BREAKING: Reps passes bill to ban banks from hiring casual and contract staff

The House of Representatives has taken a decisive step toward ending the widespread use of casual and contract staff in Nigeria’s banking industry, following the passage of a bill seeking to outlaw the practice at second reading.

The proposed legislation, which aims to amend the Banks and Other Financial Institutions Act (BOFIA) 2020, is expected to significantly alter employment practices across the financial sector if eventually signed into law.

The bill, sponsored by Hon. Fuad Laguda of the All Progressives Congress (APC), who represents Surulere I Federal Constituency of Lagos State, seeks to prohibit, criminalise and impose penalties on Nigerian banks that engage workers on a casual or contract basis. Lawmakers say the initiative is designed to protect millions of Nigerians trapped in precarious employment arrangements that deny them basic labour rights and benefits.

Leading the debate during plenary, Laguda described the widespread reliance on casual and contract staff by banks as exploitative, oppressive and inconsistent with both the spirit and letter of Nigeria’s labour laws. He argued that while banks continue to post impressive profits, a large proportion of their workforce remains excluded from decent working conditions, job security and statutory benefits.

According to the lawmaker, existing legal frameworks such as the Labour Act of 2004 and the Employees Compensation Act of 2010 have failed to adequately address the realities faced by casual and contract workers, particularly in the banking sector. He noted that gaps in enforcement and regulatory oversight have allowed financial institutions to bypass their obligations to workers, often with little consequence.

Laguda cited a 2023 report by the Chartered Institute of Bankers of Nigeria, which revealed that Nigerian banks increasingly depend on casual and outsourced labour as a cost-cutting strategy. By doing so, banks are able to avoid financial commitments such as pensions, health insurance, minimum wage compliance, promotions, bonuses, training opportunities, study grants and severance packages.

He disclosed that casual and contract workers now make up an estimated 65 per cent of the total workforce in Nigerian banks, a figure that has raised serious concerns among labour unions, civil society groups and financial regulators. According to him, the bill seeks to restore balance, fairness and dignity to the workplace by ensuring that all bank employees enjoy equal protection under the law.

The lawmaker further argued that many banks deliberately flout Section 7(1) of the Labour Act, which prohibits the engagement of workers for more than three months without formal recognition of employment. Instead of regularising such workers, banks reportedly rotate or reassign them through third-party outsourcing firms, thereby keeping them in a perpetual state of job insecurity.

“I urge my colleagues to support this bill because it aligns with the position of the Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, who has acknowledged that casual and contract staff in Nigerian banks are exposed to poor and unsafe working conditions,” Laguda said.

He added that beyond economic hardship, casualisation exposes workers to emotional stress, mental health challenges and workplace abuse, as they often lack the confidence to speak out against unfair treatment for fear of losing their jobs. According to him, the practice has created a two-tier workforce within the same institutions, deepening inequality and resentment among employees.

When the Deputy Speaker, Benjamin Kalu, put the bill to a voice vote, it received overwhelming support from members of the House, signalling strong legislative backing for reforms in the banking sector’s employment practices. The bill has now been referred to the relevant committee for further legislative scrutiny and public hearing.

Beyond workers’ welfare, analysts have warned that unchecked casualisation poses broader risks to Nigeria’s financial system. Experts argue that the heavy reliance on poorly paid and insecure workers enables employers to sidestep labour regulations, weakening accountability and undermining institutional integrity.

Due to low wages and job insecurity, some casual employees are reportedly pushed toward unethical practices as a means of survival. Reports by the Nigeria Deposit Insurance Corporation (NDIC) have linked a significant percentage of bank fraud cases to outsourced and casual staff. Some studies estimate that more than 75 per cent of such incidents involve temporary or contract workers, raising alarm over the long-term stability of the financial sector.

Labour rights advocates also point out that casual workers typically exhibit low morale and weak organisational commitment, largely because they lack job security, career progression opportunities and access to staff welfare programmes. This, they argue, leads to reduced productivity and ultimately affects service delivery and business growth within the banking industry.

Findings by The Southern Examiner in Uyo indicate that organisations heavily dependent on casual labour are less inclined to invest in staff training and professional development. According to the report, this reluctance limits skills acquisition and innovation, with long-term negative implications for national economic growth and competitiveness.

Matthew Kofi Okono, a labour rights advocate and head of Open Forum, described casualisation as a false economy that ultimately harms both employers and the wider society. He noted that frequent turnover among casual workers disrupts operations and increases recruitment and induction costs, which can amount to as much as 33 per cent of a new employee’s annual salary.

“Casual workers generally earn far less than their permanent counterparts for the same work and are often paid below the national minimum wage,” Okono said. “This traps a large segment of the workforce in a cycle of poverty, limits their ability to save or invest, and increases dependence on government support systems.”

He added that job insecurity, poor remuneration and lack of protection are driving many skilled Nigerians to seek better opportunities abroad, contributing to the country’s growing brain drain. According to him, the widening gap between protected permanent staff and exploited casual workers continues to worsen income inequality and social tension.

As the bill progresses through the legislative process, stakeholders across the labour and financial sectors are closely watching its fate. If passed into law, it could mark a turning point in Nigeria’s labour landscape, forcing banks to adopt more ethical employment practices and strengthening protections for workers who have long operated at the margins of the system.

For millions of Nigerians employed in the banking sector, the proposed legislation offers renewed hope that dignity, fairness and security may finally replace years of uncertainty and exploitation.