‘Nigeria should embrace international best practices on labour matters’
Director-General of the Nigeria Employers’ Consultative Association (NECA), Dr. Timothy Olawale, in this interview with GLORIA NWAFOR, says the national minimum wage should still be left as a national item, adding that the amendment bill in the National Assembly seeking to move it from the Exclusive Legislative List to the Concurrent List should not have been initiated in the first instance. He, however, adds that the private sector is not bothered by the controversy surrounding the issue because “we are way-way above whatever minimum wage being paid in the public sector.”
How do private sector employers perceive the bill before the National Assembly seeking to allow states to determine their own minimum wage instead of having a national benchmark?
The bill has actually gathered so many storms. Firstly, we have to look at it from the perspective of how it affects the private sector. In the private sector, we are not really bothered about it because the issue of collective bargaining agreement has taken care of the issue of national minimum wage. As a matter of fact, when you talk of organised private sector, not the informal sector, even before the discussion on enactment of any minimum wage law, we discovered that we were far and above any threshold of what was going to be set. This is because of the unique system of collective bargaining in the private sector.
Every two years, we sit down with the sectoral employer bodies; we discuss with the sectoral unions and agree on a review of terms and conditions of service, which also includes their pay and wages. That is why we are way-way above whatever minimum wage is being paid in the public sector.
Having said that, there are many factors you have to look at on the controversy that has been generated by the issue of whether to retain the minimum wage on the Exclusive Legislative List or move it to the Concurrent Legislative List or allow other tiers of governments, states and local governments to determine their own wages.
Statutorily, the ideal thing is to embrace international best practices. International best practices, when it comes to labour matters, are dictated by the International Labour Organisation (ILO) conventions and standards. Nigeria is a signatory to the setting of minimum wage, and to the extent of that, all the core conventions of the ILO automatically binds on Nigeria as a member of the ILO. To the extent of that, it becomes mandatory for the state called Nigeria to continue to observe and practice all the best practices as enshrined in the ILO conventions and standards. Note that it is not individual state governments or local governments that are signatory to those standards; it is the nation called Nigeria. That is the reason we just have to continue to live by those international best practices.
The second reason can be emotional but it is the truth, when you see the type of decisions and policies our political leaders implement. A state government in the past seven months has been paying half salaries to workers. If that state governor could unilaterally decide, outside the provisions of the law, to short-change workers and set aside their rights to full wages, if he has his way, he will want to pay pittance to the workers. That kind of state governor will never pay equitable wages for fair work that the workers are doing, and we have several of them. Some, up till now, while living flamboyant lifestyles, find it difficult to implement the N30,000 national minimum wage two to three years after the enactment of the law. Are those the political leaders you want to leave the determination of the wages of their employees to? What their disposition will be and how responsible they will be in handling the benefits and welfare of their workers is suspect. Those are the two main arguments.
But, of course, there are arguments against it. One is the issue of the condition and standard of living, which varies. But I think the strength of the argument in support of retaining the national minimum wage at the centre is stronger that whatever arguments that are used to counter it.
The sponsor of the bill said some state have been unable to pay the current minimum wage hence the need to allow them determine what they can pay. Do some of your members complain that the national minimum wage is too high?
Let me first respond to the issue of some states that are unable to pay. I believe that as a person and business leader, states that have been unable to pay misplace their priorities. The human capital should be prioritised. If they set their priorities right, they will be able to embrace a reward system that will take care of their workers as well as improve productivity. In other words, there is no state that should not be able to pay the minimum wage.
Secondly, in the private sector, like I said earlier, before we agreed on the N30,000 minimum wage at the national level, a survey conducted by us about our members’ minimum wage in 2018 found that the minimum was about N53,000. In other words, we were paying way-way above. So, if we are paying way-way above, the issue of complains or whether we can pay or not is out of it. As a matter of fact, after the agreement on that, several sectors of the economy have even had to review their salaries based on collective bargaining after the expiration of collective agreement. So, the reviews are bi-annual; we are not waiting until Nigeria reviews in five or 10 years time. We negotiate every two years; that is why we are way above. So, the issue of we cannot pay is not even relevant.
How do your members usually cope whenever the national minimum wage is reviewed upward?
Well, how we cope has been taken care of by the previous question. The only relevance to that is the consequential adjustment, where we have also said that where an employer is paying way higher than the minimum wage, there is no need for any consequential adjustment. As I said, it is only the informal sector that is caught in the web of not paying up to, and we encourage them and support them to also embrace best practices and see how they can implement it.
We have encouraged them through continuous enlightenment. When we have our programmes, even though they are not members of NECA, we invite them so that we can also encourage them on best practices. Through the initiative, we discovered that most of their members are now engaging on best practices. They have embraced the issues of paying pension, paying rates of occupational health and safety in employee compensation scheme as well as the issue of raising the minimum wage structure. It has really paid off and it is an ongoing structure. We will continue to carry them along and we will continue to encourage them to continue to be part of mainstream of best practices.
What impact do you think having the minimum wage on the Concurrent Legislative List will have on employer/employee relations in the private sector?
As I mentioned earlier, it makes no difference really because in the private sector there is no issue as regards the minimum wage. We are home and dry and comfortable. Our employees are comfortable with our practices. They cannot have it better than it is presently.
Linking it up with issues on COVID-19 and the #EndSARS saga, if it affected us paying salaries, our priority post-COVID-19 has been to encourage our members to show that termination or separation with their workers is the very last option. When every other option had been exploited, that is when it should be considered and in the event that businesses cannot carry the burden. What we have said is that whichever employee is to be let go should be the first to be considered when the business bounces back. That is what also encouraged the memorandum of understanding we signed with the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to say that as much as it is within our control, organised businesses will not sack workers.
Should the National Assembly invite NECA to a public hearing on the bill, what will be your position?
Our position is exactly as we have stated. The national minimum wage should still be left as a national item, which is debated and agreed upon nationally, for there to be checks, balances and control. Naturally, we are going to attend the public hearing as long as there is going to be a public hearing. If the bill did not suffer sudden death before the process, definitely NECA will be there to lend our voice to supporting the retention of the national minimum wage on the Exclusive List. With the agitation of the labour movement for the National Assembly to stop the transfer of the national minimum wage from the Exclusive Legislative List to the Concurrent Legislative List, ordinarily, we want to believe that the bill is going to suffer a premature death because government, I mean the executive and the Minister of Labour has come out to say they are in the same position with NECA; even the organised private sector and Labour are on the same page. Most of the legislators are not on the same page with the sponsor of the bill, apart from some governors, who are pushing the agenda through him. Majority of Nigerians are against the bill and we want to believe that common sense will prevail. It is most likely that the bill will die a natural death; such bill should not have come up in the first instance.
Some of our political leaders need enlightenment on what is right, what is needful and what best practices are. We should not cause unnecessary heating up of the polity because there are more important issues nationally that should agitate our minds, that we should focus on, like the big issue of high rate of youth unemployment and the issue of endemic poverty in the country. It is not irrelevant things that will heat up the polity like this that should be coming up. Due diligence should always be done for us to examine the pros and cons of our actions before we go ahead with it. This is very instructive for our political leaders.
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