Airport staff get $200,000 in severance pay despite continuing to work
A company that ran airport navigation and maintenance services from 2016 to 2019 has been ordered to give former staff more than $200,000 in severance payments.
The Permanent Arbitration Tribunal found in December 2020 that CI2 Aviation Bermuda had to pay severance to staff it let go on March 31, 2019.
However, the company launched a judicial review of the decision in the Supreme Court on the basis that the staff had kept their positions when the Bermuda Aircraft Authority took over management of the airport the following day.
Puisne Judge Larry Mussenden upheld the ruling of the PAT in a decision dated April 7 this year.
Mr Justice Mussenden said: “It is not disputed that the employees were terminated as a result of redundancy on 31 March, 2019.
“It then follows that the employees were entitled to be paid severance allowance by the applicant.
“The employees then commenced employment with the BAA at the same place under no less favourable terms than when employed with the applicant.
“The employees did not refuse to accept an offer of re-employment, or for that matter, employment – in my view, the employees accepted new employment with a new employer, the BAA.”
The court heard that in February 2016, CI2 was awarded a contract by the Department of Airport Operations to operate airport services including air navigation and airport maintenance.
Before the contract concluded in March 2019, the Government told CI2 that BAA would take over the airport operations, including the employment of all the Bermuda-based employees.
On March 31 that year, CI2 ceased business operations in Bermuda and terminated its employment agreements.
While two employees chose to leave the island, the other 14 unionised staff and 15 non-unionised staff were employed by the BAA on April 1, 2019 in exactly the same position with a 2 per cent pay increase.
However, the Bermuda Public Service Union, on behalf of its members, made a claim on behalf of its members for $207,742 in severance pay.
The dispute was sent to the PAT, who heard the matter in November, 2020.
The PAT accepted that the terms and services of the employees were no less favourable under the BAA than they were under CI2, but as CI2 had ended their employment, severance was owed.
CI2 argued in the Supreme Court that the PAT had misinterpreted the legislation and that because the employees had accepted the same positions at the same location, severance was not due.
Jai Pachai, lawyer for CI2, added that the purpose of severance was to provide support for the employee while they seek new work, not to act as a “bonus” in circumstances where they are continually employed in the same post.
However, Kyle Masters, lawyer for the PAT, said that the legislation was clear and that CI2, as the employer, had ended the workers’ employment.
Mr Justice Mussenden found in favour of the PAT and said that while employers could avoid severance by offering alternative employment under no less favourable terms, employment by a different company was not considered in the legislation.
He said: “The section is clear, unambiguous and poses no difficulty.
“If the intention of the section was to provide for a circumstance where a new employer offers employment to employees formerly employed by a previous employer, then there would have been another subsection to deal with such circumstances – similar to the circumstances about the dissolution of partnerships and death of an employer.
“However, Mr Pachai’s arguments amount to using a shoehorn to force the actual reality of the circumstances into the ambit of the section. Unsurprisingly, it does not fit.”
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