The Tribune

MAKE NO bones about it, the political season is upon us.

It was ushered in by a slew of amendments to the Employment Act and Industrial Relations Act tabled last week in Parliament, amendments that were clearly conceived to win votes among the masses who, the Progressive Liberal Party believes, will equate dictating higher redundancy and termination pay with finding the Holy Grail.

Tragically, the real consequences of the proposed amendments are more like The Last Supper, celebratory dining before the betrayal that befalls the very individual being toasted and celebrated.

The amendments do not strengthen the position of the worker. On the contrary: they weaken it by making the employment environment more taxing and unstable than it already is. They are a punishing slap in the face to business so it is no surprise that businesses large and small – hotels, restaurants, wholesale and retail, manufacturing – have come together to say they will fight the proposed amendments with everything they have.

And the timing could not be worse for proposed amendments that increase termination costs, redundancy pay caps and include such idiocy as requiring an employer to notify the Minister of Labour if he or she plans to make a single position redundant.

So if a fuel station operator or a hair salon owner wants to make a cashier or receptionist position redundant because they no longer need a night cashier or a second receptionist, do they really have to seek permission from the Minister of Labour? The potential for bureaucratic bungling boggles the mind.

Further increases in the cost of doing business make absolutely no sense in an economy slowly recovering from a lengthy recession at a time when companies are still reeling from hikes in business license fees. Those hikes came shortly after they swallowed the Value-Added Tax (VAT) pill, including the extra expenses incurred by having to retain an accountant to certify returns, while still paying Customs duties that consultants advised should be abolished once VAT was introduced.

Additional increases in the cost of doing business will only serve as a disincentive for investment, both domestic and foreign, further slowing what is already an abysmal rate of growth.

Specifically, increasing the redundancy pay cap 67 per cent within a two-year period - from 24 weeks to 40 weeks for line staff, and from 48 weeks to a maximum of 80 weeks for management - could have one of several effects. Employers who are considering making a position redundant are likely to speed up their decision, acting now rather than later to avoid higher costs, so the immediate effect could be more people left jobless. Some businesses may move to outsource greater shares of their production or sales or hire more part-time staff to reduce eventual liability through either termination or redundancy.

Many of the small- to medium-size businesses in the Bahamas struggle weekly to keep their doors open. They are already mired in a conundrum of having to retain existing staff no matter how unproductive they are, or how recalcitrant, or how slack, because letting them go is too costly. It is easy for someone who is not in business to say that such a condition is just the result of poor management, but the reality is that a business that is operating at bare bones, paying its bills relatively on time and hoping for brighter days ahead may not have the $20,000 or $30,000 that it costs to let a single employee go. So they retain them until retirement.

The high cost of termination or redundancy also chokes and suffocates the freedom to recruit new, young talent. By loading business with the burden of retention till death or retirement do us part, the proposed labour amendments stifle the ability to inject fresh blood, an objective that is highly desirable not only for the business to remain competitive but to reduce the extraordinary youth unemployment rate that hovers around 30 per cent.

With nearly one of every three young people on the unemployment roll, how can a country expect to make the most of its talent when there is no place for that talent to go? How can it expect to solve its crime problem when nearly one-third of its youth population has no pay cheque at the end of the week?

There is also the matter of how the proposed amendments were tabled, which the Bahamas Chamber of Commerce and Employers’ Confederation argues is in direct conflict with government’s policy that a tripartite council agreed. While the Chamber agrees that it was consulted during the drafting, it did not agree to the amendments it reviewed and said there were last-minute changes in the version tabled.

If the poorly-conceived labour amendments are any indication of the type of politics the present government plans to offer, Dr Hubert Minnis’ lack of charisma may look like a small price to pay for a thoughtful and safer regime.