15 January 2013

Nigeria: Poor Implementation Mars National Minimum Wage

Linda Eroke writes that nearly two years after the N18,000 National Minimum Wage for workers was signed into law, many State Governments are yet to fully comply with the new Act.

Well over 20 State Governments have practically failed to fully implement the N18,000 National Minimum Wage for public sector workers nearly two years after the minimum wage bill was signed into law.

Sadly, workers under the employ of Enugu, Zamfara, Niger and Ebonyi state governments are yet to be paid the new wage despite pressure from labour.

Investigation by THISDAY revealed that many states have tried, in some cases successfully, to renegotiate the modalities for payment of the new wage to civil servants, while states such as Plateau, Kwara and Adamawa have resorted to partial implementation; a situation where some categories of workers benefit from the new wage while others are being paid the old wage.

FG Inclusive

More worrisome is the fact that the Federal Government, which signed the new wage into law, has not fully complied with the minimum wage act as government has failed to implement the new wage across board to workers under its employ. Rather, what the federal government did was a staggered implementation, by adding about N1,000 each to workers at all grade levels.

The action of the federal government is based on the argument that it had already commenced the payment of N17,034 minimum salary relatively to workers under its employ.

General Secretary, Association of Senior Civil Servants of Nigeria (ASCSN), Mr. Alade Lawal said the implementation of the new wage for civil servants was done in bad faith, noting that workers have not benefitted from the adjustment in the new wage.

He said the argument by government that minimum wage is only for workers in the lower cadre does not hold water, stating that services of workers in grade level 1-2 (cleaners) had already being outsourced to private firms. He challenged government to tell Nigerians those that are benefiting from the new wage.

"To us, it is an implementation done in bad faith. This is because the minimum salary in the civil service before the implementation of the minimum wage is N17,034. What the federal government did was to adjust the amount to N18,000. At the end the 0.01 per cent increment was used to adjust up to grade level 17. Their argument is that they do not want to create distortion in the system. Government has made a mess of the whole issue. We do not see this as implementation of minimum wage because the adjustment has to be scientific," he said.

States' Obligation

However, the state governments who have taken a cue from the federal government had often argued that the National Minimum Wage Act places no obligation on them to effect an increase of salaries 100 percent across board for all categories of workers in their employ, but rather to ensure that the least-paid worker in the state public service does not earn below N18,000 per month.

For instance, workers in Lagos state have had similar experiences as teachers have had their Teachers Salary Allowance (TSA) withdrawn in exchange for the minimum wage. This was an allowance teachers struck and fought bitterly to win in 2009. Thus, workers and state governments have often disagreed on whether or not the government was paying minimum wage genuinely.

Unfortunately, the states council chairmen who had sworn oath to defend the rights of the workers are hands-in-glove with their state governments; thereby short-changing the interest of their workers. Most council chairmen and secretaries are competing to be in the good books of their government and this partly accounts for the reason why the minimum wage law has not been implemented in some states.

Minimum Wage Debacle

The organised labour had in February 2009 presented a demand of N54,000 new national minimum wage for workers with the argument that the current wage of N7,500 could no longer cater for the needs of workers in view of the present economic situation.

Apparently in a bid to forestall a labour crisis, the federal government had in May 2009 constituted a tripartite committee which had eight members drawn from labour, government and employers to negotiate a new wage for workers.

The committee headed by Justice Alfa Belgore completed its negotiations in 2010 with a recommendation of N18,000 minimum wage for the workers and this was agreed to by all stakeholders, including representatives of state governments.

The committee had earlier proposed a minimum wage of N22,500 per month as the appropriate figure for workers. However the committee observed that the economy would not support the amount and after extensive deliberations, negotiations, it was agreed that the new wage be pegged at N18,000.

According to the report, "it is binding on organisations with 50 employees and above to pay the new wage."

The Belgore committee had recommended that: "In order to forestall any possible industrial crises that might arise as a result of the new national minimum wage, the Federal Government through the Federal Ministry of Labour and Productivity as a matter of expediency convene a meeting of the social partners (NLC, TUC and NECA) to agree on the broad guidelines for the implementation of the new national minimum wage in the various sectors of the economy, including the public service."

With the signing into law of the minimum wage bill by President Jonathan in March 2011, many had thought that the minimum wage controversy had been laid to rest. However, this seems not to be the case as the debate for the minimum wage issue assumed a new dimension following the delay by state governors to implement the new age Act months after it was signed into law.

Governors' Refusal

The governors, under the umbrella of the Nigeria Governors' Forum (NGF), refused to begin the implementation of the minimum wage months after it was signed into law, claiming that their revenue cannot absorb the new minimum wage. Part of their argument is that their workforce is less than 2.5 per cent of the total population and so it was irrational to allow a very minimal percentage of the population to tie the hands of development in the states.

It was against this background that the Governors Forum called for an adjustment in the existing revenue allocation formula that allocates 52 per cent to the Federal Government, 36 per cent to the states, and 26.7 per cent to the 774 local government areas in the country.

The governors have recommended that the allocation of 52 per cent to the federal government be reviewed downward to 32 per cent and state governments to receive 42 per cent while the local government areas are to receive 32 per cent instead of 26.7 per cent. Many of the governors have insisted that unless this recommended formula is implemented, it will be almost impossible to pay the minimum wage.

Federal Argument

The federal government, on the other hand, had argued that it cannot pay the minimum wage across board insisting that it would only implement the minimum wage to workers in the lower wage bracket (levels 1-6) and defer the payment of other categories (levels 7-17) to January 2012 as this would be captured in next year's budget.

The government had also insisted on implementing the minimum wage for only core civil servants. The implication is that workers in various agencies and parastastals of government will be excluded from the minimum wage.

This position was rejected by the labour leaders who issued a three-day warning strike to compel both levels of government to fully implement the new wage Act across board.

The warning strike called by labour was later suspended following a six-point agreement reach with federal government to comply with the New National Minimum Wage (Amendment) Act 2011 and implement the minimum for all categories of workers including those in various agencies and parastatals.

Part of the agreement was that the federal government shall conclude negotiations with Labour on the implementation of the New National Minimum Wage not later than 31st July, 2011.

The Governors' Forum also agreed to comply with the minimum wage Act. The agreement states that: "The 36 States of the Federation agree to comply with the new National Minimum Wage (Amendment) Act, 2011; The State shall conclude negotiations with Labour on the implementation of the new minimum wage not later than July 31, 2011; Detailed negotiations on salary across board will be done with a view to effecting payments by August 2011, while modalities for payment of the minimum wage will be worked out according to the peculiarities of each state.

"The 36 States agree that the effective date for the implementation of the new minimum wage shall not be later than 1st August, 2011 provided that any worker who earned less than the N18,000 between 1st April and the effective date of the implementation of the new minimum wage shall be paid arrears of the difference.

"The time-frame for the payment of the arrears of the difference of the new minimum wage effective April 1, 2011 shall not be later than October, 2011. No State shall victimise any worker in any manner or form as a consequence of the implementation of the new minimum wage. In the face of the commitment by the governors, Labour resolved to suspend the 3-day warning strike."

Labour's New Year Strategy

The Nigeria Labour Congress (NLC) has vowed to clamp down on state governments that have refused to implement the minimum wage for workers in the New Year.

NLC, President, Abdulwaheed Omar, who made this known in a New Year message, warned state governors who are yet to implement the new national minimum wage to do so, adding that the singular act of not complying with the minimum wage law is an impeachable offence.

He said: "It is our resolve that the few states that are still reluctant to pay the Minimum Wage to some categories of workers will come under full focus by the labour movement. The struggle will no longer be left in the hands of the state councils, but handled in conjunction with the national leadership of the labour movement".

Meanwhile, the civil servants spokesman hinted that the labour leaders are already mapping out a strategy to tackle the issue holistically, and called on workers to give the unions details on the implementation of the new wage by government.

However, workers and civil society groups have expressed strong view that labour leaders need to fight more seriously for the implementation of minimum wage for workers with a better strategy that brooks no compromise.

They maintained that it is the interest of workers that unions are created, stressing that the only way to force the defaulting states to pay up is through a sustained mass campaign of strikes and protests .

Lamenting the inability of labour leaders to defend the right of workers, Secretary, Democratic Socialist Movement (DSM), Hassan Soweto, said: "Workers have a right to a living wage. Unfortunately, the NLC and TUC leaders are more worried about whether a state receives enough allocation to be able to afford to pay the minimum wage than the real conditions of their members.

"In climbing down from N52,200 to N18,000 with the excuse that they were considering the revenue base of the states, labour leaders empowered the state to continue to use this excuse to attack further the interest of workers. The only way to force the defaulting states to pay up is through a sustained mass campaign of strikes and protests. Yet the NLC and TUC leaderships are still trapped in the same old unproductive tactics", he added.

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