PHILIPSBURG--Legal advice issued by attorney-at-law Jairo Bloem of law firm Bloem, Bonapart and Aardenburg to Minister of Public Health, Social Development and Labour VSA Richard Panneflek on Monday, April 20, questioned the legality of, and counselled against Social and Health Insurances SZV being designated as the entity to manage the payroll support programme of government’s proposed St. Maarten Stimulus and Relief Plan (SSRP).
The advice, which was made available to The Daily Herald by a confidential source, was in response to the draft National Decree which would authorise SZV to administer the payroll support programme. The draft decree was prepared by the Finance Ministry.
According to Bloem, the draft decree does not fulfil the legal requirements to mandate SZV to execute the payroll support programme.
SZV tasks are designated in the National Ordinance on Effectuating Body, Social and Sickness Expenses Insurances, which limits SZV to implementing social and sickness insurances or insurances with mostly a social character.
“It is questionable that the payroll support programme … constitutes a matter that relates to social and sickness expenses insurances. Whilst there is no argument that the plan intends to provide highly necessary social aid, it does not meet the insurance criteria. …
“If it [government – Ed.] still insists that SZV must exercise the payroll support programme … [government must] endeavour to explicitly motivate why this must be considered to be a cardinal part or aspect of the existing social and sickness expenses insurances,” said Bloem.
Failing this motivation, SZV’s tasks can only be changed through two means: by a decree issued by the VSA minister or through National Ordinance.
An (amended) National Ordinance must be passed by Parliament. Moreover, because the draft decree, if adopted, will be issued by Finance Minister Ardwell Irion, it “consequently lacks judicial basis,” said Bloem.
However, the VSA minister can mandate the finance minister to issue a decree on his behalf, said Bloem. “This is, in my view, the only way to legally realise a valid assignment to SZV,” he said.
According to Bloem, the VSA Ministry’s Department of Labour is a better fit for implementing the payroll support programme.
“Because time is of great essence and considering the legal challenges of the assignment of the tasks to SZV and, more importantly, the prevailing laws, even in case of a disaster, do not derogate to the ministerial responsibilities of all ministers, it’s recommendable to have the Labour Department carry out the payroll programme. This, of course, if it has the requisite capacity. … If not, SZV could designate part of its work force to assist the Labour Department … in effectuating the payroll support programme,” Bloem said.
He also cited several cases in which employers were asserting the right to cease or reduce the payment of their employees’ wages due to a calamity. In these cases, the employer had to be “fully transparent with respect to the financial reason for proposing the change.”
Employers had to provide the court with annual reports from preceding years, a substantiated cash flow forecast, and a detailed plan for the future. Moreover, if there is insurance in place covering damage in the event of a business interruption, the employer was obligated to present a detailed damage report accompanied by underlying documents and a motivated opinion of the insurer on the expected payment.
According to Bloem, businesses applying for payroll support must also furnish government with the same – or at least similar – documents.
“More importantly, as part of an equitable government payroll support programme, have the statutory directors of employers sign a [personal] guarantee on behalf of the companies receiving payroll support to allow or facilitate the recourse facilities of the St. Maarten government in case reimbursement is mandated for whatever reason, for example, misrepresentation of financial situation, ultimately not compliant with grant criteria, etcetera,” he said.
According to Bloem, the draft National Decree is also too unclear to be workable. “At first glance it is somewhat unclear if the draft decree intends for SZV to only render administrative services by, briefly put, organising and checking the grants for financial aid … on behalf of country St. Maarten, or to also do more,” he said.
He said the ambiguity extends to the financial component of the draft decree as well. “The draft decree does not state where the requisite funds to realise the payroll support will be derived from. The language used in the draft decree is furthermore generic enough to possibly cause misunderstandings. This, in the sense that it could be interpreted and/or understood that SZV would have to finance the payroll support itself, at least temporarily,” said Bloem.
