PHCN workers allege forced severance package

Channels Television  
Updated August 9, 2012

Staff of the Power Holding Company of Nigeria (PHCN) have accused the federal government of forcing them to sign papers that would compel them to accept a severance pay they do not agree with.


According to the Nigerian Union of Electricity Employees (NUEE) the federal government’s package is for staff to receive only one year basic salary as severance but now, they are also being compelled to compulsorily give consent to deduction from their salaries to a Retirement Savings Account (RSA) imposed on them.

Zonal Coordinating Secretary of the union, Temple Iworima alleged that the Managing Director and Executive Director Finance and Administration, Pius Apuye following a meeting at the Ministry of Power ordered the Accounts Department to deduct 7.5 per cent from staff salary on Tuesday.

The Ministry of Power however swiftly reacted to the allegations in a statement by the Special Adviser on Media to the Minister of Power, Mr. Ogbuagu Anikwe.

The statement said “the management of the PHCN this morning began distributing letters to each PHCN staff member advising him or her on the retirement benefits, in view of the impending privatization of 17 out of the 18 PHCN successor companies. Each letter, personally signed by the Managing Director/Chief Executive, Engr. Hussein Labo, stipulates the pension and gratuity, among other benefits, of every employee”

The statement advised the workers to “study the contents of every form and look out for critical issues like possible computational errors and then return them not later than August 10, 2012, with appropriate remarks to the management.”

A look at the computations shows that some executives will earn as much as N38million each as retirement benefit on account of the generous offers which the government has made to the staff in recent months.

It further stated that “this considerably huge retirement figure stands in sharp contrast to the N2million which NUEE officials have been alleging will be the maximum amount of money any employee will receive on retirement.

This figure also shows quite clearly that employees will get about 400 per cent more than their counterparts in regular public service employment”.

Meanwhile the statement also clarifies that the entire severance benefit, calculated at N80billion, will come from the government treasury.

This is because the management did not comply with the Pension Reform Act which came into force on July 1, 2004, and which requires every worker to contribute 7.5% of the basic salary towards pension and the employer another 7.5% as individual contribution.