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All is not lost for retired Airport worker

Attorney-at-law Nazim Burke – represented the Claimant in the case

A former longstanding worker with the Grenada Airports Authority (GAA) who felt aggrieved with her compensation package is leaving the high court with mixed feelings based on a ruling from Justice Raulston Glasgow.

Roselyn Charles took legal action after complaining that the formula used to calculate her financial benefits was the wrong one and was seeking a package in the region of just over EC$125, 000.00.

The retired female employee had approached the court seeking various reliefs for alleged breaches of a contract of employment made between herself and the Airports Authority which entitled her to certain emoluments.

On 1st August 1984, Charles began employment with the Authority in the office of Air Traffic Control (ATC) Officer and prior to that date, she was employed as a civil servant appointed by the Public Service Commission of Grenada (PSC).

Her engagement with the Authority came about after she was seconded to the Authority by the PSC.

Charles continued working with GAA on the basis of several contracts from the time of her secondment until 5th May 2016 when she retired.

Attorney-at-law Nazim Burke, the former Minister of Finance in the 2008-13 Congress government appeared for the Claimant while Kristopher Ross Fields represented GAA in the matter.

In his ruling, Justice Glasgow said the claims for the relief sought by Charles are dismissed except to say that –

(1)   The Authority is to pay Ms. Charles any difference in the sum paid to her pension at the rate of 3% per annum as opposed to 4.2%.

(2) The Authority is to recalculate the retroactive salary payments to take account of the income tax rates existing between 2011 to 2016.

(3) The Authority must pay Ms. Charles any sums that may be due to her further to the terms of paragraphs (1) and (2) within 30 days of this judgment. Ms. Charles has been partially successful on her claim. She is awarded costs of $3000.00.

(4) As a public service, THE NEW TODAY reproduces in full the Raulston Glasgow ruling in the case:-

JUDGMENT
[1] GLASGOW, J.: The claimant, Ms. Roselyn Charles (Ms. Charles) has approached the court seeking various reliefs for alleged breaches of a contract of employment made between herself and the defendant (the Authority). Ms. Charles’ complaints are in respect of alleged breaches of her entitlement to certain emoluments.

Background
[2] On 1st August 1984, Ms. Charles began employment with the Authority in the office of Air Traffic Control (ATC) Officer. Prior to that date, Ms. Charles was employed as a civil servant appointed by the Public Service Commission of Grenada (PSC). Her engagement with the Authority came about after she was seconded to the Authority by the PSC. Ms. Charles continued working with the Authority further to several contracts from the time of her secondment until 5th May 2016 when she retired.

[3] In her witness statement filed on 15th May 2020, Ms. Charles outlines the various posts which she held with the Authority as follows –

(1) 1984- Promoted to ATC Supervision (C03)

(2) 1995 – Promoted to Senior Air Traffic Controller (C04).

(3) 2006 – Promoted to Assistant Manager of Air Traffic Services (Assistant Manager, ATS).

(4) 2011 – Promoted to Manager of Air Traffic Services (Manager, ATS).

[4] It is the latter promotion that has caused contention between the parties which contention has led to these proceedings.

Case for Ms. Charles
[5] Ms. Charles’ claim is that the Airports’ Authority failed to follow certain established practices and procedure relating to the process of acting in a higher position. She cites the following practices and procedures that should have been applied by the Authority to her contract as Manager, ATS –

(1) “When an officer acts in a higher position the officer will be paid an acting allowance of half the difference between their current salaries and the salary of the substantive holder of the higher post while so acting; and

(2) The unpaid difference in the salary for the period of acting will be paid to the officer on being confirmed in the position.” Ms., Charles refers to this payment as a “back pay”.

[6] At the time that Ms. Charles acted as Manager, ATS the substantive holder of the post held a contract wherein he was paid the sum of $8684.50 per month. Ms. Charles was paid an acting allowance of $1515.50 which sum was half the difference between her salary of her substantive post of Assistant Manager, ATS in the sum of $5635.50 and the salary of $8684.50 being paid to the substantive holder of the post of Manager, ATS.

[7] Ms. Charles explains that when she was confirmed in the post of Manager, ATS on 1st April 2011, her appointment was further to a letter dated 10th April 2011 (the agreement) wherein a salary of $6800.00 was quoted. Instructively for these present purposes, Ms. Charles was asked to sign the letter which stated that it contained all the terms and conditions appertaining to the agreement between the parties and that it superseded all previous such agreements. Ms. Charles acknowledges that she signed the letter as requested by the Authority. However, she stresses that even though she signed the letter, she omitted to tick a box contained in the letter as to whether she agreed to the terms stated therein.

[8] Ms. Charles’ first concern is that she anticipated being paid the salary of the previous holder of the post of Manager, ATS. She complains that the Authority discriminated against her by failing to pay her the salary paid to her erstwhile colleague in the office of Manager, ATS. Ms. Charles claims that she legitimately expected to be paid the same salary as the previous holder of her office. By reason of the failure to follow the alleged practices and procedure of paying her the same salary as her predecessor in office, she asserts, she has lost the benefit of this money along with all increases in salary that would been paid over the years. In her closing submissions she further stated that the discrimination was due to the fact that she is female, and her former colleague is male. This treatment, she says in her closing submissions, was a patent breach of the Employment Act, Cap. 89 of the laws of Grenada (the Employment Act).

[9] In her witness statement, Ms. Charles refers to Mr. Glen Forsyth who acted in the post of Manager of Maintenance during the same period that she acted as Manager, ATS and who was later confirmed in the post of Manager of Maintenance. Ms. Charles observed that Mr. Forsyth “was treated in accordance with the established practice and procedure… He got half the difference between his salary and the previous Manager’s salary for acting in that position and received the full salary when confirmed in that position.”

[10] Ms. Charles references Ms. Alana Paul, Ms. Hernel Panchoo and Mrs. Christina Joseph, who also complained about their salaries. Management thereafter adjusted those salaries. In respect of Ms. Paul and Ms. Panchoo, the union representing that category of workers got involved in the fray and negotiated a settlement with the Authority on the question of their salaries. Those two were paid the same salary as their predecessor in office after negotiations with the union.

[11] Ms. Charles also asks the court to find that she signed the agreement by mistake since there is no way that she would have properly signed the same with a salary that was less than the salary paid to the previous office holder. In fact, she says, she complained to the Human Resources Department and several of her superiors at the Authority about the matter but to no avail. At paragraph 6 of the statement of claim, Ms. Charles sets out a table detailing the sums that she was allegedly deprived of by reason of the Authority’s alleged failure to pay her the same salary as the previous office holder and for unpaid salary which amounts to $142, 821.26.

[12] Besides her complaint about the salary paid to her, Ms. Charles also pleads that the Authority improperly and/or illegally calculated and paid her retirement benefits.

[13] She explains at paragraph 7 of the statement of claim that –

“… it was also a term of the Claimant’s employment with the Defendant that the Claimant will be paid a Retirement and Pension Benefit comprising a Past Service Benefit effective June 1, 1998 in the sum of $26,721.00 at 5% per annum compounded: and a contributory Pension Plan Benefit of the basis of an equal monthly contribution by the Claimant and the Defendant of 5% of the Claimant’s gross salary with effect from June 1998 until retirement, which was being invested by the Defendant in an interest bearing account with the National Commercial Bank (now Republic Bank (Grenada) Limited) at an interest rate of 4% per annum compounded for the benefit of the Claimant”.

[14] Ms. Charles’ case is that the Authority erroneously calculated the Past Service Benefit (PSB) due to her. In respect of the pension benefit, she explains that “this did not take account of the unpaid salary and acting allowance set out above and the invested rate of 4% per annum, which the Claimant has calculated to be $123,056.58 being employer and employee contribution and accrued interest of $44,315.01.”

[15] Ms. Charles makes the further charge that her retirement benefits were improperly adjusted for income tax when she was not liable to pay the same. The following reasons are offered for this view–

(1) Being a public officer on secondment to the Authority, her retirement benefits were in effect a gratuity and as such the same were exempt from the deductions for income tax pursuant to section 25(1) (i) of the Income Tax, Cap 149 of the Laws of Grenada (the Income Tax Act);

(2) Tax was applied to the interests earned on the PSB and the contributory pensions payments, which were in fact deposits and as such not liable to taxation.

(3) The salary for the period May 2016 being $1,026.60 and the payment for her earned vacation leave in the sum of $3,079.82 were erroneously taxed as her PSB and pension benefits.

[16] Ms. Charles’s further claims that even if income tax is to be deducted from her retirement benefits, the Authority is liable to repay her these sums as the Authority failed or refused to register the pension plan with the Comptroller of Inland Revenue as an approved pension plan in accordance with section 48 of the Income Tax Act. Ms. Charles calculates her losses in respect of the alleged breaches of her rights to retirement and pension benefits in the sum of $77,301.41.

[17] At some point in the exchange of correspondence between the parties about their differences, the Authority acknowledged that it did not properly calculate some of Ms. Charles’ salary. It later paid these sums to Ms. Charles. Those sums are referred to in this judgment as retroactive salary. In its submissions before the court at the further case management conference held on 10th August 2023, the Authority explains the retroactive salary as comprising annual salary increases paid over the years to its workers. Ms. Charles does not dispute this characterization of the retroactive salary paid to her but wishes the court to draw certain inferences from those payments. Those inferences will be addressed below. The parties agree that the annual increases in salary over the years 2011 to 2016 when Ms. Charles served as Manager, ATS amounted to about 3% per annum.

[18] In her witness statement filed on 15th May 2020, Ms. Charles explains her concerns about the tax adjustments made to her pension benefits and to the retroactive salary as follows –

(1) The interest paid on her pension was at a rate that was different to the rate applied to the pension fund account by the banks in which it was invested. Ms. Charles insists that interest at the rate of 4% should have been paid in accordance with advice given to her by Mr. Sean Stewart, an employee of the Authority. She claims that Mr. Stewart informed her that the Authority’s Board of Directors disallowed a request to pay her pension at a rate of 4% but instead approved payment at a rate of 3%. Ms. Charles says that this information was confirmed by the Authority’s General Manager, Wendy Williams.

(2) The pension benefits did not take account of the unpaid salary and acting allowances attaching to the post held by her predecessor in office.

(3) The retroactive salary payments were adjusted for income taxes at the 2016 rates of income tax which did not account for the fact that the 2016 income tax rates were different for the years 2010 to 2016. In that regard, she claims that –

“the income tax rate of 15% for earnings between $36,000.00 and $60,000.00 ($24,000.00) which was not in existence between 2010 and 2013 – this tax came into effect on January 1, 2014 – was illegally applied to my retroactive salary payment; while the sums paid as retroactive salary earned from January 2014 to April 2016 was double taxed at the 15% band rate, because income taxes were already deducted at this tax band rate when the actual salary was paid during the said period”.

(4) The pension amounts to a gratuity/benefit for the purposes of section 25(1)(i) of the Income Tax Act. The pension replaces the gratuity and pension which were foregone by her secondment to the Authority. If she had not been seconded to the Authority, her benefits would not have been taxed. She was not to lose benefits by being seconded to the Authority and as such those benefits should not have been taxed.

(5) Even if the pension was to be taxed, she lost the benefit of a better rate of taxes because the Authority failed to register the pension plan with the Comptroller of Inland Revenue. If the plan was registered her pension would have been taxed at a rate of 10% on 25% of the pension instead of the whole of it. 75% of her pension would have been tax free.

Case for the defendant
[19] The Authority accepts that Ms. Charles held a contract as Manager, ATS, at a salary of $6800.00 per month. However, the defence refutes the assertions that Ms. Charles was –

(1) paid the wrong salary. On this score, the Authority contends that, having signed the contract, Ms. Charles has not set out on what basis, legal or otherwise, she is entitled to a different salary.

(2) entitled to a “back pay”. The defence on this score is similar to the defence on the question of the wrong salary.

(3) paid the incorrect amount as the sum due for her retirement benefits. The defence makes the point that –

(a) The Authority is not a taxing authority and as such, it is not liable to defend claims about improper taxation. On this issue, the Authority’s position is that the Income Tax Act provides a mechanism for hearing and resolving disputes about taxation and that Ms. Charles has failed to engage those procedures to resolve her complaints about improper taxation.

(b) The Authority’s matched contributions to the pension plan were taxable and as such there can be no complaint about the deductions made for these purposes.

(c) The Authority was under no obligation to register the pension plan.

[20] Ms. Wendy Francette Williams, General Manager of the Authority provided a witness statement filed 15th May 2020 in which she articulated the defence’s case. Ms. Francette Williams makes the point that the agreement signed by Ms. Charles “contained the entire understanding between Ms. Charles and the Airports Authority.” In this regard, Ms. Francette Williams asserts, there was no “uncertainty or lack of clarity about the salary that was being proposed that was being proposed by the Authority and what was agreed to and accepted by Ms. Charles, which was a fixed salary of $6800.00 per month.” In fact, Ms. Francette Williams explains, Ms. Charles requested correspondence that was sent to several entities on her behalf in which the agreed salary of $6800.00 was quoted. These entities included banks, credit unions and the United States Embassy.

(1) When she acted in the post of Manager ATS, from 1st August 2010 to 1st April 2011, Ms. Charles was indeed paid an acting allowance of half the difference between the salary of her post of Assistant Manager, ATS and the salary of the substantive holder of the post of Manager, ATS. Indeed, there were other occasions on which Ms. Charles acted in the office of another person and received an acting allowance accordingly.

(2) In respect of the claim to a “back pay”, Ms. Francette Williams insists that there was no such agreement with Ms. Charles. Ms. Francette Willams refutes the assertion that there is such an established practice. Indeed, she claims, there are myriad considerations that may determine the salary to be paid to an employment, including years of service.

(3) Ms. Francette Williams refutes the assertion that taxes were improperly deducted from retirement benefits or that the Authority was obliged to register the pension plan with the Inland Revenue Department (IRD). Ms. Francette Williams explains that the contributions made to the pension plan by the Authority were taxable pursuant to section 31(d) of the Income Tax Act.

The trial
[22] At the trial of this matter, after discussion, it appeared to both the parties and the court that the issues in this claim could be disposed of by written submissions on the following matters –

(1) Whether or not the document signed by Ms. Charles was a concluded agreement with the Airports Authority.

(2) Even if so, where are there any terms on salary and other emoluments to be implied into the terms agreed and if so, what were those terms?

(3) The taxation issues.

[23] The parties were asked to file and exchange written submissions and authorities which they filed on 30th June 2023. Ms. Charles filed further written submissions and authorities on 26th July 2023 and the Airports Authority filed further responses on 10th August 2023. A further case management conference was conducted on 10th August 2023. Ms. Charles filed further submissions on 18th August 2023.

Submissions made by Ms. Charles

Salaries
[24] In her written submission filed on 30th June 2023, Ms. Charles’ frontally challenged the payment of a salary of $6800.00 on the basis that paying her a sum that was less than that received by her erstwhile colleague was illegal in that it contravened sections 3, 26(1) and 27 and 28 of the Employment Act. Sections 3, 26(1), 27 and 28 of that Act read as follows –

“3. Status of Act

(1) Any provision in an agreement shall be void to the extent that it seeks to exclude or in any way limits the operation of any provision of this Act to the detriment of the employee.

(2) Notwithstanding, where an employee has received any specific benefit under an agreement, he or she shall not be entitled to the same benefit under any provision of this Act.

  1. Prohibition of discrimination

(1) No person shall discriminate against any employee on the grounds of race, colour, national extraction, social origin, religion, political opinion, sex, marital status, family responsibilities, age or disability, in respect of recruitment, training, promotion, terms and conditions of employment, termination of employment or other matters arising out of the employment relationship.

(2) Subsection (1) does not preclude any provision, programme or activity that has as its object the amelioration of conditions of disadvantaged individuals, including those who are disadvantaged on the grounds enumerated in subsection (1).

(3) A person who contravenes this section commits an offence and shall be liable, on summary conviction, to a fine not exceeding ten thousand dollars or to a term of imprisonment not exceeding three years, or to both such fine and imprisonment.

  1. Equal pay for equal work

Every employer shall pay male and female employees’ equal remuneration for work of equal value.

  1. Remedies for infringement of rights

(1) An individual claiming an infringement of his or her rights contained in this Part may seek redress in the Court if that infringement cannot be redressed by way of the industrial relations framework.

(2) For the purposes of subsection (1) the Court may make such orders as may be necessary to ensure compliance with the provisions of this Part, including an order for reinstatement of an employee, if requested, the restoration to him or her of any benefit or advantage, and an order for the payment of compensation.”

[25] Ms. Charles’ position is that consistent with the terms of the Employment Act, the Authority was obliged to pay her the same salary as her predecessor in office. She submits that the –

“provision in the confirming letter seeking to limit the Claimant’s monthly salary to $6800.00 per month, seeks to exclude or limit the operation of sections 26(1) and 27 of the Employment Act and by virtue of section 3(1) of the Act, the salary provision contained in the confirming letter is void and ought not to be confirmed to the detriment of the Claimant.”

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