Updated | Belgian press accuses Dar Malta of not paying taxes, social security

Updated with foreign ministry reaction at 4:30pm

Malta’s permanent representation to the European Union is in the eye of a storm in Brussels, with a front-page report in newspaper Le Soir claiming dozens of Belgian and non-Maltese employees are subjected to illegal working conditions.

According to documents relayed to Le Soir by one of the employees, secretaries are being employed on temporary contracts without any taxes or social security being paid by the administration at Dar Malta, the nine-storey complex that houses both the consulate and representation to the EU.

Le Soir reports that the employees, most of them secretaries who apply for the posts through the national employment agency Orbem, were informed by the Maltese administration as early as 2005 “that they are employed on a trial basis for six months and that they have to pay their own taxes and social security, without any contract being signed.”

It appears that secretaries are paid a net €1,200 every month, whilst another €200 appears as a fringe benefit. The newspaper claims ‘tens of thousands’ of euros in Belgian taxes “are passing undeclared to the authorities”.

Another employee employed on a temporary contract was only paid in cash. He never complained, the newspaper said, “because it was his first job”. His employment was regularised months later, but no taxes or social security were deducted from his payslip.

One long-time employee was reported to have amassed some 500 hours of overtime without ever being paid. In May 2007, the employees demanded a meeting with the head of administration at Dar Malta, demanding that they be paid overtime, have a standard payslip, and reimbursement of their transport costs. But the administration only agreed to pay their transport costs and an overtime rate that was “lower than the legal tariff” and also net of tax, and therefore undeclared.

“Over five years, these work practices have encouraged a score of employees to leave their employment. Those who stay on want real working conditions, reason enough to come out in the open on their situation,” Le Soir reports. “We know we are risking but we want to have the situation regularised,” an employee is reported as saying.

“I don’t care if the inland revenue realises the situation and demands that I pay tax arrears. I want to be in line with the law and live with dignity. “I want to be able to claim my pension serenely… I cannot understand how an EU member state acts in this manner – in defiance of the law and treating its employees badly.”

In comments to Le Soir, first counseller and head of administration Victor Grech was described as “not in the mood to talk” about the matter. “I have nothing to say. Who called you? Who is complaining?”

In a reaction, the foreign ministry said certain conditions of employment were introduced at the Embassy of Malta to Belgium in 1997 which later applied also to the Permanent Representation to the EU, but certain elements of these conditions had started to be phased out as from 1 January 2006 on instructions from the Permanent Representative.

"Following the approval of additional funds by the Ministry of Finance in 2011, the phasing out of these elements of the conditions of employment was accelerated. The conditions of employment for all locally engaged personnel with the Embassy of Malta to Belgium and the Permanent Representation of Malta to the European Union in Brussels are now in line with Belgian law," the ministry said.

Additional reporting by Pasquale Calabrese