Chief (Sen.) Chris Ngige, Honurable Minister for Labour and Employment

Nigerian employers laying off workers as poverty deepens in economy

*42 percent workers lost jobs to Coronavirus pandemic, resulting in dwindling incomes of 79 percent of households ─National Bureau of Statistics

*Reasons NERC issued a business continuity order to power firms amid N1trn revenue shortfall

Isola Moses | ConsumerConnect

There is no doubting the fact that the novel Coronavirus (COVID-19) pandemic has been disruptive with far-reaching impacts on individuals, families and businesses, especially personnel’s employment contracts in workplaces lately.

Workers in many lands have lost their sources of income and/or means of livelihood, while others are yet losing their jobs due to the continuing Coronavirus crisis and its attendant rise in poverty threshold among the populations.

Having spread to most of the countries, and consequently, has been identified as a pandemic by the World Health Organisation (WHO), COVID-19 is substantially affecting the global markets, says lexology.

Of course, certain extraordinary, cushioning measures have been taken not only by governments and appropriate authorities but also by the private companies to lessen the impacts of the fatal virus on productions, enterprise and wealth creation capacity in several economies.

Granted, that at the outbreak of the novel COVID-19 epidemic, some of the employers were obliged to shut down their workplaces due to governmental requirements of total lockdowns.

Some of them closed their workplaces without any formal requirements, according to reports.

However, how have some chosen to frontally address the direct fallout of the devastating virus as regards the respective rights and obligations of the parties in employment contracts under the Nigerian Labour law?

Comrade Ayuba Wabba, President of NLC (2nd from Left), and Other Officials of the Nigeria Labour Congress  Photo: File

Though a number of employers’ groups, trade associations, such as Nigeria Employers’ Consultative Association (NECA), LCCI, and the Nigeria Labour Congress (NLC), obviously, have requested the government to assist with considerable support funds to be able to pay salaries post-lockdowns, the Federal Government has continued to urge them to not lay off their workers.

The government as well asked both public and private establishment employers not to cut salaries during the Coronavirus pandemic crisis.

Recently, Olukorede Yishau analysed the approaching shocking scenario in many workplaces in his opinion piece titled: “Salary earners will also cry”, stated at the time of writing that either the lockdown ended, or was extended, “salaries will not be paid.”

According to him, “it will not be because our employers are wicked; it is just that companies are closed and money is not made.

“Companies that have been operating have not done so at full blast and whatever revenue has been earned is bound to be infinitesimal and incapable of footing bills.”

Yishau had anticipated in the critical write-up that because of the damaging effects of the financial dire strait of affairs, as caused by the pandemic, many Nigerian companies would be left with “severely depleted reserves, or no reserves at all!”

Feeling the heat of the disruptive pandemic, scores of employers in different sectors of the Nigerian economy are said to have disengaged workers to mitigate the negative effect of Coronavirus disease on their businesses.

Latest findings indicated that most sectors of the nation’s economy are affected apart from those driven by technologies, according to a survey by Daily Trust.

CBN’s COVID-19 pandemic intervention funds

Amid the efforts at contain the spread of the virus in the economy, at least N107.45 billion was reportedly accessed by beneficiaries from the N1.15 trillion Central Bank of Nigeria’s (CBN) COVID-19 pandemic intervention funds in the last 90 days, according to data by the apex bank.

Mr. Godwin Emefiele, Governor of CBN

The data showed about 6,000 beneficiaries, comprising organisations and individuals, had accessed the COVID-19 intervention loans thus far.

Reports said workers had been disengaged from especially sectors such as aviation, hospitality, banking, construction, manufacturing, media as well as sales and services industry.

Likewise, the National Bureau of Statistics (NBS) recently informed that 42 percent of the Nigerian workers lost their jobs as a direct consequence of the impact of COVID-19 epidemic.

The situation has resulted in diminishing incomes of about 79 percent of households in in the country, according to the Bureau.

The NBS said: “The impact on employment and income has also been widespread. The impact of COVID-19 has been most strongly felt in the commerce, service and agriculture sectors.”

50,000 jobs lost in MSME sector

The Micro, Small and Medium Enterprises (MSMEs) operators are among the worst hit by the effect of the COVID-19 pandemic as some of them closed shops and their employees automatically lost their jobs in the process, industry reports reveal.

Engr. Auwal Bununu Ibrahim, National Vice-President, North Central of the National Association of Small and Medium Enterprises (NASME), estimated that about 50,000 workers have been disengaged in the MSMEs sub-sector of the economy, stated the report.

Ibrahim disclosed that over 10,000 MSMEs businesses have collapsed across the country amid the devastating pandemic.

In his remark on the development, Dr. Muda Yusuf, Director-General of Lagos Chamber of Commerce and Industry (LCCI), revealed that employers of labour have very little capacity to absorb the shocks inflicted by the COVID-19.

Dr. Muda Yusuf, Director-General of Lagos Chamber of Commerce and Industry

He said: “Their cash flow had since collapsed; most of them depend on daily income streams for survival and they cannot sustain their workforce when their income streams have collapsed,” he said.

He said worst hit are businesses in catering, rental, decoration, event planning and musicals among others.

Data from the NBS showed that Nigeria has about 47 million MSMEs in the country.

Mr. Paul Alaje, an expert and Senior Economist with SPM Professionals, has projected that “unemployment figures may reach 40 percent record high by Q4 2020.”

Hotel workers at home without pay

Many hotels have disengaged staff in the wake of the Coronavirus pandemic. Several support staff have been asked to stay at home without pay pending when businesses pick up, report further stated.

Mr. Moses Sule, a staff of a top hotel in Abuja, FCT, said he had been waiting to be recalled since the Management asked most staff to stay away from work without pay. It has been a harrowing experience for him and his colleagues, said he.

Media disengage employees

Report further indicates that the COVID-19 pandemic hit the Fourth Estate as some media firms as in Nigeria have resorted to disengagements and early retirement of some staff.

Newspaper and radio firms were the most affected with at least three media organisations that retrenched workers or converted them to freelance staff while many others had slashed workers’ salaries as a way to cut cost, findings have shown.

Mr. Emmanuel Ogbeche, Chairman of the Nigerian Union of Journalists (NUJ), Abuja Chapter, disclosed that the number of media professionals that are losing their jobs is increasing.

However, Ogbeche urged media organisations not to put profit above media ethics and professionalism in the process of handling the fallout of the pandemic.

“Some of the hands that are being retrenched are experienced hands and the media industry needs them to groom new hands,” he said.

Uncertainty grips staff at ports

The Nigerian ports may suffer job cuts any moment from now as a result of low cargo imports.

It was gathered that the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) has warned Nigerians to expect a low turn-around of cargoes into different ports beginning from June 2020 as a result of the COVID-19 pandemic.

Adeniyi Ajayi, Deputy National President of the Council stated: “Clearing Agents might not be able to get jobs as a result of low cargo trade. As a clearing agent, what will be the need to have ten to 15 workers amidst job scarcity?” He asked.

Tony Iju, President of Association of Nigerian Licensed Clearing Agents (ANLCA), said the maritime sector had recorded job losses.

Iju disclosed that shipping companies have laid-off workers while freight forwarders have asked their ‘boys’ to stay back.

Bank workers fortunate

Despite the harvest of job losses in other sectors of the economy, Comrade Oyinkan Olasanoye, President of the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), stated that at present, commercial banks have heeded the call by the Central Bank of Nigeria not to sack their workers.

However, Olasanoye further disclosed that there were complaints from members that some of the Deposit Money Banks (DMBs) were about reducing salaries and reviewing contracts.

“This is an indirect way of asking people to take a walk,” he said.

Insurance firms cut jobs

The private sector industry players in the insurance sector of the Nigerian economy recorded a few job losses, according to findings.

A staff of one of the tier-one insurance company reportedly said: “Cumulatively, I haven’t heard up to ten jobs losses so far in different companies, so it is not that significant to worry about.”

Mr. Dele Ayeleso, Spokesman for the Nigerian Council for Registered Insurance Brokers (NCRIB), disclosed that Council hasn’t “heard of any insurance broking firm sacking any workers.”

Similarly, the industry regulator, National Insurance Commission (NAICOM) stated that it has not received any information of sacking of staff due to COVID-19 in the insurance sector of the economy.

Mr. Rasaq Salami, Head, Commissioner for Insurance Directorate of the NAICOM, said he was not aware of retrenchment in the industry.

Nonetheless, report indicates that job losses in insurance sector and other financial services sector would come “in the course of implementing new business models that the COVID-19 pandemic has thrown up.”

In its industry assessment, PwC noted that “as the number of enquiries and claims increase … directing customers to self-service channels and the automated processing of straightforward claims are proving effective.”

School adopts pay-per-hour solution

Reports say that job losses in the education sector will only come to the fore when schools resume, particular among private schools, as some of them have stopped paying salaries following the outbreak of COVID-19 pandemic and subsequent closure of schools in the country.

A school in Abuja was reported to have said: “I don’t know if they will pay us since we did not work but they asked us to do some lessons via video for the pupils.”

The Chairman of a faith-based private school in Abuja, who preferred to be unidentified in print revealed they have no plan to sack any teacher.

According to him, the school paid their teachers 50 percent of April and May salaries, but that from June 2020, they will be paying N500 per hour to the teachers.

Fear heightens in power sector

Some employees in the power sector, report further stated, disclosed that there is no immediate loss of jobs yet, but they feared that the post COVID-19 era and looming recession might have a negative impact on the sector.

Mr. Mike Olokun, an electrical engineer with an electricity Generation Company (GenCo), said the Nigerian Electricity Regulatory Commission had issued a business continuity order, spelling out what the power firms should do immediately the lockdown of COVID-19 started so as to avert any job losses or crumbling services.

Moses Saidu, an employee of one of the GenCos, said: “Although, we at Kaduna Electricity Distribution Company haven’t had any abnormal cases of job cuts, we fear there would be no promotion this year along with some other allowances due to revenue losses.”

The power sector had recorded over N1 trillion shortfall so far, a development that is reportedly affecting power supply services.

There was to be some respite with a semi cost-reflective tariff planned to kick-in in April  before the outbreak of COVID-19 pandemic and NERC postponed it till end of June 2020.

The 11 DisCos lost N366 billion in the last three months.

John Damilare, a meter installer under a Meter Assets Provider (MAP) in Abuja, said: “Most of the installers have not done any work since April and we are not on salary. The MAP firms contracted us on a ‘pay-per-installation’ model, which means one is not paid if no meter installation takes place.”

Kunle Kola Olubiyo, President, Nigeria Consumer Protection Network (NCPN), said to forestall job losses in the power sector, the Federal Government should immediately give fiscal incentives, such as rescheduling of loans for the operators and introducing subsidies.

In her remark on the status quo in the industry, Mrs. Funke Osibodu, Managing Director of Benin DisCo, in a recent PwC webinar on COVID-19 and the power sector, urged the three tiers of government to pay all outstanding bills to improve market liquidity.

No jitters in telecom, oil and gas sectors

Despite the anxiety resulting from job losses in other sectors, telecom, information and communications technology as well as oil and gas sectors of the economy, report indicates that they did not feel much impact of the Coronavirus pandemic as no job loss was recorded.

Daily Trust’s findings also revealed that many private businesses in the two sectors thrived in the heat of the pandemic even as most of their workers operated from home. One of the MTN Nigeria staff who spoke with one of our reporters said he wasn’t aware of any job loss in the telecom company.

“MTN didn’t sack anyone because of coronavirus. We have all been working from home and I think the company made a lot of money. So, I am not aware of any job loss,” the MTN staff who requested not to be named because he was not authorised to talk the media, said.

However, a telecom right advocate, Chief Deolu Ogunbanjo, said companies should embrace disruptive innovation as a means to thrive and generate future income even as the world struggles with the COVID-19 global pandemic.

Meanwhile, Malam Kashifu Inuwa Abdullahi, Director-General of the National Information Technology Development Agency (NITDA), has predicted a paradigm shift in workforce post-COVID-19.

“Things are not going to be the same after the pandemic, and the world economic order is going to change,” posited Malam Abdullahi.

Additional reporting by Gbenga Kayode and Alexander Davis

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