The Tribune

• Ex-chair: Go’vt ‘jettisoned position of strength’

• And says taxpayers ‘royally screwed’ as result

• Asks: Did union chief get costs, Senator benefit?

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Lucayan’s ex-chairman yesterday blasted the Government’s decision to settle with the resort’s managerial union as “a betrayal of trust” that has heaped further costs on taxpayers.

Michael Scott QC, who headed the Lucayan Renewal Holdings Board until it was replaced post-election, challenged the Davis administration’s decision to “jettison” a position of strength provided by the Supreme Court judgment that gave the resort a near-total victory over the Bahamas Hotel Managerial Association (BHMA) and its 36 members.

Besides dismissing virtually all BHMA member claims for wrongful/unfair dismissal, Justice Petra Hanna-Adderley had also awarded Grand Bahama’s ‘anchor’ property its legal costs which were to be paid by the union. However, the newly-elected Government has chosen to reverse course and “resolve” the dispute rather than contest the BHMA’s appeal before the Court of Appeal.

Blasting this as an “unconscionable waste of public money”, Mr Scott told Tribune Business that the settlement terms needed to be publicly disclosed - and not remain confidential as the Government and union have seemingly agreed - because Bahamian taxpayer funds are involved.

He further argued that the decision to settle amounted to “an abuse of the taxpayer and executive discretion”, especially at a time of fiscal crisis when every $1 counts, going so far as to accuse the Government of “a breach of their public duty” in choosing to capitulate.

The settlement comes against the backdrop of the labour-friendly Memorandum of Understanding (MoU) that the then-opposition Progressive Liberal Party (PLP) signed with the umbrella union bodies, the Trades Union Congress (TUC) and National Congress of Trade Unions of The Bahamas (NCTUB), just prior to the general election in a bid to secure the support of their members.

Mr Scott, questioning whether the Grand Lucayan settlement represented the first cost of that MoU for Bahamian taxpayers, also asked whether the Government’s decision to settle includes paying the BHMA’s legal costs. Obie Ferguson QC, the TUC president, also acts in the same capacity with the BHMA and represented it in the action against the Grand Lucayan.

Tribune Business sources revealed that Mr Ferguson had been seeking a $600,293 sum to settle the matter, with this figure representing termination/redundancy payments allegedly owed to the middle managers plus membership dues and agency shop fees due to the BHMA itself. It is unclear whether that sum includes Mr Ferguson’s legal fees.

And, in particular, Mr Scott also questioned whether a public figure, namely Senator Kirkland Russell, who was the PLP’s unsuccessful general election candidate for central Grand Bahama, had benefited financially from what he argued was a questionable use of taxpayer monies.

Mr Russell, formerly the Grand Lucayan’s head chief, and the BHMA’s vice-president, partially won his Supreme Court claim when Justice Hanna-Adderley awarded him wages and notice pay. However, four months’ worth of unemployment benefits were deducted from this award, and Mr Russell’s claim for compensation for unfair/wrongful dismissal was rejected.

Given that the settlement terms have not been released, it is uncertain whether the Government has also agreed to pay Mr Russell that compensation in addition to what he was awarded at the Supreme Court. Mr Scott reiterated that, if the Minnis administration had been re-elected, the Grand Lucayan would have appealed Mr Russell’s securing of wages and notice pay.

“I regard this as a betrayal of trust,” Mr Scott told Tribune Business of the settlement. “It’s certainly a breach of their [the Government’s] public duty and, as you highlighted, the taxpayer, the Bahamian public, who I regarded as my duty to protect by keeping costs to a minimum, have been royally screwed. The taxpayer has been screwed yet again.

“It’s an embarrassment. It’s a disgrace.... Who settles like that when you are ahead? The union would have lost the entire appeal. It’s a disgrace. During my tenure as chairman I bent over backwards to economise, and deploy strategies of operational economy and efficiency, because I was aware that the Government had gone out on a limb to save jobs and employment.

“While some might say the Grand Lucayan is a venerable and vintage asset, it is also a decaying asset, which required money to be spent on ongoing costs of maintenance and repair. There was also some damage from Hurricane Dorian,” Mr Scott continued.

“I am shocked and stunned that a settlement was reached, and a case in which the Government had the benefit of a judgment in its favour, and costs in its favour, all of that was jettisoned in favour of paying an enormous settlement to the union that it was not entitled to in law, plus costs to the lawyers representing the union, including the venerable Mr Ferguson.

“I find that unconscionable, and a waste of public monies, plus an abuse of the taxpayer and executive direction. Some observers might argue that the payout to the BHMA and its members pales when set aside the $150m-and-counting that the Government has pumped into the Grand Lucayan to keep it afloat since acquiring the property in September 2018.

However, the nature and extent of The Bahamas’ fiscal crisis means the Government can ill-afford to waste a single tax dollar. Mr Scott sought to make a case for why it has done exactly that, adding that he was “bothered” and “mystified” by the decision to keep the BHMA settlement terms confidential despite the use of taxpayer monies.

“Insofar as the hotel is ultimately a publicly owned hotel or asset, the public interest requires, and indeed expects, that the terms of settlement should be laid bare and should be seen to be manifestly in the public interest as a whole, and prospectively not for the benefit of certain narrow partisan interests,” the ex-chairman argued.

Mr Scott said questions needed to be asked about the “commercial imperative” for the Government to settle when it held the advantage in the legal process, and whether it paid the BHMA’s legal fees.

“In my respectful view, if this turns out to be the case, this would amount to a betrayal of trust because the former Board and I left a scenario in place where the fees with the costs incurred by the Government in defending this misguided litigation were to have been paid by the union to Government,” he added.

“It is my firm view that the public has a right to know the plain and unvarnished facts of this settlement. The public also has a right to know that the public interest will not be sacrificed on the basis of some expedient.... for the so-called Memorandum of Understanding between the unions and the present Government in consideration of which this appears to be some kind of payment.”

Mr Scott could not be said to have enjoyed a warm relationship with Mr Russell and Mr Ferguson during his time as chairman. However, the TUC president told Tribune Business that the unions’ MoU with the Government is already bearing fruit.

“Certainly, the Government made a commitment in our MoU that they would meet with the unions, negotiate with the unions and respect the workers in these unions,” Mr Ferguson said. “That was very significant for the labour movement.

“Prior to that, for the past three-and-a-half to four years we could not get a formal meeting with the former government. The former prime minister [Dr Minnis] indicated to us he didn’t believe in trade unions; only profit sharing.

“We have some other announcements to make in short order with regard to the progress we have made with the Government with respect to working people in this country,” he added. “The unions are moving in another direction, and that direction is to be included in the governance of this country.

“The public will soon understand what the new prime minister committed to. He is attempting to fulfill, step by step, block by block, the commitments that were made.”

Pledging that trade unions will “fight for a livable wage”, Mr Ferguson said: “We won’t ask for anything out of the air. We know the state of the economy. We know there’s only so much the economy can bear, but we’re not going to allow you to disrespect us. Those days are gone.”