The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s latest proposed labour law amendments have been slammed as “irresponsible governance”, a well-known businessman warning: “Don’t legislate the private sector out of business.”

Robert Myers, a principal in newly-formed civil society group, the Organisation for Responsible Governance (ORG), urged the Christie administration and trade unions to focus on making the economy more competitive instead of “going after business”.

He argued that doing so would have a far greater impact on “improving job security” than the measures the Government is seeking to push through the National Tripartite Council and Parliament in the wake of Sandals’ mass termination exercise.

The Department of Labour served notice of the Christie administration’s intentions to the other two sides represented on the Tripartite Council - the private sector and the trade unions - via a notice issued to them on August 30.

The Christie administration wants to make it mandatory for employers to provide two months’ (60 days) notice to itself and the relevant bargaining agent (trade union) whenever they are about to make 10 or more workers redundant, with failing to do so becoming a criminal offence.

And, joining this proposal in the “emergency legislation” the Government wants to bring to the House of Assembly by September 30, the Government also wants to remove the Employment Act’s existing ‘12-year cap’ on severance/redundancy pay.

Such a move has long been demanded by Bahamian trade union leaders, while the ‘advance redundancy warning’ measure appears to be a “knee jerk” reaction by the Government to what occurred at Sandals.

While both proposals must be discussed by the Tripartite Council, in a bid to achieve consensus before they become draft legislation put before Parliament, the Government has made little effort to disguise its determination to move them forward.

However, both Mr Myers and Rick Lowe, an executive with the Nassau Institute think-tank, described the Government’s proposals as akin to “using a sledgehammer to crack a nut”.

Mr Lowe told Tribune Business of the measures: “It’s another nail in the coffin that we know as the private sector in the Bahamas.”

He added that the proposal to lift the ‘12-month cap’ on redundancy pay threatened to impose “astronomical costs” on the business community when some firms might need to downsize to survive.

And Mr Myers, the immediate past Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chairman, was even more forthright.

“If we keep this nonsense up, you’re going to put the country out of business. If you put the businesses out of business, the country will be right behind them and go out of business. That’s downright irresponsible,” Mr Myers told Tribune Business.

“How much can the private sector take? You can’t do that. You’re going to make it so bad for people to hire, lay-off and terminate people that you are going to kill-off industry.

“Don’t legislate the private sector out of business. We appreciate the Government wants to gain votes and protect workers, but don’t drive the private sector out of business. You are going to have less and less, not more and more. If that’s OK, keep throwing out the private sector and you’re going to have no more employees. That’s extremely short-sighted.”

Many in the private sector view the latest labour law reforms, especially the ‘redundancy notice’ proposal, as unwarranted government intrusion and interference into the affairs of private businesses, and how they manage their operations.

They also threaten to undermine labour market flexibility, and the flexibility of Bahamas-based businesses in general to restructure as necessary to ensure their survival.

Businesses are also likely to view the proposals as government over-regulation and overkill, and a ‘knee jerk’ response to the peculiar circumstances created by Sandals decision to terminate virtually its entire workforce to facilitate a $4 million renovation programme.

While the ‘redundancy notification’ proposal threatens to tie the private sector up in more ‘red tape’ and bureaucracy, plans to lift the statutory ‘12-month cap’ on redundancy pay will further increase business costs.

Both Mr Myers and Mr Lowe said the proposal contradicted recent promises by Prime Minister Perry Christie and other Cabinet ministers to reduce the cost, and improve the ease, of doing business in the Bahamas.

“I don’t understand quite why the Government is taking this position when the PLP said in its Charter for Governance that they understood the problems businesses were having, and would correct them,” Mr Lowe said.

“Instead, they’ve done a complete 180 degree turn on these pledges. At every turn, they’re making it more difficult for businesses, who are their tax collectors for VAT.

“Instead of forging a partnership, they seem to be out to destroy the private sector and any semblance of a market economy,” he added.

“They’re so upset that Sandals had the right to do this that they’re going to extremes to support the Bahamian worker.”

The main concern for many Bahamian businesses is unlikely to be the latest labour reform proposals by themselves, but rather that they add to a series of cost and regulatory impositions that have been heaped on the private sector in recent years.

Apart from Value-Added Tax (VAT), companies have had to contend with the likes of Tax Compliance Certificates, delayed VAT refunds and minimum wage increases within a narrow one-two year window.

Meanwhile, industries such as construction and service contract providers will likely face practical difficulties in implementing the ‘60 day redundancy warning’ provisions.

Mr Myers, who has business interests in these sectors, explained that construction was “cyclical”, with contractors frequently having to terminate workers when a project came to an end and there was nothing to replace it.

It was the same for services businesses such as his Caribbean Landscaping company, where clients frequently terminated or chose not to renew contracts, again requiring lay-offs.

Thus the effect of the Government’s reform proposals on these sectors would be an increase in the administrative burden, through numerous lay-off notifications, and costs associated with such terminations.

Mr Myers suggested that construction and service contract companies, as a result, might now have to include clauses in client contracts that prevent termination unless the latter agrees to cover the additional costs imposed by the Government’s reforms.

“That’s not tenable. It’s not a business transaction that works,” Mr Myers told Tribune Business. “You can’t get in the face of business. We’re not Gods. We don’t control our clients, and what’s going on in the world.

“This is above and beyond the fact that most of us in the private sector think the existing redundancy laws are excessive, overblown and so expensive.”

With foreign direct investment (FDI) dollars able to choose from multiple competing jurisdictions where they will earn the best returns, Mr Myers warned that the Bahamas could ill-afford reforms that may scare them away.

“If we want to improve business and job security, think about how to make the Bahamas more competitive, not less,” he told Tribune Business. “Let’s stop going after the private sector and think about how to move the country forward.

“If you don’t want to have a free market, and have a socialistic country that is run in a socialist way, you’re going to see an exodus of people.

“It’s extremely irresponsible to start killing a fly with a sledgehammer. Instead of looking at this particular issue and both sides of the coin, you’re going to react in a certain way because it’s politically popular to do so. That’s not responsible governance. You’ve got to be completely ignorant and short-sighted to think that it is.”