Indications emerged yesterday that the Federal Government and the Organised Private Sector (OPS) may be heading for a serious confrontation over plans to increase the levy employers pay to the Nigeria Social Insurance Trust Fund (NSITF) under the Employees’ Compensation Scheme (ECS).
At present, the Employees’ Compensation Act (ECA) 2010 mandates employers to contribute one per cent of their employees’ total monthly payroll to the Employees’ Compensation Fund (ECF). Although government has not publicly disclosed the proposed new rate, employers have raised the alarm, warning that any increase could trigger job losses, factory shutdowns, and further strain on already struggling businesses.
The one per cent contribution is used by the NSITF to provide compensation for work-related injuries, deaths, rehabilitation, medical care, and other forms of support for affected workers and their families. However, government officials believe the current framework does not adequately reflect the value of workers’ lives, especially in cases of fatal workplace accidents.
Speaking at the Safe Workplace Intervention Project (SWIP) annual stakeholders’ forum and awards ceremony, Minister of State for Labour and Employment, Nkeiruka Onyejeocha, openly called for a review of compensation under the scheme. She described the benefits paid to families of deceased workers as grossly inadequate and stressed that workplace safety must be treated as a legal and moral obligation.
According to the minister, a safe workplace should no longer be viewed as optional or a financial burden. She argued that compensation levels must reflect the true value of human life and urged employers to fully comply with the provisions of the Act through prompt registration, regular remittances, and sustained investment in safety systems.
However, employers pushed back strongly. Speaking on behalf of the OPS, Director of Corporate Services at Seplat Energy Plc, Dr. Steve Ojeh, warned that increasing the levy would worsen existing economic pressures. Represented by Seplat’s Senior Manager for Industrial Relations, Ken Okoroh, he listed potential consequences including job cuts, reduced investment, limited performance-based incentives, and possible factory closures.
Ojeh noted that businesses were already overwhelmed by more than 75 different taxes and levies, adding that employers would have preferred a reduction in the contribution rate rather than an increase. He also highlighted challenges such as inefficiencies in the system, limited access to benefits, and multiple regulatory burdens facing employers.
In his remarks, Minister of Labour and Employment, Muhammadu Dingyadi, called for dialogue and mutual understanding between government, organised labour, employers, and the NSITF. He reaffirmed the government’s commitment to workplace safety and urged employers to raise standards in line with global best practices to protect Nigerian workers.
On behalf of organised labour, the National Treasurer of the Nigeria Labour Congress (NLC), Aliyu Haruna, described the Employees’ Compensation Act as a landmark reform. He stressed the need for stronger awareness, digitised claims processes, wider coverage, better enforcement, and firm political commitment at all levels of government to ensure the Act achieves its purpose.
As discussions continue, the proposed levy increase has clearly exposed deep tensions between government’s push for improved worker protection and employers’ fears of economic fallout—setting the stage for a potential clash over the future of workplace compensation in Nigeria.
