NCB staff prevails in profit-sharing battle
Unless it further appeals and is successful, National Commercial Bank Jamaica, NCB, will have to fork over hundreds of millions to the NCB Staff Association, which has prevailed in a long-running battle over a profit-sharing arrangement.
In the latest round of the legal fight, the Court of Appeal handed the staff association yet another victory in a challenge by the bank regarding the period over which interest was applied to the near $143 million in damages previously awarded to the association in a court decision in 2017.
Supreme Court Justice Brian Sykes awarded interest with effect from 2002, the same year in which staff was denied the profit-share payout by NCB, although the respondent had sought interest from the date of judgement.
Appellate Justice Nicole Foster-Pusey held that Supreme Court Justice Brian Sykes was entitled to exercise his discretion to grant interest for the period over which the staff association’s members had been deprived of the payment.
Up to two years ago, the interest had accrued to $436 million.
Asked on Thursday about the bank’s next move in light of the adverse judgement, NCB Financial Deputy CEO and NCB director Dennis Cohen said that that is still under review.
“We are still having discussions with our lawyers on the matter, so we can’t comment on whether or not we will appeal further,” Cohen told the Financial Gleaner.
President of the NCB Staff Association, Paul Stewart, said the individuals who will benefit from the court’s award covers all staff who were employed as at September 30, 2002, and those who left in good standing order during the period spanning October 2001 to September 2002.
“So if you were fired, you wouldn’t get anything. But if you retired or were made redundant, or you left on your own but in good standing with the bank, you would be made a payment,” he said, noting that the number of persons would be just over 2,000.
As to whether the court win would have implications for future wage agreements, Stewart said, it had no bearing as the bank eventually began making provision for the profit-share arrangement, and “so that money is set aside already”.
The profit-sharing agreement between NCB and the staff association was agreed through negotiation three decades ago, in December 1980.
However, in December 2002, the bank advised the association that based on the computation of its auditors, no profit sharing was payable that year, referring to the bank’s financial year ending September 2002.
The staff association challenged the approach used by the auditors to arrive at its decision, but after years of discussion, and no resolution to the issue, it sued NCB on February 14, 2006.
The case was heard a decade later, over the period July 2016 to May 2017, after which Justice Sykes, in a decision handed down two months later, awarded damages of $142.82 million to the staff association and ordered NCB to also pay interest at the commercial rate of 20.05 per cent on that sum, starting October 1, 2002, to the date of payment.
NCB appealed the judgement, and in May 2018, was granted a stay of execution on the payout to the staff association. However, the bank was ordered to open accounts in the names of both parties and retain the $142.82 million award in an account that paid interest at 20.05 per cent per annum.
According to the Court of Appeal judgement, interest on that sum, as at January 16, 2018, amounted to $435.96 million and was to be placed in a separate account. The parties agreed that the sum would bear interest at the weighted time deposit rates as published by the Bank of Jamaica for the commercial banking sector.
Foster-Pusey said that having reviewed Sykes’ judgement, the evidence, as a whole, supported the decisions to which the judge arrived on the profit-sharing scheme and the interpretation of the staff circular in which the agreed terms were reflected.
She said that while the staff association claimed interest as at the date of judgement, which was handed down in July and October of 2017, they had been deprived of the monies from 2002.
The dispute concerning the profit-share payment related to NCB’s audited financial statements as at September 2002. The staff’s court claim was filed in 2006 and amended in 2014.
She said that while attorneys for NCB submitted that there was no explanation for the delay between when the claim was filed in 2006 and the period up to May 2015, no positive assertion was made that the staff association deliberately caused that delay.
Foster-Pusey, with whom the other Court of Appeal panellists – Justice Hilary Phillips and Justice David Fraser – agreed, said that NCB had not established that Justice Sykes misunderstood the law or evidence before him in the exercise of his discretion.
NCB was represented by attorneys Walter Scott, QC, and Anna Gracie in the case, while attorneys Crafton Miller, Patricia Roberts-Brown, Jonathan Neita ,and Lesley-Ann Stewart represented the staff association.