Aug. 23, 2004 – In a last-minute change of heart, management at the Grand Beach Palace Resort agreed to give most of its 300 employees a more generous severance package than originally planned, plus a week's salary and three months of paid medical insurance.
"It was the right thing to do," St. Thomas attorney Adriane Dudley said on Monday.
Dudley, representing Palace Resorts, the Mexico-based chain that owns the hotel, said the severance package is costing the company more than $1 million.
Labor Commissioner Cecil Benjamin did not return telephone calls requesting comment.
The hotel closed for good on Sunday. Employees were to pick up their severance paychecks between 3 and 7 p.m. Monday.
When the Grand Beach Hotel management announced the closing plans on July 1, it offered employees a week's severance pay across the board. Labor Department officials contended many of the employees were owed more because they had worked at the resort under previous ownerships. The territory's plant-closing law specifies severance of one week's play for each year of employment.
However, Palace Resorts acquired the property less than a year ago, and the hotel management argued that the new ownership constituted a new business that has been in operation for less than a year and thus is not covered by the law.
Under the final agreement, the severance packages are based on how long employees worked at the resort, no matter who owned or operated it, but the workers with the most longevity will receive less then a week's pay per year worked.
The agreement is for severance of two weeks' pay for workers with less than three year's service; three weeks' pay for those with at least three but less than six years' service; four weeks' pay for those with at least six but less than 11 years; five weeks' pay for those with at least 11 but less than 15 years; and six weeks' pay for those with at least 15 years' service.
And when the hotel is sold, Dudley said, workers are to be given preference in hiring if their skills match the jobs available.
Grand Beach Palace bought the former Renaissance Grand Beach Resort last November for $9.75 million. When the new owners took over the 290-room hotel, the United Steelworkers Union continued its efforts to organize the workers.
Management announced on July 1 that the hotel would close for about six months for a multimillion-dollar upgrade. Union leaders charged then that an impending vote on unionization was the reason for the closing. Subsequent conflict between the resort management and the V.I. government escalated to the point where the hotel owners decided more than a week ago to close for good.
Dudley said it became obvious to the owners after listening to discussions at an abrasive Senate hearing that they were not wanted in the territory. "There's an anti-business attitude," she said.
She called on the community to welcome whatever company buys the hotel.
The government went to Territorial Court last week seeking a temporary restraining order to force the hotel to stay open, but was unsuccessful.
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