According to the Supreme Court’s ruling yesterday, Meliá Nassau Beach resort had no obligation to pay the all inclusive gratuities to its employees because there was no agreement for the gratuity rate.

This ruling, handed down by Justice Roy Jones, supports Meliá’s position on the matter and rejects the position of the Bahamas Hotel Catering and Allied Workers Union (BHCAWU).

Last year, Meliá withheld the gratuity payments by all-inclusive guests from non managerial employees, claiming that failure to determine a rate and distribution formula for all inclusive guests staying at the resort is critical to its survival.

However, the BHCAWU argued that withholding the gratuity payments from non managerial employees is critical to the livelihood of its members, whose take home pay is “drastically” reduced with the absence of gratuity payments.

But this long argument came to an end yesterday as the Supreme Court ruled that under the 2003 Collective Bargaining Agreement (CBA), gratuities were not contractually payable on all inclusive vacation packages offered by the resort without agreement on the gratuity rate and distribution formula.

The court also ruled that there are no preconditions to operate Meliá exclusively as an all inclusive vacation resort prior to negotiating a gratuity rate and distribution formula.

In addition, the Supreme Court ruled that in the absence of an agreement for gratuity rates for all inclusive packages between the resort and the union prior to the expiration of the CBA, the gratuities are not part of the individual employment contracts of the employees.

The court also discharged the injunctions ordered on December 24, 2014, which was extended on January 14, 2015 and February 11, 2015.

According to Pablo Cogolludo, acting general manager of Meliá, in a statement released following yesterday’s ruling, the resort informed the employees that the all inclusive gratuities, which ceased distribution at the end of 2014, were placed in an escrow account.

As a result of the ruling, he said the resort can now establish the all inclusive gratuity rate and distribution formula and apply them to the funds collected in the escrow account.

“This means that within the next few days we will be able to pay backdated all inclusive gratuities to all eligible employees,” Cogolludo told the 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.

He explained that throughout this dispute, the resort has always maintained that its intention was not to deprive the employees of the gratuities they worked very hard to earn.

“Our sole objective was to find a fair and equitable way of dealing with the all inclusive gratuities, which would enable us to secure long term viability and sustainability of our business and at the same time, ensure that you are not financially worst off by the introduction of this new business model,” Cogolludo told the employees.