Economy

Decentralisation of Wage Management: Will It End Perennial Labour Conflict?

Recently, a bill seeking an amendment to the 1999 Constitution by removing matters relating to wages from the Exclusive Legislative List to the Concurrent Legislative List, narrowly passed its second reading.

The legislation is titled ‘A Bill for an Act to Alter the Constitution of the Federal Republic of Nigeria, 1999 (as amended) to, Among Others, Transfer the Subject Matter of Minimum Wage Prescription from the Exclusive Legislative List Set Out Under Part I of the Second Schedule to the Concurrent Legislative List Set Out Under Part II of the Second Schedule to the Constitution; and for Related Matters.’

The issue of minimum wage has always been a knotty one between the NLC trying to protect the rights and interests of Nigerian public sector workers and the various state governments who can only pay according to their “strength”. The incessant protests and industrial actions that follow are rude and avoidable interruptions to national development. This is why state governments and political players are constantly seeking ways to adjust this segment of the constitution.

Till date, the Federal Government maintains the exclusive powers to negotiate and determine the national minimum wage for workers across the three tiers of government in Nigeria. To bring the incessant perennial conflicts over minimum wage to an end, there are propositions to decentralize it.

However, whenever talks on minimum wage are brought up, the Nigerian Labour Congress (NLC) will rise like a threatening monster. This is because the NLC is known for her stern and direct approach when issues of minimum wage are on the front burner. Equally tenable as vital reason for NLC’s opposition to decentralisation is the need to avoid the development of a segmented labour union from this trend. The state chapters might suddenly realise that there is no relevance for a national body when everything can be finalized at the state level.

Meanwhile, the NLC has consistently fought for a minimum wage commensurate with the economic conditions of Nigerian public sector workers. With continuous pressure, the Nigerian Labour Congress (NLC) was able to push the Federal Government to sign the N30, 000 minimum wage bill into law two years ago. It was a major victory for Nigerian workers given the harsh economic realities of the times.

It turned out that labour’s success became a pyrrhic victory as most state governments have not increased their minimum wage from N18, 000 even after two years due to tough economic conditions.

Despite the law increasing the country’s minimum wage, the NLC is still battling with many state governments over non-compliance. On February 19, the Nigeria Labour Congress directed workers in all the states where the national minimum wage of N30, 000 is yet to be paid, to immediately embark on industrial action. Although the states were not listed, labour noted that more than half of the 36 states of the federation were yet to conclude negotiations on payment of the minimum wage.

It is this sad reality that is compelling lawmakers and political stakeholders to propose the deregulation of minimum wage. To many politicians, decentralisation sounds like the perfect bargain. In the words of former Governor of Lagos State, Babatunde Raji Fashola, decentralisation of minimum wage is the best for true federalism, as states should not be compelled to pay wages fixed by the Federal Government in any democracy.

Sponsor of the bill, Senator Muhammad equally noted that “The resources available to the states also differ and while some states may be able to afford the national minimum wage, others may not. Within the states, the resources available to the local government councils also vary but they are also subjected to the national minimum wage.

“The Governor of Ebonyi State, Dave Umahi, alleged that the local governments would need to borrow N1bn to service salaries, while some states allege that they would spend 100 per cent of their earnings to pay salaries.

“Under the independence and 1963 Constitutions, prescription of minimum wage was a concurrent matter to be legislated upon by both the federal parliament and the states.”

Senator Muhammad opined that the NLC does not have to worry about exclusion in the proposed scheme as regards negotiations. What it means is that labour will have to negotiate with each state to ensure that the minimum wage in each state is reasonable in the circumstances of that state:

“Labour already has experience of this as usual. In the aftermath of every minimum wage review, it has to engage in protracted negotiations with individual states over consequential wage adjustments, amongst others.

“The proposed alteration to the Constitution will inch us closer to true federalism by devolving power from an over-burdened centre to the component states. The above considerations, all point to making the subject matter of prescription of the minimum wage a comment matter

“This is an opportunity to resolve the controversies that attend the determination of the national minimum wage once and for all as well as it is another step towards devolution of powers and true federalism.”

The argument against the deregulation of the minimum wage however is its vulnerability: selfish and insensitive state governments can utilize it to the disadvantage of the working masses. This is why many, including labour, reason that the deregulation of the minimum wage is anti-masses and anti-workers.

As Deputy Speaker of the House, Ahmed Idris Wase, noted, most states will take advantage of the situation to pay the workers’ wages that will not take care of their interest. Wase added that the constitution stipulates that the welfare of the people is the responsibility of the government, adding that even when the states have the resources to pay, many states have refused to pay workers quality wages.

Aminu Suleiman, Chairman of the House Committee on Tertiary Institutions and TETFUND, echoed Wase’s position when he noted that governors and state governments would abuse the proposed law. Suleiman added that states that are not paying the stipulated minimum wage have the capacity to do so but waste resources by refusing to prioritise their projects: “If we pass this law, we will be giving states the latitude to do whatever they want. We should have the security of the workers at heart.”

Former Governor of Edo State, Adams Oshiomhole, who led a protest when the same proposition came up sometime in 2014 cited the lack of uniformity it would create among state governments. The labour union no doubt will have a position on the decentralisation of the minimum wage.

Read Also: Plans to Review Nigeria’s Labour Laws Underway- Minister

Also in 2014, Babajide Raji Fashola, while speaking on the issue noted that, “who makes the law and who has the responsibility to manage it only detracts us from the main issue. It is not who makes the law that matters, it is whether or not the Nigerian worker gets fair pay for a hard job.” But does decentralisation guarantee that workers will get fair pay for their hard job without some of the problems highlighted?

There is a traditional saying that states that some things in life are better left the way they are. States’ determination of minimum wage and other established emoluments for the staff of civil service of the states, institutions, bodies, and agencies, established and managed by government councils and Local Government Services Commissions will introduce politics into wage determination, in particular during elections, as was the case in the First Republic.

Many analysts still insist that the Senate should leave item 34 of the 1999 constitution and allow minimum wage determination to remain in the Exclusive List. There is an urgent need to strengthen and not weaken the protection of the most vulnerable segment of the nation. Making it a national issue is thus the best way to ensure this.

Piercy Mabel

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