Collective Bargaining Structure in Nigeria Should Be Reviewed

08 Jan 2013

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Dr. Olusegun Oshinowo

Director-General of the Nigeria Employers’ Consultative Association (NECA), Dr. Olusegun Oshinowo, spoke to Linda Eroke on various industrial relations issues including the high incidence of strikes in the country, stressing the need to review the current structure of collective bargaining. Excerpts:

What is responsible for the high incidence of strikes and agitations by workers in the country and how can this be addressed?
The agitation for increment in salaries and the high incidence of strikes have been more in the public sector than in the private sector but the structure and policy for managing industrial relations and collective bargaining from the national perspective is the same whether you are operating in the private sector or the public sector.

So the question we should ask ourselves is why has it worked in the private sector and it has not worked very well in the public sector? The answer to that is first, the government has not demonstrated its responsibility well enough to respect the agreement which it signed with the unions. This is because quite a number of past strikes had to do with the failure of government to honour agreement which it signed.

The second issue as to why there is a higher incidence of strike in public sector is the failure of the parties involved to respect the structure which they have agreed upon for engagement and I give an example, the current structure of collective bargaining in Nigeria is anchored on industry-wide collective bargaining, and just as we have industrial unions in the private sector, we have sectoral unions in the public sectors. In the private sector, it is the industrial unions that negotiate with the employers but in the public sector, the employer is the government.

The third question is that why are those unions in the public sector not engaging their employers in collective bargaining on a regular basis? One reason for that is that quite unlike in the private sector where you have procedural rules of engagement that are very clear as to when you are going to negotiate, in most public sector organisations, you do not have rules of engagement which explains why the workers will just wake up one day and demand say 40 per cent increment in salary from government.

If the rules are well structured they will know that there is a time when they can do that and when that time has not come, they will not be any reason to engage government. Thirdly, and this is cross cutting and not restricted to only the public sector, the structure is not supposed to stand perpetually. The structure comes out of the dynamics in your environment and your strategic objectives. The current structure we are operating in has been in existence since 1970s and there have been a lot of changes in our economy. Whether you are talking about the public sector or the private sector, that is where the reform issue comes in. I think the time has come for us to really ask this question.

The current structure we are operating in, is it really the best, is it in line with current clime? Now, I give you an example using the Academic Staff Union of Universities (ASUU), the national secretariat will want to meet with the Federal Government and negotiate terms and conditions of employment for all universities in Nigeria wherever they are located. I think there is something wrong with that structure. The Governor of Anambra State in the person of Peter Obi said recently that a professor in Harvard University does not earn the same salary with a professor in one other university in another part of the United States (US).

So we need to tinker with the structure of bargaining that will make ASUU to negotiate on common terms and conditions of employment for all university lecturers with FG. This is because the ability of one state to pay is different from the ability of another state to pay. The nature and working environment and values differs from state to state. So we need to give more power to the federating components to determine how this should be done.

In the same vein the power to determine what should be applied in the universities should be in the hands of the unions within the universities while discussing with their real employers which is probably the governing council of say the University of Lagos. Until we go back to tinker with that structure, we will be enmeshed in this kind of crisis. Because now ASUU is talking with the FG and whatever they agree upon, ASUU will want state governments that had not been part of that negotiation with FG to implement.

Therefore we expect a tinkering of that structure which will allow the state governments that are going to pay those lecturers to meet with the unions within their state and agree on what will be appropriate.

How is NECA addressing the issue of employers not allowing their workers to unionise?

Often times, we create excuses for the union to be lazy. The right of employees as per unionisation is well enshrined in the law of this country. It is the responsibility of the unions to organise its members. In the event that any employer is preventing the unions from organising its members, it is the right of the unions to insist because it is well enshrined in the law as to what to do. So even if your employer in a particular company is saying no, it is against the law of the land, so the question is what are the unions doing about it? It is a question for them not for us.

As far as we are concerned we always preach to our members the fact that the law of the land recognises the right of any employee to belong to the union of his choice. So if any employer is resisting that whether deliberately or not, it is the responsibility of the union and not the employer. It is left for the union to do the appropriate thing in terms of getting that employer to respect the rights of the employees.

Some banks have embarked on massive disengagement of workers with the consequences of increasing the level of unemployment in the country. What does this portend for the economy?

Well, we must accept the fact that business must survive first before giving consideration to any other issue. This is because if businesses do not survive, the employee will not survive. So basically from time to time, in the course of running business, companies will come to a conclusion on whether to recruit or downsize. That is basically a business decision, so it will not be right for anybody to criticise any company for downsizing. While some companies are downsizing, others are up scaling and recruiting staff. So that is basically business decisions that are dictated by the dynamics of the business and the business environment.

However, the most important issue is that if you are downsizing, you must follow the law of the land. You must respect the rights of employees; you must embrace the best practice in parting ways with employees that have been useful to you during the good time. And the assessment of the action of any company that is downsizing should not be on the basis of the decision to downsize but the way the company has gone about that downsizing, that the company has respected employees right, that the company has respected the labour laws of the law, as to whether the company has treated the employee decently in parting ways with them.

That is our take on that. A situation where companies are terminating appointment of employees when they do not require their services, the use of the word termination is an infringement on the rights of the employees because the basis of separation should not be termination, it is redundancy. This is because to terminate their appointment and give them letters of termination is to jeopardise their opportunities in securing employment elsewhere. This is wrong.

What companies should do under that circumstance is to fall on the process of redundancy as articulated in our labour law and the companies must pay redundancy benefits and not deprive the affected employees of those benefits. If any company is downsizing and depriving employees’ redundancy benefits, then it is an infringement on the rights of those employees.

We have often time witnessed a situation where banks declare redundancy without actually paying the severance packages of the affected employees. In such cases what can NECA do to compel members to respect the law of the land?

We represent employers and we preach this doctrine to them, they are aware of this doctrine and we cannot sanction them. The employees, they have their own representative organisations which is the unions. Unfortunately, some of these workers do not belong to the unions, there are on their own so to speak. But they can seek recourse in the National Industrial Court (NIC). It is for their purpose that government has set up the NIC. So, even when they are not unionised, they can take their case to the NIC.

For us, what we do is to give advice and professional guide to our members from time to time, and we can only advise, we can’t compel them. It is left to the other party whose interest have been injured or affected to seek for the redress of those rights.

Sir, casualisation has become a major issue in workplaces. How can this be tackled effectively once and for all?

We must realise the fact that casualisation on itself is not illegal. There is a legal form of casualisation. That I choose to employ a worker for a period of say three months under a casual contract I have not breached the law of the land.  But if the duration of that contract exceeds three months, I am expected under the law to give any worker that I have contracted a written contract in which case I could have a written contract for six months, nine months even one or two years. There is nothing in our law that says that I must sign a pensionable contract with my employees.

The dictate of my business will determine those whom I want to employ on pensionable terms and those I want to contract on fixed term. Yes, we must acknowledge the fact that there could be abuses. The abuse will now come in where an employee that had been given a one year or two years contract, 12, 14 and 15 years down the line is still with me as an employee in which case I have been renewing the contract endlessly. That constitutes an abuse because the responsibility and job that necessitate the contract which I have signed with that employee is almost of a permanent and regular job.

And because it is a regular job, if I am giving him a short contract of one year, I am only trying to be smarter by probably edging myself against long term benefit like gratuity or pension. So our focus should not be on casualisation, it should be on this type of abuse. When the current Governor of Edo State, Adams Oshiomhole was the President of the Nigeria Labour Congress (NLC), NECA and NLC had a meeting on this and our focus really was on abuses and we indeed set up a joint audit team that were going round companies to identify areas of abuses so that we can lip them in the bud. NECA is still committed to this initiative.

Two years after the minimum wage has been signed into law, some state governments are yet to pay the new wage. This again has raised the issue of lack of trust on government. How can this be resolved?

You see, the more and more you reflect on the behaviour of government, the more depressed you feel for our country Nigeria. The national minimum wage did not drop from the horizon overnight, no, the outcome of the national minimum wage took well over nine to 12  months of discussion where state governors, state governments were represented. The representatives of state governments were very punctual and regular at the meetings which we had. So it couldn’t have come to the state governments as a surprise because they were receiving feed backs as to what transpired at the Belgore Committee.

So why should they now wait for the outcome of the Belgore Committee to be formulated into law before saying they cannot pay. Where have they been all along? And that is my own outgrow with them. They had the opportunity before the Committee actually rounded up its meeting to say we will not be able to pay N18,000 , we will be able to pay N12,000 or N15,000.  And what this simply translates to is that government that is supposed to ensure that its citizens-whether individual or corporate keep the law of the land is showing bad example by breaching the law of the land.

National minimum wage is an Act of the State and anyone in breach of it should be arraigned before the court. So what moral justification will the government really have through the ministry of labour which is supposed to conduct inspectorate responsibility to now sanction any private organisation that fails to implement the minimum wage law. What will be the moral platform on which they are going to stand on? Again, it is playing out in the ASUU/Federal Government faceoff year in year out. Why is it that government will go into discussion, negotiation, sign an agreement and the same government will wanton breach the agreement? It is a question we should put to them to answer; honestly speaking.

Do you think labour’s demand for improved welfare for workers has been realised with the N18,000 minimum wage given the inflation rate and high cost of living in the country?

Minimum wage in any society, whether in Nigeria, Europe or America will not provide the welfare with which workers or Nigerians will grow. Minimum wage cannot address the basic issue of decent living. Decent living and welfare for Nigerians- whether workers or business owners can only be guaranteed through good governance. What the citizens and workers need to live a decent life actually goes beyond a living wage. A living wage is actually just one component of it.

Good governance is really the recipe for decent living and for the welfare of workers and welfare of Nigerians. The mere fact that the subsidy element has been removed partially will set in motion inflation which will eat into the wages of workers. So the purchasing power of workers on account of that whether we like it or not has gone down. You cannot call on the employers to compensate for that because the employers are under the same pressure. Remember, the employer of any business pays from revenue that is realised.

So on account of the high cost of living, businesses will increase their price to recover their cost and the simple law of demand stipulates that when prices go up, demand comes down. So we might be finding a situation whereby some companies may be experiencing this capacity utilisation which might lead into another spiral of redundancy or retrenchment. So the issue is not so much about the minimum wage or living wage, the issue is about good governance. The things that actually impact on a continuous basis on the quality of life fall within the realm of government responsibility.

What any employer pays for is simply the value of the work of the employee which will not take into an account the imperative to live decent life. But the totality of your life and the quality of that life is a function of so many factors of which wage is one and the bulk of those items are things that fall within the responsibilities of government. So until we get to a stage where we can boast of good governance, I am sorry, this whole idea of decent wage, we will not be able to get there.

Tags: Business, Nigeria, Featured, Collective Bargaining Structure

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