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Trade Disputes and Settlement Mechanisms in Nigeria: A Critical Analysis


Anyim Chukwudi Francis, Ph.D
Department of Industrial Relations and Personnel Management, Faculty of Business Administration,
University of Lagos, Nigeria.
Email: chucksanyim2004@yahoo.com

Chidi, Odogwu Christopher
Department of Industrial Relations & Personnel Management, Faculty of Business Administration,
University of Lagos, Nigeria
Email: krischidi2002@yahoo.com

Ogunyomi, Olusiji Paul
Department of Industrial Relations & Personnel Management, Faculty of Business Administration,
University of Lagos, Nigeria
Email: yomipaul@mail.com

ABSTRACT

The objective of this paper is to examine the drudgery and ineffectiveness inherent in the disputes settlement
mechanisms (DSM) in Nigeria. Industrial or trade disputes have both costs and benefits to the three social
partners and the society at large. These social partners are the government, labour and management. However,
it should be noted that from experience the costs of industrial disputes have always outweighed the benefits. The
authors observed that in spite of the statutory mechanisms put in place to mitigate disputes, the phenomenon has
been on the increase on a consistent basis. To achieve the above objective, the authors adopted a theoretical
approach. The authors advanced recommendations for the efficient and effective settlement of trade disputes in
Nigeria such as alternative dispute resolution (ADR) mechanism and the use of social dialogue inter alia.

Keywords: Trade disputes, settlement mechanisms, critical analysis, alternative dispute resolution, social
dialogue


INTRODUCTION

Industrial or trade disputes have both costs and benefits to the three social partners and the society at large.
These social partners are the government, labour and management. However, it should be noted that from
experience the costs of industrial disputes have always outweighed the benefits. According to Imberman (1979),
strikes costs more than you think. Trade disputes as exemplified by strikes, to a large extent have a great
bearing on the smooth and orderly development of the economy and the maintenance of law and order in the
society. They sometimes arouse public resentment because they may hurt the public more than the parties
involved in the dispute. Ubeku (1983) posits that strikes especially major ones have a dramatic effect on the
public particularly in essential industries. In similar manner, Ifedi (1994) commenting on protracted strikes in
Nigeria states that the common man is unfortunately the victim. Factories and government establishments are
closed down. Basic facilities like petroleum products become very scarce; prices escalate as the cost of transport
rise beyond the reach of commuters.

The costs of strikes include loss of production or output; disruption in essential services (oil, electricity, and
banking); capacity under-utilization; scarcity and high costs of essential items; unemployment and manpower
contraction amongst others. A strike-prone country is not likely to attract foreign investors as this index has
become a very vital consideration for foreign industrialists and multinational corporations. However, it may be
instructive to state that whether dispute staged is adjudged to be successful or not, it is obvious that some
damage must have been done and parties and the public have to bear the costs.
One of the cardinal points of the National Policy on Labour is the expeditious or swift settlement of disputes by
the institutions created for this purpose. However, experience has shown that the Industrial Arbitration Panel
(IAP) takes up to 12 months or more to make its decision known to parties, thus creating room for erosion of
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confidence and frustration for the parties. Fashoyin (1992) notes that whereas the IAP has 42 days within which
to make its award, this duration is hardly complied with. Government policies, pronouncements and directives
sometimes lack credibility, firmness and the finesse they should have; as the government has consistently
breached the legislation on no work, no pay. As Orifowomo (2008) rightly observes; employers especially in
the public sector seldom invoke the no-work no-pay rule, possibly because the employers themselves are usually
at fault by their failure to nip a looming strike in the bud. The government as a pacesetter and the largest
employer of labour should lead other employers in its policy implementation. The government restructured the
trade unions in both the public and private sectors to enhance the effectiveness of collective bargaining process
but the government seldom uses the machinery in the public sector in comparison to what obtains in the private
sector. This scenario gives the government room for unilateral determination of terms and conditions of
employment which is a negation of the partnership in progress doctrine outlined in the National Labour
Policy. As Fashoyin, (1992) observes, the inequities associated with unilateral decision-making and the
unwillingness of the public employer to use the bargaining machinery has made strike to be the means of
ensuring favourable employment conditions in the public sector crucially important. Besides, labour-
management negotiations is achieved through informal means or through political pressure mounted by the
unions. The existing statutory machinery for the settlement of disputes as could be found in the Trade Disputes
Act 1976 and all subsequent amendments has not been effective in terms of delays experienced by aggrieved
parties as well as cumbersomeness of the procedure. Oftentimes, judgements drag on for years and justice
delayed is justice denied. More so, the statutory dispute settlement procedure has not fostered industrial
harmony to a large extent (Chidi, 2010). The statutory settlement mechanism is exemplified by mediation,
conciliation, industrial arbitration panel and the national industrial court as shown in figure 1.

FIG. 1: MODEL OF DISPUTES SETTLEMENT MECHANISMS IN NIGERIA










Source: Adapted from Fajana (2006)

However, in emergency situations disputes could also be referred to a board of enquiry for speedy resolution.
The objective of this paper is to examine the drudgery and ineffectiveness inherent in the disputes settlement
mechanisms (DSM) in Nigeria. The authors observed that in spite of the statutory mechanisms put in place to
mitigate disputes, the phenomenon has been on the increase and on a consistent basis. The study aims to
advance recommendations for the efficient and effective settlement of trade disputes in Nigeria.

LITERATURE REVIEW
In Nigeria, the courts have given judicial support to the legislative definitions of trade dispute contained in
section 47 of the Trade Dispute Act. That section defines a trade dispute as cited in Aturu (2005) as any dispute
between employers and workers or between workers and workers, which is connected with the employment or
non-employment, or the terms of employment and physical conditions of work of any person. The following

Settlement

National
Industrial
Court
Internal
Settlement
Mechanism

Conciliation Mediation

Industrial
Arbitration
Panel

Frustration
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elements must be present before a dispute can qualify as a trade dispute: the dispute must be between employers
and workers or workers and workers, the dispute must be connected with the employment or non-employment
of any person; or the dispute must be connected with the terms of employment or physical conditions of work of
any person.

From the data compiled from the Central Bank of Nigeria Annual Statistical Bulletin, for various years; the
number of disputes declared in Nigeria between 1968 and 2004 is 6, 287; the number that resulted in strikes or
work stoppages is 4,079 or 64.88% when compared to the number of disputes declared. Within the same period,
the number of workers involved is 10,755,205 while man-days lost is 296,189,399. The average of these
figures per annum show that the number of disputes reported is 170; work stoppages 110; number of workers
involved 290,681 and man-day lost 8,005,118. The trend shows that the number of disputes settled by
conciliation within the same period is 3,719 or 59.15% of the number of disputes reported; the number settled
through the process of arbitration (IAP) is 601 or 9.53% of disputes reported while 411 or 8.53% of the disputes
reported were settled through the National Industrial Court (NIC). These statistics as a matter of fact are not
healthy and palatable for a developing economy like Nigeria. Consequently, the problem calls for a
dispassionate and objective study with a view to tackling the identified problems through the deployment of
efficient and effective trade disputes settlement mechanisms.

(Insert Table 1here)

Conflict in some form and degree is part and parcel of virtually every facet of human life. Some people tend to
view conflict as undesirable component of human life while others through history and experience have come to
the conclusion that conflict can indeed lead to changes regarded as desirable in terms of generally acceptable
human values. In Karl Marxs theory of class and class conflict, they observed that in order to survive, humans
must produce food and other material objects (Marx & Engels, 1932). The production process involves what he
termed the forces of production which include technology, raw materials and scientific knowledge. Each stage
in the development of the forces of production corresponds with a particular form of the social relationships of
production which people enter into in order to produce goods and services. Taken together, the forces of
production and the social relationships of production form the economic basis or infrastructure of the society.
The mode of production gives rise to two classes in society, the wealthy property-owning class and the poor,
weak propertyless class. In the scheme of things, the wealthier and more powerful class exploits the relationship
between the classes and much of the wealth is appropriated in the form of profits by the property owners or
capitalist whereas the wealth is produced by the labour power of the workers. Consequently, the wages paid to
the workers are well below the value of the wealth they produce. Marx believes that the capitalists exploitation
which has created a situation of distress and misery for the workers will give room to class consciousness. This
will in turn lead to agitation by workers against oppressive conditions of work and eventual downfall of the
capitalist system which will be replaced with a socialist system and later communism.

Marxs theory of conflict relates to clashes of class interests which makes history of society a class struggle.
Some critics of Marxs work have raised a number of difficult points on this theory. The first is, when and how
would widespread class consciousness come about? Transition from shop floor conflict to the wider political
arena and the formation of association for the purpose of mass action is a process that rarely occurs. Besides, in
the workplace, there is even conflict amongst the workers. The model seems to be tilting towards religion as it
appears to be diverting the work group from the realization of their personal wishes or true interests. Despite
Marxs view on the overthrow and destruction of the capitalist system, the system has continued in the western
world for over two centuries since the dominant social class that owns and controls the means of production will
largely monopolize political power and its position will be supported by law framed to protect and further their
interests.

Dahrendorf (1959) posits that capitalist society is but one sub-type of industrial society which is a transitory
form limited to the western societies. In a sense, there is agreement between Dahrendorf and Marx as each
holds that capitalism as a type of society is destined to be supplanted by another. According to Dahrendorf the
disappearance of capitalism comes about through a relatively smooth process of social development governed
primarily by the economic changes involved in the spread of industrialization. In Marxs view, the overthrow of
capitalism could only be achieved through the process of revolutionary change which will produce a different
type of society which is socialism. Marx in this context believed that class conflict is inevitable and would play
a fundamental role in the process of transition. However, it is not enough to state that Dahrendorf relegates
class conflict in Marxs idea, but he accords importance to the emergence of liberal-democratic state where
conflicts in the industrial sphere became regulated or controlled. Dahrendorf argues further that some of Marxs
basic ideas have been shown to be invalid while Miliband (1969) holds that they are essentially correct and have
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lost little of their explanatory power with the passing of time. Miliband accepts that the period since Marxs
death has witnessed far-reaching social, economic and political changes. However, he states that these can be
understood by elaborating upon Marxs conceptions rather than by altering or abandoning them. Weber (1958)
adds to Marxs insight in the development of conflict theory by insisting that class alone is not sufficient for
identifying the privileged in society. Wealth and ownership of means of production although are important signs
of privilege, status is also derived from prestige, breeding and other social categories. Weber believes that the
stratification of privilege in modern societies is more complex than Marx had presented in his model. Weber
also pointed out more clearly the relationship between ideology and distribution of resources. In his analysis of
class, Weber disagreed with Marx on a number of issues. Firstly, factors other than the ownership of property
are significant in the formation of classes. Market value of the skills of the properties varied and the resulting
differences in economic returns are sufficient to produce different social classes. Secondly, Weber saw no
evidence to support the polarization of classes rather he saw the diversification of classes and an expansion of
the white collar middle class. Thirdly, Weber rejected the view held by some Marxists in respect of the
inevitability of the proletarian revolution. Weber saw no justification why those sharing a similar class situation
should necessarily develop a common identity, recognize shared interests and take collective action to further
those interests. Lastly, Weber rejected the Marxists view that political power necessarily derives from economic
power. He argues that class forms only one possible basis for power and the distribution of power in society is
not necessarily linked to the distribution of class inequalities. According to Hyman (1975), the Marxists see
political and class conflict as synonymous with industrial conflict since the capitalist structure of industry and of
wage labour is closely connected with the pattern of class division in society. Simmel (1955) further enriched
the theoretical base of conflict theory by suggesting that conflict serves as a source of both integration and
dissention. Intra-group conflict for example helps integrate society by serving as a safety valve for built up
hostility; if workers are fighting one another, they will not organize and unify to challenge their employer.

Most writers agree that some conflict is both inevitable and necessary in effective organizations but a well-
known psychologist, Maslow (1956) observes a high degree of ambivalence regarding the value of conflict.
Maslow notes that managers intellectually appreciate the value of conflict and competition. They agree it is
necessary ingredient of the free enterprise system. However, their actions demonstrate a personal preference for
avoiding conflicts whenever possible. According to Robbins (1974), it is not natural for an untrained or
inexperienced person to avoid threatening situations and it is generally acknowledged that conflicts represent the
most severe test of a managers interpersonal skills. The task of the effective manager therefore is to maintain
an optimal level of conflicts focused on productive purposes.

Hyman (1975) posits that labour dispute is an unavoidable evil in any modern organization, particularly in large
ones. It is a product of industrialization. Work relations themselves are inevitable source of dispute. Iwuji
(1982) describes disputes as a vital process towards seeming adjustments of expectation to economic realities.
The conflict taking place in industrial relations between those who buy labour and those who sell it is seen as a
permanent feature of capitalism, merely reflecting the predominant power base of the bourgeois and the class
relations of capitalist society generally. On the strength of the foregoing view, Allen (1971) sees class conflict
as permeating the whole of society and is not just an industrial phenomenon. In the same way, trade unionism is
a social as well as industrial phenomenon. Trade unions are by implication, challenging the property relations
whenever they challenge distribution of the national product. They are challenging all the prerogatives which
go with the ownership of the means of production, not simply means of production, not simply the exercise of
control over labour power in industry. In similar vein, Albert (2000) notes that conflict pervades human
existence. Not only are there always wars in one part of the globe or another, interpersonal conflict occurs in any
human group and business organizations are certainly not exempted. If constructively managed, conflict can
have positive outcomes.

As Keenoy (1992) observes, business organizations in particular are fertile ground for conflict. The basic
interest of employers and employees are opposed to each other and it takes some effort and goodwill to
reconcile them. Kornhauser, Dubin and Ross (1954) assert that conflict is a complex phenomenon. It could take
various forms and dimensions ranging from in-house labour-management strife to explosive pitched battle. It
could lead to a total work stoppage by labour in which case we refer to it as strike or it could lead to a lock up of
the business premises by Management practice commonly known as lock-out. In the opinion of most people,
industrial conflict has a negative meaning and its most visible form tends to be the strike. Batstone (1979) holds
the view that conflict refers to an opposition of interest or perspective and generally involves corresponding
forms of action. According to Beach (1975) strike is a concerted withholding of labour supply in order to bring
economic pressure to bear upon the employer, to cause him to grant employees and/or unions demands. It is a
test of economic strength and a contest of staying in power. The writer seems to adduce that economic
consideration induces the employer to lend ears to the demands of workers. Industrial conflict no doubt, has its
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benefits but there is need for a proper analysis of the benefits /costs implications before union resorts to the
staging of conflict. However, the aim of conflict is to ensure that certain aspects of the work environment in
which labour and management operate are reformed.

In the views of Otobo (1987), conflict may be organized or unorganized. Organized conflict has to do with a
conscious strategy designed to change the situation identified as the source of conflict. In unorganized conflict,
the workers react spontaneously to the situation in the only way open to them as individuals It could be
through outright sabotage or indiscipline. In general, where workers experience sufficiently acute deprivations,
unrest will be expressed in one form or the other. The circumstance of the case will however influence what
form the expression of the conflict will take.

Otobo (1987), discussing the variety of forms industrial conflict may assume, observes that industrial conflict is
not the same thing as strikes, which is the impression generally created by news media, employers and some
union officials themselves. Strikes are only but one form of industrial conflict, and thus that there is no strike in
a given period does not mean that other forms of conflicts are not occurring within the work setting or shop
floor. Examples of such latent forms of conflicts are pilferage; lateness to work, absenteeism, sabotage, poor
quality of work, sick leave abuse, restriction of output, loitering from one floor or office to the other, trading
within the office, peddling rumour, staff leaving office before closing hour, inciting staff against management
policies, over time ban, etc. Some conflicts may not even be expressed at all; they remain latent but quite
volatile, waiting to be ignited at the slightest further provocation.


Where a harmonious relationship exist between parties, both union and management will be opposed to the use
of strike except as a last resort and this vital point differentiates strikes which are regarded as the costliest and
extreme form of industrial conflict from other forms of conflict. Strikes may be the most overt and the most
significant aspect of industrial conflict, but they are unfortunately only a part of the phenomenon of conflict,
(Johnson, 1973). It has been argued that the examination of conflict should be expanded to include the total
range of behaviour and attitude that express opposition and divergent orientations between individual owners
and managers on one hand and working people and their organization on the other (Deutsch, 1962). From
motivation studies, we can infer that job or salary dissatisfaction is likely to result into certain outcomes. A
dissatisfied worker would take time off to look for alternative jobs, thereby increasing his/her absence from
work. He or she might just wilfully, without official release, be absent from work, especially where strong
sanctions are not imposed to check frivolous absences (Anyim, 1998).



It has been noted that white-collar workers (office staff) have been identified with organized conflict, while the
blue-collar workers (technicians) with both organised and unorganized conflict. Workers in higher skilled
occupations who form more cohesive work groups and possess greater bargaining strength are more likely to
both pursue grievance(s) through the formal negotiating procedure and to engage in strikes, go slows, and
overtime bans. Lower skilled groups, who figure least prominently in such collective activities, have the highest
level of involvement in the measurable forms of unorganized conflict (Deutsch, 1973).


Some industrial conflicts may have serious economic repercussions while others do not have any significant
effect on the economy. In similar vein, conflict organized during recession or depression period of an industry
will have no appreciable impact on management or perhaps on the economy. Management therefore would have
been successful in curbing or checking the effects of the unions economic weapon (strike). In reality, the
number of industrial conflicts fluctuates with the movement of the business cycle. From empirical findings,
number of strikes decline during depression when employers are presumed to be relatively strong and vice versa
(Anyim, 1984). In a democratic setting, conflict is never eliminated but could be better regulated. Conflict is
accepted as an inevitable consequence of a complex society predicated on a complex culture. The number of
conflicts and the issues involved will differ in historical periods as well as the techniques for carrying them out.
Like other institutional frameworks, it needs be emphasized that industrial conflict is not static but it is a
phenomenon passing through an evolutionary process (Anyim, 1984).
Njoku and Nwosu (2007) posit that the role of government can be seen in providing a level playing field for the
interested publics in industrial relations through the recognition of collective bargaining as a means of settling
conflicts. Despite its potential in fostering industrial harmony, bargaining is less effective in Nigeria;
particularly in the public sector. This is so because government has always resorted to the use of adhoc
committees or commissions in settling workers demands. Chidi (2008) opines that the use of adhoc
commissions in addressing workers demands such as wage determination and other terms and conditions is
unilateral and undemocratic as it negates good industrial democratic principles. Thus, it is antithetical to
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democratic values. Social dialogue or concertation should be vigorously pursued and embraced by all
stakeholders to manage conflict at all times (Chidi, 2010).

IMPLICATIONS FOR POLICY
The Ministry of Labour and Productivity being the agency of the government charged with the
responsibility of labour and industrial relations matters should put in place alternative dispute
resolution mechanisms in view of the drudgery inherent in the statutory dispute settlement procedure to
facilitate speedy resolutions of disputes.
The use of social dialogue needs to be intensified in the management of disputes. Such stakeholders
meeting should be convened at the instance of the Ministry of Labour and Productivity to deliberate on
issues before they escalate into full blown crises.
The planning, research and statistics department of the Ministry of Labour and Productivity should be
alive to its functions by engaging in periodic surveys to determine consumer price indices and level of
inflation with a view to advising government on appropriate workers salaries and wage reviews that
would reflect cost of living index so as to forestall incessant workers agitations for increase in salaries
by organized labour.
Government should always respect and implement agreements reached with workers unions to
forestall unpalatable face-off with the unions.

CONCLUSION

This paper set out to examine trade disputes and settlement mechanisms in Nigeria. The objective of this paper
is to examine the drudgery and ineffectiveness inherent in the disputes settlement mechanisms (DSM) in
Nigeria. The authors observed that in spite of the statutory mechanisms put in place to mitigate disputes, the
phenomenon has been on the increase and on a consistent basis. The authors advanced recommendations for the
efficient and effective settlement of trade disputes in Nigeria.
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TABLE 1: MODES OF DISPUTES SETTLEMENT (1968-2004)

Years No. Referred No. Settled or
Frustrated
No. Settled by
Conciliation
No. Settled by
IAP
No. Settled
by NIC
1968 132 33 99 NA NA
1969 163 48 115 NA NA
1970 165 27 138 2 NA
1971 296 188 108 7 NA
1972 196 81 115 14 NA
1973 173 63 110 10 NA
1974 338 219 119 8 NA
1975 775 228 547 57 NA
1976 230 17 213 14 NA
1977 172 47 125 14 NA
1978 142 86 56 8 NA
1979 155 50 105 13 5
1980 355 195 160 12 5
1981 258 128 130 20 9
1982 341 124 217 23 9
1983 184 30 145 24 5
1984 100 49 51 8 6
1985 77 29 48 53 17
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1986 87 8 79 31 17
1987 65 27 38 9 19
1988 156 105 51 10 14
1989 144 72 72 36 18
1990 174 85 89 22 17
1991 204 98 106 15 15
1992 221 68 153 7 15
1993 160 66 94 19 14
1994 199 61 138 15 24
1995 46 15 31 17 30
1996 29 11 18 9 20
1997 31 1 30 1 15
1998 16 2 14 10 9
1999 52 13 39 10 5
2000 49 6 43 10 28
2001 51 27 24 32 27
2002 50 28 22 28 24
2003 149 117 32 18 23
2004 152 107 45 15 21
Total 6287 2559 3719 601 411
Source: Compiled from records of Federal Ministry of Labour and Productivity and Central Bank of Nigeria
Annual Statistical Bulletin.