By Victor Ahiuma-Young

The Nigeria Labour Congress, NLC, has accused the Federal Ministry of Finance of illegally deducting 40 percent of funds meant for the Employees’ Compensation Scheme, ECS, warning that the action threatens workers’ welfare and violates existing labour laws.

In a strongly worded letter addressed to the Managing Director/Chief Executive of the Nigeria Social Insurance Trust Fund, NSITF, NLC President, Joe Ajaero, demanded an immediate refund of the deducted funds within two weeks, with interest.

The letter dated July 22, 2025, reads in part: “We write to bring to the attention of the management of the Nigeria Social Insurance Trust Fund (NSITF) the illegal deduction of 40% of the contributions to the Employees’ Compensation Scheme (ECS) by the Federal Ministry of Finance. This claim was made some time ago by a top official of the NSITF and has not been publicly repudiated to date.

“The Nigeria Labour Congress is concerned that despite the clear provisions of Sections 33 and 39(1) of the Employees’ Compensation Act (ECA), 2010, which mandate every employer to make a contribution of 1% of its total monthly payroll to the ECS as their contribution to mitigating the impact of occupational injuries on behalf of their employees.

“In demonstration of the dedication of the ECS to employees’ welfare, the Act expressly prohibits employers from deducting this contribution from their employees. It is, therefore, strange and extremely weird to us why the Federal Ministry of Finance would deduct 40% of the ECS contribution under the guise of removing the operating surplus of the fund and purportedly in line with the Fiscal Responsibility and Finance Act of 2020.

“We wish to remind the management of the NSITF that the ECS was developed to provide a buffer for workers who encounter workplace or occupational accidents or even death while at work. It is in the overwhelming consideration of the welfare of workers that the Act ensured that the ECS was designed to be a ‘No Fault Scheme’.

This is to ensure that the ECS would essentially cater to workplace hazards, injuries and death.

“It is for this reason that the NSITF, as a tripartite agency holding contributed funds in trust for the benefit of workers, is not treasury-funded and does not draw from the Consolidated Revenue Fund of the Federation. This means that the NSITF is not designated to be a revenue agency of the government.

“The implication is that there is no basis whatsoever, both in law and practice, for the deduction of any part of the funds contributed to the Employees’ Compensation Scheme for the benefit of Nigerian workers.

“The Nigeria Labour Congress demands answers on the illegal deduction of 40 percent of the contributions to the ECS.

“Given the clear position of the law on this matter, Congress demands that the illegally deducted funds from the ECS be returned to the fund immediately and with reasonable interest, within two weeks of the receipt of this letter.”