FG, OPS on collision course over NSITF levy hike

…Say increase may lead to job losses, factory closures

By Victor Ahiuma-Young

Indications emerged, yesterday, that the Federal Government and the Organised Private Sector, OPS, may be on collision course  over the proposed increase in the levy employers pay to the Nigeria Social Insurance Trust Fund, NSITF, under the Employees’ Compensation Scheme, ECS.

Currently, under the Employees’ Compensation Act, ECA, 2010, employers pay one per cent of the total emoluments of employees’ monthly payroll as a compensation levy to the scheme.

Although the proposed rate of increase has not been made public, the OPS warned that any further increase could lead to job losses and factory closures.

Under ECA 2010, the one per cent contribution from employees’ total monthly payroll to the Employees’ Compensation Fund, ECF, is used by the NSITF to pay compensation, death benefits, rehabilitation costs, financial support, and medical assistance to employees injured in the course of work, among other mandates.

Speaking at the Safe Workplace Intervention Project, SWIP, yearly stakeholders’ interactive enlightenment forum and awards ceremony, organised by the Ministry of Labour and Employment, the NSITF, and Nigeria Employers’ Consultative Association, NECA, Minister of State for Labour and Employment, Nkeiruka Onyejeocha, called for a review of compensation.

She also expressed concern over the “peanuts” paid to families whose beneficiaries died in the course of workplace accidents.

The minister said: “A safe workplace is not optional; it is a legal requirement. Going forward, there is also need to review our legal framework to ensure that it adequately reflects the value of workers’ lives when accidents result in fatalities.

“I strongly advocate a review of compensation because, as it stands, when workers die, their families are often given what can only be described as inadequate compensation. This narrative must change. Employers must comply with established standards, and this is what we should collectively uphold and celebrate.

“The Safe Workplace Intervention Project, SWIP, is, therefore, both timely and strategic. By combining awareness, compliance, support, and recognition of excellence, SWIP helps to shift the mindset of employers from viewing workplace safety as a cost to recognising it as an investment in people.

‘’I, therefore, urge employers to fully comply with the provisions of the Employees’ Compensation Act through prompt registration, regular remittance of contributions, and sustained investment in safety systems. I also encourage workers to remain safety-conscious and exercise their rights responsibly under the law.”

However, speaking on behalf of employers on the topic, ECA 2010 Compliance and Claims: Employer Challenges and the Way Forward, Director of Corporate Services, Seplat Energy Plc, Dr. Steve Ojeh, warned about the implications of such an increase.

He said it could lead to job losses, investment challenges, expansion of payroll items, limited performance-based incentives, and factory closures, among others.

Represented by the Senior Manager, Industrial Relations, Seplat Energy Plc, Ken Okoroh, Ojeh highlighted challenges employers were currently facing, including economic pressures, efficiency gaps, multiplicity of levies, and limited utilisation of benefits, among others.

He lamented that the OPS was already overwhelmed by over 75 taxes and levies, saying “we would have preferred that the rate be reduced, but it should be left where it is rather than increased.”

Also speaking, the Minister of Labour and Employment, Muhammadu Dingyadi, called for better understanding among organised labour, NECA, and the NSITF to advance workplace safety for the benefit of workers, productivity, and the country at large.

He assured of the government’s commitment to workplace safety and urged employers and organisations to raise their standards in line with best practices.

This, he said, would make Nigerian workers safer.

Speaking on behalf of organised labour, the National Treasurer of Nigeria Labour Congress, NLC, Aliyu Haruna, noted:  “The Employees’ Compensation Act 2010 remains a landmark reform in Nigeria’s labour and social protection framework.

“To ensure the Act fulfils its intended purpose, a coordinated and sustained approach is required—one that prioritises awareness creation, digitisation of claims processes, expansion of coverage, stronger enforcement, institutional capacity building, and firm political commitment at the federal, state, and local government levels.

“Strengthening the ECA 2010 will not only reduce the socio-economic burden of workplace injuries and fatalities but also promote a national culture of safety, accountability, and social justice. Ultimately, the success of the Act depends on the collective commitment of government, employers, trade unions, and workers themselves.”

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