By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent trade union yesterday asserted workers are "backing the Government 100 percent" over proposed redundancy protections to stop "everything being cancelled" when firms "go belly-up".

Obie Ferguson KC, the Trades Union Congress (TUC) president, told Tribune Business the Government has finally "come around" to the position he and other labour leaders have been advocating for 15-20 years with plans to mandate that employers pay a "bond" or finance some form of "redundancy insurance" for their staff so that the latter's benefits are covered in a corporate collapse.

The proposed 'termination pay' security is among a package of labour law reforms due to be discussed at Town Hall meetings in New Providence tonight and Grand Bahama tomorrow. Bahamian employers have already voiced strong opposition to the idea, branding it as "dangerous" and "untenable" given the extra cost burden it threatens to inflict following multiple expense rises in recent years.

Companies have also warned that implementing such a measure will act as a deterrent to hiring and job creation, while some have called for it to only apply to "bad" employers. Mr Ferguson, though, told this newspaper that "we just need to be more sensitive when dealing with working people" and the potential plight they and their families face when an employer suddenly collapses and/or falls into liquidation.

While conceding that companies must operate and "make a profit", he countered that they have "an obligation to what is reasonable" during times when the business is doing well and set aside monies to help workers' termination pay and other due benefits should the unexpected happen.

The TUC president also suggested there should be no discrimination between so-called 'good' and 'bad' employers, and reiterated his long-voiced position that "$260 per week is a no-no as far as we're concerned" when it comes to the weekly minimum wage. He and the umbrella union have been pushing for a $90 per week, or 34.6 percent increase, to $350 a week.

"We're backing the Government 100 percent; we're supporting the Government 100 percent on that issue," Mr Ferguson told Tribune Business of the 'redundancy insurance' concept. "That's something we are glad they have accepted the position we have been advocating. For about 15-20 years we've been trying to get that in. They've come around, and are at least giving it some serious attention.

"If you recall, that was a position we had advocated several years ago from the Commonwealth of The Bahamas Trades Union Congress. We took the view that, with most of these companies that go belly up, there's no protection for the workers.

"While these companies are making money and doing extremely well, we said 'x' amount has to be put into an escrow account or redundancy fund. What we're saying is that it just seems reasonable that, when a company goes belly up or goes into liquidation, when it goes into liquidation that sometimes takes years to be resolved," Mr Ferguson added.

"In the meantime, we know what happens to the workers who are affected. The home mortgage is gone, the car payment is gone, any medical assistance or insurance is gone, and the children's school fees are gone. Everything is cancelled and the worker has to start over again; they are struggling unless they find another job with equal pay quickly."

The Government is eyeing the proposed redundancy 'bond' or insurance as a way to cover employee termination pay and other benefits when a company suddenly closes down or ceases operation, and/or it becomes insolvent and goes into liquidation. However, in any liquidation the employees are normally at or near the front of any creditors' queue - usually second behind the Government and its taxes.

Mr Ferguson first called for a national 'redundancy fund' to be set up in the wake of the Royal Oasis' abrupt closure in September 2004 following hurricanes Frances and Jeanne. Some 1,200 Bahamian staff lost their jobs, while Driftwood (Freeport), the property's operator, fled the jurisdiction with around $22m in storm insurance proceeds and leaving massive multi-million liabilities - including to the workers.

"We say that provisions must be out in place," the TUC president said yesterday. "We continue to support it. I am satisfied that the 200,000-plus workers here in the country support it. They have given tacit approval to the view advanced to the public. It makes sense and we're going to continue to pursue this. It's a major item on our agenda.

"We'll do what we have to do as a collective to ensure it comes into effect. It's [redundancy insurance] really necessary. It's really a part of the workers' struggle. It's a part of their economic well-being, part of what is necessary to maintain a family for a reasonable period of time following redundancy during which they have to go out and find new employment.

"When it comes into effect, sudden termination and redundancy will not have a devastating effect on the family because they do not have any money. Sometimes employees are not even aware that their employer is about to close. Sometimes they find out it's closing when they report to work," Mr Ferguson continued.

"The idea is that it's necessary for the protection of the family. We have to revise our laws for this type of situation. We are not going to abandon that. That's a major part of our existence. I think it will be very important and very significant because there's a number of people who are suffering as a result of the closure of their companies and don't have the funds to hire an attorney or labour advocate."

Mr Ferguson did not identify any specific recent cases where employees have not received their due severance pay and other benefits upon their employer's closure or termination. As for employer concerns about an additional cost burden being heaped upon them, he added: "What we are saying is whether you are good or bad, there's an obligation to do what is reasonable.

"We understand companies have to operate to make a profit. I don't have a difficulty with that, but while they are doing it and doing well, and the labour workforce is contributing to that success, why would you not make provision in case things go belly up?

"It seems logical to me. We just need to be more sensitive when dealing with working people. They don't have the means, don't have the clout; they don't have the clout to do anything... We're not suggesting that companies have an obligation to keep you employed for life, but they should give you a reasonable period of time to assess the situation and find a balance. It's a two-way street."

Odecca Gibson, executive director for the Bahamas Hotel Restaurant and Employers Association, which acts as the sector's bargaining agent in industrial negotiations with trade unions, recently branded the requirement for businesses to pay a "bond" or finance some form of "redundancy insurance" for their workers as "perhaps the most controversial" of the Government's planned labour law reforms.

Addressing the Bahamas Hotel and Tourism Association's (BHTA) quarterly directors meeting, she argued that resorts, tourism operators and the entire private sector "are literally left defenceless" because no information has been provided on how such redundancy protection will be implemented or operate in practice.

Warning that time is running out for the Bahamian business community to challenge the proposal, Ms Gibson said the proposal will heap another "unnecessary cost burden" on employers - many of whom are struggling to survive.

And she also cautioned that imposing a redundancy "bond" or insurance will effectively act as a tax on employment, potentially deterring companies from hiring at a time when the number of unemployed workers increased by almost 9,000 over the seven months to January 2025. The requirement, if implemented, would likely force companies to set aside thousands of dollars.

"What is being contemplated by the Government of The Bahamas is to introduce a bond or insurance for businesses to ensure that employes receive redundancy or termination benefits when the employer closes down or shuts down its business or goes into insolvency," Ms Gibson said.

"Our specific queries were who will manage this process? How will employers be assessed to determine what types of contribution will they make to the bond, because they are using the term 'insurance'? When the bond assessments are done and submitted to the Government of The Bahamas, will those funds find themselves in the consolidate fund or be separated?

"We all know that if the sums go into the consolidated fund they are lost, so the objective of protecting the worker will ultimately be lost because then you will have to go to the Government of The Bahamas to seek the compensation that these supposed employees will have lost as a result of the redundancy exercise or insolvency process."