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Wednesday, July 9, 2025

TCL asks for extra time to pay $90 mn backpay

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20140706

TCL chief ex­ec­u­tive, Rollin Bertrand, has ad­mit­ted that the fi­nan­cial­ly trou­bled lo­cal ce­ment pro­duc­er does not have $90 mil­lion "stock­piled" to meet its back­pay com­mit­ments to its em­ploy­ees, which the In­dus­tri­al Court or­dered the com­pa­ny to pay by Au­gust 8.

In an ex­change of e-mail with the Sun­day BG on Thurs­day and Fri­day, Bertrand said that TCL is propos­ing that the back­pay should be paid in in­stall­ments and that the ce­ment com­pa­ny wants to "sit with the union and de­vel­op a pay­out sched­ule that can be han­dled by the cash-flow pro­jec­tions."

Asked what would be TCL's po­si­tion if the Oil­fields Work­ers Trade Union (OW­TU), which rep­re­sents TCL work­ers, in­sists that the com­pa­ny abide by the terms of the June 27 In­dus­tri­al Court judg­ment, which or­dered that back­pay should be paid by Au­gust 8, Bertrand said:

"The Union can­not in­sist be­cause the debt is not be­tween the com­pa­ny and the union. The debt is to in­di­vid­ual em­ploy­ees. For the past six months, man­age­ment has been meet­ing with em­ploy­ees ad­vis­ing them that the pay­ment will be made over a pe­ri­od just as it has done for many col­lec­tive agree­ments in the past.

"We have nev­er made back-pay pay­ments in one lump sum be­cause they are al­ways ma­te­r­i­al since agree­ments are nor­mal­ly sev­er­al years old. This is al­so the case in our com­pa­nies in Ja­maica and Bar­ba­dos. We have a sen­si­ble work­force who we are con­fi­dent will work with us on this mat­ter."

Re­spond­ing to Bertrand's po­si­tion, OW­TU pres­i­dent gen­er­al An­cel Ro­get said the trade union felt vin­di­cat­ed by the rul­ing of the In­dus­tri­al Court in the TCL mat­ter.Ro­get said: "We in­sist that the In­dus­tri­al Court judg­ment on this mat­ter be fol­lowed to the let­ter as work­ers de­serve their retroac­tive pay­ments.

"We ve­he­ment­ly dis­agree that the com­pa­ny does not have the abil­i­ty to pay work­ers their back­pay, es­pe­cial­ly in the con­text of the com­pa­ny's wastage of mon­ey at the plants and the com­pa­ny's squan­der­ma­nia in pay­ing lawyers huge sums of mon­ey.

"We are call­ing on the share­hold­ers and cred­i­tors of TCL to take stock at how the com­pa­ny is be­ing man­aged by the CEO and top man­age­ment and we are re­in­forc­ing our call for the dis­missal of Bertrand and the en­tire top man­age­ment of the com­pa­ny who have the com­pa­ny in the po­si­tion it is in."

Ro­get al­so said that it was "wrong and un­law­ful" for the com­pa­ny to by­pass the rec­og­nized bar­gain­ing union and ne­go­ti­ate di­rect­ly with the work­ers and that he would have more to say on TCL mat­ters when the union holds a news con­fer­ence.The In­dus­tri­al Court heard TCL's ar­gu­ments that it should be al­lowed to pay the back­pay in in­stall­ments in the In­dus­tri­al Court mat­ter in­volv­ing the wage dis­pute for the 2008 to 2011 pe­ri­od; that dis­pute re­sult­ed in the TCL work­ers stag­ing a 90-day strike in 2012.

In its judg­ment, the In­dus­tri­al Court sum­ma­rized TCL po­si­tion in this way: "A re­view of the au­dit­ed fi­nan­cial state­ments would con­firm that there was no cash al­lo­cat­ed or put aside in a bank ac­count to meet any back­pay pay­ments to em­ploy­ees."Cur­rent­ly, all cash gen­er­at­ed by the TCL group was be­ing used to meet the loan re­pay­ment re­quire­ments. Fail­ure to meet the quar­ter­ly pay­ments would re­sult in the TCL group be­ing de­clared in­sol­vent and the busi­ness placed in the hands of re­ceivers.

"They re­quest­ed that the Court al­lowed a rea­son­able time pe­ri­od for the com­pa­ny to pay any award­ed pay in­creas­es/back­pay to the em­ploy­ees and pro­posed four quar­ters in­stall­ments."The Court said TCL's po­si­tion was pre­ma­ture as ar­gu­ments for de­layed pay­ments should on­ly be made af­ter a wage award has been made by the Court and such ar­gu­ments should be backed by "sup­port­ing ev­i­dence."

In an e-mail to the Sun­day BG, Bertrand in­sist­ed that TCL had made ad­e­quate pro­vi­sion for the $90 mil­lion back­pay but that there was a dif­fer­ence be­tween the cash­flow im­pli­ca­tions of the pay­ment and the po­ten­tial prof­it and loss im­pact.

...re­sponds to ar­ti­cles in BG

The TCL Group wish­es to clar­i­fy re­cent ar­ti­cles, head­lined "TCL Faces New Chal­lenges" and "Will TCL Di­rec­tors Stay", which ap­peared in the Busi­ness Guardian edi­tions of Sun­day, June 29 and Thurs­day, Ju­ly 3, 2014 in that or­der.

In­dus­tri­al Court Rul­ing

�2 As far as the In­dus­tri­al Court is con­cerned, TCL did not "lose" the case, as the com­pa­ny al­ways want­ed the mat­ter to go be­fore the Court rather than de­te­ri­o­rate in in­dus­tri­al ac­tion. TCL's fi­nal po­si­tion was 7.5 per cent while the Union's fi­nal po­si­tion was 12 per cent; the Court ruled at 9 per cent - which can­not be in­ter­pret­ed as a loss.TCL has made ad­e­quate pro­vi­sion for this rul­ing and will have dis­cus­sions with the Court and the Union about a phased pay­out, notwith­stand­ing the Court's dead­line of Au­gust 8, 2014.

In the sec­ond ar­ti­cle, there seemed to have been a dis­tor­tion of the facts re­lat­ed to the rul­ing and TCL's abil­i­ty to stay in busi­ness and it was in­ac­cu­rate­ly stat­ed that TCL "did not make any pro­vi­sion" for an in­crease in salaries/wages in its 2012/13 fi­nan­cial state­ments when in fact, the TCL bal­ance sheet has $500 mil­lion for payables and ac­cru­als, which in­clude the back-pay. TCL will have to back-pay around $90 mil­lion, which it will gen­er­ate over the next year, while en­sur­ing that it meets all oth­er fi­nan­cial oblig­a­tions.

Debt Ser­vic­ing and Fi­nan­cial Po­si­tion

�2 The com­pa­ny has ho­n­oured all its debt ser­vic­ing quar­ter­ly pay­ments since De­cem­ber 2012 and is ful­ly com­pli­ant with all covenants un­der the Over­ride Agree­ment with its Lenders. TCL is gen­er­at­ing ad­e­quate cash flow to pay all its oblig­a­tions (in­clud­ing back-pay) and pro­jec­tions show that each will be met in­to the fu­ture. All pay­ments have been made on time with com­fort­able cash bal­ances af­ter each quar­ter. Mar­kets are im­prov­ing and the com­pa­ny has made im­por­tant break­throughs in new mar­kets such as Brazil, Venezuela, Mar­tinique and Colom­bia.

�2 TCL post­poned its debt re­struc­tur­ing in the HY Cap­i­tal Mar­kets af­ter it was con­vinced that a re­turn to these mar­kets with a slight­ly dif­fer­ent strat­e­gy would be more suc­cess­ful. TCL's re­cent of­fer to the HY mar­ket was over­sub­scribed af­ter a suc­cess­ful road­show to the US and Cana­da. It is there­fore puz­zling that it was de­scribed in the ar­ti­cle as an "am­bi­tious road­show".

�2 Up­on ex­am­i­na­tion of the com­pa­ny's fi­nan­cial state­ments over the past three years, one would clear­ly re­al­ize that its fi­nan­cial po­si­tion has im­proved sig­nif­i­cant­ly. Rev­enues are back up to pre-cri­sis lev­els of US$300 mil­lion, EBIT­DA mar­gins at up to 20 per cent and the com­pa­ny has made ma­jor break­throughs in­to new mar­kets. Why then would some­one "run to the High Court" with a writ of bank­rupt­cy in 2014 when that was not done in the pe­ri­od 2010-12?

�2 TCL de­clared a mora­to­ri­um in 2011. It was made in con­junc­tion with the Lenders and as such, the com­pa­ny was not "dar­ing" any­one to de­clare it bank­rupt. Ad­di­tion­al­ly, cred­i­tors cap­i­tal­ized all in­ter­est fore­gone dur­ing the pe­ri­od of the mora­to­ri­um and added 200 ba­sis points to over­all in­ter­est. That debt re­struc­tur­ing was very "cred­i­tor friend­ly".

�2 The re-in­ter­pre­ta­tion of the at­tempt­ed takeover by Ce­mex in 2002 is al­so mis­in­formed. There is no way that Bertrand and Bha­jan with less than 1 per cent of share­hold­ing be­tween them could have "kept TCL lo­cal". It was kept lo­cal by the ju­di­cious think­ing of em­ploy­ees, mi­nor­i­ty share­hold­ers, the OW­TU and the man­age­ment of the com­pa­ny who have con­fi­dence that Caribbean peo­ple can man­age their own af­fairs and de­vel­op World Class com­pa­nies in the re­gion. Sad­ly, the old colo­nial men­tal­i­ty is still per­va­sive and con­tin­ues to push an agen­da for for­eign own­er­ship of all our ma­jor busi­ness­es.

Price In­crease

�2 TCL's re­cent price in­crease was im­ple­ment­ed to cov­er gen­er­al in­fla­tion. The com­pa­ny is con­fi­dent that it will man­age its labour costs through a com­bi­na­tion of man­pow­er ra­tio­nal­iza­tion, tech­no­log­i­cal im­prove­ments and out­sourc­ing. This has been the com­pa­ny's strat­e­gy for the last decade when it was able to ab­sorb in­creas­es in salaries and wages that were high­er than 9 per cent.


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