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FG Offers PHCN Workers N144 billion As Severance Pay, Union Demands N443 billion

By on August 17, 2012

Power Minister, Barth Nnaji

In order to resolve all labour issue relating to the Power Privatization scheme of the Federal Government, the Ministry of Power, Barth Nnaji has said that the Federal Government is ready to pay N144 billion as severance pay to employees of PHCN.

This is against the demand of N443 billion being requested for by the PHCN employees. Employees that just yesterday suspended a strike that saw millions of residents across Nigeria without power for over a week. The strike was suspended due to intervention from the Ministry of Labour after both parties decided to give peace talks a try.

Speaking on the Severance Package, Nnaji said, “Government has calculated a total of N144bn as severance package to be paid the PHCN workers. But the total amount, which the unions are requesting is N443bn. Where will the government get this from?

“PHCN as a company does not make this much and from where are they expecting the government to get the funds, which they are demanding? We have calculated what each worker will get, which of course shows government’s generosity, but it is surprising to see the unions demand this high.”

Speaking on the hotly contented issue on pension over which allegations and counter-allegations have been traded in the past few weeks, Nnaji said government would abide by legislation enshrined in the Pension Reform Act of 2004.

He said, “The government shall transfer accrued rights of staff as of June 30, 2004 to their Retirement Savings Account. The government will provide 7.5 per cent minimum employer contribution on active employees’ monthly emoluments from July 1, 2004 through June 30, 2012.

“The government will also pay the outstanding 7.5 per cent for the employees and the sum of N34.4bn is estimated for the 15 per cent contribution, which is 7.5 per cent employer contribution and 7.5 per cent employee contribution.”

Speaking on the government’s offer, the General Secretary of the National Union of Electricity Employees (NUEE), Joe Ajaero said the workers would not make unreasonable demands and that the N443 was infact their entitlement.

He said, “Is it what government wants to pay or some people’s actual entitlements? The N443bn covers everybody’s entitlements. Let’s say the N144bn means they don’t have money, and if this is the case, then you can plead that you don’t have money during negotiations and then we now ask you how you want to go about it.

“It is not because you don’t have money then you decide to pay us what you want. This is our entitlement and it is our right.”

On the issue of pension, Ajaero said, “The PRA 2004 actually states that 7.5 per cent should be contributed each by the employer and the employee. But the National Pension Commission’s guideline on pension implementation states that employers can contribute more than this, and that is in section 2.10, which states that employers contributing more than this before the Act should not return it.

“So, it is in the provisions of the law that they uphold the 25 per cent. That there was no contribution of 25 per cent is a lie. How were they getting money to pay employees this percentage all this while?”