csrreporters 
The Federal Government has pledged to halt and reverse deductions from the Employees’ Compensation Scheme, managed by the Nigeria Social Insurance Trust Fund (NSITF), in a bid to ease tensions with the Nigeria Labour Congress (NLC) and protect workers’ welfare.
The NLC had accused the government of diverting 40 per cent of employer contributions to the national treasury, warning that the move undermined workers’ social protection and threatening a nationwide strike if the funds were not restored.
The Employees’ Compensation Scheme, funded solely by employer payroll contributions, provides financial support to workers in cases of job-related injuries, disabilities, illnesses, or death.
In a letter to the union dated August 16, 2025, NSITF Managing Director Oluwaseun Faleye admitted deductions had been made, but clarified they were not a diversion of funds. He explained that the deductions followed a December 2023 fiscal policy requiring government-owned enterprises to remit half of their internally generated revenue. However, he assured that statutory contributions are no longer being touched, and some reversed payments have already been made.
Faleye added that deductions on investment income continue but discussions with the Ministry of Finance and Budget Office are ongoing to resolve the matter fully. Both offices, he said, have pledged that no further deductions will be made.
The NLC, however, insists that the NSITF should not be treated as a revenue-generating agency, stressing that the contributions exist solely to safeguard workers. Assistant General Secretary Christopher Onyeka said: “These funds are meant to protect workers in their most vulnerable moments. They must never be depleted for fiscal purposes.”
Meanwhile, NSITF dismissed concerns about alleged attempts to weaken the Employees’ Compensation Act, stating that its proposals to the National Assembly were aimed at strengthening compliance and enforcement against defaulting employers, thereby ensuring stronger protection for workers.
The latest development reflects growing pressure on the government to balance fiscal reforms with its responsibility to protect social safety nets.