The Chairman of the Federal Civil Service Commission ( FCSC), Prof. Tunji Olaopa, has suggested ways to resolve the current minimum wage.
Olaopa spoke on Monday in Abuja during a retreat on “Labour Reforms and the Quest for Living Wage in Nigeria: A Focus on Legislative Intervention” organised by the National Institute for Legislative and Democratic Studies (NILDS).
The bureaucrat who said that the topic was relevant since the process of fixing a national minimum wage was yet to be resolved recalled that in April 2024, President Bola Tinubu constituted a 37-member Tripartite Committee on National Minimum Wage with the charge to recommend a New Minimum Wage (NMW). He said the timing of this significant move by the government was predicated on the attainment of the statutory 5-year periodicity following the last enactment of the rate in April 2019; and the significant rise in the cost of living resulting largely from the FGN’s removal of subsidies on petroleum products, and its unification of FOREX rates .
He disclosed that there was a stalemate among the parties and the Tripartite (government, OPS, and labour unions) on the acceptable rate to adopt, which keeps threatening national industrial peace and harmony.
While he noted the minimum pay would motivate workers to work hard as to improve productivity, he noted the need to reckon with the capacity of employers to pay the contemplated wage level, given their revenue base, other cost commitments, bottom-line and their capacity to meet their basic mandates.
Explaining concepts such as wage and salary, Olaopa said: ” There are so many concepts embedded in this conversation. It is not useful to make this clarification academic. Consequently, I will simply explain the meaning so we are on the same page as I proceed.The first is wages, which in a general sense is a pecuniary reward paid to an employee for his or her services to an organisation. In a classical sense however, a wage is the emolument paid for specific units of labour rendered, usually measured hourly or daily rates, and is usually applicable to blue-collar jobs in factory lines.The second concept is salary, which in practical terms is the same thing as a wage; a reward for employee’s service. It is however technically different, as unlike wages, it is measured in annual rates and paid in monthly instalments, usually applicable to white collar jobs. The third category is pay, which encompasses wages and salaries as well as any regularly paid allowances or emoluments.The fourth is remuneration or compensation which is a broad term that includes wages or salaries, but wider in scope to cover financial allowances as well as such non-pecuniary benefits such as paid vacation, study leave, provision of car allowance or free transport, accommodation, medical expenses, other staff loans, long-service awards, etc.”
Olaopa also distinguished between the living wage and minimum wage. According to him, “a living wage is an income level that allows the employees and his/her households (as might be bench-marked) to afford minimum or adequate shelter, food, and other basic necessities of life.
“Minimum wage, on the other hand, is the lowest amount of remuneration required to be paid by law to an employee by an employer for work performed during a given period”.
According to Olaopa, the Tripartite Committee, chaired by Alhaji Goni Aji, has submitted its report to the President. But the latest information is that there is yet no agreement on the proposed wage figure.
He said that whereas labour’s last offer is N250,000 per month, that of government and private sector employers is in the region of N60,000.
According to him, faced with this impasses, the president has the option of calling Labour for a last-ditch discussion toward some compromise figure or to submit government’s preferred figure to the National Assembly for enactment.
“If the second option is chosen, the National Assembly will be advised to take up the gauntlet of mediation to reach a mutual rate, before the enactment.
“Where no agreement is reached after such efforts, the Assembly can pass the law anyway, because it is not absolutely necessary that agreement is reached in every negotiation,” he said.
Regarding issues raised by Comrade Joe Ajaero, President, Nigerian Labour Congress and others during the discussion of his paper, Olaopa opined that even in an ideal situation, the tripartite committee would still have some points of fundamental disagreement regarding workers rights and condition of service.
He said: “With regard to the unresolved minimum wage, even the N62,000 which the government is proposing, if calculated and extrapolated along compression ratio and the consequential it will generate, implementing will be significant pressure on the national economy, how much more if government meets the labour even half-way to the N250,000 it proposed?
“The only window according to him, is for the government to work harder on unbundling the bloated cost of governance through efficiency cum productivity audits of the entire expenditure structure of government with a view to freeing resources to finance development programmes and enhanced remuneration for the workforce. And even at that the government would only have addressed the government side and not that of the private sector.
“Indeed, the nation has reached a point where the tripartite committee needs a no-holds-barred conversation that should culminate in a national summit, the objective of which will be to arrive at a shared vision on Nigeria’s development future and how to achieve industrial harmony that is so badly required for national economic transformation. And the paper presented by Hon. Justice Benedict Kanyip, president of the National Industrial Court has thrown up some issues that should feature along with numerous others in that national conversation.”
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