from the definition of worker.
How quickly must I confirm a pay rise in writing?
Within one month of the change, under section 7(2).
Sources
- Labour Act, Cap L1 LFN 2004 (PLAC) · accessed Oct 2026
- judy.legal: Labour Act 1974 (section headings and text) · accessed Oct 2026
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