The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamasair’s employee pension fund has flown into turbulence due to a dispute that has equally divided the trustees responsible for its management and administration.

Justice Loren Klein, in an October 21, 2022, ruling disclosed that the trustees representing the national flag carrier itself and those acting for the Bahamas Airline Pilots Association are at odds with their counterparts from the Airport, Airline and Allied Workers Union (AAAWU) and the Public Managers Union (PMU) “over the general administration and management of the fund” that contains millions of dollars for retirees.

Gladstone Adderley, Susan Palmer and Hugh Morally, the three AAAWU trustees, have initiated legal action against their counterparts representing Bahamasair’s and the pilots’ interests in the Bahamasair Employees Provident Fund over what they allege is the “improper” amendment of the trust deed and rules governing the pension plan. They claim to have the support of their fellow union trustees from the PMU, representing the airline’s middle management staff.

The changes, Justice Klein noted, were said to enable the Bahamasair and pilot trustees to manage the trust and exclude those from both unions. “This, it is said, had the effect of altering the quorum requirements of the committee to the prejudice of the plaintiffs (AAAWU trustees), and cleared the way for the defendants to administer the affairs of the trust - including the power to amend the trust instruments - to the exclusion of the plaintiffs and the PMU trustee,” he wrote.

“They also allege other management breaches, which include excluding them from management functions and meetings by failing to give notice; withholding their honoraria; failing to share reports and other records which the plaintiffs say are necessary for the performance of their duties; and the irregular appointment of the chairman of the committee (Dion Bethell).”

The trust deed sets out how the pension fund is to be administered and managed on behalf of Bahamasair employees, both existing and retired. Delving more deeply into the dispute, Justice Klein added: “Significantly, the plaintiffs claim that the effect of the amendments was to oust their participation in the management of the fund, as it allowed the defendants to form a quorum and transact all necessary business without them, contrary to the requirements of the rules.

“They also claim that the conduct of the defendants has resulted in the loss of their monthly honoraria from November 2021, ostensibly based on their failure to attend meetings - of which they say they were not made aware - and even though they continue to carry out other duties towards the fund.

“Further, they question the legality of the election of the first defendant as chairman of the committee. They also allege that the defendants have denied the PMU a second trustee seat, even though the same was voted on and approved,” he added.

“Finally, they say that the defendants had an audit prepared without their knowledge and approval, and are presenting it for approval at the pending AGM (annual general meeting), notwithstanding that it has not been seen or approved by the plaintiffs and the PMU trustee.”

The concern with disputes of this nature is that they prove a major distraction for those charged with properly administering and managing millions of dollars on behalf of existing and future retirees, although there is no indication from Justice Klein’s ruling that this is happening here. The Supreme Court was not required here to rule on the substantive merits of the AAAWU trustees’ case, just their application for an injunction.

The three AAAWU trustees had sought an injunction to block the staging of the AGM, which had originally been set for August 10, 2022, and had publication of the pension plan’s audit until the main dispute was resolved and the auditor’s work reviewed and queried. The scheme provides for plan members to contribute between 5-6 percent of their salaries, with matching contributions made by Bahamasair and the participating unions.

Justice Klein, in granting the injunction sought by the AAAWU trustees, limited it to blocking the Bahamasair and pilot representatives from acting on any of the disputed trust deed amendments said to have been agreed at the November 10, 2021, AGM. They are also forbidden from doing any work on the pension plan’s behalf without the knowledge of the three AAAWU representatives.

The audited financials were already posted on the pension plan’s website on August 4 this year, and Justice Klein added: “I discharge the interim injunction granted on August 10, 2022, preventing the holding of the AGM. This means that the committee, acting pursuant to the quorum requirements existing pre-2021 amendments, is free to give the requisite notice for the holding of the AGM.

“To facilitate the AGM, I also direct that the plaintiffs be provided with the necessary documents relating to the audit and an opportunity to discuss the said audit with the auditors in a meeting organised for that purpose. I further direct that they attend such meeting when it is organised.

“It should also be clear that the issue of the amendments does not arise for the consideration of the AGM. The trust instruments are very clear as to the location of the power to amend; it is reposed in the company and participating unions along with the trustees, although the formulations for the exercise of the power differ depending on the nature of the amendments proposed.”