A position taken by RBC Royal Bank against making advanced redundancy payments to more than 200 employees of the former Wyndham Kingston Hotel, which was closed after a major fire in March, is headed for the Ministry of Labour and Social Security.
The Bustamante Industrial Trade Union (BITU), which represents the workers, has written to the ministry seeking its intervention. The union says that "the workers are currently highly incensed".
The situation has developed since August 30, when the hotel's appointed receiver informed the union that he had been advised by RBC that "while it sympathises with the workers", it could not at this time propose any advance for redundancy payments, because if any money was advanced that was not recovered when the hotel is sold, it would expose RBC to legal challenges in recovering the amount from the shareholders and guarantors of the loan.
BITU senior negotiating officer, Rudolph Thomas, said that this is a position the union cannot support, as the workers' right to receive their redundancy payments cannot be hinged on a prospectus of making enough money from the hotel's sale.
"The workers have done what is required of them by law and their entitlement must be honoured without contingency," he said.
The workers were laid off in April, and the union had written to the receiver asking that he provide information on the bank's position regarding payment of all entitlements due on their separation from their jobs, as a 120-day grace period had passed when they could have demanded redundancy payments under the Employment Termination and Redundancy) Act.
The receiver informed the union that, as was requested by the union, the bank agreed that in terms of the employees' pension fund contributions, necessary arrangements would have been made to facilitate refunds to workers who have both opted for redundancy and indicated a desire to receive their contributions, and that it would start sending out letters to this effect on September 2.
In response to the issue of the hotel's future, he informed the union that the bank has said that its objective is to get the hotel sold for a reasonable price, but that the timing is "largely dependent" on the finalisation of the insurance settlement and subsequent repairs to the hotel.
The Ocean Chimo Limited-owned hotel was taken over by RBC in August 2011 and placed in receivership by RBC Royal Bank Jamaica and RBC Royal Bank Trinidad and Tobago for unpaid debts estimated at more than US$30 million (J$3 billion). It was placed on the sales market in April 2012, after Ocean Chimo, which was formed by Jamaican investor Delroy Howell to operate the hotel, failed to get an injunction in the Supreme Court to prevent the appointment of a receiver and the sale of the property by RBC to recover the debt owed to the bank.
Real estate firm Allison Pitter and Company was retained by the receiver to assist in the sale of the "property, assets and undertakings" of the hotel and an auction was set for April 10 this year, but the fire in mid-March caused what was supposed to be a temporary closure and, eventually, a postponement of the auction.
In the meantime, the Wyndham Hotel Group announced that it would pull its name from the property as of July 13, ending a long association with the New Kingston hotel that helped bring prestige to the resort area, as well as preparations for a reopening of the hotel and a possible resumption of work by the laid-off workers.
Thomas said the union has advised the ministry to expedite the conciliation process to facilitate a speedy resolution of the issue, especially against the background that the workers have been without a salary for more than four months now, have been facing severe financial challenges and are now restive over the development.