The New Today


Legal irregularities concerning NIS unemployment benefit!

Is the ‘new, young and excited’ 23 June 2022 ruling National Democratic Congress (NDC) party with its “Transforming Grenada” agenda, ‘conscious of and comfortable with’ what it is doing and the direction it is taking which can stain its legacy?

On this query about the performance of the NDC Government on some critical welfare issues thus far, the instant case in point is the introduction of the Unemployment Benefit Assistance Insurance programme or scheme.

There are many ‘apparent’ indicators that the effecting of this ‘special separate’ Scheme has not been done in a proper manner and which indeed represents a ‘blow and betrayal’ to the Grenadian people.

The criticism about the start of the Scheme is in terms of transparency and openness for the understanding of the people, the prevailing socio-economic circumstances and employees’ earning levels in the nation, the treatment towards application of pertinent recommendations, and the instituting of operational and legal requirements.

If not realised or not experienced or not being notified about as yet, this ‘improper manner’ of setting the Scheme would ultimately cause much ‘awkwardness and losses’ for all concerned, ranging from the Government to the National Insurance Scheme (NIS) and to the workers.

It is thus imperative to relook the ‘disturbing’ situation, with remedial mechanisms to ease off confusion, controversy and collapse about the Scheme.

It should be of great interest and usefulness for the electorate to know of the philosophical context and at what point in time would a misstep in State governance be proven, rehearsed and recognised for correction, with a genuine intent for betterment about strategic approaches; as Prime Minister Dickon Mitchell robustly reminded the nation in his 12 July 2022 inaugural Post-Cabinet Press Conference that the NDC campaigned on a process of transformation and so was elected and is expected to make difficult decisions.

Dickon made it clear; “If the decision is wrong, we will find out and you will get the opportunity to correct it. But the malaise of not making decisions, of over analyzing several reports, of consultants, of back and forth, and then four years later nothing gets done, is not an approach I am (he is) going to take”.

However, such a declared position should not be entertained at the peril of the nation. That is, any ignorance, arrogance, recklessness and experimental ventures concerning the affairs of the nation should not be allowed to continue.

This modus operandi has been fueled by the expectation, eagerness, popularity and power of a ruling party which quite often, is devoted at doing the biddings and wishes of ‘extraneous and unconcerned’ interest groups and policy influencers, at a cost to the people.

The record teaches ‘unambiguously, demandingly and purposefully’, with the sense towards the need for prudent corrections and betterments in governance, how uncontrolled political strategies and pursuits bring much undue pressure on the people.

With every incoming political Administration, the people are coached with a barrage of finger pointing and blame-making for past failures and a rhetoric of sovereign commitment and capacity for future successes.

The people are also faced with the wooing calls for shared responsibility in bearing the tremendously painful cost for the ‘redress, recovery and refocusing’ process for the nation.

Horrendously though, this pattern for gaining political sympathy and mileage with the people, is being perpetuated even whilst the politicians, policymakers and technocrats are set free from accountability and the consequences for malfeasance and corrupt practices in governance and moreover, quite often the incoming Administration creates and loads its own brand of problems on the nation.

In fact, it is quite apparent that the lack of any viable arrangements for, and/or any convincing evidence of, exerting harsh punishments concerning the ‘abuse of State power’, explains and sets the principal incentive for individuals entering the political arena and for the worsening plights in the nation.

Any sound transformational push should also feature ‘serious scrupulous’ efforts to learn the valuable lessons of the past so as to inform and facilitate wise decisions going forward, with the chance for very minimal offensive blunders and regrets.

The previously internet-circulated four-part article “How Sound Is Grenada’s New NDC Government Transformational Push?” acknowledges the exclamation and agitation about Implementation Deficit in the affairs of the government, especially when considering the possible gross harm to the development and prosperity of the nation when a ruling administration is plagued by sluggishness and/or hindrances in taking actions and achieving goals.

As has been advised however, the ‘transition period’ should be optimised to understand the ‘matrices, constraints, intricacies and partners’ associated with institutional projects and thus the need for accessing and assessing the governmental system; but it must not be about the ‘asserting and manipulating’ of political expediency.

Whilst the premise for the “unemployment benefit insurance” is plausible and agreeable, it must not be missed that since it will be executed and managed by the NIS then its legality has to be within the April 1983 National Insurance Act (NIA) which establishes and governs NIS, and/or within some other related legislation.

The Government cannot be satisfied that the primary legal requirements for the Scheme were met, by the obtaining of the consent of the Actuary, in accordance with such sections as 28, 42, 43 and 64 of the NIA, and then by the gazetting of the amendments of the pertinent Regulations on 30 January 2023 for increasing the contribution rate to NIS from eleven percent to twelve percent, effective 01 February 2023.

It should also be plausible and agreeable for the people to know of all of the precautions and pre-actions to be taken for, as well as the parameters and reservations associated with, the successful implementation of the Scheme within the ‘employment and financial’ demographics in the nation, as offered by the Actuary.

Has the Government followed all the considerations and offerings of the Actuary, which may also involve extra legal observances and extra stakeholders’ inputs? Nothing should give the impression that the introduction of the Scheme has been premature, uncoordinated and of false pretense, and that the increase in contributions to NIS for the Scheme is illegal and misapplied.

Both Dickon Mitchell and the Social Security Minister, Philip Telesford, promote that the Scheme is about meeting financial loss to involuntary unemployment in the event of a natural disaster, pandemic, or other such shocks including global downturns.

Has the Attorney-General and Minister responsible for Legal Affairs, Labour and Consumer Affairs, Ms. Claudette Joseph, guided and endorsed the Government for not setting the meaning of “disaster” in the NIA? Is there no need to have particular regulations about the unemployment benefit in adherence with Part V of this NIS Act?

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By starting the deduction of employees’ earnings for making contributions “to properly fund an unemployment benefit scheme to benefit the population”, has the NIA clearly defined and characterised the features and operations of the Scheme?

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?

Should the employees as well as the Grenada Trade Unions Council 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?

Does the apparently unreserved authorisation of the Actuary for the permanent unemployment benefit scheme dismiss the motivation for and the substance of the previous related article “More Pressure On Grenada NIS By New NDC Government“?

Thus for example; there is no merit in wondering as to “what mathematical model, risk analysis and regulatory reform have been applied for successfully meeting the overall demands on NIS’s funds, when considering the scary financial condition painted about NIS, the past experiences of NIS with lost investments, the old areas of contention for the life of NIS, as well as the introduction of any additional ‘new’ benefits to be serviced by NIS?”.

Is the Actuary also aware of the registration and compliance rate of employers and the supervision and enforcement pattern of the NIS, regarding the deductions and payments of contributions on behalf of all employees, which have been degrading the financial standing of NIS and the Age Benefit of retirees?

With the persistent cries and calls of especially low-paid workers about the ‘fixed inadequate’ old age pensions received from NIS, has the Government taken the opportunity now to place greater efforts to break the abuses to domestic, construction, sales and so on workers from employers who deduct contributions and have not reported to the NIS, to ensure that those workers can enjoy fully the unemployment benefit?

Whatsoever is to be concluded about the verdict and the extent of considerations by the Actuary on the request of the Government and/or NIS, and about the then conduct and doings by the Government, the previous inquiring about “has the Government budgeted for and injected a start-up amount to this crisis Unemployment Benefit Scheme; and/or will the Government provide any matching funds” deserves an assuring reaction.

Indeed, it would be of ‘good meaning and appropriate application’ on the part of the Government to the population, as it should be reasonably expected and welcomed by the population, to provide such start-up and matching funds and for those funds to be derived from the Citizenship By Investment (CBI) programme via the 2015 National Transformation Fund (NTF) Regulations.

This issue is relevant especially in the light of the submission by the Government in a Special Sitting of the House of Representatives on 18 January 2023, of a Bill to amend the section of Regulation 11 of the principal NTF Regulations.

The Bill intents to reduce drastically the monthly contribution of “forty percent” as sanctioned by section 8 of the 2015 Fiscal Responsibility Act (FRA), to “ten percent”, of the inflows into the NTF, which shall be directed to a Contingency Fund from which payments shall be made to the Consolidated Fund for purposes including, “to provide relief from a national disaster”; the amendments coming into force on the same date, 01 February 2023 as the unemployment benefit assistance scheme.

Like the concerns about the move by NDC Government to implement the unemployment benefit scheme without much clarification and legality, the crucial rationales for amendment to the NTF Regulations are not properly disclosed and made reasonably evident to the Grenadian people.

In fact, any intention to pass and enforce the proposed National Transformation Fund (Amendment) Regulations, 2023, does not reconcile or does not validate the need for the pressure placed on the NIS and on the people to service this additional benefit at this point in time.

Moreover, it seems that the ‘sad unjustified’ intrusion of the contingency provisions has been ‘incomplete and inconsistent’, since there has not been a corresponding amendment to section 8 of the FRA.

Is this deficiency in the legal process a result of a disapproval, or an unresolved request, on the pertinent issue by the International Monetary Fund?

The inflows into the NTF as established under the 2013 Citizenship by Investment Act, account for the “qualifying investment” made by the applicants for citizenship, and it must be ‘considered wisdom and vision’ for the 2015 FRA to address “contingent liabilities” which takes care of “possible obligations which shall arise by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Government …. “.

The raised Amendment thus compromises ‘relief capacity’ dangerously. What amount of the one percentage increase in the contribution to the NI goes towards the funded unemployment benefit programme and what portion goes towards the saving of NIS from bankruptcy?

Has NIS been financially fortified to pay the benefit to qualified workers for a fair period, if a shock occurs in the next few weeks or months? Would the quantum of the benefit be for a fixed period, or for as the disaster persists, or for as long as the worker is unemployed?

What are the criteria and procedures for an employee to receive the benefit? Would suffering workers from a disaster due to political unrest or industrial protest qualify for the benefit? Should ‘relatively secured’ established employees in the public sector as well as in the private sector be obligated to contribute to this ‘new special fund’?

How will contract-employments be treated? Would displaced workers from employment, due to situations such as the exercise of constitutional rights by not taking a COVID-19 vaccine, be entitled to the benefit? Would all employees contributing to the Scheme benefit accordingly; and what is the formula?

The critical point must be made that the formalisation of an unemployment benefit as a permanent scheme cannot be considered and executed similar to the ‘ad hoc, impulsive, loose and unsystematic’ manner for the COVID-19 Stimulus packages.

Certain critical concerns about the provisions and entitlements under the Scheme need to be clarified and settled within a legal framework, with the consideration for apparent inequalities in receiving the benefit.

Pertinent also to be considered, is the regulatory procedure as to how the NIS relates to the 1999 Employment Act and Labour Relations Act.

J.K. Roberts