The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The hotel union’s president says KFC’s decision to lay-off 35 workers exposes how “the chains” that bind the Bahamian economy together have either been weakened or broken by COVID-19.

Darrin Woods, the Bahamas Hotel, Catering and Allied Workers Union’s (BHCAWU) chief, told Tribune Business the fast food franchise’s action highlighted just how dependent many industries are on the tourism industry and the subsequent effects of the fall-out from that sector’s tepid re-opening.

All 35 workers impacted are BHCAWU members, and Mr Woods said he understood those affected have been sent home on temporary furlough for 12 weeks. Once that period expires, KFC and its owner will reassess and determine whether to move to full severance payouts and permanent terminations.

Restaurants Bahamas, the Bahamian Kentucky Fried Chicken (KFC) franchise’s owner/operator, in a statement on Friday blamed a combination of “the unprecedented economic slowdown” caused by COVID-19 and the government’s 10pm nightly curfew for the move to cut its more than 360-strong workforce by almost ten percent.

The franchise had typically operated until midnight pre-COVID, but the curfew has effectively cost it some 21 operating hours per week to reduce both revenues and staff working hours. Restrictions on indoor or eat-in dining have also cut into earnings for KFC and rival fast-food and restaurant businesses.

“For almost a year now the curfews imposed on New Providence have severely impacted sales and revenue. We have made adjustments throughout this pandemic in order keep everyone employed, but unfortunately we now find ourselves in the position where this very difficult move is simply unavoidable,” said Nina Maynard, Restaurants Bahamas’ human resources director.

Restaurants Bahamas, which is ultimately part of businessman George Myers’ Myers Group, which owns other local fast-food franchises, said the early closures (likely 9pm) caused by the Government’s curfew mean it “loses an entire segment of business” and cannot roster its staff for their contractual days and hours as set out prior to the pandemic.

It added that efforts to lobby the Government for an extension of the curfew to later at night, given that COVID-19 infection rates and cases have declined in recent months, were unsuccessful giving it little choice but to implement the lay-offs across its nine locations.

Mr Woods said KFC’s move meant no industry where the union’s members are present has been spared by the pandemic. “KFC was the only area not targeted by lay-offs or furloughs previously,” he told this newspaper. “It now means that all the areas we represent have been infiltrated by lay-offs.”

Confirming that the franchise had provided him with the same rationale for the workforce downsizing, Mr Woods said the curfew meant KFC was “unable to operate at full capacity” while the Government’s restrictions also confined it to just drive through and take-away operations.

However, he argued that the job cuts also reflected how the hotel and tourism industry’s ongoing weakness was being felt at all levels of the Bahamian economy. Mr Woods said job losses and income cuts in that sector were resulting in much-reduced discretionary spending that was being felt by KFC and multiple other companies throughout the country.

“Everything is connected,” he told Tribune Business. “One way or another it’s connected or there’s a common thread running through it. Persons in the hospitality industry patronise other businesses in the country, and those workers in those businesses then patronise other companies. It’s like a chain, and when one link in the chain breaks it weakens the whole chain.

“That’s why it’s so important for the industry as a whole to open up because it has a trickle down effect. These are the businesses that are really suffering. People are unable to frequent these places like KFC as often as they can. It does say who patronises these businesses.

“All areas are impacted as a result of it. I was in a store, a clothing store, and the only people in there were my wife and I besides the two employees. That says everyone is being affected. Every time you turn around it’s something different,” Mr Woods added.

“We have to keep plugging at it until we can get the tourism industry up and running. We have got to be able to jump start it. But it’s very hard to get on your feet if you’re struggling against those headwinds. It’s very hard to get up, and the industry is facing some very strong headwinds. These body shots; ain’t nothing a prize fighter can to do to survive them.”

Mr Woods said KFC had indicated to him that the 35 impacted workers would be recalled if the company was able to operate at pre-COVID-19 hours, adding that the employees’ contracts did not allow the company to operate a ‘one week on, one week off’ system.

He added that KFC had yet to pay full severance packages, although management had suggested a decision on this would be taken when the 12-week furlough expires. As a result, Mr Woods said it amounted to another group of Bahamian workers going home without pay and having to join the Government’s social security lines.

The hotel union chief said he was still negotiating with KFC over the deferred Christmas bonus and ham/turkey, and added: “I know one thing we did say to them. They’ve had some good years, and now it’s time to see what they can do for the employees in these bad times. Increases in salaries and benefits didn’t happen, and we believe something should have been to hold on to what they had.”

KFC’s move comes as little surprise given that the franchise warned in late 2020 that it was “in absolute survival mode” and may have to close locations or “even shutdown” with revenues off 50 percent. Ms Maynard, the human resources director, in a December 1, 2020, letter wrote: “The ongoing emergency restrictions continue to substantially challenge the operations of Restaurant Bahamas Ltd.

“We have experienced a 50 percent decrease in revenue from last year resulting in persistent, substantial operating losses since April 2020.” Margins in the fast-food business are normally thin, and she was backed up by David Wenn, Restaurants Bahamas chief financial officer.

He wrote: “The unprecedented impact of the COVID-19 pandemic on the economy of The Bahamas is having a devastating effect on the financial stability of Restaurants Bahamas. To date, total sales are down and we see no positive movements in these numbers.

“This has necessitated the need for us to do a concentrated and intense review of every facet of the business including all financial commitments. The serious financial concerns resulting from government lockdowns and restrictions have not only inflicted unsustainable conditions on the company but also bring the continued existence of KFC into question.”