The Court of Appeal has upheld a bid by BAS Serco to get the Government to pay out $650,000 in redundancy fees to airport staff, when Government did not renew the company’s contract to run the airport.
BAS Serco staff argued they had lost “continuity of employment”.
The company also moved to get Government to pay its legal fees associated with settling the workers’ claim.
This after an arbitrator found that the Government was liable for the $650,000 under the company’s contract. But BAS launched an appeal to argue that the Government should pay for further legal costs.
The Court of Appeal dismissed the BAS Serco appeal in a judgment.
Appeal Judge Geoffrey Bell said the arbitrator’s decision not to order the legal costs to be paid could only be overturned if it was “obviously wrong”.
The panel found that the appeal failed to meet the mark.
“I find it impossible to say that the award was obviously wrong, the test which I have indicated is in my view the appropriate one, and for my part I would dismiss the appeal,” he said.
His colleagues on the bench, Appeal Judges Anthony Smellie and Sir Scott Baker both agreed with Justice Bell’s written judgment.
According to Serco’s contract with the Bermuda Government, if the contract was not extended beyond March 31, 2016, the Government would indemnify the company against “all liabilities” that the company may have to its employees on the termination of the contract.
The Government chose not to extend the contract past that date, and awarded the contract to CI², based in Atlanta, Georgia.
The Court of Appeal decision said: “The majority of the workforce employed by BAS at the airport accepted employment with the new facilities management company, but did so without the continuity of their employment being preserved.
“This led to a large number of those employees bringing claims for severance against BAS under the Employment Act 2000, the value of such claims being said to amount to approximately $800,000.
“The claims for severance had originally been approximately $900,000, but were settled by the Government, acting on behalf of BAS, according to BAS’s submissions, for approximately $650,000.”
BAS was hit with legal costs to deal with the claims. The company argued the terms of the indemnity deal should cover those as well.
But the arbitrator found that the clause was not broad enough to cover the legal fees — valued at around $80,000 — on the grounds the costs did not arise from any liability the company had to the employees.