JobsPlus lenient with employers that repeatedly flout employment rules, NAO says

Inspectors tasked with investigating breaches of employment rules have been adopting a lenient approach when dealing with certain infringements, a National Audit Office investigation found.

JobsPlus has adopted a practice not supported by law that affords defaulters a rectification period before imposing administrative penalties on employers for certain infringements. The NAO established that this lenient approach is also afforded to repeat offenders.

“This Office believes that such a lenient approach by the inspectorate may passively elicit an overall lax attitude towards compliance with employment regulations from those within the local employer cohort who are so inclined, proving unfair towards those abiding with this legislation,” the NAO said, adding the concern becomes even more pressing given that this treatment is also afforded to repeat offenders.

This lenient approach is not adopted on infringements that cannot be rectified such as employing someone who is underage without clearance from the education authorities.

The finding is one of the more critical aspects noted by the NAO in what was an otherwise satisfactory overall performance by JobsPlus’s law compliance unit (LCU).

The NAO report was presented to Speaker of the House Anglu Farrugia by Auditor General Charles Deguara on Monday and subsequently tabled in parliament.

Fines not serving as deterrent

The NAO report calls for an upward revision of fines for employment infringements since the new higher fines introduced in 2019 do not appear to be acting as a strong deterrent.

The review showed that figures of identified irregularities were substantial and resulted in an uninterrupted annual upward trend between 2019 and 2022.

In 2019, 27% of individuals approached by JobsPlus as part of routine inspections or because of suspicion they were working irregularly, resulted in infringements, with this percentage reaching a significant 49% in 2022.

“NAO notes that this indicates that the level of penalties is still not serving as an adequate deterrent to curb irregular employment,” the NAO said.

However, the NAO noted it was a shortcoming of the unit not to assess whether the current penalties were set at a sufficient level for effective deterrence or otherwise thus providing no fact-based feedback to policymakers entrusted with proposing legislative changes.

The JobsPlus unit is comprised of 12 officials, eight of whom possess an inspector’s warrant. Inspectors are endowed with the legal rights required to carry out physical inspections onsite. At the time of the audit, the unit also employed three desk investigators who worked on specific cases, primarily those involving third country nationals suspected of being employed without the necessary engagement form being supplied to JobsPlus.

The staff complement at the unit has remained unchanged despite a rapid increase in the country’s workforce between 2019 and 2022, the NAO noted.

It added that most of the investigations carried out were desk-based and inspectors were reluctant to adopt different work practices that allowed them to carry out inspections after normal work hours.

Resistance to work outside office hours

But while acknowledging that the overall performance of inspectors was satisfactory, the NAO expressed concern at the resistance to adopt different working hours that would otherwise plug gaps in enforcement that could be exploited by defaulters.

In its reply, JobsPlus top management insisted the current number of inspectors is sufficient and desk-based investigations rendered their operations more efficient. The management said through the use of desk-based investigations and the judicious use of big data, large amounts of infringements could be identified through processes that are significantly less laborious than on-the ground inspections. To this end, five desk investigators were engaged in the third quarter of 2022.

However, Jobsplus’ assertions that it had sufficient on-the-ground inspectors was not supported by formal studies or a needs assessment, the NAO said.

“In view of the foregoing, this concern becomes particularly pressing when one considers the registered continual increase in the gainfully occupied population as well as the evident developing complexities and expanding parameters in the local labour market, which put inevitable strain on LCU’s inspectorate capacity,” the NAO said.

It added: “While it is acknowledged that industrial relations could prove challenging, having a relatively low inspectorate visibility outside normal office hours is, in NAO’s opinion, a serious cause for concern. It is therefore being suggested that working hours of LCU’s inspectors are adapted at the earliest so that the gaps created by this shortcoming are addressed.”