The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A trade union leader has criticised the lack of consultation over the transfer of the Melia Nassau Beach Resort’s 1,000-strong staff, and their employment contracts and rights, to the China Export-Import Bank.

Obie Ferguson, the Trades Union Congress’s president, told Tribune Business that both the Department of Labour and unions representing Melia staff should have been given advance warning of the transfer to ensure the process went “smoothly”.

Warning that uncertainty could result in “unanticipated consequences” for both employer and staff, Mr Ferguson said unions and the Government had to become “more assertive with, and more responsive to” multinational companies entering the Bahamas to do business.

Given that such entities tended to bring their own culture with them, the TUC president argued that they needed to meet with both government and trade unions to ensure all parties started their relationship ‘on the same page’.

Mr Ferguson was speaking after Baha Mar’s receivers, the Deloitte & Touche accounting firm, informed Melia staff via a February 10, 2017, letter that they had a new employer.

The letter, a copy of which has been obtained by Tribune Business, informs Melia employees that they have been transferred from Cable Beach Resorts to Perfect Luck Employer (No. 1) Ltd.

The latter is an affiliate of the special purpose vehicle (SPV) created by China Export-Import Bank to purchase Baha Mar’s assets from the receivers, and has inherited all the benefits and entitlements owed to Melia staff.

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, told employees that the sale of Baha Mar’s assets to the SPV, Perfect Luck Assets Ltd, was completed on September 27, 2016.

As a result, Mr Winder said the Melia was “under new ownership” - that of the China Export-Import Bank’s SPV, which had reached an agreement with China Construction America (CCA) to complete Baha Mar’s physical construction.

“By operation of law under Section 72 of the Employment Act 2001, your employment continues without interruption, and we wish to inform you that Perfect Luck Employer (No. 1) Ltd (a subsidiary of [the] SPV) is your new employer,” Mr Winder told Melia staff.

“Pursuant to section 72, all of your accrued employee benefits and entitlements have been assumed by Perfect Luck Employer (No.1) Ltd.”

The letter concludes by asking Melia staff to consent to their ‘employment’ transfer by signing and returning the letter to Mr Winder.

The latter’s letter to the employees is also signed by a Perfect Luck Employer (No. 1) Ltd director, Mark Munnings, a Bahamian accountant and fellow Deloitte & Touche (Bahamas) partner who works with Mr Winder.

Mr Winder confirmed the letter’s contents when contacted by Tribune Business, and said the transfer of the Melia employees - together with their benefits and rights - was part of the ‘first Baha Mar sale’.

This sale was solely intended to move Baha Mar’s assets out of receivership through their acquisition by China Export-Import Bank, the project’s secured creditor, which used its Perfect Luck Assets Ltd SPV to effect the transfer.

“You must remember there are two sales,” Mr Winder said. “The first was to Perfect Luck, and that first transaction has been completed. That [the Melia employees] was a Perfect Luck transaction.”

The ‘second sale’ is from Perfect Luck Assets Ltd SPV to Baha Mar’s new owner, Chow Tai Fook Enterprises (CTFE), a deal which, although agreed, will not close until late 2017 when CCA has completed the project’s construction.

Some observers, though, are likely to question why the 1,000 Melia employees have been transferred to Perfect Luck Employer (No. 1) Ltd, rather than have CTFE as their new employer.

Mr Winder, though, said that because the Melia had been the only Baha Mar resort to remain in operation throughout the receivership, it - and its staff - had to be treated differently.

“For the most part, Melia, as an operation, existed during the receivership period, and after the receivership period still exists as an operation,” he explained. “Melia has been dealt with differently from the rest of Baha Mar.”

Graeme Davis, president of CTFE (Bahamas), confirmed in a statement to Tribune Business that the employer for Baha Mar’s 1,500 new staff will be a Bahamian subsidiary of the Hong Kong-based conglomerate, not the SPV.

He declined to comment on the alleged stroke suffered by CTFE’s chairman, Dr Henry Cheng, but said any personal issues would not impact completion of Baha Mar’s purchase.

“I can confirm he remains in full control of the company,” Mr Davis said of Mr Cheng, “and it has no impact on the sale of Baha Mar to CTFE.”

Mr Ferguson, meanwhile, said the trade unions were operating as if their existing industrial agreements with the Melia’s original holding company, Cable Beach Resorts Ltd, were still in effect.

The latter was part of the corporate structure set up by original developer, Sarkis Izmirlian, and Mr Ferguson said “the implication” of Mr Winder’s letter was that the industrial agreements had been transferred to Perfect Luck Employer (No. 1) Ltd.

“It doesn’t spell it out,” the TUC president added of Mr Winder’s letter, “but from a legal standpoint that is the position we are adopting; that all the benefits and collective agreements are an agreement of statute.”

Mr Winder did not comment on whether the industrial agreements had been transferred to Perfect Luck Employer (No. 1) Ltd, but Tribune Business sources confirmed this was the case.

Melia employees are represented by two trade unions, the Bahamas Hotel Managerial Association (BHMA), which acts for middle management and is affiliated with Mr Ferguson’s TUC, and the Bahamas Hotel, Catering and Allied Workers Union, which looks after line staff.

“A letter of this nature ought not to have gone out without the Minister of Labour and union being consulted,” Mr Ferguson said of the February 10 document, “if you’re talking about things being done in a co-operative way, and the goal was to maintain good workplace relations.

“We don’t object to the transfer, as the whole objective was for those workers to be employed, but for it to be a sustainable situation there ought to have been consultation.

“In the absence of consultation, you could have unanticipated situations where consequences flow. The lack of communication can sometimes cause it. I’ve been in contact with the Department of Labour and Registrar to let them know what my views are.”

Mr Ferguson said the Bahamas needed to alter how it dealt with multinational corporations that came it its shores, adding: “I think labour has to become more assertive and more responsive to these nuances that are coming on board as a result of these multinational and transnational companies.

“Wherever they go in the world they impose their culture on local laws and local labour. The Minister of Labour and Department of Labour ought to become more proactive in engaging these parties to come together at a very early stage with these large conglomerates, so that there is some consensual understanding of how to move forward.”