The Government had to pay out $650,000 in redundancy packages to BAS Serco staff after they did not renew the company’s contract to run the airport.

BAS Serco staff argued they had lost “continuity of employment” even though CI², who took over the role, hired the majority of existing staff.

The news came as the Court of Appeal considered a bid by BAS Serco to get the Government to pay its legal fees associated with settling the workers’ claim.

An arbitrator earlier found that the Government was liable for the $650,000 under the company’s contract, but BAS launched an appeal to argue that the Government should pay for further legal costs.

But the Court of Appeal dismissed the BAS Serco appeal in a judgment.

Appeal Judge Geoffrey Bell said the arbitrator’s decision not to order the legal costs to be paid could only be overturned if it was “obviously wrong”.

He added that the panel found the appeal fell short of that mark.

Mr Justice Bell wrote: “I find it impossible to say that the award was obviously wrong, the test which I have indicated is in my view the appropriate one, and for my part I would dismiss the appeal.”

Fellow Appeal Judges Anthony Smellie and Sir Scott Baker agreed with Mr Justice Bell’s written judgment.

BAS Serco’s contract with the Bermuda Government said that if it did not extend the company’s contract beyond March 31, 2016, the Government would indemnify the company against “all liabilities” that the company may have to its employees on the termination of the contract.

The Government chose not to extend the contract past that date, and awarded the contract to CI², based in Atlanta, Georgia, instead.

The Court of Appeal decision said: “The majority of the workforce employed by BAS at the airport accepted employment with the new facilities management company, but did so without the continuity of their employment being preserved.

“This led to a large number of those employees bringing claims for severance against BAS under the Employment Act 2000, the value of such claims being said to amount to approximately $800,000.

“The claims for severance had originally been approximately $900,000, but were settled by the Government, acting on behalf of BAS, according to BAS’s submissions, for approximately $650,000.”

But BAS was hit with legal costs to deal with the claims and argued the terms of the indemnity deal should cover those as well.

The arbitrator found that the clause was not wide enough to cover the legal fees — valued at around $80,000 — on the grounds the costs did not arise from any liability the company had to the employees.