Grand Lucayan managers facing $2m payout divide

photo

Obie Ferguson, President of the Trade Union Congress.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Lucayan and its management union are $2m apart on the value of voluntary separation packages, with the latter's attorney yesterday arguing such payouts are not covered by law.

Obie Ferguson, pictured, who is acting for the Bahamas Hotel Managerial Association (BHMA) in its negotiations with the hotel's government-appointed Board, said different legal interpretations may have contributed to the divide between the two sides over how much is due to middle management staff wishing to exit.

The Trades Union Congress (TUC) president told Tribune Business that the Grand Lucayan Board appeared to have based its financial calculations on the Employment Act, but he argued that "there's no provision" in this or any other statute law that governs voluntary separation payouts.

Nor are they included in any Bahamian trade union's industrial agreement, with Mr Ferguson suggesting that Bahamas Power & Light (BPL) had recently established the model for such packages - namely that they must be agreed by both employer and union following negotiations.

He revealed that the BHMA had calculated the total payout due to the 90 of its 115 members wishing to leave at "about $5m", whereas the Grand Lucayan Board's offer was "just about $3m".

These figures suggest that 78 percent, or around four out of every five existing middle management staff, wish to leave the Grand Lucayan. And Tribune Business understands that the payout "divide" between the resort and BHMA may be greater than that indicated by Mr Ferguson, with the union seeking double or 100 percent more than the Board believes is due.

Michael Scott, the board's chairman, declined to comment further yesterday. But this newspaper further understands that a similar "gap" exists between the Government-owned resort and the Commonwealth Union of Hotel Services and Allied Workers (CUHSAW) over the payout due to the 100-150 Grand Lucayan line staff it represents and also wish to depart.

It was suggested to Tribune Business that, collectively, the two unions are seeking double, and perhaps triple, what the Grand Lucayan Board believes is owed, setting the stage for a potential stand-off that could undermine the Government's goal of achieving a quick sale of Freeport's last mega resort property.

But Mr Ferguson, who said it was "unfair" for Mr Scott to brand the unions' calculations as "extravagant" and "high", countered that he did "not foresee a major problem" in bridging the gap with the resort on the voluntary separations.

Pledging that the BHMA will "not be unrealistic and unreasonable" over its position, the TUC leader said the differences and "excitement" could have been avoided if both sides had met prior to the exchange of their proposals.

"I think the reason for the difference between the proposal of the BHMA and the proposal from the [Grand Lucayan Board] is due to the fact we had no meeting prior to the figures being formalised," Mr Ferguson told Tribune Business.

"The chairman, Michael Scott, wrote me a letter and said he would first calculate the numbers from their side and then he wanted me to send our proposal through. He said we would then meet and discuss the proposals. That never happened.

"Then I saw in the paper he was saying our figures were high and extravagant. That was actually unfair to us, because he agreed to meet before a decision was made on the figures and, once we both agreed we'd both sign off."

The TUC leader said there were also gaps in Bahamian law as it related to voluntary separation, which he suggested could also be causing confusion. "The Board seems to have taken the view that the Employment Act applies," he told Tribune Business.

"But there's no provision in the Employment Act for voluntary separation, and no provision in industrial agreements for voluntary separation. No union in The Bahamas has an agreement that you will find makes provision for voluntary separation. It's a creature that's negotiated between employer and employee."

Mr Ferguson said he and Mr Scott met for the first time on Monday afternoon, and agreed to further meetings and contacts "to see where the differences lie".

"I don't foresee a major problem," he told Tribune Business. "There is common ground we can agree on, and we are willing to review the voluntary separation packages with the chairman to see how best we can come to an agreement that will be beneficial to the management and supervisory employees at the Grand Lucayan and the hotel.

"The idea is not to propose something that is unrealistic or unreasonable. We have had a separation package with the Hotel Corporation [which Mr Scott also chairs] before. This is not the first time. The system we proposed is consistent with that. We did not deviate from that."

That refers to the compensation paid to BHMA members who left the former Radisson Cable Beach resort (now the Melia) when it was owned by the Government. Mr Ferguson said the union's Grand Lucayan offer had been modelled on this, plus the recent BPL voluntary separation exercise.

However, the Government will be especially keen to minimise the Grand Lucayan voluntary payouts given its goal of keeping the taxpayer's exposure and liabilities as low as possible - especially given the controversy and criticisms that accompanied its $65m purchase of the property.

And Mr Scott previously put both unions on notice that "misconceived claims" will not be entertained given that "public money" - meaning the Public Treasury and Bahamian taxpayers - will finance the payouts.

Still, Mr Ferguson added yesterday: "There is no reason we can't many any reasonable adjustments that are necessary to bring resolution to the matter. Based on the conversation I had with the chairman, he seemed to be open to resolving the differences with a view to resolution.

"We feel very strongly that once both sides meet, which we will do shortly, we can sit down and do a complete analysis of the whole situation. It's in the interests of both sides to reach agreement. They're trying to sell the hotel and bring it up to a certain standard. We have an interest in that, but also have the members' best interests to look after.

"There just needs to be a meeting between the parties, and we will come to an amicable agreement. I then have to take it to my members, we will ratify it and move on. This is nothing new; we have done it before. Once the proposals were exchanged we ought to have met, come to an arrangement and ironed out any differences. This could have happened before all this excitement."