PM raises new concerns regarding the sale of Scotiabank

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The Antigua and Barbuda government has raised new concerns regarding the sale of Scotiabank operations here amid reports that the financial institution may be examining an alternative to paying severance to workers following the decision to sell its operations in nine Caribbean countries.

Prime Minister Gaston Browne, who has publicly expressed reservations about the proposed acquisition, has already indicated that St. John’s would not be issuing a vesting order to facilitate the move.

Prime Minister Gaston Browne (File Photo)

Last November, the Trinidad-based Republic Financial Holdings Limited (RFHL) announced that it  was seeking to acquire Scotiabank operations in several Caribbean countries.

A RFHL statement said that the banks being acquired are located in Guyana, St. Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.

It said that the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.

Browne told radio listeners that some new information which has been brought to the attention of the government, may further hamper the sale of Scotiabank.

“I am told that Scotiabank has had temporary staff or contract staff who have been on staff for the last 14 years. Not they (Scotiabank) are about to sell the branch here, these individuals have no benefits, severance, nothing.

“I am also told too that Scotia is seeking to roll over the severance benefits of the staff over to Republic Bank and clearly have people been working there for 20 years, 30 years, the ideal situation would have been to sever them and then they can take up employment in the new entity,” Browne said.

Browne said there were other issues “we have been told about” promising to bring the matters before the Cabinet later this week where a policy decision would be made.

“Those issues must be addressed,’ Browne said, adding that ‘anyone who has been working with Scotiabank for the last 14 years must be eligible for severance and that will be yet another condition precedent before any vesting order is issued.

“The staff must have the right to determine whether they want to have their severance payments or if they wish to have it roll over,” Browne said, adding that he had placed the matter in the hands of Attorney General, Steadroy Benjamin “to review the case laws and the necessary statutes …to ensure that we are on solid legal grounds and you can rest assured we will never allow Scotiabank to take advantage of the staff”

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6 COMMENTS

  1. Does the Antigua and Barbuda Labor Code have provision in place that proceed the Union Bargain Agreement with the Bank and staffs?? I know in any union bargain agreement there is a clause that allow the employees to chose if they wants their severance payments or let it roll over into the new company.
    When it comes to the temporary staffs (if not already being part of the union), the Labor Code will have to come into play here to help these employees.

  2. DEFLECTION

    So what about the big bad consortium of banks?

    Will the Gaston Brown administration compulsory acquire Scotia Bank?

    When is the show down?

    Staff issues are low hanging fruits already covered by the Constitution, labour code, and case presidencies…

  3. Yawn. This is a classic Gaston Browne diversionary tactic. Throw mud at the enemy to make them look bad even if there is no mud to throw. This is a made-up non-issue.

  4. PM, is wrong on this one since this is a settled matter in law. One needs only to refer to the recent case involving Chevron where the court ruled that once persons contracts/work arrangements are the same, no severance is necessary:

    “Workers of the just sold Chevron West Indies Ltd yesterday lost their battle for severance as Industrial Court President Phillip Pilgrim ruled that the sale of the aircraft fuelling company has not affected their employment.

    Pilgrim said the workers failed to prove the grounds for severance in cases where there is a change in ownership of a company because no dismissals had been effected and no situation of redundancy had arisen and as such he dismissed the case reference.

    “I am not persuaded that any settled industrial relations practice exists in Antigua & Barbuda that when a business is sold that the employees have the option to elect if they wish to be paid severance or to have it deferred,” Pilgrim said. see Chevron workers get no severance, May 27, 2011).

    If the PM wishes to change this then as a law maker, he knows what to do.

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