The Federal Government has ordered an immediate stop to the controversial deductions from the Nigeria Social Insurance Trust Fund (NSITF) following intense pressure from the Nigeria Labour Congress (NLC), which had threatened to embark on industrial action over the matter.
The dispute arose after the NLC discovered that 40% of contributions to the Employees’ Compensation Scheme (ECS) – meant to provide financial support to workers who suffer job-related injuries or deaths – were being automatically deducted into government coffers. The labour union described this as an “illegal diversion” of workers’ welfare funds.
In a swift response to avert the planned strike, the NSITF management confirmed in an August 16 letter that:
Deductions from employer contributions (1% of payroll) have stopped since March 2024, Some previously deducted funds have been refunded ,Finance Ministry officials have promised no further deductions.
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NLC Assistant General Secretary Christopher Onyeka told media correspondent, ”These contributions are sacred funds meant to protect injured workers, not government revenue. We’re reviewing their response but will not back down until every kobo is accounted for.”
The deductions began under a December 2023 policy requiring all government agencies to remit 50% of internally generated revenue. However, the NSITF maintains that employer contributions constitute statutory liabilities rather than revenue.
The NLC’s National Executive Council will meet this week to decide whether to proceed with the strike. Meanwhile, the Federal Government has initiated talks with labour leaders to resolve the impasse permanently.
The ECS covers over 10 million Nigerian workers, providing critical support for workplace accidents. Experts warn that continued deductions could render the scheme ineffective, leaving vulnerable workers without protection.
