23 January 2011

Nigeria: The New Employees Compensation Act


We welcome the recent signing into law by Mr. President of the Employees Compensation Act (2010), which automatically repeals the Workmen's Compensation Act (2004) often considered to be outdated, inadequate and in many respects cumbersome to implement. The President's action indeed represents an important landmark in Nigeria's labour policies and legislation and further demonstrates his administration's willingness to maintain a harmonious relationship with labour towards enthroning a viable and sustainable economy that will enable the country to realise its developmental goal via Vision 20-2020. We equally commend the National Assembly for making this law possible. When the chips are down, this may end up as one of the principal legislations made by the National Assembly under the present democratic dispensation.

We are convinced that the new Act, which is in line with the International Labour Organization's (ILO) recommendations and global best practice, will enhance the productivity of Nigeria's workers as a result of the motivation they would derive from many of its provisions. It is evident that for many years, issues relating to the welfare of the Nigerian worker have never been taken seriously. In effect, these individuals who sacrifice daily for the economic development of the country and its peoples are left to the whims and caprices of their capitalist employers, who in most cases treat their welfare with levity. To worsen matters several foreign companies operating in the country are also known to be notorious for their unfair labour practices. They often subject their workers to inhuman conditions without let or hindrance. This is why we welcome this new law given that it will safeguard the rights, well-being and morale of the workforce not only in the interest of the workers themselves but also that of the investors/employers and the economy. The law would also go a long way in creating harmonious industrial relationships between labour groups and organizations. In the end, Nigeria would be seen as a nation that cares for the well-being of its citizens.

We note in particular that the Act, which covers employees of both the private and public sector essentially seeks to: provide an open and fair system of guaranteed and adequate compensation for all employees or their dependants or any death, injury, disease or disability arising out of or in the course of employment; provide rehabilitation to employees with work related disabilities as much as possible; establish and maintain a solvent compensation fund managed in the interest of employees and employers; provide for fair and adequate assessments for employers; provide for an appeal procedure that is simple, fair and accessible with minimal delays; and, combine efforts and resources of relevant stakeholders for the prevention of workplace disabilities, including the enforcement of occupational safety and health standards.

Also worthy of note is that the new Act has adequately addressed the observable defects of the Workmen's Compensation Act (2004) especially those relating to the lack of a reliable funding source, which exposed employees and their dependants or both to avoidable frustrations and suffering as well as its inadequate scope of compensation, which was far below internationally acceptable standards. It is good that the new Act now provides for the establishment and maintenance of a solvent compensation fund managed in the interest of employees and employers to be pooled from 1% total pay package of employees, but paid by employers to the Nigerian Social Insurance Trust Fund (NSITF). Moreover, the fact that funds accumulated under the compensation fund will be available for investments makes it possible for such investments to further strengthen the resources and sustainability of the scheme.

At the same time, we also know that Nigeria has never been lacking in laws or policies, rather the problem has always been our inability to effectively implement the several legislations that abound. We hope that this will be different. We are also watching with keen interest to see whether the President will truly fulfil his recent promise to labour leaders that he will continue to work with them "to protect the interests of and improve the lives of workers in Nigeria so that we can attain the goals of 20-2020". We also enjoin both the executive and legislature to ensure that even the minimum wage bill presently before the National Assembly is also passed and signed into law within the life span of this administration. That way, they would be seen to have actually worked for the interest of the workers, who are indeed the chicks that lay the golden egg.

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