By ANNELIA NIXON

Tribune Business Reporter

anixon@tribunemedia.net

Bahamian employers yesterday argued that only tax delinquents and companies in breach of other financial obligations should be forced to provide financial security in advance for staff’ terminations.

Kendrick Delaney, owner of The New Duff, told Tribune Business: “If the concern is unpaid staff when a business shuts down, then let’s focus on the real risk: Companies that don’t file regularly, skip VAT or NIB payments, or show a pattern of poor financial management. Those are the ones that should be mandated to post a bond. And, if they improve, remove it.

“At The New Duff, even through global economic storms, few rebates and limited government funding, we work hard to meet every standard, pay every tax and prove our commitment to our team of amazing staff.

“Reward the businesses that strive to do right, and put the oversight where it belongs. Each time a new tax is considered - let’s call a thing, ‘a thing’ - ask yourselves: ‘Am I clipping the wings of the flamingos just to hold a few pesky pigeons to task?’”

Molly McIntosh, the Bluff House Beach Resort and Marina’s top executive, warned that requiring companies to pay a “bond” or finance some form of “redundancy insurance” for their workers threatens to deter them from hiring and would lead to both higher unemployment and higher costs passed on to consumers.

“I am afraid if we continue adding on cost after cost to businesses, unemployment will go up, as well as our prices to the consumers which, in turn, may decrease the amount of business to the resorts and trickle down business to smaller local businesses,” Ms McIntosh said. “It just seems like the Government is taxing and requiring more and more wasted time and money from businesses to stay in operation.”

While supporting financial security and “fair treatment” for employees, the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC), voiced its concerns over “the potential economic impact, lack of clarity and absence of stakeholder consultation on this proposal”, and has called for a full consultation document or ‘White Paper’ to be published on the topic.

“At present, no detailed framework or policy paper has been released outlining how this system would operate, how contributions would be calculated, or what safeguards would be in place for employers — especially small and medium-sized enterprises (SMEs),” the Chamber said.

“Moreover, we caution the Government against adding additional cost burdens on businesses already facing high operational costs and inflationary pressures, coupled with a paradoxical unease of doing business.

“There is also uncertainty around calculation and enforcement mechanisms, lack of differentiation between high and low-risk employers or industries, disproportionate impact on MSMEs (micro, small and medium-sized enterprises) and the potential deterrence to local and foreign investment. These can be detrimental to the business community and stifle continuity.

“In light of these concerns, the Chamber is calling on the Government to publish a full consultation document or ‘white paper’ outlining the proposed bond scheme; its structure and intended implementation timeline; engage in open dialogue with the private sector, including formal consultations and technical working groups, commission a full economic impact assessment to evaluate potential unintended consequences, including effects on employment, cost of doing business and competitiveness; and consider alternative or risk-adjusted approaches that achieve worker protection goals without introducing one-size-fits-all obligations.”

Robert Farquharson, head of the Ministry of Labour’s special projects unit, declined to comment on the proposed redundancy bond that is designed to be a safety net for employees in case a business shuts down or falls into insolvency. He added that with town meetings on this and other proposed legal amendments scheduled in the near future, he does not want to pre-empt any discussions on labour reforms.

“You’ll have an opportunity to express concerns, the recommendation, and then I’m sure we’ll be able to answer any questions regarding that at that time,” Mr Farquharson said. “I would not want to speak outside of that town meeting on any of the recommendations.”

The Ministry of Labour and the Public Service will hold legislative reform town hall meetings. They will be at 6pm on October 7 at the National Training Agency in New Providence, and on October 8 at the Ministry of Labour and the Public Service Winn Building in Grand Bahama at the same time.

Proposals for a “redundancy” bond or insurance are nothing new, however. Obie Ferguson, the Trades Union Congress (TUC) president, has called for the creation of a National Redundancy Fund to be established ever since the Royal Oasis’s last owner shuttered the resort in 2004 and exited the country leaving behind some $22m in liabilities - including unpaid staff termination pay and other benefits.

Mr Ferguson has argued that The Bahamas mandate that foreign investors coming to do business here set aside what would effectively be a performance bond - held in escrow - that could be used to compensate employees and other creditors should they ultimately flee this nation and take all assets and funds with them. The latest proposal is strikingly similar to this.

Reforms such as extending maternity leave to 14 weeks have also made it through from the ‘White Paper’ to the upcoming October public consultation. Accommodations have also been made for adopting and breast-feeding mothers, while it is proposed that fathers will be able to take two weeks’ paternity leave “once every three years”.

Other changes to the Employment Act propose introducing “mental health wellness leave” of three unpaid days per annum, while a paid daily work “break” will also be mandated. And, while an employer and employee can agree to the latter working up to 10 hours per day, overtime has to be paid for two hours as this exceeds the standard eight-hour day.

A requirement for a minimum eight-hour break between shifts is also included in the proposed reforms. The Employment Act revisions also “eliminate” the current distinction in section ten concerning overtime for workers who receive the majority of their pay in tips, while managers and supervisors will now “be given time off for overtime hours worked”.

As for the Industrial Relations Act, the proposals include strengthening the “conciliation process” involving employer/employee disputes by giving the Department of Labour “more power to address those matters that really have no merit proper to being referred to the minister and, subsequently, to the Industrial Tribunal.