Opinion
FG Employees’ Compensation
Employee’s compensation Act No. 13 of 2010 is an Act promulgated by Dr. Goodluck Jonathan’s Administration, to repeal the Workman’s Compensation Act Cap.W6LFN, 2004 and to make provisions for compensation for any death, injury, disease or disability arising out of or the course of employment; and related matters.
The Act in section 2(2) stipulates that the scheme shall be managed by Nigeria.. Social Insurance Trust Fund (NSITF).
This is in line with section 71(2) of the PRA, 2004 and the provision of NSITF Act, 1993, which statutorily empowered NSITF to manage all social security insurance schemes other than pension.
The Employees’ Compensation Scheme (ECS) is a Work Injury Scheme under the ILO Convention No.102 of 1952 (Convention on Minimum Standards of Social Security).
The scheme is designed to provide compensation to employees who suffer from occupational diseases, sustain injuries or disability from accident at workplace or in course of employment, whether at usual place of work or outside of it. It also provides compensation to the dependants of an employee who dies at or in the course of work.
The scheme propagates Social Insurance which is financed by contributions made by both employers and the employees while in employment, sustained through the pooling of risks and finances and benefits prescribed by the law.
Whereas, Commercial Insurance Services which aim at profit maximization, serve the individual, companies and agencies that can pay the required premium; Social Insurance is non-profit oriented and serves individuals who may not be able to pay the premium mandatory in commercial insurance.
The objectives of the ECA are:
(i) To provide a fair, guaranteed and adequate compensation for all insured employees in case of injury, disease, disability or death arising out of or in the course of employment.
(ii) To rehabilitate employees who suffer work-related injuries, disabilities or occupational diseases.
(iii) To establish and maintain a solvent compensation fund, which will be managed in the interest of both employees and employers.
(iv) To provide for a fair and adequate assessment of employers’ risk rating and ensure that adequate contribution is paid.
(v) To provide claims procedure that is simple, fast and less cumbersome for the injured persons or their dependants in case of death.
(vi) To promote the enforcement of occupational safety and health standards in the workplace.
It should be noted that the employees, under the Employees’ Compensation Act are persons employed by an employer under oral or written contract of employment whether on a Continuous, part-time, temporary, apprenticeship or casual basis and includes a domestic servant who is not a member of the family of the employer, including any person employed in the Federal, State and Local Governments, and any of the Government Agencies and the formal and informal sectors of the economy.
The Employees’ Compensation Scheme is funded by the employer’s contribution. In the circumstance, employers are obliged to contribute 1% of total payroll, consisting of total emoluments paid to their employees on a monthly basis.
At the commencement of the Scheme’s, funding all liable employers would pay the same premium of 1% of total payroll for the first two years. Thereafter, the Act provides for risk assessment with a view to categorizing contributions on the level of risk to which workers are exposed. This implies that some employers would pay lower, or more than 1%, while others would pay exactly 1%.
Interestingly, on the long run, there is provision for merit rating for those employers known for high level of safety in the workplace with the result that their rate of contribution would be much lower.
It should be noted, that employer contribution under the Act does not qualify as “tax”, because the contribution has direct beneficiaries. For instance, employees who may suffer injuries or diseases in course of their work, who are in-turn motivated to be more productive with the attendant benefit to the employer.
It is well deserving to note also, that the ECA of Dr. Jonathan’s administration, offers not only better and adequate compensation to employees or their dependants for any injury, death, disability or disease arising out of, or in the course of employment, but also ensures that such employees are further assisted by counseling and rehabilitating to resume work and in the case of permanent injury, assist the injured worker to buy body parts support. More fundamentally, ECA provides for speedy and adequate compensation, resolution of disputes without real course to the courts as obtained in the repealed workers compensation Act Cap.W6LFN, 2004 in which virtually all categories of compensation have to be resolved in law courts.
The enactment of ECA, 2010 has indeed boosted Dr. Jonathan’s present administration’s rating in implementing welfare programs in tandem with the welfare package enshrined in chapter two of the 1999 constitution of the Federal Republic of Nigeria.
Nigeria now joins the league of members of ILO which cares for its employees in workplace. All employers of labour in Nigeria are therefore solicited to partner with the Nigeria Social Insurance Trust Fund (NSITF) to promote industrial peace, and improved quality of life through prompt response to health challenges in workplace with attendant impact on Nigeria’s economic indices, like Human Development Index (HDI).
Tonye Fuayefika, Public Analyst writes from Port Harcourt.
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