The government negotiator in the face off between the workers of the Power Holding Company of Nigeria (PHCN), Comrade Hassan Sumonu, has recommended the payment of workers’ gratuity in line with company’s conditions of service.
Dismissing the argument that the Pension Reform Act (PRA) of 2004 abolished gratuity in PHCN or any other sector, Sumonu said there was no reference to gratuity in the Act therefore the company’s conditions of service on the payment of gratuity should be applied ahead of privatization.
He urged the authorities to look into the unions’ demand because the PRA 2004 did not abolish the payment of gratuity as a separate component of retirement benefit noting that the Act never abrogated the conditions of service of PHCN which was signed in March, 2010.
On the computation of severance package and benefits accruable to workers, the report recommended “five weeks salary for every completed year of service on Basic salary, subject to a maximum of 18 months.
Meanwhile the unions demanded five weeks salary for every completed year of service, computed on total emolument and not subject to any ceiling.
There has been a faceoff between government and the three unions in the power sector on the modality for the payment of workers’ pension and gratuity.
Government’s agents have argued that workers were entitled to pension and gratuity up to June 2004 and thereafter the provisions of the PRA 2004 should he maintained. The unions, on the other hand, have said that gratuity should be paid in line with the extant PHCN conditions of service as contrary to government’s stand, adding that the Act was not against payment of gratuity.