Labour’s opposition to minimum wage bill

ON Wednesday,  March 10, members of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) marched into the National Assembly. They  converged on the National Assembly arcade with many carrying placards of different inscriptions to protest against the moves by lawmakers to move minimum wage matters from the exclusive legislative list to the concurrent legislative list. The bill to move minimum wage matters from the exclusive list to the concurrent list had passed second reading in the House of Representatives on February 23. The labour unions fear that should the bill become law, the Federal Government would not have exclusive jurisdiction to determine a national minimum wage and states would then have the power to determine their own minimum wages. The labour unions have been at loggerheads with many state governments which continue to pay wages below the national minimum set by the Federal Government. The National Assembly had passed the bill for a minimum wage of N30,000 on March 19, 2019 and President Muhammadu Buhari had signed it into law on April 18, 2019. However, the implementation of the law by state governments has been difficult, with states claiming inability to pay. Some are still paying the old rate of N18,000.

A minimum wage is the “minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.” Accroding to the International Labour Organisation, it is an element in a policy designed to overcome poverty and to ensure the satisfaction of the needs of all workers and their families. The purpose of fixing a  minimum wage is to give wage earners necessary social protection with regard to minimum permissible levels of wages. Usually, in determining the level of minimum wage, factors such as the needs of workers and their families, the general level of wages in the country, the cost of living and changes therein, the relative living standards of other social groups, the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment are taken into consideration.  The Nigerian minimum wage applies to companies employing 50 persons and above.

In federations, there are usually two sets of minimum wages, one by the state government and the other by the Federal Government.  Indeed, the Federal Government can set varying minimum wages across the country based on the variations across the country of the factors listed above. Thus, it can be argued that a national minimum must be the lowest denominator across the country.  In federations, it must be recognised that the Federal Government is to provide leadership in policy areas in the concurrent list and where there is inconsistency, federal law supersedes that of the states, except the courts rule that the constitution states otherwise.  An elaborate process of negotiation and collective bargaining usually precedes the fixing of the national minimum wage. It involves the employers’ associations in the private sector, state governments and labour unions.  The outcome of this process is expected to be acceptable to all.  The transmission of the national minimum into law is to strengthen enforcement.  With regard to state governments, what is expected is for some states to pay minimum wages that are higher than that of the Federal Government.  In such a situation, employees who live in areas where two minimum wages exist are expected to be paid the higher minimum. The unfolding debate in Nigeria has been driven largely by state governments that have failed to implement a minimum wage in whose negotiation they partook.

The sponsor of the bill in question,  Datti Garba, of the All Progressives Congress (APC), argues that it is to allow both the federal and state governments to freely negotiate minimum wage “with their workers in line with our federalism” as part of the devolution of powers, which allows states to determine minimum wages based on capacity. Item 34 on the exclusive legislative list places “labour, including trade unions, industrial relations; conditions, safety and welfare of labour; industrial disputes; prescribing a national minimum wage for the Federation or any part thereof; and industrial arbitration” on the Federal Government. While there is an apparent contradiction in insisting on placing minimum wage on the exclusive list while calling for decentralisation, it should be clear that the current law has not prevented states from negotiating wages with their workers. Indeed, in practice, public sector employee wages vary across the states  of Nigeria. Thus, it seems the purpose of the Garba-sponsored bill is to abolish a national minimum wage, which is neither desirable nor realistic given the nature of federal arrangements and the responsibility of the Federal Government to balance the requirements of welfare and the demands of economic and productivity growth. The Federal Government cannot abandon its responsibility for citizens’ welfare.


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