Joseph Nicholas Russo III v Butler & Sands Company Ltd

• Jurisdiction: Bahamas
• Judgment Date: 19 March 2004
• Docket Number: No.717 of 2003
• Court: Industrial Court (Bahamas)

In the matter of the Industrial Relations Act

and

In the matter of the Employment Act, 2001

Joseph Nicholas Russo III

Applicant

and

Butler & Sands Company Limited

Respondent

No.717 of 2003

INDUSTRIAL TRIBUNAL

NASSAU

Counsel for the Applicant — Mrs, Caryl A. E. Lashley

Counsel for the Respondent — Rawson McDonald Esq.

DECISION AND REASONS

The Facts & Evidence:

1 Under terms of letters dated May 1, 1998, and May 15, 1998, the Applicant commenced employment with the Respondent in the capacity of Managing Director of its associated company, Todhunter-Mitchell Wine & Spirits Limited, Freeport Grand Bahama.

2 The letters read respectively as follows:

“May 1, 1998

Mr. Joseph N. Russo III

Box 5023

St. Thomas

USVI 00803

Dear Mr. Russo,

Let me set forth the main points we have agreed to, regarding your employment with us:

TITLE: Managing Director

Todhunter Mitchell Wines and Spirits Limited

DUTIES: To develop Todhunter Wines & Spirits Limited into a full-line independent sales and distribution company throughout the Bahamas, as well as to maximize export sales of Todhunter Mitchell brands throughout the world. To also provide direction to Todhunter Mitchell Distilleries Limited re new products and upgraded packaging and labelling.

COMPENSATION: Base salary: $10,500.00 per month plus year end bonus payments to be agreed upon.

WORK PERMIT: We will arrange a work permit at our expense for a three year period, as well as resident permits for yourself and your wife.

MOVING COSTS: We will pay all moving costs and agree to move you back to the United States at the end of your employment. I understand that this will entail roughly two forty-foot containers and transportation of two vehicles.

AUTOMOBILES: An interest free loan will be made available for the provision of one car. All vehicles will be registered under the name of Butler and Sands Company Limited so that they can be bonded to reduce the cost for the move. It is noted that the cars belong to you.

VACATION: Four weeks paid vacation per year, not to be taken consecutively.

TRAVEL: A significant amount of travel will be required, including attendance at major industry shows and symposiums (IAADFS, Tax free World, WSWA, etc.) All usual and customary travel expenses will be reimbursed and travel will be by business class on flights over three hours.

LOCAL EXPENSES: Trade spending, CC and YC dues, Chaine des Roitsseur membership etc., airline and credit fees, visa and passport fees to be reimbursed.

ADVANCES AND DEPOSITS: You will be given a permanent $1,000.00 travel advance to facilitate your travel. The deposit on your apartment will be paid by Todhunter Mitchell Wines & Spirits and deducted from your last month's rent unless we terminate your employment and you have to forfeit the deposit.

EQUITY: Your shares will be held in trust by us until they can be registered in your name. You should understand that you cannot sell them with (sic) our authorization.

Welcome aboard!

Please sign your acceptance below:

JOSEPH N. RUSSO III	JOHN E. SANDS
Witness

dated: May 1/1998”

“May 15, 1998

Mr. Joseph N. Russo III

Box 5023

St. Thomas

USVI00803

Dear Mr. Russo,

Re: Year End Bonus Payments

Pursuant to my letter of May 1, 1998, the following year end bonus payments have been decided upon as follows:

Year One:	$10,000.00
Year Two:	$20,000.00
Year Three:	$25,000.00

Sincerely,

BUTLER & SANDS COMPANY LIMITED

John E. Sands

Managing Director

ACCEPTANCE: _____________________

Joseph N. Russo III”

3 The Applicant's contract of employment with the Respondent in the aforesaid capacity expired on June 27, 2001, and prior to the said expiry, the Respondent re-engaged the Applicant in the capacity of Export Director, Todhunter-Mitchell Wine & Spirits Limited for a period of six months ending December 27, 2001, by letter dated June 18, 2001 as follows:

“Mr. Joseph Russo III

Todhunter-Mitchell Wines & Spirits

P.O.Box F-42444

Freeport, Grand Bahama

BAHAMAS

Dear Mr. Russo:

Your employment contract expires June 21, 2001, the expiration of your existing work permit. Following are the terms and conditions of a new employment contract.

Title: Export Director — Todhunter-Mitchell Wines & Spirits

Duties:

To maximize export sales of Todhunter-Mitchell brands throughout the Caribbean and the U.S.A. with specific attention to the introduction of Don Lorenzo flavors in the U.S.A.

Salary:

Ten Thousand Five Hundred Dollars ($10,500.00) per month deposited directly to your account each month end. Any or all other benefits received are not intended to form a part of your employment compensation or terms for which you may claim additional compensation.

Work Permit:

The company, at our expense, will submit when necessary the renewal for your work and residency permit including residency permit for Mrs. Russo. This will be done within the required period, which is one month before the expiration date of the permit.

Your work and residency permit has been approved from June 28, 2001 to December 27, 2001.

Local Expenses:

You will be reimbursed for trade spending, airline, credit card fees, visa and passport fees, local transportation. Your club memberships will be paid for 2001. Receipts for reimbursements must be forwarded to the Accounts Department (monthly) and you will receive a cheque in accordance with the expenses.

Moving Cost:

At the end of your employment the company will pay moving expenses to relocate you back to the U.S.A. The use of two forty-foot containers and transportation of two vehicles will remain as part of the company's moving expenses.

Automobiles:

Vehicles presently registered under the name of Butler & Sands belong to you. The remaining payments are to be completed by December 31, 2001.

Travel:

All usual and customary business travel expenses will be reimbursed and travel will be business class on flights over three hours. Travel will include attendance at major industry shows and symposiums (IAADFS, Tax free World, WSWA, etc.). You will receive One Thousand Dollars ($1,000. 00) travel advance to facilitate your travel.

Vacation:

The entitlement of four (4) weeks vacation per year will remain, however this cannot be taken consecutively.

Apartment:

Living expenses will remain as is i.e. the company will continue to pay utility expenses, rent, maid services, etc.

This employment contract expires on December 27, 2001 and it will be renewed pending the results of the introduction of Don Lorenzo flavors in the U.S.A.

Kindly acknowledge your acceptance of the terms and conditions outlined above by affixing your signature where indicated.

Sincerely Yours,

Bart De Buecker

Joseph N. Russo

Witness

Date: 6.28.01”

4 Upon the expiration of his initial contract of employment with the Respondent on June 27, 2001, the Applicant inter alia immediately expressed his serious concern by letter of even date, that his future with the Respondent upon the expiration of his second contract of the employment on December 27, 2001, would depend upon the successful marketing of Don Lorenzo flavours in the U.S.A.

5 Nevertheless he unequivocally agreed to the terms and conditions of the ensuing six-month contract of employment. He said in that letter:

“… I have some trepidation as to placing my future on the line for the U.S. market given the fact that, at this point in time, the company does not have a product which is approved for sale in the U.S.A. and that the current formulation is at variance to numerous U.S. regulations. Nevertheless, I am willing to take on the challenge and trust that the company understands the issues and will not act unreasonable (sic)…

Irregardless (sic) of the above concerns I look forward to taking the assignment at hand and affirm that my enthusiasm will not be mitigated by my ongoing efforts to resolve my equity interest in Todhunter Mitchell Wines & Spirits Ltd…”

6 Upon expiry of the latter contract of employment on December 27, 2001, the Respondent continued to engage the services of the Applicant in the said capacity of Export Director on an indefinite basis until his summary dismissal by letter dated April 19, 2002 as follows:

“PRIVATE & CONFIDENTIAL

Mr. Joseph Russo III

Export Director

Todhunter Mitchell Wines & Spirits Limited

P.O.Box F-4244

Freeport, Grand Bahama

BAHAMAS

Dear Mr. Russo,

Re: Employment Contract

As you are aware, your employment contract with TodHunter Mitchell Wines & Spirits Limited, Freeport, Grand Bahama expired during December 2001. Please be advised that the Board has decided not to renew your contract. This will take effect immediately.

As per the terms of. your contract, we will facilitate your relocation expenses back to the United States. Furthermore, we have advised the Department of Immigration of our decision in reference to your employment.

We wish you all the best in your future endeavors.

Yours faithfully,

BUTLER & SANDS COMPANY LIMITED

Mark A.G. Finlayson

President”

7 The Applicant testified and the Respondent did not deny, that pursuant to the penultimate paragraph of his contract of employment dated June 18, 2001, he used his best efforts to introduce/market Don Lorenzo flavours in the U.S.A.

8 He testified that at the outset he had difficulties in getting the product approved with the Bureau of Alcohol & Firearms (B.A.T.F.) in the U.S.; the Bureau had problems with some of the chemical components of the product. He said that he had to get the product tested and evaluated at independent laboratories, and eventually the product was accepted upon certification by the laboratories.

9 He next had to convince distributors as to the marketability of the product.

10 The Applicant testified that after much arduous effort, he was successful in introducing the product in a number of states...