Ten Cayman Islands Airports Authority employees received a total of $173,000 in ad hoc “severance payments” upon their retirement from the authority, airports officials confirmed Friday.
The severance payments were not condoned by the authority, and CIAA Chief Executive Officer Albert Anderson said he could not respond regarding why the practice of paying severances seemed to prevail prior to his tenure in March 2014.
“I am advised that the current CIAA board stopped the practice immediately when they were made aware of it back in 2013,” Mr. Anderson said. “It certainly has not happened since March 2014. The records show that 10 former employees received the severance packages. The total paid to the 10 employees was $173,000.
“I can say categorically that the practice has been stopped and will not happen again during my tenure as CEO.”
Government auditors flagged the severance payments mainly during the government’s 2012/13 financial year. A few may have been paid in the beginning of the 2013/14 year, which began just prior to the appointment of the current board of directors, auditors said.
Mr. Anderson did not elaborate on whether all 10 retiring employees received the same amount. Typically, severance payments, under the Cayman Islands Labour Law, are made when an employee is made redundant or wrongfully terminated.
The payment can equal between one and two weeks’ pay for each year the person has worked for the company.
Acting Auditor General Garnet Harrison reported last month that it appeared none of the former airport authority employees who received the “severance” payment had provisions in their contracts for such a payment. The payments were authorized by the airports authority board at the time, auditors confirmed.
Lump sum payments can be made in the public sector upon a worker’s retirement, but such payments are usually arranged beforehand, the auditor general’s office noted.
Current CIAA board Chairman Kirkland Nixon was clearly upset when informed about the practices of the former board.
“It’s ridiculous. It’s the first time I’ve ever seen it,” Mr. Nixon said. “People don’t get severance payments when they retire.”
Mr. Nixon said airport board members appointed under the Progressives-led government administration first learned of the severance payments during a 2013 briefing with financial managers. He said none of the payments was authorized by the current board of directors.
“This had apparently been going on for years,“ Mr. Nixon said. “We stopped it immediately.”
Mr. Anderson said he could not confirm statements about the severance payments occurring “for years.”