Minimum wage: NECA urges balance between welfare, affordability

Director-General of NECA, Adewale-Smatt Oyerinde.

The Nigeria Employers’ Consultative Association has said any credible minimum wage determination must take into account the cost of living, workers’ welfare, productivity, enterprise sustainability and ability to pay, employment generation and retention, and the prevailing national economic conditions, as organised labour clamours for an increase in the National Minimum Wage.

 The employers’ body stated this on Thursday in a statement signed by its Director-General/Chief Executive and Member of the International Labour Organisation Governing Body, Adewale Oyerinde.

 NECA said it acknowledged and commended the ongoing engagements between the Federal Government and organised labour on the wage. It said it recognised the legitimate concerns regarding workers’ welfare, rising cost of living and declining purchasing power.

 The association insisted that the determination of the National Minimum Wage was a tripartite process that must involve government, employers and workers as equal social partners.

 “The determination of the National Minimum Wage is fundamentally a Tripartite process that must involve Government, Employers and Workers as equal Social Partners,” NECA said.

 It said the principle of tripartism was established in the ILO instruments, particularly the Minimum Wage Fixing Convention, 1970 (No. 131), the Minimum Wage Fixing Recommendation, 1970 (No. 135), and the Minimum Wage-Fixing Machinery Convention, 1928 (No. 26). According to the association, the instruments underscore the importance of meaningful consultation with the most representative employers’ body, NECA, and the most representative workers’ organisation, the Nigeria Labour Congress.

 NECA said it respected the right of the government and organised labour to hold bilateral discussions but added that such talks could not substitute for the statutory tripartite process: “Organised private-sector employers cannot be deemed parties to, or contractually bound by, agreements reached without their participation and concurrence.”

 The association said this did not diminish employers’ obligation to comply with any National Minimum Wage validly established under the National Minimum Wage Act.

 NECA said it was not opposed to the negotiation or review of the wage, stressing that the process must be inclusive, transparent, evidence-based and consistent with relevant ILO conventions and recommendations. It said Article 3 of ILO Convention No. 131 required consideration of both workers’ needs and relevant economic factors.

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 The association said the considerations were critical at a time Nigerian businesses continued to grapple with high energy costs, inflation, high cost of funds and other operational challenges.

 NECA also drew a line between the National Minimum Wage and a general wage increase, stating, “The National Minimum Wage is the legally prescribed minimum compensation that employers covered by the law must pay workers. It serves as a statutory floor for worker protection and should not be misconstrued as an automatic, across-the-board salary increase for all categories of employee.”

 It said consequential salary adjustments, wage relativity and general wage increases were distinct remuneration matters that should be addressed through collective bargaining, contractual arrangements and enterprise-level negotiations.

 The employers’ body also expressed concern over threats of industrial disruption arising from the ongoing wage discussions. It said avoidable disruptions could threaten enterprise survival, employment security and investor confidence, and frustrate the ongoing economic recovery of organised businesses, especially small and medium enterprises.

 “We therefore call for constructive social dialogue, mutual respect and the use of established lawful dispute-resolution mechanisms to preserve industrial harmony,” NECA said.

 NECA said it looked forward to the commencement of the formal National Minimum Wage negotiation process and trusted that the Federal Government and all social partners would ensure full respect for tripartism and the fundamental principles of the relevant ILO conventions and recommendations.

 The association said the welfare of workers and the survival of businesses were complementary objectives that must be pursued concurrently in the interest of national development.

 “A fair National Minimum Wage must protect workers, preserve jobs, sustain enterprises and support national economic growth. Tripartism is not merely desirable; it is indispensable to achieving this objective,” NECA said.