Video: Minister Dickinson & Minister Hayward

[Updated] Minister of Finance Curtis Dickinson and Minister of Labour Jason Hayward are holding a press conference this afternoon [Nov 30], and we will have additional coverage later on and in the meantime the live video is below.

Update: The live broadcast has concluded and the 42-minute replay is below

Update 2.33pm: Minister Dickinson’s remarks:

Good afternoon.

Thank you for joining the Minister of Labour and me today.

As the coronavirus continues to profoundly impact our lives, the Government of Bermuda remains focused on the necessary work to ensure that Bermuda remains safe. Additionally, we continue the work required to provide a safety net to those persons and businesses who are experiencing financial difficulties as a result of the pandemic.

In my remarks today, I will cover three areas. They are as follows:

• Redundancy payments at the Fairmont Southampton Hotel;
• Government’s Supplemental Unemployment Benefit; and
• Our Economic Performance in 2020 and the outlook.

Fairmont Southampton Hotel redundancy payments

Let me start with the Fairmont Southampton Hotel redundancy payments. In particular, I would like to address a number of questions that have arisen over the course of the last couple of days in the media and generally surrounding payments in the absence of an agreement with Gencom or their subsidiary Westend Properties Limited.

First, some background information. As previously advised, the Government of Bermuda put into action a plan to pay the workers directly. These are people who had been made redundant, were due redundancy pay, and after not receiving these payments as promised, urgently required funds to provide for themselves and their families.

As of the end of last week, we advanced about $9.7 million or 89% of the total amount due of approximately $11 million. This included payments made to 552 or 82% of the 671 former employees that were due redundancy payments and offered advances by the Government.

The timing of any further advances is completely subject to any remaining employees submitting properly signed documentation.

Now, I would like to deal with the legal position surrounding our actions/decision. Section 33 [3] of the Employment Act 2000 [As amended] reads as follows:

Subject to section 232 of the Companies Act 1981 [expenses of liquidation], but notwithstanding section 236 of that Act [priority of creditors] or any other enactment, on the winding up of an employer’s business or the appointment of a receiver, the claim of an employee to wages and other payments due under his contract or under this Act shall have priority over all other creditors, including the Crown.

Prior to making payments to the employees, we took advice from leading UK and Bermuda Counsel on the impact of the Employment Act. The Agreements entered into by each Employee prior to their payment are likewise designed with the statute in mind.

Following expiry of the November 20th deadline that Gencom had provided for making the payments, and after a week of hearing no proposals from them with respect to effecting these payments, lawyers representing the Employees will issue a Statutory Demand requiring payments of the amounts outstanding from Westend Properties Limited. If no arrangements are made with respect to the payments, the Employees’ lawyers are free to apply to the Supreme Court of Bermuda on the basis that the company is unable to make its payments when they are due. As we have demonstrated previously, the Bermuda Government is willing to use the full extent of the law to protect the interests of the People of Bermuda.

Considering the potential position we are in, we have begun work on how the project could proceed in the absence of a transaction with Gencom and have looked at the potential to partner with other equity and debt investors, including Bermudian investors and lenders, so as to get the project back on track. An additional option under consideration might be scaled-down renovation plans to reduce capital requirements and potentially the closure time. While we remain at a preliminary stage and nothing has been finalized, we are examining the options and will proceed in the best interests of Bermuda if needs be. What is clear from the steps we have already taken, however, is that the burden of that uncertainty will not be placed on the shoulders of Employees subject to redundancy, who are worst placed to bare it.

Some commentators have questioned whether the loan arrangements with the former Fairmont Southampton employees ushers in a new precedent where the Bermuda Government stands to make payments on the behalf of troubled companies. To be clear, it does not. The Fairmont Southampton is an iconic property and an essential component of the available beds and conference facilities that support Bermuda Tourism and the airlift that we as a country currently enjoy. We are committed to seeing this project through and are prepared to do so without Gencom if necessary, if they cannot stand behind the obligations they have.

On the issue of redundancy payments and Fairmont Southampton, let me conclude by saying that underlying all of the analysis that was conducted was an awareness of the painful impact the failure to pay the Employees would have on them and their families. In addition to being placed in the unenviable position of losing their jobs and not being paid the amounts due to them under the law, they would have had to pursue their rights through a legal system few could afford to navigate. Accordingly, the Bermuda Government decided to step in, pay the Employees, and then allow the legal process to follow its due course. Any funds paid to the Employees’ lawyers would be directly remitted to the Bermuda Government in satisfaction of the loans each Employee receiving a payment has entered into prior to payment.

Supplemental Unemployment Benefit

The public will recall that when the 18 week Unemployment Benefit concluded the Government quickly introduced a Supplemental Unemployment Benefit [SUB].

The purpose of the SUB was to provide payments to individuals who did not qualify for Financial Assistance, but for whom it had been determined through a means test that they required income assistance from the Government.

The amount is not intended to cover all living expenses. It is designed to be supplemental income. The intention is to prevent recipients from becoming reliant on the benefit long-term, but to provide temporary support that allows persons to be retrained, to seek employment and to transition into a new job.

The means test is administered by the Department of Financial Assistance while the Ministry of Finance’s team administer the payments via the UEB direct payment system. DFA provide a monthly list to the Ministry of Finance.

The SUB would be paid once a month and the programme will run until 31st March 2021. Recipients must immediately notify Government when they commenced any form of employment as they would no longer be eligible.

The SUB pays recipients with health insurance $1,520 per month and $1,950 per month to those without health insurance. All persons without insurance have been placed on the Government operated Health Insurance Plan.

Thus far, just over $267,000 has been paid to about 60 persons in the programme. In additional approximately $50,000 has been paid on insurance premiums.

We want to ensure that those persons in our community that need assistance receive it. Therefore if members of the public who have been laid off, lost their job or are working substantially reduced hours due to COVID-19 require financial assistance, I encourage you to reach out to the Department of Financial Assistance so that an officer can assist you with the application process.

2020 Economic Performance

The economic impact of the pandemic public-health measures required to suppress COVID-19 caused severe reductions in the Bermuda economy during the first half of 2020 and beyond. However with the reopening of the economy and the borders, the Ministry expects economic activity to increase during the second half of 2020. With the resumption of greater levels of commerce, there is now increased focus on sustaining the economy and building on the ongoing work to stimulate the economy.

As previously advised, considering the impact that COVID-19 was having on all sectors in the Bermuda economy and the projected level of unemployment, the Ministry of Finance, working with the Caribbean Regional Technical Assistance Centre [CARTAC] and another consultant firm revised our original GDP growth forecast for 2020 from 1.0% to 2.0% per cent to -7.5% to -12.5%. This was a preliminary projection, based on reasonable assumptions and was primarily dependent on how long, the intensive, but very necessary, suppression measures remained in force.

Summary Economic Indicators for 2020 are as follows:

• The year to date [July] average inflation as measured by the Consumer Price Index [CPI] was 0.2% and the 12 month average rate was 0.5%. This compares to an average CPI of 1.0% for both the year to date and the 12 month periods for July 2019.

• Imports decreased by 27.5% over the first two quarters of the year to register at $437 million.

• Air arrivals during the first two quarters of 2020 fell by 81% while the number of cruise passengers fell by 96% over the same time period. Total visitor arrivals were down by 91% versus a year ago.

• Total air visitor spending in the first six months fell by $152.8 million or 82% settling at $32.7 million.

• The estimated value of construction work put in place was $58.0 million, a reduction of 57.5%.

• Based on preliminary estimates from the Office of the Tax Commissioner, employment income for the first 9 months of 2020 fell by $194.2 million to $2.528 billion, a decrease of 7.1% when compared to the first 9 months of 2019.

• Total retail sales for the first seven months of 2020 decreased by 6.4% or $45.3 million to register at $657.9 million.

• 503 new international companies and partnerships were registered in Bermuda during the first nine months of 2020 representing a 5.7% increase when compared to the 2019 registrations of 476.

• Bermuda’s Balance of Payments over the first two quarters of 2020 recorded a surplus on the current account of $453 million, which was $100 million greater than the corresponding surplus in 2019. The increase in the current account surplus was due in large part to a $167 million reduction in the deficit of the goods account.

The above mentioned economic data clearly illustrates the severe economic shock that COVID-19 has had on the Bermuda economy and the economic performance for the first 6 months of calendar 2020 was as expected. Based on preliminary estimates it is estimated that GDP contracted by about 9%-11% during this period.

However, as previously advised the Government’s COVID-19 – Fiscal Plan has provided timely and targeted fiscal stimulus to various components of our economy, as needed. The government has taken urgent, and appropriate, action to reduce hardship and prevent business failures. Without these stimulus measures the overall economic contractions in 2020 would be a lot worse.

We are still facing much uncertainly, and in particular, there is the risk that the economic impact of the pandemic may be even more severe and longer lasting than currently anticipated.

With contraction in many of the key economic data such as visitor arrivals and spending, imports, construction activity, consumer spending and employment income expected to continue, but at a lesser level of contraction than in the first 6 months of this calendar year, the Ministry of Finance expects GDP in 2020 to be in the range of negative 7% – 9%.

Throughout the economic disruption caused by COVID-19, the Government has and will continue to make a concerted effort to stimulate domestic spending and maintain employment levels in Bermuda through the implementation of timely and targeted measures, with some of these measures being recently announced in our Speech from the Throne.

In closing, I want to encourage everyone to please take this pandemic seriously. The past few weeks are a reminder that we must all continue to be vigilant. This recent uptick in cases means that we cannot be complacent. Please follow the guidelines and make every effort to protect our health, and the health and well-being of this island. I remain confident that we will come out of this crisis stronger, and the team at the Ministry of Finance will continue to work very hard to strengthen our community.

Thank you.

Update 3.20pm: Minister Hayward’s remarks:

Good day to members of the media and the listening public. Thank you for your attendance and for watching this Press Conference.

Introduction

In today’s press conference I will provide an update on four [4] areas:

• 1. Employment Act and Labour Law changes;
• 2. Hamilton Docks Dispute;
• 3. Financial Assistance Updates;
• 4. Department of Workforce Development Updates.

1. Employment Act and Labour Law changes

On Friday I tabled two critical pieces of legislation:

• The Employment Amendment Act 2020; and
• The Trade Union and Labour Relations [Consolidation] Act 2020.

These two Bills seek to strengthen the rights and obligations of employers and employees in Bermuda’s labour force as well as modernize and clarify areas of the existing legislation to ensure that it is in line with international best practices.

In addition, the legislation will revise the labour dispute mechanisms in Bermuda.

These legislative changes had substantial input from employers, trade union representatives and the Government over the years.

Now let me highlight some of the major amendments to the Employment Act 2000:

• 1. Probationary Periods – Timeframes have been built into the legislation to avoid the practice of lengthy extensions of the probationary period. Employers will now be required to provide employees with a review of their performance midway through their probationary period so that employees are aware of areas that need improvement to enable successful completion of their probation;

• 2. Ante-natal Care – Employees are no longer required to work for one completed year before being entitled to paid time off from work to attend ante-natal appointments.

• 3. Bereavement Leave – Persons for who bereavement leave may be taken has been extended to include grandparents, great-grandparent, grandchildren and great-grandchildren.

• 4. Payment upon Termination – Employers will be required, upon the termination of an employee, to pay any wages and other remuneration or benefits owed to an employee within seven days or at the next interval that the employee would have been paid.

Additions to the Act include:

• 1. Independent Contractor – The Labour Relations Manager may issue guidance surrounding the employment relationship as it relates to independent contractors to ensure that persons are not being incorrectly classified;

• 2. Meal Breaks – Employees are entitled to a meal break of at least 30 minutes after working continuously for five hours; and

• 3. Bullying and Sexual Harassment – Employers are required to have a policy against bullying and sexual harassment in the workplace that applies to all employees. The inclusion of this provision is to ensure that all workers are protected from bullying and sexual harassment at work and from colleagues. This addition follows guidance set out by the ILO Convention on Violence and Harassment in the world of work.

The Employment Amendment Act will come into operation on 1 June 2021 to allow all stakeholders to make the necessary changes to ensure compliance.

Now I turn to the new Trade Union and Labour Relations [Consolidation] Act 2020. This legislation is a consolidation of:

• The Trade Union Act 1965;
• The Labour Relations Act 1975; and
• The Labour Disputes Act 1992.

It is important to provide a brief summary of some of the more significant changes contained in this comprehensive and ground-breaking legislation.

Tribunals and Boards of Inquiries – In the current labour legislation in Bermuda, there are the following nine [9] Tribunals and Boards:

• 1. Permanent Arbitration Tribunal
• 2. Essential Industries Disputes Settlement Board
• 3. Trade Union Act Tribunal
• 4. Labour Disputes Tribunal
• 5. Sole Arbitrator
• 6. Arbitrator with Assessors
• 7. Independent Chairman with Arbitrators
• 8. Mediator
• 9. Board of Inquiry

Additionally, the Employment Act 2000 established the Employment Tribunal to hear employment related complaints.

This new legislation will streamline and consolidate the number of tribunals across all labour and employment legislation into one to be known as the Employment and Labour Relations Tribunal.

This means there will be one Tribunal to handle all employment complaints and labour related disputes. This is a significant improvement on the current state of affairs.

2. Hamilton Docks Dispute

This is a perfect transition into my comments on the recent dispute at the Hamilton Docks. This legislation and the recent actions by unionized workers highlights the importance of good industrial relations and strong mechanisms for dispute resolution.

As Minister of Labour, I was aware from the earliest possible point of the industrial dispute between Stevedoring Services Limited and the Bermuda Industrial Union.

I personally took time to proactively discuss the matter with both parties, in addition to efforts made by the Labour Relations Manager of the Labour Relations Section. There was extensive dialogue in attempts to mediate.

As the dialogue continued, it became clear that the parties were at an impasse and no further progress was being made. You will note that this was even while essential items were still being unloaded by dock workers.

Therefore, in accordance with Section 11 as read with Section 4 of the Labour Disputes Act 1992, as Minister of Labour, I referred the dispute for settlement to the Labour Disputes Tribunal.

Any breakdown in industrial relations is unfortunate. This is especially the case now as we fully consider the state of the economy and the effect that the pandemic has had on jobs. This Government will continue to work with all parties involved to resolve this dispute.

However, now that the matter has been referred to the Tribunal, we must respect the dispute resolution process and allow it to take its course.

I am confident that a resolution to this issue will be reached to enable this essential service to fully resume operations.

3. Financial Assistance Updates

Regarding the total number of Financial Assistance recipients, I can advise that as of November 20, 2020 there is an estimated at 2,163 persons receiving benefits. The breakdown is as follows:

• 141 are able-bodied unemployed;
• 769 are disabled;
• 223 have low earnings; and
• 1030 are pensioners.

I can also advise that the total number of children on the Financial Assistance Child Day Care Program is 117, which is unchanged from the prior period.

Regarding the total number of persons on the Supplemental Unemployment Fund, I can advise that over the same period, the number of beneficiaries have decreased to 58. This represents a decrease of 36 persons receiving benefits, down from the previous month when we reported that there were 94 recipients. Please note that the decrease in numbers is attributed to 36 persons receiving their redundancy payments. In accordance with the relevant Regulations, the amounts received deemed them no longer eligible for the Supplemental Unemployment Benefits.

Concerns

At this time, I wish to address the primary concern from the Ministry and Department of Financial Assistance. There remain a number of applicants that fail to complete the applications in FULL. I cannot stress it enough, the importance of completing the application in full.

This trend continues to occur, resulting in significant delays, time wasting, and most importantly, the inability of Government to provide support to those in need. Oftentimes, the incomplete areas of the application include:

• 1. Unsigned forms;

• 2. No Social Insurance Number;

• 3. No Social Insurance Number for the Landlord, which is again in accordance with Government financial instructions to verify and ensure the correct person is paid; and

• 4. No bank verification details for the Landlord.

There have also been incidents of dishonesty, with some applicants attempting to hide assets or failing to report all members of the household.

Despite the few who try to take advantage of the system, most are honest citizens doing their best to provide for themselves and their families.

To these persons, I want to remind you that the Government is here to provide assistance in your time of need, but you must do your part and ensure all information is provided in the application in order for you to have a chance of receiving the benefits.

Regarding individuals receiving redundancy packages and as a result are no longer on Financial Assistance. I encourage you use the money wisely and responsibly. Use it to take care of your outstanding debts, to provide items you or your family need, or secure a brighter future for your loved ones. Unlike the COVID pension relief withdrawals – the redundancy packages are factored in the assessment calculations. This means that many persons will not be eligible for continued Financial Assistance awards as set out in Section 3 of the Financial Assistance Regulations 2004.

Clients for Financial Assistance and the SUB are reminded that any changes in their circumstances MUST be reported immediately. Examples include a change of address, change in banking details, change of employment status, or recent travel.

4. Department of Workforce Development Programme Updates

At this time I have the pleasure of updating the public on the success to date of the Department of Workforce Developments programmes.

MEF Group of Companies Restaurant Training Programme

For starters, I am pleased to announce the MEF Group of Companies Restaurant Training Programme.

The MEF Group of Companies in partnership with the Department of Workforce Development has launched a Food and Beverage, Waiter Server Training programme.

The programme launched last week Monday, 23rd November, will run for fifteen weeks and provide twelve Bermudians opportunities at both the entry level and professional level with on-the-job training. Participants will spend time training in rotation between the twelve [12] MEF Group of company restaurants.

The objectives of the programme are twofold:

• 1. To increase the number of qualified Bermudians in the hospitality industry;

• 2. To further development a sustainable career path and talent pool of Bermudians.

On successful completion of the training, participants will have earned training at a National Standard that meets the requirements of Bermuda’s tourism and hospitality industry. Furthermore, all twelve participants will be hired as full-time employees in various positions at each restaurant location.

The success of this programme, as well as others, will be replicated to add additional cohorts of training for Bermudians to gain employment as the economy begins to rebound.

Industry-Driven Training Programmes

Now on to the subject of industry-driven training programmes. Many would have seen or heard the advertisements ran over the past few weeks by the Department of Workforce Development, informing and inviting Bermudians to register for a number of training programmes and occupations identified by industry stakeholders. They included, but are not limited to:

• 1. Certified Cleaning Technicians;
• 2. Landscape Gardening;
• 3. Computer Literacy;
• 4. Digital Literacy;
• 5. Certified Administrative Assistant;
• 6. Graduate Trainee Programme; and the
• 7. Learn-to-Earn and Food and Beverage/Waiter Server Training programmes.

I am pleased to inform the public that all seven of the accredited training programmes were oversubscribed.

It is anticipated that the programmes will continue to be offered along with a provision for sponsorship, based on need and demand, in occupations where Bermudians could be employed and guest workers have repatriated.

For further information on these training programmes, please logon to www.bermudajobboard.bm or contact the Department of Workforce Development at 297-7714.

Apprenticeship Training Programme

I will now give an update on the Apprenticeship Training Programme and can advise that in partnership with the industrial trade industry, the Department of Workforce Development have increased the number of apprenticeship trainees. The breakdown is as follows:

• Two at Bermuda Electric Light Company;
• One at E&G Carpentry;
• One at Brilliant Solutions;
• Two at Universal Electrical;
• One at Otis Elevator;
• One at Sunnyside Solar Limited; and
• One at Strike Force Carpentry Company.

This is a total of nine new apprenticeship trainees.

Conclusion

I am pleased at the progress made to date but there is much work to be done before Bermuda and the world will emerge out of this crisis.

I have said this before, and it begs repeating. The people of Bermuda have entrusted this Government to lead, but we must also all work together.

I would like to thank the entire staff of the Ministry of Labour and all its related Departments for all their efforts and dedication during these unprecedented times. For all those who are working seven days a week and 12 hour days, we see the sacrifice that you are making for the benefit of this country. We thank you for the time spent away from your families and homes.

At this time, I welcome questions from the media.

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