The Fairmont Southampton will not re-open until spring next year, it was announced yesterday, but a remarkable agreement ensures all 740 employees of the flagship hotel will remain on full pay until it does.

General manager Norman Mastalir revealed the details of the unprecedented arrangement immediately after a meeting with grateful staff and was flanked by a grinning BIU president Derrick Burgess who hailed it as "clear evidence there are some good employers in Bermuda".

Just a day after the BIU action which hit buses, ferries, docks and trash clearance was called off, the Fairmont group was only to happy to hail this agreement, which will be bankrolled by the hotel chain's insurers.

Under the scheme, Bermudian and expatriate workers will remain on full pay subject to making themselves available for work on cleaning up the hotel, of which there would "hundreds of hours available", revealed Mr. Mastalir.

There would also be opportunities for staff to work at other Fairmont properties or to seek employment with contractors working on the hotel's reconstruction.

Expatriate workers would also be allowed to seek temporary work permits elsewhere or take unpaid leave of absence, with their return air-fare paid for and a $1,000 bonus payment, subject to returning to the hotel for its re-opening in 2004.

Part-time and on-call workers, however, are exempt from the scheme.

"We are very proud of our reputation for service excellence and the loyal and dedicated service of our employees," said Mr. Mastalir.

"Our goal is to retain our loyal workforce as part of the Fairmont Southampton re-opening plan.

"The hotel may not re-open until next spring and we will likely need that much time to restore the hotel to its pre-Fabian condition. It is our intent to re-open with the same superior level of product and service upon which our reputation has been built."

Workers also have the option of seeking employment with any of the contractors working on the hotel and would either still be paid their basic salary or the contractor's rate, whichever is the higher.

Mr. Mastalir revealed that up to 250 contractors would be staying at the hotel during the reconstruction, meaning many cleaning and catering staff would be able to retain their current positions.

Staff could also opt for temporary transfers to other Fairmont properties in the United States or Canada.

When asked how the hotel could afford to make such a generous settlement to its workers, Mr. Mastalir replied: "We have extensive insurance coverage for property damage and business interruption."

He added the agreement with staff was reached "in collaboration with our insurers" but added that the company was set to lose between $5 million and $10 million net of the insurance claim because of the damage to the hotel and its business caused by Hurricane Fabian's impact on the Island 15 days ago.

Mr. Burgess, who announced the cancellation of industrial disruption following the CableVision dispute only the day before, was delighted with this agreement. "This is clear evidence that there are some good employers in Bermuda," he told the press conference.

"The Fairmont has become a leader in this category. We certainly appreciate what they are doing. I want to thank the Fairmont on behalf of the people of Bermuda. This is a first."

And John Harvey, executive director of the Bermuda Hotel Association, added: "This is very significant indeed. The Fairmont Southampton has demonstrated that it is absolutely committed to re-opening as soon as it can.

"They take care of their employees who are part of the Fairmont Southampton family and who they see as integral to the success of the hotel.

"They have to be congratulated and we hope to see them open again as soon as possible."

The hotel's closure for six months will lead to the rebooking of more than 75,000 guests in the coming months, with many opting to move to either the Hamilton Princess, other Bermudian hotels or Fairmont properties in other countries.

The Royal Gazette has been told that as many as two-thirds of visitors due to visit in the coming months have insisted on remaining in Bermuda, although some have chosen to take their vacations in Fairmont properties in Hawaii, Barbados or Canada.

Workers at the hotel were clearly delighted with the settlement, which has ended two weeks of insecurity about their future employment.

"This is fantastic for us," one told The Royal Gazette.

"I don't mind coming in and cleaning this place up if it means I can keep my job. Not knowing when your next paycheque is arriving is not a nice feeling, but this way I can plan ahead for me and my family in the run up to Christmas.

"It would be fair to say we are all pretty relieved. It is a pretty generous offer and we were only too happy to grab it."