OPS opposes proposed hike in workplace compensation levy

Nkeiruka Onyejeocha, Minister of State for Labour and Employment

…warns of possible job losses

The Organised Private Sector of Nigeria (OPSN) has opposed a possible increase the Nigeria Social Insurance Trust Fund (NSITF) employee compensation levy, warning it could trigger job losses and put more burden on businesses, many of which are struggling amid harsh operational environment.

Government officials renewed calls for a review of the levy on Tuesday in Lagos at the Safe Workplace Intervention Project (SWIP) annual stakeholders’ engagement forum and awards ceremony, organised by the Ministry of Labour and Employment, NSITF and the Nigeria Employers’ Consultative Association (NECA).

Under the Employees’ Compensation Act (ECA) 2010, employers are required to contribute a minimum of one percent of their monthly payroll to the Employees’ Compensation Fund (ECF), which provides financial and medical support to workers affected by workplace injuries and accidents.

Speaking at the forum, Nkeiruka Onyejeocha, Minister of State for Labour and Employment, observed that current compensation payouts to families of deceased employees or workers who suffered permanent disability, remain inadequate.

According to Onyejeocha, such compensations are “peanuts”, stressing the need for employers to comply with improved standards to enhance worker welfare.

But employers voiced strong opposition. Steve Ojeh, director of corporate services at Seplat Energy Plc, who spoke on behalf of employers at the forum, warned that increasing the levy would worsen business pressures, potentially leading to reduced hiring, payroll restructuring, lower performance-based incentives and factory shutdowns.

Ojeh, represented by Kenneth Okoroh, senior manager, industrial relations, Seplat, cited economic pressures, multiple taxation, efficiency challenges and limited utilisation of existing benefits as key concerns. He urged the Federal Government to maintain the current one percent contribution rate to enable businesses remain viable and protect jobs.

Mohammad Dingyadi, Minister Labour and Employment, called for deeper collaboration among organised labour, employers and the NSITF to strengthen workplace safety standards. He reaffirmed the government’s commitment to safer work environments, saying improved compliance would enhance productivity and national development. “With this, we can build a future of work anchored on dignity, protection and sustainability,” Dingyadi said.

President of NECA, Ifeanyi Okoye, represented by Bunmi Osuntuyi, director-general, International Chambers of Commerce (Nigeria), lauded the introduction of the ECA and increasing workplace compliance by businesses, which he believed has aided productivity.

Adewale-Smatt Oyerinde, the director-general of NECA, noted that Nigeria’s alignment with the International Labour Organisation (ILO) has made it more imperative for businesses to comply with workplace safety measures.

Oluwaseun Faleye, managing director, NSITF, on his part, stressed the need for continued strong collaborations between private and public sectors in driving occupational safety and productivity.

Aliyu Haruna organised labour, National Treasurer of the Nigeria Labour Congress (NLC), , described the Employees’ Compensation Act as a landmark reform but noted that its impact has been constrained by low awareness, administrative bottlenecks, weak enforcement and limited coverage.

Haruna called for increased digitisation of claims processes, stronger institutional capacity, broader coverage and sustained political commitment across all tiers of government to ensure the Act delivers its intended benefits. According to him, strengthening the compensation framework would reduce the socio-economic burden of workplace accidents while promoting safety, accountability and social justice nationwide.

SENIOR ANALYST - LABOUR/LAGOS STATE

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