Minimum wage and maximum disagreements over implementation

It’s over four months now since the N30, 000 new minimum wage bill was signed into law by President Muhammadu Buhari for implementation, but disagreements between the federal government and Labour over its implementation still persist. TAIYE ODEWALE, in this report, takes a look at the contending issues.

When on Thursday, April 18, 2019, President Muhammadu Buhari signed into law the N30, 000 national minimum wage bill, forwarded to it for assent by both chambers of the National Assembly in March, this year, none of the stakeholders involved – the federal government , Organised Labour and workers envisaged that its implementation would delay for about four solid months.

Not even what can be described as “marching order” given by President Buhari exactly a month ago (July 16, 2019), that payments of the N30, 000 minimum wage should be effected on salaries of those collecting below the amount, has helped in kick-starting the payment of the new minimum wage to any categories of workers at the Federal Civil Service level, due to disagreements between government and Labour over appropriate templates to be used for implementation.

While both parties, as at May 27, 2019, when the N8.92trillion 2019 budget was signed into law by President Buhari, knew and agreed that implementation of the 66% increments across board from grade levels one to 17, will be impossible, such agreement has not been met with by both parties on any of the other alternative templates of implementation put forward from both ends.

Interestingly, the N30, 000 new minimum wage is by simple arithmetic, N12, 000 above the N18,000 minimum wage  still being collected by the least paid public workers in the country otherwise known as grade one officers which is 66% increment.

Were the same percentage increment to be implemented across board by the federal government from grade levels one to 17, it will require it to look for additional N1.6 trillion to the N2.29 trillion earmarked for personnel cost out of the N4.04 trillion recurrent expenditure component of the N8.92 trillion 2019 budget. By extension, additional external borrowings which President Buhari said will not be done in getting the new minimum wage implemented must be carried out.

President Buhari who gave the advice on December 19, 2018, during presentation of the 2019 budget proposals to the joint session of the 8th National Assembly, said: “In order to avoid a fiscal crisis with the federal government, as well as the states, it is important to devise ways to ensure that its implementation does not lead to an increase in the level of borrowing.

“I am, accordingly, setting up a high-powered technical committee to advise on ways of funding an increase in the minimum wage and the attendant wage adjustment without having to resort to additional borrowings.

“The work of this technical committee will be the basis of a finance deal, which will be submitted to the National Assembly alongside the minimum wage bill. In addition, the technical committee will recommend modalities for the implementation of the new minimum wage in such a way as to prevent its inflationary impact as well as ensure that its introduction does not lead to job losses.”

However, with the accomplishments of all the processes and understanding that borrowings or retrenchment of workers will not be done to implement the minimum wage, the remaining grey areas between the federal government and Labour, have been required appropriate templates to be used for consequential salary adjustments for workers on grade levels seven to 17 since those on grade levels one to six are largely to enjoy the 66% increment.

Some of the templates suggested by Labour, but rejected by government officials within the last three months, were 50% upward salary adjustments for grade levels seven to 14 officers and 30% for those on grade levels 15 to 17 or 30% adjustments for the former and 25% for the latter.

Negotiations between the two parties got deadlocked recently when the federal government, in line with its plan of not going outside the provisions of the 2019 budgetary allocations, proposed 10% upward salary adjustments for grade levels seven to 14 and five per cent for grade levels 15 to 17 in carrying out implementation of the new wage.

The proposal was not only rejected by labour officials, but also threatened to call out workers for nationwide protests, a move negotiators of the federal government strategically countered by alleging that Labour “is responsible for the delay being experienced in the implementation of the new minimum wage.”

Specifically, on Monday, this week in Abuja, the chairman of the National Salaries, Income and Wages Commission, Chief Richard Egbule, declared that the delay in the implementation of the new minimum wage as regards as regards consequential adjustments of salaries of workers from grade levels seven to 17 was caused by unreasonable demands of labour unions.

Egbule said the current demand of the labour unions would raise the total wage bill too high and that was why government could not accept their proposed salary adjustments.

He said, “Labour is asking for higher consequential adjustment and government in its wisdom had made budgetary provision for an adjustment of 10% across the board for those already earning above N30, 000 per month.

“However, the Unions have refused this offer, saying that because the increase in minimum wage from 18,000 to N30, 000 was 66 per cent, therefore they want 66 per cent increment across the board.

“We told them that the minimum wage was not raised from N18, 000 to N30, 000 through percentage increase but as a result of consideration of economic factors including ability to pay.

“However, we said that if they want consequential adjustments in percentage terms, we will use a percentage that when applied will not exceed what has been provided for in the budget.

“The computation based on a percentage which government had given to labour, was 9.5 per cent from levels seven to 14 including levels one to six of those salary structures that did not benefit from the minimum wage; and then five per cent from level 15 to 17. Labour countered the offer and proposed 30 per cent increase for level 7 to 14 and 25 per cent for level 15 to 17.

“One point we keep repeating is, it will be unfair that because you gave the person earning N18,000 minimum wage N12, 000 increase and now give a level 17 officer already earning about   N400,000 per month,  N100, 000 in addition,  if the suggested  25 per cent increment is approved.”

According to him, in line with budgetary provisions for the new minimum wage, at the last meeting between the Federal Government and the labour unions, the government proposed a 10 per cent increment for levels seven to 14 and a 5.5 per cent increase for levels 15 to 17 which are however being rejected by labour and invariably delaying implementation of the entire offer.

“Labour is currently stretching out and eating up the time that people could have used in benefiting from the adjustments because the new minimum wage implementation will start from April, this year, when the president signed it into law.

“My advice is for labour to accept the terms for now and prepare to fight for the harmonisation of salaries that is coming up very soon where some of the other issues being raised will be taken care off. The committee has already been formed and awaiting inauguration. I want them (Labour) to know this and liberate us from this unnecessary log jam.”

Egbule said only five out of the numerous different salary structures within the scope of public service will be covered by the new minimum wage implementation.

Workers to benefit according to him, are those being paid through  the following salary structures ÷ (i) the Consolidated Public Service Salary Structure (CONPSS), ii,  Consolidated Health Salary Structure (CONHESS), iii,  the Consolidated Research and Allied Institutions Salary Structure (CONRAISS), iv, Consolidated Tertiary Institutions Salary Structure (CONTISS II) and v, the  Consolidated Tertiary Educational Institutions Salary Structure (CONTEDISS).

“The negotiations between the Federal Government and the joint National Public Service Negotiating Council on the consequential adjustments arising from the new minimum wage for officers who earn above N30, 000 would continue. The outcome of such negotiations will be implemented with effect from the date an agreement is reached,” he said.

However, the negotiating team of the organised labour three days ago, specifically on Wednesday this week after an emergency meeting, insisted that the proposed salary adjustments for levels seven to 17 by the federal government was unacceptable.

Fielding question from journalists after the meeting, the secretary of the Joint National Public Service Negotiating Council, Comrade Alade Lawal,  said with its proposals and rigid position on it, the federal government was trying to force labour into acceptance which according to him, will only make workers poorer.

“We have met with the federal government team and vehemently rejected their proposal. We maintained our earlier position and demands at the meeting. Government negotiators were not ready to move from their position also. We have told to package our position and their own proposals and send to their principal (President Muhammadu Buhari) to look at the difference.

“We want him to look at it hoping that the federal government will come up with better proposals. Whatever they come up with, will be the subject of our meeting next week,” he said.

But in the week starting from tomorrow (Sunday, August 18, and ending on Saturday, August 24, 2019), payments of August salary will commence, meaning that whatever agreement arrived at, will not be captured in the workers’ salaries for the month.

Perhaps, expected agreement by both parties from such negotiations may be arrived at before commencement of payment of September salaries for workers with the coming on board of ministers next week who will be in better position to drive the process at both the labour and finance ministries.

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