The Melia Nassau Beach resort yesterday won a long-running dispute between resort executives and the Bahamas Hotel Catering and Allied Workers Union (BHCAWU) over gratuities for the resort's all-inclusive vacation packages, with Supreme Court Justice Roy Jones striking down the union's demand for a 15 percent gratuity as "no more than a gratuitous giveaway".

In a ruling released yesterday, Jones found that under the collective bargaining agreement (CBA) signed between the BHCAWU and the Bahamas Hotel and Employers Association in 2003 gratuities were not contractually payable on all-inclusive packages without an agreement on the gratuity rate and distribution formula. Jones ruled that there was no implied term in the non-managerial employees' contract of employment for the payment of gratuity charges for all-inclusive guests at the resort. With no agreed rate and distribution formula, Jones concluded that the resort was simply not obligated to pay gratuities for all-inclusive guests to the resort's line staff.

"In those circumstances, it is no more than a gratuitous giveaway," stated Jones in his written conclusions. Jones' analysis rejected the idea that there was an agreed rate and distribution formula for all-inclusive guests at the Melia or the Radisson, a predecessor of the resort, as the union had argued, during the pendency of a valid industrial agreement.

Cable Beach Resorts Limited and New Continent Ventures Inc. argued that the failure to determine a rate and distribution formula for all-inclusive guests staying at the resort was critical for its survival as a going concern.

Escrow

The ruling also dealt with the gratuities that Melia executives have held in escrow for its employees for approximately seven months. The union's counsel argued that there was no legal basis for the resort to hold the gratuities on the grounds that they were considered part of the non-managerial employees' wages under their contracts.

However, Jones dismissed this, stating: "In my judgment, in the absence of an agreed rate and distribution formula with the union for [all-inclusive] gratuities under a valid industrial agreement the resort can withhold the gratuities under the [all-inclusive] plan."

Guardian Business understands that the gratuities held in escrow for the resort's staff since the start of the dispute will be distributed to Melia workers. However, it remains unclear at what rate the resort will pay back said gratuities held in escrow given the Supreme Court's ruling that there was never an agreed upon gratuity rate and distribution formula. Moving forward automatic gratuity will be eliminated. An employee memo from Acting General Manager Pablo Cogolludo issued to Melia workers yesterday afternoon stated that all efforts would now turn to establishing a gratuity rate within the coming day.

"Within the next few days we will be able to pay backdated All Inclusive gratuities to all eligible employees. We are very acutely aware of the financial difficulties this situation has put many of you in. I want to assure you that we will make these calculations and the payment an absolute priority so that you do not have to experience any further delay in receiving your money," read the statement.

Lamentable attitudes

In his summary and conclusions, Jones said that it was "lamentable" that the ongoing feud had been allowed to create a "climate of extraordinary uncertainty" that had ultimately soured the working relationships vital to the union and executives' partnership. Melia's line staff initially voted to strike following the hotel executives' decision to remove the automatic 15 percent gratuity from the bills of all-inclusive guests, which executives argued kept in line with the hotel's all-inclusive model. However, the court granted the resort an ex-parte interim injunction on December 24, 2014 preventing the union from taking industrial action against the resort.

The resort executives were then granted multiple extensions to that injunction over the past seven months. However, the Supreme Court's ruling discharges the injunction against the union, stating that there is no evidence for a permanent injunction. The court additionally declared that there were no preconditions to operate the Melia exclusively as an all-inclusive resort prior to negotiating a gratuity rate and distribution formula.

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