The current standoff in Barbados between the incumbent telecoms company, LIME, and the country’s largest workers union, is discussed.
For those of you who regularly read our news roundups, you might have realised that there has been a highly contentious matter in Barbados between the one of its largest workers unions, the Barbados Workers’ Union (BWU), and the incumbent telecoms company, LIME. Earlier this month, LIME fired 97 employees. Negotiations with the BWU reached an impasse, and as of last week, the union threatened an island wide strike, which was expected to happen this week.
However, Barbados Prime Minister, Freundel Stuart, summoned both BWU and LIME to a meeting on Wednesday 16 January, in what might have been a last ditch effort to resolve this standoff. Thanks to Prime Minister Stuart’s intervention so far, the BWU has postponed the strike, but with a follow-up meeting scheduled for today, Friday 18 January, in order to continue negotiations, this post highlights the issues and aims to provide another perspective on the matter.
BWU vs. LIME: what is the problem?
From all reports in the local newspapers in Barbados, it is perhaps fair to surmise that there is an uneasy tension between the BWU and LIME. In February 2012, the BWU was threatening industrial action to secure a new collective agreement with LIME, and over 100 of the company’s employees had staged a sickout, which forced the closure of some branches across the island (Source: Antigua Observer). For this current matter, the publicly available facts are as follows:
- LIME and the BWU have been in negotiations over the separation of some employees since August 2012
- In the first week of 2013, LIME announced it would be terminating the services of 97 employees, and did so the following week
- The BWU demanded that the termination letters issued be withdrawn
- LIME has refused to withdraw the letters
- A key point of contention is the severance package that LIME intends to pay (or has paid) the separated employees. The BWU wants a larger package; LIME is of the view that is already considerably more generous than what is is legally mandated to provide
- The Minister of Labour has unsuccessfully intervened in this matter
- The BWU has threatened industrial action, but has postposed it following the intervention of the Prime Minister, which as at posting, is still on going.
LIME might not just be vindictive
To be clear: all contentions between the BWU and LIME do not appear to be publicly known, but it ought to be generally appreciated that no position or appointment is truly permanent or exists into perpetuity. Persons remain in the employ of an organisation upon the mutual agreement of both parties. Moreover, the practice is that either party can terminate an employment arrangement at any time, and the terms governing termination, along with the compensation payable, are usually clear and agreed to by those concerned.
It is also important to highlight, according to the half-year report (April—September 2012) published by Cable and Wireless Communications, LIME’s parent company, that the company has been investing in Barbados. The following initiatives in Barbados were stated in the report:
- LIME TV was launched during that reporting period
- continued roll out of 4G/HSPA+ (Evolved High-Speed Packet Access) mobile data networks
- roll out of triple play and pay TV services.
Additionally, in the telecoms industry in particular, and as the impact of competition is experienced, companies must evolve to become leaner, more efficient and agile in order to thrive. For example, towards the end of 2012, LIME opened a contact centre in Barbados, which is expected to create up to 180 jobs. This contact centre is likely to service a number of countries in which LIME operates, and would introduce some efficiency into the company’s overall operation, provided that commensurate adjustments can be made.
Finally, LIME is the incumbent telecoms operator in Barbados, which means that it is frequently subject to regulatory oversight – in order to create a more level the playing field. In that regard, and unlike most Caribbean countries, LIME’s landline customers in Barbados pay a flat monthly fee for local calls. In other countries, even where LIME operates, customers are billed based on usage, usually minutes consumed. This flat rate in Barbados might not truly reflect the true cost of providing the landline service. Currently, it might be subsidised by other sources, which is generally considered poor business practice, but the company might be required to keep the price low and find other avenues through which savings can be realised.
As one door closes, has another opened?
Among the Bajan public, there has been concern that LIME will be inviting back only a select few of the 97 terminated employees to engage with the company as external contractors, or some other kind of relationship. This concern might also be at the core of the BWU’s demand for larger severance packages for the separated workers, in order to offset perceived uncertainty in the market. But is LIME the only game in town?
Currently, Karib Cable and Flow are in the process establishing operations in Barbados, which suggest that employment opportunities are imminent. Further, as discussed in Pros and cons when tech companies downsize, this seemingly unfortunate event can invigorate the industry, since it opens up the labour pool and potentially limits the degree of cannibalisation of other existing companies, which tends to occur when there are new entrants in the market.