December 1, 2022

Have you ever heard of the Employee’s Compensation Act? This crucial law will be the focus of this article. However, before we dive into the main discussion, as usual, lets place issues in context. In workplaces and offices across Nigeria, it is common to hear stories of workers or employees getting hurt, losing their lives or suffering from work related injuries or diseases while carrying out their duties[1]. These occurrences are usually traced to the risks or hazards associated with the jobs some of these workers are involved in or exposed to[2]. Sadly too, sometimes these workers suffer these injuries, diseases or disabilities without being compensated by their Employers. This is the exact situation that the Employee’s Compensation Act exists to correct.

The Employee’s Compensation Act applies to all employers and employees in Nigeria[3]. It does not matter whether they are employed in the private or public sectors. The only persons exempted from the provisions of this law are members of the Armed forces who are not employed in a Civilian capacity. It is also interesting to know that the provisions of this law apply to apprentices, part-time workers as well as workers/employees who are employed in the informal sector of the economy.

So please do not limit your mind to thinking that this law and what we will discuss here only applies to workers in big banks and factories. This law applies even to domestic servants helping out with house chores.

What should all Employers/Business Owners know under this law?

This law places a duty on all Employers/Business Owners in the Country to make a monthly financial contribution to the Employee’s Compensation Fund. The Employer is to contribute 1% of his total monthly payroll to the fund. The fund is managed by the National Social Insurance Trust Fund Management Board (the Board). This contribution is a compulsory one required by the Law[4] and it is not to be (directly or indirectly) deducted from the Employee’s Salary[5].

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So when planning your next payroll as an Employer, do not forget to include this deduction for every Employee. The law will not exclude or forgive your ignorance.

If you need further assistance on how to calculate your payroll liabilities including the contribution to the fund we have just mentioned, Accountinghub.ng has an amazing resource on this subject that would guide you simply visit https://accountinghub.ng/online-courses/ . We are not affiliates to accounting up and the recommendation made is entirely value based. Also, we get no commissions from any purchases made on Accountinghub’s website.

Also every employer is duty bound under the Act to report to the Board, any disease or death that arises in the course of the employee’s carrying out his/her job. Failure to make this report is an offence – Section 5 of the Act.

Hospital patient

If I suffer a work related injury/disease – am I entitled to compensation?

Yes, by provisions of the Employee Compensation Act, if as an employee, you suffer a work related injury or disease, you would be entitled to compensation. To state that more elaborately, all employees who suffer from mental stress, occupational injuries and diseases, as well as the dependents of an employee, who dies due to occupational injuries, are entitled to compensation by Law. This notwithstanding, the procedure for getting the compensation as provided by the Law must be followed, if not an injured employee stands the risk of losing out and not getting compensated.

If I have an accident while on my way to work – am I entitled to Compensation?

The circumstances of the individual accident would have to be carefully examined. This is one of the reasons we advise very clearly that once you suffer a work place injury, you endeavor to reach out to a lawyer who would appraise the circumstances of the injury and give you proper legal advice.

That said, to answer the question here, if one suffers an injury on the way to work, whether or not he or she will be compensated depends on the circumstances of the accident. The law is to the effect where an employee is entitled to compensation if suffers an accident while on the road or way between his place of work and

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(a)  the employee’s principal or secondary residence;

(b) the place where the employee usually takes his or her meals; or

(c) the place where he or she usually receives remuneration (that is payment),

provided that the employer has prior notification of such place. – Section 7 of the ECA

what if my work gives me mental stress – can I be paid compensation?

Shocking as it may sound, the Law provides for compensation when an Employee suffers mental stress as a result of the nature of the work[6]

If an Employee dies due to work related injury – are his family members entitled to compensation?

If an Employee dies due to a work related injury, even his/her family members are entitled to be paid compensation. The law has gone on to even provide a scale for the compensation of the bereaved family[7]. Again, the circumstances differ but in summary, the scale of compensation is a percentage of the salary of the deceased employee which is to be paid to the family on a monthly basis.

If I suffer a work related injury, what should I do?

As already mentioned, we advise that you contact a lawyer who would ensure you take the proper steps under the law to receive compensation for the work related injury.

That said, it is necessary to state again that the law (in this case the ECA) has provided for a procedure that anyone seeking compensation is to follow so as to get compensated. Where this procedure is not followed, such a person stands the risk of not being compensated.

  • Also, more importantly, it is necessary to mention that by the Law, the injured Employee or his dependents (in the case of death) are to inform the Employer of the injury within 14 days of its occurrence. Section 4 of the Act
  • This report of the injury or death to the Employer is to be made with all the details required by the law in Section 4 of the Act.
  • Once the Employer receives this report, he is to make a further report to the Board and the National Council for Occupational Safety and Health in the State within 7 days of the occurrence or of his being notified about it.
  • An application can then be made to the Board (that is the National Social Insurance Trust Fund Management Board) within 1 year after the occurrence of the injury.
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The issue of compensation should be raised as early as possible by the injured employee. Why is this? It is because the Law requires that compensation (made under the ECA) claims are to be submitted to the NSITF board within One year of the occurrence of the accident. And in exceptional cases not more than THREE YEARS after the occurrence of the accident. If an injured employee does not submit his claim to the Board within the period stated above, he loses his right or opportunity to claim compensation from the board.

You may ask, so after three years, does it mean that an injured employee has no other remedy?

Not entirely. The three year period does not mean that the injured employee does not have a right to other legal remedies.

More precisely, depending on the circumstance of the case, the injured employee may still be able to sue his former Company or Employer and claim monetary compensation for negligence or sue to recover his benefits or unpaid gratuities. In either of these cases, it is very important to get the advice of a lawyer very timely.

Nkobowo Nkobowo BL


End note

Since 2010 when the Employee Compensation Act came into force, the Workmen’s Compensation Act was repealed (that is, it is officially no longer in force). Consequently, contracts, employee handbooks and other documents that are currently prepared for Companies/ Employers need to reflect or make reference to the Employee Compensation Act and not the Workmen’s Compensation Act.

[1] https://www.flyingdoctorsnigeria.com/2018/07/20/10-most-common-injuries-in-the-workplace/

[2] For example did you know that Pneumoconiosis is a globally well-known occupational disease; this is a chronic lung disease resulting from widespread exposures to silica, coal, asbestos and various mineral dusts in mining, quarrying, construction and other manufacturing processes. https://www.premiumtimesng.com/opinion/130871-prevention-of-occupational-diseases-a-case-for-decent-work-in-nigeria-by-emmanuel-obasi.html

[3] Section 2 of the Employee’s Compensation Act

[4] Section 33 of the Act

[5] Section 14 of the Act

[6] Section 8 of the ECA.

[7] Section 17 of the Act

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