More than 100 employees of CLICO (Bahamas) had their services officially terminated last Thursday, when they were sent home without severance packages or letters detailing what compensation they would receive.
According to a report in the Nassau Guardian, on Thursday morning the court-appointed liquidator Craig Gomez informed the staff members that their services would no longer be required. The workers were reportedly also given termination letters that explained why they were being let go. Several of them were told to return later Thursday to receive compensation letters, but the newspaper was unable to ascertain if the employees received the information. According to the report, Gomez refused to speak to the media outside of CLICO’s offices. He cited a gag order put in place by Justice Cheryl Albury.
CLICO (Guyana) had invested $6.9 billion (US$34M) in CLICO (Bahamas) and it was the liquidation order issued to the Bahamian company on February 24 that forced the local authorities to place the local company under judicial management. Since then, the local company has been forced to cut its expenses and has closed two of its branches and reduced staff.
The Bahamian company was ordered wound up by Justice Albury on April 7, making the likelihood of Guyana retrieving its investment dimmer. Prior to this, Gomez had proposed that the amount dispatched from Georgetown be reclassified as unsecured intercompany advances. This classification is currently being challenged by CLICO (Guyana)’s legal representatives in the Bahamas, President Bharrat Jagdeo told members of the media last week.
CLICO Bahamas previously employed nearly 200 staff members, 140 of whom were Bahamians. However, the termination of staff has left the company with a “skeleton staff” operating at the company’s Mount Royal Avenue offices, along with members of the liquidation team. These staff members will continue to take payments from policy holders while the liquidation process is sorted out.
According to the Guardian, those employees who lost their jobs were placed in a better position, since Gomez had anticipated the company’s folding and had budgeted $3 million for severance payments to them. He made the listing as part of his liquidation projection. The payment is listed under the rubric ‘debts and preferential claims.’
The liquidator’s report, filed recently in the Supreme Court, said, “the liquidator must determine a release date for the general staff. Failure to do so on a timely basis will result in the staff being paid from the company’s resources, which will result in an erosion of the asset pool as revenue is not being generated from which staff could be paid.”
While the liquidation projection lists severance pay at $3 million, the liquidator’s report says, “I have calculated the severance pay for CLICO’s permanent staff, and agents, which totals approximately $2 million. Payments to be made as soon as possible, subject to court sanction.”
Gomez lists payment of staff severance pay’ as one of his top concerns.
Meanwhile the Guardian said the issue of policyholders continuing to make their payments, despite the ongoing liquidation process, came up in the House of Assembly on Thursday. The session reportedly featured a heated exchange between St Thomas More MP Frank Smith and Marco City MP Zhivargo Laing. Smith accused Prime Minister Hubert Ingraham of misleading policyholders by suggesting in a communication last month that they continue to pay the premiums on their CLICO policies, although a government guarantee for policyholders has not been given. He said, “every bank has an interest in CLICO because they have mortgages that are [supported] by life insurance that is with CLICO.” He added, “Now whether they can rely on the government’s word is a different thing, because if a single mother who is insured with CLICO dies today, she cannot get her mortgage paid off, [even] if she was still paying the premium to CLICO. That is unfair, Mr Speaker, you cannot mislead people like that, you cannot do that.”
Laing, however, said that “no such misleading was done” and that the government stood by its position on the CLICO matter.
