60% of security firms snub NHT’s payment demand
Published:Thursday | March 31, 2022 | 12:10 AMTanesha Mundle/Staff Reporter
More than 60 per cent of the island's security companies, accounting for 28 of the larger firms, have been ignoring the National Housing Trust's (NHT) demands for them to pay over the employer's portion of Trust contribution for their workers.
Winston Barnes, vice-president of the Jamaica Society for Industrial Security (JSIS), the umbrella group representing the majority of the island's security firms, made the disclosure in the Revenue Court Wednesday after he was questioned by Justice David Batts about the rate of compliance among industry players.
The managing director of Securipro Limited, during cross-examination from NHT lead counsel John Vassell, QC, said that the companies started deducting the contributions from the workers' pay in 1999 after the Government had sought their assistance to collect the statutory amounts from guards who were delinquent.
According to him, a verbal agreement was reached during a meeting between the JSIS and then Finance Minister Dr Omar Davis in 1999.
When asked what was the agreement, he said, “The industry - and I say loosely - was encouraged to assist the Government in collecting taxes due from security guards who we had engaged as independent security guards because, prior to that, they were unable to collect these taxes from the guards,” Barnes told the court.
“After 1999, we immediately sought to carry out the decision taken at that meeting.”
Since 2017, the NHT and the security companies have been at loggerheads over their refusal to comply with the Trust's declaration that the guards are employees, not contract workers as indicated by the companies. That, the Trust argued, triggered an obligation to pay over three per cent of the worker's earnings as contribution, in addition to the two per cent that is deducted from their pay.
The companies, however, have only been paying over three per cent contribution deducted from the guards' pay while insisting that they are contract workers and, essentially, self-employed.
SEVERAL MEETINGS
Consequently, the NHT, after facing opposition from several delinquent companies that were brought before the parish court, initiated proceedings against Marksman Limited to recover approximately $806 million in employer's contribution for the period 2000-2016. The figure included interest.
Barnes, following further questions from Vassell, explained that the companies had several meetings with the Government to discuss issues affecting the workers but that the agreement was made after the Society sought the intervention of the finance minister.
He recalled that the NHT, in 2002, had written to several companies, including his, advising that they should treat guards as employees and pay over the required statutory deduction.
Barnes said it was that letter that had triggered the series of meetings.
He, however, conceded that the agreement was never formalised in writing and that, when he tried to confirm the pact via a letter, he did not receive a response from the minister.
Barnes also told the court that, in a 2017 letter to then Minister of Finance Audley Shaw, JSIS encouraged the Government not to ignore the legal status of security guards as independent contractors, but no response was forthcoming as well.
While recalling, too, that the NHT had written to his company in 2013 demanding that they pay over five per cent in contributions, including the employer's portion, the JSIS executive acknowledged that, since then, the Trust has not relented from the stance it has taken since 2007.
Prior to dispatch of that letter, he said the NHT had started assessing security companies, including Securipro, and that he sought audience with Phillips.
The defendants, including Robert Epstein, former managing director of Marksman Limited, will continue their case today.
Attorneys-at-law Trudy-Ann Dixon Frith and Samantha Grant are also representing the NHT.
Dr Lloyd Barnett, QC, and Gillian Burgess are representing Epstein, while Walter Scott, QC, and Deniece Beaumont Walters appeared for Marksman Limited.