By Neil Hartnell
Tribune Business Editor
A trade union’s bid to secure nearly $5m in damages from the Water & Sewerage Corporation for violating their industrial agreement has been rejected by a Supreme Court judge.
Justice Ian Winder ruled that the Water & Sewerage Management Union, together with its trustees and president, were due just $15,000 in “nominal damages” after the state-owned water utility breached the industrial agreement clause that gave its members a “90-day exclusivity” to bid on all outsourcing opportunities.
Besides finding that the union was incapable of claiming damages on its members’ behalf, Justice Winder also dismissed calculations by its financial analyst, Davinia Bain-Blair, that it was due $4.856m in damages due to not being informed of three Family Island reverse osmosis plant opportunities.
The analysis was based on the corporation’s $4,000 per month guaranteed payment to Watermakers Inc/Staniel Cay Yacht Club for each of the three plants over the life of their ten-year contracts, but the Supreme Court found this to be too simplistic and superficial.
Justice Winder said Ms Bain-Blair’s evaluation was also based on evidence not before the courts, and agreed with the Corporation that it failed to take into account the investment, capital outlay and overheads involved in constructing each of the three water plants.
His September 11, 2019, decision stems from a previous ruling by then-acting justice, Brian Moree QC, who in ruled in early January 2016 that the Corporation had breached the two sides’ industrial agreement over reverse osmosis plant contracts for Mayaguana and Long Island.
The contracts involved the construction and maintenance of of two 20,000 gallon per day reverse osmosis plants in Mayaguana to serve the communities of Abraham’s Bay, Betsy Bay and Pirate’s Well. And a similar 20,000 gallon per day reverse osmosis plant for Simms, Long Island, was part of the same tender.
Then-acting justice Moree found that the Corporation breached article 29 of the industrial agreement, which covers outsourcing, by failing to inform the union of these contract opportunities prior to awarding the deal to Watermakers/Staniel Cay. He added that the individual contracts of union members were also violated as a result.
The industrial agreement’s Article 29 stipulates that the Corporation consult the union on all forthcoming outsourcing opportunities “at least 90 days” before they happen.
Should union members, who are “existing employees” of the Corporation, decide to bid, they have a ‘90-day exclusivity’ from the time they are informed of the opportunity. This shuts out all rival bidders.
And only members of the management union, or Bahamas-domiciled companies where they hold a “minimum” 70 per cent equity interest, will be allowed to bid during the exclusivity period.
Then-acting justice Moree, though, left the question of damages to be determined before another Supreme Court judge. Justice Winder thus picked up a matter where only one witness was called by either party - the union’s financial analyst, Ms Bain-Blair.
Explaining how she derived her figures, she said they were based on revenue and production figures for the three plants provided by the union. With the trio enjoying 10-year contracts, Ms Bain-Blair said in evidence: “The Corporation was prepared to pay $4,000 a month whether the plant performed or not.
“The worst case scenario was considered of a straight line average growth approach from the date of production of water to the end of contract. This means that maximum production of water would only occur in year 10.....
“The amount due and owing to the union and the members as bargaining agent as a result of the breach of article 29 is $4.856m as of October 26, 2018. The calculations provide the present value of the amount due and owing. The amount includes interest which is prime plus 2 percent.”
The $4.856m sum was described as the “opportunity cost” lost to the union and its members, but this was subjected to what Justice Winder branded a “multi-pronged” attack by the Corporation and its attorneys, Ferron Bethel, Camille Cleare and Viola Barnett of Harry B. Sands & Lobosky.
They argued that the union was “incapable of sustaining any damage”, while it had provided no evidence about individual members seeking to bid on the three plants. The Corporation and its attorneys also slammed Ms Bain-Blair’s assessment as “flawed” because it ignored costs and investment in constructing the plant, while there was “no obligation” to award the deal to the union’s members.
Justice Winder backed the Corporation and its attorneys on the union’s standing to claim damages, finding that article 29 was geared towards providing financial opportunities for its members - not the union itself. And the Industrial Relations Act limits union trustees to initiating legal actions only where union assets or property are concerned, not to act as an agent for individual workers.
Then, noting that Ms Bain-Blair herself had “complained about the paucity of information to make her assessment”, Justice Winder said a valid claim for damages needed to specify what each individual union member would have done had they been aware of the outsourcing opportunity.
Ruling that this could not be calculated using Watermakers’ proposal, he added that there was no evidence that the $4,000 guaranteed monthly payment represented its profit or if it covered ongoing capital and operational costs.
“It does not appear to be a right of first refusal as the analysis suggests,” Justice Winder concluded of article 29. “There is no obligation on the defendant to give preference to an employee’s bid or to accept a bid from an employee within the period of exclusivity or at all.”
Despite finding there was no evidence of then union or its trustees sustaining any damages, he nevertheless awarded them a “nominal” $15,000 due to the industrial agreement being breached.