Employers in the private sector don’t need to wait for the approval of the national minimum wage to increase staff salaries, Mr. Olusegun Oshinowo, the Director-General, Nigeria Employers Consultative Association (NECA), has said.
Speaking in an interview, Oshinowo who has been at the helms of affairs of the umbrella body for employers in the country almost two decades now, confided in The Nation that the outcome of the committee saddled with the responsibility of fashioning out a new minimum wage for workers is expected next month.
He however said it was not the norm for the organised private sector to rely on the dictates of the national minimum wage before taking any decision with regards to fixing wages for its workers.
Specifically, he said: “In the private sector, there are actually three possible ways by which a worker can enjoy salary increase; one is through performance. At the end of the year the employer will review the performance of the employee and based on the performance of the employee, the employer will grant a performance increase which also varies between 5-20 percent.”
Most well-organised businesses in the private sector, he reiterated, “Have a performance management scheme on ground which ensures that on a yearly basis, their workers are remunerated base on their performance. Then the second other source of possible salary increase is the collective bargaining machinery in the private sector and most industrial sectors of the private sector have that collective bargaining machinery through which either on a two yearly basis or three yearly basis.”
Besides, he said, “The third source of possible salary increase for employees, is base on what we call the prerogative of the employer, where the employer will either grant general salary increase to his employees on account of inflation or cost of living index or on the basis of his survey which the employer must have conducted and which must have been indicated that employer is not competitive in the labour market and if it fails to review its salary that employer may find it difficult to retain his quality staff or attract quality staff. So, it will be wrong for anybody to say that private companies are waiting for the outcome of the national minimum wage implementation before they increase their salaries. Because any of these sources of possible salary increase which I’ve just mentioned to you, could take place irrespective of whether the national minimum wage is being reviewed or not because it’s been a practice that’s well established in those companies over the years. So that’s the point. The only difference truly, is that well, because the national minimum wage that is being discussed may not have impact in the private because some might just decided to delay any of those salaries increase which I have mentioned because of the imminent national new minimum wage which may or may not impact on the wage level of most private sector companies.”
The erstwhile African Vice President of the International Organisation of Employers (IOE) further maintained that the OPS need not wait for the national new minimum to increase workers.
“They don’t have to wait for the national minimum wage if they have an enshrined and institutional practice of wage increased based on the collective bargaining system or the company’s policy on wage administration.”
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