A Review of the Nigerian Energy Industry

Labour vows to resist PHCN sale over severance pay

Victor Ahiuma-Young

17 July 2012, Sweetcrude, LAGOS – NIGERIA’S electricity workers have vowed that no private sector individual or group will take over the assets of the Power Holding Company of Nigeria, PHCN, unless their severance benefits and other entitlements were fully paid.

At a joint briefing in Lagos, under the umbrella of the National Union of Electricity Employees, NUEE, and the Senior Staff Association of Electricity and Allied Companies, SSAEAC, the workers also insisted that the PHCN’s assets are worth over N1.5 trillion.

They argued that anybody valuing such assets at N200billion is not only a rogue, but an enemy of the country.

Addressing journalists on behalf of the two unions, the President-General of SSAEAC, Mr Bede Opara, said, “The fourteen months (14) long Negotiations between the Federal Government of Nigeria and the Labour Unions in PHCN ended recently without concluding the most important issues of severance payment, gratuity and pensions.

“Furthermore the request for the payment of 53.36% salary increase availed public servants in 2009, when government freezed salaries in PHCN and requested for negotiation on our expired collective agreement were turned down by government. In all, government turned down our requests because it claimed it has no money to pay.

On the vexed issue of gratuity and pensions, government proposed that a percentage of the two will be paid as severance, as government contended that gratuity is merged with pensions in the new Pensions Reform Act 2004.”

However, the unions disagreed with government, and argued that gratuity payment is exclusive of pensions, saying, “While gratuity is a one stop payment at the end of service which the Pension Reform Act never contemplated, or bordered with as it has nothing to do with pensions; pensions is for life and its mode of operation is adequately provided for in the Pension Reform Act.

“In paying our Pensions, Government posited that it will pay into RSA to be opened by all staff and it will calculate in accordance with our superannuation up to June, 2004 which takes into recognition 25% of our salaries deducted for that purpose and from June 2004 (effective date of the Pension Reform Act) it will calculate only 15% which is the minimum granted by the Pension Act.

“The Unions contended that our pensions should be calculated based on the practice of our superannuation fund by calculating all Pensions to date on 25% deducted from staff salaries for that purpose.”

The workers, therefore, urged government to urgently offset its liabilities to them, failing which it would resist the privatisation programme for the power company.

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  • This tiff between labour and government has become a ding dong affair that does not do either party any good. We advise that government makes a conscious effort to have this matter resolved quickly.