By VICTOR AHIUMA-YOUNG

AS the tension in the power sector and fear of a nationwide industrial action over the Federal Government deployment of armed soldiers to Power Holding Company of Nigeria, PHCN’s, installations and unresolved labour issues ahead of government privatization of PHCN, Senior Staff Association of Electricity and Allied Companies, SSAEAC, has petitioned Chairman of the Senate Committee on Power and his House of Representatives counterpart, stating its side in the quagmire.

SSAEAC in a 7-page petition by President-General and General Secretary of SSAEAC, Bede Opara and Abiodun Ogunsegha and copied the Minister of Labour and Productivity, lamented that after 15 months of negotiation, about 95% payments of all outstanding monetization arrears of PHCN workers, renegotiation of outstanding 137% salary increase of 2009 leading to a compromise increase of 50% out of the 137% as final settlement of that outstanding agreement implementation and regularization of ‘casuals’ in the employment of PHCN employment were partially achieved. According to the petition, severance pay, gratuity and superannuation fund are three major unresolved issues.

Severance Pay: SSAEAC explained that severance was compensation for involuntary and sudden loss of job and the Condition of Service of PHCN (2010 edition) provided that Severance should be negotiated. The Association noted that “We submitted to negotiations based on this provision and the government proposed on last day of negotiation payment of 20% of sum of gratuity and pensions.

Operating condition of service

The unions submitted that they would only discuss this 20% proposal when the component of gratuity and pension are determined using the operating Condition of Service. This is a provision of Condition of Service which requires that both sides must give notice or pay compensation of specific issue of notice to the other party. In this case, all workers are entitled to 3 months salary in-lieu of notice, payable as part of the terminal benefits.

*Comrade Bede Opara and Abiodun Ogunsegha, President-General and General Secretary of SSAEAC, at a briefing in Lagos.

Gratuity: On gratuity SSAEAC said it “is end-of-service (Terminal) benefit provided for in the PHCN Condition of Service (2010 Edition). It is graduated for payment in accordance with employees’ length of service and rank. It is a worldwide practice payable to reward long service of employees who were not relieved of employment due by dismissal.

The Unions were vehement in requesting for the payment of gratuity to all staff at this point of involuntary disengagement. The union therefore finds it preposterous that government claims that Pension Reform Act 2004 does not permit gratuity payment as in PHCN Condition of Service. Please note that the Act is Pension Reform Act and not Pension and Gratuity Reform Act.”

PENSION; the NEPA/PHCN Superannuation fund: According to the association, “since the inception of NEPA, it established the superannuation fund as a contributory Pension Scheme for the employees. Over time 25% of Staff pay was earmarked  to be paid by the Management of the Authority into the Fund, as provision for retirement benefits.

This Fund is managed by a Board of Trustees where Management representative is chairman of Board. With the Superannuation Fund there was no problem with payments to retirees even those who retired recently were paid their entitlements as defined by the Condition of Service. At a point the Government depended on this Fund to pay salaries of its personnel.

Superannuation Fund Problem: Giving detail of problems of the superannuation fund, the petition said “the Scheme was under-funded by Management as the appropriate money earmarked for remittance to the Fund as withheld from staff were not paid but Management at different times only remitted amounts grossly less than the expected sum to the Fund.

Among other reasons, the shortage of fund accruable to the Fund could be responsible for the inadequate funding of the Superannuation due to the followings: The Authority/PHCN continued to witness inadequate internally generated revenue mainly because of unrealistic low tariff. This is because Government restricted PHCN then from increasing tariff despite the push by both Management of PHCN and the Labour Unions. Government claimed supply of electricity was a social service.”

“The cost of production of power was high relative to selling price of Power. There were several increases in the purchase price of gas from Independent Power Producers, IPP, but these were never reflected on selling price of Power. For instance at a time the unit was N14.00 from IPP, PHCN was made to sell same at N6.00 Therefore internally generated revenue was no longer adequate to sustain constant remittance to Superannuation Fund more so 60% of PHCN Power Stations are gas fired without commensurate tariff to recover cost of gas and other inputs.

Several increases in price of petrol and gas heavily weighed on the cost of operations in PHCN. It was in realization of the pitiable condition that the Government actions inflicted on the flow of money into the Superannuation Fund that the Government of Chief Olusegun Obasanjo instructed that non-core assets of PHCN to be released to the Fund, to meet its funding obligations.”

“Since Government interfered with and prevented PHCN to generate enough fund to meet its obligations including remittance to Superannuation Fund, it is logical for Government to make up for the loss revenue and fund fully the underpayment of the Superannuation Fund.

The Superannuation Fund had been operating in a manner that makes its payment to retirees easy. It pays in small ranches, such that it always has enough funds for payment. However, now that all workers are required to leave at once due to proposed liquidation of original employer (NEPA/PHCN), the mode of payment of the Fund also changed.

Government should therefore make up for the excess fund needed to sort out the employees exit. This is a fundamental expectation to liquidate labour liabilities before forcefully liquidating PHCN/NEPA.”

Way forward: Proffering panacea to the imbroglio, SSAEAC said “Government should pay gratuity to all as In accordance with provision of the Staff Condition of Service reviewed in 2010. Pay severance as proposed (20% of sum of pension and gratuity) once the value of gratuity/Pension is correctly computed as stipulated in the operating Condition of Service, 2010.

Calculate the pension liabilities of each worker as defined in the Condition of Service towards complying with PRA 2004. Pay the shortfall into the Superannuation fund towards transforming it to Closed Pension Fund Administrator (CPFA) or for crediting PFA of choice of workers.

“Since all the 18 Successor Companies may not be sold and handed over at the same time, payment of these end-of-service benefits could be made company by company using the agreed format for all. For instance, TCN can be settled now when an agreement is reached, since the Management Contractor has been appointed while the others follow when they are sold.

Conclusion of all payments as above, including issuing associated ‘documents to all exiting staff.  It is our believe that when TCN and all the others are paid this way, they will be able to operate freely without any labour hangover, more so that TCN is an integral part of PHCN that is to be liquidated in line with the Electricity Reform Act.”