Thursday, November 8, 2018
By NEIL HARTNELL
Tribune Business Editor
The Grand Lucayan's chairman yesterday said he is defending "the interests of 400,000 Bahamas residents" over staff payout demands that exceed the resort's offer by $4.6m.
Michael Scott told Tribune Business that neither of the two unions representing the Government-owned resort's workers had "seen the light" over their voluntary separation requests, which are double and triple, respectively, what the hotel is offering to provide.
While the Grand Lucayan's Board had "resolved to be fair" over the voluntary separation packages, Mr Scott sounded a warning that it will not be bullied or coerced into paying more than is due, saying: "It also has the courage to say no."
The attorney, who also chairs the Hotel Corporation, revealed that the Bahamas Hotel Managerial Association (BHMA), which represents the Grand Lucayan's middle management staff, was demanding a collective $5.4m payout for its members - double the $2.7m offered by the resort's board.
He also disclosed that the Commonwealth Union of Hotel Services and Allied Workers (CUHSAW), which acts for the line staff, was asking for "over $3m" - a sum near-triple the Grand Lucayan's $1.1m proposal.
The two trade unions are thus asking 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.
Mr Scott argued that both unions were failing to account for the Grand Lucayan's precarious financial condition, the weakness of the Government's finances, and the strained Bahamian economy in making their demands.
He added that he was "representing the public interest" given that it is Bahamian taxpayers who will be financing the voluntary separation packages through a sum the Government is eager to minimise as much as possible.
The Grand Lucayan chairman, standing by his assertion that the unions' demands are "extravagant" and "high", suggested that bowing to such payouts only risked further inflaming the "antipathy and scepticism" shown by many Bahamians towards the Government's original $65m purchase of the property.
While agreeing with Obie Ferguson, the Trades Union Congress (TUC) president and BHMA representative, that voluntary separation packages are not covered by the Employment Act or any statute law, Mr Scott said they had to be seen for what they were - a "gift" for employees who had effectively agreed to resign.
He revealed that the Board's payout offers were based on "the high-end of the scale under the Employment Act", while dismissing Mr Ferguson's argument that the packages should be based on those offered by Bahamas Power & Light (BPL) as akin to "comparing apples to tangerines".
Indicating that the Board was willing to proceed without any agreement with the unions, Mr Scott said it was planning to stage a "payout" for both managerial and line staff "on or around November 23". Those who want to leave will be able to claim their due monies, while those wishing to remain at the Grand Lucayan will stay.
Urging the unions to account for the financial plight of hotel and country, the Grand Lucayan chairman said: "I tried to explain to him [Mr Ferguson] that the Grand Lucayan hotel/casino, and the special purpose vehicle that holds it, is set up and holding an illiquid resort because of the actions of Hutchison Whampoa in neglecting the property contrary to the terms of the 1997 Heads of Agreement."
Mr Scott said the Hong Kong-based conglomerate breached clause 1.1 (d) of that deal, which required it to maintain the Grand Lucayan complex as a premier, high-end destination, through "a pattern of benign neglect over the previous 10-15 years".
He added that this was exacerbated by Hutchison Whampoa's decision to "export" the $85m in Hurricane Matthew insurance proceeds out of The Bahamas, rather than use them to repair the Grand Lucayan - an action he suggested had "ripped the country off".
Mr Scott said that, as a result, the Government had acquired a resort which had been "limping along" for almost two years since that hurricane. It had been left with few revenue-generating sources, with only the 196-room Lighthouse Pointe, convention centre and golf course earning income to sustain that property.
"Plus against that backdrop we have a country limping along with limited finances, under international scrutiny, pressure and stress, and everybody complaining about the cost of living," he told Tribune Business.
"I've told him [Mr Ferguson] that there's a huge amount of antipathy and scepticism towards the Government's involvement in this property in this case, and at times this scepticism verges on outright hostility.
"I'm representing the public interest, looking after the interests of 400,000 Bahamians, whereas you're looking after the interests of 90-100 persons. I've said to him that the Board has resolved to be fair, and it's never wrong to do the right thing," Mr Scott continued.
"I said we're doing the best we can with limited resources. Then he [Mr Ferguson] says: 'Well, you know, the whole issue of voluntary separation is a unique situation that is not governed by the Employment Act."
Mr Scott agreed with Mr Ferguson that voluntary separation packages are not covered under Bahamian law, explaining the rationale for the Board's calculation of the compensation it deems due to the 90 managerial staff and 100-150 line staff who wish to exist.
"Our position was based at the high end of the scale under the Employment Act, as if it were a termination, and we would agree voluntary separation packages using that as a barometer," the Grand Lucayan chairman explained.
"The whole rationale for acquiring the hotel was to save jobs. The point of voluntary separation is that people are not being terminated. Staff are free to withdraw their request to leave at any time."
He added that the BHMA's industrial agreement with the resort, which expired in 2014, restricted union members' benefits to what was stipulated in the Employment Act. And the union's efforts to seek similar packages to those offered in the past at the Bahamas Telecommunications Company (BTC) and BPL were dismissed as misguided.
"I said to him that was completely inapt," Mr Scott told Tribune Business of his reply to Mr Ferguson. "It's not applicable at all. In the case of those two government corporations there are organic business lines generating revenue streams and in come.
"We are a company that is operating under severe constraints, that in effect has been operationally hobbled. I said that you're talking about apples and tangerines, not apples and apples.
"I offered him $2.7m, and they wanted $5.4m. Plus there were a lot of holes in their [the BHMA's] accounting. They were looking for periods in excess of 12 months' compensation; in some cases 18-24 months," Mr Scott continued. "There was also some double dipping in their accounts. It really irritated me.
"I have him the benefit of our analysis, and hoped he would see the light and have a Damascene moment, but obviously Damascus eluded him."
Mr Scott told Tribune Business that the Government-appointed Grand Lucayan Board had gone through "a similar experience" with the CUHSAW union and its negotiator, the former PLP MP Pleasant Bridgewater, who had "come up with these enormous demands".
He argued that the line staff union was making "back claims" for unpaid gratuities and other payments it alleged had been due under Hutchison Whampoa's ownership, but said these had been rejected at the Court of Appeal.
"Unlike the management union they have no valid industrial agreement," Mr Scott said. "They're backstopping on top of the basic claims they might have under the Employment Act."
Ms Bridgewater, at a meeting held with Willie Moss, the Board's secretary, and Ellison Delva, its restructuring officer, had pushed "back claims" that were "unceremoniously knocked out" by the Court of Appeal.
"That's going nowhere fast," Mr Scott told Tribune Business. "Pleasant also claims certain ministers made promises to her members that their unverified claims - that went through the court process and were knocked out - will somehow be honoured in the political process.
"Neither the Prime Minister, Deputy Prime Minister or any other minister has told me that my fiduciary discretion as a director, or the discretion of the Board, is to be fettered in any respect. That cannot be right."
Mr Scott said the Grand Lucayan Board was planning to hand out the voluntary separation package payouts "on or around November 23", enabling those workers who want to exit to go.
"Our position is as follows," the Grand Lucayan said of himself and his fellow directors. "The Board has resolved to be fair, and in all the circumstances it will be fair. It is committed to doing the right thing, but also has the courage to say no and to exercise its discretion, balancing the interests of the few against the larger public interest, and to take into account the economic predicament this hotel finds itself in and the limited resources the Government can allocate while we discharge our primary mandate of finding a qualified investor for the resort.
"I'm not going to let anyone blackmail me. That's not happening. Nor are the Board. I can say to you I have the full support of the Board and, I believe, the Government. People are complaining about the cost of electricity, and the cost of this and that. We don't live in a vacuum and there has to be some sensitivity to the public interest. All my directors feel this way."