The Federal Government and private sector employers appear headed for a confrontation over the proposed increase in the Nigeria Social Insurance Trust Fund employee compensation levy.
Employers have cautioned that raising the levy beyond the statutory one per cent could trigger job losses and force some factories to shut down.
The Federal Government made the case for the increase on Tuesday in Lagos at the Safe Workplace Intervention Project, an annual stakeholders’ interactive enlightenment forum and awards ceremony organised by the Ministry of Labour and Employment, the NSITF, and the Nigeria Employers’ Consultative Association, according to The Punch.
Speaking at the event, the Minister of State for Labour and Employment, Nkeiruka Onyejeocha, called for a review of the compensation framework, expressing concern about the benefits paid to families of workers who died in the course of duty.
She said the situation must change and stressed that employers must comply with established standards.
“A safe workplace is not optional; it is legal. I believe that, moving forward, we should also be reviewing the legal system and see how it complies with the quantum of workers when lives are lost. I strongly advocate that the compensation should be reviewed. When people die, their families are just given peanuts. The narratives have to change, and they must comply with the standard. SWIP helps to shift the mindset of employers from treating safety as an expense to recognising it as an investment in the people. I wish to reaffirm that this administration will not compromise on occupational safety and health,” she said.
However, speaking for employers, the Director of Corporate Services at Seplat Energy Plc, Dr Steve Ojeh, warned that the proposed increase could result in potential job losses, investment constraints, an expanded payroll burden, reduced performance-based incentives, and factory closures, among other consequences.
Represented by Seplat’s Senior Manager, Industrial Relations, Mr Ken Okoroh, Ojeh outlined the challenges employers currently face, including economic pressures, efficiency gaps, multiple levies, and the limited utilisation of benefits.
He urged the Federal Government to refrain from raising the levy and instead consider lowering the current one per cent employer contribution, given the mounting challenges confronting businesses, so they can remain viable and safeguard thousands of jobs.
He said employers currently shoulder over 75 different taxes and levies, a burden he noted is driving many businesses to the brink.
In response, the Minister of Labour and Employment, Muhammadu Dingyadi, called for deeper cooperation among organised labour, the Nigeria Employers’ Consultative Association, and the NSITF to elevate workplace safety for the benefit of workers, productivity, and the nation.
Dingyadi reaffirmed the government’s commitment to workplace safety and urged employers and organisations to adopt higher standards and best practices.
He added, “With this, we can build the future of work that is anchored on dignity, protection, and sustainability.”
