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Why Workplace Shops/Canteens Are Illegal In Nigeria.

Why Workplace Shops/Canteens Are Illegal In Nigeria.

Why Workplace Shops/Canteens Are Illegal In Nigeria. Daily Law Tips (Tip 702) by Onyekachi Umah, Esq., LL.M, ACIArb(UK)


Labour and employment is highly regulated in Nigeria. The Federal Government of Nigeria, regulates all types of employment in any part of Nigeria. The federal law (the Labour Act) made since 1st August 1971 is binding all employers and employees in Nigeria. The Labour Act is designed to ensure that employers do not exploit and take advantage of their employees (workers). This is well within the constitutional obligations of the government in Nigeria. 

Among other things, the federal law regulates content of an employment letter, duration of an annual leave, workplace conditions, place for payment of salaries and types of salaries/wages. This work reveals the position of the Nigerian labour law on the establishment of shops/Canteens by employers for selling of provisions to workers.   

Legality of Workplace Shop/Canteen: 

The Labour Act prohibits the establishment of shops in any place of employment, by an employer for the sale of provisions to his workers. It also prohibits employers from allowing any person to establish or keep such shop. 

The reason behind this may not be far from the fact that, an employer may lure or force his workers to patronize his shop. In reality, we have seen cases where employers force their workers to shop and patronize their shops, schools and any other type of business that the employer does. This is unfair and illegal. 

A shop for sale of provision to workers, can only be established by an employer, if the employer has an approval from the Federal Minister of Labour. The Federal Minister of Labour cannot issue such approval without a consultation with the State Authority (State Governor) of the state where the employer wishes to locate his shop. Even where there is an approval for establishment of shop, no worker is to be forced by any contract or agreement, written or oral, to purchase provisions at any shop established in his workplace. 

Offence of Workplace Shop/Canteen:

Establishing a shop for sale of provision in a workplace without an approval is a criminal offence. Also, the forcing any worker by any means to patronise such shop is a crime, even where the shop was established with an approval of the Federal Minister of Labour. 

These crimes are punishable with fine of not more than Eight Hundred Naira (#800.00) for a first offender. A second time offender or subsequent offender is punishable with fine of not more than One Thousand, Five Hundred Naira (N1,500.00). 

Conclusion and Recommendation: 

The gap between the poor and the rich is very wide in Nigeria. Most employees (workers) are poorer than their employers, hence most employees are often muscled and violated by their employers. Hence, there is a need for government to regulate the relationship between employers and employees to ensure fairness and equity. There is need to ensure that employees are not forced to spend their wages and salaries in the shops and business enterprises of their employers. And any shop in an employment place should have the approval of the Federal Minister of Labour. 

No matter how promising and beautify a legislation may be, until there is an enforcement of the promises and beauty of the law, the law is a mere imagination. The Federal Ministry of Labour must wake up to enforce the Labour Act. Task force teams should be supervising workplaces and engaging employees to ensure that employees are not exploited by the employers. 

The Labour Act of 1971 is about 49 years old and needs serious amendments to stay alive with the present-day realities of Nigeria. Punishment (fine) under the Labour Act is N800.00 ($2.00), this is too poor and will not discourage crime. Being a maximum penalty, it means that a court of law cannot go above the fine of N800.00, this ties and limits the just hands of judges, even where substantial justice would have been done through a higher punishment. 


  1. Sections 1, 2, 3, 14, 16, 17 (3) (c), 318 and 319 of the Constitution of the Federal Republic of Nigeria, 1999
  2. Sections 6, 21, 91 and 92 of the Labour Act of 1971.
  3. Onyekachi Umah, “Places, Workers Cannot Be Paid Salaries In Nigeria” (, 27 February 2019) < > accessed 22 November 2020
  4. Onyekachi Umah, “It Is Illegal For Workers To Be Told Where And How To Spend Salaries” (, 20 February 2019) < > accessed 22 November 2020
  5. Onyekachi Umah, “An Employment without a Written Employment Agreement is an Offence” (, 30 April 2018) < > accessed 22 November 2020. 
  6. Onyekachi Umah, “Fines And Deductions From A Worker’s Salary Are Illegal” (, 15 July 2020) < > accessed 22 November 2020. 
  7. Onyekachi Umah, “Sacking Of A Private Sector Worker With Or Without Reason” (, 8 May 2020) < > accessed 22 November 2020
  8. Onyekachi Umah, “Can Workers Be Paid Salaries With Relief Materials And PPES?” (, 17 April 2020) < > accessed 22 November 2020
  9. Onyekachi Umah, “Duration Of Sick Leave With Pay In Nigeria” (, 24 March 2020) < > accessed 22 November 2020. 
  10. Onyekachi Umah, “Who Must Pay The Cost Of Medical Examination Of All Workers In Nigeria” (, 23 March 2020) < > accessed 22 November 2020
  11. Onyekachi Umah, “List Of Things That Must Be In An Employment Letter/Agreement” (, 28 January 2020) < > accessed 22 November 2020
  12. Onyekachi Umah, “Oral Employment Agreement Is Illegal In Nigeria” (, 23 January 2020) < > accessed 22 November 2020










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