Tension High As NLC Forces FG’s Hand On Workers’ Compensation

The Federal Government has pledged to reverse deductions made from the Employees’ Compensation Scheme, managed by the Nigeria Social Insurance Trust Fund (NSITF), in a bid to ease rising tensions with the Nigeria Labour Congress (NLC) following its threat of a nationwide strike.

According to reports, the NLC had accused the government last Thursday of diverting 40 percent of NSITF contributions to the national treasury.

The union described the move as a direct assault on workers’ welfare, demanding an immediate refund and the reconstitution of the National Pension Commission board. It warned that failure to comply could lead to a nationwide industrial action.

The Employees’ Compensation Scheme is designed to support employees who suffer work-related injuries, illnesses, disabilities, or death. It is solely funded by employers, who remit about one percent of their monthly payroll, with no deductions from employees’ wages.

In a letter dated August 16, 2025, and addressed to the NLC, NSITF Managing Director, Oluwaseun Faleye, acknowledged that deductions were made from the fund but denied that they amounted to diversion of workers’ money.

The correspondence, which was also copied to the Ministers of Labour and Finance, the Director-General of the Budget Office, and the Accountant-General of the Federation, explained that the deductions were carried out under a federal policy introduced in December 2023.

Faleye clarified that the policy, signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, directed all government-owned enterprises to remit 50 percent of their internally generated revenue to the treasury. The measure, he noted, was part of President Tinubu’s fiscal strategy to boost national revenue and bridge a widening budget deficit.

He added: “Recall that the Federal Ministry of Finance circular (Ref: FMFCME/OTHERS/IGR/CFR/21/2021), dated December 28, 2023, introduced the policy of automatic deduction of 50 percent of the internally generated revenue of all Federal Government-owned enterprises.”