A carpenter has won his case for pension, after taking the National Insurance Scheme (NIS) to court in what has been hailed as a landmark ruling that pronounced on the obligation of the NIS and the employer for the maintenance of accurate and complete records.
The Court has further made it clear that NIS needs to be more robust in ensuring that employers comply with the law regarding deduction and payment of NIS contributions on behalf of their employees.
NIS’ contention was that Shariff Zainul did not have the required number of contributions for the payment of old age pension, and was therefore entitled only to a grant.
High Court Judge Damone Younge found, however, that Zainul was entitled to be credited the 354 contributions for the period he contested—which his former employer—Toolsie Persaud Limited (TPL)— had said he had not been employed.
This pensioner’s win over the insurance scheme would not only be seen as a victory for him, but for countless other pensionable members whose complaints against the scheme are all too similar.
The court ruling will therefore be used as a precedent.
Justice Younge in her ruling delivered on Monday, made it clear that an applicant should not be made to suffer for failure on the part of NIS and employers to reconcile their records or to have an accurate record of the contributions made by an applicant—or for the failure of employers to pay over their employees’ contributions to the insurance scheme.
In fact, the Judge in no uncertain blasted the NIS which she said has become “notorious” for inaccurate and incomplete contribution records which are ultimately unreliable.
In the written ruling seen by this newspaper, Justice Yonge asserted; “as the instant case pellucidly demonstrates, contribution Schedules can and sadly are often inaccurate or incomplete.”
She continued, “it is most unfortunate that NIS contribution records in the possession of the Respondent [NIS] have become notorious for its unreliability.”
NIS’ case was that, because Zainul did not meet the minimum threshold of 750 contributions, he was not entitled to old-age pension; but based on his 453 recorded contributions was entitled only to the payment of an old-age grant which he had been paid.
Zainul vehemently argued and resolutely maintained, however, that his former employer—TPL—failed to remit contributions on his behalf for the years 1992 to 2000 and so he had requested the insurance scheme to credit him with the 354 omitted contributions which would have entitled him to old-age pension.
Instead, what the NIS did, was pay the pensioner a grant of $9,869 to reflect 426 contributions; and over time updated his contributions to 453 with an additional grant award of $14,549.
Citing Regulation 3 of the National Insurance and Social Security (Benefits Regulations), Justice Younge said that a person who has attained the age of 60, and who has paid or been credited with 150 contributions and has paid or been credited with not less than 750 contributions is entitled to an old-age pension.
Regulation 3 provides, “Old age pension shall be payable to an insured person who has attained the age of sixty years and that such person has paid not less than one hundred and fifty (150) contributions, and has paid or been credited with, or has paid and been credited with, not less than seven hundred and fifty (750) contributions.”
On this point, the Judge noted from the evidence that NIS’ records showed that Zainul had amassed only 453 contributions, though he contended having worked with TPL during the years in dispute and it was the company that failed to remit his contributions.
In this regard, she said that provisions of both the Regulations and the National Insurance and Social Security Act needed to be considered.
Section 17(1)(c) of the Act states, “regulations may provide for treating for the purposes of any right to benefit, contributions payable by an employer on behalf of an insured person but not paid as paid where the failure to pay is shown not to have been with the consent or connivance of or attributable to any negligence on the part of such person.”
Meanwhile; Regulation 6(1) of the Contribution Regulations she noted, provides that “Where a contribution payable by an employer in respect or on behalf of an insured person is paid after the due date or is not paid, and the delay or failure in making payment thereof is shown to the satisfaction of the Board not to have been with the consent or connivance of, or attributable to any negligence on the part of the insured person, the contribution shall, for the purpose of any right to benefit, be treated as paid on the due date.”
Underscored
Justice Younge underscored that both provisions allow for contributions which have not been paid by an employer on behalf of an employee to be deemed as paid as at the due date provided that there is no consent, connivance or negligence on the part of the insured person.
Against this background, she went on to reason that in Zainul’s case, no issue of consent, connivance or negligence on his part regarding the failure to pay the omitted contributions was raised.
She said that the case before her was simply one where NIS was not satisfied that the applicant was in fact an employee of TPL for the disputed period.
The Judge recalled that in his efforts to prove that he had been employed by TPL for the disputed period, Zainul had submitted a letter dated 13th, October 2016 from former Personnel Officer of TPL, Krishendatt Sahadeo, indicating that he was employed with TPL as a carpenter for the period 4th, May 1992 to 31st, December 2000.
The Judge pointed out further that while NIS was reluctant to accept the personal handwritten letter of Sahadeo, there was also a letter dated 4th, March 2013 from the Director of TPL confirming that Sahadeo was in the company’s employ as the Personnel Officer in their Human Resource/Admin Department during the period 4th, May 1992 to 31st, December 2000 which is the disputed period.
The Judge also referenced, as requested for proof by NIS, Zainul’s submission of two statutory declarations of former employees of TPL—Surujpaul Danpaul and Kenneth Gordon—who had both attested to working with the Applicant at TPL from 1992 to 2006 and 1995 to 2008, respectively; periods which cover the years of employment in dispute.
She noted, too, that pay slips for the years 1993, 1994, 1995, 1996 and 1997 were also submitted which substantiated that the Applicant received wages from TPL.
All of these documents Justice Younge noted, were submitted by Zainul in an effort to show his employment record with TPL after his attempts to obtain his record of employment from TPL proved futile; while noting that no response was ever received to a letter written to the company by his attorney.
The Judge said that despite submitting all those additional documents, the NIS remained unconvinced that the applicant had been an employee of TPL for the period in dispute.
“It is unclear to this Court why the Respondent did not accept the documentation, particularly the letter and statutory declarations of the three former employees, as good and sufficient proof of the Applicant’s employment. The Respondent itself has confirmed that these persons did in fact work at TPL at different points during the disputed period,” Justice Younge said.
“So why then wouldn’t the Respondent accept the attestation of these persons, who have not been discredited, that they worked with the Applicant?” the Judge enquired rhetorically.
Justice Younge said that for NIS to advance the point as it did; that the contents of the Applicant’s documents “conflicts with primary documentation” in in its possession; without more, is not a satisfactory explanation, particularly when it is immediately apparent from the evidence before the Court that the Respondent’s record of the Applicant’s NIS contributions was either inaccurate or incomplete.
Justice Younge said that while she agrees with the Respondent’s contention that the contribution schedule submitted by an employer is to be considered a primary document to which regard must be had when computing an employee’s NIS contributions, it is by no means the only document.
It was on this point that the Judge had asserted, “as the instant case pellucidly demonstrates, contribution schedules can and sadly are often inaccurate or incomplete. It is most unfortunate that NIS contribution records in the possession of the Respondent have become notorious for its unreliability.”
Against this background she went on to point out that NIS had stated that at the time Zainul had applied for payment of pension he had 426 contributions and was paid an initial grant of $9,860.
The Judge noted that the NIS had said that “over time” his contributions were updated to 453 contributions; but that it never stated the basis for that update.
The Respondent, the Court observed, then stated that their primary documentation—the contribution schedule— submitted by TPL only recorded Zainul as an employee for the period May to December 1993, 1995, and 1996, omitting the year 1994, whilst at the same time confirming receipt of pay slips from the Applicant for the years 1993, 1994, 1995 and 1996.
From the evidence, the Applicant has in fact provided pay slips for the years 1993, 1994, 1995, 1996 and the period January to March 1997 from TPL.
The Judge said she was of the considered view that contribution schedules should by no means take precedence over later documents, to the exclusion of those later documents.
She made it clear that NIS is required to consider all documents put before it before coming to a decision on the calculation of an insured person’s contributions and his or her entitlement to pension benefits under the Act.
The Judge said that Zainul having been unable to obtain his employment records from TPL despite his valiant efforts, did what he could to provide proof that he was employed by TPL and that he made the requisite number of NIS contributions to entitle him to the payment of old-age pension.
Justice Younge said she found that the letter from the company’s former Sahadeo attesting to the fact that the Applicant worked with TPL during the period 4th, May 1992 to 31st, December 2000, the letter by TPL itself confirming Sahadeo’s employment, the statutory declarations and the pay slips that the Applicant submitted were good and sufficient proof that he was employed by TPL for the period 1992 to 2000.
The Court would then go on to further find that Zainul was entitled to be credited the 354 contributions for that period which TPL failed to remit to NIS as the company was required to do under the Act.
This, Justice Younge said, would mean that he would have made the requisite number of contributions to qualify him for the payment of pension.
“This Court therefore finds that the Applicant is entitled to be paid an old age pension,” the Judge declared; while adding that the Applicant should not be made to suffer for failure of the NIS and TPL to reconcile their records or to have an accurate record of the contributions made by the Applicant, or for the failure of TPL to pay over the Applicant’s contributions to the NIS.
She said that this is in keeping with the spirit and intention of Section 17(1)(c) of the Act and Regulation 6(1).
“This Court finds it rather disturbing that the Respondent, despite being empowered to do so, does not take a more robust approach in ensuring that employers comply with the law as it relates to the deduction and payment of NIS contributions on behalf of their employees. Instead, the Respondent seemingly allows employ[ers] to flout the law to the detriment of the employees,” Justice Younge said.
Given her ruling, the Judge ordered that Zainul be paid his old age pension effective from October 16th of 2011 when he attained the age of 60 and that there be interest on his arrears of pension due calculated at the rate of the 6% per annum from his birthday, to when the judgment was delivered on Monday; and thereafter at the rate of 4% per annum until fully paid.
Justice Younge further ordered that the sums received by Zainul as the grants, be deducted from the arrears of pension.
Further, he was awarded court costs in the sum of$150,000 to be paid no later than December 29th, 2023.
