The New Today


Apparent NIS knee-jerk reaction on unemployment benefit

The National Insurance Scheme (NIS) informs the Grenadian people with a Press Release on 01 March 2023; ”the commencement of the Unemployment Benefit Programme …. will take effect 1st May 2023”.

Prime Minister Dickon Mitchell on 05 December 2022 had presented in the 2023 Budget Statement thus: “through the National Insurance Board, Government will implement a permanent unemployment benefit insurance programme. This programme will provide cash transfer to workers who are rendered unemployed in the event of a natural disaster, pandemic, or other such shocks”.

The issue of this new benefit was elaborated on 24 January 2023 by Social Security Minister Philip Telesford; “ …. beginning from the first of February …. (‘there will be’) an increase in the rate (‘for NIS contribution’) …. This would now enable us to properly fund an unemployment benefit scheme to benefit the population. This move is extremely critical. We’ve learnt from the (‘2020/2021 COVID-19’) pandemic, we’ve learnt from 911 (‘11 September 2001 terrorist attacks in America’), and so many other downturns that we’ve had in the economy, including the global recession. And so, this is something that must be done ….”

Mr. Telesford also notified that a full rollout of the Government’s adjustments “to ensure that the NIS is saved”, would come from the NIS as to what it is doing.

Sometime around 22 February 2023, NIS started its public relations campaign with Director Dorsett Cromwell in a special promo, seeking to give ‘reassuring rationales’ for increases in the pensions-rate contribution and the pensions-retirement age.

Mr. Cromwell insinuates about currently an empty or an approaching empty NIS Fund as established under section 3 of the National Insurance Act (NIA) and the unsustainability or the financial limitation for pension and benefit disbursements; and that the changes in the contribution rate and the pensionable age are necessary for NIS to be more comfortable for increasing the payments for some benefits, and to be able to introduce a permanent unemployment benefit.

Interestingly, the evening primetime news of the Grenada Broadcasting Network on 01 March also reported that hundreds of cases are pending against non compliant employers in the Court, for (not) paying employees’ NIS contributions.

NIS’ Manager of the Compliance Department, Ms. Franka Bell, speaks about exhaustive efforts with employers who ignore the regulations for registration and payment, and about having burdensome tasks to use the long process of the court system in dealing with the noncompliance (or delinquent) situation.

The latest previous circulated article, “Grenadians Face Pie In The Sky For Increases In NIS Rates”, rates the Director’s message to a certain extent as ‘comprehensive’, in integrating or in bringing on broad the various aspects, presentations, discussions and stakeholders about the purported recommendations of the actuarial reports on the NIS, for the Government’s pertinent adjustments.

Indeed, there still exist ‘significant’ deficiencies and discrepancies about the message, as well as the basis and situation for the message, which should be addressed before having the full ‘acceptance and settlement’ by the people about the “Run Wid It” philosophy of the 23 June 2022 administration of the National Democratic Congress (NDC), as generally regards the implementation of reports and projects.

The Government and NIS may feel comfortable to appease the employers and employees with the small annual increment changes until the year 2031, and even as Cromwell testifies that payment increase of any kind can be frustrating but emphasizes that the current contribution rate cannot keep the NIS afloat for much longer.

The crux or the reality of the matter though, is about the concerns for the socio-economic welfare of the people, in the light of the expected high inflation and taxation, the unresolved salary negotiations, the unstable economy, and especially the ‘long’ three-year life of Dr Curlan Gilchrist’s October 2022 Wage Advisory Committee for updated minimum wages from those of November 2011.

Whilst the people are trying to analyse and accommodate the pertinent adjustments, and particularly trying to understand the Special Promo about the 1% increase in the contribution rate, to mean it is having ‘simultaneous applications’ for the three main purposes being expressed at the different times by the different officials.

The Press Release raises more questions than answers; and this includes about the capacity, operations and intentions of NIS, as well as NIS’ practical respect for and relationship with the NDC administration.

Consider for any useful sense of ‘congruence and synergy’ herein: “This Unemployment Benefit will be funded with a contribution rate of 1% shared equally between employee and employer.

This means that the NIS contribution rate will be 6.5% for employers and 5.5% for employees, bringing the total to 12% effective 1 February 2023.”

Is this declaration also signaling to both employers and employees that a different percentage increase should be expected to save the NIS from bankruptcy and to satisfy the minimum disbursements increases, in reference to the utterances of the Prime Minister and the NIS Director?

It should also be concerned as to why May 1st was set for the commencement of the payment of the new benefit, after its contributions begun on February 1st; but that no date was indicated for the commencement of the increases in the payments of some existing benefits.

Furthermore, is the Press Release providing proof about the seemingly ‘maneuvering and deceiving’ by both the Government and the NIS, about the people to expect enjoying adequate benefits from the NIS?

It must be realised that the ‘purpose, substance and worth’ of this March 1st announcement is unclear; and so too as to whether or not the NIS is ‘seriously and sincerely’ “constantly looking for ways to better serve the evolving needs of the population” and that “this new benefit eases the stress of sudden unemployment”.

What exactly should be concluded from this communication, particularly on the level of ‘readiness and preparedness’ of NIS for the unemployment benefit?

Is the Release really a knee-jerk reaction, in order to save the face of the NIS, with respect to the related internet-circulated article, “Legal Irregularities Concerning NIS Unemployment Benefit!” especially when considering that it flagged both employers and employees on the matter?

That is, “Are the employers obliged to honour the instructions by the NIS for deducting the employees’ earnings, without the acknowledgement of the legal provisions for the purpose which has been stated?

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Should the employees as well as the Grenada Trades Union Council (GTUC) contemplate legal protest, if it has been concluded that indeed there are legal irregularities with the unemployment benefit programme and that there are no ready efforts by the powers-that-be to remedy any disturbing situation?” Is the Release therefore about adequate regulations?

The GTUC may be in an awkward position to scold the NIS, by virtue of its representation on the seven-member National Insurance Board, as established under section 4 of the 04 April 1983 NIA (Cap. 205).

It was disturbing though, how ‘excitedly shallow’ the President of the powerful Public Workers Union, Brian Grimes, considers the new unemployment benefit as presented in the Press Release.

Mr. Grimes claims that the benefit is “an initiative that was …. advocated for …. in an earnest manner by the Grenada Trades Union Council over a long period of time; so I’m (‘he is’) happy to see that it comes into fruition. Now this is a model in my view that is being adopted from, let’s say, some European countries …. Nordic countries which (have) a high emphasis on social safety nets”.

Is Grimes certain that the features and executions of this initiated benefit are at least similar to that in the First World countries, and that Grenada’s economy and labour landscapes, as well as NIS’ reserves, can maintain such a version?

Anyhow, Grimes seems aware that the public will be asked to help fund the benefit, as he also mentions that through “cooperative economics and taxation”, NIS would have an ample fund?

In the interest of all workers, especially those who are impoverished and non-unionised; shouldn’t the GTUC press to ensure that the so-called, or the ‘to be’’, Regulations for NIS’ unemployment benefit, are not in conflict with the Labour Code and would not cause deprivation and inequity for the ‘qualifying’ beneficiaries?

Is the GTUC satisfied that the grounds and factors highlighted in the actuarial recommendations for a ‘rich and rewarding’ unemployment benefit programme, are met by the Government and NIS?

Here is more of the Press Release and consider if a ‘professional’ Actuary will endorse such conditions, in the context of ‘involuntary loss of job as a result of an emergency’?

“While many are eligible for this benefit, some conditions must be met to qualify. The person must have been an insured employee at the time of loss of employment, has paid at least 52 weeks of contributions and must also be under the pensionable age.

Additionally, the individual must not be at fault for the loss of their employment. Someone who has voluntarily left their job or was terminated due to theft, fraud or dishonesty will be disqualified from receiving this benefit.

For the NIS to verify the cause for loss of employment, the employer must provide the individual with a termination certificate. The individual must conduct check-ins with the NIS twice monthly and must be actively seeking suitable employment while in receipt of this benefit.”

On the surface, this statement implies that the benefit is open for all cases of rendering to be employed, except when the employee is “at fault” for the loss of the job, such as for acts of dishonesty and voluntary separation.

Is the statement also answering for or instructing workers who may wish to exercise their inalienable constitutional rights by, for example, not taking a Covid-19 jab?

As pertinently critical, it should be ascertained from the Prime Minister, who is also the Minister responsible for Finance, as to what constitutes or provides for declaring to the House of Representatives on 18 January 2023 that “it is now expedient that the Principal Transformation Fund Regulations be amended by the National Transformation Fund (Amendment) Regulations, 2023 …. to decrease the percentage of the inflows into the National Transformation Fund …. that is payable into the Contingency Fund pursuant to regulation 11A of the principal Transformation Fund Regulations (as amended) from forty percent to ten percent”.

It is instructive to grasp that this contribution to the Contingency Fund, as sanctioned by the 2015 Fiscal Responsibility Act, is for purposes of ‘unforeseen and uncertain “contingent liabilities” outside the Government’s control, which includes “to provide relief from a national disaster”.

Is the expediency for seeking the approval of the House for the reduced percentage, via the “Resolution for the purposes of section 45 (2) of the Public Finance Management Act, No. 17 of 2015”, based on the necessity for funding the “one billion, three hundred and fifty million, four hundred and sixty-five thousand, two hundred and forty-six dollars (EC$1,350,465,246)” 2023 National Budget; or is it due to the launching of the employees-funded Unemployment Benefit Programme seen as viable?

Despite the issue of a permanent Unemployment Benefit Programme which may be administered by the NIS was first noted in its Seventh Actuary Review and developed in the Eighth Review; despite the sad experience suffered by NIS in assisting the Government with its COVID-19 unemployment payments; despite the push by NIS for the Government to embrace and formalise this additional benefit; despite the advanced work done by the administration of the New National Party in obtaining clearance by an actuary for the introduction of the benefit; and despite the 30 January 2023 gazetting of the statutory regulations for the deductions of the contribution rate from employees’ earnings towards the benefit, the Press Release in its current form by the NIS is ‘shocking and questionable’.

Is the Attorney-General who is also the Minister responsible for Legal Affairs, Labour and Consumer Affairs, Claudette Joseph, as well as the Prime Minister and the Social Security Minister, satisfied with the Release, on the basis that it provides the adequate statutory requirements for the unemployment benefit?

Moreover, are those parliamentarians satisfied that the standard legislative process for those requirements was met or will be met adequately?

Hasn’t Ms. Joseph seen the need to clearly define “unemployment benefit”, amongst other pertinent parameters, in the NIA (NIS Act), for ‘smooth and fair’ execution of the programme?

J.K. Roberts