CASUALIZATION OF LABOUR: IMPLICATIONS OF THE TRIANGULAR

EMPLOYMENT RELATIONSHIP IN NIGERIA

Dr Gogo George Otuturu

LL.B, LL.M, PhD, B.L, CBA, DipEd, AITD, ACIArb (Nigeria)
Senior Lecturer, Faculty of Law, Niger Delta University
Wilberforce Island, Bayelsa State, Nigeria
E-mail: [email protected]

ABSTRACT
Casualization is a global phenomenon. It is a form of nonstandard work
arrangements practized in both developed and developing countries with
varying degrees of regulation. Employers see it as a means of cutting costs
and achieving flexibility, while workers see it as a work arrangement that
denies them the right to employment benefits and to unionize and bargain
collectively. This paper examines the concept of casualization and the
implications of the triangular employment relationship in Nigeria in the
context of international labour standards. It also examines the rights of casual
workers to employment benefits and trade union rights in Ghana and China. It
argues that the triangular or disguised employment relationship, which is the
commonest form of casual employment in the banking and oil and gas sectors
in Nigeria, fall outside the purview of the Labour Act. Amongst other things,
the paper finds that the triangular or disguised employment relationship does
not yield itself to the rights and benefits provided for workers in the traditional
employment relationship and that it has segmented the labour market into
core, non-core and peripheral zones. The paper calls for a comprehensive
review of the Labour Act in line with international labour standards. It
recommends the Ghana model with the necessary changes to suit local
circumstances.

Key words: casualization, flexibility, globalization, outsourcing, subcontracting

INTRODUCTION

Casualization is a form of nonstandard work arrangements practiced globally. In the

international literature, nonstandard work arrangements cover all forms of temporary

employment outside the traditional model of permanent and continuous employment with an

employer. The term is used interchangeably with contingent, atypical, flexible and alternative

work arrangements1 and includes temporary work, part-time work, subcontracting,

outsourcing, labour hire, zero-hour employment, dependent self-employment and disguised

employment relationships.2

1 ES Fourie, ‘Nonstandard Workers: The South African Context, International Law and Regulation by the
European Union’ (2008) 4 PER 110, 111-113
2 ILO, Nonstandard Employment Around the World: Understanding Challenges, Shaping Prospects (ILO
2016) 20-32

1
Casualization is not a new concept. It has been in use for many decades. What is new,

however, is the utilization of workers on nonstandard work arrangements to avoid standard

employment relationships.3 With globalization, trade liberalization and technological

innovation, coupled with unemployment and poverty, casualization has become a more

widespread feature of contemporary labour markets. Because of unemployment and poverty,

people are ready to accept work under any kind of arrangements.

Traditionally, the term “casuals” or “casual workers” was used to refer to workers who are

employed in irregular and seasonal employment with intermittent breaks, but it has come to

refer to all forms of non-standard workers. 4Thus, casualization may be defined simply as the

utilization of workers on nonstandard work arrangements in place of full-time permanent

employment. It can also be defined as the practice whereby employers engage casual workers

rather than full time permanent workers.

The International Labour Organization defines “casuals” as ‘workers who have an explicit or

implicit contract of employment which is not expected to continue for more than a short

period, whose duration is to be determined by national circumstances.’ 5 This definition has

been criticized for being ambiguous as it did not address the rights of the workers in this

category and what constitutes a short duration. 6 The determination of these issues by

reference to national circumstances is largely responsible for the variations in national laws

for the duration of causal work and the rights of casual workers.

3 O Bodibe, The Extent and Effects of Casualization in Southern Africa: Analysis of Lesotho, Mozambique,
South Africa, Swaziland, Zambia and Zimbabwe (National Labour and Economic Institute 2006) 55
4 In Australia, casual jobs are commonly understood as jobs that attract an hourly rate of pay but very few of
the other rights and benefits, such as the right to notice, the right to severance pay and most forms of paid
leave (annual leave, public holidays, sick leave, etc), that are normally associated with ‘permanent’ jobs.
See R May and others, ‘The Rise and Rise of Casual Work in Australia – Who Loses?’ (Sydney University,
Seminar Paper 2012) 1
5 ILO, Resolution Concerning International Classification of Status in Employment adopted by the
International Conference of Labour Statisticians, January 1993, paragraph 14(e)
<http://www.stats.oecd.org/glossary/detail.asp?ID=293> accessed 12 March 2017; see also ILO (n2) 22
where the ILO defines “casual work” slightly differently as ‘work that is executed for a very short period,
or occasionally and intermittently, often for a specific number of hours, days or weeks.’
6 O Animashaun, ‘Casualization and Casual Employment in Nigeria: Beyond Contract’ (2007) 1(4) Labour
Law Review 14, 18

2
In the past, casual workers were engaged to supplement full time workers during peak

business periods, particularly in agriculture, construction, manufacturing and retail business.

It is akin to the “Just in Time” business strategy introduced by the US manufacturer, Henry

Ford. This business strategy entails producing goods in response to demand rather than in

anticipation of demand. It challenges the idea of maintaining a permanent workforce in idle

times. It poses the question, ‘Why not bring in labour and skills as required, and save the

organization the costs associated with maintaining a permanent workforce?’7

In the past also, casual employment was mainly for unskilled workers. Nowadays, however,

the business model in many industries is such that casual workers are an integral part of a

permanent workforce and not just a supplement to a permanent workforce in peak business

periods. Both skilled and unskilled workers are engaged as casual workers in place of

permanent workers. In fact, one retail outlet uses the phrase “permanent casuals” to describe

their casual workers, indicating that they often work for years for a specific outlet.8

The ultimate outcome of casualization is reduction in the number of permanent workers and

increase in the number of non-permanent workers. 9 This helps the employers to move

towards arrangements that reduce the costs and risks associated with the standard

employment relationship through using cheaper labour, reduced wages and employment

benefits and increased flexibility. There are three kinds of flexibility. These are employment

flexibility (the freedom to change employment levels quickly and cheaply), wage flexibility

(the freedom to determine wage levels without restraint) and functional flexibility (the

freedom to altar work processes, terms and conditions of employment, etc, quickly and

cheaply).10

7 J Palmer-Brown, ‘Casualization of the Workforce: The Good, the Bad… and the
Uncertain’<http://www.greatwesternpages.com.au/gwp--online--journal/2014/08/02/casualisation-of-the-
workforce-the-good-the-bad%e2%80%a6-and-the-uncertain> accessed 28 February 2017
8 Fourie (n1) 113
9 C. Fenwick and E. Kalula and I. Landau, Labour Law: A South African Perspective (International Institute
for Labour Studies 2007) 19
10 H Cheadle, ‘Regulated Flexibility: Revisiting the LRA and Basic Conditions of Employment Act’ (2006)
27 Industrial Law Journal 663, 668

3
This paper examines the law and practice of casualization and the implications of the

triangular employment relationship in Nigeria. It also examines international labour standards

and the rights of casual workers to employment benefits and trade union rights in Ghana and

China. It argues that the triangular and disguised employment relationships, which are the

commonest forms of casual employment in the banking and oil and gas sectors in Nigeria,

fall outside the purview of the Labour Act. The paper recommends an urgent review of the

Labour Act in line with international labour standards especially as the Labour Act has

become quite obsolete.

TRIANGULAR EMPLOYMENT RELATIONSHIP

In developed countries, there is a readjustment of the legal framework for the regulation of

casual workers in such a way that casual workers can enjoy employment benefits and the

right to unionize and bargain collectively.11 In developing countries, on the other hand,

especially in Nigeria, there is virtually no legal framework for the regulation of casual

workers. This has created loopholes for employers to move towards the triangular or

disguised employment relationship which is the commonest form of casualization practized

in most countries.

In Nigeria, casualization is used generally to describe work arrangements that are

characterized by job insecurity, low wages and lack of employment rights such as pension,

gratuity and severance payments that accrue to full-time permanent workers. 12 There are

three categories of casual workers in the Nigerian labour market. These are:

1. Workers who are employed directly by a firm on casual, seasonal, fixed-term or

temporary basis;

11 RA Danesi, ‘Labour Standards and the Flexible Workforce: Casualization of Labour under the Nigerian
Labour Laws’<www.ilera-directory.org/15thworldcongress/files/papers/Track_4/Poster/CS1W_32_
DANESI.pdf> accessed 26 February 2017
12 D Eyongndi, ‘An Analysis of Casualization of Labour under Nigeria Law’ (2016) 7(4) Gravitas Review of
Business and Property Law 102, 104; TM Fapohunda, ‘Employment Casualization and Degradation of
Work in Nigeria’ (2012) 3(9) International Journal of Business and Social Science 257; RA Danesi,
‘Labour Standards and the Flexible Workforce: Casualization of Labour under Nigerian Labour Laws’
<http//www.ilera-directory.org> accessed 7 June 2021.

4
2. Workers who are employed in a triangular employment relationship such as

outsourcing and subcontracting arrangements;

3. Workers who are employed in a disguised employment relationship such as

independent contractors and home based workers.

The traditional employment relationship normally involves two parties: the employer and the

employee. But the triangular employment relationship and disguised employment relationship

present a more complex situation in which one or more third parties are involved. It occurs

when the employees of an enterprise (the “service provider”) perform work for a third party

(the “user enterprise”) to whom their employer provides labour or services. From a legal

standpoint, this kind of employment relationship presents some difficulty as the employees

concerned may find themselves interacting with two or more intermediaries, each of whom

assume certain functions of a traditional employer.13

This is the commonest form of casualization practized in the banking and oil and gas sectors

in Nigeria. The client company (the “user enterprise”) procures the services of a labour

contractor (the “service provider”) who recruits the workers and supplies them to the client

company. The service provider remains the employer and the workers are referred to as

“contract staff” or “contract workers” in preference to “casual workers.” The labour

contractor retains the right to withdraw such workers and recycle them amongst various client

companies. The purpose of this triangular arrangement is to relieve the client company of the

responsibilities and the costs associated with being the employer of the workers.14

In the landmark case of PENGASSAN v Mobil Producing Nigeria Unlimited 15 the respondent

engaged Manpower Services (MPS) Contractors, under which category is the appellant’s

employers, to provide various services in the course of normal business. These classes of

13 ILO, The Scope of the Employment Relationship, International Labour Conference, 91st Session, Report V
(Geneva: ILC 2003) 37
14 B Atilola, ‘Protecting the Rights of Casual Workers in Nigeria: Lessons from Ghana’ (2014) 8(2) Labour
Law Review 1-11, 5
15 (2013) 32 NNLR (Pt. 92) 243

5
workers are typically auxiliary support service workers, whose employment and

disengagement, as the case may be, are not directly negotiated with the respondent, but with

the MPS Contractors who employ such workers under their specific contract of employment.

These contract workers are unionized and negotiate their terms and conditions of service with

their employers, the MPS Contractors. Sometime in January 2006, against laid down rules

and regulations, especially in breach of contracts of engagement between the contract

workers and their employers, the appellant’s contract workers began to agitate for “Equal Pay

for Equal Work” with the respondent’s regular workers and sought to directly negotiate their

grievances with the respondent. This led to the breakdown of law and order which compelled

the respondent to invoke the relevant clause in its agreement with the MPS Contractors

urging the latter to withdraw their affected workers from the respondent’s premises.

It was against these facts that the appellant filed its memorandum before the Industrial

Arbitration Panel seeking for an order to reinstate the contract workers whose services were

disengaged by their employers. The Industrial Arbitration Panel found that there is no

contract between the respondent and members of the appellant. The National Industrial Court

dismissed the appeal and stated that the relationship between the parties yields to a triangular

employment relationship which comes in a variety of forms the best known of which (and

which relates to the instant appeal) is the use of contractors and private employment agencies.

Justice Kanyip said:

The ILO does not brand as invalid or unlawful or as wrong the triangular
employment relationship; neither had it even branded the practice of
outsourcing or contracting out as an unfair labour practice as the appellant
made it out in some of its communications with the Ministry of Labour
regarding this matter. All the ILO enjoins is that the respective laws of
member States on the issue should be respected and applied.16

It is to be emphasized that legislations that protect the rights of workers are based on the

traditional employment relationship. Workers in triangular and disguised employment

relationships do not fall within the purview of the protection and rights available to

16 Ibid 327 C-D (Ratio 13)

6
permanent workers.17This is clear from the definition of “worker” under the Labour Act. 18

Under the Act, “worker” means -

… any person who has entered into or works under a contract with an
employer, whether the contract is for manual or clerical work or is expressed
or implied or oral or written, and whether it is a contract of service or a
contract personally to execute any work or labour …19

It is obvious that the definition of worker is based on the traditional employment relationship

between an employer and an employee. However, the definition distinguishes between a

contract of service and a contract for services. Under a contract of service, an employer

engages an employee who works or provides services in a situation of subordination to or

dependency on the employer; or is integrated in the employer’s organization; or does not

assume the risks specific to an employer. 20 Under a contract for service, an employer

engages a self-employed person or an independent contractor to execute any work or labour

directly for the employer.

What this means is that the Labour Act applies to only the traditional employment

relationship between an employer and an employee. It does not apply to the triangular or

disguised employment relationship. The most visible effect of this type of employment

relationship is that the worker does not obtain the benefits provided to employees in labour

legislations and collective agreements. In fact, the ILO Committee of Experts on the

Application of Conventions and Recommendations has noted that the current trend by

employers to move towards replacing the traditional employment contract with other types of

contract is to evade the protection provided under the Termination of Employment

Convention 1982.21

17 RA Danesi, ‘Labour Standards and the Flexible Workforce: Casualization of Labour under the Nigerian
Labour Laws’<www.ilera-directory.org> accessed 26 February 2017
18 Cap L1, Laws of the Federation of Nigeria, 2004
19 Ibid, s. 91
20 ILO (n13) 23
21 Ibid 26

7
However, under the Employees’ Compensation Act 2010 the definition of employee has been

extended to persons employed on casual basis. 22 Thus, any worker under dependent labour

relationship who suffers any of the injuries, disability or occupational diseases can claim

under the Act.23It is submitted that “employment” in this context envisages the relationship

between the worker and the service provider.24

In the case of Abel v Trevi Foundation Nigeria Ltd 25 where the claimant who was employed

by the defendant as a “contract staff” sustained injuries in the course of his employment, the

National Industrial Court relied on the definition of “employee” under the Employees’

Compensation Act 2010 and held that the claimant is an employee of the defendant and

therefore entitled to compensation for injuries sustained in the course of his employment with

the defendant. The Court stated that the definition of who is an employee has been extended

widely by the Act to include persons engaged on temporary or casual basis.

The Trade Unions Act26 also extends the definition of “worker” for the purpose of forming

or joining a trade union to include a temporary worker. The Act defines a trade union as ‘any

combination of workers, whether temporary or permanent, the purpose of which is to regulate

the terms and conditions of employment of workers.’ 27 It is submitted that “temporary

worker” is broader term than “casual worker” and includes a casual or contract worker. Thus,

a worker, for the purpose of forming and joining a trade union in Nigeria, includes a person

engaged on temporary or casual basis.

In Patovilki Industrial Planners Ltd v National Union of Hotels and Personal Services

Workers28 the appellant company was into the business of industrial cleaning. The

22 Employees’ Compensation Act 2010, s. 73

23 I.N.E. Worugji, ‘Work Injuries Compensation under the Employee’s Compensation Act in Nigeria: What is
Next?’ ((2013) 10 Journal of Law, Policy and Globalization 30, 32
24 MPNU (n15)
25 (2014) DJNIC 288-289
26 Cap T14, Laws of the Federation of Nigeria, 2004
27 Ibid, s. 1(1)
28 Patovilki Industrial Planners Ltd v National Union of Hotels and Personal Services Workers(1978-2006)
DJNIC 288-289

8
respondent union sought to unionize the appellant’s workers but the company refused on the

basis that they were casual workers. The respondent union therefore declared a trade dispute

which was heard by the Industrial Arbitration Panel, which gave an award in favour of the

respondent union. On appeal, the National Industrial Court upheld the award of the IAP that

both permanent and casual workers have the right to form a trade union. The Court stated that

section 1(1) of the Trade Unions Act allows workers, whether permanent or temporary, to

form a trade union and a relevant trade union can unionize workers who are employed on

casual basis.

In most organizations, however, casual workers are denied the right to form or join trade

unions and to bargain collectively with their employers. In practice, once employed, the

casual or contract worker is made to sign a yellow dog contract, 29 that is, employment of a

worker subject to the condition that he shall not join a union or shall relinquish trade union

membership.30

It is submitted that this practice is a violation of the constitutional and statutory right of every

worker to form or join a trade union of his choice for the protection of his economic and other

interests. This right is enshrined in the Constitution of the Federal Republic of Nigeria

1999,as amended, which guarantees every citizen the right to assemble freely and to form or

join a trade union of his choice for the protection of his interests. 31The constitutional

provision on freedom of association is reinforced by the Labour Act 2004, which provides

that ‘No contract shall make it a condition of employment that a worker shall or shall not join

a trade union or shall or shall not relinquish membership of a trade union…‘32

It is submitted that by virtue of section 40 of the Constitution of the Federal Republic of

Nigeria 1999 (as amended)and section 9(6)(a) of the Labour Act 2004, all yellow dog
29 EE Okafor, ‘Globalization, Casualization and Capitalist Business Ethics: A Critical Overview of Situation
in the Oil and Gas Sector in Nigeria’ (2007) 15(2) Journal of Social Sciences 169, 171
30 GG Otuturu. ‘Freedom of Association and Trade Union Membership in Nigeria’ (2009) 3 (1) Labour Law
Review 63, 64
31 Constitution of the Federal Republic of Nigeria 1999, as amended, s 40.
32 Labour Act 2004, s. 9(6)(a)

9
contracts by which employers seek to deny the rights of casual workers to join trade unions

and to bargain collectively for better wages and other conditions of employment are illegal

and of no effect in Nigeria.

It is noteworthy that the Minister of Labour has issued Guidelines on Contract

Staffing/Outsourcing in the Oil and Gas Sector. 33Under the Guidelines, all jobs on the

organogram of a company operating in the oil and gas industry must be occupied by

permanent employees and outsourcing shall be restricted to non-core business of the

company except for proven short term projects. The Guidelines also enjoin employers of

contract staff to enter into collective agreements with the contract staff. The Guidelines

further empower the principal oil company to terminate the labour outsourcing contracts

where the labour contractors fail to comply with extant labour laws. However, the Guidelines

have not been be applied by the National Industrial Court and no principal oil company has

invoked its coercive powers to revoke any labour contract.

INTERNATIONAL LABOUR STANDARDS

The protection of “contract labour” was extensively discussed at the International Labour

Conference in 1997-98 leading to the adoption of the Private Employment Agencies

Convention 1997.34 The Convention highlights in its Preamble the role that private

employment agencies may play in a well-functioning labour market, while recalling the need

to protect workers. The Convention is applicable to all private employment agencies, all

categories of workers and all branches of economic activity except seafarers 35 and enjoins

member States to take measures to ensure that workers recruited by private employment

agencies are not denied the right to freedom of association and the right to collective

bargaining36 and that the agencies treat workers without discrimination.37

33 Issued by the Minister of Labour, Employment and Productivity on 25 th May 2011 pursuant to section 88(1)
of the Labour Act 2004.
34 ILO Convention No. 181
35 Ibid, article 2
36 Ibid, article 4
37 Ibid, article 5

10
ILO Convention 181 is supplemented by the Private Employment Agencies

Recommendation, 199738 which provides, inter alia, that workers employed by private

employment agencies and made available to user enterprises should, where appropriate, have

a written contract of employment specifying their terms and conditions of employment, with

information on such terms and conditions provided at least before the effective beginning of

their assignment39 and that private employment agencies should also not make workers

available to a user enterprise to replace workers of that enterprise who are on strike.40

Other ILO Conventions and Recommendations of particular relevance to workers in

nonstandard work arrangements include the Equal Remuneration Convention, 1951, 41 the

Discrimination (Employment and Occupation) Convention, 1958, 42 the Employment Policy

Convention, 1964,43 the Part-Time Work Convention, 1994,44and the Employment

Relationship Recommendation 2006.45

The Equal Remuneration Convention, 1951 is aimed at eliminating discrimination between

men and women with regard to remuneration by ensuring the application to all workers of the

principle of equal remuneration for men and women for work of equal value. 46The

Discrimination (Employment and Occupation) Convention, 1958 enjoins member States to

undertake and pursue a national policy designed to promote equality of opportunity and

treatment in respect of employment and occupation, with a view to eliminating any

discrimination on grounds of race, colour, sex, religion, political opinion, national extraction

or social origin and any other form of discrimination as may be so prescribed, nationally,

38 ILO Recommendation No. 188

39 Ibid, para 5
40 Ibid, para 6
41 ILO Convention No. 100
42 ILO Convention No. 111
43 ILO Convention No. 122
44 ILO Convention No. 175
45 ILO Convention No. 198
46 Nigeria ratified this Convention No. 110 on May 8 May 1974

11
which has the effect of nullifying or impairing equality of opportunity in employment or

occupation.47

The Part-Time Work Convention, 1994 aims at ensuring that part-time workers get the same

wages (pro rata), social security schemes, occupational health and safety protection,

maternity protection, trade union rights, paid annual and public holidays and sick leave as

full-time workers, It is supplemented by the Part-Time Work Recommendation, 1994 48which

enjoins employers to provide information to part-time workers on their specific conditions of

employment. The Employment Relationship Recommendation 2006 enjoins members States

to formulate a national policy to guarantee effective protection for workers in an employment

relationship.49

In the African region, the African Charter on Human and Peoples’ Rights provides that every

individual shall have the right to work under suitable and satisfactory conditions and shall

receive equal pay for equal work.50 This implies that there should not be any form of

discrimination in employment between workers in standard employment and workers in non-

standard work arrangements.51 The Charter is part of Nigerian domestic law by virtue of the

African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act 2004.52

THE POSITION IN OTHER JURISDICTIONS

In some jurisdictions, legislations have been enacted to regulate various aspects of

casualization. A good example is Ghana. The Ghanaian Labour Act 2003 was drafted with

the assistance of the International Labour Organization. It is, therefore, in substantial

compliance with international labour standards.

47 Nigeria ratified this Convention No. 111 on 2 October 2002

48 ILO Recommendation No. 182
49 Nigeria has not ratified Convention 122, 175, 182 and 198.
50 African Charter on Human and Peoples’ Rights 1981, Article 15.
51 B Rasak, ‘Casualization and Labour Utilization in Nigeria’ (2011) 65 International Labour Review 1-35
<www.ilo.org> accessed 20 May 2020.
52 African Charter on Human and Peoples’ Rights (Ratification and Enforcement) Act, Cap A9, Laws of the
Federation of Nigeria, 2004.

12
Under the Labour Act 2003 a “worker” is defined as a person employed under a contract of

employment whether on a continuous, part-time, temporary or casual basis. 53 A “casual

worker” is defined as a worker engaged on a work which is seasonal or intermittent and not

for a continuous period of more than six months and whose remuneration is calculated on a

daily basis, while a “temporary worker” is defined as a worker who is employed for a

continuous period of not less than one month and is not a permanent worker or employed for

a work that is seasonal in character.”54

Although the contract of employment of casual worker need not be in writing, the Act

stipulates the rights of casual worker. In particular, a casual worker is entitled to equal pay

for work of equal value, have access to any medical facility made available for workers

generally by the employer, be entitled to be paid for overtime work and be paid full

remuneration for each day on which he attends work.55

The Act provides for a transition of a worker from temporary to permanent work. It provides

that a temporary worker who is employed by the same employer for a continuous period of

six months and more shall be treated as a permanent worker. 56 In addition, an employer has a

statutory obligation to pay each temporary or casual worker full remuneration in respect of

every public holiday.57

China has also taken some drastic measures to regulate casual or contract employment in line

with international labour standards. Under the Labour Contract Law 2008, casual or

dispatched workers, as they are called in China, are recruited by labour dispatch firms and

hired to user firms under fixed term contracts of not less than two years. 58 The labour

dispatch firm remains the employer of the dispatched worker and pays the worker the

53 Labour Act No. 651 of 2003, s. 175

54 Ibid, s. 78
55 Ibid, s. 74
56 Ibid, s. 75(1)
57 Ibid, s. 77(1)
58 F Xu, ‘The Emergence of Temporary Staffing Agencies in China’ (2012) 30 Comp. Labour Law and Policy
Journal 431.

13
remuneration due to him or her. The dispatched worker is entitled to be paid overtime,

performance bonuses and benefits relevant to the post irrespective of employment status and

is entitled to earn the same pay as that received by the regular workers of the user firm. The

dispatched workers also have the right to form or join a labour union while in employment to

safeguard their lawful rights and interests.

The Labour Contract Law 2008 was amended in 2012 which came into force in 2013. The

amendments were set out to limit the overuse of agency work. The amendments emphasized

that the primary form of employment is engagement of staff through employment contracts

with the ultimate employer rather than through labour dispatch arrangements. The

amendments also provide that the number of workers who are engaged through labour

dispatch company cannot exceed a certain percentage of the total workforce, details of which

are to be provided by the Ministry of Human Resources and Social Security in a separate

regulation.59

As at March 2016, following a two-year window for companies to adjust, the new regulations

require that dispatched workers shall not exceed 10 percent of the total number of employees

at a given company. In addition, employers are not allowed to engage workers in core

business positions without the benefit of a long-term employment. The regulations require

employers to engage workers through dispatch companies for temporary, ancillary and

substitute positions only.

A “temporary” work position refers to a job that lasts not longer than six months. An

“ancillary” position refers to a position providing supporting services to the core business

positions of an enterprise, such as security and canteen services. A “substitute” position refers

to a position in which the staff engaged through a labour dispatch company temporarily

59 GLiu, Sector Working Paper No. 293: Private Employment Agencies and Labour Dispatch in China (ILO
2014) 16-19.

14
replaces an existing employee on study leave, maternity leave, sick leave or some other

reason.60

FINDINGS AND ANALYSIS

The triangular or distinguished employment relationship does not yield itself to the rights and

benefits provided for workers under the traditional employment relationship. Thus, the rights

and benefits provided for workers under the Labour Act 2004 are not available to workers

under the triangular and disguised employment relationship. As one writer puts it, workers

involved in casual jobs suffer a substantial deficit in their rights and benefits compared with

employees in standard or permanent jobs.61 Such rights and benefits include statutory notice

periods, pension and gratuity, security of employment and redundancy payments.62

The above finding is consistent with the views expressed by the ILO Committee of Experts

on the Application of Conventions and Recommendations. In its 91st Session, the Committee

stated that the current trend by employers to move towards replacing the traditional

employment contract with other types of contract is to evade the protection provided under

the Termination of Employment Convention 1982.63

The triangular or disguised employment relationship does not also yield itself to any

meaningful collective bargaining. The main reason workers form or join trade unions is for

the protection of their economic and other interests. This is achieved largely through

collective bargaining. The union represents the workers to bargain collectively with their

employer for better wages and other conditions of employment.

60 Fair Labour Association, ‘Labour Dispatch Workers in China’ Issue Brief, March 2016
<www.fairlabour.org> accessed 9 March 2017
61 PO Kalejaiye, ‘The Rise of Casual Workers in Nigeria: Who Loses, Who Benefits?’ (2014) 8(1) African
Research Review 32.
62 R May and others, ‘The Rise and Rise of Casual Work in Australia – Who Loses?’ (Sydney University,
Seminar Paper 2012) 1; CB Okoro, Law of Employment in Nigeria (Concept Publications 2013)
102-103.
63 ILO (n13) 26

15
It is clear from the case of PENGASSAN v Mobil Producing Nigeria Unlimited 64 that the

casual or contract workers in MPNU earned lower wages than the regular workers in MPNU.

They have the same qualifications and skills and they do the same jobs as the regular workers

in MPNU, but they are paid lower wages. It is this disparity in wages that informed the

members of PENGASSAN (Contract Staff Branch) to agitate for “Equal Pay for Equal

Work” and to seek to bargain directly with MPNU, but they were resisted because they had

no contractual relationship with MPNU.

While collective bargaining is notionally possible between the members of PENSGASSAN

(Contract Staff Branch) and the MPS Contractors, the nature and form of employment

militates against it. This is because the terms of the contract between the members of

PENGASSAN (Contract Staff Branch) and the MPS Contractors are largely determined by

the contract between the MPS Contractors and MPNU. This is the plight of casual or contract

workers in Nigeria.

The triangular or disguised employment relationship has further segmented the labour market

into core zone, non-core zone and peripheral zone. The core zone is made up of workers who

are engaged on full-time regular employment in the formal sector. The non-core zone is made

up of workers who are engaged on casual, atypical and other forms of nonstandard work

arrangements still in the formal sector. The periphery is made up of workers who are self-

employed in the informal sector.65 This segmentation is consistent with the Guidelines on

Contract Staffing/Outsourcing in the Oil and Gas Sector, which restrict outsourcing in the oil

and gas sector to non-core business of the company except for proven short term projects.

CONCLUSION AND SUGGESTIONS FOR REFORM

Nigeria is a leading member of the African Union as well as a member of the Governing

Body of the International Labour Organization. This dual role places her in a position of

64 MPNU (n15)
65 Bodibe (n4) 56

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responsibility to lead by example. In particular, the Federal Government of Nigeria must

make deliberate efforts to ensure that the country’s labour laws are in tandem with

international labour standards.

At present, there is no general legal framework for the regulation of casual or contract

workers and other forms of nonstandard work arrangements in Nigeria. The Guidelines on

Contract Staffing/Outsourcing in the Oil and Gas Sector, as the name implies, are restricted to

the oil and gas industry. Besides, the Guidelines have not been applied by the National

Industrial Court and no oil company has invoked its coercive power to revoke any labour

contract for noncompliance with them.

The definition of “worker” under the Labour Act is too narrow and does not contemplate new

forms of employment relationship especially the triangular or disguised employment

relationship. With the opening up of the Nigerian economy to attract direct foreign

investment especially in the power, rail transport, manufacturing and offshore oil and gas

sectors, the traditional model of employment is steadily giving way to new forms of

employment.

In the light of the observed pitfalls in the laws relating to casualization in Nigeria, there is an

urgent need for a comprehensive review of the Labour Act in line with international labour

standards as the Labour Act has become quite obsolete. 66 In this regard, the Ghana model is

recommended. The choice of Ghana is significant for two reasons. First of all, Ghana is

located in West Africa like Nigeria. Secondly, Ghana is a developing country like Nigeria.

The provisions of the Ghanaian Labour Act No. 651 of 2003 can, therefore, be easily adapted

to national circumstances in Nigeria.

66 The Labour Act was decreed in 1974 by the Military Government of General Yakubu Gowon when
nonstandard work arrangements were not very common in the country and subsequent amendments have
not introduced the desired changes to bring it in line with international labour standards.

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