The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Trade unions yesterday urged that the Employment Act be changed to treat workers and their severance pay as leading, secured creditors when their employer goes into liquidation/bankruptcy, thus preventing a repeat of the “absolutely catastrophic and devastating” City Markets situation.

Unveiling the Trade Union Congress’s (TUC) proposed changes to the Employment and Industrial Relations Acts, Obie Ferguson, its president and a leading labour attorney, said the organisation was also proposing that all Bahamas-based companies create a ‘Redundancy Fund’.

This, he argued, would ensure that a pool of money to compensate redundant employees was available upfront. He dismissed the notion that this would create a further, untenable cost burden for Bahamian employers, suggesting that such a Fund would represent monies they paid out in any event.

Describing the continuing struggle by former City Markets employees to obtain the $3-$4 million in severance pay due to them as a “terrible scenario”, Mr Ferguson said this had been repeated several times in recent Bahamian history.

He referred specifically to the closures of Gladstone Farms and Freeport’s Royal Oasis hotels, two occasions where businesses had closed and their foreign owners exited the Bahamas without paying hundreds of Bahamian workers what was due to them in severance/redundancy pay.

And, given the ongoing City Markets saga, Mr Ferguson confirmed to Tribune Business that this latest case had motivated the TUC to recommend that the Government amend the Employment Act to treat redundant staff as priority creditors - placing them alongside the Government and its taxes at the front of the queue.

“The TUC recommends that in the event a company is bankrupt or in liquidation, the employee should be treated as a secured creditor, and his benefits prioritised similar to Government taxation,” the umbrella union body said.

It added that the amendment should be drafted following consultation between the Government, employers and the trade unions.

“It’s terrible. It’s a terrible scenario,” Mr Ferguson said of City Markets. “If you look at Gladstone Farms, it was the same situation. The hotel in Freeport, the Royal Oasis, the same situation.

“We’re suggesting that just like taxes for the Government, we consider it to be a priority.”

And the TUC president added: “ The City Markets situation is unsettling. It is not something that ought to have happened. We say the workers ought to be paid upfront.

“We think it’s very important. City Markets is an obvious example, the Royal Oasis in Freeport is an obvious example, and at Gladstone Farms they closed and the workers were left with no funds at all.”

In City Markets’ case, the now-closed supermarket chain’s 78 per cent majority shareholder, the Finlayson family, and their Trans-Island Traders vehicle, have been awaiting the proceeds from the sale of their leasehold interests in three store sites to Rupert Roberts’ Quality Supermarkets brand.

The deal is understood to have generated $3.5 million in proceeds to date, and could have been $5 million had the Finlaysons hung on to the Harbour Bay lease.

However, City Markets employees have yet to see a cent to-date, and various moves by the Finlaysons - mulling whether to convert the company into a temp agency, hiring out staff as needed to Mr Roberts, and proposing to base severance pay on reduced work weeks - indicate they are looking to minimise what staff will receive.

Asked about the impact of all this on City Markets’ staff, Mr Ferguson said: “It has been absolutely catastrophic. It has been devastating on those people. They’ve lost their income.

“The City Markets matter is a very serious matter. We take it very seriously. A number of workers are out of work, and can’t pay their school fees, rents and car payments.

“A number of their obligations are in arrears, permitting the creditors to walk in and take their homes, their cars.”

Even more controversial is the TUC’s proposal that “each employer should establish a Redundancy Fund”.

Mr Ferguson explained: “We’re suggesting that Redundancy Fund legislation be put in place where companies put up a sum of money upfront, so if they go belly-up the workers have something to claim against.”

When asked whether this would represent an unsustainable burden on Bahamian companies, Mr Ferguson replied: “Not really. It’s a matter of the Government introducing legislation, and a certain amount of money paid into that Fund.

“If the company makes someone redundant, they will pay it in any event.” The TUC president added that the Fund would also be able to earn interest, potentially reducing the burden of future payouts on employers.

When it came to the Industrial Relations Act, the TUC is recommending that it be amended to remove the employer’s right to revoke its recognition of a trade union.

The TUC also wants the balloting threshold to determine an Agency Shop to be lowered to 50 per cent ‘plus one’ additional worker - the same as the bargaining agent recognition threshold.