NCB Staff Association scores landmark win on profit share
THE NATIONAL Commercial Bank (NCB) Staff Association has triumphed in Jamaica’s final appellate court, the Privy Council. This comes as NCB lost its appeal in a longrunning legal fight with workers seeking their share from the financial giant’s profit-sharing scheme.
NCB wanted Jamaica’s final appellate court to strike down the rulings of then Supreme Court judge Justice Bryan Sykes, saying he wrongly interpreted the bank’s circular on its scheme and the meaning of the term “consolidated profit before tax”.
The dispute dates back to December 1980, when NCB implemented a profit-sharing scheme with its staff members, who are represented by the NCB Staff Association.
Sykes had found in the first case that the scheme was subsequently incorporated i nto the staff ’s employment contracts through negotiation.
The terms of the scheme were reflected in a staff circular, which provided that “the maximum annual amount to be distributed shall be six per cent of consolidated profits before tax, as agreed by the company’s auditors before, making allowance for the payments under the scheme…as shown in the audited accounts of the immediately preceding year”.
The fallout came in December 2002 when NCB informed the association that based on computation done by its external auditors, no profit-sharing was payable for the year ended September 30, 2002.
A sum attributable to minority interests had been deducted from the “consolidated profits before tax” amount for the year 2002.
But for the deduction, the threshold set out in the circular for triggering the profit-sharing scheme would have been met, the board of the Privy Council noted.
As at 2002, the effective date of the disputed contract, profit before taxation and extraordinary items was just over $2.2 billion.
In handing down judgment yesterday on a case heard on December 12, 2023, the board, consisting of Lord Hodge, Lord Stephens and Lady Rose, dismissed the bank’s appeal against the award of interest from October 2002.
The board condensed the original six-part ruling from Justice Sykes that there should be a declaration identifying documentation with subsequent amendments to cover the scheme and that it was part of the employees’ contracts.
The board also agreed that NCB should pay costs in the longrunning case.
Justice Sykes had granted declarations that the profitsharing scheme formed part of NCB employees’ contracts of employment, that the deduction for the minority interests was not in keeping with the terms of the circular, and that a profit-sharing payment was due for year ending September 30, 2002.
Justice Sykes awarded simple interest from October 1, 2002, to the date of payment.
NCB filed an appeal in Jamaica, contending that the judge wrongly interpreted the circular and the meaning of the term “consolidated profit before tax”.
At the same time, NCB did not challenge the judge’s finding that the profit-sharing scheme had been incorporated into the employment contracts, the Privy Council noted.
The Court of Appeal dismissed the motion and NCB then took the matter to the Privy Council.
CHALLENGE
While it did not challenge the judge’s finding that the scheme was incorporated into the workers’ employment contracts, it sought to challenge his interpretation and application of a formula relating to participation in a profit-sharing scheme, as well as awarding interest for a period that was longer than originally claimed for by the staff association.
The board said the effective contract is contained in Staff Circular No. 33/1980/P dated 17 December 1980. It said Justice Sykes had found the first fully documented formula for the calculation of amounts payable under the scheme.
“The scheme had been the subject of detailed negotiation between the association and the bank since 1977, which had been agreed in principle,” the board said.
The bank was represented by Sandra Minott-Phillips, KC, and Noel Levy, instructed by Myers, Fletcher & Gordon of London, while the staff association was represented by M. Georgia Gibson Henlin, KC, Patricia Roberts-Brown and Jonathan Neita, instructed by Simons Muirhead & Burton LLP.
Contacted for comment, Gibson Henlin hailed the judgment as a landmark in the search for justice and the determination of those who seek it.
“Justice has been served. The decision has given effect to the intention of NCB’s predecessors and NCB’s intention to allow the employees a profit share as part of their contract of employment. The decision is a lesson in perseverance, and the dogged determination of the association on behalf of its staff members should not be underestimated,” Gibson Henlin said.