Govt To Loan Redundancy Money To Workers
The Government will step in to assist Fairmont Southampton workers who are waiting for their redundancy payments, making “loans to employees equal to amounts due to them in redundancy, which will require repayment once sums are paid by Gencom.”
This was announced by Finance Minister Curtis Dickinson today, with the Minister saying “it is clear that having missed the October 23rd payment deadline, these payments are in doubt” and it is “unacceptable to leave the workers in the dark.”
The Minister added that they ”will also take steps to ensure that the continuing obligations for payments to employees are given appropriate priority by Gencom.”
In September, Fairmont Southampton announced that the property will temporarily close to undergo a complete renovation, with hundreds of staff members made redundant.
Speaking at a press conference today, Finance Minister Curtis Dickinson said, “I would like to speak on the redundancies at Fairmont Southampton Hotel. These redundancies have had a searing impact on the workers and the people of Bermuda generally.
“The Bermuda Government supported the redevelopment plan put forward by hotel owners Gencom in December 2019 when they purchased the hotel. At that time, it was clear that the hotel would need to be closed for extensive renovations.
“Additionally, it was known that redundancy payments would need to be paid to the hotel workers, many of whom have spent their entire working lives on the premises, making the tourism industry that we all rely on successful.
“What no one foresaw was the interruption to the 2020 tourist season brought on by the COVID19 pandemic. All Bermuda hotels, and indeed hotels worldwide, have seen their businesses closed, temporarily or otherwise, and their workers without an ability to support their families.
“It has been hard on everyone, but especially hard on those in our hotels and restaurants who rely heavily on gratuities to earn a living. However, the challenging operating environment does not remove the obligation on the hotel owners to make payments to employees, as they have elected to make staff redundant.
“The Bermuda Government, through the Ministries of Finance and Labour, have been engaged with stakeholders to ensure that the hotel owners meet their obligations to the workers. It is clear that having missed the October 23rd payment deadline, these payments are in doubt.
“It is unacceptable to leave the workers in the dark until November 20th as most, if not all, have financial obligations to meet today.
“Therefore, the Bermuda Government has put into action a plan to pay the workers directly through a program designed to see workers paid as soon as this week. These payments will be in the form of loans to employees equal to amounts due to them in redundancy, which will require repayment once sums are paid by Gencom.
“We will also take steps to ensure that the continuing obligations for payments to employees are given appropriate priority by Gencom.
“The workers and management at Fairmont Southampton have done everything to bring this difficult phase of the hotel closure to a sensible conclusion, and we appreciate and recognize their efforts.”
I wonder what happens if the Hotel decides not to pay?
Do the tax payers get left holding the empty bag?
So we are a loan and collection agency for a hotel now? Absolutely insane!
Well it took a month to come out but this is old news in the underground. They dont have the money to pay the staff or the renovation ….you wanna see a bad deal watch this space ….another bail out …at worst the government will get another Hotel …and burt wants to own a bank next …..great with people using thier pensions to guarantee mortgages ..you couldn’t right a better script for a horror movie
” the Minister saying “it is clear that having missed the October 23rd payment deadline, these payments are in doubt” and it is “unacceptable to leave the workers in the dark.””
A great idea. Now every employee in Bermuda should expect the Government to give them money if their employer is in financial trouble!
What could go wrong?? I’ll take a loan of $800,000 please.
It’s my humble, not financially Savvy opinion that this is not an easy undertaking administratively and otherwise (Bermuda Public Purse is in the cesspit line way out to sea) so how is money being identified and sourced sooo quickly to bail out a Huge Non-Bermudian company in order to settle payment to mostly Bermudian workers.
I am in no way saying the workers do not need to get payment, however, as a tax-payer I need to ask could this move means a precedent is being set? Plus what is the benefit to Govt. for doing this?? Interest payment of a good % that make a difference to the balance sheet???
The delay of payout is not my problem as I think it is no easy task to calculate for the number of employees involved, but in all honesty, that’s not Govt/Finance Ministry problem. There is more than enough on Govt. plate to get done, right of the bat..I can see audit needs major overhaul, tax/fees collection and social insurance statement errors being corrected so that employers can get a ‘true’ balance.
Gencom made a business decision to purchase the Fairmont Southampton Princess and I am almost sure that they had to have factored in the expenses associated with this venture.
Gencom need to do their own work in settling their private business affairs.
Live up to the Investment Philosophy they have online..
Quote: Guided by an investment criteria that satisfies the demands of institutions and individuals alike, Gencom brings an entrepreneurial approach and attention to detail befitting a company that owns some of the most renowned hotels, resorts and residential properties in the world.
Glad to see the taxpayer effectively bailing out an international hotel company. Has government got any guarantees from the company about repaying the money or are they just hoping the hotel workers repay them? And if the hotel workers don’t repay the loan, what then? Is the government going to take these workers to court to collect? Doubtful.
This is a gift from the taxpayer to a select group of workers because the company they work for can’t or won’t pay.
I’d be pretty unhappy if I worked for another shuttered hotel and wasn’t so lucky as to get this extra taxpayer-funded bonus.
it’s only another 9 day before gemcom pay out ! Why is the government getting involved? Unless gemcom hasn’t got any money !,
BINGO and we have a winner and Bda we have a loser ” us ” this money will not be recouped and btw which government allowed a second acquisition of a hotel property when the first property Rosewood is clearly not in a good financial position…add this to Grand Atlantic ….we are heading in the wrong direction
Exactly! How does Government know that Gencom cannot meet their obligations to pay redundancy on November 20?
Why and how does Government know the inner financials of this company?
And what happens if Gencom doesn’t pay up? The taxpayer ends up being on the hook! Why are we being shafted yet again!
Bermuda will soon be headed towards the situation Jamaica found itself in in the 1970′s – owning the majority of the hotels. It became National Hotels and Properties (NHP). It did not end well. It was then that Jamaica’s economy failed and the IMF came in, and the currency began its descent to what it is now. From .80 to the USD to over 160. It should be a warning that the PLP have taken Bermuda back to the 1960′s and 70′s in so many ways.
It’s what happens when you have a mix of 1960′s era revolutionary rhetoric, incompetence, greed and huge political capital.
It makes you think you can do no wrong, and that you are above criticism.