By NEIL HARTNELL
Tribune Business Editor
The Grand Lucayan is “hellbent” on using the wrong formula to calculate staff separation packages for middle managers who were yesterday said to have cut their demands “by over $1m”.
Obie Ferguson, the Trades Union Congress (TUC) president, told Tribune Business that the resort’s chairman, Michael Scott, was incorrectly using the Employment Act’s Section 29 to determine the value of the voluntary separation packages due to the 90 Bahamas Hotel Managerial Association (BHMA) members who wish to exit.
The attorney, who is the BHMA’s lead negotiator in talks with Mr Scott and the Grand Lucayan’s Board, said that section dealt specifically with termination pay and nowhere did the Act speak to voluntary separation packages.
Pointing out that the Bahamian courts have ruled that the Employment Act provides for the bare “minimum” terminated employees should receive, Mr Ferguson said the BHMA’s biggest problem was that Mr Scott did not want to compensate its members based on their years of service.
Warning that the union will not compromise on this issue, the TUC president said it had nevertheless made concessions in other areas that had slashed the value of its compensation demands by more than $1m.
Mr Ferguson said this had cut the total value of the BHMA’s desired package from an initial $5.4m to “roughly about $4m”, with the Association also willing to work out a deal for essential staff who wanted to leave to stay on temporarily so that the Grand Lucayan was “not left high and dry” on guest service.
He added that he was unaware a “bargaining impasse” had been reached until he read Mr Scott’s comments to Tribune Business yesterday, and did not realise the Board had reached a “take it or leave it” stance on the separation packages.
“I have some concerns with what he’s saying,” Mr Ferguson told Tribune Business of the resort chairman’s position. “His position is that he does not want to use years of service for assessing voluntary packages, and instead wants to come up with some other figure using the Employment Act.
“There’s no terminations here, so the Employment Act does not apply, as it does not speak to voluntary separation packages. He’s [Mr Scott] fixed on paying them according to Section 29 even though he’s not terminating them.
“We said: ‘On what basis are you relying on Section 29?’ Section 29 is the minimum. The Court of Appeal ruled that is a minimum below which an employer cannot go.” The Employment Act provides for terminated workers to receive a maximum 12 months’ pay if they are managerial staff, and six months for line staff, if they have been with an employer for 12 years.
But the Bahamian judicial system has ruled there is nothing to stop workers, especially those who have served an employer for longer than 12 years, from suing under common law for greater and better benefits.
Mr Ferguson and the BHMA fear that long-serving managers, with 12 years or more service at the Grand Lucayan, will thus not receive fair compensation if Mr Scott and the Board fail to base the voluntary separation packages on this indicator.
With the TUC leader arguing that the Employment Act’s sections on unfair dismissal are also irrelevant, he added: “What I’m saying to him [Mr Scott] is if it’s not termination, if it’s not unfair dismissal, then the union and the company ought to get together and look at past practices and come to an arrangement.
“For some reason he’s [Mr Scott] hell bent on the Employment Act and a ‘take it or leave it’ kind of thing.”
Mr Ferguson said there was “precedent” for calculating the Grand Lucayan’s voluntary separation packages, pointing to the similar exercises undertaken recently at Bahamas Power & Light (BPL) and the Bahamas Telecommunications Company (BTC), and more distant examples in the hotel industry as “a guide and a reference point in reaching an amicable agreement”.
“For some reason he’s having some difficulty,” the TUC leader told Tribune Business. “Mr Scott does not want to pay on the basis of years of service. We have made a substantial reduction in the original position we had in order to reach a compromise.”
Mr Ferguson then revealed that the BHMA had dropped its demands from $5.4m to around $4m, a sum that is understood to be within $1m of what the Grand Lucayan’s Board is prepared to offer.
Mr Scott, though, has made it clear on multiple occasions that he is restricted by the need to protect the interests of Bahamian taxpayers given that they will ultimately be funding the voluntary separation packages issued by the Government-owned Grand Lucayan.
He told Tribune Business in an interview last month that he was defending “the interests of 400,000 Bahamas residents” over staff payout demands that exceed the resort’s offer by $4.6m, with the two unions’ opening positions double, and triple, the Grand Lucayan’s own valuations.
Mr Scott, an attorney, then told this newspaper on Wednesday that the Board hoped to make voluntary staff separation payouts before Christmas even if they had not reached agreement with the workforce’s trade unions on their value and terms.
“Our position is that we have bent over backwards and strained to be as fair as generous as we could, but we have a limited budget and are expected to ensure we conserve it as best we can,” he said.
“I have told the representatives of the line and managerial staff that we have gone as far as we could with them. We are preparing to implement what we have offered: If you like it [the payout], take it, and if not show up for work.
“We are going to get this done by the end of the year. There is no more money. I made them an offer I consider fair and reasonable. It’s been blessed by the Board, and they will not let me advance a dollar more. Someone has got to take a stand.”
Mr Ferguson, revealing he was taken aback by Mr Scott’s remarks, told Tribune Business yesterday that the BHMA was not prepared to compromise on the need to base the voluntary separation packages’ worth on the years of service given by each departing member.
“We made concessions of over $1m to them in other areas, but not on the years of service. That’s where we are,” he said. “I have just written him [Mr Scott] a note today. I didn’t realise he had a problem. I know he had a problem with the number of years, but didn’t know it was to the point of ‘take it or leave it’.
“That’s strange to me. I was not aware of it until now. The public needs to know he doesn’t want to pay them on years of service; he wants to pay them using some other formula. I didn’t recognise we had a bargaining impasse until now.
“He said his job is to look after the 400,000. My main position is to deal with the separation packages in an amicable way to avoid hardship on the hotel,” Mr Ferguson continued.
“I said to him that if you need more of those people to stay, we’ll work out an agreement; we don’t want to leave the hotel high and dry. The tourists will be coming in and we need to serve them.”
The TUC leader said outstanding issues left behind by the Grand Lucayan’s former owner, Hutchison Whampoa, also needed to be resolved - especially the breach of the BHMA’s past industrial agreement where the Hong Kong-based conglomerate failed to pay a sum equivalent to 4 percent of each BHMA member’s salary into an annuity retirement fund.
Mr Scott on Wednesday revealed the board had retreated to its previous fall-back position of a “take it or leave it” approach. Cheques will be made available, and all those declining to accept them will be deemed as having decided to stay and be required to report to work as normal.
He had been “aiming” to finalise the packages for the 227 staff who had indicated they wished to leave - 90 managerial and 137 line workers - by the end of last week, with the Board having increased its original $2.7m total offer to the BHMA.
The gulf between the Government-owned resort and Commonwealth Union of Hotel Services and Allied Workers (CUHSAW) is understood to be much wider and little changed from their original multi-million dollar differences. The CUHSAW had initially been asking for “over $3m” - a sum near-triple the Grand Lucayan’s $1.1m proposal.
As reported previously by Tribune Business, the two unions had thus initially asked for a total $8.4m payout, which represents a sum more than double, or 121 percent higher than the resort’s total $3.8m offer.
The lower the compensation payout, the greater the savings for the Bahamian taxpayer who has ultimately financed the Grand Lucayan’s $65m acquisition and a series of subsequent multi-million dollar payouts to former owner, Hutchison Whampoa, along with $3.5m in renovation costs.
Opposition members in the House of Assembly yesterday said the voluntary separation impasse was a consequence of what they described as a flawed deal with Hutchison Whampoa, and the Government’s failure to make the former owner take responsibility for resolving this issue.