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Decent work agenda for Nigerian workers, the goal of employee’s compensation bill

By  Olaseni Akintola-Bello
The Employees’ Compensation Bill (ECB) which has passed its second reading in the National Assembly and currently the subject of public hearing – represents an attempt by the Federal Government to promote the ‘decent work agenda’ which has been actively promoted by the International Labour Organization (ILO) since 1999.

David Mark, Senate President

The Employees Compensation Bill is a gender-neutral alternative to the “Workmen’s Compensation Act of 1987″. It is a form of Social Security Insurance that provides income replacement to workers who are absent from work resulting from workplace related illness or injury. In return, employees are not permitted to sue their employers for injuries or illnesses suffered in the course of their employment.

The essence of Employees’ Compensation Scheme is to reduce litigation. In general, a statutory Employees’ Compensation System strikes a compromise, guaranteeing workers medical care and payment for lost time on a no-fault basis. Under the ECB, compensation for claims is certain and the procedure for claims payment is made so easy that the courts play little or no role.

A Statutory Employees’ Compensation System provides for prompt payment of medical, rehabilitation, and lost time costs to injured employees while placing limits on the costs of the system for employers.

This prompt or automatic payment is paid from the insurance or contributions of employers to be based on their payroll, industry sector and history of injuries (or lack thereof) in their workplace. The ECB provides for a government-run employees’ compensation system that provides income replacement to workers absent from work resulting from workplace related illness or injury. It also provides rehabilitation, counseling and health care or medical services to the injured beneficiaries.

Participation is generally compulsory for all employers in the public and private sectors.The ILO, over the past 80 years has adopted 185 Conventions and 195 Recommendations covering all the issues of interests to workers and employees, governments and students of social security protection.

These have included matters relating to employment, wages, hours and conditions of work, social security, industrial relations, multinational enterprises, health and safety at work, and many others. The ‘decent work’ concept is an attempt by ILO to capture in a simple and succinct manner, the essence of ILO’s mission and areas of work.

A component of decent work is employment. It refers to all kinds of work – self employment, wage employment and work from home. It refers to full-time, part-time and casual work and to work done by women, men and children. For decent work to obtain, certain conditions must be satisfied. From the perspective of Employees’ Compensation Bill, workers should be protected against accidents, unhealthy and dangerous working conditions, and excessively long hours of work. An essential minimum of social security also forms part of decent work.

Work that meets the above conditions is a source of dignity, satisfaction and fulfillment to workers. It motivates them to give their best efforts and furnishes a sense of participation in matters affecting their livelihoods. It also contributes to harmonious working relations, political stability and the strengthening of democracy.

Social Protection
Social protection under the decent work agenda relates to contingencies such as sickness, accidents, death of the principal breadwinner, unemployment, disability, old age and needs of vulnerable groups such as orphaned or abandoned children and widows.

The purpose is to provide security against a variety of contingencies and vulnerabilities. Social protection policies thus aim to reduce suffering, anxiety, insecurity and material deprivation. Promoting decent work is an excellent way of alleviating poverty in a situation in which most of the poor have nothing to sell but their labour.

The dynamics of poverty show that an individual can be vulnerable to poverty due to illness in the household, accident, loss of job due to illness in the household, accident, loss of job leading to destitution or macroeconomic shocks, and death of the breadwinner.

Social Protection, Social Insurance and Social Risk Management under ECB
The ECB can be described as a social protection system and includes social insurance and can serve as an instrument for social risk management. As a social protection programme, it focuses on the employment-related forms of insecurity, e.g occupational hazards and work-related conditions. It also provides an economic safety net. As a social insurance programme, it helps households insure themselves against sudden reductions in income. The ECB contains provisions for the payment of compensation for disability, death of the main provider and for sickness.

As a social risk management instrument, the ECB attempts to minimize the impact of exposure to uninsured risk by employees and lower their vulnerability. As a mitigation strategy, ECB, with an inbuilt insurance, will help individuals to reduce the impact of a future risky event.

This type of programme can provide an insurance function to help households avoid taking ex-ante risk management decisions that lower their incomes. ECB also serves as a coping strategy by relieving the impact of risk once it has occurred.

Reduce Incidence of Negative Coping Strategies
When individuals or households have not saved enough to handle repeated or catastrophic risks, the government has an important role to play by providing transfers. When families, especially poor families, face reduction in income or assets, they may resort to costly coping strategies that perpetuate poverty, such as selling their most productive assets.

There is clear evidence that families that suffer from short-term shocks may be forced to cut back on the feeding or schooling of their children; deterioration in nutritional or health status is found more often than withdrawals from school. The proposed bill can help reduce the incidence of negative coping strategies.

ECB attempts to promote ILO’s decent work agenda with respect to two, namely employment and social protection, of the four components of the decent work paradigm: There are some key aspects of the employment domain of decent work agenda not directly addressed by the ECB. These are (i) the opportunities for all to find any kind of work both in the formal and informal sectors and (ii) freedom of choice of employment, and productive work, providing adequate incomes and social dialogue (freedom of association, protection from all forms of discrimination, bipartite free collective bargaining). Nonetheless, it protects the employment related forms of insecurity e.g occupational hazards and work-related conditions – an important aspect of decent work agenda.

A Landmark Legislation
ECB represents an important landmark in labour policies and legislation in Nigeria. It qualifies to be labeled an Employee’s Charter but its scope is somehow limited. It does not include the informal sector which is the most critical sector in a developing economy as Nigeria. The formal sector is small and dominated by public service.

In formal sector, workers have steady and reasonably high incomes, long planning horizons, and discretionary resources that can be tapped for social insurance schemes. However, this is not the case for the vast majority of those in the informal sector. In Nigeria, as is true of most developing nations, large number of poor people make their living from agriculture or informal sector activities from which earnings are irregular.

The predominance of self-employed and informal sector workers means that a form of social protection programme needs to be extended to the informal sector. This means the ECB must make provision for the informal sector to make the legislation inclusive, if the objective is to advance the wider decent work objective.

The security of life, livelihood and citizenship needs should be regarded as a basic right of all individuals in all societies. The argument about the resource implications of such a right is myopic. The protected worker would be more productive and profitable, which makes social protection a good investment.

As more potent argument is the “the security and protection of capital and wealth could be jeopardized by the poverty and vulnerability of the poor.

Social protection policies are therefore also investments in political stability”. The ECB fits in within the broader policy agenda for decent work, poverty reduction and risk management. The ECB heralds a new dawn for Nigerian workers in the formal sector.

The ECB does not adequately address the gender dimensions of employment and social protection. It must seek to adapt working conditions to the specific needs of women workers. The ECB must include provisions, which are women-friendly.


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