called Government's $89,000 compensation of former Club Med Hotel employees "a precedent'' for workers seeking compensation.

His comments came during the House of Assembly's debate over supplementary estimates for the last financial year.

Finance Minister Eugene Cox said the Progressive Labour Party Government had an obligation to deal with the Club Med situation, which could not be dealt with by third parties.

He said the unionised workers there had been assured by the previous United Bermuda Party Government that they would be compensated by the hotel's former owners for being made redundant, but this never happened.

This was why the PLP Government stepped in and paid $89,000 to workers even though it was not involved in the original dealings.

Mr. Dunkley said he fully supported the workers but added that he was concerned over how Government came to make the decision to pay them compensation, which he said "sets a precedent''.

"This opens a can of worms for anyone to go to Government and state their cause,'' he added.

PLP backbencher Derrick Burgess said the furnishings were sold from the old hotel and, as the debt was owed to the workers, the proceeds were passed on to them.

Mr. Eugene Cox said the issue was one of human relations and decency.

Eleven workers were kept on at the hotel after it closed in 1988 and they were made redundant in 1997.

Premier Jennifer Smith announced in the House of Assembly in October last year that "in the spirit of the tabled Employment Act 2000'', the Club Med workers "would be treated as if the Act were already law''.

At that time, Mr. Dunkley said the Premier had overstepped her authority and accused her of compensating the workers in a political ploy to ensure votes in an upcoming party conference.

The Employment Act 2000 was made law in November, 2000.