Economic stability at risk as labour relations collapse, NECA

By Victor Ahiuma-Young

The Nigeria Employers’ Consultative Association, NECA, has warned that Nigeria’s economic stability and national productivity were under serious threat due to the steady collapse of the country’s industrial relations system, citing institutional decay, weak law enforcement, and persistent disregard for due process by both employers and labour actors.

In a detailed policy paper, the Director-General of NECA and member of the Governing Body of the International Labour Organisation, ILO, Mr Adewale-Smatt Oyerinde, painted a grim picture of the state of industrial relations in Nigeria, describing it as “complex, crisis-prone, and dangerously fragile.”

Oyerinde said: “Nigeria’s industrial relations system stands at a critical crossroads. Though the framework for managing employer–employee relations has evolved through legislation, collective bargaining, and tripartite dialogue, persistent challenges, weak enforcement of labour laws, politicisation of union activities, and ineffective dispute resolution—continue to threaten industrial harmony and productivity.”

Tracing the historical evolution of the system, he explained that Nigeria’s industrial relations structure was modeled after the British tripartite system involving government, employers, and labour, with a mix of voluntarism and state intervention.

However, he noted that decades of poor governance, economic instability, and policy inconsistency have eroded its foundation.

According to him, “Institutions like the Federal Ministry of Labour and Employment, the Industrial Arbitration Panel, and the National Industrial Court of Nigeria are the backbone of our industrial relations system, yet their authority is waning. Frequent, non-compliance with judgments and the bypassing of due process erode judicial authority and foster impunity, turning manageable disagreements into national crises.”

Oyerinde warned that the situation has been compounded by economic pressures such as the removal of fuel subsidies and high inflation, which have severely eroded workers’ purchasing power and made wage negotiations more contentious.

The NECA DG explained that “Macroeconomic reforms, particularly the removal of fuel subsidies, have placed immense strain on workers and employers alike. High inflation has drastically reduced real wages, while the focus of labour unions has shifted from enterprise-level bargaining to national protests over economic policies. This blurs the line between industrial relations and political activism.”

He also decried what he called “sectoral chaos where frequent strikes in essential services—such as health, education, and power—pose grave risks to national stability.

“Our industrial relations system is inconsistent—highly regulated in some sectors but completely unregulated in others, particularly in the informal and gig economies.

“The result is growing fragmentation, union radicalization, and rising militancy driven by economic hardship and declining worker welfare.

“The government must demonstrate political will to ensure full compliance with Industrial Arbitration Panel and National Industrial Court judgments.

“Failure to do so breeds chaos and undermines lawful dispute resolution. We must also professionalize and adequately fund mediation and conciliation services in the Ministry of Labour to resolve disputes early and effectively.

“Wage negotiations must begin to reflect productivity realities, not just inflationary pressures. Savings from subsidy reforms should be directed toward social protection in transport, healthcare, food, and education to ease the burden on workers and their families.”

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