SME Advisory, Uncategorized



By Razaq Ayeni

The Employee’s Compensation Act, 2010 is a publication of the Federal Government, which commenced the 17th day of December 2010. It contains nine parts and sixty-nine sections.

It was enacted basically to address the patent errors, loopholes and some other area not covered and repeals the Workmen Compensation Act CAP. W6 LFN 2004

The Act provides a shield and guides the employees who suffer from occupational diseases or sustain injuries arising from accidents at the workplace or in the course of discharging their duty (ies) in the workplace or off workplace but sent by the employer. Act shall apply to all employers and employees in the public and private sectors in the Federal Republic of Nigeria

Objectives of the Act

This Act was enacted to equip the employee a fair and guaranteed compensation for them or their dependant in case of any bad occurrence that may occur to them during the course of discharging their duties. It also caters for rehabilitation of workers when they encounter work-related disabilities. It establishes and maintains a solvent compensation fund which is done in the employees’ interest. It also makes the assessment and accessibility of the fun less stressful and herby enhancing safety and health standard in the workplace.

 The Board

The Nigeria Social Insurance Trust Fund Management Board (in this Act referred to as “the Board”) shall have the power to implement and maintain this Act and the Fund.

Employee’s Notification of Injury.

In case of an injury or disability sustained in the workplace, it should get to the notice of the Board within 14 days of occurrence or receipt with the name of the victim, the place and time of its occurrence should be noted not leaving the nature and cause of the diseases.

Employer’s obligation to report death, injury or disease of an employee

The employer shall report to the Board and the nearest office of the National Council for Occupational Safety and Health in the State within 7 days of its occurrence every injury to an employee and also must notify the Board immediately of any case of occupational injury or death filling in the name, place, time, nature of the disease or injury or death with the address of the accredited medical practitioner who attended to the employee.

Application for compensation

The occupational injury or death form prescribed by the Board will be filled and an application for compensation shall be made on the form prescribed by the Board and shall be signed by the employee or the deceased employee’s dependent. If the board has verified it and they are satisfied, they will pay the compensation provided by this Act if the application is filed within 3 years after that date.

Compensation for Injury

This Act provides for any employee, whether or not in a workplace, who suffers any disabling injury arising out of or in the course of employment shall be entitled to payment of compensation. The Board must be provided information like the employee’s principal or secondary residence, the place where the employee usually takes meals, the place where he usually receives remuneration if available.

Compensation for Mental Stress

When an employee has an acute reaction to a sudden and unexpected traumatic event arising out of or in the course of the employee’s employment, it is referred to as mental stress. To begin with such a claim, he/she will be diagnosed by an accredited medical practitioner as a mental or physical condition amounting to mental stress arising out of the nature of work such employee engages in. Sometimes, such mental stress may be as a result of the employer new directives which are not favourable or change in working condition that exceeds workers’ ability. Such shall be liable to compensation to the degree as the Board will appoint a Medical Board to Inquire about it.

Compensation for Hearing Impairment

This section is for an employee who by one way or the other suffers partial or full hearing ability as a result of their job which may be from the noise they are exposed to. This Act provides that employee suffers from hearing impairment of non-traumatic origin, but arising out of or in the course of employment shall be entitled to compensation. The Board under this Act in consultation with the National Council for Occupational Safety and Health in respect will seek to know the ranges of hearing impairment, the percentages of disability etc.

Limitation of actions, subrogation

The limitation or subrogation here talks about the cause of the death, injury or disability of the employee lies against some other person, not the employee or the employer, the employee’s dependant may claim compensation within 6 months of the occurrence of the injury or death or any longer period. The award for damage or compensation shall be a provision of health care and remuneration paid by an employer during the period of disability.

Compensation cannot be Waived

This Act makes it clear that the employee cannot waive the compensation either willingly or coarsely as it is a must that the compensation issued to the worker must be accepted as he cannot agree with his employer not to receive the compensation because this Act says such agreement is null and void.

Contribution by Employees for Compensation Prohibited.

No employer for any reason shall, either directly or indirectly, deduct from the remuneration of an employee as such deduction is liable to imprisonment for the term not exceeding a year or a fine of not less than one hundred thousand Naira for individual and one million Naira fine for a corporate firm/body.

Compensation in fatal cases

The compensation for fatal loss as a result of employee death, the dependent will be in the position to receive the compensation if the deceased leaves them alone as a widow or widower. For two or more children, the compensation shall be 90 percent of monthly remuneration of the employee, for one child it will be a monthly payment of 85 percent of the monthly take-home of the employee when the employee has no child it will be 60 percent of the monthly income of the employee. The monthly payment discussed in this Act shall be paid to them till they reach the age of twenty-one or until they graduate from their first degree.

Proof of the existence of dependants

The board will have to verify the existence of the dependants every time and also the condition indicated in their claim receipt as to be sure the dependants still exist.

Permanent total disability

In the case of total disability, this Act provides that ninety percent of the remuneration of such employee be paid to him/her as compensation periodically. This Act further made it clear that the payment should come monthly to the employee.

 Health care and disability support.

To further ease the pain or help the employee better, this Act says that “the Board may provide for the injured employee any medical, surgical, hospital, nursing and other care or treatment, transport, medicines, crutches and apparatus, including artificial members, that it may consider reasonably necessary at the time of the injury, and thereafter during the disability, to cure and relieve from the effects of the injury or alleviate those effects”

It stressed the health relief benefit further by saying “The Board may make a daily allowance for the subsistence of an injured employee when, under its direction, the employee is undergoing treatment at a place other than the place where the employee resides, and the power of the Board to make a daily allowance for subsistence under this section extends to an injured employee who receives compensation, regardless of the date the employee first became entitled to compensation.”

The Duty of accredited Medical Practitioner and other Specialists

The Board shall appoint an accredited medical practitioner to attend to or consult the employee and such practitioners shall carry out the following functions as stated in this Act:

“provide the reports in respect of the injury in the form required by the Board or regulations made by the Board, but the first report containing all information requested in it shall be supplied to the Board within 7 days after the date of his or her first attendance on the employee; provide a report within 7 days after the employee is, in the opinion of the medical practitioner or accredited medical practitioner, able to resume work and, if treatment is being continued after resumption of work, to furnish further adequate reports; give all reasonable and necessary information, advice and assistance to the injured employee and a deceased employee’s dependents in making application for compensation, to provide the required certificates and proofs, without charge to the employee.”

Retirement Benefits

Section Twenty-eight of Employee Compensation Act 2010 will not deny any employee from receiving any benefit he or she is entitled to from the Pension Reform Act 2004 as such employee is allowed to receive a 7.5% of such employee periodic payment.

Payment of Retirement Benefits

The amount of money paid to the employee or the dependant shall be the part payment from the employee retirement benefits in accordance with the provision of the Pension Reform Act 2004.

Let’s take this time to talk about the employer as we have discussed a lot about the employee.

Employers’ contribution to the Fund

Starting from Part Six section thirty-three, it discussed the employers’ quota of the Fund. It is therefore mandated by this Act that every employee after two years of this Act commencement, they should remit one percent of their total payroll.

As to payment Assessment, every payment shall be due for remittance on the 1st of January in the year it payable and on the date which will further be determined by the Board.

Employer Classification

It is in the capacity of the Board to classify and categorise employers into class and sub-class. The board will still further classify some other employers in the sub-class to further sub-class when they find it necessary. The Board can also consolidate or rearrange any existing class and sub-class when necessary.

Employer to Provide Estimate of Payrolls

All employers shall furnish and forward to the Board employees payroll for proper assessment and such payroll must be complete and accurate. The employer must do this not later than 31st December each year. If any employer should file in false information or fails to comply, such employer will be liable and the penalty shall be 100,000 for individual and 1,000,000 nairas or a jail term of not more than a year.

Statement and Estimate of Earning

Every employer of labour should tender a statement of all earnings paid to its employees not later than 29th of February of each year. Not forgetting to include the estimate of the earning meant to be paid to the employees for the current year. It is also important to include the earning of any employee qualified for compensation.

Employer’s Experience Account

It is the duty of this Act Board to keep and maintain an account called employers’ experience account showing all the assessment charged and cost of all claims linked to such employer.

For Employer commencing business or recommencing business, the employer will file and submit to the Board required under section 51 of this Act within 30 days of commencement.

Should in case an employer ceases to be an employer, he/she will inform the Board within 30 days of cessation and accompany it with the statement of total payroll for the year.

All employers shall keep a record of all the remuneration paid to its employees and any other particular for the employers’ operation as may be required by the Board.

For books of account examination, the Board will employ or appoint and authorize any person to perform the duty of examining the statements submitted by the employers.


Enforcement Powers

Officer of the Board carrying out his/her duty under this Act may enter any workplace at any time without warrant or notice and request for the production of any licence or any document needed to carry out his/her duty effectively.  He/she may decide to inspect, examine any document provided or he/she may decide to make enquiries from/of anybody who is either in the workplace now or before.

Right to Appeal

Any person not comfortable or pleased with the decision of the Board may appeal the Board decision or judgment. Such appeal will be made in writing to the Board within the period of 180 days or be disposed by the Board within 180 days. The case will be addressed in the National Industrial Court.

General Penalty

Anyone who fall short of the provisions in this Act and fails to comply with the provisions in any Section of this Act and there is no penalty prescribed, such offender, shall be liable on conviction to a fine of 20, 000 naira for first case or jail term of not more than a year and 100, 000 naira on subsequent cases. The offender may even be punished with fine and imprisonment.

In conclusion, the Act has the best welfare package for workers across all board or spheres of work making it a point of duty that no one suffers loss or injury without being compensated to ease the patient pain and further help the person recover on time for partial injury.

Is there anything I have not touched here? Please share in the comments section. I also request that you share this post, thanking you for helping by sharing it as an email or on Social Media.

Kindly call 08023200801, for further assistance.

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