The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Private sector executives yesterday warned that the Minnis administration's plans to increase the 12-month redundancy pay 'cap' would further endanger an economy already "in deep trouble".

Peter Goudie, an employment and labour relations specialist with the Bahamas Chamber of Commerce, told Tribune Business that such intentions ran contrary to the new government's stated objective to improve the 'ease of doing business'.

Mr Goudie warned that such strategy "makes no sense to me", because any increase to business costs "will not create desperately-needed employment" for Bahamians.

He was speaking after Dion Foulkes, minister of labour, reiterated in his Senate Budget debate communication that the Government planned to increase the Employment Act's 'redundancy cap' following consultation at the National Tripartite Council level.

This effectively picks up where the Christie administration left off just two months prior to the general election, when it was forced to drop union and labour-friendly plans to increase the redundancy pay 'cap' by two-thirds from its present level.

The Minnis administration's plans to return to this issue so rapidly have alarmed the private sector, especially given that greater GDP growth is the key to solving the Bahamas' unemployment and fiscal crises.

Mr Goudie contrasted Mr Foulkes' pledge, which he also made in his national Labour Bay address, with remarks yesterday by his fellow Cabinet minister, Brent Symonette, on the need to make conducting business in the Bahamas much simpler and easier.

"This country is in deep trouble," Mr Goudie told Tribune Business. "We don't need to put anything in the way of the 'ease of doing business'.

"Brent Symonette talked this morning at the Chamber Power Breakfast and said we've got to make doing business easy. Increasing redundancy costs, or any costs, are not ease of doing business. You can't talk one thing and then do a different thing."

Mr Goudie, one of the private sector's representatives on the National Tripartite Council, added: "We need to be very careful here. I don't see any real reason to increase these costs when we're trying to get business to come to the Bahamas.

"It makes no sense to me. You can quote me on that because that's the truth. We're not in favour of increasing the costs of doing business when we're trying to make it easier for business to do business.

"We're not going to create employment by increasing costs, and we're desperate to increase employment in this country."

Mr Goudie told Tribune Business that Mr Foulkes had seemed to grasp such "bigger picture" issues when the Chamber, and its labour and employment committee, enjoyed "a very amicable meeting" with the Minister.

"We spoke to him about the need to be more worried about moving the country forward than changing the labour laws," he added, "although we agreed it wouldn't hurt to review the Employment Act; not saying it necessarily needs to be changed. We want to be more concerned about the whole country rather than little issues around laws. We need to move forward."

Mr Goudie said Mr Foulkes seemed focused on increasing productivity with the creation of a Productivity Council, while there was "a push" to bring the Inter-American Development Bank's (IDB) apprenticeship programme proposal to fruition.

"What we're trying to do with the Minister, and think he is looking at, is the bigger picture and how we're going to move the country forward and increasing employment," he added.

At present, line staff remain entitled to a maximum 24 weeks or six months' redundancy pay, gaining two weeks for each year they have been employed up to the 12-year 'cap'. Managers remain at a maximum of 48 weeks, or one month for every year worked up to 12 years.

The redundancy cap was a key contention between employers and the the trade unions when Employment Act reforms were introduced earlier this year under the Christie administration.

The former government's proposals called for the 'cap' to be increased to 32 weeks (16 years) for line staff immediately upon enactment of the reforms.

And, ultimately, the 'cap' for line staff redundancy pay is to be increased to 40 weeks some two years after the Employment Act amendments are passed.

As for managerial staff, the existing 48 weeks (12 months/one year) redundancy pay maximum that they are due currently under the Employment Act is to be immediately increased to 64 weeks. Should the proposals pass, the 'cap' will ultimately be lifted to 80 weeks after two years.

The Chamber at the time branded the removal of redundancy pay 'caps' in the Employment Act as "economically untenable", since they threatened to further deter job-creating investment and business expansion in a climate were the private sector is already bedevilled by uncertainty.

It wrote: "An increase in redundancy pay will result in significant cost increases for an employer. In this present uncertain economic climate, an employer cannot shoulder any additional financial burden. Moreover, the costs associated with the increase are not quantifiable.

"A business which remains open is one where employees remain employed. However, this recommendation threatens to cripple and/or bankrupt most businesses, especially small businesses, in the Bahamas, resulting in lay-offs and business closures."