Tinubu’s Assent: The Real Battle for Minimum Wage Implementation Begins

The recent passage of the new national minimum wage into law and its subsequent assent by President Tinubu has sparked optimism that the long-standing controversy surrounding minimum wage has been resolved. However, many anticipate that the real challenge lies ahead, particularly in implementing the wage increase at the state level, where resistance has historically been the strongest.

In recent years, negotiating the consequential adjustments of the national minimum wage has consistently encountered significant obstacles from numerous state governments. These governments often employ various tactics to avoid complying with the Minimum Wage Act, creating a climate of apprehension among stakeholders who prepare rigorously to ensure they are not outmaneuvered in the negotiations that follow.

Some state governors have already signaled the difficulties they face in fully complying with the new wage law. For instance, the Governor of Gombe State recently stated that the state lacks the financial capacity to meet the requirements of the National Minimum Wage Act. However, this is a familiar excuse; it has been repeatedly demonstrated that the issue is not a lack of resources but rather a question of whether states are willing to prioritize the salaries and welfare of their workers. Some states, such as Edo, have already begun implementing the new wage even before the law was enacted, while others have expressed readiness to comply as soon as the law takes effect.

Workers’ Welfare in the Balance

The Nigeria Labour Congress (NLC) has consistently argued that states will continue to claim financial incapacity unless they begin to prioritize the welfare of their workers. The NLC points to past instances where state governors, despite receiving funds from the Buhari administration specifically to pay salary arrears, diverted these funds to unrelated projects or misappropriated them. This, the NLC asserts, is clear evidence of the habitual disregard state governors have for workers’ welfare, despite these workers being crucial to the state’s operations.

With the new wage law set to take effect retroactively from April 19, 2024, per the stipulations of the 2019 Act, stakeholders are already strategizing to ensure its proper implementation. The battle is expected to be intense, particularly at the state level, where compliance has historically been most contentious. Ideally, the implementation of the new wage law should be straightforward, provided that laws are adhered to and the welfare of the populace is prioritized. Unfortunately, given the level of impunity and disregard for the rule of law in governance, the process is likely to be fraught with challenges.

Negotiating the implementation of the new minimum wage will not be an easy task. The process of securing the best possible outcome for workers while avoiding prolonged negotiations, as seen in previous instances, will require patience, knowledge, and tact from the unions. At the same time, state representatives from the Labour Centres, which include the NLC, the Trade Union Congress (TUC), and the Joint Negotiating Councils, will face significant pressure, with attempts to either bribe or intimidate them during negotiations.

State-Level Negotiations

The NLC’s state secretariats must engage in rigorous negotiations to ensure that the new wage is implemented across all public and private sector organizations within each state. This includes state, local government, and state-owned enterprises, with careful consideration given to the proper consequential adjustments for pensioners. Ideally, the minimum wage should be implemented within two months of the President’s assent on July 29, 2024.

The NLC has recognized the need to build the capacities of its representatives to ensure they fully understand their roles and can effectively negotiate better wages for their members at the state level. To this end, the NLC has initiated a workshop to train its state officers in all 36 states and the Federal Capital Territory, Abuja. This training is intended to address the shortcomings of previous minimum wage implementations, which were plagued by delays, outright refusals by some state governments to comply, and subpar outcomes that left workers dissatisfied and led to strikes across the country.

It is important to understand that the negotiation process is not just about ensuring that no worker earns less than ₦70,000, the baseline for workers on grade level one, step one. In reality, no worker should be on this grade level; most states have a minimum grade level of GL 4, step 2, and for federal workers, it is GL 3, step 4. This means that no public sector worker should be paid less than around ₦100,000, with some states potentially setting the minimum at ₦115,000 to ₦120,000. The negotiating teams must carefully navigate the details to ensure that workers do not lose out during this process.

Typically, the National Joint Public Sector Negotiation Council, comprising representatives of public sector workers and the government, would establish a salary table that serves as a framework for implementation. This federally agreed salary table would then guide each state in making the necessary consequential adjustments. It is therefore the responsibility of union leaders at the state level to ensure that this is properly applied in their respective states.

Private Sector and Pension Adjustments

In the private sector, a more dynamic mechanism has evolved, with salaries and wages being renegotiated every two years. This practice is something the new National Minimum Wage Act seeks to align more closely with, to keep public sector workers’ wages in step with inflation. However, with the new Wage Act, private sector employers will need to sit down with various unions to negotiate upward adjustments based on the Act’s provisions.

Additionally, pension adjustments are also tied to the new minimum wage, ensuring that retirees receive adequate remuneration. This is why the Union of Pensioners often participates in negotiations, albeit as observers.

As this new round of negotiations begins, it is clear that tensions will run high, particularly if state governors adopt a belligerent or unyielding stance. While private sector employers are expected to face fewer challenges, as their wage scales are generally more competitive, it remains crucial that all parties approach the implementation process with caution.

The Federal Ministry of Labour, as the arbiter, must deploy all available resources to monitor the process, reduce tensions, and prevent industrial crises. With genuine cooperation from all parties, the 2024 National Minimum Wage implementation could be the smoothest and most conflict-free yet. However, much depends on the attitudes and actions of the stakeholders involved. It is vital that all parties remember the urgency of getting the new wages into workers’ hands to alleviate the severe economic hardships many Nigerians are currently facing. A swift resolution will help mitigate hunger and reduce the escalating social tensions in the country, including ongoing protests against bad governance.

This article is sourced from The Vanguard newspaper, with minor edits and adaptations by The Spectacles for clarity and readability.