Experts fault provisions on redundancy in Nigerian Labour Act
Experts in labour law and Human Resource management are picking holes in the provisions on redundancy in the Nigerian Labour Act enacted in 1974, which according to them has become obsolete and no longer in tune with the reality of times.
This observation is coming at a time when the country is currently experiencing economic recession, forcing organisations to declare redundancy and therefore laying off staff without proper negotiations.
Speaking during the Hybrid Solicitors and Consult Annual Lecture, Bimbo Atilola, Managing Partner, Hybrid Solicitors and Consult told BusinessDay that the Nigerian Labour Act is the only act in Nigeria that talks about redundancy, and is provided for in section 20 of this Act.
According to Atilola, “The Act was enacted in 1974 and since then it has not been amended yet remains in force nonetheless. That Act is obsolete and devoid of any contemporary relevance.
“The Act cannot address the modern day redundancy situation. For instance, the Act defines redundancy as involuntary loss of employment due to excess manpower.
“Today, organisations declare redundancies, not just as a result of excess manpower but as a result of different reasons including re-engineering, human resource strategies such as Business process and manpower out-sourcing, job offshoring and automation of processes.”
He pointed out that unlike the Nigerian Labour Act that talks about notice of redundancy to unions and employees, the English Employment Rights Act talks about consultation. Similarly, The Nigerian Labour Act provides that the employers shall use his best endeavours to negotiate redundancy payments while the English Act has a clearly defined statutory redundancy pay. And because the Nigerian Act leaves the question and quantum of redundancy pay to collective bargaining negotiations, this usually results to deadlock and industrial actions. To address this missing links, Atilola advised that employers of labour should have a policy on redundancy payment incorporated into their Employee Handbook or negotiated in advance in the Collective Bargaining Agreement if the company is unionized.
Atilola also advised that the government should revisit the provisions of the Labour Act and take a look at the Employment Rights Act in the UK and even the Ghanaian Labour Act of 2003, which have wider provisions on redundancy.
Tunde Busari, SAN, Vice Chairman, Chartered Institute of Arbitrators (UK) Nigeria said the discussions on redundancy at the forum are needed at this time considering the economic realities at the moment.
He said, “indeed what we are discussing is how to manage the incident of redundancy, how to cope with it and mitigate it. Companies have to consider various other options in turning issues, problems and challenges into opportunities.
“We have talked about redundancies and why we should also not lay off staff and how we can consider other issues like reduction in hours of work, pay cut and open other opportunities such that a time of economic challenges, will now become a time of transformation.”
IFEOMA OKEKE