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Employee Compensation Bill not necessary, NAICOM

Patience SAGHANA
The National Insurance Commission (NAICOM) has said that the Employee Compensation Bill is not necessary as the commission alleged that the provisions in the bill are not in the interest of the general public.


Mr Fola Daniel, Commissioner for Insurance said the supervisory body had carefully gone through the content of the bill and concluded that “The Employee Compensation Bill (ECB) as presented to the National Assembly, and having weighed the relevant surrounding circumstances, it is the considered view of the National Insurance Commission (NAICOM), that the bill is not really necessary. The commission gave two major reasons for its conclusion on the bill.

The primary reason, according to NAICOM, is that we have an existing legislation which provision is adequate for our purpose whilst the other reason the insurance regulator adduced, is that the bill as proposed has several provisions which are not in accord with good reasoning.

“At the moment, the NAICOM has carried out a review of the entire insurance laws including the existing Workmen’s Compensation Act, and had repackaged same as a consolidating legislation in line with international best practices. The body of the legislation is presently with the Executive for onward transmission to the National Assembly”.
Besides that the Insurance commission also believed that the NSITF lacked the capacity to contain the bureaucratic challenges inherent in the payment administration of the employees’ dependants.

A memorandum presented to the National Assembly by NAICOM said that it had carefully considered the Employee Compensation bill, and having weighed the relevant surrounding circumstances, it concluded that the bill was not necessary.

The commission said that it was very much alive to its responsibility of enforcing the existing Workmen‘s Compensation Act. It, however, regretted “that its efforts had consistently been marred by the unjustifiable failure and refusal by the Ministry of Labour to make regulations for enforcing the provisions of the Act.

NAICOM pointed out that Section 40 (1) of the Act provides that every employer to whom this section is made applicable shall, as from the commencement of any regulations made under subsection (2) of this section, insure every workman employed by him against injury or death arising out of or in the course of his employment.”
It explained further that “Section 40 (20) of the Act states that the Minister in charge of Labour may, after consultation with such persons as he may determine, make regulation prescribing anything failing to be prescribed for the due enforcement of the section including the categories of employers to whom the section is to apply.

For more than 20 years now, NAICOM said, the Ministry of Labour had failed to make the relevant regulations.
”The clear implication of this failure to make regulation is that while workmen‘s compensation is compulsory by virtue of section 3 (1) of the Act, workmen‘s compensation insurance is not compulsory, and therein lies the helplessness of the Commission.”

The commission suggested that a clear solution to this problem would be to make the relevant regulations, adding that the real aim of the Act may hardly be realised unless the Act‘s provision is made applicable to every employer

It said, ”The Bill provides that compensation shall be calculated as a percentage of the employee‘s monthly remuneration and payable monthly (See section 21). This is unlike the existing Workmen‘s Compensation Act which, provides for payment of bulk sum compensation of 42 months‘ earnings for death, and 54 months‘ earnings for Permanent total incapacity.”

It observed that the proposed bill entails that the employee or his dependant must notify the employer of any circumstance that may give rise to a claim under the scheme within seven days of its happening of which failure to give the relevant notice constitutes a bar to a claim for compensation.


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