Minimum Wage: Progressive Governors’ Forum DG Faults NLC Over Protest
Channels Television Updated March 12, 2021
The Director-General of the Progressive Governors’ Forum (PGF), Salihu Lukman has berated the Nigeria Labour Congress (NLC) for protesting against the decentralization of minimum wage.
Lukman in a statement issued in Abuja on Friday said the campaign for the retention of the minimum wage in the exclusive legislative list under the 1999 Nigerian Constitution as amended, is being handled by the leadership of organised labour, especially Nigeria Labour Congress (NLC) based on deliberate distortions of facts.
According to him, one of the claims is that moving minimum wage from the exclusive legislative list to the concurrent list in the 1999 Nigerian constitution will contravene provisions of the International Labour Organisation (ILO) Convention, which Nigeria is a signatory.
Lukman, who was until his foray into politics, a high-ranking member of NLC, said the method being adopted by organised labour to press home its demand was outdated.
He enjoined the Nigeria Labour Congress to be objective in the fight against the removal of minimum wage from the exclusive list adding that the process of minimum wage-fixing across the world varies in almost every ILO member country.
See the full statement below…
DISTORTIONS IN THE MINIMUM WAGE DEBATE
The campaign for the retention of the minimum wage in the exclusive legislative list under the 1999 Nigerian Constitution as amended, is being handled by the leadership of organised labour, especially Nigeria Labour Congress (NLC) based on deliberate distortions of facts. One of the claims is that moving minimum wage from the exclusive legislative list to the concurrent list in the 1999 Nigerian constitution will contravene the provision of the International Labour Organisation (ILO) Convention, which Nigeria is a signatory.
If anything, the Convention allow for flexibility for each country to apply the guiding principles to its circumstances through consultative processes that take into consideration all the interests in the country’s labour market. The guiding principle is ‘to ensure that each Member ratifying the Convention is in possession of the information necessary for a decision upon the application of minimum wage-fixing machinery, the wages actually paid and the arrangements, if any, for the regulation of wages should be ascertained in respect of any trade or part of trade to which employers or workers therein request the application of the machinery and furnish information which shows prima facie that no arrangements exist for the effective regulation of wages and that wages are exceptionally low.’
Nowhere in the Convention is it provided that minimum wage-fixing is the exclusive responsibility of federal authorities. There is a requirement for a structure to manage the responsibility of fixing minimum wages. This is provided that ‘minimum wage-fixing machinery, whatever form it may take (for instance, trade boards for individual trades, general boards for groups of trades, compulsory arbitration tribunals), should operate by way of investigation into the relevant conditions in the trade or part of trade concerned and consultation with the interests primarily and principally affected, that is to say, the employers and workers in the trade or part of trade, whose views on all matters relating to the fixing of the minimum rates of wages should, in any case, be solicited and be given full and equal consideration.’
The structure should have representation from the government, labour and employers. Note that governments are expected to participate both as employers as well as sovereign authorities having the responsibility to promulgate laws, which should be respected, based on agreements reached. In fact, the role of governments as sovereign authorities, which also cover the obligation of enforcing the laws are more critical. It is expected that the government’s role as employer of labour should be secondary and in the event that the role of government is influenced more by its responsibility as an employer of labour will weaken the process of minimum wage fixing is provided in ILO Convention No. 30 of 1928.
Globally, in compliance with the provisions of the ILO Convention No. 30, two approaches are adopted by ILO member countries in fixing minimum wages. There is the Committee method and there is the notification method. The Committee method involves the government setting up a committee to undertake enquiries and make recommendations for fixing minimum wage. The notification method is based on the government publishing proposals in official gazettes to inform affected persons. Before publishing the proposal, the government is expected to make consultations. The difference between the two is largely theoretical. Often, the scope and orientation of collective bargaining structures in ILO member countries dictate the approach adopted.
Perhaps, it is also very important to highlight that all the experiences of ILO member countries across the world in handling challenges of minimum wage-fixing emphasises the presence of some preliminary technical functions to arrive at a consensus. Part of the technical work is largely around the process of estimating or computing specific economic variables of productivity, cost of living and affordability. Once those variables are established and agreed by all the different interests, it is then easy to fix the minimum threshold for wages, which then become the minimum wage.
Experiences of all ILO member countries will further confirm that fixing minimum wages is never the exclusive preserve of federal authorities. Since our model of democracy is the United State of America, it should perhaps be the first reference. In US, the minimum wage is set by US Labour Law and a range of state and local laws. As at January 2020, there were 29 states and D.C. with a minimum wage higher than the federal minimum. Almost 90% of US minimum wage workers are earning more than $7.25 per hour, which is the minimum wage at the federal level in the US.
The Federal, States and Counties make laws for minimum wage. The minimum wage for each level is negotiated. Different states are able to set their own minimum wages independent of the federal government. When the state and federal minimum wage differ the higher wage prevails. As at January 2018, there were 29 states with a minimum wage higher than the federal minimum. Washington, D.C, and New York City have the highest minimum wage at $15.00 per hour. By January 1, 2021, California has the highest state minimum wage at $14.00 per hour, which will be raised to $15 per hour starting January 1, 2022. The minimum wage in New Jersey is $12.00 an hour as of January 1, 2021, but will be raised by a dollar a year until 2024 when it will be $15. Massachusetts minimum wage is $13.50 per hour. A number of states have also in recent years enacted state preemption laws, which exclude local governments from setting their own minimum wage. As at 2017, state preemption laws for local minimum wages have been passed in 25 states.
Legislation has been passed recently in multiple states that significantly raises the minimum wage. California, Illinois, and Massachusetts are all set to raise their minimum wages to $15.00 per hour by January 1, 2023, for California and Massachusetts and by 2025 for Illinois. Colorado raised its minimum wage from $9.30 per hour to $12 per hour by January 1, 2020. New York has also passed legislation to increase its minimum wage to $15.00 per hour over time, with certain Counties and larger companies set on faster schedules than others. Some smaller government entities, such as Counties and Cities, observe minimum wages that are higher than the state as a whole.
The National Minimum Wage in the United Kingdom is set depending on your age, and whether or not you are an apprentice. It has been in place since 2005, and several changes to the way it operates have been made over time. At present, the minimum wage applies to any worker aged 16 or over. However, there are some exceptions, such as people who are working in their employers home, or who are undertaking voluntary work. In these cases, the National Minimum Wage might not apply. For eligible workers aged 25 and over, the minimum wage is known as a National Living Wage. It is expressed as an hourly gross payment, and reviewed every April. For the period April 2017 to March 2018, the National Living Wage paid to employees aged 25 or over, is £7.50 per hour. The National Minimum Wage is set by the UK government. It is reviewed every year, and usually, most categories get an annual increase. However, as the system is quite complicated and based on a number of different age bands, there have been years when employees of certain ages don’t get their minimum pay increased.
Some other countries negotiate with trade unions and employers, and agree on what should be the minimum wages. This means that there could be different minimum wages depending on the sector. Belgium, Norway and Sweden work in this way. Other countries have a different way of managing minimum wages. Singapore has minimum wages set by the government, but only across some low income sectors. These minimum wages are applicable to Singapore nationals and permanent residents only – although employers are encouraged to extend them to other workers as a minimum, too. And yet other countries don’t have any minimum wage at all, preferring to leave employers and employees to negotiate on an individual basis.
Coming closer home, in South Africa and Ghana, minimum wage is determined through negotiations between unions, employers and government. The National Minimum Wage (NMW) in South Africa was increased to R21.69 per hour from March 1, 2021. The 93c increment was announced by Employment and Labour Minister, which is in line with the NMW legislation of January 1, 2019. It is illegal and an unfair labour practice for an employer to unilaterally alter hours of work or other conditions of employment in implementing the NMW. In Ghana, government-mandated minimum wage provides that no worker in Ghana should be paid less then the mandatory minimum rate. Employers in Ghana who fail to pay the Minimum Wage may be subject to punishment by the government of Ghana. Weekly rates per month are calculated 4.33 times the standard hours per week.
What all this means is that the process of minimum wage-fixing across the world varies in almost every ILO member country. As much as every federal authority plays an important role in facilitating the process of fixing the minimum wage, it is never their exclusive legislative jurisdiction. How, as a nation, Nigeria arrived at the constitutional provision of assigning minimum wage under the exclusive legislative list is completely not based on the guiding principles provided under ILO Convention 30 of 1928.
It is however necessary to recognise that there are legitimate fears expressed by organised labour in Nigeria on the potential that the process can be abused if our states are allowed to fix minimum wages through moving minimum wage to the concurrent legislative list. What is required to address such problem is to revive the National Labour Advisory Council (NLAC), which normally has representation from labour, employers and government. It used to serve as the tripartite body in Nigeria for the resolution of major labour challenges. As things are, NLAC is hardly existing.
If we have NLAC, why can’t we have members agree to all the variables determining minimum wage in the country – productivity, conditions of living and affordability, based on which the national minimum is reviewed on annual basis being the proposed benchmark for the country? The National Bureau of. Statistics (NBS), National Salaries, Wages and Income Commission and National Productivity Centre (NPC) can handle the task of providing information about the variables of productivity, cost of living and affordability. With objectively computed information, the process of achieving consensus that highlight the minimum threshold for wages can be handled very effectively. Agreement under NLAC can serve as the federal minimum wage. Once agreement is reached at the level of NLAC, a prototype minimum wage bill can be developed and sent to National Economic Council (NEC), chaired by the Vice President of the Federal Republic with Governors of the 36 states as members. Following consideration and adoption by NEC, states can then domesticate provisions of the agreement as contained in the prototype bill based on their peculiar circumstance.
This model was used around 2005 for instance to resolve the challenge of amending our pension law. When the contributory pension law was passed by the National Assembly and accented to by President Olusegun Obasanjo, both unions, employers and state governments were opposed to the new pension law. But through consultations at the level of NLAC, both labour and employers agreed to a prototype pension bill, modeled based on provisions of the new Pension Act, which was presented to the NEC. Eventually, NEC adopted the prototype pension bill, which was transmitted to all the 36 states. The rest is now history as all states have domesticated the pension act based on their peculiarities.
Part of what needs to be resolved is the issue of whether states are allowed to adopt minimum wages below the agreed federal minimum wage established by NLAC as adopted or approved by NEC? Or what minimum wage should apply to workers employed by private organisations whose operation cover many states? First, no state should be allowed to have minimum wage lower than the benchmark as provided in prototype bills adopted by NEC. Secondly, in the case of private employers operating in more than one state, the highest minimum wage should apply.
The current debate about whether states can make minimum wage laws is basically about correcting the distortion in terms of applying the principles of minimum wage fixing as provided in ILO Convention 30 of 1928. It is important we appeal to leadership of organised labour, especially NLC, to stop promoting false information.
The fourth distortion that needs to be corrected is that the proposal to transfer minimum wage to the concurrent legislative list is not to stop the payment of N30,000 minimum. Although many state governments and private employers are having difficulty implementing the N30,000 minimum wage, we should separate the problems associated with implementing agreements from the bigger challenge of correcting the wrong procedure used in fixing the minimum wage in the country. Problems of implementing agreements can be addressed with reference to invoking provisions of Nigerian arbitration laws, which is what ILO Convention 30 of 1928 recommends. As a nation, we have arbitration law. Why is the leadership of organised labour not taking advantage of provisions of our laws to enforce the implementation of minimum wage law?
For emphasis, the challenge before us as a nation is about developing the capacity of our democracy to resolve national problems. It will amount to undermining our democracy to seek to block consideration of proposals before the National Assembly demanding the transfer of minimum wage to the concurrent legislative list of the 1999 Nigerian Constitution as amended. It is quite disappointing that labour leaders are organising protests and threatening to declare a national strike because the National Assembly is considering a democratic proposal. Organised labour and NLC leadership in particular need to be reminded that before the bill can become law, it will have to pass democratic stages that can accommodate labour’s demands.
Specifically, the House of Representatives Committee on Labour will have to organise a public hearing which will invite the submission of organised labour. Even if the bill is passed by the House of Representatives after public hearing, it will require the concurrence of the Senate, with another public hearing necessary. Assuming it is passed by both the House of Representatives and the Senate, being a matter requiring Constitutional Amendment, it will have to go to State Assemblies and will need endorsement by at least 24 States House of Assemblies. Assuming the bill passed through all these stages, it will have to be accented to by the President of the Federal Republic.
There is a wide scope of opening for engagement with the different layers of our democratic structures in the country to win the support of elected representatives to prevent the bill from coming into law. Instead of exploring how to engage democratic structures and prevent the bill from coming into law, the NLC leadership went to the over drive mode of protest and threats of a strike. Unfortunately, in all of these, it is doubtful if the NLC, its affiliates and all our organised labour bodies in the country are implementing the minimum wage of N30,000 for their employees. Ideally, he who comes to equity should come with clean hand. This is hardly the case. The boundary of accountability should cover organised labour.
Another related issue is that respect begets respect. Leaders of organised labour need to moderate how they easily and cheaply alleged that anyone who is critical or opposed to their position is doing the bidding of others. It appears that the only language they speak in campaigning for their demands is to slander people who disagree with them. We should relate to debate based on the capacity to explain our positions and win support without resort to blackmails. Blackmail and name calling will not resolve our challenges as a nation. NLC leadership and organised labour can allege whatever fancy their imagination, it will not resolve the challenge around issues bordering on implementation of the minimum wage in Nigeria unless we are able to have the courage to do the needful, which is about recognising the rights of all employers and the constituent units of our federation to negotiate and determine laws that affect them.
Finally, there are claims in the media that the 1999 Nigerian Constitution as amended provides for review of the minimum wage in the country every five years. Nowhere in the 1999 Nigerian Constitution, such a provision is made. What came close to that was the proposal by the current Speaker of the House of Representatives, Rt. Hon. Femi Gbajabiamila in 2017, then as Majority Leader proposed the amendment of the Minimum Wage Act to insert the clause that “The Minimum Wage shall be subject to periodic review every five years.” This proposal was never passed by the 8th National Assembly.
It is important that all these distortions are corrected. Our democracy must be insulated from distortions and falsehood. The struggles of Nigerian workers for a just and better Nigeria should not be oriented based on falsehood and distortions. The earlier NLC leadership retrace their steps and return to the path of truth and democratic engagement to win the support of Nigerians, including elected representatives, the better. Political bullying is antithetical to democracy and is counter productive to the struggles for a decent wage!
This position does not represent the view of any APC Governor or the Progressive Governors Forum.