Compensation and Working Time

Overtime Compensation

While the National Minimum Wage Act of 1981 specified normal full time working hours to be forty hours per week, there is no such specification under the National Minimum Wage Act of 2019. The 1981 law assumed the full-time work as 40 hours per week.

The Labour Act also does not specify general working hours, rather these are fixed by the mutual agreement or collective bargaining within the enterprise or industry. Where there is no machinery for collective bargaining, the general working hours may be fixed by an industrial wages board.

If the worker has to work more than the fixed normal working hours, it is considered as an overtime. There is no statutory provision regarding the overtime work limit and overtime pay. Overtime compensation is entirely a matter of mutual agreement (employment contract), collective bargaining agreement or an order by the industrial wages board.

The Labour Act does not specify a maximum number of daily or weekly working hours, overtime hours or premium rates and delegates this to mutual agreement, collective bargaining, or wages boards.

Source: §13(1-2) & 59(8) of the Labour Act (Cap L1 LFN 2004)

Night Work Compensation

Night time for industrial undertakings is defined as period of eleven consecutive hours (in some cases, the period is reduced to ten hours) including the time between 22:00 to 05:00. For agricultural undertakings, night is a period of nine consecutive hours including the interval between 21:00 to 04:00.

Night period for young workers (under the age of sixteen years) is the period of twelve consecutive hours, including the interval between 22:00 to 06:00. For workers between sixteen and eighteen years of age, night is a seven consecutive hours’ period, including the time interval between 22:00 to 07:00.

There is no statutory provision regarding compensation for night work. However, the premium rate for pay can be adjusted by mutual agreement, collective bargaining, or an order by the industrial wages board.

Source: §55(3) & 60(4) of the Labour Act (Cap L1 LFN 2004)

Compensatory Holidays / Rest Days

Workers can be engaged in certain tasks during the weekly rest periods and public holidays. In extraordinary circumstances, workers may work on weekly rest days and public holidays. In such cases, the worker is entitled to a day off within fourteen days in lieu of work done or a monetary compensation according to overtime rates (specified under the employment contract, collective agreement or an order by industrial wages board) is paid.

As an alternative, workers are entitled to payment for their work in addition to their normal pay for that day according to the pay rate that applies to overtime work.

Sources: §13 (7) of the Labour Act (Cap L1 LFN 2004); §6 of the Public Holiday Act 1979

Weekend / Public Holiday Work Compensation

Workers may be required to work on weekly rest days and public holidays. In such circumstances, when an employee has to work on official holidays or weekly rest days, he/she is entitled to the payment for work done in addition to their normal pay according to the pay rate that applies to overtime work (as determined under an employment contract, a collective agreement or an order of the industrial wage board). The other alternative is corresponding time-off from work, which should be allowed as soon as possible (within 14 days).

Sources: §13 (7) of the Labour Act (Cap L1 LFN 2004); §6 of the Public Holiday Act 1979