Termination of employment is an important management decision, but it can create significant legal exposure if not properly handled. For employers in Nigeria, the objective should be to ensure that every termination is legally compliant, commercially justified and properly documented.

A sound termination process requires close coordination between management, HR and legal advisers.

  1. START WITH THE EMPLOYMENT CONTRACT

Before terminating employment, employers should review the employee’s contract, applicable policies, staff handbook, collective agreements and any other terms governing the relationship.

The contract will ordinarily determine the applicable notice period, termination rights and other exit obligations. A termination that does not comply with the agreed terms may give rise to a claim for wrongful termination.

HR should therefore confirm the applicable contractual requirements before any termination decision is communicated.

  1. GET NOTICE AND FINAL ENTITLEMENTS RIGHT

Employers should establish whether the employee is entitled to notice or payment in lieu of notice, and ensure that the applicable amount is accurately calculated and paid. Final entitlements should also be reconciled, including salary accrued to the termination date, outstanding leave where payable, contractual benefits and any other sums properly due.

Severance is not automatically payable in every termination. Entitlement may depend on the contract, applicable policies, collective arrangements, legislation or the circumstances of the separation.

  1. TREAT DISCIPLINARY TERMINATIONS DIFFERENTLY

Where termination arises from misconduct, poor performance or other disciplinary concerns, employers should follow the applicable disciplinary or performance-management process. The employee should be given an appropriate opportunity to respond, and the employer should maintain a clear record of the investigation, representations made and decision reached.

The purpose is not to create unnecessary bureaucracy. It is to ensure that the decision is fairly considered, consistently applied and capable of being defended if challenged.

  1. DOCUMENTATION IS CRITICAL

Good documentation is one of an employer’s strongest protections in an employment dispute.

Depending on the circumstances, the employer should retain:

  1. the employment contract and relevant policies;
  1. performance reviews, warnings or disciplinary records;
  2. investigation and meeting records;
  3. the employee’s responses;
  4. management approvals;
  5. the termination decision and letter;
  6. calculation of final entitlements; and
  7. evidence of payment.

Records should be contemporaneous, accurate and consistent. Employers should avoid creating documents retrospectively to justify a decision that has already been made.

  1. DRAFT THE TERMINATION LETTER CAREFULLY

The termination letter should be clear, precise and consistent with the underlying employment records. It should ordinarily address the effective date of termination, notice or payment in lieu, applicable terminal benefits and arrangements for the return of company property and cessation of access.

Where termination follows disciplinary proceedings, the letter should accurately reflect the basis for the decision without unnecessary allegations or inflammatory language.

  1. IDENTIFY HIGH-RISK SITUATIONS EARLY

Certain terminations require heightened legal scrutiny, including those involving:

  1. redundancy or restructuring;
  1. senior or executive employees;
  2. fixed-term contracts;
  3. allegations of discrimination or victimisation;
  4. whistleblowing or protected complaints;
  5. trade union activity;
  6. pregnancy or maternity-related rights; and
  7. other statutory or contractual protections.

Where a termination presents material legal or reputational risk, legal advice should be obtained before the decision is communicated, not after a dispute has arisen.

  1. A SIMPLE MANAGEMENT TEST

Before proceeding, management and HR should be able to answer four questions:

  1. Do we have the contractual right to terminate?
  2. Have we followed the applicable process?
  3. Have we calculated and paid everything properly due?
  4. Can we produce contemporaneous evidence supporting our decision?

If the answer to any of these questions is uncertain, the termination should be reviewed before implementation.

Conclusion

A well-managed termination is not simply an HR transaction. It is a legal, people and reputational risk-management exercise. Employers should approach termination with three priorities: compliance with the employment terms, procedural discipline and comprehensive documentation.

Early coordination between management, HR and legal advisers can significantly reduce the risk of disputes and ensure that legitimate business decisions are implemented in a manner that is both commercially effective and legally defensible.

Team 618 Bees

 

 

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