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Labour Not at Ease over Cost Cutting Measures

21 Apr 2013

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Labour Minister, Emeka Wogu 

Recent plans by various economic players to cut costs are giving labour leaders sleepless nights amid the air of uncertainty pervading the work place, reports Festus Akanbi

One employer of labour who recently experienced the fury of its employees is Aero Contractors, a major player in the nation’s aviation sector.  Although the 16-day crisis between the airline and its staff has been resolved, observers said the loss suffered by Aero Contractors while the crisis lasted cannot be forgotten in a hurry.

The crisis, which was triggered off by the cost cutting measures adopted by the airline, was brought to an end only when the two parties reached a truce brokered by the Chairman, Senate Committee on Aviation, Senator Hope Uzodinma.

At the end of the negotiation, Aero management recalled sacked staff (655 out of about 1,200) as demanded by the striking workers. The dispute saw Aero ground operations for about three weeks with revenue losses in excess of N500 million.

Labour sources hinted last week that apart from the aviation industry, other sectors of the economy likely to witness implosions by their aggrieved workers include banking and manufacturing.  The fear of labour disharmony is underscored by the ongoing banking sector reform, which has left on its trail unprecedented job losses in banks.

Purge in Banks
In banks, a combination of pressure from the Central Bank of Nigeria on the one hand, and the increasingly difficult environment on the other hand has made it abundantly necessary for banks to review their operations. In most cases, when this is done, it is human resources that usually take the heat.

Ironically, the so-called reform has not reflected in the labour practices of the banks, a situation that has seen bank and financial workers not only overexploited but also subjected to job uncertainty.

THISDAY investigation showed that apart from employees affected in the various rationalisation exercises, some of the lucky ones that are able to retain their positions in the affected banks are compelled to work under unfavourable conditions. The seriousness of the situation, according to a source, explains the decision of banks to subscribe to outsourcing of some categories of services hitherto undertaken by employees directly employed by the institutions.
In banks, apart from those manning the marketing department of these financial institutions, who have very difficult targets to meet in terms of deposit placement, some bank workers especially those at back office, are made to put in extra working hours which may spread till weekend.

For instance, Access Bank Plc recently lay off about 1000 of its staff, who according to sources, could not scale through the stringent conditions spelt out by the bank. Some of the affected staff were those said to have failed to meet the targets set by the bank.

THISDAY checks also showed that some organisations including banks are beginning to cut some perks of office. For instance, some banks are said to be planning to phase out the issue of staff bus service in order to cut cost. While banks are reviewing the transportation arrangement with their staff, some manufacturing companies have long ago withdrew transportation services from the list of incentives for their employees.

Spokesperson for the Central Bank of Nigeria (CBN) Ugo Okoroafor told THISDAY that the apex bank could not frown at banks for the pressure on their staff to meet the new thresholds for customers’ deposit. This, according to him, is because, as a profit oriented institutions with responsibility to their shareholders, banks would like to make profits at the end of each financial year.

ASSBIFI Kicks
However, the National President of Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), Mr. Sunday Salako, traced the unfavourable labour relations in banks to the banking sector reforms initiated by the current leadership of the CBN.

“We are not against the reforms in the banking sector but the area of mass sack of our members is giving us a serious concern. Any reform that is aimed at cutting jobs is not a good one especially in Africa,” Salako argued.
He recalled that before the latest reforms, the banking sector was the second highest employer of labour after government.

On the issue of eradication of some perks of office including free transport services to staff, the ASBIFFI President said companies are justified to cut its costs in view of the reality of the nation’s economy.
He said members of his association cannot raise any eyebrows on the issue, given the fact that as senior staff, they are entitled to car loans, explaining that it does not make sense for a senior staff to be asking for free transportation services.

However, he lamented what he described as stringent condition of service in banks. He frowned on a situation where bank staff works round the clock even at weekend. “Bank staffs are made to work even at weekends as if their lives depend on it,” he said.

Nigerian Workers at the Receiving End
Labour analysts said the problem of Nigerian workers is compounded by the government policies on divestment as the right of the workers are seldom put to the front burner during negotiations between old and new owners.
Recently, the National Executive Council of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) condemned the National Oil Corporation of Brazil, which operates in the country’s oil and gas sector as Petrobras Nigeria Limited, for maltreating its employees.

In a statement last month, PENGASSAN criticised the company for locking out Nigerian employees “under the excuse of furthering the divestment of its stake in some Nigerian oil blocs valued at N795 billion.” It said, “Petrobras, as a corporate personality, including its management in Nigeria, must respect due process and rule of law and ensure that the parent body of the organised labour in Petrobras, which is PENGASSAN, is adequately engaged in accordance with the provisions of our extant national and labour laws, and the industry best practices before the planned divestment is finalised and as part of the process of consummating due diligence on Petrobras.”

According to the association, such exercise goes a long way in minimising the incidence of contingent liabilities and hindrances for the divesting company and the divestee that would acquire Petrobras assets and portfolios in Nigeria.

PENGASSAN explained that before it decided to issue a statement on the issue, efforts were made by its national secretariat, which engaged the top management of the company, to address the matter.

It added that even though it severally advised the Managing Director of Petrobras against undermining due process, rule of law and industry practice, he seemed bent on doing so, “ostensibly to his own peril and to the detriment of the new company that will acquire its stake in the Nigeria oil and gas industry.”  PENGASSAN warned that it would not be taken “for a ride.”

Violation of Workers’ Right
In March last year, the Civil Liberties Organisation (CLO) urged the Federal Government to investigate the alleged maltreatment of some Nigerians working in some foreign-owned companies in the country.

The leadership of the Akwa Ibom chapter of CLO said that in light of the rising cases of the maltreatment of Nigerians working in such firms, such investigation was considered very imperative.

The organisation cited the China Civil Engineering and Construction Corporation (CCECC) as one of the firms that was known for the gross violation of the rights of Nigerian workers.

He alleged that the perceptible violations included verbal insults as well as singling out and overworking specific individuals. The CLO leadership stressed that due to the fact that these foreign companies provided the much-needed employment, people were often willing to overlook their aberrations regarding violation of the workers’ rights and work ethics.

There are other allegations regarding the misconduct of foreign companies, particularly with regard to how expatriate workers were being given preferential treatment in the workplace.

Besides, concerned observers note that there have been complaints about enhanced remuneration for the foreign workers, who are also given residential quarters and official cars, while they are often allowed to go on their annual leave at their convenience.

On the contrary, the Nigerian workers in these firms are not allowed to enjoy similar privileges, while they are often laid off impulsively and indiscriminately.

Analysts, however, contend that whenever specialists are brought into a country, their pay package should reflect their skills, while it should also take into cognizance the fact that they were now working in a completely different country.

Some of the analysts are, nonetheless, quick to point out that there are enough qualified citizens who can easily be trained to perform the jobs which most of these foreigners are brought in to do.

Some business owners said the high cost of doing business in the country might be responsible for the harsh operating environment in the country.

In what looked like a response to the outcry against high cost of doing business, the Federal Government recently approved the downward review of the cost of business registration at the Nigerian Investment Promotion Commission (NIPC) from N50, 000 to N15, 000.

The Minister of Trade and Investment Olusegun Aganga said the review was designed to make Nigeria highly competitive in line with international best practices. The NIPC’s Assistant Director/ Head, Media and Publicity, Joel Attah, said the downward review is in line with the desire of the federal government to improve the country’s competitiveness rating in doing business.

“It is also a very bold attempt at lowering the cost of doing business in Nigeria. This is expected to substantially enhance the country’s national competitiveness as a foreign direct investment destination,” he said.

Tags: Business, Nigeria, Featured, Cutting Measures

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