The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

“Veteran” sales agents have lost their ‘breach of contract’ appeal against the Bahamas Telecommunications Company (BTC), the Court of Appeal finding they effectively consented to giving up 45 per cent of their revenue earnings.

Appeal Justice Jon Isaacs, delivering a unanimous Appeal Court verdict, found that existing BTC’s phone directory sales agents were not coerced into signing the 2003 contracts that stipulated they would retain just 55 per cent of their advertising accounts.

And, given that a memo from Claude Hanna, BTC’s senior manager for directory publications, had informed them of the new revenue/account split prior to the contract signing, Appeal Justice Isaacs found the ‘breach of contract’ claim “unsustainable”.

He and his fellow Court of Appeal judges, Dame Anita Allen and Stella Maureen Crane-Scott, backed the initial Supreme Court verdict, in which then-justice Claire Hepburn said of the agents: “The plaintiffs were free to elect not to continue selling advertisements for BTC on the terms set out in the April 17, 2003 contracts.

“What they were not free to do was to insist on retaining their employment on their own terms, or on terms other than those lawfully inserted in the contract by BTC.”

Three BTC phone directory sales agents, Clarice Butler, Valerie Stubbs and Darren Smith, initiated the ‘breach of contract’ action in 2004 as “representatives” of their “veteran” colleagues - effectively making it a ‘class action’ lawsuit.

Justice Isaacs found that their job was to solicit advertising from Bahamas and south-Florida based businesses for the annual phone directory and Yellow Pages, and they were employed on an annual contract whose terms “hardly changed” from year to year.

Contracts started on February 1 each year, and each sales agent normally received all the advertising accounts they had worked on “or enhanced” the previous year. They then had the task of obtaining renewals and/or new business from corporate Bahamas.’

“By way of remuneration, in respect of renewals the [sales agents] were paid a commission of 15 per cent of the revenue generated by any existing accounts which were renewed, and in respect of newly created accounts or increased sales to existing clients, a commission of 27.5 per cent of the new or increased revenue thereby generated,” Justice Isaacs wrote.

“Thus, the more assiduously an agent applied himself to his accounts, the possibility for greater gains materialised. It could be said, therefore, that by the sweat of their brow they reaped the harvest.”

However, the three “veteran” sales agents alleged that this happy arrangement was disrupted in November 2002 when BTC decided to hire extra sales agents.

Arlington Miller, an industrial negotiator, complained on their behalf that BTC “had doubled the complement of sales agents”, triggering meetings between the “veterans” and the communications provider’s management on how accounts would be split.

The Court of Appeal judgment is silent on why BTC allegedly “doubled” its directory sales agent workforce. However, at that time, the company was still 100 per cent government-owned, and the administration had changed just six months earlier in May 2002, the first Christie government having been elected to office.

Following a meeting that involved then-BTC chief executive and other management members, and the “veteran” sales agents, the latter alleged there was an agreement that they would each surrender 17 per cent of their existing accounts to the new hires.

The trio alleged that 17 per cent was “the accepted practice” whenever new sales agents were hired, but BTC denied there was any agreement.

Still, Justice Isaacs said: “The appellants believed that this proposal was accepted by the respondent, because the respondent [BTC] issued the revenue accounts to the appellants for the new contractual year, that is, in February 2003, minus the 17 per cent.”

An internal BTC memo, though, written by Tellis Symonette to then-internal legal chief, Felicity Johnson, said the 17 per cent allocation had proven unsatisfactory to the new sales agents.

“The new sales agents complained about this arrangement and, as a result, we were directed to reallocate revenue to ensure that all agents received an equal share,” Mr Symonette wrote.

The three “veterans” representing the class alleged that, as a result, BTC had taken the “unilateral decision” to reallocate all advertising accounts to their detriment.

However, other BTC internal documents purported to show meeting minutes where it was said that the “veteran” sales agents had been warned that the 17 per cent figure “may not be final”.

This ultimately resulted in Claude Hanna’s March 19, 203, memo in which he told all BTC sales agents - new and old - of the 55/45 per cent account and revenue split in favour of the latter.

“The appellants allege that this 45 per cent-55 per cent split of existing revenue was imposed by the respondent, with the ‘Newbies’ receiving 45 per cent of the existing revenue which would normally have been assigned to the appellants as a matter of course,” Justice Isaacs wrote.

He also noted Mr Hanna’s admission that the “veteran” sales agents “earned less in 2003 than they did in 2002” as a result of the account split, with the trio bringing the action claiming to have lost “more than 50 per cent of their previous annual income”.

Dismissing the agents’ claim to have any property interest in their employment contracts, Justice Isaacs said it was clear these were owned BTC, and the company could assign advertising accounts “as it deemed fit for maximum revenue potential”.

However, he found that such reassignment depended on two factors - a sales agent’s past and present performance, and this could only happen during the final months of the contract’s “canvass period”, which lasted from February 1 to September 30.

Justice Isaacs said neither of these factors was in play when it came to the case brought by the “veteran” agents, finding that the account reassignment instead had “everything to do with addressing the complaints of the Newbies and ensuring as even a split of the accounts between the Vets and the Newbies as possible”.

However, Justice Isaacs said the 2003 employment contract between BTC and the sales agents had yet to be signed when the accounts were assigned.

While the “veterans” expected that the 17 per cent ‘reallocation’ term would continue in their new contract, Justice Isaacs’ said Mr Hanna’s March 19, 2003, memo “would have disabused them of that notion, as it laid out the revised split of the accounts.

“Thereafter, when they were presented with the 2003 contracts, they signed them with the knowledge that the 17 per cent no longer applied, and the 54/45 split obtained for the 2003 contract period,” he concluded.

“The evidence of the Vets, who gave evidence before the judge, reveals they all signed in the knowledge the accounts were to be assigned 55/45, and that when they signed they were not forced to do so.”

As a result, Justice Isaacs ruled the ‘breach of contract’ claim “unsustainable”.

“The memorandum related to an anticipatory event; that is, the entering into of the 2003 contract,” he said.

“The recall of the accounts was preparatory to their assignment under the new contract.”

As a result, Justice Isaacs said the case was “without merit or substance”.