The New Today

Commentary

Grenada Unemployment Benefit Scheme commences scarily

On 05 December 2022, Prime Minister Dickon Mitchell presented in the 2023 National Budget that “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”.

Then on 01 March 2023, the National Insurance Scheme (NIS) in a press release, ‘presumably’ on behalf of the Government of Grenada, announced thus: “the commencement of the Unemployment Benefit Programme …. take(s) effect 1st May 2023 …. This Unemployment Benefit will be funded with a contribution rate of 1% shared equally between employee and employer …. effective February 1, 2023”.

In analysing both of the official extracts, much uncertainty arises as to whether the revelation of the NIS reflects the ‘philosophy, context and intent’ of the Government, or there is a change in the stance of the Government; if the stated programmes are the same.

There is also the accompanying uncertainty about the ‘form, extent and soundness’ of the Programme. It is imperative that the Grenadian people grasp the genuine concerns for the credibility and perpetuity of the Programme, by identifying and resolving all non-conducive factors.

Whether or not there are discrepancies in the approach and execution of the Unemployment Benefit Scheme, as perceived by the Government and by the NIS, there remains critical concerns.

Primarily, it is important to know the level of conformity of the structure and operation of the Scheme with the recommendations and reservations of the (‘professional and credible’) Actuary, especially based on Risk Analysis and Risk Management.

Any expressions and indications of ‘uncertainty and uneasiness’ about the Scheme is justifiable, when the 23 June 2022 administration of the National Democratic Congress (NDC) appears to be proving that its “Transforming Grenada!” agenda, is not about the plight of the Grenadian people with the ‘tactfully devious and treacherous’ conduct of public affairs.

That is, up to this present time, the Administration fails to make the pertinent documents, including the recent actuarial report(s) on the unemployment benefit, accessible for ‘scrutiny, satisfaction and settlement’ by the people.

Indeed, the commencement of such a ‘sensitive and demanding’ Scheme in the absence of openness is scary, when considering the possibility of its collapse and of the extreme loss to the workers.

In announcing what the NIS considers “the commencement” of the Scheme, its press release seems to be also geared to give insights about the requirements and procedures for an eligible worker to receive the unemployment benefit.

The communique however must be acknowledged to be ‘convoluted, ambiguous and deficient’ and thus, it should not be taken for granted and treated lightly but instead it must be challenged for clarity and sense.

In fact, if it is to be concluded that the receipt of the benefit is as of 01 May, after the application of the 1% contribution rate as of 01 February, then it means that the Scheme has already ‘virtually’ commenced.

On this premise and in addition to the flimsy guidelines pointed out in the communique, it is horrible and irresponsible of the Government to commence (whether on February 1st or May 1st) the Scheme in the absence of a comprehensive and adequate set of pertinent legislations and a clear and efficient setup of dedicated assignments.

As earlier questioned in the two-part article “More Pressure On Grenada NIS By New NDC Government”; it is imperative for the powers-that-be to establish if the Scheme is a ‘separate special’ operation of financial transactions by the NIS, like what is expected for the National Health Insurance which is cited for implementing before or in the year 2025.

From a historical point of view and even as currently revealing, there should be the awareness of how ‘institutional abuses’ have led to the failures of worthwhile initiatives which were promoted and established in the ‘name and interest’ of the people.

The 1983 NIS can be taken as evidence regarding this ‘bad and sad’ reality; since NIS has been forecasted for imminent bankruptcy, in the absence of radical shifts in its administrative trajectory.

With this understanding, and in the light of the conflicting messages and the shaky circumstances which surround the introduction of the unemployment benefit, emotions of ‘suspicions and scares’ about the Scheme are aroused inevitably.

The circulated article, “Legal Irregularities Concerning NIS Unemployment Benefit!” points to the need to define and characterise the features and operations of the Scheme, as well as the need for it to be financially boosted by the Government.

The Grenadian Voice reported in its March 10, 2023 E-paper, that NIS Director, Dorset Cromwell assures that the key principles about this new benefit have been agreed upon, and that “the relevant legislation is still being drafted and after completion it will be gazetted”.

The Director also informs the news outfit that “a mechanism will be developed along with an agency for people (‘who have lost their jobs’) to check in with ease and to allow the NIS to verify that people are actively seeking employment”.

To qualify for the benefit, NIS also requires the employee to present within 15 days, a Termination Certificate from the employer to verify the cause for loss of employment.

The mechanism with an agency for those individuals who are rendered unemployed, which has been hinted by Mr. Cromwell, may involve the NIS networking with the NDC administration’s created Ministry of Mobilisation, Implementation and Transformation (MIT).

On around 08 March 2023, the MIT sets off on the formulation of a National Unemployment e-Registry which may be a plan for the smooth execution of the unemployment benefit. Most likely, this ministry would be providing NIS with pertinent information and guidance on employment, including the employment status of individuals and of sectors.

With reiteration though, regulatory protocols are necessary for the NIS to relate to the 1999 Employment Act and Labour Relations Act, and to the trade unions, since injustices and other forms of problems can be meted out to a dismissed employee, even in the pursuit of the benefit.

Moreover, NIS along with the Grenada Trades Union Council need to verify if permanent or established government employees are entitled for the benefit, and/or why they should be obliged to contribute to the Scheme.

Whilst the MIT would be a tremendous resource for the NIS, it is hoped that Mr. Cromwell has made provisions for ‘greater, serious and effective’ efforts of protecting especially the daily paid, temporary or part-time workers (agriculture, domestic, construction, sales, and so on) from unscrupulous employers so as to ensure that those workers enjoy fully the range of NIS’ benefits.

That is – the Unemployment Benefit Scheme should necessitate and facilitate the NIS to establish (or to strengthen) a ‘supervisory taskforce’ to investigate the compliance by employers for registering and reporting on the deductions of employees’ contributions to the NIS, and to achieve improved enforcements of the National Insurance Act (NIA) particularly section 13 on the “appointment and powers of inspectors”.

The taskforce should also be mandated and equipped to investigate and decide on the ‘legal and moral’ justification(s) stated by an employer for the termination of an employment. In fact, the employer should be required to present the employee with the Termination Certificate, instant at the time of release from the job, and to declare also any ‘goodwill’ towards the prospect of the employee being reinstated.

It should be instructive that according to the NIS’s 2020 Annual Report, “Government, through the National Insurance Board (NIB), has sought the assistance of an Actuary to provide a recommendation for the introduction of Unemployment Benefit as a permanent offering under the National Insurance Act.

As such, the Canadian Actuarial Consulting Firm of Morneau Shepell, was engaged to review the Board’s proposal to provide a temporary relief programme to contributors. The Firm provided the appropriate review and recommendations that allowed for the provision of the much-needed support at a critical time.”

This request by the Government under the New National Party (NNP) for clearance by an actuary, before the introduction of an added benefit of the NIS as required by section 42 of the NIA (NIS Act), was driven by its efforts in providing business stimulus packages, workers unemployment benefits and increased social assistance to the less fortunate people during the “critical time” of the COVID-19.

It is fair to say that the Prime Minister’s pronouncement on the unemployment benefit is in accordance with the report of the Canadian Actuarial Consulting Firm which most likely acted and concentrated on determining a ‘feasible or reasonable or sustainable’ mechanism for providing “much-needed support at a critical time”.

It is also fair to link or to interpret “critical time” to the specific situations of an emergency; especially within the context which have caused the Government/NIS to engage the Firm.

Indeed, an emergency situation would result “in the event of a natural disaster, pandemic, or other such shocks” and would have negative impacts on the livelihood and welfare of the nation, including the “contingent liabilities” of the Government, such as defined in the 1984 National Disaster (Emergency Powers) Act and the 2015 Fiscal Responsibility Act.

However, it seems that NIS interprets and applies “critical time” to the general situations of loss of employment. A fundamental factor though, in deciding which of the illustrated situations about “critical time” is more suitable to be embraced for the success of the Scheme, depends greatly on the administrative and financial capacity of the NIS, which is ‘in doubt’.

The NIS may seek to address its approach and execution of the Unemployment Benefit Scheme, beyond the considerations of involuntary unemployment ‘in times of critical crisis’, in terms of the conventions of the International Labour Organisation (ILO).

That is – ILO Convention No. 102 on Minimum Standards of Social Security and ILO Convention No. 168 on Employment Promotion and Protection Against Unemployment. However, would the Scheme fulfil the ILO’S fundamental conditions which also imply the need for taking care of all unemployed individuals even if never had the opportunity to work?

Moreover, the NIS may be relying particularly on the 06 October 2021 article “Unemployment insurance in the Caribbean: An urgent call to protect workers and their families” which is logged on the ILO’s webpage.

This article by the ILO Social Protection and Occupational Safety and Health Specialist for the Caribbean, focuses on the experiences of the various Governments in responding to the challenges of emergency and unemployment from the COVID-19 epidemic.

Again, has the NIS undertaken a thorough study of the pertinent cases in other countries, as recommended by past actuaries which reference Barbados, and are the ‘features, structure and operations’ of the Scheme patterned from any of the countries?

Do the design and cost assessment of the Scheme also have ILO’s technical input? Should it be ruled out that the introduction of the Unemployment Benefit Scheme, with its 1% contribution, is of false pretense, as a strategy to ease the tension in achieving a more contentious goal?

J.K. Roberts