Nigeria Social Insurance Trust Fund
Employees’ Compensation Act 2010established the Compensation Fundwhich provides forcompensation to employees in the event of death, injury,disability or disease arising out of or in the course of employment; and for relatedmatters. It also provides compensation to the dependants ofan employee who diesin the course of work.
The objectives of the ECA, 2010 include:
i) To provide a fair, guaranteed and adequate compensation for all insured employees in case of any injury, disease, disability or death arising out of, or in the course of employment.
ii) To rehabilitate employees who suffer work–related injuries, disabilities, or occupational diseases.
iii) To establish and maintain a solvent compensation fund, which will be managed in the interest of both employees and employers.
iv) To provide for a fair and adequate assessment of employers’ risk rating and ensure appropriate contribution is paid.
v) To provide a claims procedure that is simple, fast and less cumbersome for the injured persons, or their dependants in case of death.
vi) To promote the enforcement of occupational safety and health standards in the workplace.
An employee is a person under oral or written contract of employment whether in the formal or informal sectors whether on a continuous, part-time, temporary, apprenticeship or casual basis including a domestic servant; and any person employed in the Federal, State and Local Governments, including any of the government agencies.
An Employer is any person/individual, body corporate, Federal, State or LocalGovernment or any of the government agencies.
The ECA 2010 provides for cash and non-cash benefit components such as:
(i) Compensation payable in cash periodically for permanent, temporary, total, orpartial disability where he/she is eligible.
(ii) Counselling services to the affected employee in addition to cashcompensation to which he/she may be eligible.
(iii) Provision of medical, surgical, nursing and other healthcare which may berequired.
(iv) Payment of daily subsistence allowance where applicable, to the injuredemployee whilst undergoing treatment.
(v) Provision, replacement and repair of appliances and prosthesis to the injuredemployee, where applicable.
(vi) Vocational rehabilitation.
The Act covers all employees except members of the Armed Forces of the Federal Republic of Nigeria.
Yes. Self-employed persons are covered.
Yes. Casual and out-sourced employees are covered under the Act.
The ECS is funded from contributions made by employers.
The rate of contribution is 1% of the total employee payroll.
No. Contribution by employees is prohibited.It is an offense for an employer to make deductions from the employees’ emoluments forthe purpose of contributing to the Fund.
The Act provides that all employers contribute a minimum of 1% of total payroll,within the first two years. It further provides for categorization ofrisk factors; andsubsequently different assessment ratesshall apply to each class of industry, sector orworkplace. This implies that in future, some employers may pay more than 1%.
Yes there are. An employer who fails to pay contributions as at when due, or neglects to comply fully with the provisions of the Act commits an offense and shall be liable on conviction to the following penalties:
i. Imprisonment for a term notexceeding one year or fine of not less than N100,000, orboth imprisonment and fine for an individual;
ii. A fine of not less than N1,000,000 for a body corporate and in addition, each director,manager or officer of the body corporate shall be deemed to havecommitted an 3offence and shall be liable on conviction to imprisonment for a term not exceedingone year or a fine of N100,000 or both; and
iii. A penalty in an amount equal to 10% of the unpaid assessment.
No. Employer’s contribution under the Act does not qualify as tax.
There is no such provision in the Act. However, the Act provides the minimum floor of protection compulsory for an employee in the event of injury or death or occupational disease in the course of employment.
The Nigeria Social Insurance Trust Fund Management Board is the implementing agency. It is responsible for collecting contributions, paying claims and other responsibilities as prescribed by the Act.
Yes. Examples include Zambia (since 1963) and Germany (1897).
i. Periodic compensation to employees or their dependants for any death, disability,injury or disease arising out of or in the course of employment.
ii. Medical expense refund for injury arising out of or in the course of employment.
iii. Provides counselling and rehabilitationiv.In the case of permanentinjury,provides prosthetic support for disabled employee.v.A simple claims processvi.It isa “no fault scheme.’’
vii. Solventfunds available for the payment of compensation regardless of the financialposition of the employer at the time of claim.
viii. Coverage is universal for all employees except members of the Armed Forces.
Yes, there are. They each cover different contingencies.
i) The Employees’ Compensation Act, 2010 covers workplace injury, occupational disease or death arising out of or in the course of employment.
ii) The Pension Reform Act 2004 covers the employee after retirement.
An employer is obliged to report an injury, occupational disease or death occurring to an employee in the form and manner prescribed by the Board. The notice of injury, death or occupational disease must be received by the Fund within 21 days of the occurrence. The date of diagnosis of the occupational disease is deemed to be the date of occurrence of the occupational disease, for the purposes of filing a claim application. The appropriate forms are available on www.nsitf.gov.ng
Yes. Any employer who fails to make a report as required by the Act is liable on conviction to a fine or imprisonment or both.
An injured employee or deceased employee’s dependant must notify the employer, who will file the claim for compensation by completing the requisite form for that purpose.
The claim for compensation must be filed within one year from the date of injury, occupational disease or death.
No, an injured employee who chooses to sue his employer in the civil courts for damages arising from the injury cannot file claim under the ECA 2010, at the same time because the Act prohibits it. Indeed, one of the objectives of ECA 2010 is to avoid costly settlement of claims.
The employee is obliged to inform the employer within 14 days, after occurrence of an injury or disability or occupational disease arising out of or in the course of employment. In the case of death, the dependant will inform the employer appropriately.
The employer is obliged to report every injury arising out of or in the course of employment to the NSITF Board within 7 days of receiving information of its occurrence. The employer shall also report within 7 days, every disabling occupational disease, or death of an employee in the course of employment.
The employer benefits in the following ways:
i. Refund of medical expenses.
ii. Indirectly improves productivity from the workforce because the emotional cost of disability or death is assuaged by the monetary compensation.
iii. The ECA 2010 provides for a pool of funds from which such costs are met through refund of medical and rehabilitation expenses.
Employees would benefit as follows:
i. Prompt and direct payment of compensation to the injured employee or dependants of the deceased employee not subject to the whims of any employer
ii. Periodic re-evaluation of disability iii. Rehabilitation of injured or disabled employees to ensure quality of life. iv. Provision, replacement or maintenance of prosthesis where required.
Where the employer has failed to make the mandatory contributions as prescribed by the ECA, 2010, the Board shall prosecute the employer to recover all contributions due.
No refund is payable to any employee.
No. There is no special benefit by way of refund or rebate.
Society as a whole stands to benefit in the following ways:
i. The ECA 2010 provides for some measure of income replacement in the event of workplace disability or death.
ii. A pool of investible funds for socio – economic development is created.
iii. Industrial peace would be promoted, leading to enhanced economic development and higher productivity.
