Organised labour has issued a warning to the Federal and state governments, as well as the private sector of the danger in retrenching workers due to the economic downturn, saying the body would resist such a move since there is an alarming rate of unemployment in the country, reports TOBA AGBOOLA.
The organised labour has read the riot act to the Federal, states and private organisations, that it would react to any downsizing measure against its members under the guise of harsh economic condition the country is passing through. They said reducing staff strength cannot be the only solution to the problem.
It warned that such an action may further fuel the uncertainty in the labour market.
The warning by Labour may not be unconnected with the statement credited to the former Coordinating Minister of Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, that government is living on borrowed money to pay workers salaries.
In addition, strong indications have also emerged that workers in both private and public sectors are faced with mass retrenchment as crude oil price continues its descent.
However, the organised labour is accusing the states, and particularly, the past government of diversion of money resrved for wages payment to prosecute the just concluded 2015 general elections.
According to them, it is worrisome to note that the general elections gulped a lot of money which has taken a toll on governments’ finances.
They said both the private and the public sectors should not retrench workers at this time when the purchasing power of the average Nigerian worker is at its lowest ebb, adding that already, there is high unemployment rate in the country.
Stakeholders in the oil sector painted a gloomy picture of the economy and the prospects of workers this year. They based their projections on recent happenings in the Nigerian and global economies.
Oil prices have been on a steep decline since June 2014 as a result of slow demand and the United States’ oil boom, which has resulted in over-supply. The global oil benchmark, Brent, against which Nigerian oil is priced, recently, tumbled below $58 per barrel, hitting its lowest level since May 2009.
Recently, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), gave indications to this effect when it raised the alarm that companies, especially petroleum companies, have plans to retrench some staff.
According to the association, non-core employees of oil firms in the country may be asked to quit their jobs, if the fall in oil prices persists till the end of June.
The Media Officer, PENGASSAN, Mr. Babatunde Oke, said employers have grown weary of the slump.
“The effect might be severe if it continues till middle of the year because some employers are already complaining that they may need to shed weight, if it persists. Of course, it will affect contract staff, if the slump persists,” Oke added.
The President, Trade Union Congress, TUC, Comrade Bobboi Kaigama, warned of dire consequences if the both the government and private sectors decide to retrench workers under the guise of bad economy.
“Any attempt by the government to sack workers or reduce their salaries in the name of bad economy will amount to a declaration of war on Nigerian workers and would be resisted by the labour movement.
“0ur warning is very clear because when the economy boomed, the political office holders were freeloading as if there is no tomorrow while most Nigerian workers live below $2 per day.
“While workers called for better pay package in the past, but were rebuffed by the ruling elite, especially those in government, then, the helpless workers roasted as if they were not stakeholders in the system,” Kaigama said.
According to Kaigama, labour is worried that indeed, as at today, the meagre N18,000 monthly minimum wage approved in 2011 by the Federal Government has not been fully implemented by some state governments and as such, it will be the height of insensitivity for any government to contemplate sacking civil servants or reducing their pay in the name of austerity measures.
“Our union has urged the Federal Government to reduce their pay packets and mouth-watering allowances of political office holders and check other leakages that encourage corruption in the system, but the wise counsel fell on deaf ears.
“Records will also show that this union on several occasions advised the Federal Government to stop the depletion of foreign reserves and needless rush to seek foreign loans for white elephant projects because such mindless profligacy can only lead to the collapse of the economy.” he said.
The Secretary-General, Association of Senior Civil Servants of Nigeria, ASCSN, Mr. Alade Lawal, said workers should not be made to bear the burden of the country’s distressed economy.
Lawal said: “As for the issue of resorting to retrenchment as a result of the drop in the price of crude oil in the international market, labour will surely resist it.
“We have already sensitised and mobilised our members on the matter.
We workers did not create the problem and we will surely not allow the ruling elite to use us as tools to be dumped because of the temporary setback in the pricing of oil.
“When the going was good, we were left unattended to. Now that the chicken has come home to roost, they, and not innocent workers, should bear the brunt.
“We are fully prepared and on red alert, waiting for signals from the two labour centres in the event of any attempt to retrench workers as part of recently introduced austerity measures.”
He added that there is high hope among Nigerians that the new government would bring fresh perspective to bear on governance as is the case in civilised countries of the world.
His words: “There is no doubting the fact that the challenges that lay ahead are enormous. We nonetheless believe that with hardwork, perseverance and selfless service to our fatherland, you will overcome and move the country to the next level.
“Today, Nigerians yearn for good governance, freedom of conscience and freedom of expression so that they can participate actively on how they are governed as free citizens entitled to fundamental human rights in a democratic society.
“Consequently, we solicit that this administration should hit the ground running and live up to expectations of many Nigerians who crave for change by healing the wounds and bitterness occasioned by the electioneering campaigns and lift Nigeria to greater heights by addressing the myriads of problems facing the country, including economic problems, infrastructural decay, energy crisis, joblessness and corruption.”
He enjoined the new government to be focused and wary of public officials or anybody who may want to advise him to toe the path of retrenching workers in the name of reforms citing the temporary setbacks in the global oil market as reasons.
“We need to caution that such step, if taken, will only worsen the already precarious situation the country has found itself in.
“Our take is that with the plugging of loopholes where heavy leakages from the treasury are experienced on a daily basis, coupled with robust management of government’s expenditure profile, Nigeria as a nation will surely get it right and be better for it,” he said.
On his part, the General Secretary, Nigeria Labour Congress, NLC, Dr. Peter Ozo-Eson, warned that the NLC would meet to take an appropriate decision, should any state government decide to sack workers.
He said: “Our position, as already stated, is that there are adjustments that government can make by cutting the cost of governance.
“We have already warned that they shouldn’t allow workers to be victims of the downturn in the oil price.
“We believe that the down-turn should not be used to sack workers, they should cut excess waste and the cost of governance. We have a situation where a governor has a retinue of excess aides and entourages; all these can be cut. These are areas where we feel adjustments should be made.”
Deputy President (South), National Association of Small Medium Enterprises, NASME, Mr. Orimadegun Agboade, said retrenchment had already begun in some sectors.
He said: “With the way things are right now, many companies may reduce their staff.
“Based on recent events, federal, state and local governments still owe salaries. It is an indication that things are not right at all. In fact, many of us are afraid of what will happen.”
Agboade stated that the current foreign exchange rate is the harbinger of the gale of retrenchments that would sweep workers out of the manufacturing sector.
“For instance, I am a manufacturer of medicine; I received a notice from my bank recently that the Federal Government had placed an embargo on all letters of credit. The implication of this is that immediately we run out of the raw materials we have now, the hope of getting more will be slim, or it won’t come on time.
“In the pharmaceutical industry, where I belong, close to 98 per cent of our raw materials are imported. A lot of companies are already cutting salaries,” Agboade added.
He said the scale of retrenchment could be as high as 25 per cent, adding that if things were not sorted out quickly, it could reach 50 per cent.
Similarly, the Chairman, National Association of Small Scale Industrialists, Lagos State chapter, NASSI, Mr. Segun Kuti-George, said the fact that the foreign exchange rate was not in equilibrium with the naira was a sign that mass retrenchment might be closer than expected.
“We have more naira chasing fewer dollars now. Also, the monetary policy is moving from 12 per cent to 13 per cent higher interest rate. We now have a higher rate of exchange, which inherently means inflation.
“It means that prices of imported and locally-made goods will go up, which would mean lower demand and, therefore, lesser profits for companies. This may then lead to layoffs,” he said.
The Director-General, Lagos Chamber of Commerce and Industry, LCCI, Mr Muda Yusuf, predicted that the year would be challenging for businesses, as the cost of production would increase, while purchasing power would decline.
He explained that businesses would have to look at all possible options for survival, including cost reduction in other areas. The process of reducing costs, according to him, may result in cutting the number of employees.
Recently, the International Labour Organisation, ILO, in its report predicted that unemployment and retrenchment will continue to rise in the next five years in Nigeria and other countries, as the global economy has entered a new period combining slower growth, widening inequalities and turbulence.
By 2019, more than 212 million people will be out of work, up from the current 201 million, according to the World Employment and Social Outlook – Trends 2015, released by the ILO.
“More than 61 million jobs have been lost since the start of the global crisis in 2008 and our projections show that unemployment will continue to rise until the end of the decade. This means the jobs crisis is far from over so there is no place for complacency,” the ILO Director-General, Guy Ryder, said.
The report noted that the employment situation had improved in the United States and Japan, but remained difficult in a number of advanced economies, particularly in Europe.
The employment situation according to ILO, has not improved much in Sub-Saharan Africa, despite better economic growth performance.
It stated that the steep decline in oil and gas prices, if sustained, might improve the employment outlook somewhat in many advanced economies and several Asian countries according to some forecasts.
By contrast, it will hit labour markets hard in major oil and gas producing countries, like Nigeria.
Way forward
For this challenge to be addressed, the organised labour has advocated cut in the cost of governance, describing the country’s presidential system as the most expensive in the world.
TUC urged the government to work towards reducing the cost of governance in the country.
It stressed the need to cut down on political appointments, insisting also that the situation whereby lawmakers fix their own salaries and allowances must be discouraged and discontinued.
“We condemned all the state governments owing workers salaries, as it is unhealthy for the nation. We urged both the Federal and State government to cut their expenses in order for them to meet with workers’ salary”, he said.
The NLC President also canvassed a drastic reduction of the cost of governance in the country which he said was unacceptable.
He said the high cost of governance could be rectified not by workers’ rationalisation but through fighting corruption and removal of waste in the system.
“The cost of governance at all levels, including the legislature, is very high and morally reprehensible and must be brought down, not through rationalisation of personnel (as personnel emoluments constitute an insignificant fraction of cost of governance) but through wiping off of corruption and reduction of waste in the system.”
