The Nigeria Social Insurance Trust Fund (NSITF) has announced plans to criminalise employers' failure to enroll their workers under the Employees Compensation Scheme (ECS). This significant policy shift would move the Fund from its current persuasive approach to a more enforcement-driven strategy.
Stronger Legal Backing Sought
NSITF Managing Director and Chief Executive, Oluwaseun Faleye, revealed this development during his presentation at the annual Labour Correspondents Association of Nigeria (LACAN) conference in Abuja. The Fund is advocating for a review of enforcement provisions in the Employees Compensation Act (ECA) to impose stricter penalties on defaulting employers.
In his paper titled 'Employees' Compensation Enforcement: Issues and Challenges in the Oil and Gas Industry,' Faleye emphasized that in high-risk sectors like oil and gas, protecting workers through enforceable compensation mechanisms is both a statutory obligation and a moral duty.
Challenges in Enforcement
Faleye identified several obstacles hindering effective implementation of the compensation scheme in critical sectors:
- Widespread non-compliance and evasion by employers
- Increasing outsourcing and casualisation of workers
- Low awareness among stakeholders about their rights and obligations
- Inadequate sanctions that fail to deter violations
- Poor safety culture within organizations
The Managing Director described the Employees' Compensation Act of 2010 as a "bold, visionary step" that replaced the outdated Workmen's Compensation regime with a modern, no-fault system funded entirely by employers.
Comprehensive Reform Initiatives
To address these challenges, the NSITF has implemented multiple reforms including:
- Regular inspection of employers' records and documents
- Digitalisation of registration and remittance processes
- Simplified claims and compensation procedures
- Aggressive stakeholder engagement campaigns
- Enhanced inter-agency collaborations
- Strengthened workplace safety and health measures
Faleye proposed additional measures such as making ECS compliance a mandatory requirement for business licensing and renewal, establishing a unified labour data system for seamless monitoring, and empowering labour inspectors through better training and resources.
Union Support for Management
In a related development, two major domestic workers' unions within NSITF - the Association of Senior Staff of Banks, Insurance, and Financial Institutions (ASSBIFI) and the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE) - have expressed strong support for the Fund's current management team.
In a joint letter to the Minister of Labour and Employment, Dr Muhammadu Dingyadi, the unions commended the management's ability to drive positive change and ensure effective utilization of the Fund's resources.
The Employees' Compensation Scheme requires employers to contribute one percent of employees' salaries to provide fair compensation, rehabilitation, and support for workers who suffer occupational injuries, diseases, disabilities, or death in the course of their employment.
