Source: Royal Gazette – Government volunteered to pay out $11 million to redundant hotel workers without securing an agreement from the hotel’s owners that the money would be paid back.
Curtis Dickinson, the finance minister, made the admission in the House of Assembly this morning.
More than 700 staff at the Southampton Princess were laid off last month when the hotel shut its doors for an 18-month re-fit.
Hotel owners Gencom said it would meet its legal obligation to pay out redundancies to staff.
But when the payment process was delayed by a month, Government stepped in – insisting that the money would be paid back by Gencom eventually.
This morning Mr Dickinson acknowledged that no written agreement between Government and Gencom had been made.
Asked by Opposition leader Cole Simons to present the agreement to the House, Mr Dickinson replied: “There is no agreement between the Government of Bermuda and Gencom. There is no agreement between Government of Bermuda and Westend Properties. What does exist is an agreement between the Government of Bermuda and each employee who received redundancy.”
Mr Simons suggested that Government had in effect loaned the funds to individual employees rather than Gencom, and that “the only recourse he has at this time other than going to court is to recover the funds from the employees of Fairmont Southampton”.
Mr Dickinson refused to confirm that.
“All employers have an obligation to provide for their employees in the event of redundancy,” Mr Dickinson said. “That obligation existed before Government stepped in and continues to exist.”
Mr Dickinson told the House of Assembly that the decision to step in on behalf of Gencom came about was was his alone.
“I became aware that there was going to be a delay in making payments to employees,” he said. “Sensing that there was a potential to be a problem, I with my team decided on working to a solution.
“We certainly had some discussions with the owners because we were concerned around their failing to meet the October 23 payment date, and so in the spirit of trying to ensure that employees – who at that point had not been paid – to ensure that they would get their payments by November 20.”
The Minister added that because of the coronavirus pandemic, the infrastructure to make emergency payments to people out of work was already in place.
“In the height of the pandemic the Ministry of Finance set up a team to be positioned to make payments to a number of persons who were unemployed, so the infrastructure, the process, the ability to make payments in a fairly shortly period of time was already available,’ he said. “We took the opportunity to use those capabilities to provide for the people at Westend Properties.”