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COMPENSATION ACT 2011 AND THE

NIGERIAN INSURANCE GROUP


President Goodluck Jonathan has on January 17, 2011 signed the Nigerian
workers Compensation Bill into law. The time has truly come for Nigeria
Insurers Association (NIA) to be told, loud and clear, that it has no Workers’
Mandate on the Employee Compensation Act 2011 and therefore does not
have a basis to say the Act is anti-workers law.

For years, the insurance industry has administered the obnoxious


Workmen’s Compensation Act, (WCA) in accordance with profit motive.
Profit motive as we all know, in private insurance, will always work against
the interest of the victims. As a matter of fact, by its set-up and scheme, the
defunct Workmen Compensation Act, (WCA) under its underlying private
insurance, would not have contemplated long term and continuous welfare
of the injured employee so as to either get him back to work, or take care of
his livelihood so he does not turn out a social liability.

Due to profit motive, writ large under the previous Workmen Compensation
Act, (WCA) many of the victims of workplace injuries, receive less than
humane treatment or satisfactory compensation. The Insurance Group with
the benefit of hindsight, has this legendary characteristic of persistently
attacking progressive labour because of sheer profit motive.

In 1994 during the transformation of the National Provident Fund (NPF) into
Nigeria Social Insurance Trust Fund, (NSITF) with enhanced benefit for
workers covering Invalidity Pension/grant. Retirement Pension/grant,
Survivors pension/grant and Funeral grant, the Insurance Group petitioned
Government to exempt its members supposedly “with better
pension/retirement schemes.”

The employment injury, otherwise known as invalidity benefits and


survivor’s benefits are two of the nine branches of the ILO Convention 102.
The Insurance Group would have preferred the continuation of the NPF
scheme, ad-infinitum, where not much would be required of its members for
the long term benefit of the workers. Under the National Provident Fund,
(NPF) managed by organized labour, employer and government, a registered
worker paid N4 monthly and with a matching N4 from his employer.

So, in a month, the worker contributed N8 and in a year, the contribution


would be N96! Still less than N100.00! In 30 years, the worker would have
succeeded in contributing N2,880.00; a figure less than N3,000.00. The
contribution which could only be invested in government bonds attracted 2%
interest rate initially but subsequently increased to 4%. The NPF scheme
was operated from 1962 to June 30, 1994 and even when in the spirit of
tripartite the stakeholders pushed for its replacement, the Insurance Group
would not want the workers in its payroll to benefit from it.

However, they were unable to have their way in the face of the
overwhelming tripartite (Govt. as represented by the Ministry of Labour,
Organised Labour, NLC and Employers, NECA) that informed the
transformation of the provident fund scheme to social insurance.

History again repeated itself in 2010. Rather than appreciating the


Employee Compensation Bill and its marvelous humane Workers ‘
Compensation (ECB) for the whole life span of the worker when he is
injured, that singular solidarity feature became the rock upon which all
efforts by the NIA to demonize the ECB breaks.

The group’s full page advertorial of Tuesday 6th July 2010 expressed
disgust with the aspect of the Employees Compensation Bill that “seeks to
pay employee compensation “for the life” of the injured worker or the
dependants of deceased workers notwithstanding that the employer might
have made contribution in respect of that worker for only one year….”and
called on the people’s representatives in the National Assembly to reject it.
Apart from this solidarity feature the following are other fine distinctions
between insurance claim and employees compensation claim;

“Insurance can only be made against specified forms of occurrence on the


happening of which assessment would amount to little in view of its fault
finding characteristics. However, claim under the Employees’ Compensation
Act has no such imitation. All that is requisite under the latter is that the
injury happened in the course of work.

“In insurance the sum payable is limited to the insurable value of the policy
taken not necessarily to ensure that (in the case of an injured worker) the
worker recover from the injury. However, under the Employees’
Compensation Bill now passed into law, the scheme is to compensate the
worker, follow up to see that he recovers and where he does not, rehabilitate
him and where any part of his body requires artificial part support, assist him
to get it. Contrarily, under the Workmen’s Compensation, where it is made
is a one-off payment and thereafter to hell with the worker.
“In insurance, the cause of injury is relevant and assessed. If for instance the
injury results from a negligent act not covered as one of the circumstances
under which claim can be made, insurance claim for such an injury may be
defeated. Mercifully, under the Employees’ Compensation Act, the
employer contributes regularly to the fund against any form of injury at
work by any means. Thus, the cause of injury will not be relevant before
claim for injury sustained at work and in the course of work will be assessed
and paid. It is a no-fault claim.

Participants can now see that insurance scheme as opposed to compensation


claim under the new Act are poles apart and are roundly dissimilar. It is apt
to note at this point that the provision for employer to insure the employee
under the old Workmen’s Compensation Act is not generic and is weak.
Little wonder it is observed in the breach or total disregard by a larger
majority of employers of labour.

The new Act is a Social Security Act which has no nexus with the profit
motivated private insurance. We workers are no longer available for
commercialization by the Insurance Group.