Employees compensation during disaster period: Matters arising (II)

In our last week article, we commenced discussions on issues raised from the feedback received on the write-up made on workers compensation during emergency period.  Today we clued the discussion hoping that we would have done justice to the topic and cover all angles.  Read on, please! Companies and indeed entrepreneurs found themselves with a […]

In our last week article, we commenced discussions on issues raised from the feedback received on the write-up made on workers compensation during emergency period.  Today we clued the discussion hoping that we would have done justice to the topic and cover all angles.  Read on, please!

Companies and indeed entrepreneurs found themselves with a crisis that is of gargantuan in nature threatening the survival of organisations.  Thus there are needs for urgent steps to ensure that an organisation survives the challenge.  Such steps general include and call for sacrifices by all stakeholders.  If and where one insists on his/her rights, an organisation may not survive hence the introduction by many businesses of suspension of payment of salaries/wages, reduction in amounts of salaries/wages agreed to be paid to staff and or re-scheduling of work hours as well as the introduction of shift duty.  These steps should be discussed with staff to avoid unilateral action which may lead to litigations.

While I feel for workers particularly the need to keep family together with the purchase of foodstuff and payment of rent, utilities as well as other necessities, it is clear that business owners found themselves in between the devil and the deep blue sea.

The business risk occasioned by the pandemic gives employers several options to consider in dealing with the issue.  One can terminate workers, this would have to be done following due process, temporary layoff or far Lough as it is called in other climates, this unfortunately is not defined in our labour laws, early retirement of staff although there are financial implications to this action and several other options.

Indeed, a number of organisations have been pragmatic in handling the challenge.  Some have decided to treat the lockdown period as part of staff leave period and thus pay all staff their full Working From Home (WFH) in which case the staff are kept engaged and busy thus earning their pay.  Most of these steps are options adopted in order to mitigate the impact of the lockdown, and save cost as well as the business.  They are steps taken in the mutual interest of all parties.

In all these situations and actions the position of the International Labour Organisation (ILO) is very clear.  ILO believes that a state of emergency cannot justify the suspension of workers obligations from an employer neither should war have the effect of cancelling the right of workers to their pay from employers.  A plea from the suspension of such rights has to be appraised by an Independent, Competent and Impartial Authority.  If our Ministry of Labour is up to its responsibility, it should have provided the leadership necessary to address this issue squarely and appropriately.

In fact, like every other contract, an employment contract is capable of being frustrated.  Frustration occurs when or where ever the law recognizes that without default of either party, the contractual obligation has become incapable of being performed because performance is impossible due to some circumstances beyond parties’ control.  Lawyers posit that the threshold of proof in this kind of a situation is extremely high and litigation if and eventually explored as an option of a resolution of the impasse may take years to be determined.

As we conclude this piece, it is gratifying to note that the National Assembly is currently debating a bill on Employment protection under the Emergency Stimulus Bill 2020.  The bill seeks to provide relief on Corporate Tax Liability, Suspension of Import Duty on selected goods and Deferral of Residential Mortgage obligations to the Federal Mortgage Bank of Nigeria in order to alleviate the financial burden on companies and citizens in response to the economic downturn occasioned by the outbreak of Corona Virus.

Indeed, the bill seeks to encourage businesses to retain their employees during and after the Covid-19 pandemic period particularly March – December 2020 by creating and providing palliatives to organisations in order to alleviate the adverse effects of the pandemic on businesses.

In conclusion, what is due to Caesar must be treated as a fundamental obligation and when such is being threatened, employers must communicate timely and effectively to the employees.  If the impact would be limited to periodicity or regularity of the payment such position should be clearly stated and ambiguities should be avoided.

Indeed, where or when the quantum of the pay may be affected, it may be wise by the employer or negotiate, communicate and treat such reduction as differed income or payment to staff.  If an employer plan to slash payment, it is important that staff consent is sought and obtained prior to implementation of such a decision.  If an organisations staff are unionised, it is important that prior understanding and agreement with the union is established.  The actions being suggested are basically to prevent litigations which could be costly and time-consuming.

 “My Lord! Enrich me with knowledge…” (Quran 20:114)

For the Lord gives wisdom; from his mouth come knowledge and understanding (Proverbs 2:6)