To cut cost and maximise profit, banks and other financial institutions are increasingly turning to contract staff as opposed to full employment. But the practice, otherwise known as casualisation, has drawn the ire of labour activists and other stakeholders. Many of them argue that the cost-cutting measure can threaten the stability of the banking system, if not checked, TOBA AGBOOLA reports.
It may have been a corporate survival strategy foisted on banks and other financial institutions by the prevailing economic realities in Nigeria. But, banks’ resort to contract staffing as an option to cut cost and maximise profit in an increasingly challenging and competitive business environment, has not gone down well with labour activists and other critical stakeholders. To them, it’s opposed to full employment,
Indeed, the country has been witnessing a downturn in economic activities, forcing many banks to look at ways of cutting back on their spending as their profits dropped. Consequently, many of them opted to engage casual workers, popularly known as ‘contract staff’. But in doing so, they have pitched themselves against labour unionists, stakeholders and the contract staff so engaged.
Labour, stakeholders kick
Some stakeholders, who spoke with The Nation, expressed fears that the increasing spate of casualisation in banks may be responsible for the rising cases of frauds in the banking industry. According to them, most frauds in banks may have been perpetrated by contract staff whose meagre salaries are barely enough to keep their eyes away from depositors’ funds.
One of the stakeholders, who preferred to be anonymous, recalled, for instance, that a contract staff in one of the new generation banks in Lagos recently attempted to steal a box ful of dollar notes after the bank had closed for the day. He said it was in a bid to avert this kind of scenario that the Central Bank of Nigeria (CBN) warned commercial banks to desist from giving sensitive banking roles to contract staff, as they do not have a stake in the banks.
A former CBN Director, Banking and Payments System Department, ‘Dipo Fatokun, lent credence to this when he noted that the apex bank has severally encouraged banks to ensure that their staff are those with something at stake. “A temporary staff may not have a stake in the bank so to say. So, it is encouraged that if they have members of staff, who are not regular staff, they should not give them responsibilities or roles that will expose them to critical functions of a bank.
“If you are giving somebody an authority to approve transactions of high magnitude, and he does not have a stake in your bank, then you are already exposing yourself. So, this has been going on and I believe many banks understand the need to rely on their key staff for major duties. That is one of the reasons fraud attempts have been rising, but the value lost is declining.”
For the National President, Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), Comrade Oyinkan Olasanoye, the country Labour Act has not been fair to workers. She said under the Act, organisations can use outsourced staff, but they cannot be used for more than six months before they are converted to full-time employees.
However, Olasanoye lamented that organisations are not keeping to the rules, as outsourced staff remain in the same position for years, and sometimes, sacked without due consultation. She accused the Ministry of Labour and Employment of not enforcing compliance among companies, stating that the Ministry needs to encourage more inspectors to go out and look at the conditions that casual workers are being exposed to.
The ASSBIFI national president, however, said the Association sent a lot of proposals to the National Assembly, drawing its attention to the negative effects of casualisation in the financial sector, but the Association is yet to get a feedback on those proposals
Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) General-Secretary, Mr Lumumba Okugbawa, is no less worried by banks’ preference for contract staffing. Describing casualisation as “a cankerworm that has eaten deep into the fabrics of our industry in particular”, he said most companies’ management keyed into this option to short-change the average worker in order to maximise profit.
The PENGASSAN scribe also accused banks and other orgnaisations engaged in contract staffing, of denying employees their right to be organised. “We agree that there are short-term jobs like three to six months, but keeping a worker for up to 15 years as a casual worker is nothing short of slavery and should be condemned in its entirety.
“We, therefore, call for a strengthening of our relevant laws to discourage this menace. In some climes, due to the short period and fixed term of their contract, these categories of workers even earn more than the so-called permanent or regular workers. The struggle is still on to discourage this practice. Casual or contract workers have no legal protection,” he told The Nation.
Also speaking on evils of casualisation, Mr. Femi Aborishade, an Ibadan-based legal practitioner and activist, said: “Casual employment refers to contracts of employment which are for a short duration. It is characterised by uncertainty, temporariness, flexibility, fluctuations in workload, and so on. Casualisation, as the phenomenon is often referred to, can take several forms and called by different nomenclatures, depending on the country and work enterprise.
“It could be called casual labour, temporary staff, contract staff, outsourced labour (i.e. labour supplied by sub-contractors), on-call workers (called in to work only as and when they are needed), zero hours contracts (workers, who are not entitled to any minimum number of hours of work), undocumented labour, seasonal labour, and so on.”
Aborishade emphasised that casual workers tend to be underpaid and are not entitled to any rights – no fringe benefits, transport, feeding, medical care allowances, no freedom of unionisation, no pension, no leave, and so on. He said in most cases, they are only paid for days worked regardless of sickness–induced absence from work.
The activist said the policy is in practice, not only in the private sector, but also in the public sector. He added that unfortunately, there is no legal protection for the typical casual worker in Nigeria. “The Labour Act ought to be overhauled such that, in principle, labour casualisation is abolished or at least, properly regulated within the relevant standards established in International Labour Organisation (ILO) Conventions and Recommendations so that the casual worker is entitled to basic trade union rights,” he urged.
Aborishade, therefore, called on the labour movement to put pressure on the Federal Government to ratify relevant ILO conventions. His words: “In the least, I recommend for Nigeria, the adoption of the Zimbabwean legal protection for the casual worker. In Zimbabwe, Section 12 (3) of the Labour Act provides protection for job security of casual workers.
“Under this Section, casual workers are entitled to not being unfairly dismissed. Their dismissal can only be valid if substantive and procedural fairness are shown. Indeed, Section 12 (3) of the Labour Act provides that a casual contract (casual worker) shall be deemed to have been converted to a permanent contract (employee) where the employee works for an aggregate period of more than six weeks in any four consecutive months.”
Aborishade said although, he commends the Zimbabwean legal provision on conversion from casual to permanent worker status, and recommends it for adoption in Nigeria, he generally believes that the upsurge in precarious employment is the fallout of globalisation, but its practice in Nigeria is nothing but industrial slavery.
Contract staff lament
Mr. Segun Olaoye said contract staff in banks are really poorly treated. “I even have a friend who works for a new generation bank who told me that he is really finding it tough as a contract staff, but has no choice due to lack of jobs in Nigeria. He complains of the very little salary he collects, which is about N70, 000 and works from morning till around 9pm,” he narrated.
Busola Olaoke, who has also been working in a bank as a contract employee for the past four years, told The Nation that she is now getting apprehensive about what the future holds for her. She said she does not know if her contract with the bank will be renewed or not, and even if the contract is renewed, her salary will not be better than what it is in any case.
However, Olaoke is not alone in her predicament. Seun Alabi, another contract staff, said she has struggled endlessly to ensure that her employer converts her employment to a permanent one. She, however, expressed regrets that her aspiration seems to be a mirage. To make matters worse, she said the bank often threatens its entire contract staff with termination of appointment at any given opportunity.
While Alabi and her colleagues are quite eager to secure good jobs with better conditions elsewhere, the snag, however, is that such jobs may not be within their reach, a situation that has compelled them to make do with their current occupation where the working conditions are unpalatable.
The Nation learnt that the sad stories of Olaoke and Alabi mirror the situation in most organisations, particularly banks where contract staff engagement has become the order of the day. Although, the practice abounds virtually in all the sectors, including manufacturing, oil and gas, the banking industry appears to be more pronounced.
The reason for this is not far-fetched. Since mid-June 2014 when the country’s economy was hit by a debilitating recession caused by the crash in oil price, down to the end of 2017 when the economy started recovering, the fortunes of banks have dipped.
The economic recession was said to have hit most banks on several fronts, ranging from a record high bad loan (non-performing loans) to a decline in income. In view of the dwindling revenue and the impact of bad loans, most of the banks resorted to cost-cutting measures, including outright staff retrenchment and contract staffing.
The Nation learnt that the engagement of contract staff is common mainly among the top tier banks, some of who may have just two full staff in a branch. Some of the contract staff who spoke with The Nation, lamented the outrageous targets given to them to sustain their contract.
Can govt rein in the monster?
President Muhammadu Buhari had, at the last Centenary International Labour Conference (ILC) in Geneva, told a gathering of world leaders, employers and workers representatives that casualisation of workers in any form was no longer in practice in Nigeria.
This was even as he said labour should be the centre piece of economic and social policies for building a just, fair, equitable and egalitarian society in the future.
Towards realising this, Buhari said the Nigerian government has inaugurated and launched the 2017-2020 Federal Civil Service Strategy and Implementation Plan for the purpose of improving and developing capacity in the public sector to advance the nation’s economy.
The Permanent Secretary, Ministry of Labour and Employment, Mr. Williams Alao, who spoke on behalf of President Buhari and Nigeria, as head of the Nigerian delegation to this year’s ILO Centenary session, said Nigeria as a country has already barred casualisation.
He said the Federal Ministry of Labour and Employment had issued several circulars banning casualisation in Nigeria, adding that casualisation was not acceptable in the country.
He said the Federal Government will no longer tolerate casualisation in the nation’s world of work. “I am pleased to inform this august gathering that Nigeria is one of the countries that has convened a National Dialogue on the Future of Work and is implementing many of the initiatives as well as the recommendations of our National Dialogue.
“We agree with the ILO that labour, being the most critical factor of production, should be the fulcrum of economic and social policies if we are to have a just, fair, equitable and egalitarian society in the future.”
He pointed out that, there is presently a concerted effort to create an efficient, productive, incorruptible and citizen-centred work force, anchored on four pillars of professionalism, enterprise, content management system, entrepreneurship culture and enhanced welfare package for employees.
While these are no doubt cheery news for Nigerians caught in the web of casualisation across the sectors, the Federal Government’s claims that it has outlawed the practice is clearly at variance with the reality on ground. This is so particularly in the banking industry where the practice has continued to thrive.
However, going by the tough stance of the labour movement and other concerned stakeholders against the practice, it’s probably safe to say that the issue will continue to pitch orgnaised labour against employers on one hand, and the government on the other hand, until it is addressed.