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No Gencom repayment agreed for $11m hotel redundancy payout

No deal: Curtis Dickinson, the Minister of Finance (File photograph by Akil Simmons)

The Government paid out $11 million to redundant hotel workers at the Fairmont Southampton without an agreement from owner Gencom that the money would be paid back, it was revealed today.

Curtis Dickinson, the finance minister, added that the Government had evidence that Gencom was in financial difficulties before it decided to step in with the bailout.

The minister admitted in the House of Assembly that recent attempts by the Government to find out how Gencom would pay back the cash have gone unanswered.

More than 700 staff at the hotel were laid off last month when the hotel shut its doors for an 18-month refurbishment.

Gencom at first said it would meet its legal obligation to pay out redundancies to staff.

When the payment process was delayed by a month, the Government stepped in – but that the money would be paid back by Gencom.

But Mr Dickinson told MPs that no written agreement between the Government and Gencom was drawn up.

He was speaking after Cole Simons, the Leader of the Opposition, asked for the agreement to be tabled in the House.

Mr Dickinson said: “There is no agreement between the Government of Bermuda and Gencom.”

He added: “What does exist is an agreement between each employee who received redundancy and the Government of Bermuda.”

Mr Simons suggested that the Government had loaned the cash to individual employees rather than Gencom and that “the only recourse he has at this time other than going to court is to recover the funds from the employees of Fairmont Southampton”.

Mr Dickinson refused to confirm the suggestion.

Michael Dunkley, the shadow national security and health minister, asked if Gencom was required to give updates on how it intended to get the Government “off the hook”.

Mr Dickinson said: “There is no legal agreement.

“I would expect that, in the spirit of partnership they would keep us abreast with developments in their financing activities.

“We have gone out to them as recently as last week and have not had a response back in terms of how the financing is going.”

He added: “It’s my understanding that the owners are exhausting their options to find appropriately priced capital to move this project forward.”

Mr Dickinson told the House that the decision to step in was his.

He said: “I became aware that there was going to be a delay in making payments to employees.

“Sensing that there was a potential to be a problem, I with my team decided on working to a solution.

“We certainly had some discussions with the owners because we were concerned around their failing to meet the October 23 payment date, and so in the spirit of trying to ensure that employees – who at that point had not been paid – to ensure that they would get their payments by November 20.”

Mr Dickinson added that because of the coronavirus pandemic, the mechanism to make emergency payments to people out of work was already in place.

He said: “It is public record that employees were owed the funds by Westend Properties on October 23 2020, that date having passed with evidence of financial difficulties.

“Inasmuch as anyone owes the Government or employees money, the government will pursue with whatever remedies are available to it whatever actions are required to get those payments made.

“All employers have an obligation to provide for their employees in the event of redundancy.

“That obligation existed before Government stepped in and continues to exist.”

Mr Simons said tonight the Government had been “negligent”.

He added: “We take the view that a lien could be considered against the hotel owners’ assets until the $11 million payment is recovered.”

The Royal Gazette submitted a string of questions on the redundancy payouts over the last week.

A spokeswoman said on Wednesday: “The Ministry of Finance is currently assessing all of the data to provide an accurate response to the media queries we have received.”

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Published November 28, 2020 at 8:37 am (Updated November 28, 2020 at 8:37 am)

No Gencom repayment agreed for $11m hotel redundancy payout

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