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PHCN Privatisation: N170bn Workers’ Severance Pay Ready

16 Dec 2012

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PHCN office



Chineme Okafor 

Indications emerged at the weekend that the N170 billion meant for disbursement to workers of the Power Holding Company of Nigeria (PHCN) as settlement benefits to cover gratuities and pension of workers as agreed by both parties in negotiation for the transfer of ownership of the PHCN successor companies to their eventual owners is ready.

The Federal Government and the labour unions in PHCN finally resolved lingering issues that were threatening the progress of the power reform programme when they struck a deal late on the thorny issues of severance pay and pension for electricity workers after a late Tuesday night meeting at the office of the Secretary to the Government of the Federation (SGF) in Abuja.

But speaking Saturday at the fifth national power summit organised by the Federal Ministry of Power in Lagos, the Permanent Secretary at the ministry, Dr. Dere Awosika disclosed that the funds for the settlement were ready and the Bureau of Public Enterprises (BPE) was already working out total cost.

Awosika explained that letters notifying the workers to forward details of their Retirement Savings Account (RSA) for onward transfers of their benefits will be issued out to the workers within next week.

She also hinted that training was being organised by the Federal Government for top officials of the successor companies on labour issues and modalities for winding up before the eventual hand over to the preferred bidders, adding that a consensus on the date to wind up the companies would have to be reached.

“The senior officials are going to be trained to be equipped to provide needed leadership and direction to the labour in the sector. It will equip them to be able to negotiate employment terms  with the new owners. We need to have a consensus on the winding up date for hand over to the new owners (preferred bidders),” Awosika said.

Also in her presentation, former permanent secretary in the Ministry of Labour and a member of the Federal Government negotiation team with the labour unions, Dr Timi Agary said the agreement reached last week provided that 20 percent of all accrued benefits are to be paid to the workers as gratuity while 25 percent of all accrued benefit are to be paid as pension.

Agary stated that the Federal Government would soon approach the National Pension Commission (PenCom) for a forbearance package to be able to pay staff of the utility company their pension, adding that the 2004 Pension Act provides that only workers who opened their RSA before 2007 are eligible for pensions but that a clause provides for a forbearance granted by the PenCom.

She urged Chief Executive Officers (CEOs) of the successor companies to stop rejecting staff posted from the headquarters to their stations considering that the Multi Year Tariff Order (MYTO-2) did not make provision for their salaries.

She said: “I plead with the CEOs to accept the headquarters staffs that are on transfer to them to allow them access the pension. They will find it difficult to get their salaries if you refuse to accept them.”

Agary further warned the preferred bidders who are expected to take ownership of firms not to be averse to labour unions, saying the Nigeria laws provide for a vibrant labour unionism.

“Our laws provide for labour unionism. What we want is responsible unionism. I know the private sector is averse to unionism. Even as government, we will protect them,” she said.

Tags: Business, Nigeria, Featured, PHCN, Privatisation

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