The House of Representatives has approved a proposed N10 million fine for any corporate body that unlawfully deducts employees’ compensation contributions from workers’ salaries, alongside a minimum fine of N500,000 or a one-year jail term for individual offenders.
The lawmakers gave the approval during the consideration of a report on a bill seeking to repeal the Nigeria Social Insurance Trust Fund Act, 2004, and the Employees’ Compensation Act, Cap E17A, Laws of the Federation of Nigeria, 2004, and enact the Nigeria Employees’ Compensation Trust Fund Agency Act.
The proposed legislation also seeks to extend coverage under the Employees’ Compensation Scheme to self-employed persons, workers in the informal sector, industrial training participants and members of the National Youth Service Corps (NYSC).
The bill further seeks to establish the Nigeria Employees’ Compensation Trust Fund Agency as a modern institutional framework for administering the Employees’ Compensation Scheme and providing compensation for death, injury, occupational disease or disability arising out of or in the course of employment.
It also provides for the management of the compensation fund, the rights and obligations of employers and employees, enforcement mechanisms and other administrative matters aimed at strengthening the protection of workers across the country.
Under Clause 33(1), the proposed law expressly prohibits employers from deducting any portion of the statutory contribution payable into the compensation fund from employees’ remuneration or requiring workers to contribute towards indemnifying their employers against liabilities under the scheme.
The bill stipulates that any individual who violates the provision commits an offence and, upon conviction, is liable to imprisonment for a term not exceeding one year, a fine of not less than N500,000, or both. The offender would also be required to refund any amount unlawfully deducted from the employee’s remuneration.
For corporate bodies found guilty of the offence, Clause 33(3) prescribes a fine of not less than N10 million, in addition to the repayment of all sums deducted from affected employees.
The proposed legislation further prohibits employers from reducing workers’ remuneration or allowances, directly or indirectly, on account of contributions or penalties payable under the compensation scheme. This provision seeks to prevent employers from transferring their statutory obligations to employees.
Under Clause 1, the bill aims to establish an open and fair system of guaranteed and adequate compensation for employees or their dependants in cases of work-related death, injury, disease or disability. It also provides for the rehabilitation of employees who suffer work-related disabilities.
Other objectives include maintaining a solvent compensation fund managed in the interests of employers and employees, ensuring fair and adequate assessments for employers, and establishing a simple, accessible and timely appeals procedure for aggrieved parties.
The proposed law also seeks to promote collaboration among relevant stakeholders in preventing workplace disabilities and enforcing occupational safety and health standards, with the broader objective of improving workplace safety and protecting workers against employment-related risks.
In a significant expansion of coverage, Clause 2 provides that the legislation shall apply to employers and employees in both the public and private sectors, including those in the informal sector, self-employed persons and individuals engaged in compulsory national service, industrial training attachments and the NYSC scheme.
The clause further requires employers and employees covered by the legislation to register with the proposed agency in accordance with its prescribed procedures. An employer who fails to register an employee would commit an offence and become liable to pay compensation that would otherwise have been due for any qualifying work-related injury, disease or death.
However, Clause 3 exempts members of the Armed Forces from the proposed law, except those employed in a civilian capacity.
On compensation for workplace injuries, Clause 26 provides that an employee who suffers an injury arising out of or in the course of work would be entitled to compensation under the legislation, whether or not the injury occurs within the conventional workplace.
The provision extends protection to accidents sustained while travelling between an employee’s residence and place of work, travelling to or from the place where the employee usually takes meals, or travelling to or from the place where the employee ordinarily receives remuneration, provided the employer has been notified of the relevant locations.
It further stipulates that where an injury prevents an employee from earning full remuneration at the workplace, compensation shall become payable from the first working day following the injury, although only healthcare benefits would be payable for the day the injury occurred.
The bill also establishes a presumption that an injury or disease caused by an accident arising out of employment occurred in the course of employment, unless evidence proves otherwise. Where a new injury or disease aggravates an existing disability, compensation would be limited to the proportion of the disability reasonably attributable to the new injury or disease.
In addition, Clauses 27, 28 and 29 provide for compensation in cases involving occupational diseases, hearing impairment and injuries sustained outside the normal workplace, further broadening the circumstances under which affected employees may seek redress under the proposed law.
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