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Outsourcing must conform with global best practices – HuCaPan President

By Funmi Komolafe

Labour Vanguard  met the president of Human Capital Providers Association of Nigeria, HuCaPan, Mr. Neye Enemigin who spoke on a number of contemporary labour issues, including outsourcing and its effect on the economy. Are workers being fairly treated?  What role does HuCaPan play?  The role of the Ministry of Labour &Productivity were also discussed during the interview. Details in this edition of Labour Vanguard:

HOW relevant is outsourcing in Nigeria?

Out sourcing is the in-thing all over the world and Nigeria cannot be an exception. We live in a global village.  What we need is global best practice.

*Mr. Neye Enemigin
*Mr. Neye Enemigin

Basically, what is outsourcing?

Its an organization trying to give out a non-core area of its business to another organization that has core competence in that area so that the main organization can focus on areas where it has core competence to allow this other organization that has core competence in that area to manage the business. That’s what it is.   I think that outsourcing is adding value  especially in the case of Nigeria where we have rampant casualisation.

Rampant casualisation

So what companies are doing now is that instead of engaging in casualization which is inhuman, which to me is also illegal, they outsource these people that used to be casual employees.

What does this mean?

It means that these people now have some benefits; I mean the employees recruited. Their salaries are better, they have conditions of employment, they  get every other thing that the regular employees get — pension, health facilities etc. It means that they have  structured   employment and then they have decent work.

How do we tackle quacks in the business of outsourcing?

There are lots of quacks. It ought to be the responsibility of the Federal Ministry of Labour & Productivity. They are the regulators of the business. I can tell  you that under the law, Sections 23, 24, 25 and 71 of the Labour Act, Laws of the Federal Republic of Nigeria 2004, the Federal Ministry of Labour is supposed to issue out licenses to companies who  want to engage in the recruitment of employees, what they call Private Employment Agencies. This law is in line with ILO Convention on Private Employment Agencies. So, these companies are supposed to be licensed to look after employees in the industries.

What  does this mean?  It means that if you are not licensed to do this business then you are a quack. If you are licensed, you must observe the laws, the regulations. The law is specific on what you must do for the employees. People who are doing the business who are not licensed, the quacks, are just doing what they like. It is the responsibility of the Ministry of Labour to fish out these people and sanction them because what they are doing is illegal. What they are doing is against best practices. What they are doing is not in the interest of the Nigerian workforce. So, they are supposed to be sanctioned.

Would you say that Decent Jobs have been generated in the economy through out-sourcing?

Definitely yes. For instance if you are doing outsourcing, before you obtain a license from the Ministry of Labour, you are expected to show that you will allow employees to belong to unions, if they so desire which is freedom of association in line with the Trade Union Act as amended,  i. e.  Trade Union Amendment Act 2005, which gives the worker the right to belong to a union if he so desires. It is in line with ILO Convention 87, it is in line with the Constitution of the federal Republic of   Nigeria. Two, you  must have an insurance bond. It is one of the requirements, so that if something happens and you are not able to pay, the insurance will take that responsibility to pay  on your behalf.

You must have evidence that the workers are insured in line with the Pension Act 2004. So, you must have insurance coverage for them.

Three, you must register them with Pension Fund Administrators to ensure they are pensionable, and you must show the evidence that they are registered. Four, you must also show evidence that they have health coverage. All these are to promote Decent Work because the casual employees in most of the companies don’t get these benefits so, if you are dealing with a registered agency, the outsourcing agency must make sure that  these are agreed upon before the contract is signed.

You once  mentioned that the private sector is being over burdened with charges, levies, etc. In view of this, do you think the private sector is making any significant contribution to the economic growth of this country by creating job opportunities for instance?

Of course the private sector is contributing in terms of job creation given the political and economic environment because government is supposed to provide an enabling environment for the private sector to continue to do business.

Enabling environment

This enabling environment is in terms of infrastructure, electricity, good roads etc.  It also includes what kind of tariff you pay. When you are overburdened with tariff, pension, employees compensation, industrial training fund contributions…. They are so many.  Of course , the reason why anybody goes into business is to  break even and make profit. If you are doing business and the business is not paying itself, then you have a problem.

Employers will prefer to have a win-win situation and not a win-lose where government is just taking all the money and they don’t have electricity, roads.  So, if the environment is right, they would contribute more to unemployment than they are doing now. They are contributing but they can do more.

For example, manufacturing, agriculture, mining are supposed to be the main stay of the economy.  It is not service but what we find in Nigeria is that   it is the   service industry that is making money.  The banks, telecommunications, insurance, these are supposed to support the productive sector; the main sector which is manufacturing, agriculture , mining but we don’t see growth in these areas but we see growth in banking, in telecommunications all these are  services.  Apart from oil and gas being the mainstay of the economy. The real sector is suffering and the service sector is growing and this is due to government policies.

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