Longley v Colina Financial Advisors Ltd (cfal)
| Jurisdiction | Bahamas |
| Judge | Adderley, J. |
| Judgment Date | 31 October 2012 |
| Court | Supreme Court (Bahamas) |
| Docket Number | COM/com 30 of 2010 |
| Date | 31 October 2012 |
Supreme Court
Adderley, J.
COM/com 30 of 2010
Mr. Thomas Evans QC; Miss Veronique Evans with him for the plaintiff
Mr. Terry North; Ms Wynsome Carey with him for the defendant
Industrial Law - Contract if services — Termination — Redundancy — Compensation.
By an amended statement of claim the plaintiff seeks damages for unfair or wrongful dismissal from his employment as Vice President of Business Development with the defendant, the payment of thirty-nine thousand dollars ($39,000.00) per year by way of bonus in respect of the years 2008 and 2009, and the transfer of one percent (1%) shares in CFAL to which he claims to be entitled by virtue of contract.
On the date of the trial prior to its commencement the court gave leave for the plaintiff to amend the statement of claim filed 2 November 2010, and also for the defendant to make consequential amendments to its defence filed 26 November 2010.
The plaintiff is a chartered accountant. He was employed as an associate at a salary of $65,000.00 per year by way of a written contract dated 5 June 2000 subject to the terms set out in the letter and in the defendant's Employee Handbook. It was an express term of his contract that his employment would commence 3 July 2000, and upon completion of one year's employment he would be eligible for participation in the Employee Stock Option Plan. In addition, according to the plaintiff, in August 2001 Mr Anthony Ferguson, President of the defendant's Company, informed him that he would offer him shares representing one percent (1%) in the equity of the defendant. These shares were never issued to the plaintiff.
In 2001 the defendant also implemented as part of its remuneration to employees a bonus program based on an allocation of up to twenty percent (20%) of the annual net income generated by the marketing efforts of the plaintiff. Although paid from 2002 to 2007 the defendant failed to pay any bonus to the plaintiff for the years 2008 and 2009.
It was expressed in paragraph 203 of the Employee Handbook that the policy of the company was to carry out an annual appraisal and salary review but the plaintiff failed to carry out such a review since in 2007, and 2008 until December 2009.
By letter dated 21 January 2010 the defendant terminated the plaintiff on the ground that his position as Vice President of Business Development had become redundant by virtue of a decision to eliminate the unit which he headed. At that stage the following payments were made to him.
“Severance Pay (9.58 months representing one month for (each year worked)
$ 72,696.15
Severance Pay (one month's salary in — lieu-of notice)
7,587.67
Pension balance at 31 January, 2009 (excluding interest)
$114,161 29
Salary for the period 16 January to 31 January 2010
2,767.75
Vacation Entitlement (1 remaining vacation days for 2009)
6,303.60
Vacation Entitlement (Vacation days accrued in 2010)
556.48
Total
$204,072.87
Less
Outstanding loan balance — CHBL shares
$ 12,080.87
Outstanding loan balance — personal with Fund
$ 51,281.23
Outstanding loan balance — personal
2,210.30
Total
$ 65,572.40
Final Payment
$138,500.47”
The plaintiff by letter the same date accepted the cheque as part payment of his entitlement without prejudice in respect of termination but reserved his right to seek further compensation which he is now doing. Mr Anthony Ferguson, the president of the defendant and who signed the letter of dismissal, states that he does not recall receiving that letter.
The plaintiff's case is that his termination was planned by the defendant and systematically pursued from December 2006.
The plaintiff had moved through the ranks of the company by taking on the portfolio of senior persons who resigned from the company. In March 2001 he assumed responsibility for Pension Administration from two staff members who resigned; in December 2001, responsibilities for Business Development and Marketing; and by April 2002, Pension Administration, Financial Control, Human Resources and Operations and Information Technology by June 2002.
His salary likewise increased. He was promoted to senior associate in December 2005 and paid a salary of $85,000.00 per annum. In January 2007 it was increased to $88,400.00. In January 2008 his annual salary was increased to $91,052.00 by virtue of an inflation adjustment throughout the Colina Group of Companies. In 2009 he was in addition named Chief Financial Officer.
According to Mr Ferguson in October 2008 a decision was made in order to reduce costs to centralize certain accounting functions at the parent Company A F Holdings Ltd and its subsidiaries. Because of customer complaints with financial statements, over budgeted costs, delays in implementing their upgraded accounting software, and the significant deterioration in the plaintiffs work performance he transferred him in a lateral move in 2009 to the post of Vice President of Business Development at the same salary of $91,052. They had also lost 2 major clients including The National Insurance Board representing together about $150,000.00 in fees.
They also gradually stripped him of his duties. It should be noted, though, that when this move was made in February the plaintiff by e-mail queried why the pensions administration was being removed from him and whether it was due to any incompetence on his part, Mr Ferguson replied by e-mail dated 26 February assuring him that it was simply because Mani (Emanuel Alexiou, the majority principle) wanted it to be done at the corporate level. Mr Ferguson confirmed this in his oral evidence.
Mr Ferguson stated that due to the global downturn in the economy during 2008 and 2009, the decline in projections for new business, and the fall-off in net new business by 40%, CFAL's Board decided that the position held by the plaintiff was no longer tenable and decided to eliminate the unit. That made the plaintiff redundant.
However, on the evidence it also appeared that in December 2006 differences developed between Mr. Ferguson and himself. Mr Ferguson had promised him a salary increase to $95,000 per annum plus a bonus of $39,000 and had not delivered on it and instead offered a salary of $85,000 with a bonus of $20,000. As a result they had words of difference. This concluded with the payment of the salary and bonus of $39,000 as originally promised. The negotiations were acrimonious, the plaintiff was called names, and since then the relationship began to deteriorate, says the plaintiff.
In the plaintiffs view from 2007 Mr. Ferguson started to find fault with his work. They included complaints about failure to properly reconcile accounts, which prompted an audit. Some responsibilities were reallocated including the reconciliation process and he was left to concentrate on Business Development and Pension Administration. He nevertheless received a bonus of $37,000.00 in 2007.
In January 2008 his salary increased to $91,054 and he was promoted to his last position. In February 2008 he was stripped of the responsibility of Financial Controller to which he was appointed in 2006.
In October 2008 the Pension Administration and Operations were removed and a new VP of Pensions Administration was appointed. Prior to the breakdown in communication his confidential Staff Report for the period January to June 2006 gave the plaintiff the highest rating in 16 out of 22 categories. This was in respect of 2007, the last recently good year.
In December 2008 while all other employees received a bonus he did not purportedly for unsatisfactory performance on a performance appraisal, the first since June 2006. Upon enquiry he was given an appraisal dated 11 January 2009 in respect to his performance in 2008. He replied by a 19 page rebuttal on 30 January 2009 essentially pointing out that most of the matters complained off were by admittance in Mr Ferguson's e-mails the inadequacies of other staff members under him and the general downturn in business because of the economy.
An exchange of E-mails, in an E-mail dated 17 February 2009 Mr. Ferguson after pointing out several inadequacies in the work of the plaintiff, set a meeting for the following day and ended with this phrase, “In the meantime I suggest you seriously consider perhaps finding other employment opportunities.” In cross-examination Mr Ferguson stated that what he meant was that if the plaintiff was unhappy with his compensation he should find other employment. The plaintiff points to this as evidence of the precursor to his dismissal a year later.
During 2009 he performed a number of marketing tasks in the business community in an attempt to promote the business of the defendant with disappointing results.
From 12 December 2009 until his dismissal he had no communication with Mr. Ferguson, and Mr. Ferguson has refused to grant him a reference letter as promised in the letter of dismissal.
On the evidence, at the time of his dismissal as Vice-President of Business Development there were at least three persons, (Pamela Musgrove, Tamara Evans, and Khalil Brathwaite) employed in the same area, who performed duties similar to that of the plaintiff and junior to him. He claims that the last in — first out (LIFO) method was generally used in redundancy situations, and ought to have been used in this case. Because it was not used, he claims that it is a breach of s.32 of the Employment Act Chapter 321A of the Statute Laws of The Bahamas (“the Act”) in the implementation of redundancies as defined in s.27 of The Act.
The defendant does not agree that with the plaintiff's statement that the named persons performed duties similar to that of the plaintiff. Pamela Musgrove was...
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