Employment Offer Letter

What is an employment offer letter?

An employment offer letter, also known as a job offer letter is an official document an employer gives a job candidate who has been selected for employment.

It is a proposal for a job position and is provided after the employer has decided to hire the job candidate.

What is the difference between an employment offer letter and an employment agreement?

An employment offer letter is an offer or an invitation to enter into a contract. It indicates the employer's willingness to employ the job candidate upon the terms outlined in the employment offer. On the other hand, an employment agreement is a legal contract that regulates the employment relationship.

While both documents might contain similar provisions, the employment contract is more robust and comprehensive than the employment offer.

What are the different types of employment?

There are several employment agreements. Here are the most common types:

• Permanent Employment: This is a long-term contract without a specified end date. The employee works for the employer indefinitely until either the employer or the employee terminates the contract.
• Fixed-Term Employment: This type of employment is set for a specific duration and terminates at the end of that period unless the parties agree to renew the contract.
• Temporary Employment: This is for a short period. It can be for a few days, weeks, or months.
• Full-Time Employment: This is a type of employment that requires employees to work at least 30 to 40 hours per week.
• Part-Time Employment: This type of employment requires employees to work fewer hours than full-time employees, usually 20 hours per week.

It is important to note that employment contracts can often combine elements of different types of contracts. For instance, an employment agreement might be for a part-time fixed-term position or a full-time permanent position.

What is the difference between an employment offer letter and a letter of engagement?

An employer offer letter is provided to only persons who are hired to work as employees. On the other hand, engagement letters are provided to independent contractors or service providers.

In an employment relationship, the employer controls how the employee performs their job. Employees also receive statutory benefits and protections, such as insurance and pension benefits, annual holidays, etc. The employer also handles tax withholdings and social security contributions.

On the other hand, service providers or independent contractors have control over how the work is done. Additionally, contractors do not receive employee benefits and are responsible for their taxes.

For more information, see our legal guide "What's the Difference Between an Employee and an Independent Contractor?".

Is it mandatory to have an employment offer letter?

No, an employment offer is not mandatory. However, an employment offer letter is an essential document provided to a job candidate as it indicates the employer's interest in hiring the job candidate.

What must an employment offer letter contain?

An employment offer letter can be concise or as robust as possible. Nevertheless, a standard employment offer letter must contain basic terms or provisions, such as the following:

• Basic information about the parties, including the full names and addresses of the employer and employee.
• The type of employment, including whether the employment is full-time, part-time, permanent, or temporary.
• The duration of employment, if it is a fixed employment.
• Job position or designation of the employee.
• Work schedule or hours of work.
• Brief description of the employee's duties, including the employee's scope of work or the responsibilities expected from the employee.
• The employee's compensation or salary.
• Vacation period, as all employees who have worked for up to 12 months are entitled to vacation with pay.
• Other benefits like health insurance, pension, annual leaves, etc.

What is not allowed in an employment offer letter?

The law strictly regulates employment relationships. Hence, among other points, it is not permitted to:

• Compensation below the minimum wage: The minimum wage for Nigeria is ₦30,000. It is illegal to provide compensation below the minimum wage.
• Unpaid overtime: Employers are required to pay employees overtime wages if employees work beyond their stipulated hours.
• Unreasonable non-compete clauses: Non-compete clauses are usually included in employment offers and employment contracts to prevent the employee from working for a competitor. For a non-compete clause to be enforceable, it must be reasonable. A reasonable non-compete clause should specify the duration (how long the employee cannot work for a competitor, for example, six months, or one year). It should also specify the area or territory where the restriction applies (for example, within the same city or region). The clause should not simply restrict the employee from working for any competition in the whole of Nigeria.

Who are the parties involved in an employment offer letter?

The parties to an employment offer letter are the employer (who hires a person to work) and the employee (a person who is hired for a job).

Generally, an employee can be any individual of 18 years old or older, who has the right to legally reside in Nigeria.

Under the law, a child and young persons under the age of 15 may work but there are strict rules regulating the employment of a minor. Generally, a child cannot work except when they are employed to do light work. Additionally, young persons below the 15 will require parental consent to work.

An employer should be a national or international organization based and officially registered as a legal entity in Nigeria.

Who cannot enter into an employment agreement?

An employment agreement cannot be used in a situation when an employee is less than 18 years old.

In cases where a minor is hired, the employer must comply with the rules and obtain the consent of their parent or guardian.

What is the duration of an employment offer letter?

Like an employment agreement, the employer and employee decide on the duration of the employment. The parties can choose an indefinite period or a fixed term.

What has to be done once the employment offer letter is ready?

The employment offer letter should be signed by both parties in two original copies. The employment offer letter can be signed in person or electronically. If the employer is an organization, an officer (a representative of the organization such as the director, partner, human resources manager, etc.) will sign on behalf of the organization.

The employer should deliver two copies of this letter (either by hand or via email) to the job candidate. If the job candidate accepts the job offer, the job candidate is required to sign two copies of the employment offer and return at least one copy of the document as a formal acceptance of the employment. The signature of the job candidate (employee) signifies acceptance, which becomes binding on both parties. After signing, each party should keep one signed copy for their record.

Note that if the job candidate accepts the employment offer, the employer is required by law to deliver an employment contract within three months from the date of employment.

However, if the applicant declines the offer, he or she can send a rejection letter to the employer instead.

Which documents should be attached to the employment offer letter?

In some cases, the following documents may be attached to the employment offer letter:

• Employment Contract;
• Non-Disclosure Agreement;
• Employee Handbook;
• Employee Code of Conduct Policy;
• Employee Privacy Policy;
• Employee Expense Reimbursement Policy.

Is it necessary to notarize an employment offer letter for it to be valid?

No, it is not necessary to notarize an employment offer letter. Signatures of the parties and witnesses are sufficient.

Is it necessary to have witnesses for the employment offer letter?

The employment offer letter needs to be witnessed to be valid. The witness should be someone who is at least 18 years of age.

After the parties have signed, the document must be witnessed by at least one person. The witness must hand fill in their names, addresses, and occupations and sign the document.

What are the costs involved in the finalization of an employment offer letter?

No costs are associated with the finalization of an employment offer letter.

Which laws apply to an employment offer letter?

Employment and employment offer letters are subject to Federal laws as issues relating to employment and labour matters in Nigeria are within the exclusive purview of the federal legislature. The Federal laws applicable to this agreement include:

• Labour Act, 2004.
• The Constitution of the Federal Republic of Nigeria, 1999 (as amended).
• Employees' Compensation Act, 2010.
• Factories Act, 2004.
• National Health Insurance Scheme Act, 2004.
• Personal Income Tax (Amendment Act), 2011.
• Trade Disputes Act, 2004.

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