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NIS should not be liable for companies’ that fail to remit contributions – Attorney General
Kaieteur News – Attorney General (AG) Anil Nandlall SC is once again warning employers that failure to remit contributions for their employees will result in Court action.
The AG’s statement follows an appeal filed by the National Insurance Scheme (NIS) against a judgment granted to Shariff Zainul a former employee of Toolsie Persaud Limited (TPL).
While the ruling has sparked a new debate over employers’ deductions of their employees’ contributions, the AG is clearing the air on the reasoning behind NIS’ decision to appeal.
Attorney General, Anil Nandlall, S.C.
Addressing the matter during his Tuesday night ‘Issues in the News’ commentary on his Facebook page, Nandlall noted that NIS—as an agency of the State–took the decision to appeal the judgment after it noted that the plaintiff in matter failed to name Toolsie Persaud Limited, his former employer as a party to the proceeding.
“What this meant is that NIS is being made liable for deductions which it did not receive,” Nandlall explained.
Nandlall explained too many employers are deducting NIS from employees but are not remitting those payments to NIS and that is an offense.
“A criminal offense under the laws,” Nandlall pointed out.
As such, the Attorney General noted that if the judgment is allowed to stand it will open the “floodgates” for other persons to sue NIS for contributions which the scheme did not receive from the agencies and that could lead NIS to bankruptcy.
“If this decision is allowed to go unchallenged then it opens the floodgate where everyone will sue NIS and not their employers and NIS will have to pay although NIS did not receive any remissions of the payments made by the employee to the employers
He emphasized that the issue is that the NIS has now appealed the ruling, refusing to make the payout to Zainul on the insistence that his employer, Toolsie Persaud Limited (TPL), never remitted those contributions to the scheme.
“The issue as I understand it and the reason or the filing of the appeal has very little to do with monies awarded to individuals…The issue is that the employer was not made a party to proceedings. The gentleman sued NIS only and did not join Toolsie Persaud Limited in the proceedings.”
“The NIS records show no remissions were made by the employer to NIS,” Nandlall said in support of the appeal.
Zainul had records that he produced to the Court to establish that deductions were made from his wages/salaries.
Nandlall insisted, however, that the NIS records do not establish that those deductions were paid over.
Further, Nandlall insisted and rejected criticism that NIS was refusing to pay the man’s entitlement.
He insisted “this appeal about every employee whose payment was deducted but not transmitted to NIS… they too will have a claim and NIS will have to pay moieties it never received.”
Last month, High Court Justice Damone Younge ordered the NIS to pay a former staffer of Toolsie Persaud Limited (TPL), Shariff Zainul his full benefits. The ruling was made after Zainul was able to prove to the court that he worked with the company for several years and that the contributions were deducted from his salary.
The High Court ordered the NIS to credit Zainul 354 contributions which his former employer, TPL, failed to remit to NIS while he worked there from 1992 to 2000. The NIS was also ordered to pay Zainul his NIS Pension effective October 16, 2011, to the date of his 60th birthday.
However, the NIS through the office of the Attorney General is challenging Mr. Zainul’s right to his old pension in the circumstances of the court decision.
In the appeal, the NIS is contending that the judge erred and misdirected herself in law in her interpretation of the provisions of the NIS Social Security Act Chapter 36:01 and its regulations.
The appeal is also challenging the decision on the ground that Justice Younge erred or misdirected herself in the application of Section 17 (1) C of the NIS and Social Security Contribution Regulations and failed to apply the provision of Section 45 of the principal Act which provides the many legal remedies and recourse of the respondent/applicant as an insured person /employee; the judge erred and misdirected herself in law in applying and giving precedence to Regulation 6 (1) of NIS and social security contributions, regulations ahead of and in priority with the principal Act.
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