Min: Employees Lawyers Could Apply In Court

November 30, 2020 | 11 Comments

“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,” Minister of Finance Curtis Dickinson said today.

The Minister was speaking about the millions of dollars paid to cover the redundancy payments due to Fairmont Southampton workers, with the Government stepping in to make the payments after the company missed the payment deadline.

Speaking at a press conference earlier today, Minister Dickinson said, “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.

‘We Advanced About $9.7 Million Or 89% Of The Total Amount Due’

“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.

Extract from today’s press conference with the Minister speaking about this matter:

‘Legal Position Surrounding Our Actions/Decision’

“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.

‘Government Is Willing To Use The Full Extent Of The Law’

“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.

‘Begun Work On How The Project Could Proceed’

“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.

‘Option Under Consideration Might Be Scaled-Down Renovation Plans’

“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.

File photo of the Fairmont Southampton:

Fairmont Southampton Bermuda generic 3221

Does It Set A Precedent?

“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.

‘Allow The Legal Process To Follow Its Due Course’

“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.”

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Comments (11)

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  1. Chanticleer says:

    I tip my hat to the Minister of Finance! Masterful!

  2. Joe Bloggs says:

    ““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,” Minister of Finance Curtis Dickinson said today.”

    Yes, but why would they? The employees are not out of pocket, only the Bermuda taxpayer is. I understand the PLP Government wanting to get those ex pats out of Bermuda, but it could have stopped to think a minute and enter into a loan agreement with Gencom. Then the PLP Government could apply to the Court to wind-up Gencom instead of suggesting that an ex pat former employee who is now in some other country might do so

    • Blackmail says:

      I’m sorry but this DOES set a precedent- why only this business? Why not every employer?

      This is the stupidest move ever and should make the Guinness Book of World Records! A compensates employee has NO RIGHT to submit a case for payment to the Supreme Court as the damage is not to them but to BDA Government only. The Government has damages so they will need to claim for payment but without a loan agreement this will be viewed as a handout which is exactly what it is!

      However as it is OUR money we the people can file a case against BDA Government!!!

  3. Ringmaster says:

    The winners here will be the lawyers. Taxpayers will be the losers. Why would an employee who has been paid by the tax payer, sorry, Government, bother to go to court and pay lawyers to recover sums they already have? Even if the courts rule against Gencom, how will the award be collected? Attach a lien to the hotel, but who owns the hotel?

  4. moira thompson says:

    Curiouser and curiouser…If Gencom doesnt honour their committment to employees than the Government gets to benefit from the property? Did All 600plus employees sign on the dotted line as a class action for lawyers to represent them, and does that include the staff that reside overseas? Have all employees agreed on paper to handover their monies once it is received? Has Gencom agreed to pay the employees through their lawyers?

  5. Hey says:

    The minister playing us for fools.

    The minister must have known ahead of time about what was going on and what Gencom did or didn’t need. To pay redundancy from our taxpayer money about a week before it was due, meant the minister knew that people were not going to get paid.

    What we are seeing here is perception of standing up for the downtrodden. It was a handout to garner popularity. We will see very little of that money returned, and the little we do see will be much less than the court, lawyer and other costs involved. So to get back say 3million will cost a further 5 million. I wonder which lawyers are going to benefit from that?

    It was a stupid move by the minister. He should have agreed to loan the money to Gencom and advance it to the employees, so there was recourse with Gencom.

  6. conspiracytheory says:

    Why would they bother? That would involve effort!

  7. Boston Whaler Owner says:

    Simple answer,snatch the entire hotel back,put any Gencom or their subsidiary Westend Properties employers on a plane out and sell the joint.

    • Joe Bloggs says:

      “Simple answer,snatch the entire hotel back”

      Deprive someone of property without due process and without compensation?

      That is the kind of jackbooted thuggery we are trying to avoid.

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