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PROJECT TOPIC AND MATERIAL ON LABOUR UNREST AND UNDERDEVELOPMENT IN NIGERIA: AN APPRAISAL OF 2000-2013
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One of the major impediments to development in Nigeria is labour unrest. This is given the fact that no Nation can develop without human resource because they constitute and play very significant role in Nation building and development. The Nigerian case has been so pervasive that labour unrest extends to every situation when the Government takes major public policy decision that seems to affect the labour union and generally the masses without due consultation of labour statement; especially that which affects the social life of their member and welfare packages of the entire masses, specifically that which affect the socio-economic and political aspects, hence Nigerian development remain dependent.
Thus in our attempt to analyze and investigate this problem, we use the relative deprivation theory for theoretical framework while documentary research method was also used for gathering and analyzing data.
This research work, labour unrest and underdevelopment in Nigeria: An appraisal from 2000 – 2013 is being carried out for the purpose of assessing various means of curbing labour unrest. This study is however divided into five chapters, chapter one deals with the background of study, statement of the problem, objective of the study, significance of the study, hypotheses, method of data collection and analysis, scope and limitation of the study and definition of terms. Chapter two contains the public policies and labour unrest in Nigeria. In chapter three, we looked at labour unrest and underdevelopment. Chapter four of this work dealt with the strategies for curbing labour unrest in Nigeria.
Finally, chapter five which is the last chapter efforts shifted to the summary, conclusion, recommendation and bibliography. However this work is very incisive, interesting and educating.
TABLE OF CONTENTS
|Approval Page ——————————————||ii|
|Table of Contents————————————-||x-xi|
|Chapter One: Introduction|
|1.1||Background of the Study———————-||1-5|
|1.2||Statement of the Problem———————-||5-7|
|1.3||Objectives of the Study —————————||7|
|1.5||Significance of the Study———————||15-16|
|1.6||Theoretical Framework ———————–||16-20|
|1.8||Methods of Data Collection——————-||21-22|
|1.9||Scope and Limitation of the Study ———-||22-23|
|1.10||Operationalization of Concept—————||23-26|
Chapter Two: Public Policy and Labour Unrest in Nigeria
2.1 Economic Reforms and Retrenchment
|of Workers ————————————–||27-38|
2.2 Non-Sustainable Minimum Wage and Welfare
2.3 Arbitrary Reduction of Fuel Subsidy and Increase in
Chapter Three: Labour Unrest and Underdevelopment in
|3.1||Labour Unrest and Loss of Revenue||————||69-79|
|3.2||Labour Unrest and Loss of Investment ———||79-88|
|3.3||The Disruption of Socio-Political|
Chapter Four: Strategy for Curbing Labour Unrest in Nigeria
|4.1||The Decentralization of Labour Unions ——–||94-97|
|4.2||The Coercive Strategy —————————||98-100|
|4.3||The Dialogue Option—————————-||100-107|
- Background of the Study
The organized labour union movements in Nigeria dates back to 1912, Nigeria workers like their counterparts in other developing countries have witnessed fundamental changes in their condition over time. To a large extent, labour unions have played significant roles in the transformation of most developing countries.
Government is the largest employer of labour with private individual employing a minimal proportion of the working class (Fajara, 2000). In Nigeria, labour unions has become a very important agents of socio-economic transformation and class struggle (Aremu, 1996, Akinyanju, 1997) which began from the colonial struggle and continued till in the post independence era. In the later, labour unions played significant role in the struggle against dictatorial military rule in the country. In the same vein under the current civilian dispensation, labour
unions is at the forefront of the struggle against unpopular government policies such as deregulation of the oil sector, retrenchment of workers and refusal to honor agreement on wage increase.
Nigeria is a third world country that comprise of labour unions spread across the country. The unions are structured into industrial line and as at 1977 precisely 42 labour unions were recognized by the Government and allowed to contribute enormously to the development of economic, social, cultural and even political system of the state. The role of these labour unions is usually regarded as people oriented because it tends to oppose Governmental policies and decisions not favorable to the masses through strike actions, protest etc popularly called labour unrest.
However, in a multi ethnic democratic country like Nigeria, there exist different labour unions across the country. But for the purpose of this study, we shall dwell
more on those labour unions that have in one way or the other succeeded in influencing Governmental policies and decision. In the past such as: National Union of Petroleum and Natural Gas Workers (NUPENG), Nigeria Labour Congress (NLC), Nigeria Union of Teachers (NUT), Trade Union Congress (TUC), Academic Staff Union of Universities (ASUU), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAU) Nigerian Union of Journalist (NUJ).
In 1978 however, it’s important to note that Nigerian Labour Congress (NLC) was formed and inaugurated and the 42 industrial unions became affiliates of the Nigerian Labour Congress with a legal backing of the trade union amendment Decree 22 of 1978. Again in 1989 the trade union was restructured to become 29 affiliates unions to the Nigerian Labour Congress after their role against the anti-people Structural Adjustment programme of General Babangida.
Consequently, in 2005, the trade union act section 33 (2) was amended by substituting the phrase “central labour organization” for the phrase “federation of trade unions” the intention was to weaken the cohesion of the trade unions.
Since time immemorial labour unrest has always occupied the front burner of criticisms and oppositions. in Nigeria whenever the Government through its policies makes life unbearable for its citizens.
Nevertheless most activities of the organized labour in the form of unrest to attack Government policies and programmes often result in underdevelopment and grounding of the economy culminating in loss of revenues and sundry economic activities. However, it is not implausible to aver that one of the greatest problems that result to labour unrest and consequently underdevelopment is Governmental policies and
programmes on certain National issues especially those that affect the labour unions across the Nation.
In the light of these, this research work is inspired out of the burning desire to interrogate the motive of the labour union in their activities through protest, strikes etc against certain Governmental policies and programmes through a critical analysis and alternative roadmap to labour unrest with a view to averting resultant and decay in Nigeria.
1.2 Statement of the Problem
Labour unrest remain one of the most glaring problems hindering the development of this great nation especially when Government tends to implement policies and programmes not favorably for the majority of the people in the society (country). This is because the labour unions, using the NLC (Nigeria Labour Congress) ad TUC (Trade Union Congress) as the umbrella bodies tends to
constitute parts of organization or union that keeps the country going through their daily activities. In order words, when there is labour unrest, the economy of the country tends to be disrupted and destabilized which is why whenever Government policies and programmes that are not favorable to labour are formulated, there is usually a mass protest and strikes that dislocates the economy as the civil servants who are very significant to the Government of the day also partake in the strike and protest by not going to work.
However, the study shall make a critical appraisal of some of the major cases (protest and strikes) by labour unions and also investigate their modus operandi, so as to River at the objectives of the study, in the quest of doing this, the following research question would serve as
- Are public policies responsible for labour unrest in Nigeria?
- Is underdevelopment a consequent of labour unrest in Nigeria?
- Can dialogue and collective bargaining curb labour unrest in Nigeria?
- Objectives of the Study
The broad objective of the study is to assess the consequences of labour unrest on Nigeria’s development.
Thus the specific objectives of the study are:
- To ascertain if public policies are responsible for labour unrest in Nigeria.
- To determine if underdevelopment is a consequence of labour unrest in Nigeria.
- To discover if dialogue and collective bargaining can curb labour union in Nigeria
- Literature Review
The literature review of this work is based on 2 concepts via-a-viz labour unrest and underdevelopment.
These concepts are social science concepts which of course lack clearly definite definition hence scholars see it from their own view point and encapsulated.
Firstly labour union according to Fagane (2009) is any combination whether temporary or permanent. According to him, its principal objectives are the regulation of the relationship between work-men and workmen or between masters and masters or the imposing of restrictive conditions on the conduct of any trade or business and also the provision and benefits of members.
However, labour union is important to note are the main power resource of working people. The power in this collectivity of workers tends to promote the resolution of a variety of problems faced by the workforce which help in Nation building.
Labour unrest according to Amesen Eric (2007) is a term used by employers or those generally in the business community to describe organizing the strike actions undertaken by labour unions especially where labour disputes become violent or where industrial actions which members of a workforce obstruct the normal process of business and generate industrial unrest are essayed.
Labour unrest could be defined as the disruption of the day to day labour activities that generates income both local and international In the country and makes the economy stagnant for a while due to the strike action and protest by labour unions in the process of facilitating the interest of their members endangered by Government policies unfavorable to them (Labour Unions). However unrest in organization and industrial establishment can be disruptive when the organizational goals are stressful to the health of industrial workers.
Again labour unrest can be defined as the inability of members in a role set are unable to reach an agreement on an issue concerned with the objective of interaction. There is hardly any gainsaying the fact that industrial conflict on labour unrest are realities of any economic system where workers and the management interact. Labour unrest seems to be more pronounced in public sector organization most especially. Anugwom and Ukaegbu (1998) argue that public union have substantial market power and are usually in a position to play a key role in the political process and its this unique positioning that make them conflict prone.
Dimension of Labour Unrest
Labour unrest is so closely related to loss of peace because like Ofube (2001) argues that unrest (conflict) is as central to life, because like we know, life without conflict is no life. Therefore labour unrest is not abnormal in any organization (private or public). Hence
in the public sector, workers are always disenchanted with the Government over its handling of workers welfare and the general penury facing the nation.
Anugwom (1997) views the dimension of labour unrest as a situation when the economic depression in the country as exposing workers to a high level of economic hardship. He further contends that the public sector workers especially have been faced by given economic realities and may have seen unrest as a way of breaking loose from the shackles of economic deprivation.
Okechukwu R. O. (2002) expresses his view in the labour unrest in Nigeria especially the June 2000 strike and argued that some Government policies that are unfavorable to the workers tend to generate the often strike action and protest leading to labour unrest.
Finally it’s important to understand here that when Government formulates policies not favorable to labour
unions, they adopt some strategies or dimensions leading to labour unrest in the country.
- Labour Unions threaten the Government by issuing ultimatum within which its demand will be met. Thus failure of the Government to oblige them may elicit strike or demonstration thereby leading to labour unrest.
- Propaganda using mass media and handbills is another dimension of labour unrest; here workers all over the federation are notified on the latest development and even the public.
demonstrations is another dimension of labour unrest which could be peaceful or violent.
In economics underdevelopment is when resources are not used to their full socio-economic potential, with the result that local development is slower in most cases than it should be. more so, it results from the complex
interplay of internal and external factors that allow less
developed countries only a lop-sided development
Effects of labour unrest and underdevelopment
- Underdeveloped countries have low reservoir of natural resources and as such any kind of labour unrest tends to destroy some of these resources in the country.
- Socio-economic inequality: This is another effect that propagates labour unrest in Nigeria that leads to underdevelopment.
- Low level of industrialization.
- An unconditional policy is another effect of labour unrest and underdevelopment that hinders development in Nigeria, because Government policy not favorable to this labour union across the federation tends to generate labour unrest.
Ezema (2007) contends that most labour union and workers are often very restless and confrontational in their approach to issues which affect them as a group such as not fulfilling some of the employment contracts and as such, workers result to anti-government posture which if care is not taken can lead to labour unrest or even tear the state apart.
The existing gap here is that Government always perceive the workers as lazy, uncooperative individuals, who always hold secret labour meetings and plan drastic actions against Government and any other organization they consider threat to their interest while on the other hand workers (labour unions) perceive the Government as exploiting them especially when they make policies concerning labour without labours consultations (Chukwu, 2008). It is this perceptual basis arising from the Government and the workers that sometimes serve as the “brewing pot” of labour unrest. Hence the Nation
tends to loose a great deal of financial and material
resources (Akereke, 2010).
- Significance of the Study
Essentially, every research is a quantum of knowledge; this study will therefore be of a theoretical significance to future researchers as it is going to enclose the identified questions. Also, it is going to add to the existing body of literature as it tends to extend the frontier of knowledge. The study will definitely put the icing on the case already existing literature of labour unrest and underdevelopment in Nigeria.
Thus its importance lies in the very fact that labour unrest is currently a prevailing cancaworm and it is very spontaneous and topical. However this work will in the long run guide the Government in the quest to quell further problems associated with labour unrest and underdevelopment in Nigeria in the nearest future.
1.6 Theoretical Framework
The relative deprivation frustration aggression theory will stand as the theoretical framework of this study Dollard (1939) postulates that the primary source of the human capacity for violence appears to be frustration aggression mechanism.
Thus according to him, anger induced by frustration is a motivating force that disposes man to aggression. Frustration is an interference with goal directed behavior. According to Gurr, “Relative Deprivation is a perceived discrepancy between relative deprivation and their value capabilities”.
Value expectations are the goods and conditions of life to which people believe they are rightfully entitled. Value capabilities are goals and conditions they think they are capable of attaining and maintaining given the social means available to them. Gurr also suggests some
variables that affect the intensity of emotional respond to
the perception of deprivation.
The first proposition is that the greater the extent of discrepancy the man sees between what they seek and what seems to be attainable, the greater their anger and consequence disposition to aggression.
The second proposition relates to oppositions “men who feel they have many ways to attain their pals are less likely to become angry when one is blocked than those who have very few alternatives.
The third general proposition is that the greater the intensity of men’s expectations, the greater their anger when they meet unexpected or increased resistance.
Gurr further states four (4) intervening variables in his quest to expatiate the Relative deprivation frustration model. Thus the legitimacy of the political regime in
which violence occurs, coercive potential
institutionalization and social structures which may condition the perception of deprivation.
However, in a related manner, James Davies attributed violent outbreak to the frustration that result from short term decline in achievement following a long term increase that generate expectation about continuing increase. Basically, a person thwarted in the attempt to reach a goal is made angry and likely to protest against the imputed sources of frustration.
Dowse and Hughes observes in social life, men comes to value many things, status, power, security, equality, freedom, wealth etc when they cannot achieve those values means loosing another, angry, dissatisfaction and in the cases aggression occur, Mayer (1976) argued in support that the normal tendency towards violence aggression or dispute is increasingly frustration desire. To him, when a goal presumably attractive two or more individuals is made available in such a way that it can be
obtained looser. Those frustrate actors in political system can become sponsors of things kidnapers or even cause political, economic or even labour unrest in the country.
Davies (1973) postulates that aggressive action required four (4) main steps namely: activation of demand, frustration of demand mental process of deciding how to overcome.
Thus it is important to note that various individuals or groups involved in political, religious or even labour unrest such as the Nigeria labour congress, (NLC), trade union congress (TUC), academic staff union of universities (ASUU) etc engage in peaceful protest and subsequent strike because they perceive a sense of injustice on the part of the Government from its policies.
This is often due to the fact their needs are not properly met, and as a result of this, they stoop to strike and protest which could induce violence from some individuals and the Government of the day sees it as a
rebellious act, hence the lost of popular consensus and legitimacy thereby causing loss of life and property and starvation in the country.
Accordingly Kerlinger (1977) a theory is a set of interrelated constructs propositions and concepts that presents a systematic view of phenomenon by specifying relations among variables with the purpose of explaining and predicting the phenomena. Thus having said these, among all the theory and paradigms drafted by various school of thoughts over the years, the focus therefore is on the labour unrest and underdevelopment, its impact and effects on the countries economy.
In accordance with the research questions and founded on empirical verification deduced from the research study hypotheses thus:
- Public policies are responsible for labour unrest in Nigeria.
- Underdevelopment appears to be a correspondence of labour unrest in Nigeria.
- Dialogue and collective bargaining seem to be a veritiable alternative to labour unrest in Nigeria
- Methods of Data Collection and Analysis
The method of data collection used in this research study is the secondary source which is also known as documentation due to the spontaneous nature of the issue under investigation. We gathered information from library, textbooks, articles, magazine, journals, internet services and printout etc which are relevant to the study. The framework of content analysis is what we adopted due to the fact that it will aid us in giving better appreciable acknowledgment to the study and make us knowledgeably acquainted to the subject under analysis.
- Scope and Limitations of the Study
The scope of this research work is quite wide and broad that it encompasses the investigation of “labour unrest and underdevelopment in Nigeria” An appraisal from
2000 – date. This is because of the spontaneous nature. The scope is hinged on what have been noted from time immemorial to present in the main sub-heading of this research work. Furthermore, notable reference though is on the already listed statement of problem and hypothesis which would be used in the continuation of the research work up till the point of arriving at the conclusion and preferred recommendations of this research work.
As regards to the limitation of this study, we would point out that there were indeed limited documented materials on the issue and the factors of it being timely in conjunction with financial impediments or constraints, time and numerous academic work in campus. However,
it was obvious that the prevailing unrest was at its peak at the time of this research.
- Definition of Terms
This term that have been carefully selected for definition in this research work are those that are related to the course of study and those terms which also have ambiguous meaning, here an attempt is made to give clarity on their usage in this research work.
Underdevelopment: Liberal and Marxist scholars contend underdevelopment in terms of retardation, primitivity and backwardness or simply the lack of development for which the later view it as a man made process while the former connotes it as an internal variables and not external factors, which is occasioned by national and internal milieu.
Labour Unrest: This is a term used by employers or those generally in the business community to describe organizing and strike action undertaken especially when
Government tends to implement policies not favorable to their members.
Labour Union: This are group of people who come together in line with their profession or career with the sole aim of protecting their interest through influencing Government policies through strike actions and protest.
Development: According to the liberal view implies change which “often follows a well ordered sequence and exhibits common characteristics across countries or what Michael Todaro calls series of successive stages of transformation.
Development according to the Marxist perspective is a dimensional process as Walter Rodney encapsulated that development. In human society is a many sided process.
Strikes: This is a refusal to work organized by a body of employees as a form of protest typically in an attempt to gain a concession or concessions. Thus it’s a work stoppage undertaken in support of a bargaining position or in protest of some aspect of a previous agreement or
proposal agreement between labour unions and the management or the Government.
Government: This is an institution rules and administration of state authority. Thus it’s a group of people that governs a state. It sets and administers public policy and exercises executive political and sovereign power through customs, institution and laws within a state.
A Government can be classified into many types: democracy, republic, monarchy, aristocracy dictatorship are just to mention but a few.
Protest: This is a statement or action expressing disapproval or objection to something or to affirm in a public or formal manner to declare solemnly to a vow.
Deregulation: This is the removal of government control from an industry or sector to allow for free and efficient market place. Thus it’s the reduction or elimination of government power in a particular industry usually enacted to create more competition within the industry.
Chapter Two: Public Policy and Labour Unrest in Nigeria
- Economic Reforms and Retrenchment of Workers
With a population of 160 million people, that makes Nigeria the most populous country in Africa and a GDP second only to South Africa, yet following several years of military rule and poor economic management, Nigeria experienced a prolonged period of economic stagnation, rising poverty levels, and the decline of its public institutions. Thus by most measures human development indicators in Nigeria were comparable to that of other least developed countries while widespread corruption undermined the effectiveness of various public expenditure programs.
However, following years of economic stagnation Nigeria embarked on a comprehensive economic reform program during Obasanjo’s second tenure. The program was
based on National Economic Empowerment and
Development Strategy (NEEDS) which focused on four (4)
major areas aimed at improving:
- macro-Economic Environment
- Pursuing Structural Reforms
- Strengthening Public Expenditure Management
- Implementing Institutional and Governance Reforms.
Though in previous decades, there were severe infrastructural bottlenecks that hindered private sector activities. In particular the poor condition of the power sector prior to the economic reform illustrated the severity of Nigeria’s infrastructural deficit.
In a nutshell, the economic reform called NEEDs (National Economic Empowerment Development Strategy) embarked by President Olusegun Obasanjo’s second tenure was complemented by individual state economic empowerment and development strategy (SEEDS) which
were prepared by all 36 Nigerian states and the FCT (Federal Capital Territory).
The NEEDs program emphasized the importance of private sector development to support wealth creation and poverty reduction in the country which is evident in the four major area’s enumerated above. Furthermore, for proper understanding, we shall provide a brief background prior to the reform and subsequently examine the reform measures and program made so far.
- Macro-Economic Reform:
Nigeria’s economic performance in the last decade prior to economic reforms was generally poor. Over the 1992-2002 annual GDP growth had averaged about 2.5 percent with an estimated population growth of 2.80 percent per annum. This implied a contraction. In per capital G.D.P over the years that had resulted in a deterioration of living standards for most citizens.
Thus a major challenge for the Nigerian economy was its macro-economic volatility driven largely by External terms of trade stocks and the country’s large reliance on oil export earnings. By some measures, Nigeria’s economy ranked among the most volatile in the world for the period 1960-2000 (World Bank, 2005).
Macro-Economic Reform Measures
The central thrust of the macro-economic reform was to stabilize the Nigerian economy to improve budgetary planning execution and provide platform for sustained economic diversification and non-oil growth. A major challenge was to de-link public expenditure from Oil Revenue Earning by introducing an appropriate Fiscal Rule.
- Structural Reform
A broad range of structural reform was also needed to improve the domestic business climate and enhance competitiveness to deregulate and reduce Government
activity in various economic sectors and in an attempt in addressing these; four (4) major areas were looked into viz: privatization, civil service, trade policy and the banking sector.
(i). Privatization: Poor to the reform, the Nigerian public sector was underperforming and imposed a significant financial drain on the treasury within the public sector. Thus the underperforming of state owned enterprise was particularly costly. Large public investment in state owned enterprise in previous decade had yielded very few concrete benefits.
The Privatization Reform Measures
The privatization of some state owned enterprise as well as deregulation of Government activities in some sectors
were therefore needed to improve the efficiency of these enterprise to curb corruption and also reduce the financial cost to the Federal Government and by and large between 1999 – 2006 about 116 enterprise were privatized.
- Civil Service: This was also over sized and poorly remunerated, resulting in poor service delivery, rapid public sector, recruitments under military administration had resulted in an oversized and under skilled work force in which employers often did not have the appropriate technical skills needed for the assignment.
The civil servants generally received low pay and several fringe benefits such as free housing, free vehicles and various other allowances that often led to waste and misuse of Government resources, weak management and oversight also meant that there were problems with what workers on the Government payroll.
The Civil Service Reform Measures
This began with five (5) pilot ministries and subsequently was extended to nine (9) MDAS (ministries, Department, and Agencies) in each internal consultation were performed while verification exercise were conducted to update personnel records and payroll data organizational structures for the reforming ministries were reviewed and rationalized.
- Trade Policy Reform
Prior to the economic reform, Nigeria’s trade regime was viewed as complex and restrictive following the SAP (structural adjustment program) in 1988 a seven (7) year
tariff schedule was adopted which significantly reduced tariff averages.
Trade Policy Reform Measures
Nigeria liberalized its import tariff regime by adopting the common external tariff (EEF) of ECOWAS. This was in keeping with the Government commitment to simplify the
tariff structure and improve the transparency and predictability of Nigeria’s trade policies.
(IV) Banking Sector Reform
Prior to the reform, the Nigerian Banking sector was weak and fragmented, often financing short term arbitrage opportunities rather than productive private investment. The roots of the financing sector weakness could be traced to its poorly managed liberalization during SAP of the 1980s. The Banking sector was repressed before the SAP largely because of the imposition of interest rate that resulted in negative interest rate. However, many Banks conducted only limited lending to the private sector while engaging in a more lucrative short term arbitrage foreign exchange
:Round tripping” activities. Consolidation and improved supervision of the sector were needed to strengthen the banking sector.
Banking Sector Reform Measures
To strengthen the Banking sector and improve availability of domestic credit to the private sector, a bank consolidation exercise was launched in middle 2004. The CBN (Central Bank of Nigeria) requested all deposit banks to raise their minimum capital base from about 15 million dollars to 192 million dollars. Thus by the end of 2005, Bank failing to meet the new requirement were expected to merge or else have their license revoked. This was however, initiated to strengthen the industry.
- Institutional and Governance Reform
A Bane of Nigeria existence since the oil boom of the 1970s has been the reputation for corruption largely. Corruption and poor Governance affected growth and public service delivery in Nigeria in various ways. Corruption distorts the climate from doing business and serves as a tax on private investment. In corrupt
environment resource for human capital and other needed investment such as infrastructure, health and education are often diverted which usually occur in various ways.
Institutional and Governance Reform Measures
Public procurement following an extension review of public procurement system. The Government introduced a value for money audit or due process mechanism in public contracts. This promoted an open tender process with competition bidding for Government contracts. With this, notable improvement in the efficiency of capital spending. The federal government saved over 200 Billion Naira since 2001 in the form of reduction from inflation contract process.
Retrenchment of Workers
The retrenchment of workers was introduced in Nigeria by the military Government few months after the overthrow of the civilian administration at the close of
- The retrenchment of workers was regarded as one of the short term measures to resuscitate the depressed economy through the reduction of overhead cost.
Paradoxically mass retrenchment of workers has brought about devastating side effects such as insidious inflammation of psychosocial problems. However, the retrenchment effect has been mostly experienced by ethnic minorities, the poor and less educated Nigerians. A sample of 500 retrenched workers has revealed a variety of devastating problems such as deteriorating self esteem general instability stomach, ulcers, a tendency to commit crime, high blood pressures and heart disease. Financial emaciation and depression.
The retrenchment procedure as laid down in the labour relation act (LRA) must be followed properly and in good faith by the employer.
Finally, most Government economic reforms especially since Nigeria became a democratic state have seen or
witnessed the retrenchment of workers such as the privatization of public enterprise, for instance NEPA which is now called PHCN (Power Holding Company of Nigeria etc) These economic reform by the Government that leads to the retrenchment of workers tends to bring poverty to Nigerians because in Nigeria today, there are too many people chasing too few jobs.
2.2 Non Sustainable Minimum Wage and Welfare
Minimum wage may be defined as the rate of pay fixed either by a collective bargaining agreement or by Government enactment as the lowest wage payable to specified categories of employees. On the other hand, it would be understood to mean the minimum sum payable to a worker for work performed or services rendered within a given period, whether calculated on the basis of time or output which may not be reduced either by individual or collective agreement which is guaranteed by
law and which may be fixed in such a way as to cover the minimum needs of the workers and his family in the light of National Economic and social condition.
Over the last decade the issues of non sustainable minimum wage and welfare package have being the front burner and National issues in the country.
Earlier in 1967 the international labour organization (ILO) made analysis of what minimum wage and their analysis can be categorized into 3 (three) basIc ideas. Viz;
- According to the ILO (International Labour Organization) minimum wage is the wage considered sufficient to satisfy the vital necessities of food, clothing, housing, education and the recreation of the worker taking into account the economic and cultural development of any country.
- Minimum wage represents the lowest level of remuneration permitted in law or fact, whatever
the method of remuneration or qualification of
- Minimum wage is the wage which in each country has the force of law and which is
enforceable under threat of penal or the appropriate sanction.
Essentially the establishment of minimum wage is to ensure that the workers and in most cases their families receive basic minimum which will enable them to meet their needs and those of their families. However, policies initiated to implement the minimum wage are aimed at improving the welfare package (material condition) of workers and guaranteeing them a basic minimum standard of living which is compatible with human dignity.
Going down memory Lane, the first minimum wage law was enacted by the Government of New Zealand in 1894, In Australia 1896. They established wage boards on
which workers and employers were represented in equal number with the power to fix minimum wage enforceable on the employer.
In Nigeria as it concerns us, arising mainly from the fact that the Government is both the regulator and the largest employers of labour, the actions of Government in the area of minimum wage and welfare package for labour are usually very fundamental, and as a result, the history of minimum wage and welfare package cannot be separated from the history of public service wage negotiation and increment. For instance in 1943, the wage fixing and registration ordinance (No. 40 of 1943) had come into force establishing wage board modeled after the British (colonial master). In 1973 the Federal Government enacted the wage board and industrial council act which empowered the minister of labour to set the machinery for fixing minimum wage and
condition services for both the public and private enterprise.
The minimum wage act was first passed in Nigeria in 1981 which gave birth to national minimum wage act of 1981, which prescribed minimum wage of N125 for labour per month, but was raised in years later to N250 in 1990 and later raised again in 2000 that led to the national minimum wage amendment act of 2000 which prescribed N500 per month. The 2000 minimum wage amendment act was further amended in 2010 based on the recommendation of justice Alfa Belgore led Tripartite committee of National minimum wage.
The national minimum wage rate in Nigeria is applied to every worker (private, public civil servants) or individual who has entered into work under contacts for manual labour. Thus for emphasis the concept of minimum wage means minimum monthly salaries payable to workers as
provided by the subsisting minimum wage legislation which could be determined by collective agreement. From the brief background of minimum wage as aforementioned, we can argue that the absence of minimum wage policy, some workers tend to be subjected to such a terrible low welfare package and as such, their ability to discharge their duties and responsibility to their family, society and even themselves would be in serious jeopardy.
Minimum wage should be adjusted regularly to maintain the purchasing power of affected workers in the face of price increase and avoid large occasional stocks to the economy, because the welfare package of workers critically depends on both their wages and the prices they face. Thus in these contract, the sharply increase in food and oil prices and the high inflation forecast for 2008 and 2009 swift adjustment in minimum wage is paramount.
Accordingly Hon. Justice S.M.A. Belgore, the former chief
justice in the wake of the amended 2011 minimum wage
act committee headed by him:
The committee met severally and consulted widely, we took cognizance of the need to ensure that the outcome of the exercise must be growth propelled in terms of GDP growth rate; we also considered its capacity to promoting rapid socio-economic transformation of the country, which will not lead to inflation spiral. Our objective is armed at alleviating poverty in the country as well as maintaining macro-economic stability for the sole purpose of worker welfare.
Essentially Justice S.M.A Belgore’s committee tried to
make the National Assembly under the need and
importance for adequate and increase in the welfare
package of workers in his report.
Consequently, based on these negotiations of
stakeholders, the following were proposed by justice
Belgore’s led committee and forwarded to the secretary to the Government of the federation viz:
(i). A National minimum wage of N1800 per month for all established in the private and public enterprise employing 50 workers and above.
- An upward review of the sanction that would serve as a deterrent to would be violators of the new minimum wage.
- The committee also recommended that section 8 of the principal act, which prescribes a firm not exceeding N500 or imprisonment for a term not exceeding three (3) month or both be amended to a fine not exceeding N100,000 or to imprisonment for a term not exceeding 6 month or both fine and imprisonment and recommended the amendment of section 3 of the principal act, which prescribes a fine not exceeding N100 and in the case of continuing offence, day a fine not exceeding N10 for
each day during which the offence continues “be read instead“ a fine not exceeding N50,000 and in the case of continues offence to a fine not exceeding N10,000 for each day which the offence continues.
- A more frequent review period not exceeding 5 year to be carried out by a statutory tripartite committee that would be appointed from time to time by the president.
- That the extant National minimum wage act of
1981, 1990 and 2000 be repealed and replaced with a new act to be enacted.
Thus the Belgore’s committee recommendation was accompanied by a draft new National minimum wage Bill of 2010 for onward transmission to the National Assembly.
Commenting on the effectiveness of the proposed enforcement in the minimum wage Comrade Peter Esele president of the Trade Union Congress (TUC) whom is
also a member of the tripartite committee on National
Assembly Wage stated:
For the first time, we want to make it a law that any minimum wage divided at the federal level will be binding for every employer of labour in Nigeria. It should be made law so that we can use it in holding any state, companies and establishment liable for defaulting to pay.
In reaction to the new proposed minimum wage and
welfare package recommended by the Belgore’s led
committee and comments by the NLC and TUC
spokesperson. The Federal Government affirmed that is
not possible to immediately pay the proposed N18,000
minimum wage requested by the Nigeria Labour
Congress (NLC) and recommendation by the Justice
Belgore’s led committee.
President Goodluck Ebele Jonathan on the 6th of
November 2010 (Nations Newspaper) urged the NLC and
TUC organized labour to tow the line of reconciliation by
shelving the proposed strike. Because the labour union threatened to embark on a 3 day strike action should the new National Minimum wage is not implemented. President Goodluck Jonathan further emphasized that the Government needs to consult with the National Assembly and the council of state before the impasse could be resolved. He (President Jonathan) further explained that although no worker in the employ of the Federal Government earns less than N17, 000, but its paramount to consider how the private sector employers will cope with the new minimum wage pay if implemented.
Stakeholders eared their view that the peaceful manner in which the negotiation was done and concluded is commendable and also shows the understanding and practice of the parties especially the workers. They advice that it should be reciprocated by Government and the employers by implementing it immediately not
withstanding the fact that the assembly is in process of amending the national minimum wage of 2000 to give legal backing to the committee’s recommendation.
The National Assembly was therefore set to address the issue of minimum wage and welfare packages of workers even though there were challenges.
Challenges to Non-Sustainable Minimum Wage and
- Delay in the passage of the 2010 minimum Wage Bill into law was one factor militating against the minimum wage of workers and their welfare package of both private and public enterprise. Thus commenting on the Delay;
Comrade Issa Aremu notes that:
With respect to the new minimum wage, the Federal Government must show the same will and power that made speedy appropriation of supplementary budget of N87 Billion For INEC possible and make provision for the new negotiated fake possible in 2011 budget for the public
sector workers and also government must direct the private sector employers to negotiate with their workers with a view of implementing the new minimum wage.
Because according to the labour union the seeming
silence and delay is worrisome and thus generating some
uneasy atmosphere in the labour cycle.
- Labour Market Situation
The situation is such that there are too many people chasing too few jobs. Thus the level of unemployment and poverty in Nigeria today is unprecedented jobs lost occasioned by
- The global economic meltdown
- The relocation of companies from Niger Delta to other Regions because of the Niger Delta security crisis.
- The Relocation of companies from Nigeria to neighboring countries because of the hydra headed power sector problems, the prevalent
multiple taxation, security challenges, corruption, terrible conditions of basis infrastructure etc.
Consequently the National Minimum Wage Bill was signed on March 23rd 2010, by the president yet some state governors voiced their unwillingness in paying the new national minimum wage for instance; the former state governor of Lagos state, Ahmed Bola Tinubu said his administration was considering staff rationalization as the way out for the wage crises, in reaction TUC threatened to paralyze business activities if states fails to ensure compliance.
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