Employee Compensation Act 2010: The Role Of Trade Unions-By Chika Onuegbu

Newsdiaryonline Thurs Aug 18,2011

1. INTRODUCTION

The International Labour Organization (ILO) estimates that approximately 2.3 million people die from accidents and diseases related to work each year. The daily death toll amounts to some 6,300 persons. The ILO also estimates that approximately 337 million occupational accidents occur annually and work-related diseases affect an additional 160 million people around the world. These estimates are as staggering as they are frightful. However the good news is that each of us either as individuals or groups can do something to change the situation and reduce these avoidable deaths and injuries in the workplace. This in my opinion should be the first choice for any trade union as far as the health and safety of the workers is concerned; and should continue to remain so irrespective of the passage into law of the Employee Compensation Act. This is because it is in the best interest of the employee and his trade union that no employee is hurt through work and that the workplace is safe and healthy. Similarly, as the Iceberg diagram below shows, the indirect costs of occupational accidents and diseases to the employer are serious and so it is also in their interest that no employee is hurt at work or ill through work. Consequently the employers and the trade unions should work together to ensure that Occupational Safety and Health is in practice, an integral part of the day-to-day business of every organisation.

Iceberg Diagram on Costs of Occupational Accidents/Diseases to Employers[3]

To achieve this , it is my considered view that  trade unions should ensure that all employers of labour have good and functional occupational safety and health management systems. This is because occupational safety and health management systems(OSHMS) aim to develop a comprehensive approach to managing health and safety hazards, including legal obligations to provide a workplace free of risk, ensuring continuous improvement of health and safety in the workplace, and reduction of the costs arising from workplace accidents, illnesses and workers’ compensation payments. In addition, the workers should ensure that they work safely, protect themselves and not endanger others. The workers should also know their rights with respect to health and safety and participate in the implementation of preventive measures. The trade unions should ensure that Health, Safety and security of their members are adequately addressed and given priority attention in the collective bargaining agreements and in the day-to-day activities of the organisation. The Trade Unions should also ensure that the various collective bargaining agreements entered into by them clearly indicate the duties and responsibilities of all parties with respect to health, safety and security at the workplace.

The second choice, which is about compensation, however is no less important. It complements the first choice( i.e. Preventive measures) and is aimed at ensuring that if and when occupational accidents and diseases occur, that there is adequate safety net for the victims. To provide an atmosphere where this can be achieved, the federal, states and local governments are expected to put in place laws, regulations and policies that will ensure that the conditions of work are safe, healthy and secured; and that injured workers are adequately taken care of and the families of workers who are killed/hurt because of the job are not abandoned but adequately catered for.

In furtherance of this constitutional duty[4] to protect the safety and health of workers, the Nigerian Government has over the years enacted some legislations designed to promote the health, safety, welfare and security of workers including those designed to provide compensation  in the case of injury/death such as the compulsory life insurance provisions in the Pensions Act for the welfare of the survivors of a worker and the various compensations provided for in the Employee Compensation Act 2010. The main legislations include:

1)     The Factories Act cap 126 laws of the Federation of Nigeria (LFN) 1990

2)     Workmen's Compensation Act Cap. W6 Laws of the Federation of Nigeria, 2004 ( now repealed by the Employee Compensation Act 2010)

3)     The Minerals oil safety regulation of 1997

4)     The Pension Reform Act 2004

5)     The Harmful Waste (Special Criminal Provisions, Etc.) Act LFN 165 1990

6)     Employee Compensation Act 2010

Kindly permit me to remind us that the focus of this paper is on the Employee Compensation Act and so I would limit my discussion to that Act.

2. OVERVIEW OF THE EMPLOYEE COMPENSATION ACT 2010

“The basic objective of an Employment Injury Benefit (EIB) scheme is to ensure workers and their families a certain level of income in the case of disability or incapacity for work due to accidents and diseases related to work. This form of compensation is a fundamental labour right.”[5]

The signing into law by President Goodluck Ebele Jonathan GCFR  of  the Employee Compensation Act 2010 which repealed the hitherto Workmen's Compensation Act Cap. W6 Laws of the Federation of Nigeria, 2004 is a welcome development. Prior to the enactment of the Employee Compensation Act, the Workmen Compensation Act which was enacted in 1987 was obviously outdated and needed to be reviewed to bring it closer to international best practices  and relevant ILO Conventions .This gave rise to the new employee compensation Act 2010. The new law makes comprehensive provisions for payment of compensation to employees who suffer from occupational diseases or sustain injuries arising from accident at workplace or in the course of employment[6].The Act applies to all employers and employees in the public and private sectors in the Federal Republic of Nigeria except for any member of the armed forces of the Federal Republic of Nigeria other than a person employed in a civilian capacity[7].It also provides that the  Nigeria Social Insurance Trust Fund Management shall have power to implement the Act and Employees' Compensation Fund ( into which shall be credited all moneys, funds or contributions by employers for adequate compensation to employees or their dependants for any death, injury, disability or disease arising out of or in the course of employment). The Act also provides that ccompensation cannot be waived  and that any agreement between the employer and employee to that effect is unlawful, void and unenforceable and that the employer is not allowed to deduct (directly or indirectly) from the employees remuneration for the purpose of the contribution to the fund.

Part l- (sections 1to 3) Preliminary Provisions, covers objectives of the act, scope and application, etc. and exemptions. Section 1 of the Employee Compensation Act 2010 list the objectives of the Act as follows:

(a) Provide for an open and fair system of guaranteed and adequate compensation for all employees or their dependants for any death, injury, disease or disability arising out of or in the course of employment;

(b) Provide rehabilitation to employees with work-related disabilities as provided in this Act;

(c) Establish and maintain a solvent compensation fund managed in the interest of employees and employers;

(d) Provide for fair and adequate assessments for employers;

(e) Provide an appeal procedure that is simple, fair and accessible, with minimal delays; and

(f) Combine efforts and resources of relevant stakeholders for the prevention of workplace disabilities, including the enforcement of occupational safety and health standards.

Part II -Procedures for Making Claims (sections 4 to 6), covers procedures for employee's notification of injury, employer's obligation to report death, injury or disease of an employee and application for compensation. This part essentially covers the statutory procedures for reporting and making claims resulting from workplace injury or disabling occupational disease or death. A failure by an Employer to make a report as statutorily required constitutes an offence unless the Employer is exempted in writing from making such a report by the NSITF Board.

Let me state that observing the procedures as stipulated in Act are very crucial to receiving the compensations in the Act. For instance, Section 4(which is reproduced hereunder) stipulates the procedure for notification in case of injury and also  states under section 4(4) that failure to provide the information required under Section 4(1) is a bar to a claim for compensation:.

“4(I) In every case of an injury or disabling occupational disease to an employee in a workplace within the scope of this Act, the employee, or in case of death the dependant, shall within 14 days of the occurrence or receipt of the information of the occurrence, inform the employer by giving information of the disease or injury to a manager, supervisor, first aid attendant, agent in charge of the work where the injury occurred or other appropriate representative of the employer, and the information shall

Include -

(a) The name of the employee;

(b) The time and place of the occurrence; and

(c) In ordinary language, the nature and cause of the disease or injury if known.

4(2) in the case of a disabling occupational disease, the employer to be informed of the death or disability is the employer who last employed the employee in the employment to the nature of which the disease was due.

4(3) the employee shall, if he or she is fit to do so and on request of the employer, provide to the employer particulars of the injury or occupational disease on a form prescribed by the Board, and supplied to the employee or the dependant by the employer.

4(4) Failure to provide the information required under sub-section (1) of this section is a bar to a claim for compensation under this Act, unless the Board is satisfied that the -

(a) Information, although imperfect in some respects, is sufficient to describe the disease or injury suffered;

(b) Employer or the employer's representative had knowledge of it; or

(c) Employer has not been prejudiced, and the Board considers that the interests of justice require that the claim be allowed.”

Part III- Compensation For Death, Injury Or Disease ( sections 7- 16) ,covers  compensation for injury, compensation for mental stress, compensation for occupational disease, compensation for hearing impairment, compensation for injuries occurring outside the normal workplace, limitation of actions, subrogation, etc. It provides under section 7(1 to 4) that:

7(1) any employee, whether or not in a workplace, who suffers any disabling injury arising out of or in the course of employment, shall be entitled to payment of compensation in accordance with Part IV of this Act.

7(2) an employee is entitled to payment of compensation with respect to any accident sustained while on the way between the place of work and -

(a) The employee's principal or secondary residence;

(b) The place where the employee usually takes meals; or

(c) The place where he usually receives remuneration provided that the employer has prior notification of such place.

7(3) Where an injury disables an employee from earning full remuneration at the workplace, compensation shall be payable pursuant to this Act from the first working day following the day of the injury, except that only a health care benefit shall be payable in respect of the day of the injury.

7(4) where the injury or disease is caused by accident and the accident arose out of the employment, unless the contrary is shown, it shall be presumed that the injury occurred in the course of the employment.

Part IV-(sections 17 to 30) Scale Of Compensation, covers  compensation in fatal cases, compensation relating to enemy warlike actions, period for making payments, proof of existence of dependants, permanent total disability, permanent partial disability or disfigurement, period of payment for permanent total or partial disability, temporary total disability, temporary partial disability, health care and disability support, duty of accredited medical practitioner and other specialists, retirement benefits, payment of retirement benefits etc. Section 17 provides that where death results from the injury of an employee, compensation shall be paid to the dependants of the deceased up to 90 per cent of the total remuneration of the deceased employee for the widow(er) with two or more children dependent on the employee, 85 per cent with one dependent child, 60 per cent for 50-year old and above without a dependent child or an invalid spouse, and 30 per cent for aged below 50 years but not being invalid and having no dependent children. It further provides that the Monthly payments to eligible children shall be made to children up to the age of 21 or until they complete undergraduate studies, whichever comes first;

Part V- deals with the Powers and Functions of the Board (NSITF), Part VI Employers' Assessment and Contributions to the Fund. A key aspect of these parts of the Act is the Employee Compensation Fund provided in section 56 and managed by the NSITF. Section 33 of the Employee’s Compensation Act provides that “every employer shall within the first two years of the commencement of this Act, make a minimum monthly contribution of 1% of the total monthly payroll into the Fund.” After the first two years, the NSITF Board is authorised to “… assess employers for such sums in such manner, form and procedure as the Board may, from time to time, determine for the due administration of this Act.”It is important to note that the NSITF Board is further authorised by Section 33(2) of the Act to from time to time, make regulations prescribing the categorisation of risk factors of each class or sub class of industry and the amount of contribution to be made and for different assessment rates applicable to each class or sun- class of industry, sector or work place.

3. THE ROLE OF TRADE UNIONS

Let me once again restate that irrespective of the positive comments about any law /convention seeking to compensate employees who suffer from occupational diseases or sustain injuries arising from accident at the workplace or in the course of employment, the primary focus of any organisation should be to provide a safe and healthy environment for the workers to fulfil their obligations. The issue of compensation, as a second best choice, should not be the primary focus but a fallback position; when things go wrong. This is because when a worker leaves his residence to work for the upkeep of his family and contribute to the economy of his society and nation, he does so with a belief that he will come back to the warm embrace of his family at least the way he was when he left them. He does not expect that the work will howsoever lead to his death or disability or injury or ill health. There is therefore no gainsaying that he has a right to demand this from the society and the nation and that his employer, the society and nation have a duty to ensure that this right to safety and health at work is respected. Moreover the consequences of workplace fatalities, accidents, injuries, and sickness and disease conditions are far reaching both to the individual, the employer and the society. Anyakwe Nsirimovu[8] has submitted that

‘More than any institutional guarantees respect for human rights must be inherent in the habits and desires of the people of the society’.

It is also not surprising that Section 17 (3) (b and c) of the 1999 Constitution of the Federal Republic of Nigeria also recognises the right to health and safety at work and requires that the conditions of work are just and humane, … and that the health, safety and welfare of all persons in employment are safeguarded and not endangered or abused. Consequently the Trade Unions should continue to emphasise the primacy of a healthy, safe and secured workplace. This will include taking reasonable steps to make the employers ensure that the workplace, machinery, equipment and processes under them are safe and without risk to health. It also includes ensuring that the employers recognize the right of the worker to remove himself/herself from work situations that he/she has reasonable justification to believe presents an imminent and serious danger to his/her life or health .It is my considered view therefore that the primary role of trade unions with respect to the employee compensation act should be an integral part of their roles with respect to the health and safety of workers generally.

Nevertheless, kindly permit me to state below what I consider to be the specific roles of trade unions with respect to the Employee Compensation Act 2010:

3.1 Review The Law And Identify Grey Areas For Consultation And Resolution:

It is my considered view that the first reaction of the trade unions to any law enacted by the National Assembly or any State House of Assembly is to carry out a comprehensive review of the laws through workshops, seminars, corroborative meetings with other stakeholders. It is also advisable that for a law with significant impact on the workers like the Employee Compensation Act, the Trade Union are advised to engage the services of experienced labour and compensation legal luminaries to carry out a comprehensive review and evaluation of the Employee Compensation Act 2010 as well as drawing the attention of stakeholders to grey areas that could negatively impact on the implementation of the Act.

3.2 Education of Their Members and the General Public on the Provisions of the Act:

Trade Unions must make adequate arrangements to give proper publicity to the provisions of the Employee Compensation Act 2010. They should also ensure that the key provisions of the Act are in languages or dialects understood by workers including illiterate persons. The importance of publicity and mass enlightenment of the Employee Compensation Act cannot be overemphasised. For instance Section 4 of the Act , as shown hereinabove under ‘Overview of the Employee Compensation Act’, list the procedure for making claims and states under section 4(4) that failure to provide the information required under Section 4(1) is a bar to a claim for compensation. The fact remains that unless the employees and their labour unions are knowledgeable about the key provisions of the Act, the Act would not serve any useful purpose. Consequently the next most important duty of a trade union with respect to the Employee Compensation Act 2010 is to educate her members and the general public on the key provisions of the Act and ensure that they are well aware of their rights and responsibilities under the Act. They are encouraged to summarise the key provisions of the Act in a bulletin for easy guidance of their members and the general public

3.3 Monitor Compliance and Report All Cases of Breach/Non-Compliance

The Trade Unions have a sacred duty to ensure that the Employee Compensation Act 2010 does not end up as a "paper promise" in the workplace. They must monitor the compliance of the employers with respect to the provisions of the Act. They should also ensure the Federal Government  adequately staff their various agencies charged with responsibilities of monitoring compliance with the Employee Compensation Act as well as provide them with adequate facilities necessary to carry out their duties. The organised labour (i.e. the Nigeria Labour Congress and the Trade Union Congress) should also inaugurate their working committees for the monitoring and enforcement of the Employee Compensation Act across the country and in each state of the federation. The NLC and TUC monitoring committees when formed should ensure that they work in close partnership with organised private sector and NECA. They should also ensure that they direct their State Councils to work closely with the NSITF and National Council for Occupational Safety and Health in the State to ensure that the Act is seamlessly implemented

3.4 Enforcement of the Employee Compensation Act 2010

They should recognize that the Government agencies charged with the enforcement of the Law cannot monitor every workplace. In practice, the effectiveness of the implementation of labour protections depends to a very large extent on the worker's decision to act. Here the Trade unions have a very crucial role .They should give the workers the relevant information about their rights/responsibilities and the necessary procedures under the Act. They must also ensure that they assist the workers claim their rights by ensuring that these rights are included in the Collective Bargaining agreement; and that the workers claims pursuant to the Act are followed through to the end. To this end, The Trade Unions should direct each of their branches and negotiating units to ensure that the Employee Compensation Act is an integral part of   their collective bargaining agreement with their various employers. The Employee Compensation Act should be a full Article in the Collective Bargaining Agreement and the employer must undertake to comply fully with the provisions of the Employee Compensation Act 2010.

Trade Union can play further play this role by ascertaining whether the respective employers are contributing to the fund as provided in the law. They could instigate NSTIF to publish list of contributing employers etc. This way the trade unions can engage their respective employers with the information.

3.5 Promote Dialogue and Consultative Meetings among Stakeholders

The importance of social dialogue and consultation among the stakeholders in the effective management of the Employee Compensation Act cannot be over emphasised. The organised Labour under the auspices of TUC and NLC should encourage social dialogue and consultation amongst the stakeholders with a view to ensuring the smooth and effective implementation of the Act.

The trade Union should engage NSITF on the possibility of NSITF maintaining a desk or department of Labour Relations. This way, NSITF as the implementing body will get first hand feedbacks on the issues arising from the Employee compensation act. In addition, the NSITF should decentralise and restructure its operations to deliver quick service. It should also branches in all the states of the federation for greater efficiency. The trade unions should also engage NECA and their respective employers’ organisation on their preparations for the implementation of the Employee Compensation Act as well as share thoughts on practical solutions to identified grey areas.

4. ISSUES AND CHALLENGES

At present, there are quite some challenges in the way of effective implementation of the Employee Compensation Act in Nigeria. Some of these challenges against the effective implementation of the Employee Compensation Act 2010 are:

4.1 Culture of Impunity and Unwillingness to Obey the Law:

The greatest challenge is the culture of ‘catch me if you can’ in the observation of laws in Nigeria and it would be unreasonable to expect that the implementation and observation of the Employee Compensation Act 2010 would be different. Thisday Newspaper Editorial[9] has also voiced this concern when it stated that

 “Ordinarily, the fact of the president's assent should bring joy to Nigeria's teeming workforce. But with the nation's record of comatose policies and unimplemented ideas, the enthusiasm the new law has generated may be short-lived if the assent is not followed with decisive action. This is where the Nigeria Social Insurance Trust Fund (NSITF) comes in.”

Only recently we saw clearly the unwillingness of the State Governors to respect the National Minimum Wage (Amendment) Act, 2011.  Rumour also has it that any moment from now the Federal Government would devalue the Nigerian Naira to around N200/1USD in an attempt at ensuring that the benefits of the N18, 000 wages does not accrue to the workers. This is the usual problem in the implementation of laws and policies in Nigeria; and it is my considered view that the Employee Compensation Act 2010 would have its own fair share.

4.2 Non Passage of Bills on Occupational Health and Safety/Institute of Safety Professionals:

The Employee Compensation Act risks being ineffective as the Bill for an Act to Repeal the Factories Act and Make Comprehensive Provisions for Occupational Safety and Health in Workplaces and for Matters Connected Therewith was not passed into law by the 6^th National Assembly. Similarly the Institute of Safety Professionals of Nigeria Bill which seeks inter alia to determine what standard of knowledge and skills are to be attained by persons seeking to become registered as safety professionals. The fact is that the first focus of any law to address workplace health and safety should be prevention. The two bills that were not passed focuses on prevention. The Employee Compensation Act focuses on compensation when things go wrong and as such is only complementary. Consequently, the employee compensation fund established under the Employee Compensation Act risks being overwhelmed due to high safety lapses and may fail. It is therefore my considered view that the NSITF and organised labour should quickly draw the attention of the 7^th National Assembly to these serious defects and ensure that these bills are passed to engender an atmosphere of prevention.

4.3 Employee Compensation When Employer Defaults In Contribution:

The issue of compensating an injured or dead employee irrespective of whether the employer has complied with the Employee compensation act 2010 has to be addressed. There appears to be a gap on how the employee’s right will be guaranteed while holding a defaulting employer accountable. There is need for vigilance by trade unions as this could be exploited to the detriment of workers. This gap should be addressed in further updates of the act.

4.4 Maximum Mandatory Period for Compensation:

It is not clear from the maximum duration from the date of injury or death of an employee within which the employee shall mandatorily be compensated. This has a potential of worsening the case of an injured employee or the pains of the family of dead employees due to prolonged delay in compensation. This gap could be exploited to deny payment of compensation as it is not time bound.

4.5 Non-Unionised Workers, Casualisation and Contract Staff:

Non-unionised workers as experience has shown are the greatest victims of unsafe and unhealthy work places. Empirical evidence confirms that the respect for workers’ health, safety and dignity including the observation of the laws on Compensation payments are very much likely to be violated for non-unionised workers, casual workers and contract staff of all categories. This position is also supported by evidence available to global unions. For instance, the International Federation of Chemical, Energy, Mine and General Workers' Unions(ICEM) had noted that

 “participants at the many global and regional ICEM CAL meetings have made reference to a wide variety of problems faced by contract and agency labour workers, ranging from employment insecurity and inferior salaries, pension rights issues and working time problems, to major health and safety crises and brutal treatment and abuse of workers”[10].

Moreover since many workers in this category do not have comprehensive documents on the status of their employment, there is a potential that employers can disown such employees in the event of injury or death. In addition, the employers may not make any contribution with respect to this category of employees.

Trade Unions should therefore endeavour to unionise all workers so as to enable them enforce their rights.. It is important if they must continue to remain relevant. Fortunately section 40 of the 1999 Constitution of the Federal Republic of Nigeria, Extant labour laws, Article 10 of African Charter on Human and People Rights(Ratification and Enforcement Act) 1990 as well as various ILO conventions 87 and 98   guarantee the right of workers (including contract and agency staff )to join a trade union for their protection. Trade Unions should ensure that there should exist a minimum industry condition of service for workers irrespective of the nature of their contract, that every organisation providing contract labour have valid labour recruiter’s license and that they must commit to full adherence to the conditions in the labour recruiters license.

I want to respectfully appeal to trade unions to continue to display courage and solidarity in the protection of the rights and welfare of Nigerian workers and in the mobilisation of Nigerians against unpopular government policies. This in my view is also in consonant with one of the most fundamental trade  slogans of trade union - 'Solidarity forever ', which means  support by union members ' for each others ' struggles, and  support by the stronger for the weaker within society.

4.6 Administrative Capacity of the NSITF:                                                                           

There are doubts in some quarters as to whether the Nigeria Social Insurance Trust Fund (NSITF) has sufficient qualified personnel and appropriate administrative structure for the effective administration of the Employee Compensation Act 2010. It is our hope that the NSITF would rise to the challenge and ensure the effective  and seamless implementation of the Employee Compensation Act .Already the fact that the effective date for the implementation of the Act is way behind schedule does not help matters.

4.7 Membership of Independent Investment Committee:

The Act provides for three Representatives of the most represented Employees’ organizations as members of the Independent Investment Committee.

Given that there are two Labour centres namely, the Trade Union Congress of Nigeria (TUC) and the Nigerian Labour Congress (NLC), there is a lack of clarity as to how the third employees’ organization representative shall be determined. Moreover, the tenure of membership has not been stated. It is advised that the Trade Unions do not allow this ambiguity to break their ranks. They should collaborate with the Board for an equitable resolution.

4.8 Cooperation of Stakeholders:

For the Act to be implemented effectively there must be sincere cooperation among the stakeholders- organised labour, employers, NSITF and government at all levels.

4.9 Uncertainty as To Transition Arrangements:

Although the effective date for take-off of the Employee Compensation Act was January 1, 2011, the implementation of the Act is yet to commence in earnest. There are also doubts in some quarters as to whether the implementation could even commence this year due to some of the identified challenges. Already some stakeholders  have started nursing  a proposal for January 2012 effective date. This was however turned down with a general consensus that factoring all parameters, NSITF should be in a position to take-off next month (i.e. July 2011). The key concern here is what happens to an employee who sustains injury at work within this period when the implementation is yet to commence in earnest? Will he /she be compensated under the repealed workmen compensation Act or will he/she wait aimlessly until the employee compensation act takes off effectively? I was confronted with this question and I hope the NSITF will help me proffer solutions.

Another area of contention is that if the Act took effect in January 2011 and it gave three months grace period, automatically billing ought to have started in April 2011. Will NSITF waive the billings when it effectively take-off or will it demand arrears from April 1^st 2011? Already it is reported that the Federal Government has set aside N9bln as take-off grant for the Fund in line with the law.

5. CONCLUSION AND RECOMMENDATIONS

You will agree with me that the consequences of workplace fatalities, accidents, injuries, sickness and disease conditions are far reaching both to the individual, the employer and the society. The International Labour Organization (ILO) estimates that 270 million work accidents occur annually while 160 million are estimated to suffer from work-related illnesses.  About 2.2 million die worldwide due to such accidents – a death toll averaging some 6,000 workers a day. I would like to think that this figure does not include former employees whose health is now adversely affected by the work they did and by the conditions of the place they worked. This figure, if nothing drastic is done, is sadly expected to grow in view of the current global financial crises, other emerging risks and the changing pattern of works. This therefore underscores the importance and urgency of this paper.  The trade unions must ensure that provisions of the Employee Compensation Act 2010 are implemented and that the general attitude to safety and health in the workplace is greatly improved upon.  They should also take note of the various recommendations and concerns expressed in this paper.

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