New €113 million tender for jobless scheme seems ‘set for GWU’

A new tender issued by the government’s employment agency Jobsplus, for the management of a public-funded scheme for the jobless, known as the Community Workers Scheme (CWS), is raising eyebrows among potential bidders as it seems set to favour the incumbent organisation managing the scheme – the General Workers Union.

According to the technical criteria of the tender, which closes next month, only bidders with “recognised and extensive experience in the operation and management of organisations that deal with human resources at a minimum of 800 employees engaged on a full time basis, particularly non-professional and unskilled workers” are eligible to participate.

Industry sources told The Shift that the insertion of such a restrictive clause by the Department of Contracts suggests that the tender has already been slated for the GWU, as there are almost no other organisations on the island that can meet such conditions.

“As everyone familiar with the Maltese employment market knows, there are only a handful of private companies that have 800 full time employees on their books,” an employment expert told The Shift. “There are even less, or none at all, that employ 800 unskilled workers.”

“It is so obvious that the government wants to restrict all sort of competition so that it can pass on the contract, once again, to its former political partner – the GWU – and the current incumbent managing the scheme which is making over €1 million a year from public coffers in management fees,” the sources said.

An investigation by The Shift has already outlined the problems with the way the scheme is currently being run. The GWU was meant to run the government scheme funded by taxpayers as a nonprofit foundation. Instead, it created a company and subcontracted the project to itself for a profit.

Contrary to the first tender issued in 2015, the new offer, which has a value of more than €113 million, has now been issued for seven years, instead of the original five.

Union subcontracts scheme to itself for a profit

Launched in 2009, as a training initiative by the Employment and Training Corporation (now Jobsplus), the scheme was intended to offer part time work to the unemployed to acquire new skills and find alternative employment.

Participants used to be given a token salary as part of their unemployment benefits but were kept on the unemployment register.

All that changed after 2013 when, under the leadership of Clyde Caruana, now Malta’s unelected Finance Minister, the scheme’s management was effectively ‘privatised’.

While until 2015, the CWS was administered directly by Jobsplus, a government entity, a five-year tender was awarded to the GWU to manage the scheme on the government’s behalf.

As taxpayers started forking out a minimum wage for all participants in the scheme – 600 at the time – all recruited on a full time basis, the union started charging a management fee for each and every worker put on the scheme by the government agency.

Through this initiative, the government also managed to wipe out a long list of jobless people from its unemployment register, as those on the scheme were placed on the books of the private Foundation registered by the GWU.

The GWU’s Foundation subcontracted the job to District Operations Ltd, which operates for-profit and is majority-owned by the GWU.

The minority shareholder in District Operations is another company called District One Ltd, which is owned by Robert Borg and Aron Mifsud Bonnici, who has served disgraced former Minister Konrad Mizzi as his personal lawyer and as board secretary in numerous entities that fell within Mizzi’s ministerial portfolio.

The GWU company charges the GWU Foundation for management fees. District Operation’s directors include the union’s General Secretary Josef Bugeja, President Victor Carachi and lawyer Aron Mifsud Bonnici, who in 2019 were paid €46,600 in directors’ fees, according to audited accounts.

Another €32,400 was paid to other board members in 2018. The accounts also show another €1.2 million in ‘administrative expenses’.

Temporary training scheme turned into employment agency

While the scheme was originally intended to be phased out, as the training should have led to participants finding alternative work opportunities within the private sector, the opposite has happened.

By June 2020, the scheme’s numbers surged to over 1,000, with more and more ‘jobless’ put on the government’s payroll through this scheme.

There are no real rules on who and how those looking for a job are registered, and it is an open secret that MPs are using the scheme to put people on taxpayer-funded salaries, particularly in Gozo, with little or no monitoring of who turns up for assigned work or how much time they spend on the job.

While all those participating in the scheme receive a government salary for a full 40 hours a week, in reality participants spend only a few hours at the workplace, with a number doing part time private work on government-paid time.