INDUSTRIAL RELATIONS IN DEVELOPING COUNTRIES

The Case of Nigeria

By the same author

PERSONNEL MANAGEMENT IN NIGERIA

INDUSTRIAL RELATIONS IN DEVELOPING COUNTRIES

The Case of Nigeria

ABEL K. UBEKU LL.M. (London), D.Phil. (Sussex)

Managing Director, Guinness (Nigeria) Ltd

Foreword by Guy Routh formerly Reader in Economics, University of Sussex

M MACMILLAN PRESS

LONDON

© Abel K. Ubeku 1983

All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means,

without permission.

First published 1983 by THE MACMILLAN PRESS LTD

London and Basingstoke Companies and representatives

throughout the world

Typeset in Great Britain by Vantage Photosetting Co. Ltd, Eastleigh and London

ISBN 978-0-333-36013-2 ISBN 978-1-349-17265-8 (eBook)DOI 10.1007/978-1-349-17265-8

To my wife, Beatrice Obiageli, I dedicate this book

Contents

List of Figures and Tables

Foreword by Guy Routh

Preface

ix

xi

xv

1 A Reflew of Industrial RelatioDS Systems in Various Countries 1 1.1 Introduction 1 1.2 The Theoretical Framework 2 1.3 The Anglo-Saxon Model 6 1.4 The West German Model 16 1.5 The Communist Model 22 1.6 The Model in Developing Countries 26 1.7 Summary 34

2 The Environmental Background 2.1 Historical Development 2.2 The Nigerian Economy 2.3 Socio-cultural Factors 2.4 Employment and the Labour Force

3 The Parties in the Industrial RelatioDS System 3.1 Trade Unions 3.2 Employers' Associations 3.3 The Government and its Agencies

4 The Machinery of Collective Relations 4.1 The Legal Framework 4.2 The Collective Bargaining Process 4.3 Relations at Enterprise Level 4.4 Relations at National Level 4.5 Relations in the Public Service

37 37 41 49 54

58 58 96

106

118 119 129 134 143 150

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5 Labour Disputes aad their Settlement 157 5.1 Typology of Labour Disputes 157 5.2 Strikes 161 5.3 Voluntary Procedures for the Resolution of Disputes 167 5.4 Statutory Procedures for the Resolution of Disputes 170

6 Au Evalaatiou of the System 186 6.1 Summary 186 6.2 Conclusions and Evaluation 190

Appendices A The New Forty-two Industrial Unions 204 B Employers' Federations, 1981 210 C TheNationalPolicyonLabour 211 D The Growth o/Trade Unions, 1940-77 216

Notes and References 218

Bibliography 228

Index 239

List of Figures and Tables FIGURES

1.1 The industrial relations model 3.1 Trade-union organisation

TABLES

36 77

2.1 Nigeria'sextemal trade: exports (Nmillion) 46 2.2 Labour-force estimates, 1975-80 54 2.3 Urban unemployment rates, 1974-6 55 3.1 Growth of trade unions, 1947-51 63 3.2 Distribution of trade unions by size 74 3.3 Industrial unions with a membership of over 100000 77 3.4 Comparison of companies in the food,

beverage and tobacco industry 90 3.5 NECAmembersbip, 1965-80 105 4.1 The levels of collective relations 133 5.1 Recorded strikes, 1960-77 167 5.2 Analysisoftwenty-nineNICjudgements, 1978-81 179

Foreword Guy Routh

A few days in Nigeria are enough to convince the visitor that it is a country on the move. Its population is increasing at more than 3.5 per cent per year, a rate not unusual for an African country, but its economic growth of between 5 and 10 per cent has been able to cope with the rise in population and, in addition, to institute those changes which, by the end of the century, will have transformed the country into a modem industrial state. The transformation is, of course, oil-powered, with one million barrels per day producing, at 1982 prices, $13 billion per year. The current collapse of oil prices has necessitated a rethinking of priorities, but the ebullience and enter-prise of the Nigerian people remains an unmistakable asset. They struggle to seize their opportunities and grapple with their problems under the interested gaze of the rest of the world. Unfortunately, the country's economic growth was slowed down by the world-wide economic recession leading to a reduction of oil production output in 1983. As oil is responsible for nearly 95 per cent of Nigeria's foreign exchange earnings, the impact was dramatic. The reduction in the posted price of oil early in 1983 was a logical consequence, and in order to conserve foreign exchange certain economic measures had to be taken. However, those who know Nigeria well are optimistic. Dr Ubeku points to the fact, that although the country fought a thirty-month civil war, its economy remained intact. He argues that, as the world economy picks up again, Nigeria will be once again on the path of economic progress.

Oil comes from the bounty of nature; the use to which this bounty is put is a matter for the Nigerians themselves. It might be squandered on current consumption; it might, as the planners conceive, be used to transform the country - but this will require Herculean labours for many years to come. It is in this context that industrial relations are of particular importance, and it is for this reason that Dr Ubeku's book is

xii Foreword

to be welcomed. It is of the greatest importance that trade unionists, government and employers should have for their reference and as a basis for discussion a reasoned exposition of the field, an account and analysis of its origin and development, and an identification of the problems that will arise now and in the future. His conclusions and recommendations merit close consideration by all concerned.

The practical value of the work must not be allowed to obscure its theoretical interest. Nigerian systems of industrial relations (of which several have been tried in this experimentally inclined country) are placed in context with those in other parts of the world. 'Industrial relations' exist wherever there are employers and employees. Their interests, as Adam Smith remarked, are by no means the same, the one desiring to get as much, and the other to give as little, as possible. Thus it is that, along with the curious differences between countries, there are curious similarities that persist over the centuries and in countries with contrasting social and political systems. For most of the working day, and the working year, the parties must accommodate one another, respect one another's foibles and agree to differ on those things upon which neither party can be compelled to yield. Without this accommo-dation, life would be intolerable and nothing would get done; with it, each can make a living, and a living that becomes less irksome and more rewarding with the advance of method and the passage of time.

Within Nigeria itself, we are taken through the colonial period, when British industrial relations were being transplanted to a very different setting; then independence and parliamentary rule, which, again, reflected the British way; then military rule and civil war, followed by the 'bloodless coup' of 1975 that led to the return to civilian rule but now on an American rather than a British model. These phases have been accompanied by sweeping changes in trade-union law and structure, demonstrating a degree of government power and discretion that ministers or secretaries for labour in democratic capitalist countries might well envy. There now exist the institutions and statutes upon which a system of industrial relations may be built that will accord with the needs of industrial development. I say 'may', for, as this book demonstrates, there remain discords awaiting resolu-tion.

Dr Ubeku has qualifications, academic and empirical, that enable him to treat his subject with impressive insight. His bachelor's and master's degrees at the University of London were in law; his work has been in personnel management, in which he took the Institute of Personnel Management Diploma at the London School of Economics.

Foreword xiii

More recently, he has completed his academic work in the Labour Studies Division of the Graduate School at the University of Sussex. Thus he is able to apply interdisciplinary techniques to the interpreta-tion of the wealth of clinically derived data that have enriched his experience. The result is a study that will be of interest to students of industrial relations across the world.

Brighton, Sussex, England

Preface One common feature in the developing countries is the extent to which their institutions, social, economic and political, have been influenced and indeed modified by developed countries. This is particularly marked in the case of those countries which were, for a time, under colonial rule. The developed countries, in the process of exploiting the economic opportunities available, brought with them their own sys-tems and values and superimposed these on the existing customs and traditions. Thus they imported their own legal systems, methods of government, and their approach to labour relations, among other things, and superimposed these on those practices already in existence, in the colonial territories.

Before the advent of the modem industrial sector in Nigeria, there were already in existence employer-employee relationships with sys-tems of work and reward based on the culture and traditions of the people. In general, the employer was an individual and his workmen were essentially members of his household or of the extended family, including cousins, nephews and nieces. In the circumstances the ap-proach was paternalistic in respect of monetary rewards and other welfare facilities.

However, the modem industrial sector brought with it the modem concept of collective relations as manifested in the collective bargaining process. This new approach in employment relationships was predicated upon the British system, the metropolitan country at the time. That system had developed during the laissez-faire period in Europe, had matured over the years, and was based essentially on the voluntary principle.

The voluntary approach to industrial relations presupposes the existence of certain factors for its viability. These include:

1. A democratic way of life. This makes it possible for the various parties and interest-groups to respect each other's rights. Accord-ingly, the system is unlikely to thrive in a situation where opposition is not tolerated or where trade unions are seen as working against national goals.

xv

xvi Preface

2. The balance of power between employers and employees. Where that balance tilts in favour of the employers, and the workers' organisa-tions are weak and poorly led, as is common in a number of developing countries, the system is not likely to be viable.

The experience of developing countries like Nigeria is that in their approach to economic development they rely mostly on development plans based on specific objectives. To achieve those objectives neces-sarily implies a strict adherence to the strategy agreed upon for their achievement. This means that opposition, dissent and suggestions for deviation from the agreed path are not likely to be looked upon with favour. Accordingly, strong virile labour movements are considered to be working against the interests of the nation. This has been the position in Nigeria. It becomes questionable, therefore, whether the British model of industrial relations is appropriate in a country like Nigeria.

The literature on the subject of industrial relations in Nigeria is very scanty. Yesufu's work, An Introduction to Industrial Relations in Nigeria, was published in 1962, two years after Nigeria attained her independence from Britain and at a time when the government, though independent, was still sustaining most of the institutions of the colonial era. As a result, the book describes the system of collective relations based mainly on joint consultation as collective bargaining was not widely practised in the country at the time. Furthermore, by 1962 no new labour legislation had been passed to reflect the 'indigen-ous' situation following Nigeria's independence in 1960.

Peter Kilby! has argued that the colonial administration's legislative and administrative measures on industrial relations in Nigeria repres-ent a reproduction of the metropolitan institutional framework, cor-responding to a mature system of industrial relations and wage deter-mination which had developed over a long period. Although the government, after independence, had shown its adherence to the British model, it failed to honour the voluntary principle in respect of wage determination in the public sector. Here, wage and salary changes have occurred, not as a result of collective bargaining, but on the recommendations of specially constituted tribunals. He therefore came to the conclusion that the imported British system of industrial relations in Nigeria had failed. However, Kilby's article is not con-cerned with the specific question of whether a new system of industrial relations had developed in Nigeria or not. Similarly, although a few other writers, including Damachil and Diejomaoh,3, have focused on

Preface xvii

some aspects of industrial relations in Nigeria, we are still left with the question of what system of industrial relations has developed there. Our aim in this study is therefore to trace and analyse critically the development of industrial relations in Nigeria, and specifically to determine what system has developed in Nigeria and to evaluate its prospects. Although we are concerned with labour relations in all enterprises in Nigeria, ranging from the very small to the very large, our main focus will be on the upper end of the scale from where most of our examples will be drawn. We do so for two reasons.

First, many of the companies in the first two categories are owned by private individuals, mainly Nigerians. The owners operate these enter-prises on a one-man basis. Generally, in spite of the provision in the Labour Act 1974 which stipulates that within three months of a worker taking up employment he should be supplied with written particulars of his employment, these businesses are run on a completely casual basis without the conditions governing employment being stipulated in writing. As the enterprises are small, with the number of workers generally below fifty, and because of fear of termination of employ-ment, many of these enterprises are without unions. Even where the enterprises are foreign, as in the case of certain restaurants or certain companies that drill for oil on contract to the main oil companies such as Shell-BP and Mobil, most of their workers are considered to be, and are treated as, casual. Only a few of the staff who are skilled or are supervisors are kept on a permanent basis. Again, trade unionism does not thrive in these circumstances.

Second, the Trade Unions Act 1973 provides that a trade union may be formed by at least fifty members. This means that the law itseH recognises that an enterprise with less than fifty workers need not have a union. The Minister of Labour is, however, empowered to authorise that a union be formed by a lesser number of workers if he is satisfied that such workers are not members of an industrial or general union. In spite of that exception and in spite of the grouping of unions into industrial unions discussed later in the study, there are still many small enterprises, including hotels, drinking and catering establishments and garages, which have no house unions. The labour relations in these enterprises are determined by the owners or proprietors on a non-systematised, casual basis.

However, the fact that these small enterprises do not have unions does not mean that the workers suffer in absolute silence without redress. Workers in these organisations do in fact exercise their rights. They may resign their appointments or in some cases just walk off the

xviii Preface

jobs if they feel that they are not being fairly treated. Some have even embarked on strike action, as was the case of the workers of the K. Chellarams' Supermarket and the workers of the Quo Vadis Restaurant, both in Lagos. Both strike actions took place even though the workers had no organised unions. Similarly, six workers employed by a sewing mistress in Ikeja, near Lagos, went on strike because 'madam is always accusing us falsely'. Therefore, notwithstanding what we have said about focusing on fairly large and large enterprises, where we refer to the behaviour or reaction of the Nigerian worker in this study, we include all workers whatever the size of the enterprise they work for.

The study has six chapters. In Chapter 1 we review industrial-relations systems in various countries. These systems have been grouped into four categories: namely, the Anglo-Saxon model, the West German model, the communist model and the model in develop-ing countries. In Chapter 2 we take a look at the economic, political and social aspects of the Nigerian scene, as a background to the theme of our study. The history and development of trade unions and employers' associations together with their role and that of the govern-ment are discussed in Chapter 3. Chapter 4 deals with the dynamics of the Nigerian industrial relations system. Here we analyse the machin-ery for the collective bargaining process at the enterprise and national levels. In Chapter 5 we discuss the machinery for dispute settlement. The discussion covers the voluntary internal procedures and the statutory procedures including conciliation, arbitration, the industrial court and inquiry. In Chapter 6, the final chapter, we summarise our findings and draw conclusions.

In carrying out this study I have been helped by a number of people. It is not possible for me to mention all of them here but there are a few of them who deserve to be singled out. I am grateful to Dr G. C. Routh of the University of Sussex, Brighton, who supervised this study. Without his encouragement and guidance I would not have been able to complete it. My gratitude also goes to Dr K. J. McCormick, again of Sussex University, who gave me valuable advice and showed consider-able interest throughout the period of the study. I wish to express my thanks to my close friends who gave me encouragement and practical assistance. In particular, I am grateful to Professor U. G. Damachi, formerly of the International Institute for Labour Studies, Geneva, and now Dean of the Faculty of Business, University of Lagos, who started me off on this enterprise. I thank Dr I. C. Imoisili, formerly Lecturer at the University of Lagos and now the Executive Secretary

Preface xix

of the Food, Beverage and Tobacco Employers' Association, who assembled a lot of source materials for me and provided useful suggestions. I am also grateful to Mr G. C. Okogwu, formerly Director of Labour, the Federal Ministry of Labour, and now the Director of the Nigeria Employers' Consultative Association, Lagos, who, drawing upon his experience in government, made available to me old govern-ment policy papers, reports and records. To all others who helped me in various ways, I am most grateful.

Lagos, Nigeria ABEL K. UBEKU