By VICTOR AHIUMA-YOUNG

THE Federal Government and organized labour in the nation’s electricity sector are heading for a major showdown over disagreement on the payment of severance benefits and other entitlements due to over Fifty Thousand workers expected to be affected by the planned privatization of Power Holding Company of Nigeria, PHCN.

While the Federal Government insisted that it had concluded negotiations with organized labour under the aegis of National Union of Electricity Employees, NUEE, and the Senior Staff Association of Electricity and Allied Companies, SSAEAC, labour said negotiations ended in deadlock and vowed that nobody would take over PHCN assets without all labour issues being resolved.

Govt reacts

Reacting to Labour Vanguard’s interview with the President-General of SSAEAC, Engineer, Bede Opara, published on July 12, 2012, Spokesperson to Government negotiating team, Dr Timiebi Koripamo-Agary, said “Government, after fourteen months of eight rounds of painstaking and patient negotiations with the labour unions of PHCN, has made the best offer to the Unions on behalf of their members, and has concluded the negotiations.

*Bede Opara

In  these months of negotiations with the Unions, government recognized the strategic place of PHCN and its workers in the ongoing reforms of the power sector and the transformation agenda of  President Good luck Jonathan’s administration and  ensured that their rights and all legitimate claims and entitlements were protected, promoted, defended and paid up as at when due.”

“We are however surprised at the disingenuous portrayal of the offer of Government as a fixed position. It is pertinent to note that while the Unions were inflexible in their demands for payment of severance as part of a package comprising other items already agreed to, Government shifted its position twice to take cognizance of the concerns of the Unions with respect to years of service and seniority.

Thus, while Government moved from its initial offer of five weeks for every year of service with a ceiling at twelve months as is prevalent in similar industries, the Unions held on to their position of five weeks for every completed year of service with no capping.

Government subsequently reviewed its position and made a final offer of 20% (up from an initial offer of 10%) of total accrued pensions and gratuity. This final offer was made in consideration of the need to ensure that the employees received an enhanced package and also to remove the ceiling of 12 months for all staff categories.”

“Despite this consideration by Government, the Unions rejected the offer. In addition, the unions insisted on being paid gratuity and pensions under the Defined Benefit Scheme which is to be funded through the PHCN Superannuation Fund which is grossly underfunded even by the admission of the President General of SSAEAC in the same publication.

More importantly, the Pension Reform Act 2004 required all active workers to comply to its provisions regarding pensions in the country with effect from July 1st 2004 by opening Retirement Savings Account (RSA) with Pension Fund Administrators of their choice  Only workers who had “3 or less years” to retire were exempted from the Scheme (PRA 2004 Section 8.1). The problem in PHCN has been with the Unions’ insistence on remaining in an unfunded pension scheme in clear breach of the law.”

She added that “notwithstanding this position of the Unions, and in spite of the underfunding of the PHCN superannuation fund, Government offered to provide all accrued benefits of gratuity and pension under the Defined Benefit Scheme up to June 30th 2004, in addition to the 15% contribution under the Contributory Pension Scheme from July 1st 2004 to 30th June 2012, in view of the fact that no deductions had been made or paid on behalf of PHCN workers.”

Pay us our 25 percent deduction from salaries—workers

But speaking at joint briefing by NUEE and SSAEAC, President General of SSAEAC, Engineer, Bede Opara,  dismissed Government claims that  the unions were insisting on remaining Defined Benefit Scheme, saying they are asking for the 25 percent deduction from workers salaries be paid as against the 15 percent government wants to pay.

Unions fault govt

The unions also faulted government argument that the Contributory Pension Scheme, CPS, which came up because of the Pension Reform Act, PRA, of 2004, had cancelled gratuity payment, arguing that there is nowhere it is stated in the PRA that gratuity had been stopped.

According to him, “PHCN workers we received only 75 per cent of their salaries while 25 percent is set aside as contribution into superannuation fund till date. Even when the new contributory pension policy came up they were talking of 15 per cent. The same law says 15 per cent is the minimum provision. The government is saying they will pay 15 per cent. But we are saying the 25 per cent is not government money, but the money deducted from staff salaries.

Why can’t we settle the 25 per cent first before talking about 15 percent? But they argued that there is no money. PHCN is not a sector where people queue for their gratuity and you retire, your gratuity and other benefits are paid. Now that government is asking everybody to go, they are now telling us that there is no money and that baffles us. What we are asking for is what has been deducted from workers salaries. We will first collect the money deducted first before talking of 15 per cent.

He added that “the Managing Director of PHCN is appointed by government, and parts of the money were invested property and others. It is not a question of not having money. We are not foolish up to the level that government will ask us to open RSA retirement saving account that they will pay us.

If government fails to pay our money it is as good as they have not started the reform programme. In one of our meetings with Minister of Labour, we asked if they did not do research before embarking up the reform in the sector, and he said they did. If they did, they should have known the financial implications and not coming to tell us that Federal Government is in financial problem. If anybody wants to take over PHCN when our entitlements are not paid, the person is a joker.”

“Government proposed that a percentage of the Gratuity and Pensions, two will be paid as severance as Government contended that Gratuity is merged with Pensions in the new Pensions Reform Act 2004. The Unions objected to this vehemently. The Unions were of the opinion and rightly too that Gratuity payment is exclusive of Pensions in the new Pensions Act,” Opara stated.