ST. JOHN’S, Antigua, CMC – The Antigua and Barbuda government says it remains opposed to the decision by the other shareholders of the cash-strapped regional airline, LIAT (1974) Limited to “collapse the airline with no obligation to its employees and creditors.”
In a statement that it says represents “an effort, once again, to explain and clarify” its position regarding the airline’s former employees, St. John’s said its “preference was to maintain the airline.”
It said it had taken that position recognizing that LIAT “had a crucial role in providing necessary transportation to people of the region and that, without it, regional air transportation for both goods and services would decline to the detriment of tourism, commercial activity and the socialization of the Caribbean people.
“Indeed, our fear in this regard has turned out to be true, as the traveling public can now attest,” the statement said.
The significant shareholders of the Antigua-based airline, which entered into administration in July 2020 following increased debt and the impact of the coronavirus (COVID-19) pandemic, are Antigua and Barbuda, Barbados, Dominica and St. Vincent and the Grenadines.
Before entering into administration, LIAT had been servicing several regional destinations and has since scaled down its operations and is now servicing Anguilla, Antigua, Barbados, Dominica, Guyana, Grenada, Guadeloupe, Martinique, San Juan Puerto Rico, St. Kitts, St. Lucia, and St. Maarten.
Last week, Barbados joined St. Lucia in providing severance payments for its nationals employed with the airline. Still, Prime Minister Gaston Browne said that his administration was no longer prepared to meet bilaterally with trade unions here to discuss the issue and that efforts should be made to include the other shareholder governments of the airline.
The Antigua and Barbuda Workers (ABWU) has since called on Prime Minister Browne to re-think his administration’s challenging line position urging him to “put aside all prejudice and prioritize the 600 plus workers and their families who have been severely disadvantaged by your administration’s uncaring actions”.
In its statement, the government said that although it had no corporate or legal responsibility to any of the creditors or former employees of LIAT 1974 Ltd, it had decided to assume a “moral obligation” to provide compassionate assistance to the former employees of the airline.
“Our compassionate severance was offered system-wide, on a non-discriminatory basis, affording national treatment to all LIAT workers, irrespective of their nationality, in keeping with the spirit of the Revised Treaty of Chaguaramas” that governs the regional integration movement (CARICOM).
Further, St. John’s said that it made this decision even though “it owned only 32 percent of the shares in LIAT (1974) Ltd, and, therefore, should only have a “moral obligation” up to 32 percent to the former workers, who, indeed were employed by all the governments that comprised 100 percent of the airline’s ownership.”.
It said that despite the dire economic and financial circumstances that resulted from the impact of the COVID-19 pandemic and the scarcity of financial resources, the government decided to offer 50 percent of what the LIAT employees “reasonably might have expected compensation if the company had not been declared insolvent.
“In other words, the government decided to use monies and other resources that should have been spent on the entire population’s needs, such as improving roads and water supply, to provide compassionate assistance to the former LIAT employees.
“By any stretch of the imagination, this is a generous offer, always recognizing that no legal obligation of any kind falls to the government of Antigua and Barbuda, and certainly not for 100 percent of assistance to employees of a company, 68 percent of which was owned by other CARICOM members states”.
The government here said that if the principal shareholder governments had taken the view that all of them had a moral obligation to assist all the former LIAT employees, “an offer could have been formulated to provide such assistance, according to the ownership shareholding in the company.
“This cooperative approach which would have resulted in full settlement of staff severance payments was not pursued by the other shareholding governments. Instead, a domesticated option was employed ostensibly to limit their liabilities to the staff of LIAT.”
The statement said that LIAT (1974) Ltd was forcefully collapsed as insolvent, despite the dissenting view by the Antigua and Barbuda government and the recommendation to establish a LIAT 2020 Ltd.
In the statement, Prime Minister Browne said he was obliged to address the decision by the Barbados government to make severance payments to its nationals since the ABWU raised the payment issue.
“The Barbados government has decided to offer assistance to Barbadian employees only, in a sum it has solely determined in light of its circumstances. In this regard, neither the government of Barbados nor any other shareholder government in LIAT (1974) Ltd has acknowledged any obligation to the former workers, including those here in Antigua and Barbuda.
“Consequently, the position of the Antigua Workers Union that the government of Antigua and Barbuda should use taxpayers’ money to pay 100 percent of monies to LIAT (1974) Ltd employees and former employees to which they have no legal claim, and for which the government of Antigua and Barbuda could only reasonably be responsible for 32 percent, is both reckless, misleading and unhelpful.”
Browne said that his administration “as an act of compassion and eminent reasonableness, continues to be committed to settling this matter directly with the existing and former employees of LIAT (1974) Ltd, in their interest”.
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