GWU given €534,000 direct order to extend jobless scheme despite concerns

The General Workers Union has been given a direct order of €534,000 to manage the Community Workers Scheme for the next six months, despite criticism about mismanagement of the scheme by the National Audit Office (NAO).

The union was assigned the management of the scheme for the jobless since 2016 at a cost of some €1 million a year paid through public funds, according to the NAO.

The government forks out the salaries for the scheme’s participants and also pays the Union a ‘management fee’ for each employee.

The five-year concession came to an end last January, but the union was given a direct order to extend the contract for another six months despite revelations that the scheme was being mismanaged.

The Shift had revealed that the scheme, meant to be run by a foundation created by the GWU, was instead subcontracted to commercial entity District Operations Ltd, which is owned by the GWU and has General Secretary Josef Bugeja, President Victor Carachi and Aron Mifsud Bonnici (the lawyer of disgraced former Minister Konrad Mizzi) on its board.

The scheme has helped manage unemployment statistics in the country, by shifting numbers. It is intended to provide training for the jobless, but has instead turned into permanent employment for some, the NAO said in its assessment.

Asked why no new tender for the management of the scheme was issued, a spokesperson for Jobsplus said this was only a temporary measure. “The direct order was issued until a new tender procedure is launched and adjudicated,” he said.

There was no explanation of why a five-year contract with a clear deadline required an urgent procedure to bypass public procurement rules.

Jobs for votes

Introduced in 2009, the Community Workers Scheme was intended to give the opportunity to the long term unemployed to get on-the-job training and eventually find productive work in the private sector.

Those registering for work for more than two years were put on the scheme and obliged to work in exchange for their unemployment benefits. The scheme was administered directly by the government.

When the Labour Party was elected in 2013, Clyde Caruana (now an unelected Finance Minister) was put at the helm of Jobsplus and changed the scope of the scheme.

All those who were registering as long term unemployed were recruited full time in the Community Worker Scheme, given the minimum wage and assigned to handle small jobs at government departments, local councils and NGOs.

Although the scheme was originally intended as a temporary training scheme, over time this has become another government instrument to put unemployed persons on the State payroll.

Originally, the scheme had some 600 workers on its register and was supposed to be wound down as workers find alternative employment. Yet the opposite has happened.  By the end of last June, there were 1,036 employees on the scheme, according to official statistics.

It is most popular in Gozo where hundreds were put on the scheme by the Gozo Ministry and Labour candidates. Many of those on the scheme still work in various private jobs, mostly in construction, after spending a few hours, sometimes just minutes, on their Community Work Scheme assignment, a probe by The Shift has shown.

A cash cow for the GWU

In 2016, a five-year concession was signed following a contested tender that handed over the management of the scheme to a GWU on behalf of the government (Jobsplus).

According to the scheme, the government pays the salaries for those registered and also pays the GWU a management fee for each employee. This fee increases every time a new person joins the Community Workers Scheme.

The government has paid the union some €1 million a year, according to the NAO.

The GWU was also allowed to subcontract the scheme’s management to another company owned by the same union. According to the latest company accounts for District Operations for the year 2018, the company’s directors were paid €46,600 during that year from profits deriving from the government’s scheme.

No accounts have been presented yet for 2019 and 2020.