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The minister giveth and the minister taketh away

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Jason Hayward, the Minister of Economy and Labour, at a recent hospitality function with Chris Furbert, president of the Bermuda Industrial Union

“Withhold not good from them to whom it is due, when it is in the power of thine hand to do it”

Proverbs (3:27)

Over the past few months, Jason Hayward has been in the news with respect to an amendment to the Employment Act 2000. When first announced, the Minister of Economy and Labour praised Bermuda Industrial Union executive Helena “Molly” Burgess for lobbying him to address the abuse identified. This amendment concerned the reported practice of unscrupulous employers in the hospitality sector retaining a percentage of gratuities intended for designated employees. In other words, some employers were found to be using their control of the gratuity system in a way that was not intended and denying employees their full share of the identified gratuities in question.

But what is not generally known is that Mr Hayward was first made aware of this exploitative practice not by “Sister Molly” at the BIU as reported, but upon becoming a member of the Parliamentary Joint Select Committee on the Living Wage in late 2017- early 2018 at my invitation as chairman. It was then that he would have received a number of draft reports of the JSC, which contained that same proposed recommendation in terms of an amendment to the 2000 Act.

The proposed amendment that was contained in the drafts he found upon joining the JSC was under the heading of “Additional Policy Recommendations”. That proposed amendment to the Act read as follows:

d) The JSC is recommending that we make an amendment to the Employment Act 2000, making it illegal for employers to retain any percentage of earned gratuities due to designated hourly-wage employees. This provision would also make it illegal for managerial staff to be paid out of the designated gratuity pool. This proposed new section should also contain penalty provisions of $5,000.00 for a first offence and $7,500.00 for any subsequent offence by the relevant employer. This proposed amendment will have to be inserted in the Employment Act as a new subsection following subsection 8 (unauthorised deductions); perhaps with the heading of “Employees eligible for Gratuity Disbursements”.

Sound familiar?

Mr Hayward knew of this issue roughly six years ago and was a minister with responsibility for the living wage for five of those years. The question remains, what did he do in that time to address the issue?

Similarly to Ms Burgess, who was made aware of this abuse by workers in the hospitality industry already earning poverty-level wages in certain occupational categories, I was first made aware of this in 2016 by a former constituent. This young Black Bermudian woman is a single mother with a young child, and was working at the time in the restaurant sector, struggling to make ends meet. Subsequently, I also was informed by George Scott, a former MP and longtime BIU official, who confirmed that such abuses were continuing and becoming more widespread.

The cruel irony is that I was forced as chairman of the JSC to remove that additional recommendation — and others — by Mr Hayward and a fellow One Bermuda Alliance member on the bipartisan committee before submitting the final report to the House of Assembly.

The minister giveth and the minister taketh away

However, the final JSC draft that was submitted and approved by the House of Assembly and the Senate also contained the following recommendation:

Establish what is not pay, eg ...

• Gratuities

• Tips

• Overtime pay

Think of the potential revenue losses that workers have endured during that period by Mr Hayward’s inaction. So while he neglected unforgivably to address that issue for five years, he would facilitate the undermining of another key facet of the gratuities scheme. He accomplished this when — in conjunction with Cordell Riley, the chairman of the Wage Commission, and Chris Furbert, the president of the BIU — he allowed the industry to use gratuities in the calculation of basic pay, which employers in the global hospitality industry love for obvious reasons. All this despite the caveat in the approved report.

However, we now see even in the Cayman Islands, as was reported recently, that its “Minimum Wage Advisory Committee” has belatedly decided to a phase out a similarly inequitable scheme implemented there only a few years ago. That so-called “loophole” allowed Cayman’s hospitality sector to use gratuities in calculating 25 per cent of the employees’ wage in a similar way to ourselves.

When it came to undermining present and future Bermudian workers in hospitality, Messrs Hayward, Riley and Furbert then would allow employers to use gratuities in the calculation of basic pay despite my vehement warnings to the contrary. They also agreed to allow the hotel employers to lay off workers once an 85 per cent occupancy threshold had been reached, as has been previously highlighted.

What they, and by extension the Government and Opposition, have done is officially endorse a business model in Bermuda in certain areas of our economy — mostly in hospitality, predicated on the employment of low-cost, low to medium-skilled foreign labour — to drive down wages and benefits essentially to poverty levels. This practice is spreading to other so-called blue-collar sectors of our economy, such as construction and landscaping, thus undermining the work of the JSC to create a more equitable labour market for workers.

One final vote on the gratuities issue: Phil Barnett, a business leader of a restaurant group who was placed inexplicably on the Wage Commission, seemed very self-satisfied last May about his success in thwarting the work of the JSC and its recommendation on the use of gratuities, commissions and overtime pay. It was Britain’s Low Pay Commission whose advice I accepted — and ultimately the committee which included Mr Hayward, I might add, who signed the final report — in warning against allowing employers in hospitality from using gratuities specifically in the calculation of basic pay.

And where is the living wage? We are still waiting. Mr Hayward, as I hope the above makes clear, belatedly gave with one hand while taking away with the other.

Permanent Resident’s Certificates, anyone?

Finally, allow me to close with this related issue. The decision to allow those with work permits in a number of categories to obtain Permanent Resident’s Certificates will have unanticipated consequences. Those workers, we are assured, will not be able to vote — as if that should be the only concern for Black Bermudians, in particular. But specifically those who have been resident for ten years and earn at least $83,000 will be able — all thing being equal — to obtain the coveted certificate affording them long-term residency in Bermuda. I suspect that a significant number in this category are those who work in financial services or the international business sector.

But what these soon-to-be newly minted long-term residents would be able to do is make it more difficult for those Bermudians, particularly Black Bermudians, to be hired and advance within these financial sector-based companies in international business. And after four decades, even with some improvement in the numbers in the past quarter-century, Black Bermudians are still significantly underrepresented in the most lucrative and substantive sector of our economy.

Is there any wonder, then, that racial disparities with respect to income from full-time employment have grown over the past two decades? Imagine, just like in the bad old days, a Black parent spends close to $150,000 to educate their child to at least master’s degree level and either there is a no hiring sign on the door or, once hired, their prospects for promotion at that Fortune 500 company based in Bermuda are dim.

As related in a previous op-ed, I talked to a Black Bermudian female who was a high-level veteran in the international business sector, and who is not known for histrionics or indulging in wild conspiracy theories. On this issue, though, we found ourselves on the same page. She said that the permanent residency issue is a development we need to keep an eye on for the reasons cited.

Twenty years of progress within the industry may be unravelled for Black Bermudians by a public-policy decision that was not thoroughly thought out. This at a time as well when the employment footprint within the industry continues to shrink, even as the size of the industry is growing. And the creeping adoption of artificial intelligence and related technologies will only accelerate that trend.

Rolfe Commissiong was the Progressive Labour Party MP for Pembroke South East (Constituency 21) between December 2012 and August 2020, and the former chairman of the joint select committee considering the establishment of a living wage

Rolfe Commissiong was the Progressive Labour Party MP for Pembroke South East (Constituency 21) between December 2012 and August 2020, and the former chairman of the joint select committee considering the establishment of a living wage

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Published April 05, 2024 at 7:00 am (Updated April 05, 2024 at 6:15 am)

The minister giveth and the minister taketh away

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