Reports ProActive Management Systems owed Government up to $500,000 in payroll taxes were yesterday dismissed by the contractor.

The Royal Gazette was told that the company owed $134,000 in social insurance payments and $500,000 in payroll taxes as of August 4.

But yesterday a company spokesman said: "Whatever we owed Government on those we would have happily paid if Government had given us our money."

He confirmed that the company owed about $130,000 in social insurance payments but said that any suggestion that $500,000 was owed in payroll tax was "totally off the wall".

"The $130,000 sounds correct. Of course they could have taken it at anytime in accordance with our previous agreement with them."

The outstanding payroll tax bill was no more than $40,000, he added.

ProActive's contract to build the new senior secondary school at Berkeley was terminated last week.

Government paid the company's workers for the last week of the contract but have refused to pay any severance money.

But the Bermuda Industrial Union is pushing for the severance pay and is actively in talks with the Labour Department, according to BIU president Derrick Burgess.

"My folks are talking to the Labour department trying to get it resolved and we will go from there," Mr Burgess said.

"The Employment Act is quite clear on terminations without notice and it's quite clear on severance. It's also clear that a collective agreement is in place that's more beneficial to the workers, then that supersedes the Act."

Asked if ProActive should not be held liable for severance to its own workers, Mr. Burgess said that closing the site down was Government's decision.