Outsourcing is now embedded in Nigerian business life. Banks, manufacturers, fintechs, and telcos all depend on external partners to supply talent and run key operations. But when things go wrong, fraud, negligence, data breaches, or safety incidents, a recurring question emerges: who bears the risk?
The Igbo proverb offers a sober warning. When the canoe capsizes, everyone gets wet. No brand is ever fully insulated from the actions of its agents, contractors, or service partners. As 2026 approaches, that truth deserves renewed attention.
“Outsourcing transfers tasks, not blame. Business risk: reputation, data, customer relationships, usually stays with the principal. Employment risk, payroll, welfare, discipline, sits with the provider. But practice often blurs theory.”
“The canoe does not know who is king; when it capsizes, everyone gets wet.” — Igbo Proverb, Nigeria
The legal grey zone
Outsourcing was once treated as a simple commercial contract. But Nigerian jurisprudence has steadily blurred the boundaries between “principal” and “provider”.
In Shena Security Co. Ltd v. Afropak (Nig.) Ltd & Ors (2008) 4 SCNJ 117, the Supreme Court clarified that the relationship between a security firm and its client was a contract for services, not a direct employment relationship. Yet the case also illustrated how thin the line can be: the client still owed contractual duties, and disputes over control or termination could not be ignored.
Years later, the National Industrial Court in Mr Morrison Owupele Inimgba v. Integrated Corporate Services Ltd & Anor [2015] 57 NLLR (Pt. 195) 268 took a different turn. Although the outsourcing firm (ICSL) was the formal employer, the claimant worked daily under Ecobank’s supervision. The court pierced the contractual veil, treating both ICSL and Ecobank as co-employers. Labels, it ruled, matter less than control, supervision, and reality.
More recently, in Zachariah Ishaya v. Fidelity Bank Plc & Ors (NICN/YL/04/2017, judgement 14 Oct 2024), the court again considered whether outsourced workers could hold both the agency and the bank responsible for employment breaches. Relying on “the primacy of facts”, it allowed a co-employer claim to proceed, emphasising that each case depends on how the relationship actually operates.
These cases do not give easy answers, but they raise hard questions:
When an outsourced employee wears the client’s uniform, follows its timetable, and reports to its managers, where does accountability truly lie?
When misconduct occurs, can a company publicly distance itself from someone who represents its brand daily?
And how should contracts anticipate these shared risks without strangling operational flexibility?
Read also: Outsourcing firms urged to prioritse sustainable practices
Risk does not travel as easily as work.
Outsourcing transfers tasks, not blame. Business risk: reputation, data, customer relationships, usually stays with the principal. Employment risk, payroll, welfare, discipline, sits with the provider. But practice often blurs theory.
The public does not ask whether a marketer’s payslip came from a third party; it asks which logo was on the shirt.
That is why every outsourcing contract should now function less as a procurement form and more as a governance instrument, spelling out:
scope of work and boundaries of supervision;
who initiates and approves discipline;
how insurance, pensions, and data protection are managed; and
What happens when performance or ethics fail?
2026 and beyond
With Nigeria’s ratification of ILO Convention 181 and the enforcement of the Nigeria Data Protection Act 2023, regulators are moving toward higher transparency in triangular employment. The question for boards is no longer whether outsourcing saves cost, but whether it is being governed with the same rigour as any other risk.
Human-resource associations and service providers such as the Human Resource Outsourcing Association of Nigeria (HROAN) have begun developing standard operating frameworks. Still, compliance will ultimately depend on what happens on factory floors and banking halls, not on paper.
A call for clarity, not certainty
These cases and rules are not final verdicts on who gets wet when the canoe capsizes. They are reminders that risk, like water, finds its level. For executives, HR leaders, and lawyers, the task is not to seek comfort in boilerplate indemnities but to ask better questions:
Are we supervising outsourced staff in ways that create co-employer exposure?
Do our contracts match our operational reality?
Have we defined—not assumed—how reputational, legal, and employment risks will be handled?
As we look into 2026
The canoe will always carry many passengers — clients, contractors, and customers alike. When the waters turn rough, titles mean little. Outsourcing done right begins with honesty about risk, shared vigilance, and respect for every worker who keeps the enterprise afloat.
In the end, prevention is cheaper than litigation, and clarity is better than surprise. The organisations that thrive in 2026 will be those that treat outsourcing not merely as cost control but as co-responsibility — steering together to keep the canoe upright.
Dr. Olufemi Ogunlowo is the CEO of Strategic Outsourcing Limited, a leading provider of personnel and business process outsourcing services in Nigeria. He is also a regular columnist on employment and workforce strategy.
