NCB Jamaica Limited on Tuesday (February 20) lost its appeal at the London-based Privy Council against the NCB Staff Association, in relation to the bank’s decision not to pay staff a profit share for the financial year September 30, 2002.

The sssociation initiated proceedings in 2006 and filed a fixed date claim form in which they sought a declaration that subtracting the profits of a company that was subsidiary of NCB was not a part of the contractual calculations and therefore the profits of that year had reached the threshold necessary to pay a profit share. They also made an amendment in 2014, seeking interest at the commercial rate from the date of the judgement until payment, should judgement be made.

The main contention during the matter was the interpretation of the phrase “six per cent of consolidated profits after consultation with the auditors”, which was present in a staff circular explaining the profit share payment scheme.

It was NCB’s argument that profit meant the figure left after deducting the amount for a subsidiary and that the auditors were in a position to overrule the original calculations and determine if the payment was to be made.

However, in his judgement, dated July 20, 2017, Justice Sykes held that the line in the statement that said “Profit before taxation” is the figure that should be used to determine the profit and that the auditors did not have veto power in relation to determining payments, and simply existed to check the bank’s initial calculations. In his judgement dated October 25, 2017, he also granted interest at the commercial rate of 20.5 per cent.

The bank appealed to the Court of Appeal on the grounds that there was an incorrect interpretation of the role of the auditors, as well as what figure represented the profit from which the profit share was to be determined. They also contested the granting of the interest.

In judgement dated July 3, 2020, the Court of Appeal rejected the bank’s assertions and upheld Sykes’ declaration of what line in the statement constituted profit as well as the role of the auditors. They also upheld the judge’s discretion to grant interest.

NCB advanced the matter to the Judicial Committee of the Privy Council on the grounds that the Court of Appeal was wrong to accepts Sykes’ rulings and that proper interpretation of the clause meant that the bank was bound to act on the advice of the auditors, who concluded no profit share was payable in 2002.

They argued that the association could not prove that deducting the portion that is connected to a subsidiary was not usual practice in previous years. It was contended also, that granting interest was improper in the circumstance as well.

The committee rejected the bank’s arguments of what constitutes profits and held that Sykes did not fail in this regard. He also was correct in his interpretation of the role of the auditors. They also denied the appeal in relation to the award of interest.

The total appeal was dismissed and the Privy Council upheld the initial declarations made at first instance in 2017. There is, to date, no information as to how NCB will go about making the payments.