Budget: BIU agreement with Gencom makes island more attractive to investors
Workers at the Fairmont Southampton will get increased wages because of a new collective bargaining agreement highlighted in the Budget statement.
But the hotel may initiate layoffs if occupancy falls below 85 per cent compared with the 75 per cent threshold under the earlier agreement.
David Burt, the Premier and finance minister, said the new agreement had been struck after talks between the Bermuda Industrial Union and US-based Gencom, the hotel’s owner.
Chris Furbert, the president of the BIU, explained that the collective bargaining agreement was negotiated after the hotel “broke away” from the Hotel Employers of Bermuda, which was set up to handle collective bargaining with the hotel division of the BIU.
Mr Furbert said that the Hamilton Princess Hotel & Beach Club had struck a similar deal.
He added: “Gencom asked us to do a separate CBA for them, which we have done with the support of our membership.
“I can’t tell you all that we negotiated, we have not agreed on how many will come back to work …”
But Mr Furbert confirmed: “We are looking at better wages for the workers at the Fairmont Southampton.
“Based on this agreement, we moved the occupancy from 75 per cent to 85 per cent. The wages the workers got reflect that movement.”
Mr Furbert said: “There may be a slight change in sick leave as they are coming in as brand new employees.
“That’s the only real concession we gave up as we understood they are coming back as brand new employees.”
The agreement could have implications for the wider hotel industry.
Mr Burt said during the Budget speech: "It is the Government’s hope that this new collective bargaining agreement can be the baseline for further tourism growth in Bermuda.“
He added that other countries had a competitive edge over the island for a variety of reasons – including extended tax concessions.
Mr Burt said: “Bermuda, on the other hand, presents challenges to investors with high energy costs, increased costs of doing business, a cooler winter and the historic collective bargaining agreement with the BIU, which reduces efficiencies and increases operational costs.”
But he added: "Crisis often brings change. The pandemic forced the closure of our largest hotel, the Fairmont Southampton, with a loss of about 700 unionised jobs.
“As part of the planning for the hotel’s reopening, the BIU has negotiated a new collective bargaining agreement with the owners of the hotel, which will apply efficiencies as a precondition for approval of overseas lenders to invest in Bermuda.
“I would like to publicly thank the BIU for coming to the table as it will take a true tripartite effort to make tourism successful again in Bermuda.“
Stephen Todd, the chief executive officer of the Bermuda Hotel Association, said he did not know the details of the new CBA.
But he added: “I think we are focused on showing we can get as many back into workforce as possible.
“We are looking for efficiencies but we also want to ensure there are employment opportunities for residents and Bermudians.
“It is not clear specifically what opportunities will be available with the reopening of the hotel. As an industry, there are a number of career opportunities available and we encourage Bermudians to apply.”
Mr Todd welcomed an indication in the Budget that the Government would reduce taxes on fuel imports to cut the cost of electricity, as well as extend payroll tax relief for the hotel industry by at least another six months.