Secondment Agreement (Nigeria)

A Secondment Agreement in Nigeria sets out the rights, duties and consideration binding the parties to it.

The Secondment Agreement defines the rights and obligations of all three parties: the sending employer retains the employment relationship and typically continues to pay the secondee's salary; the host organisation directs the secondee's day-to-day work and may reimburse the sending employer for costs; and the secondee retains all accrued employment rights — including annual leave, pension contributions to a Pension Fund Administrator (PFA) under the Pension Reform Act 2014, and notice entitlements — during the secondment period.

Nigerian courts, including the National Industrial Court of Nigeria (NICN), have consistently held that a secondment does not sever the employment relationship with the sending employer. In Chevron Nigeria Limited v National Union of Petroleum and Natural Gas Workers (NUPENG) [2006], the NICN affirmed that seconded employees retain their original employment status and are entitled to all benefits accruing under their primary employment contracts. This means that if the host organisation terminates the secondment prematurely, the secondee returns to the sending employer rather than becoming unemployed.

A Secondment Agreement differs from an outsourcing or agency staffing arrangement under the National Directorate of Employment Act and from a permanent transfer of employment (novation of employment contract). In a secondment, no new employment relationship is created with the host; in an outsourcing arrangement, the worker may be employed directly by a labour contractor. In a transfer of employment, the sending employer is entirely replaced by the receiving employer, extinguishing the original contract.

For international secondments involving expatriates seconded to Nigerian entities, the Immigration Act 2015 requires that the host organisation hold a valid expatriate quota approval from the Nigerian Immigration Service (NIS) and that the secondee obtains the appropriate Subject to Regularisation (STR) visa or Combined Expatriate Residence Permit and Aliens Card (CERPAC). The Industrial Training Fund (ITF) Act requires employers with 25 or more employees to contribute 1% of annual payroll to the ITF, and secondment arrangements must account for which employer bears this liability.

The legal framework governing the Secondment Agreement (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Secondment Agreement (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Labour Act (Cap. L1, LFN 2004) sets the foundational requirements.

A Secondment Agreement in Nigeria is needed whenever an employee is to be temporarily transferred to work at another organisation, whether within the same corporate group or to an external host, while the original employment contract continues.

A Secondment Agreement is required when a parent company in Nigeria seconds an employee to a subsidiary, affiliate, or associated company — for example, when a Lagos-based holding company transfers a finance manager to a Port Harcourt subsidiary for a 12-month period to assist with a new project. Without a formal agreement, responsibilities for salary, taxes, PAYE withholding under the Personal Income Tax Act 2011, and pension contributions remain unclear.

A Secondment Agreement is needed when a Nigerian company seconds an employee to a foreign partner or multinational for skills transfer, training, or project delivery. In such cases, the agreement must address double taxation, social security obligations, and whether the secondee's remuneration will be structured to avoid triggering permanent establishment status for the sending employer in the foreign jurisdiction.

A Secondment Agreement is required when a government ministry, department, or agency (MDA) seconds a civil servant to a private sector body, international organisation, or non-governmental organisation under the Civil Service Rules. The Federal Civil Service Commission and State Civil Service Commissions regulate the terms of civil service secondments, including maximum duration (typically two to three years) and conditions for recall.

A Secondment Agreement is needed when a Nigerian bank or financial institution regulated by the Central Bank of Nigeria (CBN) seconds compliance officers or risk specialists to subsidiaries or correspondent institutions, where the CBN's Guidelines on Outsourcing and Secondment require disclosure and prior approval for certain categories of secondment.

A Secondment Agreement is required when a professional firm — such as a law firm regulated by the Nigerian Bar Association or an accounting firm subject to the Institute of Chartered Accountants of Nigeria (ICAN) rules — seconds a partner or associate to a client organisation, to govern the terms of engagement and protect both the firm and the secondee.

Parties in Nigeria should prepare a Secondment Agreement (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Nigeria Secondment Agreement must address the following essential elements to be legally effective and protect all three parties.

Identification of parties: The agreement must name the sending employer, the host organisation, and the secondee, including registered addresses and, for corporate entities, Companies and Allied Matters Act 2020 (CAMA 2020) RC numbers. All three parties should execute the agreement.

Secondment period: The start and end dates of the secondment must be stated clearly, together with any provisions for extension or early termination. The Labour Act (Cap L1, LFN 2004), Section 7, requires that the duration of any contract of employment be specified in writing.

Duties and reporting structure: The agreement must describe the role, responsibilities, and reporting lines at the host organisation during the secondment, including the name or position of the supervisor at the host to whom the secondee will report.

Remuneration and cost-sharing: The agreement must specify who pays the secondee's salary, allowances, and benefits during the secondment, and the reimbursement arrangement between the sending employer and the host. PAYE tax obligations under the Personal Income Tax Act 2011 and pension contributions to a PFA under the Pension Reform Act 2014 must be allocated to the appropriate employer.

Retention of employment rights: The agreement must confirm that the secondee's continuity of service, accrued annual leave entitlements, and employment rights under the Labour Act (Cap L1, LFN 2004) are preserved throughout the secondment period.

Confidentiality and intellectual property: The secondee will likely have access to the host organisation's confidential information. The agreement must include obligations on the secondee to protect such information and assign any intellectual property created during the secondment to the appropriate party — typically the host — under the Copyright Act (Cap C28, LFN 2004).

Health and safety: The host organisation bears responsibility for the secondee's health and safety at the host's premises under the Factories Act (Cap F1, LFN 2004) and applicable state occupational safety laws. The agreement should allocate liability for workplace injuries.

Termination and repatriation: The agreement must set out the conditions under which the secondment may be terminated early by any party, the notice period required (minimum as specified in the Labour Act or the underlying employment contract), and the obligation to repatriate the secondee to the sending employer at the end of the secondment.

Governing law and dispute resolution: The agreement must specify that it is governed by the laws of Nigeria and that disputes are referred to the National Industrial Court of Nigeria (NICN), which has exclusive jurisdiction over labour and employment matters under Section 254C of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

Additional compliance elements for a Secondment Agreement (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.