Some 400 employees of the Foundation for Social Welfare Services have found out that their employer failed to pay their social security contributions between 2000 and 2007, Voice of the Workers Weekly reported.

The missing contributions amount to around €10 million. The union said it has flagged the issue with the social policy ministry, which has launched an investigation.

The ministry has assured that the workers’ pensions will not be affected, the union said.

UHM said around the FSWS had not paid these employees’ N.I. contributions, despite deducting the amount from their salaries.

“According to a preliminary investigation into this blatant breach of the employment law, the overall amount involved is close to €10 million. Employees having these contributions missing may end up with a lower pension and might even miss out on the sickness benefit payment,” it said.

“The case came to light when FSWS employees reaching retirement age enquired on their pension, only to be given the shocking news that they did not qualify for the amount which they were supposed to be entitled for.”  

The union said that, in a “terse” reply, the social policy ministry confirmed that an internal investigation had been launched and that further steps would only be taken when the findings of this probe would be in hand.

“The Ministry did not reply when asked if the position of Joseph Gerada, the former FSWS CEO who is still the Foundation Chairperson and a consultant to the same Ministry, had become untenable. Moreover, no explanation was given on why the matter had been left under wraps for almost 20 years.”

Yet, the Ministry insisted employees would not be negatively impacted as “adjustments were being made” by the Social Security Department to rectify the situation.

UHM said it sought an explanation from Gerada, but the latter failed to reply to its questions.

On his part incumbent FSWS CEO Alfred Grixti reiterated the ministry’s assurance that none of the employees involved would end up missing out on part of their pension.

“Myself, the senior management team of the Foundation and the Ministry are committed to solve the matter in the shortest time possible while assuring that none of the employees involved will lose any rights with respect to their pension and other social benefits.”

Grixti said he had been instructed to discuss the matter with the Social Security Director General Grazio Barbara to find a solution.

In an email sent to all employees, Grixti further outlined what had happened.

"The facts of the matter are as follows: The UHM wrote to me on September 22, 2021 to ask me to look into the matter, as it was receiving queries from its members about the issue of missing NIC payments. I immediately wrote to the Permanent Secretary to seek his assistance to verify if the problem really exists and if it did, how big the problem is."

"With the help of the Department for Social Security (DSS) it has been established that the period at issue is between the years 2000 - 2007. All employees of the Foundation at the time were affected. In respect of FSWS, this concerns 399 employees. Of these, 191 have already rectified their position administratively with the DSS over time, while 208 are still to have their position rectified."

"All the NICs of all FSWS employees from 2008 forwards have been paid in full. I communicated this information to the UHM on September 29, 2021. As CEO and Senior Management we can assure you that we are committed to rectifying the situation of these 208 employees, such that none of their pension and/or social security benefits rights will be negatively impacted in any way. This is also the position of the Ministry."