The workers’ umbrella body, the Nigeria Labour Congress (NLC), opened the New Year with a demand for an upward review of the national minimum wage from N18, 000 to at least N56, 000 by employers of labour. TOBA AGBOOLA reports that labour is justifying its demand on the grounds that a minimum wage review is overdue.
Governors’ position on workers’ demand
The 36 state governors have said they could no longer pay the minimum wage of N18, 000. Their reason, given two years ago, was the dwindling allocations from the Federation Account.
Rising for their meeting under the aegis of the Nigerian Governors’ Forum (NGF) at the Old Banquet Hall of the Presidential Villa in Abuja, they said the falling prices of oil prices at the global market which reduced the revenue accruing to the Federal Government took a debilitating toll on their financial capabilities.
In a communique read by the NGF chairman and Zamfara State Governor Abdulaziz Yari, the governors said the wage burden became heavier after the price of a barrel of crude oil went below $40.
Yari said: “We resolved that we must look at ways to enhance revenue generation and at the same time look at ways to cut our overhead costs, more especially, the political office holders’ salaries and other overhead expenses.
“The situation is no longer the same when we were asked to pay N18, 000 minimum wage, when oil price was $126 (per barrel) and continued paying N18,000 minimum wage when the oil is $41 and the source of government expenditure is from oil, and we have not seen prospects in the oil industry in the near future.
“We will diversify our economy in the area of agriculture and mining. But, at the same time, we should understand our situation where some of us (states) today are taking N100 million take home (monthly allocation) and then have salaries in particular of over N2 billion to pay.”
Analysts have cautioned the Federal Government against repeating past mistakes by unilaterally reviewing and fixing a new minimum wage without input from the federating units.
They said the federal authority erred in 2011 by imposing a minimum wage on the states and local government areas without recourse to their capacities to pay. But, the unions have dismissed the governors’ argument as puerile, claiming that none of the governors who could not afford the minimum wage, offered to slash his salaries, or discontinue with the humongous security votes that are never accounted for.
Reacting to the NGF position, the NLC urged any governor who could not afford to pay the minimum wage to resign without delay. Speaking through its President, Ayuba Wabba, the NLC warned that any attempt to renege on the payment of the national minimum wage will be tantamount to breaking the law.
Wabba said: “They have been misinforming the people about the N18, 000 minimum wage. Minimum wage is not fixed. It was negotiated through a tripartite system; 10 state governors represented the governors, the Federal Government and organised private sector were also represented. It was a tripartite process of collective bargaining.
“We had looked at all the indices of ability to pay. It is a law and anybody that refuses to pay is breaking the law of Nigeria and we advise any such governor to resign.
“Why is it that the salaries of councillors to the highest political office all over the country remain the same? If there is economic challenge, why should it be the workers that will bear the burden? So, who are they fooling?
“Can they continue to fool us? When the resources were there, workers were not enjoying. Now that there is a challenge in the system, why should the burden be shifted only to the workers? That is not acceptable to us. This is like a battle for us as we must continue to insist that workers should work in dignity and there must be dignity in labour.”
To the Minister of Labour & Employment, Senator Chris Ngige, the governors were only playing politics by saying they could not cope with N18, 000 as minimum wage. He advised them to be creative in revenue generation.
Ngige, who spoke at a meeting with the NLC leadership in Abuja, added that both labour and the governors should be blamed for the state of the workers.
He said: “When the NLC joined the governors in talking about minimum wage with the governors saying ‘we cannot pay N18, 000 minimum wage and NLC saying it is time for us to ask for increase’, we know that these talks heat up the polity.
“The NLC knows better that the governors are playing politics. This is one matter that you cannot play politics with because it is a matter of rule of law.
LABOUR is demanding a new minimum wage for workers beginning from May 1, setting the stage for a clash between the three tiers of government and unions.
The workers’ unions – Nigeria Labour Congress (NLC), Trade Union Congress of Nigeria (TUC) and United Labour Congress (ULC) – are leading the battle.
What is a minimum wage?
The minimum wage is the lowest remuneration that an employer can pay any employee. Equivalently, it is the price floor below which no employee will offer his service.
Despite the parlous state of the economy, the unions have set May as deadline for an upward review of the minimum wage, which according to them, is overdue.
Although, the downturn in the economy is adversely affecting workers, but the unions’ New Year demand is coming at a time when no fewer than 26 out of the 36 state governors are finding it difficult to meet their monthly obligations to the workers. They have been unable to pay salaries as at when due. Some owe between two and six months.
The Federal Government, which gave bailout to the states in 2015, was recentlyforced to reimburse the states with their shares of the Paris Club’s refund before the close of last year. It urged the governors to give priority to workers’ outstanding salaries in the application of the N388 billion it released to the states to cushion the effects of the cash crunch.
The workers have been at the receiving end of the global economic downturn and Nigeria’s economic challenges, which was compounded by falling oil prices at the international market.
The declining value of the naira against the dollar and rising prices of goods have compounded the workers’ woes, making the N18, 000 minimum wage inadequate to take them home.
The National Minimum Wage Act, signed into law by former President Goodluck Jonathan in March 2011, approved N18,000 as the minimum wage for fresh employee on Grade Level 1, Step 1.
When converted to dollars at the prevailing official and black market rates, N18, 000 is far below $100.
In the United States (U.S.), the minimum wage per hour is about $8. Impliedly, working eight hours daily and five days weekly, an average worker goes home with $320. The amount is higher than three months’ salary for a junior employee in Nigeria.
History
The history of minimum wage in Nigeria is inseparable from that of its public service negotiations and increments, beginning from the colonial era and the setting up of Hunts Commission in 1934.
The first National Minimum Wage Act, which was enacted in 1981, prescribed a minimum wage of N125 per month. It was contained in the Official Gazette A53-57 of 1981.
From N125 per month, the minimum wage was reviewed to N250 in 1991. It again reviewed in 2000, taking the minimum wage to N5, 500 per month. The last review was done in 2011, when it was raised to N18, 000.
In a National Minimum Wage Amendment Bill presented to the National Assembly on July 1, 2010, the Justice Alfa Belgore Committee recommended N18, 000 as the national minimum wage for all establishments in the public and private sectors with 50 workers and above.
The Belgore report also included an upward review of the sanctions applicable to those not implementing the new national minimum wage. The panel recommended a fine not exceeding N100, 000, or imprisonment for a term not more than six months or both. In the case of continuing the offence, a fine of N10,000 for each day and a more frequent review period not exceeding five years to be carried out by a statutory tripartite committee that would be appointed from time to time by the President.
The Bill was passed into Law on March 15, 2011 by both chambers of the National Assembly with minor adjustments that included: “that as from the commencement of the National Minimum Wage Act 2011, it shall be the duty of every employer to pay a wage not less than the national minimum wage of N18, 000 per month to every worker under his employment and the penalty for failing to pay minimum wage is N20, 000 while the penalty for every additional day the default continues is N1000.”
However, six years after it was adopted, the minimum wage has become inadequate in the face of rising inflation and the sustainable budgets for all family income levels as well as the international benchmarks of the United Nations (UN).
Notwithstanding the inadequacy, there has been no uniform compliance with the application of the minimum wage by the three tiers of government. The tiers have unique salary structures for workers on their payroll. For instance, in Enugu, state and local government employees get 18, 500 as minimum wage as against their federal colleagues who get N18, 900. In Osun State, the minimum wage is N19, 000.
The NLC May 1 ultimatum
The NLC has given the Federal Government a May 1 deadline for the implementation of N56, 000 as minimum wage, failing which it threatened nationwide strike.
Speaking with The Nation, Wabba, decried the non-inclusion of the new wage increase in the N7.298 trillion Budget proposal for this year.
The estimate, presented by President Muhammadu Buhari to the joint session of the National Assembly, is being scrutinised by the lawmakers for approval.
Describing the poor workers’ remuneration amidst economic recession as unacceptable, the unionist argued that the Congress could not guarantee industrial peace if the government failed to raise a tripartite committee for the implementation of a new minimum wage on or before May 1.
“The issue of minimum wage remains sacrosanct because by law and practice, the review is due and overdue. I have said clearly that we cannot guarantee any industrial peace any longer if necessary steps are not taken by the government to resolve this issue before the next May Day. This is very clear because as we said, we have sent a formal notice of demand as required by law to the government to try to constitute the committee.
“Essentially, the tripartite committee expected to dialogue and negotiate the minimum has not been inaugurated. If it is set up, all of you will be aware of the membership and also their terms of reference and the timeline given to actually dispose with this very vital issue.
“The issue is so sensitive because many of our members have been subjected to difficulties because the purchasing power of ordinary Nigerian worker has been reduced to virtually nothing owing to rising inflation, naira’s free fall and to compound it all, the high cost of goods and services. More so, most workers can no longer meet up with their daily needs, they can’t pay their rents; they can’t send their children to school.
“It is even more compounded because the cost of goods and services have gone up. So, side by side with the issue of fighting corruption, it is also good for workers to be paid a decent wage that they can be able to have a meaningful living. So, this is the challenge.” the NLC President lamented.
Reacting to the allocation of funds for the new minimum wage in the 2017 Budget, the NLC chieftain expressed optimism that the Federal Government and National Assembly will see reason to accommodate the fund when the tripartite committee agree on the new national minimum wage.
“They must see reason to accommodate it because the fact is very obvious. It is legitimately due both in law and practice, and therefore, this is our approach. Once it is mutually agreed and from what I have heard from the official circle, I’ve not heard the government saying that they are not willing to consider the minimum wage issue. I think the minister of Labour has said it very clearly that the government is committed to reviewing the minimum wage. But but when that will happen is the issue.
“Therefore, let us not mix the two things. Is there a resistant to say that there will be no review of minimum wage? I am not sure I have heard that because by our constant interaction, the government has through the minister of Labour said they are also willing to review the minimum wage.
“As I said earlier, we have made a formal demand through writing and therefore, if there is the need to review the template, we will do that at the table. But that will have to be a joint decision. What we have submitted is N56, 000 and that is still valid,” Wabba said.
The NLC General Secretary, Peter Ozo-Eson, backed the call for the establishment of a tripartite committee to review and agreed on a new minimum wage.
He, however, said that the N56, 000 minimum wage proposal could no longer be tenable because it was arrived at when the economy was not too bad.
Ozo-Eson told The Nation: “The issue of minimum wage remains sacrosanct because by law and practice, the review is due and overdue. We have said it clearly that we cannot guarantee any industrial peace if necessary steps are not taken by the government to resolve this issue this year.
“This is very clear because as we said, we have sent a formal notice of demand as required by law to the government to constitute the tripartite committee.
“The committee that should dialogue and negotiate the minimum wage has not been set up. If it is set up, its composition and terms of reference would be made public.”
Ozo-Eson expressed doubt if labour would still stick to the N56, 000 minimum wage demand in the prevailing economic situation.
He recalled that the proposal was made some years back when the economy was healthy, adding that the meeting between the stakeholders would address the matter.
His words: “We made the N56, 000 proposal at a time the situation was not as worst as this. A lot of things have changed; prices of goods and services have gone up. So, what we propose then was based on the situation on ground. These are the things the tripartite meeting will address.”
Ozo-Eson said N18, 000 was approved as the minimum wage seven years ago after the tripartite meeting.
“Seven years ago, the current minimum wage of N18, 000 was reviewed from N5, 500 after the tripartite meeting, which also included both the private and the public.
“After the N18, 000 agreement, the new proposal was sent to the National Assembly for approval. So, we expect that it will go this way also,” Ozo-Eson said.
ULC seeks N96,000
minimum wage
The newly-formed United Labour Congress (ULC) brought another twist to the workers’ demand with its request for the implementation of N96, 000 minimum wage.
Speaking with The Nation, President of the ULC, Joe Ajaero, insisted that N96, 000 will be the acceptable minimum wage for workers in the prevailing economic circumstances.
According to him, the ULC has presented the proposal to the Federal Government for consideration.
Ajaero explained that the economic reality has made it imperative for the federal and state governments to dialogue with organised labour for the immediate implementation of the new minimum wage.
He disclosed said that the congress has mobilised workers to begin a national protest beginning from January 31 if the government failed to discuss and dialogue with the organised labour.
The unionist said that workers have been at the receiving end of the economic policies rolled out by the government last year. Workers, he claimed, have lost their purchasing power, with millions sacked by their employers.
He urged the federal and state governments to intiate policies that would improve workers’ living standard, protect their jobs and create employment opportunities.
All eyes on Fed Govt
Will the Federal Government agree to labour’s demand? This is the questions agitating the minds of many.
At its last parley with labour leaders, the Federal Government proposed N45, 000 as the new minimum wage as against NLC’s N56, 000 proposal.
But the increase came with some provisions, including a reduction in the number of civil servants and merger of ministries and agencies.
Rather than take the news with enthusiasm, it was received with skepticism. Not a few Nigerians have expressed doubt on the capacity of the economy to cope with an increment in minimum wage.
The Presidency has not responded to the labour’s latest proposal.
In his address, the President, who was represented by Senator Ngige, also lamented the economic challenges facing the country.
Investigation revealed that the average Nigerian worker is 400 per cent poorer than when N18, 000 was introduced as minimum wage in 2011.
No doubt, the workers’ purchasing power has been eroded with rising inflation. But is this the best time for the labour leadership to demand for pay rise?
