Employers May Go To Jail For Non-payment Of Salaries

Workman (Unpaid Wages Prohibition) Bill has passed a second reading in the House of Representatives, and shall apply to employers in both public and private sectors when it comes into effect.

Employers of labour in the country risk one-year imprisonment and loss of 30 per cent of benefits due to employees if they delay or fail to pay their salaries, as contained in the bill.
The details of the bill showed that employers would lose between 10 and 30 per cent of the wage value for delaying or failing to pay employees’ salaries.

Section 4 (1) of the bill provides, “An employer shall not hold onto the salary, wage, pension and any other benefit and emolument of any workman for a period of seven days and above from the day the payment of such salary, wage, pension and any other benefit and emolument falls due save in the event of any force majure.”

According to the bill sponsored by Minority Leader of the House, Mr. Femi Gbajabiamila, a salary delay of one to seven days, shall attract a penalty of “10 per cent of one month wage”, while delay or non-payment of salary for eight to 30 days, shall cost the employer “20 per cent of one month wage”.

Where the delay is 30 to 60 days, the penalty shall be 30 per cent of two months wage.
Salary delay of 60 days and above shall attract a harsher penalty of “30 per cent of the wage for the duration and one-month imprisonment of the employer”.

The bill provides that depending on the size of the organisation, the provision shall apply to the employer, whether as an individual, partners or the directors.

Sub-sections 3-6, added, “Where the breach is in respect of other monetary benefits apart from monthly wage and monthly pension, the penalty shall be 30 per cent of such monetary benefits for the period.

“(4) Without prejudice to the provisions of this Act, where the employer in breach of this section for more than 60 days is an individual, the schedule herein shall apply to such individual.

“(5) Without prejudice to the provisions of this Act, where the employer in breach of this section for more than 60 days is a small company other than a limited or public company, the penalties in the schedule herein shall apply to each of the partners in the company.


“(6) Without prejudice to the provisions of this Act, where the employer in breach of this section for more than 60 days is a limited or public company, the schedule herein shall apply to all the directors of the company.”

(7) The schedule referred to in sub-section 2 above shall form an integral part of this Act.
The bill defines employment as a contract between the employer and the employee, where the former agrees to employ the latter.

The proposed legislation states, “Contract means contract of employment, and includes any contract of apprenticeship.

“Contract of employment means any agreement, whether oral or written, express or implied whereby one person agrees to employ another as a worker temporarily or permanently and that other person agrees to serve the employer as a worker.”