Former Minister of Works Babatunde Fashola argues that while discussions regarding a new minimum wage for workers are at the forefront of public discourse, Nigerian income earners should be able to make appropriate adjustments to meet the country’s rising cost of living.
The former governor of Lagos State stated in an article titled “Minimum Wage Review – My Take Away” that “when cost of living rises as they have now, the lowest and the highest income earners are impacted to varying degrees and therefore deserving of reasonable adjustments whether they earn wages or salaries.”
Section 4(1)(b) of the National Minimum Wage Act 2019 was also criticized by Fashola since it exempted “an establishment employing less than 25 persons” from the Act’s requirements on minimum wage payment.
“Raises serious doubts about whether we have enacted a minimum wage Act if small businesses who barely have 25 employees but who employ the largest number of the most vulnerable people are exempt from the law as currently legislated,” stated the former minister in reference to the exemption of such firms.
He questioned, “So who is the law protecting?”
According to Fashola, a Senior Advocate of Nigeria (SAN), the National Assembly has the authority to establish a national minimum wage for the Federation, not a monthly income, under item 34 of the 1999 Constitution as revised in the Exclusive Legislative list.
While wages and salaries are popular forms of remuneration that employers might use, he explained that the former refers to payment based on an hourly rate and the number of hours the employee works, while the latter is a fixed annual sum that can be paid weekly, biweekly, or monthly depending on an agreement.
Therefore, it is clear from this definition that the NASS may have violated the Constitution by passing legislation establishing a SALARY (monthly payment) when they only have the authority to pass laws establishing WAGES (hourly payments), as the Minimum Wage Act stipulates in Section 3(1) that the minimum wage of N30,000 shall be paid monthly.
Because Section 3(4) states that the minimum pay “shall be reviewed in line with the provisions of this Act,” which includes Section 3(1), which prescribes a monthly sum rather than an hourly wage, this is significant when discussing the minimum wage in 2024.
Naturally, if and when our nation decides to establish a genuine minimum wage, we also need to come up with a formula to assess the salaries of those who do not receive pay in order to help them cope with the obstacles posed by rising costs of living.
“Given its potential to provide the groundwork for national productivity, wealth creation, and prosperity, this resolution to the employee remuneration conundrum may prove to be the most advantageous one yet. The chance is too great to pass up or waste,” he continued.
The former governor advised specialists in labor law and compensation issues to put their thinking caps on and look for assistance from the world’s top universities.
“As we proceed, we must keep in mind the necessity of potentially amending item 34 of the Exclusive list in the constitution to include salaries, as it does not at this time.”
On Monday, June 3, 2024, the Organized Labor called an indefinite industrial strike following weeks of fruitless negotiations over a new national minimum wage for workers. As labor shut down the National Assembly, state assemblies’ complexes, banks, hospitals, airports, and the national grid, business was paralyzed.
The labor unions claimed that the current ₦30,000 minimum wage was insufficient to support the well-being of the typical Nigerian worker and that the government should provide workers with a more competitive wage in light of the country’s current inflationary pressures, the consequences of the administration’s twin policies of eliminating gasoline subsidies, and the unification of its forex windows.
The labor unions also bemoaned the fact that certain states are not paying the existing salary award, which ran out in April 2024—five years after former President Muhammadu Buhari signed the Minimum salary Act of 2019. Every five years, the Act should be reviewed to ensure it still meets the needs of modern workers in terms of the economy.
President Bola Tinubu established a tripartite committee in January 2024 to negotiate a new national minimum wage.
Labour first proposed a new minimum wage of ₦615,000 at the beginning of the negotiations, but they then saw fit to lower their demand to ₦497,000 and then ₦494,000.
Additionally, at first, the government and the Organized Private Sector offered ₦48,000, ₦54,000, ₦57,000, and eventually ₦60,000; however, Labour rejected all four proposals, which led to the strike.
The Secretary to the Government of the Federation (SGF), George Akume, stated that the President was committed to a wage above ₦60,000 and that the government side of the tripartite committee would meet with labor for one week to agree on a wage last Monday, June 3, 2024, in the heat of the impasse and the attendant consequences of the strike.
Convinced, labor “relaxed” its work stoppage on Tuesday, June 4, 2024, approximately twenty-four hours following the walkout. Following that, the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) continued negotiations with the federal government, state governments, and organized private sector.
The President additionally instructed Wale Edun, the Minister of Finance, to submit a model for a new minimum wage. The minister had called the labor demands “unaffordable” prior to the directive. The 36 state governors declared that labor’s demands could not be met. The administrations of local governments likewise characterized the requests made by the TUC and NLC as unrealistic.
But on Friday, June 7, 2024, the administration and labor were unable to come to a consensus. While labor’s demand fell once more, from ₦494,000 to ₦250,000, the government promised workers ₦62,000 and added ₦2,000 to its initial ₦60,000.
The President received the reports from both parties and is likely to decide and send an executive bill to the National Assembly for approval of a new minimum wage bill that the President would sign into law.
The President promised Organized Labor in his June 12, 2024, Democracy Day speech that the National Assembly would soon receive an executive law establishing a new national minimum wage for workers.
