The Federal Government has pledged to reverse deductions made from the Employees’ Compensation Scheme operated by the Nigeria Social Insurance Trust Fund, in a bid to ease tensions with the Nigeria Labour Congress, which had threatened a nationwide strike.
The NLC accused the government of diverting 40 per cent of workers’ contributions into the Treasury, warning that such action weakens the scheme’s ability to protect employees in cases of workplace injury, illness, or death.
The union demanded an immediate refund, cautioning that failure to respond could spark industrial action across the country.
In a letter dated 16 August 2025, NSITF Managing Director, Oluwaseun Faleye, confirmed that deductions had taken place but rejected claims of diversion. He explained that the withdrawals were tied to a Ministry of Finance directive issued in December 2023, which mandated state-owned enterprises to remit half of their internally generated revenue.
Faleye clarified that employer contributions, which fund the Employees’ Compensation Scheme, are no longer affected due to a March 2024 directive from the Accountant-General. He further disclosed that some of the deducted sums have already been refunded, while the Finance Ministry and the Budget Office have given assurances to stop future deductions.
“We have been assured that this matter will be addressed. Both the Minister of Finance and the Director-General of the Budget Office have committed that no further deductions will be made from contributions or investment proceeds,” the NSITF said.
The NLC acknowledged the assurance but maintained that its executive council would study the letter before deciding on whether to suspend the planned strike. “The contributions to NSITF are not government revenue. They are meant to safeguard workers and should not be touched,” Assistant General Secretary Christopher Onyeka stated.
Beyond the deductions, the NLC also raised broader issues, including the Federal Government’s failure to reconstitute the Governing Board of the National Pension Commission. The union argued that this situation leaves pension funds open to political interference and poses risks for contributors.
The Employees’ Compensation Scheme is a statutory social insurance programme, fully funded by employers, which provides financial assistance to workers who experience job-related accidents, disabilities, or death.
The controversy began after the Finance Ministry classified the NSITF as a revenue-generating agency. Critics insist this categorisation was inappropriate, given the fund’s tripartite ownership structure involving government, workers, and employers.