Your employee came late to work, so you deducted money from their salary.
Is that even legal?
In Nigeria, some employers include financial penalties in their staff handbooks and assume those rules are lawful because employees have signed them. But a recent judgment from the National Industrial Court highlights why employers and HR professionals need to look beyond what is written in their policies.
Your employee came late to work, so you deducted money from their salary.
Is that even legal?
Sadly, this is the reality of many employees.
You come late a few times, and when your salary comes in at the end of the month, you notice that some money has been deducted.
Sometimes, the company handbook even says clearly:
"Lateness attracts a financial penalty."
So, we assume it's legal because it's written in the handbook.
But that's not necessarily true.
In Akindele Akinyemi v. Lifemate Nigeria Ltd, a case decided by Nigeria's National Industrial Court on 8 July 2026, the court found that certain salary deductions and fines imposed under the company's employee handbook were unlawful and amounted to unfair labour practices.
The court relied on Section 5 of the Labour Act, which restricts deductions from workers' wages, including deductions for fines, except where permitted by law.
The handbook included fines for several workplace infractions, such as failing to sign attendance records properly and leaving a duty post before the close of work.
The court held that the relevant fines were unlawful and ordered the employer to repay ₦207,240 in wrongful salary deductions.
You can read the judgment on the National In8dustrial Court of Nigeria's official website.
So, what does this mean for employers and HR professionals?
An employee signing a handbook does not automatically make every rule in that handbook lawful.
A company policy must still comply with applicable labour legislation.
If your company has a policy that says:
"Come late and ₦X will be deducted from your salary."
It may be time to review that policy and ask:
What is the legal basis for this deduction?
Does the deduction comply with applicable labour laws?
Are there lawful and fair disciplinary procedures for addressing lateness?
Has the policy been reviewed by a qualified employment lawyer?
Employers can set attendance expectations and take appropriate disciplinary action when employees fail to meet them. However, disciplinary action and financial deductions are not the same thing, and one should not automatically be treated as permission for the other.
The exact legal position can depend on the applicable law, the employment arrangement, and the circumstances of the deduction.
The lesson is simple.
Company policies should not exist simply because, "That's how we've always done it."
They need to be reviewed regularly and aligned with applicable labour laws.
Employers and HR professionals must look beyond what is written in a handbook and ensure that their workplace policies are actually lawful.
