July 21, 2025

Unpaid Salaries: How to Legally Reclaim Your Hard-Earned Money from your Employer

by Eko Solicitors

INTRODUCTION

Unpaid salaries are a serious issue for workers in Nigeria. The primary legal framework governing salary payments is the Labour Act 2004, which sets minimum standards for employment conditions, including timely wage payments. Other key legislation includes the National Minimum Wage Act (2019 Amendment), which mandates a minimum wage of N70,000 per month (effective July 2024), and the Pension Reform Act 2014, which governs pension contributions. This guide outlines your legal rights and practical steps to recover unpaid salaries in Nigeria.

WHAT THE LAW SAYS ABOUT UNPAID SALARIES?

In discussing laws governing the non-payment of salaries in Nigeria is anchored in statutory laws, contractual obligations, and judicial enforcement mechanisms. Below is a detailed breakdown of the key components. According to Section 15 of Labour Act 2004. It mandates timely payment of wages at intervals not exceeding one month, as agreed in the employment contract. Furthermore Section 17 of Labour Act 2004 requires employers to provide written terms of employment within three months of hiring; including remuneration details, Section 13 of the Labour Act 2004 stipulates overtime payment for work exceeding mutually agreed hours.

The National minimum wage Act (2004 Amendment) sets the minimum wage at N70,000.00(Seventy thousand naira only) per month which became effective July 2024 and requires triennial reviews to align with economic conditions, non-compliance attracts fines of up to N20,000.00(twenty thousand naira only), daily penalties of N1000(One thousand naira) for ongoing offences, on interest and on overdue wages, this exempts small businesses with 25 employees, part time workers and commissioned based roles.

UPCOMING LEGISLATIVE MEASURES

-EMPLOYEES REMUNERATION PROTECTION BILL (2023)

The National Assembly in 2023 proposed a bill with the sole aim of criminalising non-payment of salary by employers, with penalties ranging from 3-6 months imprisonment for employers and fines which is N100,000.00(One hundred thousand naira) for corporate entities.

This law will enable employees to submit written claims and petition courts if salary is unpaid within 5 working days.

WHY NON PAYMENT OF SALARIES IS A SERIOUS OFFENSE

It is trite law that employment contracts are binding under common law, requiring employers to fulfill salary obligations as per agreed terms, anything that constitutes breach of contract like non-payment of salaries permits employees to terminate employment without notice and claim owed wages.

WHICH COURT HANDLES UNPAID SALARY DISPUTES

The National industrial court is seized with jurisdiction over employment disputes. Employees can file claims for unpaid salaries, wrongful termination, or breaches of contract. The court increasingly requires employers to comply with international labour standards, such as providing clear reasons for termination.

DO YOU KNOW THAT UNPAID SALARIES CONSTITUTES A HUMAN RIGHTS VIOLATION AND NON COMPLIANCE WITH INTERNATIONAL BEST PRACTICES?

Unpaid salaries is deemed a human right violation under Nigeria’s constitution and international treaties e.g. international labour organizations convention, the National Industrial court emphasizes the principles of fair hearing and alignment with international best practices.

PRACTICAL LEGAL STEPS FOR EMPLOYEES TO RECOVER THEIR UNPAID SALARY

Where an employer defaults in payment of salary, the employee can legally explore a plethora of options to recover the unpaid salary. Here are practical steps employees in Nigeria can take to legally recover unpaid salaries from their employers:

1. Engage with Your Employer

Draft a Demand Letter: Write a formal letter specifying the owed amount, a payment deadline (7–14 days), and consequences of non-compliance (e.g., legal action). Use traceable delivery methods like registered couriers for proof of receipt.
Negotiate Internally: Engage the employer or HR department to resolve the issue informally, preserving the relationship and avoiding litigation costs.

2. Involve Regulatory Authorities

Report to the Ministry of Labour: File a complaint with the Federal Ministry of Labour and Productivity, which may mediate or issue compliance directives under the Labour Act 2004.
Engage Labour Unions: If unionized, involve the Nigeria Labour Congress (NLC) or Trade Union Congress (TUC) to escalate pressure on the employer.

3. Gather Documentation

Collect evidence, including:
- Written employment agreements (per Section 7, Labour Act 2004).
- Proof of unpaid wages (e.g., bank statements, payslips, or correspondence).
For posthumous claims, beneficiaries must provide a death certificate, probate, or letters of administration.

4. File a Claim with the National Industrial Court

Submit a claim to the NIC for unpaid salaries, allowances, or wrongful termination.
The court may order:
- Payment of owed wages.
- Fines for non-compliance.
- Garnishee orders to seize employer funds.

5. Enforce Court Judgments

Garnishee Order Nisi: Apply for a court order to freeze the employer’s bank accounts. If unchallenged, an Order Absolute transfers funds to you.
Writ of Execution: Request a court-ordered seizure and auction of the employer’s movable assets (e.g., vehicles, equipment) to recover funds.
Committal Proceedings: Seek jail time for employers who persistently refuse to comply, via contempt of court.

IMPORTANT FACTS TO NOTE WHILE TAKING THESE STEPS BY THE EMPLOYEE

The employee must ensure that while filing the claims, such claims must be filed within 6 years as prescribed under the limitation Act, unless the debtor acknowledges or makes partial payments.
An affected employee can claim the legal costs such as the legal fee of his lawyer, even as part of the judgment.
Where there are posthumous claims, the beneficiaries of the deceased employee must provide probate or letters of administration to initiate recovery.

CONCLUSION

By following these steps, employees can navigate Nigeria’s legal system to recover unpaid salaries efficiently. For complex cases, consulting a labour lawyer is advisable to ensure compliance with procedural requirements and maximize recovery chances.

The above article serves educational purposes only and does not provide in-depth consultation peculiar to your needs, legal challenges don’t wait, and neither should you. CLICK ME to schedule a call with us today.

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