The Tribune

• Grand Lucayan chair hails union’s defeat

• Claims over June 2020 dismissals denied

• PLP candidate’s termination is upheld

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Lucayan’s chairman yesterday hailed a Supreme Court verdict dismissing wrongful/unfair dismissal claims by 36 current and former managers as “a victory for common sense and sanity”.

Michael Scott QC, who heads the Government-owned Lucayan Renewal Holdings, told Tribune Business that the ruling by Justice Petra Hanna-Adderley would also produce savings for Bahamian taxpayers “who have been paying the bills” - running into tens of millions of dollars - to keep the resort open while negotiations for its sale to the ITM Group/Royal Caribbean joint venture drag on.

The judge, in a June 3 verdict, denied virtually all claims by the Bahamas Hotel Managerial Association (BHMA) and its members stemming from the Grand Lucayan Board’s decision to terminate most of the workforce in June 2020 in accordance with the terms of the sales agreement with ITM/Royal Caribbean.

Justice Hanna-Adderley dismissed the case brought by three managers because they had been retained by the Grand Lucayan, and are still working there, while three BHMA executives and trustees had no standing to bring an action because they were never employed by the resort.

And she dismissed virtually all other claims after finding that most managers had signed a “deed of release”, barring them from bringing future legal actions against the Grand Lucayan, in order to receive their termination pay and other benefits. Justice Hanna-Adderley found there was no evidence to support allegations they were “coerced” into signing the releases.

The only BHMA member not to correctly sign a “deed of release” was Kirkland Russell, its vice-president, former Grand Lucayan head chef and now Progressive Liberal Party (PLP) general election candidate for central Grand Bahama.

While finding that Mr Russell was entitled to notice pay, and his wages - minus unemployment benefit payments - for the three-month period between the COVID-19 shutdown in March 2020 and his termination, Justice Hanna-Adderley said he was not released because of redundancy but the “temporary cessation” of the Grand Lucayan’s business due to the global pandemic.

As a result, this meant Mr Russell’s wrongful and unfair dismissal claims, as well as his bid to be reinstated and the BHMA’s claim that the resort breached the Employment Act by failing to consult with it prior to the terminations, all fell away.

Mr Scott told this newspaper that he felt “vindicated” by Justice Hanna-Adderley’s verdict, saying: “I have been abused in the media by Mr Russell, and now I feel vindicated.

“I regard this as a victory, not only for the hotel but I regard it as a victory for common sense and, by extension, for the people of this country who have been paying the bills. The common sense decision lends sanity to employer/employee relationships in this country.”

Obie Ferguson, the BHMA president and attorney for the 36 managers, indicated to Tribune Business that the Supreme Court’s verdict will be appealed. “That is very likely. I’m taking some instructions on that,” he confirmed. “There are some areas that trouble me. We intend to look at it very carefully.”

Justice Hanna-Adderley, in her ruling, noted that the dispute took place against the backdrop of the Government’s efforts to sell the Grand Lucayan to ITM/Royal Caribbean’s Bahamas Port Investments vehicle, as well as the resort’s COVID-19 induced temporary closure and placement of many staff on furlough.

The Lucayan Renewal Holdings Board, headed by Mr Scott, elected to dismiss 33 middle managers, represented by the BHMA, in June and completed the termination exercise in September 2020 after allocating some $3.3m in taxpayer monies to cover the necessary payouts. Mr Russell was the only one not to correctly execute the “deed of release” or pick up a termination letter.

The now-PLP election candidate alleged in an affidavit that the Grand Lucayan/the Government breached the 2017 changes to the Employment Act by failing to consult with the BHMA aid of the terminations. He added that the dispute deepened when the middle managers attempted to return to work on Monday, June 29, 2020 after the Prime Minister said a week earlier that “all public servants are to resume work duties” on that date.

“Mr Russell states that the members of the first plaintiff [BHMA] have suffered damages due to their wrongful dismissal by the first defendant’s failure to pay them wages and benefits for the period between March 20 and June 24, 2020,” the judge noted.

“He also states that the laying off of the first plaintiff’s members without pay is a breach of the common law and unfair dismissal, and that due to the failure to give notice to the minister in the case of redundancy pursuant to section 26A(4) of the amended Act and the unfair dismissal, each member is entitled to compensation.”

Each BHMA member claimed five-figure sums averaging in the $40,000-$50,000 range, taking the total sum sought into the $1m-plus range.

However, Mr Scott, in his evidence, argued that the employees were “not being dismissed as a result of redundancy” but were terminated with notice under the Employment Act’s section 29 to facilitate the sale to ITM/Royal Caribbean. As a result, he argued there was no need to consult with the union and the law had not been breached.

Veronica Clarke, the Grand Lucayan’s manager, also alleged that the encounter with Mr Russell and his fellow BHMA members on June 29, 2020, when they attempted to return to work despite the hotel’s then-closure may have been a staged confrontation designed to extract certain responses from management.

“Based on the nature of the exchange with Mr Russell and his demeanour, it is her opinion that the entire encounter was contrived and/or designed to elicit certain responses from management; namely an instruction sending the members of the [BHMA] home in circumstances where they knew the hotel was not operational and open to the general public as a result of the emergency orders issued by the Government due to the COVID-19 pandemic,”Justice Hanna-Adderley wrote.

She found there was insufficient evidence to support allegations by the managerial staff that they had been pressured into signing the “deeds of releases” for their termination pay, which have now “estopped” or barred any wrongful or unfair dismissal claims.

“There is no evidence that the..... plaintiffs were compelled to execute the deeds of release under duress and, in the absence of the same, the court cannot properly make a finding that they were executed by the plaintiffs under duress,” Justice Hanna-Adderley found.

While “they were told that to receive their cheques a deed of release had to be signed”, she found this did not rise to the level of coercion. “I do not find that there is any evidence from which the court can reasonably conclude that the above-named plaintiffs were coerced into executing the deeds of release or that any duress in any form was exerted on them to cause them to execute the same,” she added.

That left just Mr Russell’s claims to be dealt with. Justice Hanna-Adderley found he had been “laid off” as a result of the COVID-19 emergency, during which the Government had suspended the section in the Employment Act requiring workers to be brought back after 90 days or otherwise terminated with due pay and benefits.

While agreeing that the resort should have consulted over Mr Russell’s termination, the Supreme Court said this did not override the decision or cause the Grand Lucayan to incur any financial sanctions. And Justice Hanna-Adderley said the “redundancy” definition only applied to workers being released where the business was closing permanently or if the work they performed was ceasing or being reduced.

Given that the Grand Lucayan was not closing permanently, and that the business would continue to need a head chef such as Mr Russell, she added: “I do not find that the first defendant’s termination exercise between June and September 2020 of [Mr Russell] amounted to redundancy.

“As a result of this finding, section 26A of the amended Act to consult the union and the resulting provisions in respect of compensation do not apply. Therefore, I accept the position by Mr Adams that the first defendant had a right to terminate [Mr Russell] with notice during the termination exercise between June 24 to September 11, 2020, pursuant to Section 29 of the Employment Act.”