By NEIL HARTNELL
Tribune Business Editor
Grand Lucayan managers were yesterday bluntly warned "there's no more money" after they rejected the Government's $3.1m payout offer and took their grievances to the Industrial Tribunal.
Michael Scott, chairman of the Government-owned vehicle that owns the resort, told Tribune Business that its Board and the Government had no option but "to draw a line in the sand" to protect the financial interests of Bahamian taxpayer amid ongoing efforts to sell the property.
Disclosing that the Government and the Bahamas Hotel Managerial Association (BHMA), which represents the resort's 114 managers, were still $2.4m apart on their valuations of the voluntary separation packages (VSEPs) that should be offered to those wanting to leave, Mr Scott suggested the Grand Lucayan Board would now seek to cut Mr Ferguson out of the discussions.
He indicated that it would deal directly with the 90 managers wanting to leave if the terms were right, with the Board and government adopting a "take it or leave it" position where those who opted not to take the VSEP will be expected to continue reporting to work.
Mr Scott described the worker payouts as a "sideshow" and distraction from the Board's main work, which is to focus on selling the Grand Lucayan to the buyer best able to transform the resort and surrounding area into a true destination, thereby reviving Freeport's and the wider Grand Bahama tourism product.
The Grand Lucayan Renewal Holdings chairman revealed that the Board and its adviser, Canadian-headquartered real estate firm, Colliers, had narrowed the 60 bids to acquire the resort down to "three or four finalists" and will soon be in a position to make its recommendation on the winner to the Government.
Mr Scott spoke out after Obie Ferguson, president and attorney for the BHMA, yesterday brought the VSEP battle before the Industrial Tribunal in Freeport, after the Grand Lucayan's managers last week "overwhelmingly" rejected the Government's February 27, 2019, offer to them.
Mr Ferguson told Tribune Business that offer, submitted by Dionisio D'Aguilar, minister of tourism and aviation, was virtually identical to the last proposal by the Grand Lucayan Renewal Holdings Board.
He added that it even represented "a slight step back", as the total payout value had been reduced from the Board's previous $3.2m to $3.1m. Mr Ferguson confirmed that the BHMA felt the total due to its members was $5.5-$5.6m, a figure that includes the annuity retirement fund set up by the resort's previous owner, Hutchison Whampoa.
Describing the situation as "terrible" and "ridiculous", the Trades Union Congress (TUC) chief and veteran labour advocate accused the Government and resort's Board of "failing to negotiate in good fait" and show they wanted an "amicable resolution"
He said the Grand Lucayan's managers - now effectively government employees - were questioning why they were not being offered similar VSEP terms to past Hotel Corporation workers, or fellow public sector employees at the likes of Bahamas Power & Light (BPL) and the Bahamas Telecommunications Company (BTC).
Mr Ferguson said acting Industrial Tribunal vice-president, Helen Jones, yesterday "required" the two sides to explain how the two sides arrived at their respective payout figures, and set a March 20 date for them to reappear before her.
However, Mr Scott argued that the BHMA's recourse to the Industrial Tribunal was "disingenuous" and had "no basis" because its industrial agreement with the Grand Lucayan expired in 2014 and no replacement had been agreed.
This, though, was disputed by Mr Ferguson, who argued that normal protocol was for the terms of an expired industrial agreement to remain in place and be honoured until a new deal was negotiated.
He said Mr Scott had agreed to this when the BHMA first brought the Grand Lucayan VSEP issue before the Industrial Tribunal on November 1 last year, adding that the chairman "gave a written position in his defence to the Tribunal that he and Grand Lucayan Renewal Holdings will honour this agreement and settle all matters".
"While they were there they agreed an attempt would be made to settle the matter outside the Tribunal," Mr Ferguson continued. "Obviously there's been no progress made with the matter in terms of a reasonable settlement.
"We've had three meetings with him. We went from $2.7m to $3.2m, and the proposal that was sent on February 27 was reduced to $3.1m - a slight step back. That's why the workers rejected it overwhelmingly; everyone.'
But Mr Scott, who sent "a team" and attorneys to the Industrial Tribunal yesterday when he learned of the BHMA's move, told Tribune Business: "I've been a nice guy long enough."
"That's a joke," he said of the union's action. "They don't have the basis to be before the Industrial Tribunal because they have no management agreement. There was a meeting before the Tribunal but it was improperly convened.
"This is a voluntary separation agreement. There is no valid management agreement between the union and the hotel. That's my position and I'm sticking to it."
Mr Scott then indicated the Government and Lucayan Renewal Holdings Board will deal direct with all managerial staff who want to leave in a bid to resolve a long-running matter, suggesting they may cut out Mr Ferguson and the union.
"My position is he is superfluous to this whole arrangement," he added of the TUC president. "I intend, in conjunction with the Board, to deal directly with individual members of staff.
"The Government's position in the same position we had before. There was an initial offer to them [the managers] of $2.64m, I persuaded the Government to increase that by $500,000 so it was $3.1m. They wanted $5.5m, and never the twain shall meet.
"It won't happen; that won't happen. It is what it is. This whole thing is a PR stunt managed by him [Mr Ferguson] and I'm not getting sucked into that vortex," Mr Scott continued. "As far as I am concerned the Board, myself and the management team's position is resolute. Have a nice day. There is no more money. That's it. We're drawing a line in the sand."
He added that the Lucayan Renewal Holdings Board was now more focused on the resort's sale than the manager payouts, and had succeeded with its advisers in whittling the 60-strong bidder field down to the best and most serious offers.
"We're still in negotiations and at a very sensitive stage," Mr Scott told Tribune Business. "The position is that with Colliers we've narrowed down the list of prospective bidders to tree or four finalists in terms of suitability of offer, quality of offer and character of the offer.
"Colliers will make their recommendation to us, we'll consider it as a Board and make our recommendation to Cabinet, and they'll make the final selection." The front-runner is thought to be the bid from Royal Caribbean in partnership with Mexican cruise port developer, ITM Group, which proposes to redevelop both the Grand Lucayan and Freeport Harbour via water-based adventure theme parks.
However, Mr Scott's and Mr Ferguson's respective comments indicate the two sides remain as far apart as ever on the managerial payouts. The former has previously argued that comparisons with previous public sector VSEPs, both at the Hotel Corporation and public utilities, are inappropriate and akin to matching "apples and oranges" because they were all operating businesses in the process of being sold while the Grand Lucayan was not.
Yet Mr Ferguson said yesterday: "We're really being consistent with what happened in the past. We're not asking for anything out of the ordinary. We're asking for the same system used in the past, but they seem to have a problem following it and are not giving us a reason why.
"You can't reduce 21 years of service to 12 without giving us some explanation as to why. The workers are very concerned. The atmosphere is ridiculous; it's very, very bad. I'm very discouraged and the workers are very discouraged.
"They were shown a copy of the VSEPs offer to the hotel and other workers at BTC, BPL and Water & Sewerage, and they are wondering what is wrong with them. Why shouldn't they be treated the same," Mr Ferguson said.
"But here we have a situation where the chairman said: 'Take it or leave it'. That's not a way to negotiate a a VSEP." Mr Ferguson confirmed that the union had valued the total payout due to BHMA members at $5.5m, inclusive of the retirement annuity, although it dropped this sum to $4.1m at an earlier point in negotiations.
The Lucayan Renewal Holdings Board's position, though, is that the union should be pursuing Hutchison Whampoa - not the Government - over the retirement annuity. It is also basing the VSEP offers on the Employment Act, which caps payouts at 12 years of service, even though the union argues that applies to redundancy/terminations - not voluntary departures.
Mr Ferguson confirmed that Mr D'Aguilar had sought a meeting with him yesterday, but he was unable to attend as the times clashed with his appearance before the Industrial Tribunal. He added that he had written to the minister seeking an alternative date in a bid to "put this matter behind us",.
"We're trying to find a way to find some resolution, but they're not prepared to get to an amicable conclusion," Mr Ferguson argued of the Board. "They should come to us with something reasonable but they haven't. That can't be negotiating in good faith. I would expect the minister of tourism to get involved at some stage so we can put this behind us."
Mr Ferguson briefed BHMA members on the Industrial Tribunal hearing's outcome yesterday afternoon.