Lingering Struggle for Minimum Wage
The stalled implementation of the national minimum wage is about allocation of Nigeria’s scarce resources. Somolon Elusoji urges the federal government and organised labour to come to an amicable solution
“They are unnecessarily wasting time . . . The truth is that no administration will implement anything for the workers without a fight; so they want another fight.”
These were the words of the General Secretary of the United Labour Congress, Didi Adodo, who spoke to THISDAY in June.
He was referring to the federal government’s disagreement with labour leaders over the implementation of the new minimum wage which President Muhammadu Buhari signed into law in April.
Indeed, the fight Adodo insinuated is still ongoing as the government and labour union continue to lock horns over how to properly implement the new increase in workers’ wages.
This past week, government resumed negotiations with labour union leaders, but the talks ended in a stalemate as both sides continue to share divergent opinions on the fiscally responsible manner to allocate wage increase, especially as it concerns the civil service.
How did it get to this point and will a deal be struck anytime soon between both parties and forestall any sort of industrial action that might cripple economic activities across the country?
Perhaps an important thing to note is that this is not the first time Nigeria has chosen to implement a new minimum wage.
The past minimum wage increases were: N125 (1981) by ex-President Shehu Shagari; N250 (1989/1990) by ex-President Ibrahim Babangida; N3, 000 (1998) by ex-Head of State Gen. Abdulsalami Abubakar; N5, 500(2000) by ex-President Olusegun Obasanjo; and N18, 000 (2011) by ex-President Goodluck Jonathan. President Buhari moved it to N30,000 this year.
When President Buhari signed the bill into law, workers across the country were overjoyed.
“We don’t believe the government can scam the workers because I believe in the welfarism of everybody and I don’t believe President Muhammadu Buhari’s administration will scam workers,” former President of the Trade Union Congress, Bobboi Kaigama, said after the minimum wage was restructured. Generally, expectations were high. But those expectations began to be tempered when, on May 14, the government inaugurated the relativity/Consequential Adjustment Committee, which in turn set up a Technical Sub-Committee to work out the template for the adjustment of salaries of public service employees. The labour community thought a template had been prepared already. But they were wrong.
Then the federal government, through the National Salaries, Income and Wages Commission, announced that only workers earning below the N30,000 minimum wage would be paid.
This meant that those earning above N30,000 could not determine, yet, how their wages would be increased.
The commission’s chairman, Mr Richard Egbule, while addressing newsmen on the implementation of the new national minimum wage, on July 16, had said the commencement of the approved payment would be determined by the office of the Accountant-General and backdated to when the President signed the agreement.
Egbule, had said the position of the government was that the implementation of the wage would start with workers currently earning below N30,000, while others would follow after the conclusion of talks on consequential adjustments.
But organised labour, expectedly, wasn’t happy with these developments. There were signs that a strike action was brewing.
In a joint statement signed by Mr Anchaver Simon, acting Chairman, Trade Union Side (TUS), of the Joint National Public Service Negotiating Council (JNPSNC), and the Secretary, Mr Alade Lawal, organised labour expressed disappointment by, “government’s effort to derail the implementation of a new National Minimum Wage.”
“As things are right now, the government side is only prepared to pay peanuts to workers as adjustment under the pretext that it will soon be undertaking general salary review in the Public Service,” the statement said.
TUS had initially proposed that since the minimum wage was increased by 66.66 percent from N18,000 to N30,000, salaries for officers on Grade Levels 01-17 should be adjusted accordingly to maintain the relativity that exists in the salary structure in the Public Service.
But when the government side argued that such increase across board would raise the total wage bill too high, the TUS side reviewed its demand downward and eventually settled for 30 per cent for officers on Grade Levels 07-14, and 25 per cent for those on Grade Levels 15-17.
The government side, on its part, was insisting on 9.5 per cent salary raise for employees on Grade Levels 07-14, and five per cent for those on Grade Levels 15-17.
The workers, through the Trade Union Congress (TUC), rejected the stance, with the new TUC President, Mr Quadri Olaleye, accusing the federal government of “playing smart to avert industrial unrest.” A stalemate then ensued in the discussions. “We have read the circular released by Mr Richard Egbule, Executive Chairman of the National Minimum Wage Committee set up by the Federal Government to work out the consequential adjustments arising from the wage increase.
“Let it be known that this circular is unacceptable to us because it contradicts the reason for setting up the committee,” the statement said.
Olaleye said the TUC considered the circular as a smart move on the part of government to discourage labour action, declaring that “labour is not fooled”.
“We wonder why anything that has labour undertone becomes the issue of rejection by government. By this circular, the government is testing the patience of workers.
“We assure them that they either go to the negotiating table to complete the assignment or risk the wrath of workers.”
In July, the Secretary General of the Trade Union Congress, Mr Musa Lawal, in an interview with THISDAY, echoed similar thoughts. “You can’t give absolute figure for minimum wage increase,” he said. “It is a percentage issue and we told them right from time. It is a question of percentage. Somebody who was on N18,000 who moves to N30,000, what is the difference? It is the percentage difference we are looking for; anything short of that is zero and we are not taking it. That is the position of labour.”
Meanwhile, the Head of the Civil Service of the Federation, Mrs. Winifred Oyo-Ita, has attributed the delay in the full implementation of the new National Minimum Wage to the “unrealistic demands” by labour unions.
“President Muhammadu Buhari is committed to implementing the new national minimum wage and that is why the presidential committee on the consequential adjustment arising from the minimum wage has been sitting to deliberate on it.
“The committee has sat with the union leaderships within the public service to come out with the consequential adjustment arising from the new minimum wage.
“There were a few, what I will call unrealistic, demands from the unions.
“So as not to continue delaying the implementation of the very dear policy of Mr President, we had to go ahead and seek his approval to implement the minimum wage effective from April,” she said.
She explained that the decision was to pave way for the federal government to continue with the discussions on the consequential adjustment.
Oyo-Ita said that the federal government would not allow the demands of the senior staff unions to affect those the minimum wage was largely meant to address – the low income earners.
According to a document circulated by a source close to the negotiations and obtained by THISDAY last month, if government accepts labour proposals, the resultant additional cost would be about N500,813, 183,739.00 per annum which is far above the budgeted sum.
Also, those on GL 08 Step 1 who’re earning N666,184.00 per annum would now earn N866,039.00 and those on GL 17 Step 1 earning N4,183,600.00 would earn N5,229,500.00.
According to the source, this demand poses the problem of equitable adjustment in salaries occasioned by the new minimum wage. It would then mean that while those on level 1-7 get additional N12,000 per month, those on GL 08 Step 1 would get an increase of N16, 654.58 per month and GL 17 Step 1 gets N87,158.33 per month.
If Labour was concerned about the plight of Nigerian workers, there is no reason why it should reject government proposal of N10,000 increase for those at the top while those below get N12,000, the source posits.
Meanwhile, in July, the NLC and TUC, in a recent letter to the Secretary to the Government of the Federation, Mr Boss Mustapha, urged the federal government to reconvene the stalled minimum wage committee meeting with the Joint National Public Service Negotiating Council (JNPSNC). NLC President, Ayuba Wabba, and TUC President, Quadri Olaleye, jointly signed the letter dated July 16, 2019.
They expressed dismay in the stalemated discussion and the meagre amount being offered by the Federal Government, adding that they were particularly sad over the staggered implementation of the new minimum wage.
While commending the President for setting up the committee to work out the modalities for relativity and any other consequential effect that may arise from the new national minimum wage, it said that its initial optimism was hinged on the fact that the step would speed up the implementation of the minimum wage.
“We are, however, worried by this stalemate and must, in all honesty, point out that what the government is offering is far too small to be acceptable.
“We recall that in the immediate past exercise, 53 per cent relativity was used across board. The resort therefore to unnecessary obduracy by the government’s team is neither helpful nor reflective of precedence.
“The option of a staggered implementation conveyed in a press statement by the Chairman of the Salaries and Wages Commission is similarly not in good faith; the notion of staggered implementation is both divisive and catastrophic.
“It is important to note that the national minimum wage has always been implemented holistically in acknowledgement of the fact that we all go to the same market.
“In the light of this and the need to head off a major industrial crisis, we would urge you to do all that is necessary to ensure that the meeting of the Committee is reconvened with NLC and TUC.”
This past Wednesday, July 31, the Office of the Secretary to the Government of the Federation (OSGF) resumed negotiations with organised labour. However, after a meeting that lasted about four hours, both sides again failed to come to an amicable agreement. According to reports, during the meeting, organised labour’s 10-man negotiating team, which was headed by Comrade Simon Achebe, the acting chairman of the Joint National Public Service Negotiating Council, insisted on 29% wage increase for those on levels 07 to 14 and 24% for top civil servants on levels 15-17. However, the government’s 10-man team, led by a Permanent Secretary in the OSGF, Adekunle Lawal, insisted on 9.5% to 10% for workers on levels 7-14 and 5% to 5.5% for levels 15 to 17.
Still, both sides have agreed to reconvene for talks on August 14 and 15. Undoubtedly, what will happen on the upcoming dates will go a long way in determining whether the minimum wage issue will finally be put to bed.