The Nation Newspaper

Tag: contract staff

  • Contract staff

    •Nothing justifies exploitation that goes on in banks, in spite of their huge profits

    The common practice by Deposit Money Banks (DMBs), to employ more of contract staff than permanent staff is unsafe and unethical, and we call on the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to rein in the deviants. While the practice unconscionably exploits the high level of unemployment in the country, it also exposes the banking industry to fraudulent practices, as the exploited workers vent their anger on the resources put in their care.

    When banks employ two equally endowed graduates to do similar jobs, with the permanent staff adequately remunerated, and the contract staff paid peanuts, common sense dictates that those paid peanuts may seek ways to punish their oppressors by stealing what is put in their custody. According to a finding: “the NDIC has frequently noted that its bank examination reports indicate that the high incidences of fraud and forgeries in the banking industry are linked to contract staff.”

    It is strange that the two regulatory agencies, the CBN and NDIC, have turned a blind eye to this grave unethical practice, over the years. A report sourced from the Nigeria Bureau of Statistics shows that in the first quarter of 2019, “the total number of contract staff working in commercial banks stood at 45,710, as against 39,822 junior staff, 17,767 senior staff and 170 executive staff.” While the report did not mention the earning of the permanent staff, it is common knowledge that the huge executive perks and packages they are paid are filtered from the blood of the contract staff.

    This corporate exploitation must stop, and if the regulatory agencies are too timid to rein in the perfidious bank executives, social and legal pressure should be employed by non-governmental agencies to fight the scourge of exploitation in the banks. In the said report, in 2018, while the total number of contract staff hired by the DMBs increased to 45,238, that of junior staff fell to 41,111. Conversely in 2017 “the DMBs employed a total of 41,580 junior staff compared with 32,394 contract staff, 16,745 senior staff and 204 executive staff.”

    While the level in 2017 is still unacceptable, it shows that even when the economy had improved from the recession period, the abuse by the banks increased. Strangely, while the banks have been declaring huge profits and paying huge remunerations to their executive staff, they are comfortable to employ graduate and post-graduate students as contract staff, and pay them peanuts. Yet, the banks are not just commercial enterprises, they are ethical institutions built on fiduciary relationships. So, how can an ethical based institution, run as an exploitation driven organisation?

    When its major regulator, the CBN resorts to the status of a mere toothless bull dog by merely warning “DMBs to desist from giving sensitive responsibilities to contract staff, given that such workers often believe they do not have a real stake in the organisation”  instead of demanding responsible human resources standards, we ask, is there any unethical collaboration going on? If there is none, then the regulatory agencies must roll out minimum standards for the DMBs as regards contract employment.

    After all, the CBN determines the quality of the management staff employed by banks, so why should it leave other categories of staff so open, when it knows that such category also affects the health of the banking sector. It is common knowledge that the employment of contract staff is outsourced to companies which are well remunerated, and these companies are usually owned by persons in the financial industry. If the regulators remain unconcerned, we urge the Economic and Financial Crimes commission (EFCC) to examine the modus operandi of contract staffing in the banks.

  • Contract staff

    •Banks don’t need them as they boast enough profit to pay every cadre of their staff well

    THERE is a racket in the Nigerian banking industry. Its euphemism is “contract staff”. But the real scourge is under-employment. That fuels deliberate under-payment, which preserves the perverse earnings of top bank executives.  Both the Central Bank of Nigeria (CBN) and industry unions must partner to fight and banish this scourge. If not promptly arrested, it just might spark the next major crisis in Nigerian banking.

    Luckily, banking regulators, the CBN and the Nigerian Deposit Insurance Corporation (NDIC), are already raising alarm, although in a rather narrow sense. Both have warned commercial banks (technically, deposit money banks, DMB, the dominant players in a turf of merchant and non-interest banks) to de-emphasise the hiring of contract staff (earning usually below N80, 000 monthly, without other perks available to the banks’ regular staff), to drive down operational exps.That warning is thumbs down for naked exploitation of a class of helpless bank workers, even if the business can conveniently pay fairer wages across the board. Still, that practice is aided and abetted by reportage by the business media, which prefaces almost every banking news story with that cliché: “despite the tough business environment”.

    The environment is not that tough, to justify such blatant worker exploitation.The proof is coming from the regulators themselves. Aishah Ahmad, CBN deputy governor for economic policy, declared: “Improving financial soundness indicators reflect growing banking resilience. Data provided by bank staff showed that the industry capital adequacy ratio increased considerably from 10.23 per cent in December 2017 to 15.26 per cent in December 2018; marginal improvement in non-performing loans ratio recorded is also expected to strengthen further, on account of the recent promissory notes issued by the Federal Government to settle contractor debts, whilst liquidity ratios, returns on asset and return on equity remained robust.”

    Adamu Edward Lamtek, another CBN deputy governor (corporate services), volunteered: “The last couple of months have witnessed a sustained improvement in banking sector resilience – industry capital adequacy and liquidity ratios have grown, while the non-performing loans ratio is on the decline.”

    These are cheery industry news, even if it is still in the context of an economy rebounding from recession, to modest growth.Yet, what is the reaction on the banks’ operations side? From the National Bureau of Statistics (NBS) fourth quarter 2018 report, some 45, 238 contract staff constitute 43.2 per cent of Nigeria’s entire banking workforce. In 2018 alone, the banks recruited 12, 879 contract staff. Put starkly, under the veneer of “contract staff”, nearly a half of Nigeria’s entire banking workforce the banks have condemned to systemic under-employment, low pay and low morale; given that most of these workers are tertiary graduates, who should ordinarily get far better pay and perks. That may yet wreak great havoc on the banks’ bottom line, in terms of sleaze.

    Neither is it showing an industry investing in its future, beyond the greed of the moment.  Indeed NDIC, in its bank examination reports of recent years, has consistently noted the high incidence of forgeries, fraud and allied sleaze had often emanated from the so-called contract staff. Dipo Fatokun, CBN director for banking and payment system, declared: “A temporary staff may not have a stake in the bank, so to say.

    So, it is encouraged that if they have staff that are not permanent, they should not give them responsibilities; or roles that will expose them to critical functions of the bank.”Still, this would appear to beg the question. Inasmuch as contract staffing is no justification for banking crimes, it strikes at the very root of injustices in the banking system. The industry regulators should stop dubious moral preachments. They should, instead, launch specific policies and actions to halt the racket – and fast. In that, they should seek happy partnership with banks’ industrial unions.

  • CBN to banks: don’t give sensitive roles to contract staff

    CBN to banks: don’t give sensitive roles to contract staff

    The Central Bank of Nigeria (CBN) has warned commercial banks to desist from giving sensitive banking roles to contract staff, as they may not have a stake in the banks.

    CBN Director, Banking and Payments System Department, ‘Dipo Fatokun who disclosed this at the weekend during the unveiling of the Nigeria Electronic Fraud Forum (NeFF) report in Lagos, said 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 staff that are not permanent, they should not give them responsibilities or roles that will expose them to critical functions of a bank,” he said.

    Continuing, Fatokun said: “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 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, the fraud attempts have been rising, but the value lost declining”.

    He said the forum presented its first annual report in 2012, which was a compendium of papers shared at the Forum and after an interregnum, presented the second report titled e-fraud: Fighting the battle, winning the war in 2015. “Today, we are unveiling our third annual report, “NeFF: Improving and Securing the Cyber-Environment”, he said.

    He said the CBN will continue to encourage banks to utilise the services of local service providers, where those services exist in Nigeria and enforce the necessary security standards and protocols for the protection of systems as contained in existing guidelines.

    “It is often said, that if you do not already know what is ahead, you then probably are in the wrong place. The threats faced today in our Payments System require all stakeholders to constantly and consistently stay on the cutting edge of reality. A reality we face today is that the conventional use of the World Wide Web is like dragging a net across the surface of the ocean, capturing less than one per cent of web content,” he said.

    Speaking on the Nigeria Deposit Insurance Corporation (NDIC) 2015 financial report, which showed that a total of 12,279 fraud cases were reported, representing an increase of 15.71 per cent over the 10,612 fraud cases reported in 2014 while the amount involved decreased significantly by N7.59bn or 29.63 per cent from N25.60bn in 2014 to N18.02bn in 2015, he said the result is in line with NeFF position on fraud cases.

    In terms of the actual amount lost to fraudsters from the incidences of fraud, the NDIC report explained that the sector suffered a total loss of N3.17 billion as against N6.19 billion in 2014.

    CBN Director, Consumer and Financial Protection, Umma Dutse,  praised NeFF’s Steering Committee for giving her the opportunity of unveiling the Forum’s 2015 annual report. “I also want to commend the entire payments industry for the show and act of collaboration which has been expressed through the unflinching support that the forum has received to make it a formidable platform for fighting fraud in Nigeria. We all understand the effects of fraud,” he said.

     

  • There is no contract staff in pension law, says PenCom

    The Nigerian pension law does not recognise anyone as a contract appointee, Director-General, National Pension Commission (PenCom), Mrs Chinelo Anohu-Amazu, has said. The Pension Reform Act (PRA) promulgated in 2004 was repealed and replaced by PRA 2014.

    Anohu-Amazu, who was  represented by Mrs. Opeyemi Abodunrin of the Public Sector Department of PenCom, made this known at a forum in Lagos. According to her, anyone working on contract or full employment, is entitled to be part of the Contributory Pension Scheme (CPS).

    She added that it is an obligation for an employee to open a retirement savings account and have contributions deducted from his or her salary and the employer to make same contributions.

    She stressed that the  new pension scheme does not recognise anyone as a contract appointee.

    Meanwhile, Lagos State and its Ministries, Parastatals and Agencies (MDAs) have been called upon to look for practicable ways of incorporating its contract or temporary staff into the scheme.

    The call was made at a forum organised by the state Pension Board (LASPEB) in Lagos. Participants at the event, who were drawn from the government, pension and insurance industries, expressed misgivings over the neglect of several casual workers by their employers.

    LASPEB Director-General, Folashade Onanuga, said the state has called on Heads of MDAs to discuss the way forward on contract staff within the state workforce.

    According to her, the state Pension Law states that the Scheme is applicable to pensionable employment. She said this means that contract staff are not covered and there is need to find how they can be absorbed into the scheme.

    She said: “The state law says it covers only those in pensionable employment, which is permanent staff. In Lagos State today, if you are employed and given a letter of employment, which states that your employment is contract for a temporary period of two or three years, the central processing unit where salaries are paid will pay your salary, but automatic pension contribution deduction will not apply to you.”

    A participant from one of the parastatals in the state, Mr. Sarumi noted that it is abnormal for an employee to have been engaged for numbers of years and allowed to go without pension.

    He said, though the Pension Reform Act 2014 encourages voluntary contributions, employers should ensure that casual employees, who have been engaged for long period, are covered in the pension scheme.

    Section 1 subsection 1 of the PRA 2014 states that the objective of the CPS is to ensure that every person, who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the private sector, receives his retirement benefits as and when due. It is also to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

    Section 2 subsection (1) states that the provisions of the bill shall apply to any employment in the public service of the Federation, the public service of the Federal Capital Territory, the public service of the states, the public service of the Local Government and the private sector.

    Subsection (2) further states that in the case of the private sector, the scheme shall apply to employees, who are in the employment of an organisation in which there are 15 or more employees.

    Subsection (3) adds that notwithstanding the provisions of subsection (2), employees of organisations with less than three employees as well as self-employed persons, shall be entitled to participate under the scheme in accordance with guidelines issued by the commission.

    Although the PRA 2014 did not address the issue of casual employees, Section 2 of the act expanded the coverage of the CPS in the private sector organisations with three (3) employees and above, in line with the drive towards informal sector participation.