Gripping Issues in National Minimum Wage Fixing Dud

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In most countries of the world, it is the responsibility of the government to cater to the well being of citizens. In the capitalist and socialist states as in others, the government has a role to play towards the welfare of the workers, apart from maintenance of law and order. Onuegbu (2010) in this regard defines minimum wage as the rate fixed either by a collective bargaining agreement or by a government enactment as the lowest wage payable to specified categories of employees.

The International Labour Organisation (ILO) in 1967 explained that the concept of minimum wage contains three basic ideas: The first idea is that minimum wage should be a wage considered sufficient to satisfy the vital necessities of food, clothing, housing, education and recreation of the workers taking into account the present economic and cultural development of each country. The second is the idea that minimum wage represents the lowest level of remuneration permitted in law or by principles, notwithstanding the method of remuneration or the qualification of the worker. Thirdly, minimum wage may be the wage which each country has the force of law to uphold and which is enforceable under threat of penal or other appropriate sanctions. Above all, the ILO prescribes minimum wage to be a significant initiative in addressing the right to human dignity at the workplace.

Though, the practice of National Minimum Wage is not new in any governmental system, the duration, details and nature vary from country to country. From available statistics, it is notable that the first attempt at fixing a national minimum wage in Nigeria was made in October 1954 when the former Western Regional Government proposed to supplement the wages of un-established workers under its employment so that no employee would receive less than five shillings – the equivalent of fifty kobo per day for a 44 – hour a week work.

The Western Regional Government then extended the invitation to the Federal Government to pay this minimum wage to its employees, who were then resident in the Western Regional Territory. As a result of this move, the Federal Government deemed it necessary to set up a Committee to study the suggestion on the ground that the minimum wage fixing by the Western Regional Government was not based on any systematic principle and method. Although the perspective of the Government in setting up the Committee was to ensure that such a measure was unlikely to bring any adverse consequences on employment, commodity prices, productivity and income, it was undeniable that it could lead to national industrial strikes as employees in other sectors would demand for the minimum wage to be extended to them. Notwithstanding, the Federal Government briskly upheld the submission of the Committee.

Furthermore,, during the civilian regime of President Shehu Shagari (1979 – 1983), Nigeria experienced a development on the minimum wage issue where in his budget speech of December 1980, the President announced a new minimum wage of N100 per month for public servants. This amount was announced to close up the era of wage freeze, and to declare a return to free collective bargaining. Eventually, in 1981 a joint session of the National Assembly agreed on a monthly national minimum wage of N125 per month . This was confirmed and sealed by the National Minimum Wage Act of 1981 which provided for the payment of N125 monthly wage as basic minimum that could not be set aside by any agreement whatsoever.

Another development in the minimum wage fixing was in August 1998 when the then Head of State, General Abudulsalami Abubakar announced a national minimum wage of N5,200 for all workers in the public sectors in the country. Although this was later slashed to N3,500 per month for federal workers and N3,000 for their state and local government counterparts, the nation’s industrial relations terrain has remained turbulent for both the government and the workers since this pronouncement in 1998.

On the 29th of May 1999, a democratically elected civilian government was established in Nigeria with one of the cardinal objectives of the new government being Poverty Alleviation through an improvement in the purchasing power of the populace. In order to actualize this programme, the then President of the Federal Republic of Nigeria, Olusegun Obasanjo in his address to Nigerian workers on May 1st 2000 announced a dual new minimum wage intending to pay N7,500 to all Federal Public Sectors. The amount earmarked for the states and local governments in the country was N5,500, but this was rejected by the Nigerian Labour Congress (NLC). To buttress this effort, in the same year, the Act was amended and the national minimum wage was reviewed upwards for States at N6,500 per month while that of Federal workers remained at N7,500 per month, according to the National Minimum Wage Amended Act of 2000 cited by Arizona Ogwu in 2007.

Further to this development, one finds that it was not until 2010 – 2011 under President Goodluck Jonathan’s administration that the issue of national minimum wage was put on the front burner of national politics. However, after exhaustive negotiations and bargaining, the National Assembly enacted a New National Wage Act which was signed into law by the President in May 2011 at the rate of N18,000 per month for workers of all tiers of government, including the private sector. As noted by Akunnakwe (2011), on the 23rd of February 2011, the Nigerian Senate approved Eighteen Thousand Naira (N18,000) as the minimum wage for Nigerian workers and the bill which was given swift passage by the upper chamber of the National Assembly increased the minimum wage from N7,500 to N18,000.

While examining a cursory analysis of the provisions of the National Minimum Wage Act of 2011 (Amended), one will discover in Section 2(1) that on the commencement of execution of the Act, it shall be the duty of every employer to pay a wage not less than the national minimum of N18,000 per month to every worker under any establishment. Thus, the Act abolished the dual minimum wage of the Abubakar Regime (1998-1999) and re-introduced the same minimum wage for all the tiers of government in Nigeria.

Recently, the current administration of President Mohammadu Buhari appointed a 30 -member Tripartite National Minimum Wage Committee for the negotiation of a new National Minimum Wage for the country. The Committee is made up of persons from the public sector, (Federal and State governments) and the private sector made up of the largest private employer group and the Nigeria Employers’ Consultative Association (NECA). Other members include: the Manufacturers Association of Nigeria (MAN), Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Nigerian Association of Small and Medium Enterprises (NASME).

A former Minister of Housing and Urban Development and Head of Civil Service of the Federation, Ms. Ama Pepple is the Chairman of the Tripartite National Committee. Other members are the Minister of Labour and Employment, Senator Chris Ngige who is the Deputy Chairman and the Chairman of the National Salaries, Income and Wages Commission, Richard Egbule, who is the Secretary.

Relating to the struggle to effect the current wage demands, Nigerian workers under the aegis of the Nigeria Labour Congress (NLC) went on an indefinite warning strike on Thursday September 26, 2018 to press home their claim for an upward review of the national minimum wage. This development occured in after consultations and negotiations with labour authorities, wherein the NLC President Ayuba Wabba said the strike action was in compliance with the decision of various organized labour organs which had endorsed the 14-days ultimatum earlier served on the federal government. Wabba also said that the National Minimum Wage Committee which was set up in November 2017 commenced work in March 2018 with timelines for arriving at a new national minimum wage in August / September 2018.

He mentioned that the Committee had worked assiduously to meet the deadline, but was shocked by the decision of the Federal Government to adjourn the Committee’s meeting indefinitely, saying this prompted the strike initiated by the organized labour in demand for N56,000 as the new minimum wage for workers in Nigeria.

Despite all efforts, NLC’s leadership however suspended the warning strike on Sunday, 30th September, 2018. However, before the announcement of the strike’s suspension, the Chief of Staff to President Muhammadu Buhari, Malam Abba Kyari presided over a closed – door meeting with labour leaders fronted by the NLC President at the State House in Abuja. Wabba said over the meeting that the NLC received a firm and formal invitation to a reconvened meeting of the tripartite committee scheduled for October 4 and 5, 2018 which has since held.

Examining the issues that have engulfed the struggle for minimum wage increase over the years, one would suggest that for the Government to succeed in any national minimum wage matter, some profound solutions must be adhered to. First, individual states should be allowed to pay their workers a minimum wage that is based on their financial strength and the subsisting cost of living in their domains. This observation is consequent on the existing variation in the revenue profile of states in Nigeria which is undermining their respective ability to page the minimum wage. Therefore, any Federal Government’s overriding role in wage fixing and labour related matters without giving primacy to the economic considerations of the states could amount to an exercise in futility.

More so, the Government should ensure it monitors those organizations with the culture of unfair labour practices and low wages. Incidentally, some organizations are known to have the bad culture of unfair labour practices and often exploit every available opportunity to oppress, repress and even make minimum wage bills not to be passed into law, in order to enslave workers. Such organizations usually convert the workers in their employment to contract or casual staff, so that their staff strength could run below fifty members which is the minimum number allowed by the regulation on minimum wage. This is since implementation applies only to organizations with at least 50 workers.

Another consideration beneficial to both parties – employer and employee is the need for the Government to reduce the cost of governance and improve the living standard of workers by fixing a better wage. In this standpoint, tackling political corruption has remained an imperative device for taming or curbing the gaudy and ostentations lifestyles of political office holders. Purposed to serve as arbiter for the implementation of a virile take home, this must be done so that the minimum wage laws will not remain a mere ‘paper tiger’ but become an effective government policy.

Unquestionably, diversifying the Nigerian economy is necessary for states to enhance their internally generated revenue and step into the creation of employment opportunities. The labour market situation has a strong interplay as a determinant of wage or compensation. Wary of the perceived unprecedented level of unemployment and poverty in the country, it is indubitable that this period of unemployment does not generally favour high pays. Conversely, employers in this facade have the opportunity to attract high calibers of employees without necessarily offering the legal minimum wage which may be considered as adequate or excessive.

It has become rife for the Federal Government to engage sufficient and qualified expert personnel for the purpose of ensuring that the provision of labour laws and the National Minimum Wage Act are effectively and adequately observed during negotiations. Otherwise, the resultant effect of failure to involve necessary parties in wage increase negotiations cannot be anything less than industrial relations crises.

The stipulations above are germane to the Government in order to develop acceptable and good wage review policies at the expiration of any existing tripartite agreement. This is particularly necessary when there is a rising price of commodities in the market without a correspondent increase in the wages of workers, whereby the value of workers’ salaries begin to dwindle.

Most assuredly, since rule making and power sharing form a major ingredient of industrial relations, a stable wage bargaining structure must be applied at the policy development stage. In manifesting this measure, the general principles would subsequently guide future wage fixing exercises and determine salaries through a democratic collective bargaining wheel. Whilst the Federal Government’s responsibility to fix equitable minimum wage periodically has remained highly laudable, input in the decision process from all necessary interested parties would be required to facilitate adequate implementation and avoidance of conflicts in the workplace.

Kemisola Falope is Information Officer – Web Content Unit, Information Technology Department, Federal Ministry of Information & Culture – Radio House, Abuja – (Edited: Ogar Nchu)