10 December 2012

Nigeria: PHCN - Negotiator Recommends Payment of Workers' Gratuity

IF the Federal Government respects the recommendations of its Chief Negotiator in its face-off with the workers of the Power Holding Company of Nigeria, PHCN, over the settlement of entitlements in the on-going privatization of PHCN's assets, the workers would have won a major battle, as the recommendations of the Government negotiator, Comrade Hassan Sumonu, asked the government to not only pay the workers their gratuity, but also in line with PHCN's conditions of service.

In the long-awaited report of the negotiations between the Federal Government and the three unions in the power sector, the Chief Negotiator/Conciliator, dismissed argument that the Pension Reform Act, PRA of 2004, abolished gratuity in PHCN or any other sector, saying there was no reference to gratuity in the act.

Consequently, he recommended that the PHCN's Conditions of Service, on the issue of payment of gratuity to the employees be applied ahead of privatisation of the company.

The disagreement on the modality for the payment of the workers' pensions and gratuity has been the major quagmire between the federal government and workers of PHCN.While agents of the government have been contending that the workers are entitled to pension and gratuity up to June 30, 2004, and thereafter the provisions of PRA 2004, should apply. The unions on the other hand have been arguing that gratuity should be paid in accordance with the extant PHCN Conditions of Service. They argued that contrary to the views of government, the Act was not against the payment of gratuity.

Supporting the unions' position, Comrade Sumonu in a report submitted to government, urged the authorities to consider the unions' demands because the Pension Reform Act 2004 did not abolish the payment of gratuity as a separate component of retirement benefit.

The chief negotiator noted that the Act never abrogated the conditions of service of PHCN which was signed in March, 2010, and asked government to pay gratuity to workers in the sector in accordance with the staff conditions of service.

According to the report, on the computation of severance package and benefits accruable to workers, the report recommended "five weeks salary for every completed year of service on Basic Salary, subject to a maximum of 18 months".

This is against the unions' demand of "five weeks salary for every completed year of service, computed on total emolument and not subject to any ceiling".

Meantime, organised labour in the Electricity industry has continued to pick holes in the recent bidding of PHCN assets handled by the Bureau of Public Enterprises (BPE) and its supervisory agency, the National Council on Privatisation, describing it as not only flawed, but highly compromised.

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