In a dramatic turn of events, the Federal Government has pledged to reverse deductions from the Employees’ Compensation Scheme (ECS) managed by the Nigeria Social Insurance Trust Fund (NSITF), in a bid to ease tensions with the Nigeria Labour Congress (NLC), which has threatened a nationwide strike.
Last week, the NLC accused the government of diverting 40% of NSITF contributions into the treasury, describing it as a direct attack on workers’ social protection. The union demanded an immediate refund and the urgent reconstitution of the National Pension Commission (PenCom) board, warning that failure to act could trigger industrial action.
The ECS is designed to provide financial support for workers who suffer workplace injuries, disabilities, illnesses, or death. The scheme is funded solely by employer contributions — typically 1% of monthly payroll — with no deductions from employees’ wages.
In a letter to the NLC dated August 16, 2025, NSITF Managing Director Oluwaseun Faleye admitted that deductions had occurred, but denied that funds were diverted. He explained that the deductions followed a December 2023 Finance Ministry circular, which required all government-owned enterprises to remit 50% of their internally generated revenue (IGR) to the treasury — a fiscal strategy introduced by Minister of Finance Wale Edun and championed by President Bola Tinubu to boost revenue.
Faleye noted, however, that employers’ contributions, being statutory liabilities rather than government revenue, were no longer subject to deductions after a directive from the Accountant-General of the Federation in March 2024. Some previously deducted sums, he said, had already been reversed.
Deductions from investment income generated by contributions are still ongoing, but Faleye said NSITF is engaging the Ministry of Finance and Budget Office to resolve the issue. Both institutions, he added, pledged in August 2025 meetings that no further debits would be made.
The NLC confirmed receiving NSITF’s letter but said its executive council would review it before deciding on the proposed strike.
Assistant General Secretary Christopher Onyeka argued that NSITF, as a tripartite agency owned jointly by workers, employers, and government, should not be classified as a revenue-generating body.
“These contributions exist to protect workers in case of injury or death. They are not government revenue and cannot be treated as such. Depleting them undermines NSITF’s ability to serve workers,” Onyeka said.
The union stressed that the deductions began under the current administration and insisted that safeguarding the fund remains its responsibility.
Responding to speculation that NSITF was pushing for amendments to weaken the Employees’ Compensation Act (ECA), Faleye insisted the agency’s proposals sought only to strengthen enforcement.
“Our recommendations to the National Assembly are intended to enhance compliance, not erode workers’ rights. For instance, we propose giving NSITF more enforcement powers against defaulting employers,” he explained, adding that final legislative action rests with lawmakers.
The NLC also raised alarms over the non-constitution of the PenCom Governing Board, calling it a breach of the Pension Reform Act 2014. The union warned that the vacuum gives government unilateral control over workers’ pension funds, heightening risks of mismanagement and political interference.
“Pension funds represent deferred wages, not government revenue. We demand the immediate constitution of the PenCom Board in full compliance with the law,” the NLC declared.
The PenCom board was dissolved in June 2023 alongside others by President Tinubu. Although a new Director-General, Omolola Oloworaran, was appointed and confirmed in 2024, the board’s Chairman and four full-time commissioners have yet to be named.
Pension rights advocate Ivor Takor backed the NLC’s call, noting that the Act provides for a 16-member board representing labour, pensioners, employers, and regulators. He, however, clarified that while the board delay is a genuine concern, the NLC’s demand for direct access to pension fund accounts goes beyond what the law provides.
Consumer rights activist Moses Igbrude urged dialogue over confrontation: “Not every issue must end in strikes. Both sides should negotiate and reach common ground before escalation.”
The NSITF and PenCom disputes add to the NLC’s growing list of grievances with the Tinubu administration, including disputes over fuel subsidy removal, electricity tariff hikes, and minimum wage negotiations.
Observers warn that another confrontation could further strain already fragile industrial relations.
