In the midst of discussions surrounding a potential increase in the minimum wage, Babatunde Fashola, former Minister of Works, emphasizes the need for reasonable adjustments to income earners in Nigeria to cope with the escalating cost of living.
Fashola highlights that both the lowest and highest income earners are affected by the rising expenses, regardless of whether they receive wages or salaries. He also criticizes the exemption of establishments with less than 25 employees from the obligation to pay the minimum wage, questioning the effectiveness of the current legislation.
Fashola further argues that the National Assembly does not have the authority to legislate on salaries, as it falls under the purview of wages. By mandating a monthly payment for the minimum wage, he suggests that the National Assembly may have acted unconstitutionally.
In 2024, the conversation surrounding the minimum wage is of utmost importance. Section 3(4) states that the minimum wage should be reviewed in accordance with the provisions of the Act, including Section 3(1) which sets a monthly amount rather than an hourly wage.
It is crucial that we establish a proper minimum wage and develop a formula to review salaries for those who do not earn wages, in order to address the challenges of the cost of living. This could potentially have a significant impact on national productivity, wealth creation, and overall prosperity.
It is imperative that experts in labor law and compensation collaborate and seek assistance from the best faculties worldwide. Additionally, there may be a need to consider amending item 34 of the Exclusive list in the constitution to include salaries, as it is currently not included.
The protracted deadlock in negotiations for a new minimum wage has led to an indefinite industrial action declared by Organised Labour. This has resulted in the shutdown of various sectors, including airports, hospitals, national grid, banks, and legislative complexes.
The labor unions argue that the current minimum wage of ₦30,000 is insufficient to meet the needs of the average Nigerian worker, especially considering the inflationary pressures and the effects of government policies such as petrol subsidy removal and unification of forex windows.
Furthermore, they express concern that not all governors are adhering to the current wage award, which expired in April 2024, five years after the signing of the Minimum Wage Act of 2019 by former President Muhammadu Buhari.
In January 2024, President Bola Tinubu established a tripartite committee to engage in negotiations for a revised minimum wage for the country.
The initial proposal from Labour was ₦615,000, but they later decided to lower their demand to ₦497,000, and eventually to ₦494,000. On the other hand, the government and the Organised Private Sector initially suggested ₦48,000, ₦54,000, ₦57,000, and eventually ₦60,000, all of which were rejected by Labour, leading to a strike.
Amidst the deadlock and the consequences of the strike, the Secretary to the Government of the Federation (SGF), George Akume, stated that the President was committed to a wage higher than ₦60,000. As a result, the government side of the tripartite committee planned to meet with labour for one week to reach an agreement on the wage.
Consequently, labour “relaxed” its industrial action on June 4, 2024, and resumed talks with the representatives of the Federal Government, states, and the Organised Private Sector. The President also instructed the Minister of Finance, Wale Edun, to present a framework for a new minimum wage.
Prior to this directive, the minister deemed labour’s demands as “unaffordable,” while the 36 state governors and local government administrations considered the demands of the NLC and TUC as unrealistic and unsustainable.
However, on June 7, 2024, both sides failed to reach an agreement. Labour reduced their demand once again, from ₦494,000 to ₦250,000, while the government increased their initial offer of ₦60,000 by ₦2,000, proposing ₦62,000 for workers.
The reports from both sides were submitted to the President, who is expected to make a decision and send an executive bill to the National Assembly for the passage of a new minimum wage bill to be signed into law. In his Democracy Day speech on June 12, 2024, the President reassured the Organised Private Sector and the labour unions that a resolution would be reached.
