Highlights from the Employee Compensation Act Every Employer Should Know
Brite is the founder of a fast-growing fashion startup line. He was also one of the lucky stylists exhibiting at the Lagos Fashion Week. Whilst moving in the new supplies needed for the exhibition, one of his operations personnel, tripped on the stairs and fell. The fall left him with a broken neck and hand.
He was rushed to the nearest hospital where he got adequate treatment for 10 days. The company was responsible for his bills and an intern who witnessed it all asked Brite if there was any prior provision or fund set aside for cases such as this.
Brite sat him down and gave him some lecture about the Employee Compensation Scheme. This is the point where you jot things down.
What is The Employee Compensation Scheme?
The Employee Compensation Scheme (ECS) is established by the Employees Compensation Act 2010 and the law compels every employer to make a minimum monthly contribution of 1% (one per cent) of the employees’ total monthly payroll into a fund known as “Employees Compensation Fund”. The Law was established to provide an open and fair system of guaranteed and adequate compensation for employees or their dependents for any death, injury, disease or disability arising out of or in the course of employment. The scheme is managed by the Nigerian Social Insurance Trust Fund (NSITF).
It is important to note that it is solely the employer’s duty to contribute to the Fund; no deductions from employee’s salaries/wages should be made for this purpose.
What Injuries/Disabilities are Catered for by the Scheme?
The compensation scheme covers for various occupational diseases and injuries such as diseases caused by chemical agents, hearing impairments caused by noise, infectious or parasitic diseases, occupational asthma, skin diseases, occupational cancer, etc. It also covers for physical injuries that cause either a permanent or temporary disability.
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The scheme also offers compensation for “occupational mental stress”. The usual gbas and gbos nature of some work environment can easily affect a worker’s mental health.
Also, where such accidents or injuries result in death, the dependents of the deceased are entitled to compensation.
How to make claims from the NSITF
Either in the case of an injury or death, it is the sole responsibility of the employer to report the incident to the nearest NSITF office to claim compensation for the employee. This must be done within 7 days of being informed of the incident (employees or their dependents must report the incident to the employer within 14 days of the incident’s occurrence).
The report to be made to the NSITF must state:
- the name and address of the employee;
- the time and place of the disease, injury or death;
- the nature of the injury or alleged injury;
- the name and address of any specialist or accredited medical practitioner who attended to the employee; and
- any other information required by the NSITF.
For convenience, the report need not be physically submitted. The prescribed forms can be downloaded from the NSITF website: www.nsitf.gov.ng and submitted via mail.
Let’s round off with these important points to note:
- Failure to report known occupational injuries, diseases or death (except minor injuries) is an offence under the law.
- The law covers for both permanent and casual workers since every employee is exposed to some level of risk at the workplace.
- No employee is allowed by law to agree with his employer to waive or to forego any benefit or right to compensation to which the employee or his dependents are entitled. Any such agreement in whatever form is void and unenforceable.
There you have it, the major highlights from the Employee Compensation Act! Before offering a job, every employer should know this information just like Brite.
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