A $4.3 million voluntary separation package (VSEP) payout for the 91 managers at the Grand Lucayan resort was finalized yesterday.
The government will be paying roughly $3.7 million and the remaining funds will come from an annuity fund put in place by the former employers, Minister of Tourism Dionisio D’Aguilar said.
D’Aguilar and Bahamas Hotel Managerial Association (BHMA) President Obie Ferguson signed the VSEP agreement at the Ministry of Tourism.
In October 2018, members of the resort’s management volunteered for the separation packages.
“It has been a journey, but I think that we have come to an amicable arrangement where the managers will receive a total of $4.3 million. Three point seven million dollars of that will come approximately from the government, as it is the shareholder of the property,” D’Aguilar said.
“The rest will come from monies that were put into an annuity plan by the hotel. So the employee will have the option to keep it in the annuity plan or if they want to cash it out, they can cash it out.
“I think it has been a fruitful negotiation.
“The employees didn’t get all that they wanted, but I like to think that they got almost all they wanted. In terms of the severance, they got more than a month for every year that they worked, but not in totality for the period that they worked.
“So if they worked 20 years, and they were entitled to 20 months, under our arrangement, we discounted that slightly to make it work within the government’s available cash flow.”
D’Aguilar was unable to say when the payouts will begin, and said it would depend on when they can be financed.
Ferguson, who was the lead negotiator for the managers, said he shared the minister’s sentiments.
“I think the negotiations were very constructive,” he said.
He added, “We were satisfied that the minister did what a responsible minister would do, and that is to protect and look after the interest of the public funds.
“We, as a trade union, have a responsibility to look after the interests of our members, and I’m very, very pleased that they subscribed to that.
“What is also important to note is that, and I think it seems to have gone without notice, the government, the minister and his group, they maintained the employees’ wage, their benefits, as far back as October or thereabouts.
“To me that showed good faith. That was something that we relied on…so for that I want to thank the minister for that exercise.”
In February, 150 line staff at the resort received approximately $3.2 million in payouts.
On March 27, the government signed a letter of intent (LOI) with Royal Caribbean Cruises and the ITM Group for the purchase of the resort for $65 million and the redevelopment of the Freeport Harbour.
The first phase of the development is expected to cost $195 million over two years with the creation of approximately 2,000 jobs.
According to ITM’s proposal, the Grand Lucayan resort complex will be redeveloped into an area called Lucaya Island at a cost of $30 million.