Outsourcing companies not engaged in casualisation—Boro

Isaac Boro, lawyer and principal partner at Omieta Chambers, has refuted the claim that outsourcing companies are engaged in job casualisation.
Reacting to an interview on BD Sunday which alleged that jobs are outsourced simply to deny the employees a right to retirement benefits, Boro explained that there is a big difference between outsourcing and casualisation, stressing that outsourcing is a global practice in any nation that has adopted best practices in commerce.
Quoting Section 28 of Labour Act, Boro stated that an outsourced staff is entitled to termination of employment contract by notice under section 11, entitled to consent to any transfer of his/her employment from one employer to another under section 10 of the Act, entitled to specified hours of work and overtime pay under section 13 of the Act, sick leave and annual leave with pay under sections 16 and 18 of the Act.
He stressed that these provisions of the law do not apply to casualisation.
According to him, an outsourcing company hires staff on permanent basis subject to disclosed terms and conditions of employment between the outsourcing company and the employee.
“In case of casual workers, there is no permanent relationship between the employee and the casual employer and as a result, there are no terms and conditions of employment either written or verbal,” he clarified.
“An outsourcing company issues a letter of employment to its employees pursuant to section 7 of Labour Act, 2004 whilst a casual worker is not always issued with a letter of employment.
“A staff of an outsourcing company is entitled to payment of overtime after working for an agreed period of hours in a working day or during public holidays. A casual staff is not entitled to this luxury,” he explained.
He further clarified that outsourcing companies carry out interviews and due diligence on their employees before formally employing them, pointing out that this is not usually the case when employing a casual worker.
Boro stated that outsourced staff are always exposed to specialised training before being deployed to work, unlike the casual worker who does not receive any training before deployment.
He said in law, a ‘worker’ is synonymous with ‘employee’, which means someone who works under a contract of employment for remuneration.
“As required by section 7 of Labour Act, 2004, each employer is under obligation within three months from the date of employment to issue a letter of employment to the employee indicating the terms and conditions of the employment. This is because it is only from the letter of employment that the terms and conditions of employment can be inferred,” he stated.
He said all outsourcing companies comply with the various pieces of legislation connected with and concerning employment matters including the Pension Reform Act, both as it relates to the federal and state governments.
Boro pointed out that the companies also ensure that they deduct from source and remit ‘Pay as You Earn’ personal income of their staff to the various state governments, stating that all their employees enjoy retirement benefits as contained in their terms and conditions of employment.
“Outsourcing is not casualisation; outsourced employees are paid their retirement benefits as provided under the law and the Ministry of Labour and Employment is by virtue of the provisions of the extant labour laws in firm control of employment matters in Nigeria,” he said.
On the benefits of outsourcing, Boro said it creates more employment opportunities especially for the youths and has helped in no small measure to open employment opportunities for them.
Outsourcing has assisted the government at the local, state and federal levels to generate more revenue through taxes and other levies, he said.
He said casualisation does not create a permanent relationship between the casual staff and the employer as it is temporary without terms and conditions, unlike outsourcing companies which ensure compliance with all relevant pieces of legislation regulating employment in the country.
“The Superior Courts of record, including the Supreme Court of Nigeria, have endorsed the practice of outsourcing. In Union Beverages Limited V Pepsi Cola International Limited (1994) 2 SCNJ 157 at 180 the Supreme Court cited with approval the English case of DHN Food Distributions Ltd V Lardin Borough of Tower Hamlet (1976) 3 ALL ER 462 to the effect that if the companies are to all intent and purposes one, their corporate veil could be pierced and each could be held liable for the action of the other. If one company can be said to be the agent or employee, or fool or simulacrum of another, the two companies would be treated as one. This principle has been applied by the National Industrial Court in various cases. From the cases cited above, it can be seen clearly that the Supreme Courts of record in Nigeria have since endorsed the practice of outsourcing in accordance with our extant laws. It does not lie within the power of anyone to condemn the practice of outsourcing in Nigeria,” he explained.