OGUN STATE LABOUR INDUSTRIAL ACTION: OUR POSITION, OUR OFFERS - Ogun state govt

1. Background

The commencement of one week warning strike by the organised labour in Ogun State in the middle of an ongoing negotiation process has come to the State Government as a big surprise and a breach of faith and existing cordial relationship between labour and the Government since the inception of this Administration in May, 2019.

The initial grouse of labour was ostensibly the Pension Reform Bill that was passed by the State House of Assembly without sufficient consultation with labour. The essence of the reform was to correct the conflict between the Ogun State Pension Law of 2006 (as amended in 2013) and the Pension Reform Act of 2014, as a prelude to addressing the anomalies that characterised the pension practice for Ogun State workers.

The labour wrote on 31 August, 2020 to the government to express displeasure with the process. His Excellency, Governor Dapo Abiodun immediately constituted a team comprising of the Secretary to the State Government, Head of Service, Chief of Staff, Honourable Commissioner for Finance & Chief Economic Adviser, Accountant General, Permanent Secretaries (Bureau of Service Matters, Establishment & Training, Budget & Planning, Bureau of State Pensions, Bureau of Local Government Pensions), Solicitor-General, among other top state functionaries to engage with labour.

The government team promptly invited the representatives of labour to a meeting the following day on 1 September, 2020 to obtain their input as the Bill was yet to be assented to by the Governor. Labour team comprised of the Chairman of the State Chapter of Nigeria Labour Congress (NLC), his Trade Union Congress (TUC) and Joint Negotiating Committee (JNC) counterparts, and other labour leaders, including the representatives of some affiliate unions. 

At the meeting, the government regretted the inadequateconsultation with labour and there was an agreement that labour’s input would be provided within a week so that the Bill could be returned to the House of Assembly for review. That same day, labour leaders went to the House of Assembly and the Speaker reassured them that their input would be considered in a revised Bill.

In what would later manifest as a pattern of deliberate brinkmanship, on the day following the two  separate meetings with Government representatives and the Speaker of the House (2 September, 2020), instead of labour’s input into the Pension Reform Bill as agreed, they issued a notice of Trade Dispute with demands that transcended the issue of Pension Reform.

Following receipt of the letter declaring trade dispute and conveying the demands of labour to the Government, His Excellency again mandated the Government Team to invite and engage labour in another round of negotiation. The first negotiation meeting was held on Monday, 14 September, 2020 and progressed very well such that by the following day, Tuesday, 15 September, 2020, the process narrowed down the issues and was seemingly approaching an amicable resolution when the labour team requested for a 30-minute adjournment for their own internal consultation and response on government offers. The government team excused themselves from the venue of the meeting (the Head of Service Conference Room) and returned to their offices, awaiting a notification from the labour team to resume the negotiation process, as was the case the previous day.

Rather than the labour team notifying the government team of the conclusion of their internal discussion and resumption of the negotiation, even if they differ on government offers, they left the venue of the negotiationwithout as much as courtesy of informing the government team who were waiting for them and then proceeded to declare a deadlock in the negotiation and a one week warning strike, commencing from Wednesday, 16 September, 2020.

 

This is most unfortunate and a negation of civility and expected ethos that should underpin negotiationsbetween government (particularly one that has demonstrated in many ways its commitment to staff welfare) and organised labour who are presumed partners in the task of developing the state and catering for the welfare and wellbeing of all citizens and residents. This behaviour lends credence to insinuations that labour may be acting out a script. 

1.1 Personnel Related Financial Obligations Inherited from Past Administration.

The breakdown of the inherited outstanding personnel liabilities is as follows:

i. Gratuity of exited (retired) Personnel:

a. State Personnel (accumulated 2014 – 2019)​N18.5 Billion.

b. Local Government & SUBEB (2011 – 2019)​N32.5 Billion

​​Sub Total (Gratuity)​​​​​N51.0 Billion.

ii. Leave Bonus (5 years – 2015 and 2019)​​​N9.2 Billion.

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iii. Contributory Pension Liabilities:

a. State Government​​​​​N20.1 Billion

b. Local Government & SUBEB​​​​N26.4 Billion

Sub Total (Contributory Pension Liabilities)​​N46.5 Billion

 

iv. Promotion Arrears -​​​​​N217 Million

Total ​​​​N106.9 Billion

The past Administration only remitted the deductions from staff salary for check off dues and cooperativedeductions in the twilight of its exit, leaving out accumulated Contributory Pensions.

2. Some Initiatives for the Welfare of Ogun Workers 

In fulfilment of his electoral promise to Ogun State workers and those who have toiled for the state and retired (the pensioners), the Dapo Abiodun Administration has implemented a number of initiatives to demonstrate commitment to staff welfare and recognition of their central role in effective implementation of government programmes and policies.  Some of these include:

i. Consistent payment of salaries on or before 28 of every month to all categories of workers. This is significant, given the delay and uncertainty that characterised payment of salaries in the immediate past.

ii. Prompt payment of pensions to retired public servants, eliminating agony usually experienced by pensioners as a result of delay in pension payment.

iii. Clearance of 2-year (2016-2017) backlog of over 10,000 teaching and non-teaching staff.

iv. Absorption into full employment almost 2,000 ASCON candidates engaged in the twilight of the past Administration.

v. Pardon and re-absorption into service of labour leaders sacked by the past Administration with full benefits restored.

vi. Training and retraining of public servants to enhance skills, productivity and individual development.

vii. Restoration and regular disbursement of running costs to Ministries, Development and Agencies (MDAs) as well as public schools to meet regular operating costs, provide conducive work environment and boost productivity. Staff no longer have to use their personal resources to run their offices

 

 

3. The Demands of the Labour and the Negotiation Process 

3.1 The Demands of Labour

The notice of Trade Dispute issued by labour on 2 September, 2020 giving a 21-day ultimatum included the following demands:

i. Implementation of New Minimum Wage.

ii. Review of the Pension Reforms Bill (the original and only issue of previous meeting).

iii. Payment of Leave Bonus, including the inherited backlog.

iv. Payment of accumulated gratuity from 2011 to date.

v. Gross Salary Payment, which includes remittance of deductions.

vi. Clearance of Promotion of 3 years (2018-2020).

3.2 The Negotiation Process 

On receipt of the declaration of the Trade Dispute, it was clear to the government that the review of the Pension Reform Bill, given the abandonment by labour of the mutually agreed approach to address any concern they have about it, was just a perfect excuse for some agent provocateur to rupture the existing cordial relationship and goodwill between organised labour and government. 

The government, though taken aback by the turn of events, invited labour for a negotiation meeting on Monday, 14 September, 2020 on the unilateral declaration of Trade Dispute and the demands in their letter.

 

As scheduled, the first plenary session of the Negotiation was held on Monday, 14 September, 2020 in a general atmosphere of civility and mutual respect, with each party adequately represented.

3.2.1 Principles Guiding Government Negotiation Position

The government team appreciated the legitimatedemands of labour and restated its commitment to staff welfare. However, it shared some guiding thoughts behind its approach to the negotiation, which are as follows:

a. Government acknowledged that there hadbeen a mistrust between government and labour in the past. Therefore, this Administration is committed to strengthening trust with all its stakeholders and will not give promises that it cannot honour, because there is a need to break the cycle of promises not kept by government.

b. Government will continue to demonstrate openness, transparency and sincerity in its dealings with all, and in this instance Ogun State workers, thus making available government financial positions that are verifiable.

c. Any agreement with labour will be based on ability of the State to pay, without jeopardising the ability of government to discharge its obligations to the generality of the citizenry.

d. Priority should be given to labour demands that have wide impact on both current workers as well as pensioners.

e. Whilst a mechanism should be jointly devised to gradually clear the inherited backlog, this Administration will not add to the backlog.

 

3.3 Financial Implications of Labour Demands

The following are financial implications of the demands of labour.

i. Pension Reforms Bill

It was jointly agreed that a committee be set up to fashion out an appropriate pension system for the state. 

ii. Implementation of New Minimum Wage

This will increase the monthly wage bill by N1.04b (over a Billion Naira).

iii. Payment of Leave Bonus

Labour wants an immediate payment of 3-yeararrears, amounting to approximately N9.2B (overNine Billion Naira).

iv. Payment of Gratuity

Labour is demanding immediate payment for 3 years arrears which is approximately N24b (Twenty our Billion Naira) and wants additional payment of about N1.2b (One Billion and Two Hundred Million Naira) for the underpayment bythe last Administration to some categories of retired personnel.

v. Gross Salary Payment

Labour demands regular remittance of deductions from staff salaries as appropriate. Government has already commenced regular remittance of these deductions and will continue to do so.

vi. Outstanding of 3-year Promotion (2018-2020)

Labour demands immediate commencement of the implementation of the 3-years (2018-2020) outstanding promotions.

The summary of these demands by labour is immediate disbursement of about N32.5B (Thirty Two Billion and Five Hundred Million Naira) and subsequent additional N2B monthly on top of the current wage bill.

3.3.1 Intermediate Understanding

The parties shared thoughts on the items of demand with various options considered with the meeting adjourned till the following day, Tuesday, 15 September, 2020 to finalise and sign off on a mutually agreed position.

On resumption of the negotiation on Tuesday, 15 September, 2020, the labour team expressed preference for the implementation of new minimum wage as the number one priority, whilst other items can be negotiated.

4. Government Offers and Implementation Plan

 

The government team offered a variety of options that will tick a number of boxes as indicated in the guiding thoughts (above) informing the government position.

 

4.1 Implementation of New Minimum Wage

 

In deference to the labour’s preference for the implementation of new minimum wage, even if all other items may be deferred, the government team agreed to the implementation of the new minimum wage for all categories of workers, commencing from November, 2020.

 

4.2 ​Other Demands for Future Consideration

The government will also continue to ensure regular remittance of deductions from staff salary to avoid addition to the backlog and gradually clear any outstanding arrears. 

However, the remaining demands will be subjects of further joint reviews, the first of which will be in March, 2021.

5. Resumption of Negotiation

The government considers the abrupt withdrawal of the labour team and unilateral declaration of one week strike as unfair, indecorous and violation of the principles of collective bargaining.

It is therefore a surprise that labour would take the provocative steps it has taken even when the negotiation process was still on.

As an Administration, we remain committed to the welfare of Ogun State workers as we are to the fulfilment of our electoral promises to the generality of Ogun State citizens and residents. When the State signed the agreement with labour for the implementation of the new minimum wage, no one envisaged COVID-19 and its debilitating socio-economic impact that has constrained the Internally Generated Revenue (IGR) of the State and the unplanned expenditures in its wake. This has forced Ogun State like most states in the country to review our 2020 budget down from approximately N450B (Four Hundred and Fifty Billion Naira) to N280B (Two Hundred and Eighty Billion Naira), about 38% downward review. A cursory look at the financial implications of the demands of labour in comparison to the budget size will see a glaring demonstration of the government to be as accommodating of the demands as possible, even in the face of manifest COVID-19 induced constraints and uncertainty. 

We therefore call on labour to return to the negotiation table to finalise the narrow area of difference in the interest of majority of Ogun State workers who are eagerto return to work after the stay-at-home occasioned by COVID-19 and the interest of our state as a whole. The Building Our Future Together Agenda of our Administration must continue unhindered. This requires all the stakeholders to have a broader view of issues rather than narrow consideration and immediate benefits. This is the path dedicated by reason and current circumstance and we trust preponderant majority of Ogun State workers share this vision.

Igbega Ipinle Ogun, Ajose Gbogbo Wa Ni

 

Tokunbo Talabi

Secretary to Ogun State Government

Thursday, 17 September, 2020