I stumbled on this presentation to the Bahamas Institute of Chartered Accountant’s on behalf of the Nassau Institute from Thursday, April 27, 2000, at the British Colonial Hilton. Most of it remains relevant today. I hope you enjoy it.

It was November 1998 when I last spoke with you good people and it is hard to believe that many of the same arguments made then hold true today. Part One… Part Two…

As you know I am here to discuss my views on some of the tenets in the new 95 page Union Act and the new 27 page Tribunal Act.

Despite the many accomplishments of the FNM like the sale of the government hotels etc there appears to be a decided shift toward Socialism with much of the recently proposed legislation including the various pieces of the now famous Social(ist) Agenda now being circulated.

Unfortunately many countries around the world are moving away from policies like these, or have already changed to a more business friendly position. When we consider the issues we face with globalisation, the already evident labour shortages, and the lack of human capital, policies like these, while noble on the surface, end up tying the hands of business and do not allow the flexibility businesses require to compete.

Experience in other jurisdictions like Jamaica and Guyana are evidence of the fact that legislation designed to “assist the small man” generally end up adding to the cycle of poverty that the free-market philosophy helps alleviate. We can look further afield to Canada, Britain and New Zealand for similar empirical evidence. The later three countries have managed to shift their economic policy, as we did in the early 1990’s. Unfortunately Jamaica and Guyana are not examples most Bahamians would wish to emulate.

It provides me with little comfort today to say that The Institute for Economic Freedom has been telling you this was going to happen for the last three years.

A few points to consider about this legislation are:

• The proposed reduction of hours in the workweek to 40 hours does not take into consideration commissioned employees, restaurants, or contractors to name a few professions. Most businesses these days have different requirements and must retain flexibility to meet their customer’s demands. Take a Media firm that contracts to finalise the material for an IPO (Initial Public Offering). If it is not done everyone has to burn the midnight oil. Labour laws like those proposed do not allow the flexibility these businesses require. Centrally controlled or managed labour markets are inflexible and in this day and age flexibility is crucial to survival, especially in the high tech economy that is growing so rapidly. Just the type of business that could supplement tourism and banking.
• Low productivity, high levels of employee theft, notice requirements and repayment of loans by employees are issues that are left silent in any of the proposed legislation I have seen. Employees have as many responsibilities as they have rights. Just as we do as employers.
• In the Minimum Standards and Conditions of Employment Act (January 2000) there are unfair dismissal, severance and compensatory awards that are extremely onerous to employers. Awards like these take money from businesses that otherwise might be reinvested in the company, or new business, which slows economic growth. In addition to this, it is envisioned that banks and accountants might suggest businesses establish contingent liabilities for any possible terminations…thereby reducing earnings and asset values.
• These rewards as I call them add to the chances to win at “litigation lottery” as I have seen with my experience as a panellist representing business at the Industrial Tribunal. Neither side wants to agree as one has a lot to lose and the other a lot to win.  This type of legislation on paper appears to solve the problems created when employees and employers chose not to solve their problems themselves. The reality around the world is that they do not. I continue to believe that the voluntary agreement to an arbitrator, at the expense of the employer and union and/or employee, would more easily solve these issues than more compensation requirements. If they will not agree, the union should walk out, or the employers close down. With a continuously growing economy, the bad employers will soon be forced to compete with better wages and benefits or go out business any way. Many of the frivolous grievances can only be eliminated if there is a known or potential cost if the party loses.
• There is concern that our government should be more concerned with protecting every citizen’s freedom to own property and/or a business rather than the solver of workers problems. The government took a position ensuring there are air traffic controllers available to replace striking controllers as a strike could cripple our tourist economy. This decision is fully supported. Bearing this in mind, should unions be allowed to close a private business with similar actions? After all, our businesses are our personal economy. Unions should have the right to strike, and employers should have the right to lock out. Unions however, should not be able to engage in a whole list of practices of the type that have been outlawed in Great Britain. Incidentally, many of these practices were made legal for trade unions but subsequently reversed by the Thatcher and New Zealand governments, with great difficulty. We have not even mentioned agency shop and payment of union dues by the employer yet!
• We are faced with very low productivity and opening our country up to unionisation by only 40% of our employees voting in favour is very dangerous in my view. Minority rule was abandoned many years ago as the wrong policy. There is a clear derogation of the principle of democracy here. In addition, we need to consider the important point that the private sector will be burdened with the militant union actions that almost every government corporation is experiencing today. A frightening thought I submit.
• The unrestricted power of the Minister and President of the Tribunal to take documents or reinstate without the right to appeal returns us to the rule-of-man. The rule-of-law should be the stated objective. When we allow decisions to be based on perceptions of “fair” and “unfair” the law tends to be over looked. Laws like these can very easily become the tools of victimisation.
• Subjecting employers to a summary fine of $50,000 because we fail to treat and enter into negotiations in good faith within two months of recognition of a union without a corresponding requirement for the union is certainly not “fair”…if being fair to all sides is the objective. I’m still trying to get a definition of good faith means.
• Constitutional questions arise when it is suggested that an employer must continue negotiating with the union while an appeal is heard. It appears that the real concern is that the Judiciary is not dealing with cases soon enough. If this is the case, the court and dare I say legal systems needs to be fixed.

There is little doubt that the changes in the Trade Union and Labour Relations Act 2000 will create additional caseloads for the Industrial Tribunal. Many of which will waste the union, Tribunal and employer’s time.

Two general concerns about the Industrial Tribunal and Trade Disputes Act 2000 are:

First: Allowing the appeal only when a Justice of the Court of Appeal certifies that the point of law is one of general public importance is curious to the layman. We face the business day with ensuring we do what is necessary to keeping our business viable to meet our commitments to the law, the bank, the shareholders, our employees and more inportant our customers. Surely this is as compelling as “general public importance” because we employ significant numbers of people and if we are not able to operate another problem is created.

Second: Costs should be included in an appeal. Experience at the Tribunal would indicate that the government or business makes most appeals. If they win the appeal, they should receive costs.

Many of us were preparing comment on the Minimum Standards and Conditions Act 2000, so we have not yet had the time to envision how many of the changes in the Union Act and Tribunal Act might impact our specific business.  However, the business community, through the Bahamas Employers Confederation (BECon) will be itemising its concerns with respect to both bills in considerable detail by May 1, 2000 and I trust the views of the Bahamas Institute of Chartered Accountants will be included.

There is something very compelling about the “common good” or Socialist argument, even to me, an ultra conservative on most issues, but I would like to relate a cute story to you about how the unintended consequences of legislation catch up to us in ways we least expect.

In Texas a few years ago the environmentalists convinced the government that if toilets flushed using only three gallons of water instead of the traditional five gallons a tremendous volume of water would be saved over a period of years.

Well the law was passed and everyone had to flush their toilet twice using how many gallons of water? Six gallons instead of five. That is the seductiveness of Socialist legislation I’m addressing here.

On April 20, 1999 I wrote that Freedoms lost are hard to recover.

I asked — Is it the responsibility of a good, caring, responsible and transparent government to control and regulate us? I believe their first priority should be to ensure that we can determine our own destiny with the least possible number of controls and regulations. Thomas Jefferson said: “the natural progress of things is for liberty to yield and government to gain ground.” Unfortunately he was right! The problem is, our liberty is slowly eroded. Our unwitting belief that these new laws and controls will somehow make us a better nation allows this erosion of freedom. This is not to say that laws are not necessary to protect against criminal behaviour etc.

“Politically-inspired” legislation is usually rife with consequences no one considered. I asked back then if our Parliamentarians time would be better spent reviewing the laws that exist to determine what laws should be removed from the books? The reality is that with every law passed, we lose a little more freedom. Seldom is a law changed or removed from the books…they are usually expanded when governments find out their intentions were not fulfilled with the first attempt. Our recent history is replete with examples of this.

During a recent discussion, the Prime Minister expressed regret to me that three companies were still paying people between $80 to $120 per week and this was one of the reasons for the legislation before us. However, with our buoyant economy, if these people have the skills to be employed in better paying jobs, they have every opportunity to leave and find more reasonable employers. It was not mentioned if these people were eligible for tips, commissions, and profit sharing or if in fact they were apprentices or entry level positions. As I said to the Prime Minister, with a continuously growing economy the bad employers will be forced to compete with better wages and benefits or go out of business.

For a “legal” view of these bills I would suggest you contact the Bahamas Employers Association (BECon) for a copy of Mr. Reg Lobosky’s 66 page presentation that will be included with the response to the Minister of Labour on Monday, May 1, 2000.

Finally, just as an individual investor expects to receive a return on an investment in Government Stock or share offerings, employers and entrepreneurs must receive a return on their investment. If not, the employment opportunities they create will disappear.

I trust I have given you some food for thought and don’t forget to visit www.nassauinstitute.org/ for a tremendous volume of material on the subject of regulated labour markets and what we should avoid in our little paradise.