Let me guess how you hired your first staff. A WhatsApp message and a handshake. "Resume on Monday, salary na ₦250k, we'll sort out the rest as we go." It felt fast and friendly. Then one of two things happened. Either the person left after four months with your client list and your pricing template, or you tried to let someone go and suddenly there was talk of "three months' salary in lieu" you never agreed to, plus a letter from a lawyer.
Here is the hard truth most Nigerian founders learn the expensive way: the handshake is not the cheap option. It is the most expensive contract you will ever sign, because when there is no paper, the gaps get filled by whoever shouts loudest, and increasingly that is the National Industrial Court. A proper employment contract is not bureaucracy. It is the cheapest insurance policy your business will ever buy. Let me show you how to write one that actually holds.
First, the myth: "Contracts are for big companies like GTBank"
This is the lie that keeps small Nigerian employers exposed. You look at Access, Zenith, or MTN with their HR departments and 40-page handbooks and you think contracts are a corporate thing. They are not. The moment you pay someone to do work under your direction, an employment relationship exists in law whether you wrote anything down or not. The only question is whether the terms are written by you, in advance, while everyone is happy — or improvised later by an angry ex-staff and a court.
A two-person agro startup in Ibadan needs a contract more than Dangote does, not less. Dangote can absorb a messy exit. You cannot. One bad termination dispute can swallow a quarter of your runway in legal fees and settlement.
What Nigerian law actually requires
Here is the part nobody tells the small employer. Under the Labour Act, you are required to give a worker a written statement of the main terms of their employment within three months of them starting. Not "eventually." Three months. That statement should cover the basics: who the parties are, the job, the pay and how often it is paid, hours, leave, and notice of termination.
So if you have someone who has been working for you for six months on nothing but a voice note, you are already offside. The good news is fixing it is simple, and doing it properly gives you protection you currently do not have.
A quick, necessary caveat: this is general guidance, not legal advice, and Nigerian employment rules and case law shift. For anything high-stakes — senior hires, equity, complex IP — run your template past a Nigerian employment lawyer once. Pay for it once, reuse it forever.
The notice rules you must build in (most people get this wrong)
The single biggest source of exit drama in Nigeria is notice. People throw around "one month notice" like it is gospel. It is not automatically so. The Labour Act sets a minimum notice scale tied to how long the person has worked for you:
One day's notice if they have been employed for three months or less.
One week's notice for more than three months but less than two years.
Two weeks' notice for two years but less than five years.
One month's notice for five years or more.
And here is the part employers forget: that notice runs both ways. If you want one month from a junior staff who just joined, the law does not give it to you by default — you have to write a longer notice period into the contract, and it must be the same for both sides. So decide deliberately. Many Nigerian companies write "one month's written notice or one month's salary in lieu, by either party" for confirmed staff. Whatever you choose, put it in writing, because the contract can improve on the statutory minimum but the court will fall back to the Act if your paper is silent.
The clauses that actually protect you
Forget the 40-page template you downloaded from a US website full of "at-will employment" language that means nothing here. These are the clauses that earn their place in a Nigerian contract.
Job title and duties — with a flexibility line. State the role clearly, then add that duties may reasonably evolve with the business. Without this, a staff can refuse a new task by saying "that is not my job."
Compensation, broken down. Do not just write "₦400,000 monthly." Break it into basic, housing, and transport. This matters because pension is calculated on basic plus housing plus transport, and a clean structure protects you when PenCom or the taxman comes asking. State the pay date and the currency.
