May 13, 2016

11 Things to know about the Employee Compensation Act by @LawPadi


The Employee Compensation Act was an important piece of legislation passed in order to provide for employees who were injured, disabled, or died during the course of their employment. The Act replaced the Workmen’s Compensation Act.

Some of the key features of the law which Nigerians need to be aware of are:

1.     The Law was established in order to provide an open and fair system of guaranteed and adequate compensation for employees or their dependants for any death, injury, disease or disability arising out of or in the course of employment. 

2.     The Law is applicable to all employers and employees in the public and private sectors throughout the Federal Republic of Nigeria. 

3.     The Nigeria Social Insurance Trust Fund Management Board is empowered to implement the Act and the Fund established under it. 

4.     In order to access compensation, the employee (or his/her dependants) must notify the employer of the injury/disabling occupational disease/death within 14 days of the occurrence. The information should include – name of the employee, time and place of the occurrence, and nature and cause of the disease or injury if known. Failure to provide the information required is a bar to a claim for compensation (subject to decision of the NSITF in certain circumstances. 

5.     The Employer must report this information to the NSITF Management Board within 7 days of receiving notification from the employee or his/her dependants. In the case of a death it must be reported immediately. Failure to make a report is an offence under the Employee Compensation Act. 

6.     An application for compensation must be made by the employee or his/her dependants within one year after the date of death, injury or disability arising from an occupational accident or disease, or else the claim will be refused (except if special circumstances for the delay existed). 

7.     Any employee who suffers any disabling injury out of or in the course of employment is entitled to compensation, whether or not it occurred in the workplace. 

8.     An employee is entitled to payment of compensation with respect to any accident sustained while on the way between the place of work and –
  • The employee’s principal or secondary residence
  • The place where the employee usually takes meals, or
  • The place where he usually receives remuneration provided that the employer has prior notification of such place.

9.     An employee is entitled to compensation for mental stress arising from an acute reaction to a sudden and unexpected traumatic event arising out of or in the course of the employee’s employment. 

10.                        In the case of death of the employee, compensation is paid to the employee’s widow(er) and/or child(ren) on a scale ranging from 30%- 90% monthly of the employee’s remuneration depending on the circumstances of the dependants. 

11.                        Every employer is to make a minimum monthly contribution of 1% of the total monthly payroll into the Employee Compensation Fund. 

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