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News Report: ‘Bankrupt’ Warning Over Plp’S Deal With Unions

Written by By Neil Hartnell, Tribune Business Editor - Tuesday, August 31st, 2021

  • Full extent of promises exposed by MoU

  • Redundancy cap to ‘double’; agency shop

  • Hotel union chief ‘uncomfortable’ on terms

Private sector representatives yesterday warned that the Progressive Liberal Party’s (PLP) deal with the two umbrella trade unions threatens to “bankrupt companies” if fully enacted post-general election.

Peter Goudie, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) labour division chief, in particular told Tribune Business that the pledge to double the redundancy pay ceiling from 12 to 24 months could inflict an “astronomical” cost on struggling businesses at a time when the country was reeling from its worst-ever economic and fiscal crisis.

He spoke out after this newspaper obtained a copy of the pact between the PLP and two umbrella union bodies, the Trades Union Congress (TUC) and National Congress of Trades Unions of The Bahamas (NCTUB), which revealed the extent of the Opposition party’s labour-friendly law and policy reform promises should it win the September 16 election.

The Memorandum of Understanding (MoU), signed by party leader Philip Davis and its labour spokesperson, Fred Mitchell, “pledged” a PLP government to raising the redundancy cap to 24 months through changes to the Employment Act once elected to office.

And, as “a matter of fundamental principle”, it commits a PLP government to “declaring its unequivocal support for trade unions in the workplace, including automatic agency shop”. Agency shop, which is viewed as protecting a union’s security, would result in non-union members in a particular workplace paying service fees to the union to cover costs associated with collective bargaining agreements the latter secures.

Agency shop agreements are highly-regulated in developed countries, and the US Supreme Court in 2018 ruled that such deals are invalid in the public sector for that country. However, the PLP-union MoU commits both sides to altering the Employment Act’s section 42 such that agency shop becomes “automatic” once a trade union is recognised as the sole bargaining agent for a workplace.

Other areas where the unions and a PLP government have agreed to work together on changing laws and regulations “where necessary and possible” include “allowing for at least 16 hours of rest between shifts for each employee”.

They also plan to “redefine wages to include all forms of income, including tips and gratuities”, and will look at several other potential changes to the Employment Act. These include amending section 26 (4), so that employees are entitled to redundancy pay, gratuity and a pension in cases where the employer provides a non-contributory pension.

And the PLP-union MoU also commits the parties to assessing if the Act’s section 29 can be changed so that redundancy/dismissal is based on wages instead of basic pay. The document also commits a PLP government to formally consulting the unions before permits and tax breaks/concessions are granted to foreign investors, and to using its “good offices” to ensure industrial agreements in all sectors are reached.

Both sides have also agreed to “work towards the enactment of a livable wage”, although no further particulars are given on this topic, as well as passing a National Redundancy Fund Act and enabling the Industrial Tribunal’s rulings “to be enforced without delay” rather than litigants having to seek their implementation via the Supreme Court.

The MoU extends well beyond pure labour-related matters, too, calling for the PLP and unions to work on a National Pension Act and Culture, Heritage, Art & Entertainment Encouragement Act. The two parties have also agreed to fully implement National Health Insurance (NHI), including hospital and catastrophic care.

In addition, the PLP and umbrella unions have agreed that “the heads of registered trade unions and their secretary-generals or designates should be Justices of the Peace”, while a Davis-led administration would also provide the TUC and NCTUB each with “a parcel of land” - presumably Crown Land - upon which each can build their respective headquarters buildings.

“The parties agree that these goals and objectives are binding in honour, and we will use our best efforts to ensure that the goals and objectives hereinafter expressed become the public policy of the Commonwealth of The Bahamas and, where necessary, part of the laws and regulations of the said Commonwealth,” the MoU said.

Mr Goudie, though, voiced concern that the pledges contained in the MoU could inflict further costs on the Bahamian private sector at the worst possible moment as it struggles to revive from the devastation inflicted by Hurricane Dorian and COVID-19. It will also create further uncertainty and threaten to discourage what investment appetite and job-creating expansion exists.

“Obviously I’m concerned, especially when you get into 24 months of redundancy pay,” Mr Goudie told Tribune Business. “That’s just astronomical. I don’t know how they can promise that when the country is in financial trouble.... I don’t agree with it, obviously. I think it would just bankrupt companies.”

The Employment Act currently places a 12-month maximum cap on redundancy payouts. Line staff workers receive two weeks’ pay for every year worked up to 12 years, limiting them to a maximum six months, while managerial employees gain one month’s pay for every year worked. This places a one-year cap on their pay-offs.

The PLP-MoU, though, states: “Provisions on redundancy pay should be based on years of service. We pledge to raise the cap to 24 months.” No timeline was given for doing so should a Davis-led administration be elected, and Mr Goudie yesterday voiced scepticism as to whether all the commitments listed will be achieved.

#“They can promise all they want; it doesn’t mean it’s going to happen,” he added. “That’s even if they [the PLP] get elected.... It’s silly season. They can promise anything they want. It doesn’t mean they’re going to deliver on it.”

Several observers have suggested that the MoU is more about winning election votes, and have questioned the PLP’s ability to deliver on all the promises especially after they discover the realities of government on taking office should the party be successful on September 16.

One of the MoU’s signatories, Obie Ferguson, the Trades Union Congress (TUC) president, denied that its contents would impose an unsustainable burden on the private sector and economy - especially the doubling of the so-called redundancy ‘cap’, which could make downsizing and restructuring deemed essential to saving a company cost prohibitive.

“The difficulty we have with the way it is now is that it’s very regressive,” he told Tribune Business. “If you work for me for 12 years, your redundancy pay is 12 months if you are a manager. If you are a worker for me for 37 years, for 40 years your redundancy pay is 12 months.

“How can that be fair and progressive? Twelve years and you get 12 months pay, and 40 years and you get 12 months’ pay. No reasonable individual, if thinking properly, can accept that situation as being fair and equitable. The workers agreed to what was put forward. It’s in the interests of the workers, and in the interests of the economy.”

However Darrin Woods, the Bahamas Hotel, Catering and Allied Workers Union’s (BHCAWU) president, yesterday voiced misgivings about some of the MoU’s contents. His union was one of the nine NCTUB affiliates that last week distanced themselves from the agreement, and he said: “I have some concerns. It seems as if we’re asking for things.

“I’m not one to be asking or trying to get things for myself personally. I prefer to get it for the members. There are things in there I’m not sure I’m comfortable with; they’re asking to be made justices of the peace, looking for property. I’m not sure we should be asking for them in writing.”

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