As the clamour for the amendment of the Nigerian Social Insurance Trust Fund Act beyond the Employees Compensation Scheme at the National Assembly heightens, the NSITF has intensified lobbying across state governments to key into the scheme. Damilola Oyedele writes
The Employees Compensation Scheme (ECS), introduced in 2011 is a response to one of nine recommendations of the International Labour Organisation (ILO) for social security, and to enhance welfare of the working populace. Of all 31 Conventions and 24 recommendations adopted by the organisation’s tripartite constituents, concerning social security between 1919 and 2012, the Social Security (Minimum Standards) Convention, 1952, (No. 102) is regarded as the flagship instrument. It is classified into nine: healthcare, sickness, old age, unemployment, employment injury, family and child support, maternity, disability, survivors and orphans. Governments are expected to set up schemes or programmes to cater for these branches with policies that specifically address “what circumstances each branch is meant to protect, who should be protected, what type of benefit should be provided, how do persons become eligible for benefits, and for how long the benefit should granted.”
These branches are the minimum areas every government is expected to protect, to enhance the welfare of its workers. Nigeria though, has been able to implement seven out of the nine, excluding family and unemployment benefits. The ECS takes care of employment injury. The Nigerian Social Insurance Trust Fund (NSITF, and other relevant organisations are therefore working to ensure that the remaining two branches are covered in the country.
Pending amendment to the NSITF Act
The amendment to the NSITF Act, to execute other programmes apart from the ECS, is currently waiting to be subjected to a public hearing at the National Assembly. The acting Managing Director of the NSITF, Mr. Ismail Agaka in a recent interview, told THISDAY that the hearing is a critical component of the amendment.
“The public hearing is an important part because it would afford us the opportunity to hear from critical stakeholders, provide procedures of global best practices and such, so that we can have a much more comprehensive package for employees beyond the compensation scheme.
“The Employees Compensation Scheme itself has grown over the years and we have made 45,000 registrations from zero in five years. In the last eight months alone, we moved from 40,000 to 45,000. In terms of claim settlements, we have also moved from zero claim settlement and compensation to over N700 million. We also moved from zero beneficiaries to over 6,000 beneficiaries. So the ECA is also on the right path, but the amendment bill before the National Assembly will do much more than the compensation aspect.”
Improving Efficiency of the Scheme
Despite being just one percent of an employee’s basic salary, transport and housing allowance, the ECS has not enjoyed the success that ought to accompany such laudable scheme. The NSITF has however been engaging states and employers in dialogue, to get them to join the scheme, and provide better protection for their workers.
The federal government, in a recently issued directive, also mandated that the full implementation of the ECS (at the inception of the scheme, several items on payroll, where granted five years moratorium to be considered, where the ECS was concerned). NSITF, through engagement with the umbrella body of all employers in Nigeria, the Nigeria Employers Consultative Association (NECA) therefore set out to expand the factors that constitute ‘payroll’.
Currently payroll, as defined by the ECS is one percent of employee’s basic salary, transport and housing allowance, but the new definition excludes items such as pensions, special allowances and bonuses, as contained in a Memorandum of Understanding, signed between NECA and the NSITF.
At a recent forum of stakeholders in Lagos, the Director General of NECA, Mr. Segun Oshinowo disclosed that a committee had worked on redefining payroll, adding that items such as pension, and special allowances still remain excluded from the definition of payroll.
“You cannot run a scheme where there is no clarity about terminologies and concepts, which will encourage controversies about the running of the scheme. We believe that the MoU would benefit the workers that the scheme is meant for at the end of the day and as employers we have to support that. We appreciate the fact that payroll is a generic concept because the context of payroll will differ from company to company,” he said.
Oshinowo added that to avoid unnecessary controversies, NSITF and NECA joint committee chose to define payroll on the basis of exclusion, rather than inclusion.
In his address, Agaka noted that the bid to ensure the enforcement of contributions to the ECS, has not been backed by social dialogue.
“Even if the law backs the action, the operators must be able to convince those that the law is meant for, of the need for compliance stressing the essence and benefits of such law to individuals as well as the society as a whole. At the NSITF, we recognize the fact that the law is there to be applied for the mutual benefit of the government and the governed. And in applying the law, logic and wisdom must be applied in equal measure so that it does not become a toothless law,” he said.
“In Nigeria, there are so many laws that are unimplementable because they could not be applied. This is so because there is no buy-in of those that the laws are targeted at. For a law to achieve its purpose, there must be a sense of ownership amongst all the stakeholders to take the law as theirs. This is what this agreement is intended to achieve,” Agaka added.
Dialogue paying off
The efforts of the NSITF to woo states to join the scheme paid off as Rivers states and Bauchi states have indicated their willingness to contribute to the ECS, to ensure better protection of their workers, particularly in times of injury.
The Rivers State Governor, Mr. Nyesom Wike, who played host to the Minister of Labour and Productivity, Dr. Chris Ngige, noted that the scheme is a development issue, which should not be subjected to political differences.
He however admitted that he was not aware of the scheme despite its five years of existence.
Ngige also lauded the Governor for accepting to enroll the state on the program.
“I have brought the ECA message to you in Rivers State. The Employees Compensation Act makes it mandatory for all employers of labour to care of its workforce when they sustain injury at the workplace… The private sector has keyed into the programme and the state government are beginning to understand why they need this law in the protection of their workers.”
Urgent need to cover unemployment
The ECS is a laudable scheme, but it is not enough in a country with more youthful population like Nigeria. With a high rate of unemployment in the country, particularly the young people, social security to cover periods of unemployment is a necessary tool, especially to reduce susceptibility to crime and moral vices, thus heightening insecurity. The N500 billion social welfare scheme of the President Muhammadu Buhari – led government is a step in the right direction. It is however necessary to go beyond implementing unemployment social security as a political promise, but rather entrench it in law, so it survives changes in administrations. This is necessary because new governments have been known to discard policies of their predecessors, but unemployment benefit is too critical to security, to be allowed to be swayed by political waves or tides.
Implementation of the N500 billion social welfare scheme, should therefore be integrated into the operations or mandates of organisations, such as the NSITF.