THE ECONOMIC FALLOUT OF COVID-19: A THREAT TO WORKERS’ FUNDAMENTAL RIGHTS

THE ECONOMIC FALLOUT OF COVID-19: A THREAT TO WORKERS’ FUNDAMENTAL RIGHTS

By: David Sholarin

“We must aim to build back better so that our new systems are safer, fairer and more sustainable than those that allowed this crisis to happen, and more effective in cushioning the consequences of future crises on people around the globe,”[1]

INTRODUCTION

The COVID-19 pandemic has created an uncommon global human and health crisis – a rare disaster which has resulted in a large number of human lives being lost and many human activities shutdown. There is a high degree of uncertainty about its impact on the lives of the people and their means of survival as a lot depends on understanding the virus, the effectiveness of measures to flatten the curve, and the development of therapeutics and vaccines, all of which are hard to forecast. As countries implement necessary quarantine and social distancing practices to contain the pandemic, the world has been put in a great lockdown, which has triggered economic downturn and the collapse of many businesses and human activities, the kind mankind had never before experienced.[2]

According to the latest statistics by the International Labour Organization (ILO), 81 per cent of the global workforce (2.7 billion workers) lives in countries with mandatory or recommended closures. It also projected that working hours will decline by 6.7 per cent in the second quarter of 2020, which is equivalent to the loss of 195 million full-time jobs.[3] ILO statistics also show that, before the Covid-19 pandemic outbreak, there were around 1.3 billion young people globally, of whom 267 million are classified as not in employment, education or training (NEET). Two-thirds, or 181 million, of NEETs, are young women.[4]

Interventions should start with clarity on the top priority; that is, treating the infected persons and controlling COVID-19 infection curves. While policymakers are providing unprecedented support to households, firms, and financial markets, and, while this is crucial for a strong recovery, there is considerable evidence that workers’ rights all over the world and their means of survival are under serious attack. What is more? There is considerable uncertainty about what the economic landscape will look like when the world recovers from this lockdown; uncertainties on several companies that would become bankrupt and most importantly, the survival of the over 195 million full-time workers, especially young workers, who would have lost their jobs during the lockdown period.

As it is examined in this write up, in this situation, controlling the pandemic, maintaining workers’ incomes and minimizing the long-term costs of collapsing businesses are essential. Hence, should companies/employers of labour be willing to exercise right of job termination, due attention needs be made to the rights of every employee – including the vulnerable - by providing soft and human face employment crisis-policy; perhaps in doing so, there would be a significant reduction in the number of lost jobs and death of starved workers would be avoided.

Employment or Employment Contract

The Nigeria Labour Act does not exactly and precisely define a contract of employment. It, however, does specify the content of a written contract of employment which an employer must advance to an employee not later than three months of being engaged in the employment.[5] Generally, contracts of employment concern that aspect of contract whereby one party called the employee agrees to perform some services for another, the employer, in return for the employer’s promise to pay him some remuneration called wages.[6] Contracts of employment like any other contract, generally presuppose a voluntary relationship which parties enter into on terms laid down by themselves with limitations imposed only by the general law of contract.

For the purpose of this write-up, I adopted the definition of ‘Persons in employment’ by the International Labour Organization:

Persons in employment are defined as all those of working age who, during a short reference period, were engaged in any activity to produce goods or provide services for pay or profit. They comprise employed persons “at?work”, i.e. who worked in a?job?for at least one hour; and employed persons “not at work” due to temporary absence from a job, or to working-time arrangements (such as shift work, flexitime and compensatory leave for overtime).[7]

WORKERS' RIGHTS AS FUNDAMENTAL HUMAN RIGHTS

Although very few contract employments envisage or provide for labour relations in a crisis situation such as the world is currently facing, it has been settled that such a crisis constitutes a force majeure in labour relations that empowers either party to the contract to be free of strict compliance to the obligations imposed by the employment contracts, and those that can be implied in situations where such contracts are unwritten, based on the doctrine of contractual frustration.

Moreover, it may be essential to add, there are some workers’ rights that are sacrosanct which all employers must comply with or adequately consider even in the midst of crisis. They are human rights claims all people are justly entitled to make merely by virtue of being human. The concept of human rights is intimately bound up with the development of modern democracy.

The concept of human rights was expanded further in the 20th century to include economic and social as well as civil and political rights. The Universal Declaration of Human Rights, proclaimed by the United Nations in 1948[8], included the right to social security; “the economic, social and cultural rights indispensable for the dignity and free development of one’s personality”; the right to work and join trade unions; the right to leisure, to an ‘adequate’ standard of living, to financial security during unemployment, sickness and old age; the right to free, compulsory education; and the right to enjoy the arts.[9]

Rights are the basic freedoms to which all human beings are entitled, like social, cultural and economic rights: the right to food, the right to work, and the right to education; and civil and political rights: the right to life and liberty, freedom of thought and speech/expression, and equality before the law. In short, human rights are freedoms established by custom or international agreement that protect the interests of humans and the conduct of governments in every nation.[10] Rights are those legally recognized benefits to which individuals are entitled and which they can seek to enforce. Workers’ rights, therefore, are fundamental human rights which individuals have to be gainfully employed in order to be able to provide basic necessities – including food - for themselves and the members of their families. These rights, which are ought not to be taken away arbitrarily for whatever reason by anyone including employers of labour[11], are currently facing cruel attack by the COVID-19.

EXAMINATION OF COVID-19 AS A THREAT TO FUNDAMENTAL WORKERS’ RIGHTS IN NIGERIA LABOUR RELATIONS

Workers’ rights in Nigeria are made available by the Nigerian labour laws. Many of these rights are embedded in and emanate from common law principles and practices but a few related to the issue under consideration are considered herein.

i.???Right to be provided with a written contract of employment

The Labour Act[12] mandates that an employer provides the employee with a written contract of employment specifying the particulars of employment not later than 3 months of engaging the service of the employee.

The essential clauses of the employment contract include;

i) The name of the employer or group of employers (ii) The name and address of the employee and the place of his engagement (iii) The nature of the employment (iv) If the contract is for a fixed term, the date when the contract expires (v) The appropriate period of notice to be given to the party wishing to terminate the contract, due regards being had to section 11 of the Act.[13] (vi) The rates of wages and method of calculation thereof and the manner and periodicity of payment of wages (vii) Any terms and conditions relating to –?(a) Hours of work; or (b) Holidays and holiday pay; or (c) Incapacity for work due to sickness or injury, including any provision for sick pay; and (viii) Any special conditions of the contract.

Should there be a change in the terms of the written contract of employment, the employer is obligated to inform the employee not later than one month after the said change and a copy of the written contract of employment as altered must be made available to the employee. Where a copy of the written contract of employment cannot be made available to the employee, the employer is mandated to preserve a copy of the written contract and ensure that the employee has the opportunity (s) of reading it in the course of his employment or that the written contract is made accessible to the employee in some other way.[14] It constitutes an unfair labour practice should the employee not be notified, in clear terms, the terms and condition of his employment within three (3) months of being employed, in employment relation where issuance of such contract of employment is applicable.

However, the unprecedented emergence of COVID-19 has revealed that there are too many employment relations in Nigeria that are short of this standard. It is suddenly realized that many employees have been toiling day and night with little or no employment protection. The few that can be termed employment contracts are intrinsically outdated either as a result of negligence or a subtle attempt to delay/deny the employee his/her entitlement under the contract. The consequence of this is the arbitrary lay-off of workers as seen within the past few weeks of the pandemic and lockdown all over the globe. It also appears that it will constitute an unfair labour practice for the employees’ contracts to remain unreview months after expiration of the probationary periods provided in the employment contract.

ii.??Right to be provided with work

It was generally the contention in the past that an employer was not bound to provide work in so far as wages were paid,[15] since the obligation of an employer to pay the wages of an employee is usually the primary basis upon which the latter offers services to the former. It is generally accepted that the most significant consideration which an employer may give to an employee in return for work performed or services rendered to the employer is the employee’s monetary remuneration?in?terms?of?salary?or?wages?in?legal?tender. A contract of employment does not normally oblige an employer to provide his employee with work to do, provided he pays him his wages or salary as and when due,[16] but this duty is established by the Labour Act.[17]

There is a mandatory obligation on the employer to provide work for employees who fall under the category of workers to whom the Labour Act applies.[18] The Act provides further that inasmuch as the agreement between the parties does not provide otherwise; the employee has presented himself fit and ready for work and has not broken his contract, the employee must be given work suitable to his capacity. Where the employee is not provided such work, the employer remains obligated to pay for the period. Also, according to the Labour Act, every worker shall be entitled, after twelve months of continuous service, to a holiday with full pay of at least six working days.[19]

Meanwhile, there seem to be two broad exceptions to this right/obligation. First, if the failure to provide work is a result of suspension arising from disciplinary measures against the employee for committing a wrong in breach of his contract.[20] For instance, where an employee is suspended for gross misconduct or for committing fraud or other crimes. It must be added, where the employee is eventually found innocent of the allegation, the employee must be paid full salary or wages for the period of suspension, notwithstanding the no work.[21]

Secondly, where there is a supervening temporary emergency or crisis such as the current Coronavirus pandemic, which cannot make it practicable for the employers to provide work, the worker shall be entitled to those wages only on the first day of the period in question.[22] However, if there are other means such work can be provided and attended to by the employee, for instance virtually, failure to provide the work will not discharge the employer the obligation to pay wages/salary, even during the coronavirus pandemic.

iii.?Right against arbitrary termination of employment

This is the third and final right examined in this piece. The Labour Act provides for the termination of contracts in three (3) ways, namely:

i)???By the expiry of the period for which it was made;

ii)??By the death of the employee before the expiry of that period;

iii)?By notice in accordance with Section 11 of the Act, or in any other way in which a contract is legally terminable or held to be terminated.

Either party to a contract of employment may terminate the contract on the expiration of a notice given by him to the other party of his intention to do so. As provided in the Labour Act, the period of Notice to be given for the purposes of this provision are as follow;

i)??????????One day, where the contract has continued for three months or less;

ii)???One week where the contract had continued for more than three months but less than two years;

iii)??Two weeks, where the contract has continued for a period of two years but less than five years;

iv)??One month, where the contract had continued for five years or more.[23]

Any notice for a period exceeding one week shall be in writing.[24] The Act provides further in Section 11(5) that nothing in the above provision with regards to Notice shall affect the right of either party to a contract to treat the contract as terminable without notice by reason of such conduct by the other party as would have enabled him to treat it before the making of this Act.

In addition, nothing shall prevent either party from waiving his right to notice or from accepting payment in lieu of notice.[25] Note that the Act also provides that all wages payable in money shall be paid on or before the expiry of any period of notice; and in the calculation of a payment in lieu of notice, the Act provides that it is only that part of the wages which a worker receives in money, exclusive of overtime and other allowances that shall be taken into account. The employer must give sufficient notice of termination or salary in lieu of notice.

However, just like many others, with COVID-19, many employers have been forced to terminate employee’s contract without due recourse to the Act and in breach of workers’ constitutional right.

TEMPORARY EMPLOYMENT CRISIS POLICIES APPLICABLE

It cannot be gainsaid that the Coronavirus pandemic has been cruel to both the employees and the employers alike. Helping firms and company retain staff is crucial. Cash grants by the government to support wages, training, productivity improvement, emergency interest-free loans and suspending or deferring the payment of fixed operating cost or waivers – such as duties and taxations - will go a long way in keeping firms/companies afloat at this time.

Also, employers of labour are encouraged to employ human face crisis policies to cushion the effect of the pandemic on vulnerable employees. One of the ways this can be achieved, instead of outright lay-off with an empty hand, is to propose or negotiate a variation of employment contracts for pay-cuts, virtual (work from home), and voluntary leave without pay, furlough, temporary payoff or other interim arrangements suitable to the employer to remain a going-concern and satisfactory to the employee.

Furthermore, termination on the ground of frustration should be considered with great circumspection. The employer must ensure that the duration of the supervening event and lockdown created by Coronavirus pandemic persists for a significant length of time to attract employment termination on the ground of frustration.

CONCLUSION

The rights of workers are in every way, entrenched in and flow from Fundamental Rights as well as the principles of Natural Justice. This is the sacrosanct provisions of the Labour Laws applicable in Nigeria that all employers of labour must remember and honour even as the world confronts COVID-19.

Termination of employments motivated only by the economic fallout of Covid-19 is a breach of the workers’ fundamental rights. If an employer is unfortunately unable to carry on business and needs to shut down for a while, employment variation options, such as enumerated above, without termination, may be the only approach permitted under the law.

As noted by Guy Ryder,[26] starting from the very beginning, we must aim to build back better so that our new systems are safer, fairer and more effective in cushioning the consequences of future crises on people around the globe.

David Sholarin practices law in Lagos, Nigeria and can be reached at [email protected]

[1] Guy Ryder, ILO Director-General

[2] “The Great Lockdown: Worst Economic Downturn since the Great Depression”, IMF World Economic Outlook for April 2020. https://blogs.imf.org/2020/04/14/the-great-lockdown-worst-economic-downturn-since-the-great-depression/

[3]Latest edition of the?“ILO Monitor: COVID-19 and the world of work”, https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_741905/lang--en/index.htm

[4]https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_737053/lang--en/index.htm

[5] Labour Act, Cap L 1, Laws of the Federation, 2004- section 7(1)

[6]Fabian Ajogwu.2007. Labour Relations: Termination of Employment. Lagos Business School, pg 1?

[7]https://ilostat.ilo.org/glossary/employment/

[8]https://www.un.org/en/universal-declaration-human-rights/ accessed April 2020.

[9] The inclusion of this new class of rights reflected the influence of welfare-state liberalism and, particularly, Franklin D. Roosevelt’s four freedoms: These included not just freedom of speech and belief but also freedom from fear and want.

[10] Retrieved on January 9, 2017 from https://www.hg.org/human-rights.html

[11]Scherrer, C and Greven, T (2001): Global Rules for Trade Codes of Conduct, Social Labeling, Workers ‘Rights Clauses, Munster: WestfalischesDampfboot.

[12] Section 7 (1) (a)-(d) Labour Act

[13] Section 11 deals with the termination of contracts by notice;

[14] Section 7(2) Labour Act,Cap, 198, Laws of the Federation of Nigeria, 2004.

[15] E. E. Uvieghara, Labour Law in Nigeria, Malthouse Law Books, p. 34

[16] See where Asquith, J. in Collier v. Sunday Referee Publishing Co. Ltd. (1940) 2 KB 647, said ‘provided I pay my cook her wages regularly, she cannot complain if I choose to take any or all my meals out”.

[17] Section 17 Labour Act, Laws of the Federation of Nigeria, 2004.?

[18]Section 91, supra.

[19] Section 18 (1) (a) supra.

[20] Section 17 (1) (a) supra.

[21] Ayo Peter Olowonihi v EFCC NICN/ABJ/347/2017

[22] Section 17 (1) (b) Labour Act.

[23] Section 11 supra

[24]Section 11(3) supra

[25] Section 11(6) supra

[26] Op. cit.s.