The contract signed by the General Workers’ Union to manage a Jobs Plus scheme for the long-term unemployed may be discontinued if it becomes unprofitable for the union.

According to an unpublicised agreement signed between the GWU and the government last January, the scheme is to be terminated if the concessionaires (the GWU and the Foundation it created) are not able to fulfil their obligations “without incurring an unavoidable financial loss”.

The contract stipulates that if the GWU’s Foundation ends up with only 300 unemployed persons on its books, it can ask the government to increase their number or stop the agreement due to lack of profits.

The government, through Malta Investment Management Company Limited “should communicate its intention in writing as to whether it is in a position to increase the number of workers to be transferred so that the concessionaire [the GWU] may continue to fulfil its obligations undertaken therein without incurring an unavoidable financial loss”, the contract states.

The Sunday Times of Malta last weekend reported that following a request for proposals in 2015, the GWU was selected by the government to manage a scheme on behalf of its employment agency (Jobs Plus) through which 600 long-term unemployed were struck off the jobless register and employed in government jobs.

In order to do this, the GWU has set up a non-profit foundation for the next five years. In return, the government is paying the Foundation €980 per worker monthly. From this payment, workers are to receive a minimum wage and placed with government departments, NGOs and local councils.

Although originally it was calculated that the GWU would make a profit of some €3,000 per worker every year from this scheme, the government pointed out that the profit will be less, as the GWU would also have to deduct social security contributions and statutory bonuses.

Calculations made by the Times of Malta show that the GWU will have almost a million euro in surplus every year from the unemployed workers it currently manages. Asked to state what profit the Foundation is expected to make from the scheme in 2016 and 2017, the GWU said: “Nil.”

A spokeswoman for the Education Ministry said that the Foundation’s profit will be less than €1,400 on every worker in the scheme.

Government sources said the profit will vary according to the amount of unemployed workers assigned to the foundation by the government. “The more unemployed workers, the bigger the profit for the GWU and vice  versa,” the sources said.

According to the contract, the unemployed workers assigned to this scheme are to be given duties with NGOs and in government departments, particularly schools and local councils on a full-time basis for the next five years.

The contract stipulates that in case of the sudden termination of this agreement or after its five-year lifetime, the community workers would be transferred back onto the books of the Jobs Plus agency.

The Education Ministry said that if no new tender is issued, the community workers will start registering for work again.

New information on the scheme published by The Sunday Times has stirred controversy. Archbishop Charles Scicluna has criticised the fact that a trade union was making a profit from unemployed workers, while the Opposition called the scheme “obscene”. Both the government and the GWU reacted strongly.

Without denying the financial profit connected to the scheme, the government said the concession was awarded after a public call for proposals and the workers involved were given better employment conditions than they used to receive through a similar scheme during the previous administration. On its part, the GWU said the archbishop’s comments were intended to harm the union.

The archbishop and employment minister Evarist Bartolo discussed the scheme at a meeting yesterday. Both said it was a good meeting, but Mgr Scicluna said the GWU should declare its costs and give the rest to the workers.

Under a scheme during the previous administration, unemployed workers were kept on the unemployment register and had to perform training activities for 30 hours a week. In the new scheme, all long-term unemployed have been struck off the register, with the NSO classifying them as working in the private sector.

GWU income per worker

  Month  Year
Government payment €980  €11,760 
Minimum wage €728 €8,736
Social security €73  €874 
Bonuses   €512 
Total €1,635  

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