Savoy, Coral Strand staff get their full salaries for July, with tax and pension contributions paid |11 August 2020

PS Baker (Photo: Patrick Joubert)

All staff of the Savoy and Coral Strand hotels have been paid their July salaries in full, with tax and pension contributions paid, by the Russian based Eastern European Engineering Limited (EEEL) responsible for both hotels.

This follows an imposed 48-hour ultimatum for the company to settle the salary issue after failing to do so last week.

It was the principal secretary for employment, Jules Baker, who made the announcement to the press yesterday afternoon in his office at Independence House Annex.

The company was given the 48-hour ultimatum from August 7, 2020 to Saturday 8, 2020 to pay off the local staff’s net salaries in full including tax and pension as required by law or face legal action.

PS Baker said that the Ministry of Employment, Immigration & Civil Status, through negotiations with EEEL, learned that the money (R884,475 in the Coral Strand account and R1,395,564 in the Savoy account) to pay the local staff’s salaries was transferred into Nouvobanq on August 8, 2020. As Nouvobanq and other banks are closed on Saturdays, the money was distributed into the staff’s different individual bank accounts as of yesterday afternoon as per their banks’ procedures and transactions.

In all, 144 staff from Savoy Resort and Spa Hotel and 84 staff from the Coral Strand Hotel were expected to receive their full or the missing part of their salaries by yesterday afternoon and throughout today (Tuesday).

The hotel workers had refused to work on Friday, August 7, 2020 after they had learned that they had been paid, through their bank accounts, only part of their basic salaries (Savoy employees at 89% and Coral Strand employees at 41%), excluding tax and pension payment although the company had been assisted under the Financial Assistance For Job Retention (FA4JR) scheme. The company did pay in full the salaries of their employees for the months of May and June but apart from paying only part of the staff’s salaries for the month of July, it was also in default of paying out their taxes and pensions to relevant authorities since May 2020.

PS Baker stated that as of the month of August 2020, the government under the FA4JR scheme has taken the decision to pay the taxes and pensions on behalf of the local employees of the two hotels directly to the relevant authorities and will only transfer their basic net salaries in the accounts of the two hotels to be paid to them possibly by the end of August 2020.

“The problem would not have happened this month because actually the issue was that government under the FA4JR paid the whole gross salary for the workers for May and June whereby part of their salaries related to tax and pension contributions were not paid and therefore the Ministry of Finance did not pay the gross salaries for July as the money was still in the bank accounts of Savoy and Coral Strand,” PS Baker said.

Speaking on liable penalties to be taken against EEEL, PS Baker said that while relevant information is being gathered before proceeding to present a court case, the company is also being given the opportunity to show proof of its salary payment transactions for the local employees.

He further said that in another case, the ministry is in the process of filing a court case for salary deferment of foreign workers, especially those still stranded in the country, against the two hotels. He said that a third letter to the EEEL to act on the deferment of salaries of the foreign workers is forthcoming following non compliant replies from two previous letters sent on July 16, 2020 and early August 2020.

Patrick Joubert