By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading union body has called for changes to the Employment Act that would make employees, and their severance pay/benefits, priority or secured creditors of Bahamas-based companies that went into liquidation.

Obie Ferguson, the Trades Union Congress’s (TUC) president, told Tribune Business yesterday that such an amendment would provide Bahamian workers with greater protection in a situation that happens “very frequently” in this nation.

He described the spectacle of staff being left without compensation when their employer goes into liquidation, as happened in the recent Hard Rock Cafe (Nassau) situation, “a major issue” that was of “fundamental importance” for Bahamian workers’ rights.

The TUC, in its feedback on proposed amendments to the Employment Act that were first contemplated in 2012, said: “TUC recommends that in the event a company is bankrupt or in liquidation, the employee should be treated as a secured creditor, and his benefits prioritised similar to Government taxation.”

The TUC also called for the creation of a Redundancy Fund to further protect Bahamian workers.

While the 2012 proposals failed to advance in the face of employer opposition, Mr Ferguson said he understood the Government was preparing to take another look and revive them, in the wake of recent business closures.

And Robert Farquharson, the director of labour, confirmed to Tribune Business earlier this week that the Government was looking to strengthen redundancy protection for Bahamian workers via legislative amendments.

Speaking to Tribune Business, Mr Ferguson said: “We have a lot of companies in the Bahamas today which do not have any assets. The owners are not here, or have shell companies that exist to just operate and pay the bills, such as payroll and utilities.”

This, the labour attorney said, created problems when employees tried to enforce unfair or wrongful dismissal claims against such companies, as there were often no assets upon which a lien could be secured.

And Mr Ferguson pointed to former employees of Gladstone Farms and the old South Ocean Resort, who had never received their due severance pay and benefits after the owners liquidated the companies and exited the jurisdiction.

Similar situations have also arisen at City Markets and Pioneer Shipping, and Mr Ferguson said successive administrations had failed to take legislative action despite his promptings.

This, he added, risked a repeat of the Royal Oasis situation, when the Government ended up making multi-million dollar severance and benefit payments to the former workers after the operator, Driftwood (Freeport), left town and closed the property.

Many argued at the time that the Government should not have made the payments, as it set a dangerous precedent and potentially exposed the Treasury to future claims from employees left without what was due to them.

Mr Ferguson told Tribune Business that the TUC and other unions wanted to work with employers and the Government to draft the necessary Employment Act and Industrial Relations Act reforms, “so it’s something we can all live with.

“We want to do it in collaboration with the employers” he added. “It’s ridiculous trying to put one-sided laws into effect. They never work. We want a social partnership, so it’s done in a fair and reasonable manner.”