The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Supreme Court will likely have to determine whether ex-City Markets staff are entitled to one or both of their severance pay and pension savings, a spokesman for the workers yesterday saying he had been advised trust law “supersedes” the Employment Act.

Whanslaw Turnquest told Tribune Business that his attorney, Stephen Turnquest at Callender’s & Co, had informed him that beneficiaries of a trust structure - which is what the City Markets employee pension fund is - “cannot be disenfranchised” from what is due to them.

He was speaking after comments by Mark Finlayson, principal of City Markets’ 78 per cent majority shareholder, Trans-Island Traders, sent all parties concerned - including former staff and the Government - scurrying for their law books and attorneys yesterday.

Mr Finlayson suggested that based on Section 26 (4) of the Employment Act, former City Markets staff were entitled to receive either severance pay or their pension fund entitlement - but not both.

This was because the pension fund was designed as a non-contributory structure, where the staff paid nothing and 100 per cent of contributions were paid by City Markets.

The relevant section in the Employment Act states: “Where an employer provides a gratuity or non-contributory pension for an employee, the employee is not entitled to both redundancy pay and the gratuity or non-contributory pension, but the employee shall select the one which he prefers.”

But, in response, Whanslaw Turnquest said he had been advised by his attorney namesake that the severance pay and pension issues were completely separate, non-related matters.

In particular, Whanslaw Turnquest said the Callender’s & Co attorney had pointed to the fact that the employee pension fund was governed by a trust deed, which set out how it was operated.

“What [Stephen] Turnquest is saying is that the Trust Act supersedes the Employment Act, as you cannot disenfranchise a beneficiary from a trust under the laws of the Commonwealth of the Bahamas,” Whanslaw Turnquest told Tribune Business.

“He finds it difficult that the City Markets operators are saying they can disenfranchise a beneficiary whose obligation has already vested inside of the pension fund. The company deciding to pay severance or pension, either or, is not appropriate in this situation. You cannot disenfranchise a pension in no way, matter or form. If the worker decides to take his pension, that has no impact on the severance matter.”

Whanslaw Turnquest agreed, though, that the question of whether Trust law trumped Employment law, or vice versa, in the context of the City Markets employee pension fund, would have to be decided in the Supreme Court.

Agreeing that the law was “ambiguous”, he advised no former employee to sign a disengagement form where they agreed to accept one benefit or the other.

“The matter has to be clarified, and the law needs to be specific in dealing with the trust deed and trust matter of Bahamas Supermarkets,” Whanslaw Turnquest told Tribune Business.

Key issues to be determined, he added, were whether then trust deed had legal standing, and the legal/contractual obligations that City Markets, the company, had towards its pension beneficiaries.

Questions are also likely to be asked about how the attorneys advising the staff, and the Government - especially in the form of the Department of Labour - missed the Employment Act’s Section 26 (4) until it was pointed out by Tribune Business and Mr Finlayson.

Whanslaw Turnquest yesterday said he attempted to meet with director of labour, Harcourt Brown, on the issue, but instead saw his deputy, who merely handed him the relevant sections of the Act.

Mr Finlayson himself said he believed the Ministry of and Department of Labour were aware of the implications of Section 26 (4) and, although he had never discussed it with him, took Prime Minister Perry Christie’s comments that the issue needed to be settled in court as a sign he knew, too.

Whanslaw Turnquest yesterday said the staff and City Markets had held five reconciliation meetings at the Department of Labour in a bid to resolve their disputes, but not once was the Employment Act’s contents raised as an issue.

The outcome of those meetings, he added, was “a cooling-off period” agreed to all to allow City Markets’ Cable Beach store lease to be sold to Super Value - a move intended to raise cash to pay due severance.

And Whanslaw Turnquest said the Government had yet to respond to employee requests that it pay out 50 per cent of the severance owed to them itself.

This proposal was made in a meeting he attended in Parliament’s committee room following a staff demonstration outside the House of Assembly.

Present were the Prime Minister, Deputy Prime Minister Philip Davis, Foreign Minister Fred Mitchell and Labour Minister Shane Gibson.

The Government is thought reluctant to do this, because it would set a dangerous precedent whereby it would be required to pay severance pay to workers at every Bahamas-based company who closed its doors. This would create a ruinous drain on the Treasury.