The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Court of Appeal’s president yesterday pleaded for industrial peace at Baha Mar’s Melia resort, calling for a “good faith” resolution to the long-running dispute over worker gratuities.

Dame Anita Allen, in a unanimous verdict in favour of the hotel, called on management and the Bahamas Hotel, Catering and Allied Workers Union (BHCAWU) to “return to the table” and resolve a situation that almost caused an industry-wide strike during 2014’s peak Christmas/New Year tourism period.

“The only persons who will suffer as a result of this stalemate between the union and management of the resort relative to the payment of AI (all-inclusive) gratuities are the workers,” Dame Anita wrote. 

“It is therefore recommended that both parties return forthwith to the table and negotiate in good faith, and in a spirit of true co-operation, for the benefit of the workers and management, and in the interest of good industrial relations in the Bahamas.”

Dame Anita’s plea came in a ruling that upheld an earlier Supreme Court’s verdict, which found the Melia Nassau Beach Resort was not obligated to pay gratuities in the absence of an agreement with the union - as the bargaining agent for non-managerial employees - on the rate and distribution formula.

The verdict produced predictable reactions, with the union describing itself as “shocked and dismayed” and Melia’s Baha Mar owner “happy and encouraged by developments”.

Robert Sands, Baha Mar’s senior vice-president of government and external affairs, said of the ruling: “It reinforces that our position was of merit.

“We look forward to resolving this matter amicable, so our associates can benefit and work at the Melia continues, and we continue to grow occupancies and business for the country.”

Tribune Business sources yesterday said the Melia and hotel union had agreed a gratuity rate of 10 per cent, but still needed to finalise a mechanism for how this will work in practice.

“The parties have agreed to sit down and work out how it will be allocated,” one contact, speaking on condition of anonymity, revealed. “They have to finalise the actual breakdown, and how that 10 per cent is spread; what categories of employees get points to come up to the agreed 10 per cent.”

Darren Woods, the BHCAWU’s secretary-general, confirmed that negotiations with the resort were ongoing and that a 10 per cent gratuity rate had been agreed.

He told Tribune Business that the union was supposed to meet Melia management for further discussions yesterday, but these had been postponed after the parties were informed the Court of Appeal was ready to release its judgment.

“Our attorneys are still looking at it, but we were actually shocked,” Mr Woods said of the ruling. “I’m telling you we were shocked and dismayed. We’re sitting down, checking what our next move’s going to be. Until our attorneys fully digest it, our next move is kind of wait and see.”

He added that a 10 per cent all-inclusive gratuity rate had been under discussion from earlier in 2017, the Melia having increased the percentage from the initial 8 per cent when the former Christie administration was in office.

“There still needs to be an agreement,” cautioned Mr Woods. “We need to figures, know what the minimum rate is going to be, what formula they’ll be using to break down the gratuities they’re paying.

“At this point, we need to put our hands on it and put a formula in place. Ten per cent of what? Ten per cent of zero is still zero.”

The union’s secretary-general said that while it respected the Court of Appeal’s ruling, it still felt a contract had been in place which Melia had “unilaterally” varied.

“We are still trying to remain focused and encourage the employees, because they are feeling the brunt of what has happened,” Mr Woods said, describing Melia staff as “disenfranchised”.

Recalling the dispute’s origins, Dame Anita said in her ruling that it was sparked by Melia’s January 27, 2014, decision to convert the Cable Beach-based hotel from European-plan to an all-inclusive model.

This meant that guests would pay one all-in price for their room, food and beverage and activities, with the conversion mandating management and the BHCAWU to negotiate a new gratuity structure for Melia employees under the terms of the resort industry’s collective bargaining agreement (CBA).

This required gratuities to be based on “a per person guest per day value”, with rates and distribution to be agreed between the two parties. Dame Anita, though, noted that the last legally binding industrial agreement between the BHCAWU and the Bahamas Hotel Employers Association (BHEA), which acts for Melia and other hotels in labour negotiations, expired on January 6, 2008.

Melia initially proposed an 8 per cent rate, and the initial Supreme Court judgment said of the union’s reaction: “This offer was scoffed at by the union as first amusing and, later, irritating.”

The resort continued to pay the 15 per cent European-plan gratuity rate as negotiations progressed, arguing that this was “a temporary gesture of goodwill”. The BHCAWU, though, was “less charitable” in arguing that this was merely the continuation of a policy set by successive hotel managements to pay a 15 per cent gratuity for all-inclusives.

The impasse between the two sides came to a head 10 months later, when Melia concluded that the union “was simply an intransigent party with no intent of concluding negotiations for a gratuity structure for the all-inclusive plan”.

The resort informed the union on December 10, 2014, that it was “not contractually bound” to pay the 15 per cent gratuity on food and drinks consumed by Melia guests in the absence of an all-inclusive agreement.

The Melia then withheld the all-inclusive gratuities from staff the following day, placing the funds into escrow. This led to several episodes of industrial action by employees, culminating in the union’s Christmas Eve 2014 threat to take strike action that “would affect the entire island”.

Melia successfully obtained an injunction to block any industrial action, and Justice Roy Jones found that the resort was not contractually obligated to pay gratuities without agreement on the rate and distribution formula.

He also ruled that the gratuities were not part of the employees’ individual employment contracts.

Dame Anita, in supporting the Supreme Court’s conclusion, said Melia’s predecessors - the Radisson and Sheraton - had both attempted to reach an agreement with the union on all-inclusive gratuities but were unsuccessful.

The Sheraton was said to have ‘pulled the plug’ on its all-inclusive packages in frustration, and Dame Anita said: “In essence, the agreement to pay and distribute gratuities to non-managerial staff was subject to the union and management agreeing to the rate of gratuity, and the formula by which gratuity was to be distributed.

“In the absence therefore of the parties arriving at the rate and distribution formula, the principal obligation in [the expired Collective Bargaining Agreement] to pay such gratuities was ineffective and unenforceable. Indeed, the only condition which could have given the principal obligation effect, remained unfulfilled.”

Agreeing with the Supreme Court that the gratuities were not contractually enforceable in the absence of an agreement, Dame Anita added that they cannot “be reasonably inferred” as incorporated into individual staff employment contracts.

She also ruled that the Melia was able to fix all-inclusive gratuities at a rate lower than 10 per cent.