NECA disputes Ngige’s directive on retrenchment in banks

Nigeria Employers’ Consultative Association (NECA) has expressed its disagreement over the directive of Minister of Labour, Dr. Chris Ngige to suspend retrenchment in banks and financial institution.

Ngige, who issued the directive last week, cited high spate of petitions and complaints from stakeholders in the Banking, Insurance and Financial Institutions sector.

In a reaction to the directive, Director-General, NECA, Olusegun Oshinowo said: “the labour law of the land does not empower the Minister to issue such a directive, which he considers uninformed and “populist”.

He added that the Labour Laws had envisaged redundancy situation and, therefore, made provisions in section 20 of the Labour Act to guide the actions of the parties in the event of retrenchment or redundancy.

Oshinowo said: “the Minister seems not to have shown understanding of the fundamentals of industrial relations and Labour Laws in Nigeria and thus, has acted ultra vires”.

“No employer will take pleasure in declaring redundant employees which it has invested significant resources in developing over the years. Usually, redundancy exercise is foisted on employers on account of an unhealthy economy and the dynamics of the business, which often demands staff rationalization, he said.

NECA reminded the Minister that it is part of the inalienable right of an employer to determine the optimal staff level it requires to sustain its operations.

He noted that employers have rights, which includes “the right to hire and fire within the rules governing such employment contract”. Employers’ rights are “Employers’ Prerogatives” which are not subject to Ministerial directives.

Oshinowo assured the Minister that: “where an Employer has found it necessary to carry out retrenchment, it would respect the laws of the land and the laid down procedures for redundancy”.

He added: “Employers’ expectation from the Minister of Labour and Employment is that he will work hand in hand with other Government Ministries in the establishment of the desired enabling environment to ensure business sustainability, competitiveness and job creation”

Oshinowo further advised Ngige to understand that “the Ministry of Labour and Employment runs on the principle of tripartism, which entails regular interactions with Trade Unions as represented by NLC/TUC, the Employers as represented by NECA, and Government as represented by the Federal Ministry of Labour and Employment. The Ministry is expected to respect the rights and interests of Employers and Workers alike on issues that relate to Labour and Industrial Relations”.

He said he particularly deplored “the way and manner the Minister has been running the affairs of the Ministry without respect to the prerogative and rights of enterprise as employers of labour.”

He recalled an earlier directive of similar nature to the Oil & Gas Sector, with regards to the rights of employers in Nigeria. According to him, “for a long time, employers have been advocating that the Ministry should be headed by a technocrat in order to avoid the kind of disposition being displayed by the Minister which tends towards “populism” and “partisanship” rather than professionalism.”
In the meantime NECA has written to its members to ignore the illegal directive from the Minister.