Tinubu’s gratuity restoration raises decades-old payment questions — NLC

By Victor Ahiuma-Young

The Nigeria Labour Congress, NLC, has welcomed the Federal Government’s move to restore gratuity payments for workers but says the decision has opened fresh questions about decades of non-payment to retired public servants.

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NLC President, Joe Ajaero, said while the restoration of gratuity was commendable, the government must address the plight of thousands of retirees who were denied the benefit despite that there was no law abolishing it.

Ajaero spoke on the sidelines of the just concluded 114th Session of the International Labour Conference in Geneva, Switzerland, where he also raised concerns over the welfare of pensioners and the challenges facing Nigeria’s contributory pension scheme.

According to him, “On the issue of pensioners, we have pensioners’ associations that are affiliates of the labour centres, and we remain committed to their welfare.”

He noted that existing pension regulations provide for adjustments whenever the minimum wage is increased, especially for retirees under the defined benefit pension scheme.

“There are existing pension rules that provide for adjustments whenever the minimum wage is increased. For those under the defined benefit pension scheme, there are provisions that should trigger corresponding increases,” he said.

However, Ajaero expressed concern over the contributory pension scheme, revealing that some retirees receive less than N20,000 monthly.

“We are facing serious challenges with the contributory pension scheme. The federal government is reportedly considering measures—perhaps before Christmas—to improve the earnings of retirees under that scheme. Some pensioners currently receive less than N20,000 monthly, depending on when they made their contributions and when they retired,” he stated.

On gratuity payments, the NLC president argued that the benefit was never legally abolished, contrary to widespread assumptions.

According to him: “Speaking from my own experience in the private sector, gratuity was never abolished from day one. In fact, even in the public sector, gratuity was never legally abolished.

“What baffles many of us is how government simply decided to stop paying gratuity. The Pension Reform Act was exactly that—a pension reform act, not a gratuity reform act. The law never abolished gratuity. Pension and gratuity are different things.

“Yet some employers began acting as though gratuity no longer existed. In some organisations, including where I worked, we resisted attempts to stop gratuity payments.”

Ajaero commended President Bola Tinubu for recognising what he described as an anomaly and moving to restore gratuity payments.

“Now the President, in his magnanimity, has announced the restoration of gratuity. That is commendable. But the question remains: was gratuity ever legally removed in the first place? The answer is no.

“The next question is from what point will gratuity now be paid? Will government compensate those who lost gratuity when payments were stopped, or will it simply begin afresh?” 

“Gratuity is a reward for long and dedicated service. It is an expression of appreciation before a worker moves fully into retirement,” he said.

“I often tell people that my uncle received a gold wristwatch from UAC Nigeria for his years of service. That is the spirit behind gratuity. Workers deserve that recognition before they begin living solely on pension.

“Gratuity has never been legally abolished in Nigeria. Therefore, for the President to recognise this abnormality and seek to restore it is worthy of commendation,” he said.

“However, we must also think about those who retired 15 or 20 years ago and never received their gratuities. Some have died waiting. We may need a special committee to identify all those affected and determine how justice can be done.”

On the private sector, Ajaero said labour unions would be expected to challenge any attempt by employers who discontinue gratuity payments.

“As for the private sector, if gratuity has been abolished anywhere, that matter must be addressed. Usually, the unions would raise the alarm,” he added.

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